Top reported reasons, why businesses fail to transform, are gaps in management sponsorship and support—internal cross-functional and external value chain collaboration—service delivery workflows and issues related to employee engagement and accountability. Such organizations need to do a master reset, rethink, and rebuild a technology-enabled enterprise performance infrastructure made up of people, processes, and tools for successful execution and sustained results. What does it take to crack this “how” problem of transformation?
Top 5 Learning Points
- Transformation is difficult and it takes a strong commitment to change and one has to be willing to truly commit to it and truly commit the resources.
- You can’t guide the change management of how the roles and the processes are going to change without understanding where you’re starting from.
- If you have a culture of teamwork, it makes cross-functional collaboration possible. You have to have that, and also strong leadership and communication.
- What’s really the most difficult part where most people fail is they don’t acknowledge the change management is the biggest challenge, rather than the technology.
- Some people fail because they’re trying to do everything and they keep interrupting the process with additional priorities and scope.
- We have always focused on transforming our business processes, business models, and technology is an ongoing initiative as well. One of the keys to our ability to do these transformative initiatives is our very strong support from our senior leadership team.
- The only time that an effort should be turned around and reduced is if the business itself suffers from unexpected market conditions.
- I think that transformation is difficult and it takes a strong commitment to change and you have to be willing to truly commit to it and truly commit the resources.
- You have to have a proper evaluation of your existing process, must understand the positives and know where you are and where you’re trying to go.
- Some people just want to leap ahead with the new process and they want to skip the important understanding of the current processes and work. They don’t want to do the work and take the time because they’re anxious to get to the end goal.
If an organization is focusing on implementing enterprise performance infrastructure then it is not the mere technology that must be looked at. There are many other factors as well and the key factor is people management. A thorough discussion on the same is covered here.
Sanjog: The topic for conversation is, Rebuilding Enterprise Performance Infrastructure. I have with me, Grace Monahan, Vice President and Chief Information Officer, Henry Schein. We wanted to talk about an interesting subject because we have heard so many stories about the business transformation efforts that many companies are going through. They’re not finding the best results or in some cases and even failing. Management, sponsorship, collaboration, workflow issues, and employee engagement are some of the top reasons that are reported. Since doing same old may not work, we wanted to explore the art and science of carrying out a complete reset and then rebuild. Often, organization’s performance infrastructure is the people processes and tools which can then perhaps lead us to the intended outcome. Let’s start with the challenges that are commonly reported and I’d like to start with the management sponsorship and support.
When we see these transformations when they begin, there’s a lot of excitement. There’s a lot of investment being put in and commitments are made every day, but then somewhere we find that thrill that excitement starts reducing or dwindling. In some cases, we start revoking that sponsorship, the support that we need right in the middle when things could be getting heated up or maybe up the ramp. Why does this happen?
Grace: At Henry Schein, we’ve been a rapidly growing company for many years and we continue to recognize that the economy, the marketplace, the customer needs are always evolving. Transformation is not a new idea for Henry Schein. We have always focused on transforming our business processes, business models, and technology is an ongoing initiative as well. One of the keys to our ability to do these transformative initiatives is our very strong support from our senior leadership team, including our Chief Executive, Stan Bergman.
When you look at the question as you asked, enterprise performance infrastructure is made up of people, processes, and tools. I think that’s a very key statement, it does involve those things. People, processes, and tools. Many businesses go into this initiative, focus too heavily on the idea of tools and technology. In my opinion, the people are really the key. I believe that as far as the ways that they go wrong is that the commitment is not really made. If the commitment is really made if the resources and investment are going to be committed is unavailable and the diligence is done, on what it takes to do, a short-term, medium, and long-term transformation. Then, you have a reduced risk of revoking the effort or being unsuccessful in the effort.
The only time that an effort should be turned around and reduced is if the business itself suffers from unexpected market conditions. Then you may decide that you need to prioritize something else, but otherwise, it’s really the strong commitment, communications, and leadership that drives these efforts. It’s a people issue, it’s the people that will make it successful. Means, you have to have the right people involved in the transformation and they have to be available.
Many businesses go into this initiative, focus too heavily on the idea of tools and technology. In my opinion, the people are really the key.
Sanjog: We have seen the reason why your transformation efforts may be successful, but when people are failing and then for some reason, management may have initially given, would you call it a lip service to this whole sponsorship and commitment and later on, they did not do it because they were never serious about it, is that what happened?
