Stakeholder Management Is the Key to Enabling Innovation and Digital Transformation

Heath:

Welcome to the Business Transformation Podcast. I’m your host, Heath Gascoigne. This is a show where I cut through all the hype and noise and get to the facts of what actually is business transformation and what is required, how to and how not to do it. I’ll be talking to industry experts and professionals to share their stories, strategies, and insights to help you start, turnaround, or grow your business transformation. By the end of this podcast, we have some practical tips to use to make your business transformation a success. Whether you’re just at the start of your journey or midway through, I hope you enjoy.

Heath: Hello. Welcome. My name is Heath Gascoigne and I’m the host of the Business Transformation Podcast and this is the show for business transformators who are part business strategists, part business designers, part collaborators, and part negotiators who’ve moved just past design and also includes implementation of those transformations which means also including stakeholder management, coordination, and negotiation. If you work in strategy, development, and implementation and you work to ensure that that strategy is aligned to the business design and technology, then you’re probably a business transformator. This is the show where we speak to industry experts and professionals to share their stories, strategies, and insights to help you start, turnaround, and grow your business transformation. Welcome to the Business Transformation Podcast and in this episode, we’re talking to one of those industry experts. We’re speaking to Keith Straughan who wears many hats and titles. He is currently the director of Imcom Consulting, offering tailored advisory board coaching services and education, healthcare, and technology; current partner at Ekim as head of higher education practice; served as NED, non-executive director at Habitat Learn; independent governor at Falmouth University; and many, many other roles. Keith currently holds his professorships in design engineering in London, digital health care in Vienna, and international education in Kuala Lumpur. Keith, it’s a pleasure to have you on the show. Thank you for your time.

Keith:Hi, Heath. Great to see you againand a delight to join you on the podcast. Thank you for having me.

Heath: Oh, pleasure, pleasure. You know, we haven’t talked about this yet but we have a few mutual friends. Yeah.

Keith: It’s a small world.

Heath: Oh, it is a small world. It’s a small world. Now, for the audience here, Keith has a mass of experience and knowledge across all different sectors, verticals, has a strong focus, has spent some time in higher education as a professorand also in practice. So we have the benefit here of having both a practitioner and an academic, academia. So,to set the agenda for the call, because I personally, I get a lot of inquiries and people asking me and emails and chat bots and everything else about different approaches that are currently used today versus aligning what was done at some point in time, a particular framework that was used for something else. For example, TOGAF, traditionally used as an enterprise architecture tool framework, it is — those that know TOGAF, it is designed by The Open Group. The Open Group is on the website, which I even wrote in my book.On the website, they are a technology standards company and their focus is on technology. What is happening now with business transformationor digital transformation, as it’s called now, is that they’re using frameworks that were once designed for something elseand they’re being repurposed to use for another purpose. And then there’s a little bit of — well, not exactly have been adoptedor adapted or fit for purpose and so then some issues are arising from that. So, Keith, from your professional practitioner experiencebut also from an academia experience, what are you finding with the way that frameworks have been developed and are using and are they being used the right way today?

Keith:Yeah, I really echo your comments there, Heath, and, indeed, the concerns you’ve expressed, because I think weall too easily take frameworks off the shelfor rather pay consultanciesa large amount of money to take frameworks off the shelf and fit them into to our context. And I think, you know, context is king here really. I think —

Heath: Yes, context.

Keith: — you really need to understand the particular organization, you need to understand its beating heart, its purpose, its people, because, you know, without knocking the framework, you know, theoretically, there are some very good things there, there’s some very good evidence of past use. But as with any sphere of activity, if you take a framework developed in one areaand try to kludge it into another area, you don’t always get optimum results —

Heath: Yes.

Keith: — and particularly when you, in the process, ignore the context and indeed ignore the people. One of the things that worries me deeply about digital transformation programs, whether it’s in education or health care or technologyor, you know, just general innovation is that a huge amount of attention and, indeed, a huge amount of money is spent on the tech and the consultancy piece and all too little applied to the people —

Heath: Oh, yes.

Keith: — and unless you actually address the people issue, you’re never going to leverage the benefits of the technology. And part of that is not just about enabling people to understand the technologybut to ask the right questions of the technology —

Heath: Yes.

