Case study Tesco – Business transformation programme

Value realised

Having a well-structured business transformation programme, with the projects organised to give rise to the necessary business changes, and led to the earlier release of benefits and a quicker embedding of operational improvements. The structuring dealt directly with the problems that the four-quadrant management style, which while so effective in optimising the operational capability of the organisation, had stalled progress in delivering change.

Engagement focus

Six months into the business transformation programme progress was stalled and dissent among stakeholders was growing. Projects were competing rather than collaborating in bringing about the necessary changes, with sponsors focusing narrowly on achieving their project’s purpose.

CITI analysed the business transformation programme interdependencies that existed within the programme and was able to demonstrate that the approach to sourcing and funding, which ultimately derived from the four-quadrant model used by Tesco was artificially creating interdependencies and it was these that were causing the programme to stall.

By taking a pan-quadrant approach we reduced the number of interdependencies from 54 to 11, and introduced two types of business transformation programme interface management meeting (PIMM No.1 and PIMM No.2) to address these irreducible eleven.

Approach to solution

With the focus now exclusively on the delivery of business change and the benefits they would bring about – progress was rapid. Using a number of CITI consultancy tools, we shaped and restructured the projects and what they produced into tranches so that the organisation could step from one transition state to another. One of the tools that starts ‘with the end in mind’, called BIP (benefits – impacts – projects) was used to create a clear route map – showing what was necessary to achieve the changes required – and in what order.

This led to significant modifications to the resourcing, the sequencing and the governance of the projects – and all were seen as positive gains by the Board as the momentum of the programme, measured in terms of delivered value was visibly increased. By taking this approach, we reduced the interdependencies between projects, realigned business sponsorship to focus on organisational gains rather than functional ‘wins’ – a problematical approach when large-scale cross-functional change is the outcome sought.

Lessons learned

Programmes are sets of projects that are interlinked and therefore have interdependencies. However, good design finds ways of reducing the number of interdependencies to an irreducible minimum and that is one of the keys to releasing the extraordinary power of business transformation programmes to bring about complex organisational transformations.

Models / tools used

Business transformation programme management evaluations
Business transformation programme consultancy
Benefit – impact – product modelling
Tranche construction
Programme management toolkit
RACI

Value proposition

You can read more about the strategies used during this engagement here:

Further reading

We also discuss business transformation programmes here:
http://www.citi.co.uk/orange-merger-programme-delivery/

Your thoughts?

What are your thoughts – do you agree with our approach, or do the symptoms sound like the ones you are experiencing in your organisation? We would love to hear from you either by adding a comment at the bottom of the page or by emailing one of our consultants at consultants@citi.co.uk – or call +44(0)1908 283610

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Opportunity

This Government body had in place a Centre of Excellence Programme designed to create overall improvements in project and programme (PPM) capability. Training had been in place for three years and many of the managers were either PRINCE2® and/or MSP accredited.

The organisation used CITI’s profiling tools to understand the capability of project managers in order to match them to the varying degrees of project complexity. It was clear in some instances that skill gaps existed between the project manager and the demands of their project. It was also evident from our work on the development of a skills and competency model for the PPM community, that more sophisticated development approaches were required to meet specific development needs.

Approach

Together with our client we decided to put in place a supportive coaching scheme for selected project managers. Key to the success of this was diagnosing the nature of the individual need – should the coaching focus on development needs or tactical project concerns? Using the coaching intervention model the resource manager and the CITI consultants identified the primary focus of the coaching.

To be successful, developmental interventions must be seen as relevant, and ‘just-in-time’, with a real commitment to taking part by the project manager. Short, ‘speed-dating’ interventions were used to identify the concerns, the appropriate style to be used and the commitment – these set the expectations on both sides, and matched the coach to the ‘coachee’.

These ‘speed-dates’ were invaluable. As one CITI consultant coach commented: “…for one person it may be a directive (do this) approach, because they are on a high-risk track for their project and their skill levels and lack of confidence has ‘paralysed’ them. For another person it may be a supportive approach as they have a clear and distinct approach to their project. They are ready to be challenged and supported as they stretch themselves.”

Outcome

Within this UK intelligence agency a community of professional project managers has been formed. Complex projects are now routinely run by professional project managers, who feel able to handle them with confidence, and who recognise the benefits of sharing knowledge and ideas with other project professionals – exploring options, testing ideas, delivering results.