Grace: I think that transformation is difficult and it takes a strong commitment to change and you have to be willing to truly commit to it and truly commit the resources. There are several reasons. Some people go into it focus, they think they’re going to bring this technology and they’re going to transform. Some people go into it, saying that, standing up and saying how important it is and everybody should transform and it’s everybody’s job, but everybody already has a day job. Some people go into it seriously, thinking that they’re going to do it but then, they’re not willing to make the hard decisions to force the change when people don’t want to give up the old processes. Sometimes it even means that you have to change the organizational structure or you have to change people, it really a leadership issue. You must be dedicated, stick to the plan and have high-level sponsorship.
I think that transformation is difficult and it takes a strong commitment to change and you have to be willing to truly commit to it and truly commit the resources.
Sanjog: Let’s talk about the business processes and workflows. Anyone who has ever dabbled in the transformation effort, they know you cannot slap technology. You cannot have anything which can enable the business to be done before you’ve actually tackled the business processes and workflows. You have to do an upfront evaluation, you have to improve them first as the foundation before you start doing anything else. There seems to be a situation where people are putting the cart ahead of the horse, they’re trying to put things more like technology or another type of improvement initiatives but not doing it at fundamental business process and workflow level. How come somebody ignores that critical step?
Grace: Well, first, I’d like to say that that step is completely critical. You have to have a proper evaluation of your existing process, must understand the positives and know where you are and where you’re trying to go. I think people skip it because it’s hard work. It takes a lot of time and effort to do a proper evaluation of existing processes and to do a proper vision of where it is that you want to go. Some people just want to leap ahead with the new process and they want to skip the important understanding of the current processes and work. They don’t want to do the work and take the time because they’re anxious to get to the end goal. I don’t believe that you can get there without really understanding it because it comes down to change management, and understand your future process. But you don’t understand the current process, roles, people and how it fits together, then it’s very difficult to transform what you have. You can’t guide the change management of how the roles and the processes are going to change without understanding where you’re starting from.
You can’t guide the change management of how the roles and the processes are going to change without understanding where you’re starting from.
Sanjog: Let’s talk about collaboration. You could have collaboration within the organization, basically cross-functional or even with your value chain players. It becomes critical, how communication and collaboration happen within the organization for transformation even to be successful, but we find slippages in that. Are we going wrong? Why is that? Being a critical element but people still don’t communicate properly, if they still don’t collaborate when they know you can only win when you’re together.
Grace: In order to have that, you really need to have something that Henry Schein is extremely strong on and that is a culture of teamwork. If you have a culture of teamwork, it makes cross-functional collaboration possible. You have to have that, and also strong leadership and communication. It is critical to have a solid formal process for the initiative as well. If these are weak, then I think slippage can happen. I’m going to give you an example of recent effort and what it really took to make a transformation. We had a recent data initiative that was cross business units and IT, numerous other support departments involved in the initiative. In order to do that, we had a tremendous amount of work on the current processes on where we were going, what the changes needed to be. We had a very strong team culture in the project. Also, absolutely focused leadership on the initiative, proper project planning, communication and in the end, a dedication to excellence. Within team Schein, we have the advantage that we do have at all times, to focus on excellence and teamwork. Communication is something, you always need to work on.
At the end of the day, we had over a 120-people involved in this particular initiative which was a data initiative, new categorization, definitions, etc. We had strong commitments. The things that I’m saying we had, the reasons people have slippage, they don’t have a strong commitment, they don’t make the resources available, they don’t have a strong culture of leadership, they don’t have leadership that’s focused on the win, that’s basically cheering on the team that every step, every obstacle, helping to remove obstacles, and having the team spirit. Of this 120 people, we had about half of them in, the entire weekend, putting in tremendous amounts of time that they were happy to do because we had that commitment and excitement, and you have to keep it exciting. The reason you do that I think is through visibility leaders, cheering people on, recognizing the efforts and bringing the team together.
If you have a culture of teamwork, it makes cross-functional collaboration possible. You have to have that, and also strong leadership and communication.
Sanjog: In a way, you kill two birds with one stone that you got the collaboration and communication going, but the basic commitment that you’ve put in there and the communication that the way you did and the processes and the style of leadership that was used. You also in a way seems like have gotten the employee engagement problem cracked.