Keith: — what might seem like a trivial examplebut it’s from education and, obviously, COVID, for education, as with many areas of business endeavor, has really accelerated the digital transformation program in leaps and bounds and so higher education as with K-12, etc., pivoted very, very quickly and, you know, full praise to them for the way they went onlinequite quickly. And one of the things that worries me is that educationand, indeed, with other sectors, probably now have deluded themselvesthat we’re online, we’ve done digital transformations, whereas by and large, all they’ve done is they’ve taken their existing lecturesand put them on Teams. Now, that’s not digital transformation. And even more than that, I had a really interesting argument with a very eminent law professor quite recently and he said to me, “Keith, you know, the problem is that my two-hour law lecture simply doesn’t work on Teams,” and I challenged him and said, “Well, what makes you think your two-hour lecture worked anyway?” And, you know, if we take the education example, if we’re trying to pivot onlineand we simply take an old approach, chalk and talk, which has its own limitations, and then simply put that into a sexy digital environment, we’re not gonna get the transformation in education that we —

Heath: Oh, yes. Yes. I have a thing where I sayif you started technology and add more technology, you will not end in transformation.

Keith:Yeah, absolutely. And even going back, you know, several decades when I first got into healthcare, it was from a radiology perspective so I was on the team that rolled out the world’s first clinical MRI scanner —

Heath: Oh, wow.

Keith: — in ’81 and it was really interesting that actuallythe images that people liked mostwere the really crisp, beautiful images. The images that told the medicsthe most diagnosticallywere often the images that didn’t look as good. And so people will often sort of fine tune the techor operating the tech to produce glitzy images but they weren’t necessarily the images that conveyed the most diagnostic information.

Heath: Yeah, they’re not the most useful.

Keith:Yeah. And it’s exactly the same problem in another vertical, isn’t it? We need to be asking ourselves constantly the questionwhat is it that I’m trying to extract from this toolkit, be it a piece of digital technologyor a business process, and, you know, fundamentally, by and large, that’san information problem, isn’t it? You know, what information am I looking to extract? And, indeed, how am I going to turn that information into actionable knowledge and understanding?And I talk a lot about what I,I know this term, the knowledge spectrum, so if you imagine a line with one end dataand, you know, in the world today, we are, you know, just overrun with data, and when we begin to synthesize that data, we can begin to coalesce it into useful information sources. So, Google, Wikipedia begin to allow us to do some processing. But, actually, that information by itself is meaningless until we begin then to further process itand distill it into a knowledge base. And as we begin to interrogate that knowledge base and ask questions of it, that then develops an understanding of the context in which we’re dealing. And then, over time, with experience and often with failure and lots of knocks —

Heath: Learning, yep.

Keith: — that becomes wisdom. It seems to me that actually the job of educators is to take people on that journey from data to wisdom. But in the — certainly in the digital transformation world, in edtech, most edtech products spend their time down at the information data endand very few of them, it’s beginning to happen now but very few moves up into the knowledge understanding space, but actually moving along that knowledge value chain is absolutely key if edtech is going to be transformative. But the same is true, isn’t it, of healthcare, you know, that actually, you can have these rich information sources that tell you a lot about the clinical symptoms or the physiological operation of the body but until you turn that into actionable knowledge, then you cannot begin to make decisions and interventions. And you could say the same was true in financial servicesand so on. And so I think we need to have this sort of background sort of almost dialogue within our heads as sort of business transformers, the knowledge chainwithin that particular vertical, within that business, within that bit of tech, and whether we construct it in a way that enables actionable knowledge and actionable decision making and impact within that domain. Does that ring true with your experience?

Heath: Yes. Yeah, currently, we’re helping a client now and they have a process they use for managing their capital projects and it’s now morphed into mini versions and the challenge they have with the business or the business practitionersis that there’s a lot of information in this processbut no one else can see it. They’re all in silos and they can’t get any insights, anyactionable insights out of that, as you’re saying. Any interventions. They hear and learn about events last minuteand the actions and so the quality of some assessments or evaluations or estimates are not done to the rigor that they would like so, yeah, knowledge is a major part. And I think, like you said earlier about the people part, they’re not asking the right questions. Not asking the right questions of both the people but also what of the technology that can help the people. Yes, and my role, they asked me on this project was to come in and digitalize the whole thing, and I said, “Are you sure that’s what you want to do?” First, we understand what the process is firstand then we understand what the pain points are and then we understand if there’s a priority to addressing them and then we might come up with a design and if one of those things is to digitalize it, then that’s probably gonna be part of itbut I’m not sure it’s all of it. Yeah.

Keith: Absolutely. But actually, it’s so easy to knee jerk, isn’t it? You know, we have this business problem, the answer is digital transformation, you know? Whatever the question is, the answer is digital transformation.

Heath: Oh, yes.

Keith:And that really misses the point. And I’m sure you, like I, have wasted many, many days, if not years, of our livessort of in transformation programs where the correct prior questions haven’t been asked or addressed. And if you’re starting with the wrong context and the wrong specification, the best transformation process in the world is never going to deliver what you hope it might.

