There is broad consensus that the UK needs to reduce its budget deficit dramatically from the current levels of ca. 155Bn. In this weeks Budget the coalition Government set current expenditure for 2010/11 at 637Bn with resulting net public sector borrowing at an eye-watering 149Bn. The plan is to balance the books by 2015/16 using the 80:20 rule, where 80% of the reduction is borne by cuts in public expenditure and 20% is provided by increases in taxation.

The National Health Service spend in the UK each year is ca. 120Bn, or almost one pound in every five of the current expenditure budget. What good fortune for the incoming Government therefore that their predecessors had commissioned a report from McKinsey management consultants that had identified potential efficiency savings within the NHS of up to 22%. Even if a conservative view of the estimate was taken, here was a logical place to find a significant contribution into the spending cuts pot. But no….in the Budget, spending on the NHS is to increase in real terms each year over the life of the Parliament, resulting in cuts of ca. 25% in all other areas of expenditure over the next four years.

Whilst not speculating on the rationale for this decision, surely this is a massive opportunity lost for all concerned, Government, taxpayers and the NHS alike? Rather than simply discounting the findings of the McKinsey report, which no doubt itself cost a considerable sum of money, shouldnt its recommendations be explored and implemented where appropriate? I would argue that the best investment in the NHS would be to provide the proper system, tools, training and cultural incentives to empower those working within the organization to drive these efficiency changes themselves.
Making major change happen within a complex organization such as the NHS need not be a stereotypical model of target-driven managers battling with clinical staff concerned with the quality of patient care. Yes, its true that it is important that there is a clear goal and leadership to set direction and provide the impetus for change, but the way that change is effected is best decided by those who know the organization best the people who work within it, working together.

Today, with the advent of Web 2.0 technologies to complement the already well established and successful management techniques such as Lean Six Sigma, it is possible to have both the right system AND the tools to enable teams to form, collaborate (virtually if necessary) and achieve sustained performance improvement through use of techniques such as DMAIC. Teams could comprise of the necessary mix of managers, doctors, nurses etc., depending on the project in question. Experts could be located in other Health Authorities with relevant experience; knowledge could be captured, shared and re-used. Over time, the organizational learning and capability would grow as those in it became accustomed to pursuing operational excellence in a structured and collaborative way in their day-to-day work, resulting in improved patient care AND lower cost as waste is driven from the system.

Such fundamental change would take time, and leadership would need to be sustained to keep the momentum, but how much more invigorating than simply ignoring the opportunity and throwing away money that can scarcely be afforded just to maintain the status quo.

The success rate for business change has not materially improved for 20 years in spite of increasing investment in management training and development.

I was recently talking to a global multinational that undertook a full review of how good they really were at changing their business – new processes, new products, restructuring, etc. They employed an external company to do the review against a set of realistic criteria such as achievement of the original change projects objectives, time to achieve benefits, stakeholder commitment, effective funding, etc.

They ‘kind of thought’ and ‘knew in their hearts’ that they weren’t getting the expected results and that they had very little sight of how change projects were performing as the business environment changed around them. An external organization was used to provide the objectivity and challenge to their thinking that they knew was critical to improving their capacity to change.

So, being very honest and somewhat brave in asking this difficult question, the poor result didn’t really come as a surprise. The extent of the weakness, however, was a shock:

Only 18% of the changes they tried to make were successful.

This, however, did cause management to pay attention. Everyone knew that if they couldn’t deliver change in a planned and coherent way they weren’t going to be in business in the long run.

The analysis was a real call to action against a simple heuristic: only 18% of our change projects succeed. There could have been a long debate about the measures, the projects conclusions, etc – but the measure didn’t really matter. They all knew they were poor at change, and this gave them a focus and collective understanding of the issue.

A couple of years on, despite a highly unfavorable economic climate, they have made some very impressive progress in a large and complex organization.

If many organizations took this approach, were honest and looked at themselves in the mirror, they probably also wouldn’t like what they saw!