Grace: Absolutely. The employee engagement is crucial. First, I don’t think you can succeed without the slippage to a big transformation effort in an organization where you don’t already have a high level of employee engagement. At Henry Schein, we have a culture survey that we do to measure our engagement and we have a lot of activities and leadership and incentives and all the other things that go into a high-performance enterprise. If you start with a high-performance enterprise, you have the opportunity to really do some huge transformational activities but you have to be willing to support and champion the change.
If you don’t have the employee engagement commitment and the right culture, then you have to work on that first before you do a big transformation effort as its very difficult without that level of commitment and engagement.
Sanjog: With that said, now let’s think about your situation where I’m sure you have worked very hard to get all over the humps which would have caused issues with the transformation. But there are many organizations as we spoke already have been having issues. Imagine, the issues with the management sponsorship or with the workflows and business process related issues or the collaboration, communication, and the employee engagement. People are struggling on many levels and many other companies. If you were their guide and a consultant to them if they were to try to think about a master reset and say, let’s start from scratch because this is not working out. We cannot put a new wrapper on an old product. What would be that approach to building a business case so that you can actually think about a reset and then rebuild that technology-enabled enterprise performance infrastructure?
Grace: Well, I think that you have to have a clear vision. The business case needs to be based on the market conditions, competitive goals, what it is that you want to achieve financial benefits and you have to have an organization that’s willing to invest and gains measurable outcomes of this transformation. The team itself is absolutely critical. You need to put star performers on this team, not people who everyone else is engaged in their job, all the star performers are busy and we’re just going to take people who happen to be available. The technology is there to support the business strategy. The business case itself, you need to focus on is not about technology I think when it comes to this. I would say the vision and the business case and the goals need to be clear to the transformation team and actually to the entire organization.
Business units have to have a strong, have to own the business case and IT enabling it. I don’t think you can do these transformation efforts with IT leader and vision creator. It needs to really go the other way. We can certainly, as a CIO, can certainly contribute to the business vision and business case by enabling them to understand what’s possible. But you have to have strong business drivers and a business case that’s understood, preferably with measurable goals.
We can certainly, as a CIO, can certainly contribute to the business vision and business case by enabling them to understand what’s possible. But you have to have strong business drivers and a business case that’s understood, preferably with measurable goals.
Sanjog: The next step is to actually look at within the technology because we’re trying to talk about technology-enabled enterprise performance infrastructure that means we will have to also look at technology group or what we offer in there. We have to do some readiness check and the fixes in the area of the data strategy and architecture before you will go ahead and evaluate and/or apply technology. How do you go about it, what type of readiness check and fixes that you do? Here the readiness check and the fixes that we need to require, we are basically supposed to get in place in the areas of data, strategy and architecture become very important before we go and evaluate and apply technology. What are those?
Grace: Well, everybody is talking about data, as you know. The data strategy is very important, so this is a big one. Data analysis and cleansing are part of the readiness. It’s not just the technology itself, you need to define a data strategy which is imperative to reach the required outcome, short-term and long-term. The architecture planning from an IT perspective, you have to plan for the hardware, middleware, software. You must define the products that are going to be used, the partners that are you going to engage with to create the capability. Especially if you’re going to go cloud with your data strategy and architecture. The reason for that is for the flexibility, scalability, the ability to be agile and to really have business agility cloud is generally a preferred method today, not to say it’s the only way to go. You also have to take into account some of the more challenging areas, like cybersecurity, business continuity, and disaster recovery. All the controls and governance areas. From a technology perspective, you need to look at the readiness.
If I look back on where projects fail or any challenges that I’ve had along the way in any of these transformations or even large project initiatives, it comes down to following a process. It comes down to having a defined process. If I talk about the programming processes of the waterfall and agile and all of those methods that go into a proper project management, but you also have the full project lifecycle. The readiness check, the areas that I’ve seen fail in the past is based on assumptions. I’ve had projects fail based on the assumption of data is good, somebody just decides to tell you data is good and people assume it and they go along the road. You really need to question and audit what’s going on. You need to start from the current state of data and your architecture and infrastructure and whether or not you’re really, you’ve got everything set for the initiative going forward.
It’s not just the technology itself, you need to define a data strategy which is imperative to reach the required outcome, short-term and long-term.
Sanjog: Looking at the technology stack that’s available. The tools, applications, whether on the cloud or wherever for that matter. It can help you offer the unique insights that the business needs. It can even help fundamentally redefine how the business gets executed and it also allows automation to the nth degree so that we allow our people to focus on what the core business is. If that is the level of value technology can bring. Then to what degree our organizations able to use technology as a forethought and a foundation as a catalyst versus talking about, I’m not saying enabler is a bad word but enabler could also be considered as an afterthought but how about making it as the forethought for whatever an organization wants to do even when we’re talking in the context of the people in the process and the tools reimagining and resetting and rebuilding?