Heath: Oh, yes. Yeah, yeah. Exactly. When Istarted with this client, they had already said that they had developedtheir true north, they called it a vision, but I think they mixed that with a mission at the time, what their purpose wasas opposed to what their, you know, one single vision was, they’re why, what they want to get out of it. And they saidthey want to have enabled the practitioners, the professional experts to work with some men who have expertise in autonomy and use the expertise but this vision statement was all about technology. And I was going, you know, if your thing that you want to achieve is all parts of people, process, technology, and data, but you only speak to really the technology element, I think you’re gonna struggle. And they said, “Well, we’ve already done the vision.” And I said no, I think you’ve actually done the mission, and then so, thankfully, the client was open to the suggestion to think about it and then they went back to theworkshop that was the senior leadership teamand then they’ve come up with a new one now so it’s fantastic. But not a lot of people will do that.

Keith:No, absolutely. And it’s very hard then to retrofit, isn’t it? If you haven’t got that sort of foundational level right, all is going to hinder you. I was involved in a really interesting programback in the early 2000s at a world-leading university, perhaps it should be nameless. And it was, I mean, a university that sort of excelled in the digital space, in the innovation space, but its own internal business processes were very archaic. So, for example, its central admin and its individual faculties and the constituent collegeswhere the students were basedwere not linked.Information used to pass between them by porters riding bikeson pieces of paper. So, something would have been printed out of one computer system in one placeand carried by bicycle to another place and input into the next computer system. So, we had to design a sort of an information system, an MIS, a student record system,to expand that. Now, MIS, you know, specification is normally relatively straightforward but here you had so many stakeholderswho took very strong vested positions that actually, it was impossible to take something off the shelf. It had to be —

Heath: Oh, yeah, custom.

Keith: — a new build in Oracle but, actually, it was long, it was expensive, but it was very successful.It put the stakeholder engagement pieceright. And the technology piece was a doddle in comparison. You know, that was really easy, challenging though it was. It was the stakeholder management and engagementpeople to even accept the sharing of data was important, let alone how to format that andwho had access to itand who could just read it, who could change it, etc.

Heath: Okay, just — on this point here, for the listeners to hear this very clearly because — in the context of your backgroundas, you know, you’ve been in technology, education, innovation many, many years and so you could have a tendency, if you wanted to,if you had the perception biased that way towards technology, but here you are saying the key is stakeholder management. Now, I think for a lot of technologists who love to play with their toys and the latest tech and almost design it and throw it over the fence of the business and go,“We built it. There it is. It’s amazing,” but the business is going,“Well, you know, it looks good, it sounds good,” but from your perspective, other technologists that come along and go, “Okay, I know the technology is going to feature here somewhere in this end solution but maybe we should take the time to understand these stakeholders.”

Keith:Absolutely. It’s absolutely crucial and I’ve seen so many projects fail to achieve potential or fail outrightbecause that people part, either the stakeholder engagement pieceor the equipping the people who are using the tech to deliver it, if you get those wrong, it can be a hole beneath the waterline.

Heath: Yes. Oh, yeah, yeah. That is a great analogy. I’m gonna hold you out of the waterline, because that is what it’s like, you’re likejust soaking it up.

Keith:Absolutely. And, actually, a lot of my consultancy at the momenttakes me away from that sort of central tech piece into the people piece so, you know, when I’m working with companies looking at innovation, we, of course, you know, look at, you know, all of the models and design thinking or whatever, you know, might be a part of that process, but, increasingly, I try to take them away from that and say, “Let’s devote some time to the stakeholder piece, to the culture piece,to the coaching piece,” you know? How do we coach people to be innovatorsor to feel comfortable with innovation? Because the psychology of this is every bit as important as the technology.

Heath: Oh, yeah, not one more than the other.

Keith:But it’s true.

Heath:Yes. You mentioned a great point there about the culture. Like I’vesaid many times on this podcastand I think in the book is about, you know, it’s a cliché, culture eats strategy for breakfast, you know? It doesn’t matter how great your culture is — or your strategy rather,if you invest a lot of money in your strategy, if the culture isn’t on board into it, then forget about it.

Keith:Absolutely, absolutely. And there are no easy ways to do that. You can’t, you know, just press a button and you can’t necessarily just take a rulebook off the shelf and say, “There it is.” You know, culture takes a long time to establish.It takes a lot of very careful work to understand and open up and deconstruct and put back together again.

Heath: Yeah, the new ways of working, behaviors, driving the right behaviors.