PRINCE2® is a registered trade mark of AXELOS Limited

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Value realised

Tesco operating model was transformed without disrupting the flow of goods to and off the shelves. The modelling carried out identified potential shortfalls and pitfalls that were addressed before implementation, reducing cost, reputational damage and senior management time.

Engagement focus

Tesco decided to move from opening 16 hours 6 days a week to 24/7. One of the fundamental changes to their operating model was that they now had to continuously replenish their shelves while open to the public.

Without the opportunity to close during the transition 16/6 to 24/7 the suite of changes had to be accomplished with as little disruption to customers as possible.
CITI, working with Tesco’s senior management teams, designed the target operating model (TOM) – or blueprint – of the new way of working and ‘proved’ that it could sustain the customer value proposition and business value proposition (benefits) for the vision of a 24/7 operation with its associated continuous replenishment demand.

Six months into the programme there was little discernible progress and growing dissent amongst stakeholders. Projects were competing rather than collaborating, change initiatives were being undermined by conflicting objectives between projects, with the performance impact on stores often negative. It was widely regarded by the different stakeholder groups that the project activity was failing to deliver business benefit.

Senior management were becoming frustrated by rising costs, delays and the lack of investment payback.

Approach to solution

Working initially with the various governance groups, CITI translated the stated strategy and vision of the overall programme into “as Is” and “to be” statements which in turn were mapped into the expected benefits, the explicit and implicit changes in processes, people and performance that were to give rise to the benefits, and the outputs that the projects were to deliver to give rise or to support the changes.

Through facilitating workshops and using desk-based analyses we developed and validated among all stakeholders a coherent strategic vision and initiatives for the overall transformational change initiative.

We used our proprietary BIP mapping (benefits > impacts > products) toolkit to develop the value model which directly links the benefits to the changes that are to be introduced in the organisation – and proving that these are able to give rise to those benefits and to what extent. The developed value model included specific metrics and KPIs for the changes that were to be introduced in Tesco.
CITI through the use of proprietary methodologies and toolkit provided evidence (visual and numerical) about the consequences of restructuring the projects, the relative effectiveness of different sequencing of many of the change initiatives, and the impact on benefits by de-scoping and re-scoping work streams.

It also became possible for Tesco to set up and manage the transformational change into a set of three ‘tranches’ – each with its own set of outcomes, and each taking the organisation to a new, stable state on its journey to the Board’s vision of the future state.
As a result of the success of CITI’s methodology and practice Tesco’s appetite for change increased, and before the first programme was concluded it had been overtaken by another major transformation programme which, from the start, used CITI’s methodology and toolkit.

Lessons learned

Together with the associated skills transfer from CITI to the client, they are able to successfully embark on other change initiatives with confidence. The importance of establishing clear ‘line of sight’ between the change vision, the work that needs to be undertaken and the benefits to be realised is clearly understood.

Models / tools used

SIPP Methodology
Benefit – impact – product modelling
Programme management toolkit
RACI

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Value realised

Clarity and consistency of delivery approach coupled to the ability to appropriately ‘tailor’ individual project’s assurance regimes at London Heathrow lead to significant delivery cost reduction whilst at the same time being coupled to increased safety of their investment cases throughout their projects’ lifecycles. These rewards arose from the controlled development and implementation of their Capital Delivery Divisions project lifecycle.

Mat Palmer a senior programme director at London Heathrow (LHR), who commissioned the piece of work, recognises CITI’s contribution “…the subject matter expertise, clarity of thinking and passionate facilitation provided by CITI all made huge contributions to the overall effectiveness of this initiative.”

Engagement focus

The situation that LHR faced was confusing. A legacy of numerous methodologies and independent processes, which were still extant and to some degree abided by, had led to the organisation attempting to introduce a ‘heavy weight’ consultancy-led homogenous framework. This failed to gain traction amongst the user community, probably because it was developed externally, with little or no involvement amongst the users and without any operational detail or considerations factored into the approach. A further contributory factor being that due to the segregated lifecycle in Capital Delivery projects there is invariably a hand-over from pre-feasibility, optioneering and scheme development to delivery; this, unsurprisingly, requires the careful management of different stakeholders.