Grace: Well, I think that when you look at the technology available today, it’s really very powerful. One of the things you have to look at is really the amount of choice and making the right choices and the technology and the partners. If you’re going with implementation partners who can easily fail by not doing due diligence on the proper implementation partner that has the skill set and experience behind them. I think that when it comes down to it, assuming that you choose the right technology, there’s plenty of expertise outside especially in the cloud to help you through the implementation of the technology. What’s really the most difficult part where most people fail is they don’t acknowledge the change management is the biggest challenge, rather than the technology. This is where the business agility really comes into play. The business agility will allow the organization to adapt to new technology and processes. That means, you have to keep what works going forward but you need to be willing to stop doing things the way they have always done it.
Another example of where projects have failed is, I had one project where the people put on the project were the original creators of the old process. That’s something you really have to be careful not to do and if you do do it, you need to make sure you have enough people on the team who were not part of that. Because what these people did was they had been the inventors of the old process and therefore, they took the new technology and reinvented the old process using the new technology which is a sure way to fail a transformation. At Henry Schein, a continuous process of prioritization is placed to ensure that we’re always doing what really matters. So that’s another way that you can get off track is to not focus and not have proper prioritization and everybody on board with what’s most important. Some people fail because they’re trying to do everything and they keep interrupting the process with additional priorities and scope. So, if you’re going to transform the entire organization and every single process, you still have to put a stake in the ground where you’re going to start and end on phase one. Then you continue to define additional stages as you move forward but you also I think can fail, if you try to do too much too soon. If you look at the current processes of agile and cloud, the end result is, do something small that’s scalable. Do it small, do it right and then scale. Don’t try to do everything.
What’s really the most difficult part where most people fail is they don’t acknowledge the change management is the biggest challenge, rather than the technology. This is where the business agility really comes into play.
Sanjog: To that end, while we’re talking about technology, the key here is that technology itself should not become very complicated or tough to maintain or difficult to maintain. How about we go and select cost-effective and intuitive, pure cloud-based software for the majority of our needs for the rebuilding effort?
Grace: I think that the days of custom coding everything are gone. The cloud enables you to move faster and take advantage of best practices, it enables you to upgrade with other experts basically taking advantage of the ideas of many. I really think that the cloud enables the agility for scalability. The only time that you should be customizing and custom coding to me, it has to be a complete differentiated that’s not available in a commercial product. What is going to be key from a technology perspective, choosing the right technology is always going to be key but choosing the right implementation partners. When it comes to the cloud and building those relationships and managing them is really going to be important in this rebuilding effort.
I really think that the cloud enables the agility for scalability. The only time that you should be customizing and custom coding to me, it has to be a complete differentiated that’s not available in a commercial product.
Sanjog: Finally, the leadership and culture. The type of leadership and culture we need or require to allow such creative destruction which I mean is like doing a reset and then rebuild so that we can actually have successful execution of these transformation efforts and have some sustained results as an outcome.
Grace: The leadership and culture required are really at the core of being able to succeed in transformation and sustained results. Leadership sponsorship from the top, all the way through the organization is critical. You have to have the right culture if a transformation. It’s an absolute must in my opinion. You have to have that culture backed up by the willingness to invest, the willingness to change processes, and sometimes people which is the hard part. Putting people in different seats on the bus and making changes in the way people operate. You need to have a culture that provides vision and support, the ability to stop doing things the old way. That means, some people have to get out of the way who can’t do it the new way and want to do it the old way. Leadership frees the team to drive in a new direction and to encourage people to take risks which I think is another important thing. You have to have some room for people to fail and take risks or they will simply not really take any big steps. They will do incremental change and no large transformation.
I think indeed from the leadership and culture perspective, you have to have big ideas and big vision but you need to start small and scale and understand your full journey, and you have to also have the fortitude, determination, dedication, high level of communications. Again, the culture of teamwork.
Leadership frees the team to drive in a new direction and to encourage people to take risks which I think is another important thing. You have to have some room for people to fail and take risks.
Sanjog: Thank you, Grace, for sharing your thoughts and insights about how organizations can fundamentally rethink and then rebuild their enterprise performance infrastructure to achieve predictable and positive results from their transformation efforts.