Keith:Yeah, and, you know, humans arecomplicated, sensitive creaturesand, you know, my experience is you cando the brute force and ignorance approach, and, you know, sometimes that’s necessary and sometimes that works but, by and large, you get much more nuanced and effective and long lasting results if you invest the timein, you know, getting alongside that culture, understanding the culture, teasing into it, and enabling people to own the changes in the culture that are necessary to enable everything else.

Heath: Oh, yes. You hit the nail on the head there with the enablement part. I think that’s probably one of the missing things I see with consultancies anyway coming into help the clients out and sometimes I wonder why the client even bought a consultancy in, why don’t they just build it, you know, and develop the capability themselves. Because what they end up doing when they bring in some consultancies, the consultancies don’t develop an internal capability, although that might have been a deliverable for them to do for the client to establish some form of capability to enable them to do it again and again, but what they end up doing is creating a dependency. So the client is always dependent on the consultancy. So, yeah, have you found that?

Keith: Yes, I have. Absolutely. And I think it behooves consultants and coaches, you know, the same is true in coaching, it behooves those professionals to actually sort of watch out for those dependencies and to sort of to break them, to encouragethe appropriate distancing to take placebecause that doesn’t do anybody any good. And I think sometimes, you know, companies and individuals look for those outside consultants or coaches, you know, from a sort of confirmation bias perspective, you know, “We’ve done the diagnosis, we’ve decided what’s wrong, we’ve decided what the solution is, and we want you to come say, yeah, that’s right, and do it.” Whereas, actually, the role of the consultant or the coach is to come in and say, “Oh, can we just go back to your starting assumption here? Can we take a look at that?” That’s often not welcome.

Heath: Oh, yeah, yeah. I think, you know, with the team I’m with at the moment, coaching them through it has, you know, it’s about having those uncomfortable conversations and it’s not an ideal situation to be in to come and join a project and then start to unpick previous decisions but you need to challenge why those decisions were made and on what basis they were made.

Keith:Yes.

Heath: Yeah, just what you were saying there, yeah,

Keith: Yeah, yeah.It’s sort of — I was talking to someone just yesterday about the whole COVID pandemicand around use of data and we were bemoaning, and I’m sure this is perhaps a worldwide phenomenon, but we werebeholding the sort of numeric illiteracy and statistical illiteracy of the UK population and the politicians in particular, saying that, actually, you could look at this data set and you could take away a position of despondencyor a position of hope from the same data set if you’re not asking the right questions of it.

Heath:You can interpret it any way.

Keith: You can. And, you know, we often find that in our work too, so you go in and if people aren’t asking the right questions of their context, then they can make some decisions that are sort of 180 degrees out —

Heath:Yes. Oh, yes. So then, good point there. So it is about asking the right questions. So, what are some of the questions you ask, if not all the questions you ask, and is there in order to those questions? When you join a program, the client calls you up and says, “Keith, we need you to come in and fix this,” what’s your process that you follow?

Keith:It varies enormously by context and I think it’s driven often by the people that you have in front of you. And, for me, I start probablyquite strongly with a sort of a psychological bias because I’m trying to work out how precious the people are who are sitting in front of me. You know, is there a confirmation bias there where they’ve already really decided what they want and I’m going to then have to tease into that? Or do I have people who are much more secure and open and aware of the known unknownsand aware that there could be some unknown unknowns as well? And if you’re operating in that sphere of openness, I think you can begin much more directly with the sort of key questions which are understanding context so, you know, where are you at the moment in your business on that knowledge value chain? Do you have good systems that are giving you actionable insight? Or are you fundamentally limited by the information sources that are flowing to you? Because knowing where you are in that spectrumwill help you understand fundamentally what interventions are necessary.

Heath:Yes.

Keith:I was working with a company just yesterdaywho, actually, it turned out that they had remarkably effectiveactionable informationbut they weren’t using it. So, for them, they didn’t need me to do anything particularly clever around their MIS. You know, the data was there. They were either not aware that it was thereor unaware that it would answer the questions they were asking, or, in some cases, they didn’t even know the questions that they had to ask. And so I think, you know, the toolkit that you deploy in these situations is so context specific but, fundamentally, people waited at the outset. So I spend quite a lot of timethe outset of an assignment like this getting under the skin of the people,trying to understand them and their level of securityand insight, whether they understand the business and, to give the example you gave earlier, whether there’s real alignment around the vision and the mission? Or do you talk to different people in the organization and you get very different responses?

Heath: Yes.

Keith: So, in fact, people are asking for different things from the transformation process and, you know, which are the right things? But I think if you get that bit of the process right, and in my experience, it’s rare that you can run into one of these projects and go straight in with the sort of strategic questions and the technical questions. A lot of the time is around the relationship building and the trust buildingand understanding the stakeholders and their relationshipsand the vested interests and —

Heath: Oh, yes.

