ICAEW.com works better with JavaScript enabled.

I know why transformation projects fail

Author: ICAEW Insights

Published: 02 Aug 2023

The vast majority of business transformations do not get off the ground. Neil Cutting has the answer.

It is now received wisdom in the digital project world that 70% of transformation projects fail. That figure first appeared in a 2020 study by Boston Consulting Group. This statistic is backed by McKinsey and other consultancy and professional services firms, so we can assume that this is an accurate failure rate. 

Many reports and articles have tried to diagnose why this failure rate is so high. Lack of drive from leadership, failure to engage wider stakeholders, a lack of clear objectives and more are often cited as causes, but these can all be brought together under the umbrella of ineffective project or programme management. I’ve seen this happen time and again; transformations faltering because the project management isn’t there. 

In my time consulting on transformation in corporate recovery and receivership in PwC, I had many chances to observe how people approached transformation. When I moved on to drive performance turnaround in Hewlett Packard and Mars, I continued to make mental notes. Everyone had a different approach to transformation, but there were similarities in their approach.

I started thinking about how I could help make the process foolproof. Often the people leading on finance transformation projects are not project managers and are thrown in the deep end with what can be a very complex and multifaceted task. As a finance person that enjoys the simplicity of a month-end checklist, I started wondering: could we have the same for transformation projects?

With that in mind, I started to put together what would become the GAME PLAN – an acronym I’ll lay out a little later. I started outlining the common elements of each project to create a simple-to-follow step-by-step approach. That’s the GAME PLAN.

What is the GAME PLAN FRAMEWORK?

The GAME PLAN is set out like this:

game plan 8 v1

It’s adaptable and can be applied to situations demanding a transformation or change. Think of it as a way to answer the question: “how do we get from here to there?”. We will apply it to finance transformation in this context, but it could be applied to:

  • Business transformation
  • ESG and sustainability transformation
  • AI transformation
  • Resilience transformation

All of these may come under the remit of the finance function. The framework consists of four steps.

The game: framework

GAP analysis

Look at the key perspectives which you need to consider and improve. For Finance Function transformation these are the five perspectives we considered in our previous series: leadership, people, process, structure and systems. These might be different for ESG or AI transformation.

Apply a maturity model analysis for the company’s status today – the ‘as-is’ – and where it wants to be – the ‘vision’ – and the target for the coming year – the ‘budget’. The maturity model uses five levels. For our finance transformation perspective these are leadership and metrics, structure, processes, people, and systems and technology – but again, these might be different for other kinds of transformation projects.

Since there is never enough money or time to focus on everything, you need to establish what is realistic to achieve in the next 12 months (GAP analysis will be helpful here). It will be necessary to make some strategic decisions; this will be covered in this series. 

Action planning 

Now you’ve identified the focus areas, you need to develop an action plan based around your chosen perspectives. For finance transformation, these are likely the five perspectives covered above. These will form your workstreams.

By having five workstreams, each with, for example, three projects, it will help make your communications to stakeholders (senior management, investors, the team) easier. We looked at the people factor in detail in a previous article.

Define what makes each metric red, amber or green (also known as the traffic light system) and blue for ‘complete’. Determine who is accountable for delivering these metrics and who is responsible for updating the data. We will take a look at creating a performance metric scorecard in more detail in a future article.

Measure and manage

Once you have an action plan and are ready to start the first period, you need to start delivering regular periodic (weekly, monthly and/or quarterly) reports.

The important aspect here is to set up a program governance structure so the metric data is used for real business decisions and appropriate action is taken to deliver the desired future state. An approach to programme governance and reporting will be covered in this series

Evaluate and improve

Continuous improvement is core to any transformation. Transformations by their nature are complex and challenging and when we start we do not know everything. Therefore we need to adapt as we go.

These four steps – the GAME – are supported by four foundations – the PLAN.

The plan: foundations

Project manage the transformation

The four steps require ruthless project management. There will be many requests for projects, so it is critical to establish a project pipeline system to keep them in check. We’ll cover this in detail later in the series.

Learn as you go

As you undertake the review process, it is important to remember something crucial: we do not know everything. Being clear on what you know, what you don’t know, and what you know but cannot yet share is an important skill set.

Always focus on the future state

There will be many challenges on the way, so you need to be able to be agile and nimble. The important thing is to focus on the desired future state. It is particularly important to be clear on why you are doing this, why go through the pain and trouble. Having a clear focus on the benefits, both financial and non-financial, is key.

Never forget about the people

Never forget that whatever the change is, it is likely to have an impact on the people in your team and the people that your team interacts with. Never forget about this human aspect. 

A transformation programme within organisations can sometimes require some hard decisions, but this is not an excuse to be unkind or unthoughtful towards your people. You need to treat them with the dignity and respect they deserve.

Hopefully this GAME PLAN framework will help you achieve it successfully, so you are one of the 30% of transformations that succeed.

Neil Cutting has held many CFO and transformation leadership roles with complex global organisations. Most recently he was Vice-President of Finance at Jacobs Solutions Incorporated, a $15bn Fortune 250 organisation. He is also a member of ICAEW’s Business Committee, which represents global business members, and guest lectures on strategic performance at the University of Bath.

Related articles

Read related articles by Neil Cutting on finance transformation and the finance team toolkit:

Discover more from ICAEW Insights

Insights showcases news, opinion, analysis, interviews and features on the profession with a focus on the key issues affecting accountancy and the world of business.

Podcasts
Podcast icon
Insights Podcast

Hear a panel of guests dissect the latest headlines and provide expert analysis on the top stories from across the world of business, finance and accountancy.

Find out more
Daily summaries
Three yellow pins planted into a surface in a row
News in brief

Read ICAEW's daily summary of accountancy news from across the mainstream media and broader financing sector.

See more
Newsletter
A megaphone
Stay up to date

You can receive email update from ICAEW insights either daily, weekly or monthly, subscribe to whichever works for you.

Sign up