Learning from the organisation’s costly mistake Matt decided to run a ‘Blitz’ week; during this he would corral the primary opinion shapers in each of the business units, involved across the entire product lifecycle, to resolve an appropriate overall project lifecycle at an architectural level. This would then allow the development of the detailed supporting sub-processes whilst, crucially, maintaining the buy-in and commitment of the disparate divisions. To flatter this ambition Matt was keen to ensure that the exercise of developing this process should be seen as organisational and not partisan to the Capital Delivery division – he therefore needed the work to be mediated by an expert third party.

Looking for an experienced facilitator, who could manage powerful stakeholders from different parts of the business whilst, at the same time, putting an imprimatur of expertise in assurance and change -lifecycle development on the exercise, led to the engagement of CITI.

Approach to solution

The solution was developed over a two stage process. The first stage was the ‘Blitz’ week itself. During this two CITI consultants acted as facilitators, scribes and subject matter experts on lifecycle development and application. A seven stage lifecycle with clearly differentiated gates was collaboratively developed against an input/output model. This allowed a powerful differentiation of entry from exit gates that facilitated modifications to the governance structure to give clarity over who would be making which decisions and on what basis at different points in the process.

On a daily basis the output and conclusions of the workshops were reviewed by the senior management team of LHR to ensure consistency, buy-in and alignment. By the Friday afternoon an organisationally agreed seven-stage architectural model had been developed along with a listing of the key inputs and outputs (mainly authorisation and control documentation – e.g. updated business cases) at each of the stage gates. The week concluded with a planning session to enable stage two to proceed.

Stage two was about the development and formalisation of the detailed sub-processes of the lifecycle that would allow the architectural model to function efficiently and with sufficient flexibility to be tailored to different initiatives (part of an effective assurance management process being about ensuring the assurance is commensurate with the complexity, risk and cost of failure of any given initiative). This was achieved with CITIs support in a mixed consulting/executive engagement. An example of this would have been the application of standard LHR levels of authority to different levels of complexity (as determined by CITI’s Project Complexity Analysis Tool [PCAT]) to establish the appropriate level of control and therefore stage gate requirements for any given initiative.

Working alongside the small internal team within Capital Delivery, who maintained vigorously active links with all parties involved in the ‘Blitz’ week, on a model that tapered down from a day or two a week to ad-hoc individual ‘draw-down’, CITI was able to maintain a degree of expertise, explanation and continuity that made the journey to the official launch and adoption of the new lifecycle as efficient as possible.

Lessons learned

Being able to apply simple, principle-based approaches during a week-long facilitated workshop, particularly with voluble and opinionated participants, delivers real clarity to all parties. These simple approaches however have to be underpinned by a profound understanding of the ways in which assurance can add value and what constitutes an appropriate level of assurance for any given initiative. Unless this can be achieved, the ability to deliver the optimum value through tailoring assurance will be lost.

Appropriate stakeholder engagement is invariably helpful in engineering successful change. Not only achieving early, high-energy, commitment but then maintaining an active dialogue during the ‘long-haul’ detailed development. The management of both of these to gain buy-in to, and acceptance of, the final outputs was one of the most significant factors in driving Matt’s success.

Models / tools used

The ‘Blitz’ week depended heavily on CITI’s use of its facilitative and educational skills alongside the application of the IDEF0 process model to generate an input/output view of the lifecycle. Lifecycle differentiation techniques were also deployed to remove the latent ambiguity, between project and product development lifecycles, that permeates many capital delivery organisations.

Tailoring of subsequent assurance and governance processes, arising from the developed lifecycle, was assisted by the application of PCAT which was suitably moderated for the particular complexities that LHR has to frequently deal with.

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Value realised

The approach and criteria provided to Diageo to establish which processes to roll out as ‘global’, which to set up as ‘common’, and which to be ‘local’ enabled the senior management team to allocate funds and responsibilities, which in their estimation saved them several hundreds of millions of pounds over three year.

Engagement focus

As part of its strategic review – including setting up a shared service centre in Europe – Diageo acknowledged the need to overhaul, reorganise and standardise its processes. It was recognised that a key element was to differentiate between global processes (identical across all Diageo’s markets), common processes (the ‘same’ across Diageo’s markets), and local processes (focused on specific markets).

