Five questions before approving a transformation
A short diagnostic for directors facing a multi-year change programme.
Few decisions a board takes carry more risk than approving a multi-year transformation. The investment is large, the benefits arrive late, and by the time problems are visible the organisation is already committed. Directors are asked to judge a plan that is necessarily incomplete, presented by a management team that is necessarily confident.
The questions below are not a substitute for diligence. They are a way to test, in a single board meeting, whether the programme is built to succeed.
1. What decision are we actually being asked to make?
Transformation proposals often bundle several choices together: a change in strategy, a new operating model, a technology platform and a cost programme. Each deserves its own scrutiny. Ask management to separate what the board is committing to now from what will be decided later, and at what point the board will see those later decisions.
2. How will we know, early, whether it is working?
Most programmes report activity: milestones met, systems deployed, people trained. Fewer report the leading indicators of value, such as unit costs, cycle times, customer retention or working capital, measured against a baseline agreed before the work starts. Insist on a small number of outcome measures, reported quarterly, with thresholds that would trigger a formal review.
3. What has to be true for the business case to hold?
Every business case rests on assumptions about adoption, timing, cost and market conditions. Ask which three assumptions matter most, how confident management is in each, and what happens to the return if each one is wrong by a meaningful margin. A plan that only works if everything goes right is not yet a plan.
4. Who is accountable, and do they have the authority to deliver?
Transformations fail more often from diffuse ownership than from poor design. There should be one executive accountable for the outcome, with the authority to make trade-offs across functions and the time to lead the work. If the accountable leader also runs a large business day to day, ask how both jobs will be done well.
5. What will we stop doing?
Change programmes compete for the same scarce resource as everything else: the attention of the organisation's best people. Ask management which initiatives will be paused or ended to make room, and how the core business will be protected while the change is under way.
A board does not need to design the transformation. It needs to be confident the transformation has been designed to be governed.
- 1The decision. What exactly are we committing to now, and what comes back to us later?
- 2Early signals. Which outcome measures, against which baseline, will tell us it is working?
- 3Assumptions. Which three must hold for the business case, and what if each is wrong?
- 4Accountability. Who owns the outcome, and do they have the authority and time to deliver?
- 5Trade-offs. What will we stop doing to make room?
Ask before approval, and again at every stage gate.
Using the questions
These questions work best before approval, when the answers can still shape the plan. They are also worth revisiting at each major stage gate. A programme that can answer them clearly is one the board can support with conviction, and hold to account with confidence.
What would change our view
If most failed transformations turned out to have had clear ownership and a sound case from the start, the cause would lie somewhere these five questions do not reach, and we would change the questions.
This piece is RavenArc analysis. It draws on established management practice rather than new data, and it cites no specific figures.
RavenArc tests every decision against six questions. See the RavenArc Decision Method.
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