See our Linkedin discussion on Top 11 things organizations often do with a dead horse for a more humorous further thoughts on this topic:

http://www.linkedin.com/groupAnswersviewQuestionAndAnswers=&gid=2923496&discussionID=20126230&goback=.anh_2923496

Over the past year, as part of the creation of the Indian development centre we looked very closely at which platform we should base our solution on going forward. Having built versions 1 and 2 on other platforms which required a high level of support and maintenance, with limited reusability, we looked at how we could build a more extendable solution which could reuse as much widely available, underlying functionality in a number of technologies. The aim was to have faster development cycles and produce a robust solution that we can rapidly deploy, so bringing new functionality to the market.
While there is no silver bullet to these needs, the key considerations we prioritized were:
Scaleable and robust platform
Great development environment
Evolving underlying functionality we can build on
Easy deployment in our customers environments (if they dont want SaaS)
Good architectural fit with our customers IT strategies
Easy to licence
Like many things in life there were compromises and any specific platform does have specific strengths and weaknesses but on balance we decided to deploy on MOSS Sharepoint and SQL Server.
A year down the line we have released a full commercially available version – so what have the lessons been?
We have recruited some outstanding developers with sound Sharepoint experience so we did get off to a flying start and we elected to develop our own user interface to ensure we provide a great user experience. We have leveraged many parts of the environment as you may expect IM, forums, multi language support, single sign-on integration, security models, etc and the core of our solution the lifecycles part came together really well as it leverages so much of the underlying functionality.

We have had great feedback from Microsoft one senior consulting leader described it as a lighthouse exemplar of a Sharepoint based business application we know we are on the right track.
Having tight control of the user experience is really important to us going forward we have the challenge of providing more and more functionality while making it intuitive so the design is invisible.
Whats next Sharepoint 2010 is almost out this will increase our rate of product development particularly around bringing the best of the social computing tools to the enterprise.
We firmly believe the platform choice was the right one and over the next few months look forward to lots of new cool stuff being deployed we are nothing if we are not innovative!!

We are tremendously excited about launching element8 and by our ability to add business-critical value to the challenges of transformation. Too many transformation programmes choke as they try to engage and sustain the whole organisation in business change: logistics and collaboration are just too manual, everything is too fragile when the memory of programme workshops and coaching fade away! Element8, oxygen in the periodic table, is vital for life and growth, and a technology-enabled toolkit is vital for todays transformation programmes. Organisation-wide engagement is where 80% of the value lies, and making this a reality has inspired and shaped element8s vision and roadmap over the past five years.

Its not often you get the chance to write about such a transition. Having led a consulting practice for the past 17 years, and then evolved element8 over the past three years into a full-blown software business (often via Andrew Loveless and I scribbling plans on the back of ecologically friendly serviettes in Londons Planet Organic caf), its been, and continues to be, an incredible journey!

Some of the milestones for element8 and our transformation platform, xpoint were:

STMicroelectronics, 2005 – working with technology leaders across Europe
- xpoint concept born whilst working with Phil Morris and Steve Jones to initiate and develop a Twiki as a collaborative leadership environment

Johnson Controls and Barclays, 2007 supporting a business turn-around
- xpoint beta delivered for Jane Skelton, Amanda Leonard and Priya Patalia to provide a collaborative transformation infrastructure for very dispersed teams
- excitement of seeing this come alive, millions of pounds of value being delivered, and backwater operations becoming star performers

RBS, 2008 supporting an innovation culture change programme
- xpoint v2.0, working again with Amanda Leonard, Priya Patalia and Saj Butt to provide a collaborative innovation infrastructure within RBS
- broadening the deployment in early 2009 to support two additional strategies, cost reduction and environmental impact, and again helping to deliver million pound impact

Summer 2008 strategic decision to build the platform on SharePoint technology
- leveraging the scalability, security models, and expansibility of core functionality

Summer 2009 development team relocates to new offices in Bangalore
- Continued evolution of a stunning product by a newly formed, hugely talented development team

Q1 2010 release of xpoint v3.0 platform and launch of element8

Over the past five years we have built a team that is incredibly talented. We continue to grow this team and use our own tools to deliver new capability, despite being a totally dispersed team.