A global process meant that it would be done in the same way, using the one system, with the one process and management team, and therefore in one location. In that way it would be executed in an identical way across all markets. It was also recognised that this would be an expensive process, particularly with regard to the change management aspects.

A common process on the other hand would be set up by different teams, under different managers, on similar systems in different locations. It was seen as likely that within a short time there would be small variations between implementations and this was accepted as inevitable.

Finally, local processes were under the direct governance of the local management team and were expected to be different as they were to reflect local circumstances.

Despite the practical and action-orientated culture of the organisation, the debate as to where the boundaries lay between ‘global’, common’ and ‘local’ was fast becoming esoteric. Senior management, frustrated by the circular nature of the debate, decided the discussion either ceased or was brought to a satisfactory conclusion.

Their preference was for the latter as it was accepted as potentially there were significant cost savings to be made by differentiating between them appropriately.

Approach to solution

CITI started by clarifying the Diageo change vision and strategy, and confirmed with the senior management the current organisational state (the ‘As Is’) and the desired future state (the ‘To Be’). We further assessed the change programme using our evaluation methods and it soon became apparent that a number of projects did not have a robust business case and were not being driven by their value to Diageo.

We developed a value model which directly linked the benefits to the changes that are to be introduced in the organisation – and proving that these are able to give rise to those benefits and to what extent. The developed value model included specific metrics and KPIs for the changes that were to be introduced in Diageo.

This identified which projects (and hence which processes) were not aligned to the business benefits and also the ones that the claimed benefits did not have any means by which they could be achieved. This led to the closing of those projects with no clear benefits case and to aligning others into a more coherent programme of change.

The Diageo board has since demanded that the CITI approach is adopted across their business units and for all its corporate projects.

Lessons learned

The importance of establishing a clear ‘line of sight’ between the change vision, the work that needs to be undertaken, and the benefits to be realised is ruthlessly pursued. In the end the final decision as to what type of process is what is determined by the level of contribution the decision made makes to the benefits and the vision. It is not a technical discussion.

Models / tools used

SIP Methodology
Benefit – impact – product modelling
Programme management toolkit
RACI

Value proposition

You can read more about the strategies used during this engagement here:

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Value realised

The ATM Working Group agreed to a Treasury initiative to address the issue of a significant number of communities living on low incomes and in socially deprived areas that had no access to cash machines, or only machines that charged a fee for withdrawals.

With the value of initiative re-framed in terms of benefits gained rather than products delivered, the governance group could now manage the project for value gained in terms of positive social impacts, competitive advantage, and other, wider stakeholder interests, as well as any additional revenue benefit they might achieve.

Engagement focus

The structure of the project was originally framed as a ‘mandatory’ project. It was seen as the installation of a number of cash machines in various locations around the country by a given deadline – and all to be done with a view to keeping the costs as low as possible. The project was regarded as a ‘drain’ on the investment options of the bank. The role of governance was thus focused on the technical aspects of delivery, and the constraints: the costs, schedule and management of the roll-out.

Approach to solution

CITI became involved through an initial workshop with the technical team, and offered some challenge to the assumptions underlying the existing project brief. This led to wider engagement of other parts of the business, culminating in agreement on broad terms of reference for the project that transformed it from being a mandatory technical task into one that maximised the value to the bank.

The project was restructured to take a more holistic approach that brought value to the bank by maximising the goodwill created, minimising potential negative impacts, facilitating local community engagement and leveraging positive feedback from the UK Treasury for their contribution to the initiative.

This involved a broadening of the remit to include non-technical work streams around stakeholder engagement and PR, and the management of non-technical risks related to local disruption or resistance.

Lessons learned

Classifying projects as ‘mandatory’ often causes organisations to lose benefits and opportunities go unnoticed. Badging something as mandatory should be a last resort – not a simple route to project authorisation. Once labelled as mandatory the project should be managed for minimum cost (there is after all no benefit) and reduces the sponsor’s involvement to the monitoring of constraints.

Models / tools used

Project Mission Model, a framework for engaging technical and business people in constructive discussion of project’s terms of reference

Value proposition

You can read more about the strategies used during this engagement here:

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Value realised

The company met its strategic vision of focusing manufacturing activities that provide sustainable employment in the UK. It also delivered the anticipated financial benefits of £148m cost avoided through the closure of sites, and a further £30m from the transfer of business activity from closed sites to retained sites.