Keith:And, actually, once you begin to tease into that, I think you’re much better able to ask the right questionsor rather to ask the questions in the right way that’s going to elicit more honest and open responses. And out of that, you can then do the, if you like, the functional specification, but I would only sort of begin to do the functional specification of the task at hand once you’ve completed that process.

Heath: Yeah, okay, so relationship building, trust building, stakeholders that were identification management, engagement and then see what the vested interests, if it’s a political, not so government but political organizationor political power plays or empires that are getting built or wanna o be protected, I think probably the biases will be coming in there because people want to protect certain territories, if youlike, in the organization. I’ve seen that.On one assignment I had for a big bankhere in UK, they wanted to outsource some roles to India and the COO in India, who had 400 headcountwho was just rubbing his handslooking forward to inheriting some more staff, he’s going, “Great, these new roles are coming my way, fantastic,” but he said to me, he said, “AlthoughI stand to make the most out of thisand my empire grows,” which means in terms of bonuses, it looked everything was very good for him, but for the service that we want to provide to our customersand also our partners, for us being we were, yeah, in India, and the lack of expertise,we’d need to heat hunt from our competitors and we don’t have lane location so we have to buy, we need to custom build, we are many years behind our competitors here so it was gonna cost us a lot of money and also the time zones,they operated in India standard time versus other parts of India operated in Greenwich Mean Time so he said,“We’re not gonna have an intern workflow,” and he said, “As much as I stand to gain from this, I recommend you do not go ahead with it.” And I was like, wow, this is a guy that stands to make the most. I said that is very rare. I said, wow, so my recommendation was based on that and a lot of other stakeholders, dealing with the stakeholders. Again, not to go ahead. But that was very rare that I think you get an opinion like that.

Keith: Yeah. I was in a situation recentlywhere one of the key stakeholders in the businessbasically was saying to me, “Fundamentally, the right answer is to get rid of me. We need to construct things so that I’m no longer necessary.” And I know this was an individual who’d done the same previouslyand that’s a very special person —

Heath: Oh, yeah.

Keith: — separate their own personal interests from the interest of that business or their organization. And I think, you know, there’s another part of this, Heath, which, you know, I’m sure we good consultants do instinctively, but I always try and sort of make sure that I’m regularly checking this is, you know, just the same way that the clients can have a confirmation bias —

Heath:Yes.

Keith: — so can I. We need to be very careful when we go into a situation not to sort of prediagnoseand, you know, go in thinking, “Oh, I know what the solution is here.” We may be right and it’s okay to have some starting assumptions to kind of get us ranging in the right place, but the actual answer might be something quite different.

Heath:Yes,yeah. You raise an interesting point there. You know, I think — coming back to the frameworks and your point you just mentioned, I think the frameworks are good and used, I think they are used proportionately and appropriately. They’re not used taken off the shelf and applied 100 percent. So the skill there or the issue is the skill of the consultant or the skill of the business transformator, not necessarily how good or bad your framework is, it’s the skill of the practitioner to apply those different frameworks proportionately and appropriately.

Keith: It is, yeah. I think that’s absolutely right. And, you know, I think the tendency is that we, because in many of the context which we work, the solutions are very complex and the logical implementation is very complex, but sometimes, as you alluded to earlier, the right solution is the low tech solution. And to be able to step back from thatand say, “Actually, you really don’t need this. You’vealready got what it takesor we just need to reconfigure what you’ve got.” And, you know, the big sexy digital spend is not always the right answer.

Heath: Yeah, yeah. I try and impose and press on my colleagues about when we can see that we could deliver this thing in 6 monthsor 12 monthsas opposed to 2 years or 3 years, let’s just do it in 2 years or the short amount of time.We don’t need to try and fatten out the work, if that’s the word, so that we can stay longer and bill more hours. It’s like you have to — if you deliver this for the client, the client will transformand now they have a new problem to solve once they have transformed. And business and organizationsare always changing so there’ll be another transformation coming up, don’t you worry. But to spend 3 years on the same thing and get nothing, yeah, have you found that?

Keith:Oh, for sure.And, you know, I think sometimes — and it’s great temptation, isn’t it? Because we, many of us are perfectionists and, as professionals, we want to rise to the pinnacle. But I find myself often having to say to organizations and indeed to individuals,“Good enough is good enough.”

Heath: Oh, you see, another great quote there, Keith. Good enough is good enough. That’s good enough — I think that is missed by a lot.

