Introduction
More often than we would care to admit, large transformation programmes hit bumps in the road. Whilst some are bigger than others, a proven, standard approach to evaluating and smoothing them out is essential to producing consistent responses and best-in-class transformation results.
Claverton has developed a simple, 4-step Recovery Framework which is easy to apply to any transformation crisis or recovery situation:
Recognition: to tackle a problem you first must recognise that you have one and accept that you must deal with it. Some transformation programmes can be like super-tankers, terribly slow to change direction in, so the earlier you recognise a potential problem, the better equipped you are to minimise its impact.
Cognition: fully understand the nature and causes of the problem(s) and their impact(s). Identifying root causes are vital to fully understanding the problem, identifying what and how things have changed and to avoid repetition. Included in the nature of the problem is a structured assessment of the risks and issues it poses – evaluating these allows for rapid risk mitigation and issue resolution.
Perception: people come out of a crisis with different ideas about the definition of ‘success’ as it may well have changed in the minds of key stakeholders, particularly if the business operating environment has been affected. It is important to review the transformation vision, operating model, strategy, road map and outcomes to ensure that stakeholder support is maintained.
Action: where many crisis responses fall down is in the execution or delivery phase. Oftentimes, a failure to execute quickly leads to a compound effect of risks and issues, causing things to get worse before they get better, and consequently more time-consuming and costly to fix. Identifying the right problems to fix, and in which order, can also be a challenge in a crisis when time is of the essence. One technique to apply in Step 1 of the Recovery Framework is to prioritise the problems by value, identifying those which generate the key benefits as well as those which carry the greatest risk or cost impact, and address those first.
Applying the Recovery Framework will lead to………………..
A structured appraisal of the situation, with buy-in to a revised transformation road map and a shared definition of success
Increased confidence that the recovery is under control
A clear issue resolution plan
A suite of risk mitigations which can be prioritised, acted upon immediately or managed through to avoid crystallisation
…….the result of which is that the transformation journey is back on track.
Risk Management in Transformation Recovery
As part of any recovery process, a strong risk assessment is critical component. Let’s expand a little on Step 2 of the Recovery Framework and understand how we achieve an effective risk assessment. Claverton advocates the use of basic disciplines encapsulated in our Risk Evaluation & Management Model (REMM) below:
The application of basic risk management disciplines is a great way to start tackling a crisis:
1. Context & risk appetite: companies and people can have vastly different risk appetites and in response to an unexpected event those appetites can shift quickly and markedly. The business environment you operate in dictates a level of context within which you must consider risk. A second contextual layer is the place your transformation programme holds within your company’s strategic priorities. You must reset your programme to cater for shifts in context and risk appetite, understanding any constraints placed on your transformation goals and approaches.
2. Identify & quantify risks: it is impossible to control a risk that you fail to identify. When experiencing high levels of change, and/or when it is happening rapidly, it is crucial to step away from the melee and take the time to identify, classify and quantify your risks. How serious is the likely impact? How severe? And at what cost?
3. Devise mitigating actions: every risk should have mitigating actions assigned to it. Each action must have a named owner, someone who is accountable for its completion. In a perfect world, every mitigating action will be tied to a key milestone and one or more deliverables in your project plan. Whilst that may not always be possible, undertaking this discipline for major risks will help to prevent their crystallisation.
4. Agree contingency / reserves: once you understand the overall, combined picture drawn by all of your risks together, individually and combined, it is important to decide how much of an insurance policy to take out in order to cover them. Financial contingency is one consideration but allowing additional time can be equally important.
5. Track, Report, Resolve: frequently tracking the performance of mitigating actions and reassessing your risk profile is crucial if you are to prevent them from occurring. Too many transformation programmes pay lip service to risk management, and particularly the application of proactive preventative measures.
Building the outcomes of a risk assessment into your understanding of the nature of the problems faced allows you to:
Anticipate risks ahead of time and assign ownership for managing them
Proactively manage the impacts should a risk crystallising, avoiding them before the create an issue
Demonstrate the control you have over a recovering programme of change, building stakeholder confidence
Recovery Checklist
We are often asked how to recover transformation programmes when they face significant disruption. The Recover Framework and the REMM are two examples of practical techniques used. Another simple tool, irrespective of underlying causes, is to initialize a recovery exercise using the following checklist:
Part of the skills in using a checklist is knowing the questions to ask in order to execute it and get a tick in the box – it is very easy to tick the box but miss the point. The vast experience of the Claverton team is essential to achieving a successful recovery – the knowledge, skills and presence we possess enables a thorough but rapid assessment of the situation and the production of a robust set of conclusions and actions.
If you would like to talk to us about Project Recovery, Project Management or Risk Management, please call us on 0117 325 7890 or send an email to info@clavertonconsulting.co.uk
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