As Bob Warner, CEO of Remploy, commented: “Remploy now has a really credible project and programme management capability, which is working to the highest professional standards. We now have what we need to meet the new challenges the company faces in its modernisation programme, including the building and development of successful businesses following the restructuring”.

Engagement focus

Remploy was set the challenge of modernising its business. The strategy required the closure of a significant number of factories – something that Remploy had never done before.

Previous attempts to restructure the business had not been successful. Important factors that had to be addressed were objections, on both moral and political grounds, from key stakeholders. To succeed the programme had to engage with these groups and to clearly demonstrate how the changes would culminate in a better and sustainable future. This meant a lot of planning, a lot of communications and participation in the planning, and a strong discipline within the projects to deliver what they promised.

Approach to solution

The scale and complexity of the change meant that using a project portfolio approach would not work. Project disciplines were needed to deliver specific results (e.g. the closure, merger and transfer of particular factories). But to deliver the benefits, to avoid unacceptable dis-benefits and to ensure groups were not inadvertently disadvantaged, required flexible approaches. The sequence of events were subject to complex negotiations, with the boundaries changing quite rapidly – with core elements of the scope, such as how many sites would be closed, how many employees would accept each of the different options available to them, and what level of funding would be necessary remaining ambiguous long after the start of the initiative.

For all these reasons, CITI chose a programme approach. This gave Remploy the ability to manage the overall complexity at programme level, including implementing changes resulting from negotiations or unexpected events, while maintaining absolute clarity about what each individual project was required to do, and managing the interdependencies at programme level.

Lessons learned

Ambiguity is sometimes unavoidable, and attempting to eliminate it too early leads to failure, with stakeholders feeling dissatisfied and their agendas ignored. Programmes, despite the significant difficulties associated with their management, are often the only management vehicle sophisticated enough to address this – as projects uniformly fail in the presence of unresolved vagueness.

Models / tools used

Benefit – impact – product modelling
Tranche construction
Programme management toolkit

Value proposition

You can read more about the strategies used during this engagement here:

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Value realised

Senior managers of Lloyd’s Register were now confident that their scarce IT resources were being deployed to deliver to their agenda in a near optimal way – and the development of the competence and capability of IT was closely aligned to the needs of the organisation.

Engagement focus

CITI were engaged to review the performance of the IT project management office (PMO). The Board were aware that the governance functions were not being exercised with sufficient rigour and believed that decision-making and portfolio choices were being made on an inadequate set of project performance data. The critical question that needed to be answered was, “What was the best set of projects given the resources (particularly IT resources) available?”

Approach to solution

The PMO was struggling to identify and monitor information that would aid decision-making, particularly in support of reducing resource conflicts caused by prioritisation issues between the projects.
The set of projects being monitored by the PMO were analysed and grouped by three distinct characteristics: business driver – enhancement, maintenance, or strategic; size and complexity – work packages, small projects, interlinked initiatives; and source – infrastructure, internal customer, external problem, which allowed for a much clearer allocation of governance functions and structures to be made.

This approach clearly identified two fundamentally different portfolios. Each had different monitoring requirements and required different governance structures to make the important decisions.

Workshops were conducted to engage the stakeholders, and to gain commitment to the change in management behaviours required. The Head of the PMO and her staff were profiled, as was the PMO in terms of functions, and a roadmap drawn up to align the capability of the personnel with demands being made on the newly structured PMO by the management of the two portfolios.

Lessons learned

‘One size doesn’t fit all’. Attempting to prioritise in the absence of good information, and when the projects being ranked have no agreed basis of comparison leads to a loss of control over the portfolio, and deeply discontented stakeholders.

Models / tools used

Portfolio analysis techniques
Facilitated workshops
Benefit – impact- product mapping
RACI analysis
KASE profiling
PMO maturation model

Value proposition

You can read more about the strategies used during this engagement here:

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Value realised

The Group Programmes division of HBOS, after an extensive survey, published an influential internal report identifying common, repeated failings across projects and programmes in the organisation.