Keith: Yeah, and, you know, I’m using that phrase an awful lot within my executive coaching. So, you know, aside from, you know, a transformation issue just working withC suiteand senior directors, you know, who are understandably and constantly questing after excellenceand, you know, their time spent in business, as in life, we need to be very pragmatic and say, yeah, you know, I could really sweat this asset and squeeze an extra few drops out of it and spend a huge amount of time and fortune doing so, but is it worth it? Good enoughis often good enough.

Heath:Yes. Yes. That is —

Keith:Unless —

Heath: Who’s good enough for who? You said a good point there about the excellence. I think that’s a, I don’t know what’s the word, a misnomer, it’s a term thrown around almost like business transformation, digital transformation, you know, what is digital transformationif you’re just replacing your legacygeneral ledger systemand now reinstalling an SAP relational database. Was that a transformation or are you just doing a new system upgrade?

Keith:Yeah, that’s right.

Heath: Yeah. Are we talking digital transformation or we’re just talking system upgrades here?And when you’re changing the business, maybe the business model is changingor maybe the what,you know, the capability, it doesn’t change, but how, you might have automated itin some way or fashion, now the how has changed. It’s like sayingexcellence. So how are you gonna pin down excellence? What’s excellence — if everyone’s trying to be excellent at everything, I tell you how much excellence you’re gonna get.

Keith: Yeah.

Heath: You’re gonna die trying. Yeah.

Keith: Yeah, for sure. Yeah. And, you know, going back to myknowledge spectrum —

Heath: Yeah, I love that.

Keith: — that’s where the wisdom bit comes in, isn’t it? Knowing when good enough is good enough. Knowing when saying, “Yeah, I could fine tune this, you know, I could bean F1 team and I can always tune that fraction more out of that engine but, actually, is it gonna make any difference to my overall performance? And, you know, is my investment as a business in fine tuning that output really going to affect my EBITDA? Or is the amount that I need to spend to achieve that going to wipe out the advantages?” And, you know, that requires great wisdom. I think the consultants and the whole team and the clients fundamentally are the people who need to make that decision. It’s not for us to say when you’re good enough is, it’s for us to equip them to make those decisions for themselves.

Heath:You said a great point there, Keith, because I think a lot of clients, they get, I’m not sure if the word is “threatened” or they feel threatened, that they feel that the consultancy is making the decision for them whereas it’s actually the consultancy is more likely presenting options or recommendations for the client to make the decision but the client is seeing it as, “It’s not our decision anymore, you’ve made it for us.”

Keith: Yeah. And once that mindset is in play, it becomes very hard to maintain any sort of trust in that relationship and things often don’t end as well as theycould. And, you know, that’s why I keep coming back to the culture and the people piece that, you know, ownership for them is fundamental.

Heath: Oh, yeah, yeah.

Keith:You know, they’re not commissioned to, you know, go off and build —

Heath: Think for them.

Keith: — we’re giving them something which is theirs to own. They’ve got to inhabit it and it’s a bit like, I guess, the difference between a house and home, isn’t it? You know, we, as consultants could put the framework up there. It’s a shell. It’s a very pretty shellbut it’s a shell and it’s only when the family occupies it, it’s only when an organization occupies it, that it begins to turn into a home and has a life of its own. And we have to enable that sense of ownership, don’t we, so that the shell we give them is maximized for the lifethe organization wants to live within it.

Heath:Yeah, that’s a great analogy, a house and a home. Haven’t seen it — haven’t thought of it that way but that’s exactly as it is.You might provide that structurebut without them being able to work within it in the way that they want to, that allows them to perform their best, achieve what they wanted, the vision purpose, then, yeah, otherwise, it’s, yeah, empty rewards.

Keith: Absolutely. And I know within HOBA Tech, you do a lot of coaching as part of the offer, don’t you, Heath? And I would imagine, certainly my experience is that the coaching skill set is not something which is just a sort of an add-on and a wraparound.Quite often, people think, “Oh, well, we got the transformation done and then we’ll do some coaching to enable people to work within it,” but, actually, I think a really effective consultant is someone who has that coaching mindset so all the way through the process, they’ve got those people skills at play, just understanding the right question to ask or understanding from the unsaid what the barriers areor where the pushback might be. And it sounds as though I’m pushing the people piece way too hard but I think it’s so important —

Heath: Oh, yes, yeah, yeah.

Keith: — culture piece is an important part of the whole thing. And, you know, maybe we need to come up with an L word for culture, because I know you’ve got your three L’s in your practice, haven’t you?

Heath: Yeah, yeah.

Keith: Maybe we need an L for culture of some kind.