Thank you for visiting the site, I hope it has some resonance with your experience.

There is lots written about how hard/challenging/difficult transformation/change/innovation are in companies the bigger the more difficult but there are two key issues which dont get raised enough (in my view..)

Hard decisions and transparency

Firstly – hard decisions. A couple of years ago I attended a Financial Times Innovate conference in London. The speaker that stood out was Syl Saller the Innovation Director at Diageo (it owns Guiness, Baileys, Smirnoff etc) and her honest insights into innovation and change in global companies. Syl described a series of key meetings about what they were going to invest in to support the growth of new global brands and what they needed to stop in certain countries where investments were being made in local brands. The (relatively) easy bit was where to invest the (really) hard bit was agreeing on what to stop.

Being a big company metrics drive behaviour so country managers, who ran the local P&L made local decisions to meet their revenue/profit targets. This was counter to growing global brands which, by implication, meant focussed investment in some geographies and lowering investment in others.

The hard decision was working with a country manager to free up local marketing spending for bigger projects but that meant a country manager may miss their targets which could impact their careers etc so deals had to be done based on trust such is the reality of big companies and having worked in IBM for 6 years these issues are a function of size and reach and really hard to mitigate.

Transparency is a killer. An organisation kicks off a transformation or change program gets consultants in to design and initiate. Consultants leave after the first phase when all kinds of projects have been initiated and the whole things stalls as most people go back to the day job and the rate progress is no longer as apparent. In many cases this may be due to lack of visibility rather than actual progress as people are spread across different countries and business units and are trying to manage via conference calls, spreadsheets and monthly powerpoint slide packs.

This lack of transparency can cause confusion, less alignment and additional work which in turn makes decision making slower, harder and interventions less effective.

The above is one story, but every CXO and middle manager I know can tell similar ones, regardless of the sector, geography, company culture, etc.. Having ways to surface these debilitating and often invisible organisational dynamics was a driving force behind the creation of element8 and xpoint. We know there has to be a better way, and we believe xpoint offers at least one important key to unlock this persistent problem.

When you have worked in senior management for nearly 20 years for the worlds largest technology company, particularly one whose tagline is Invent, you get to carry more than a couple of scars from the realities of organisational transformation.

The one thing that should be obvious is that it takes more than great software to become good at it. It takes courage, professional management, strong leadership and a resolve to succeed; and there will be times when walking on water might seem easy by comparison!

For some insight into the challenges, why not look up Mitch Ditkoffs excellent blog 56 Reasons Why Innovation Initiatives Fail at business-strategy-innovation.com. From Mitchs compelling list of 56, I am going to focus on 2 here, which to me hold the real key to achieving sustainable transformation in the real world:

1. Senior team not aligned and not walking the talk.
2. Lack of teamwork and collaboration, and lack of tools and techniques to help people.

Alignment is vital. I have sat in too many meetings where senior management teams ostensibly sign up to a common vision, goal or plan of action, and yet walk out of the room each immediately heading in diverging directions. The common issue here is that they have reached a compromise form of words on which they can all agree, but to which they have all put different interpretations. Remember agreement is not the same as alignment!

A useful tip here I find, is to write down any key decisions in writing, whilst still in the meeting, and drive out all opportunities for ambiguity. If disagreements exist they have to be brought out on the table and resolved.

Effective collaboration is an equally essential element of transformation. Two of my daughters have not long entered the workplace, one here in the UK and one in Holland. Their generation, the Facebook web2.0 generation, is struck by the lack of tools that exist in business compared with those that they access and live their life by at home. This lack of structure, of tools and techniques, add seriously to the challenges of teamwork and collaboration in the modern organisation. Social networking for the enterprise is one emerging capability that is closing this gap, but in and of itself it will never be enough.