The value of the ‘Right First Time’ initiative was set out at the outset. There had to be: clearer definition of projects; more engaged stakeholders; and less time and money spent on project rework. After three years, a senior I&IIT executive stated that they had audited that the level of rework costs had been reduced by 40%.

Engagement focus

The HBOS Investment and Insurance IT group (I&IIT) recognised that their IT managers were focused on delivery and were neither accustomed to, nor confident in challenging the business during project initiation and planning. Many projects began with unrealistic business expectations and most suffered regular ‘revision’ of the terms of reference in ‘mid-flight’, or were deemed failures by the business, generating mistrust between project teams and the business. I&IIT spent a considerable amount of its annual project budget on rework of existing project initiatives, rather than initiating new ones.

Approach to solution

I&IIT engaged CITI to structure and deliver a programme entitled ‘Right First Time’ to improve performance in setting up, structuring and planning of projects.
CITI engaged in a series of workshops to develop roles and responsibilities, and to gauge levels of competence with I&IIT’s project community. Master classes were arranged to transfer knowledge of good practice in project initiation, planning, stakeholder engagement, project roles and responsibilities, and focus on a project’s business outcomes. Workshops on actual current projects were used as vehicles for practicing and embedding the necessary skills. Through a rolling series of face-to-face interventions and document reviews, CITI were able to support the entire I&IIT project community in improving its performance in project initiation and planning.

Lessons learned

Improvement to project performance means project managers and business analysts adopting the right behaviours in engaging with, and challenging their business colleagues. Models and tools can illustrate best practice, but the most effective way to make improvement happen is to show what it looks like in real-life scenarios – projects that project individuals and the business have a real stake in. This approach is a powerful vehicle for facilitating peer-to-peer learning from experience.

Models / tools used

Project Mission Model, a framework for engaging technical and business people in constructive discussion of a project’s terms of reference,
Stakeholder engagement, holding project conversations
RACI model for project governance (accountabilities, responsibilities, consultation and information).
The Reflect-Learn-Act approach encouraged knowledge sharing and the problem-solving focus allowed the community to generate its own solutions to how the concepts should be adapted and applied within the organisation’s constraints.

Value proposition

You can read more about the strategies used during this engagement here:

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Value realised

The demands made on the capability and professionalism of project managers involved in the de-fuelling and decommissioning UK’s Magnox nuclear reactor sites are considerable. Now, when senior management allocated project managers and the other professionals they knew what the required competencies were, and were confident that the individuals chosen were either already capable or were being adequately prepared.

Andrew Smart, Director of Project Management, noted: “The new information we gained about our project community’s development needs is a huge step forward for us”.

Engagement focus

Magnox South is responsible to the Nuclear Decommissioning Authority for the safe decommissioning of Magnox reactors in the UK – each one is a complex and potentially hazardous project.

Andrew Smart, the Director of Project Management outlined the need: “We want to develop the capability of the individuals and of the organisation. We are not interested in a ‘sheep dip’ approach. We’ve had some experience of that in the recent past, and understand its limitations in making sustainable improvement in performance.”

He briefed CITI, “We want to better understand development needs across the community before committing investment in project management training. We also realise that we need to know more about the required competencies of our staff before we even attempt to bridge the ‘development gap’”.

Approach to solution

“Following a rigorous supplier process we engaged CITI. Their approach to assessing and establishing the ‘gap of performance’ between desired and actual capability was the basis for a ’demand-driven’ development framework for the project community of project managers, project control staff, and project team members”, said Andrew.

This assessment of core competencies in project management, as well as the specific technical competences required by professionals within such an exceptional environment, was used to provide individual reports that informed personal and management decisions about appropriate personal development plans. The process involved self-assessment, structured interviews and a 360 degree feedback process. CITI also provided population summaries and analysis that proved very useful to management in planning a development framework for the profession of project management.

Lessons learned

Project management development programmes that focus on method, without attending to the disciplines that lie ‘beyond method’ fail to deliver on their promise of improved performance. Having an understanding of method is important – it is just not sufficient. Perhaps even more important is the recognition that individuals have very different skills and learning needs and a ‘one size fits all’ approach rarely addresses this.

Models / tools used

CITI’s proprietary suite of capability profiling tools, supplemented by bespoke add-ons customised to the Magnox project environment.

Value proposition

You can read more about the strategies used during this engagement here:

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