Heath: Yeah, come up with a new one so the layers, language, and levels, yeah, layers and organizations, strategy, ops, and implementation. They have a level of detail, high leveldetail, and then the language they use is a different language. Yes, absolutely. Yes, we need one for culture. Absolutely. What can I come up with culture?

Keith:Maybe culture wraps around the whole piece, maybe the C wraps around the three L’s —

Heath:Yes.

Keith:In some ways, I guess maybe they define the culture.

Heath: Yeah, that’s why — how I describe when people look at the visual map and they’ll say,“You’ve got your vision, your strategies, objectives, and measures so where’s the mission?” I say, “Well, the mission would actually be wrapped around the whole thing,” because every part of what we’re doing is for the purpose. That’s the purpose of what we’re doing here, why we’re here. So, yeah, culture could be — yeah, that could be a way to include it. You said a good point there earlier about the ownership for the stakeholders. Now, I have, with this current client and the team that I’m in, is we, and cautious of the point that you also said about our, as consultants, own perception biasor confirmation bias that we ourselves must self-verify, self-check ourselves, we might have an idea of what that end state looks like, what the journey looks like, and I try to explain to my colleaguesand also the students is that we’re leading them down this path, this transformation path, and what will happen is we go down the path, we’ll share more of what we are showing them in terms of the problem that they’re facing so their perception of their own problem will change and then the priority of how they want to address it will also now change. And so my colleagues will push back on me and say, “But are you pushing them down to the end state that we want?” I said, “Well, it’s like this. Yes and no. We know where we’re going to end up but we want them to come to their own realization.” Because if we make the decision for them, the point you talked about earlier, if they can embed it, embed this change,that once the consultants had left, they’ll go,“There goes the consultants, bye,” and then they’ll go back to their old ways of working. They’ve never embedded the change.

Keith:Yep, absolutely right. It’s so important, isn’t it? I think it’s also very important that as consultants and coaches that wefeel sufficiently confident and self-assured to be able to step away and say, “I think I’m the wrong person for you. I don’t think I necessarily have the skill sets or maybe I fixthis sort of problem too much and I’m now just thinking in a certain way and maybe you need a fresh voice,” which is why I really liked working in teams because I think it’s really helpful as consultants that we can actually argue among ourselves and bring fresh insight and say,“No, I think you’re reading too much into this, Keith,” or,“Have you thought about this?” and I think that produces really good results.

Heath:Yeah, on that point of teams, you know, I think in culture, I’m a big fan of the — a lot of some of the collaborative workand workings. But now everyone’s working from home. We’ve almost made it a rule now that we must have at least one day probably now two into the office because when we get people in the office togetherand the collaborative work that we’ve done on whiteboardsand a whole wall of whiteboards is that we’ve just done leaps and bounds and heads apart of what we thought we would have been. But now we’re working from home and people go, “We’ve got mural boards.” And I go, you know, everyone’s using murals. And I was going, I think the — there’s no spokesperson for culture here at the moment and the culture is the silent victim.

Keith: Yeah, absolutely right. Absolutely right. And that is a real challenge and, I mean, you and I are techies through and through, you’d expect us to feel very comfortable with this but our experience tells us that, actually, until you have the degree of physical presence, it’s really hard to feel the pulse. It’s a bit like, you know, doctors, physicians now having to do triage by video and, you know, if you can’t feel the pulse of the person, if you can’t read their body language, you’re missing out important bits of information and I don’t know about you, but Ireally like to walk the corridors, you know, when I’m working with an organization. I just like to be able to wander around and, you know, pick up the vibe —

Heath: You feel the vibe, yes.

Keith: Yeah, and that tells you an awful lot about the culture piece that informs your conversations and your questions and your diagnostics.

Heath: Oh, yeah. I’ve got a program manager I used to work with in Australia and I posted something on LinkedIn about culture and he said, “Oh, no, work from home 100 percent, we’re only going to come together for a meal.” And I said, so why don’t you just have a meal on your laptop on the screen? “No, no, we need to be —” So you think you need to be in the same room beside each other having a meal, sharing a meal, but you cannot be in the same room together working on some piece of work collaboratively together? Can you not see how — those will be similar activitiesbut you put more value on one than the other?

Keith:Absolutely. And, actually, sort of the first businesses that I spun out when I was on the faculty and my patterns, they all found their life over a beer in a pub, you know, having casual conversations, not I drink a lot of beer but, you know, it’s sort of — it was in that environment where you suddenly spark and A plus B now equaled F and, you know, this crazy idea was just pitched inalmost as a laugh,“Well, we could do this, couldn’t we?”

Heath: Yeah, and then —

Keith: — responding, “Yeah, we could, couldn’t we?” And you’re kind of asking the unaskable questions and challenge the orthodoxy. Sometimes, that challenging of orthodoxy is most effectively done when you’re in a social settingbecause we’re social animals and we perform differently in those settings. Challenging orthodoxy, I think, is a huge part of the transformation process, you know, asking the questions that — or identifying the elephant in the room or asking you why do we do it that way and, often, it’s because we’ve always done it that way out,you know, but why?

Heath:Yeah.

Keith:And that’s when you get into some really interesting territory.

Heath: Yeah, yeah. Oh, you hit the nail on the head there, Keith, the elephant in the room.With this current client, they have, I won’t say any names to protect the innocent, so they have this one capital project management process for managing their capital projects. It was one project and now it’s morphed into 10 or 12. And so my remit was to harmonize them all togetherand then digitalize them. And so I asked the two questions, are you sure to separate, you know, you want to harmonize them because they’re probably separated for a reason? And that reason was probably they weren’t fit for purpose so everyone made them fit for their own purpose. And if you digitalize this, what you’ll actually be doing is you’re just gonna be faster going to the wrong place. You’re actually aligning the deck chairs on the Titanic. And my team, I never said that in front of my team, I said to the client for the first time and after that call, I said, you know, the funniest thing we’ve ever heard what Heath said on that callthat we are moving the deck chairs on the Titanicand you should have seen the look on their face. But the client came back and said, you know, “Heath is so right. This is exactly what you’re doing.” I said, “So now, I don’t think what — you called this project optimization project. I don’t think it’s an optimization project. I think what you’re doing with these capital projects that you’re investing 500 million pounds in is that you are actually, if you do itright, you are actually gonna create or enhance existing business capabilities that do two things, it will save the business and make money or it’ll save the business and lose money. But if you do it well enough, it will save the business and you can reuse it again and again and, instead, what you’ll be doing as you’re making these projects, you will be shifting the ship, changing the direction.” And they said, “Oh, yeah, that’s what we wanna do.” I said, “Okay, so if that’s what you wanna do, I don’t think we’re gonna call this project optimization.We need to call it transformation.”They said, “Yeah, that’s a good one.” I said, “Okay. And now we’ve agreed on that, now, I’m gonna call out the elephant in the room. Now that it is a transformation, just so we’re all clear, transformation projects have a notorious track record. You know, 70 percent of them fail. So we are up against it from day dot.” So, the four causes of project fail or transmission failure, lack of business user involvement, which we’ve talked about a lot here, lack of senior leadership support, changing requirements, and then complete requirements. And I said, “You asked me to digitalize this process. Now, just to be clear, all of these four failures has got nothing to do with technology. It’s all to do with people.” So the main problem is a psychological one. So who have you got there,” and they started going, “You know what, we don’t actually have the senior leadership support. We’ve got good engagement of the business, changing comments, how will you manage that?”I said, “Well, this is the problem, this is what we need to solve. But you said it, the elephant in the room was the —

Keith: Yep. And there mostly is an elephant in the room and the sooner you identify those sub currentsand the awkward questions and the malassumptions or the unknown unknowns —

Heath: Yeah, yeah, I like that

Keith: — business. You know, one of the — an example of one of my early companies working in medicine and, again, this was an idea that came up at the pub, I was working at a big London teaching hospital and this was back in the late 80s and we desperately needed an MRI scanner and then, you know, there were five scanners in the UK or something and 50 in Chicago, by way of contrast, and, you know, we tried to get the hospital to buy, we tried research grants, we tried charities, the Health Authority, no one was gonna buy it. And then one day in the pub, you know, I said to one of my clinical colleagues, “Well, why don’t we just buy it ourselves.” And that was challenging the orthodoxy. Someone else provides the equipment and we use it but there was only then the government has what they called a business expansion scheme, which made it very tax efficientto set up and operationalize businesses so what we did waswe set up a PLC, we got all of the consultants in the hospitalto raid their piggy banksand, you know, throw in 50k, 100k, because, you know, they can afford to do that, we went out and bought the scanner. We gave it to the hospital, they housed it so they paid for the room, we paid for the scanner, we gave it to the NHS patientsand they put all their patients through free of charge. So it was win-win-win for hospital. And then the rest of the time, we put private patients through and we charged them a sensible rate.

Heath: Yeah, yeah.

Keith:And then all the consultants got their money back with a big profit and everybody was happy.So that turned out to be the first PPP in the country working in the medical imaging domain. And it was it was a crazy idea over a beer when we challenged the assumption that someone else had to provide the equipment and we said,“Well, we could change the business model.” And that is such — I tell it because it’s such a trivial example.

Heath:Yeah, yeah, but major results.

Keith: But so transformative.

Heath:Okay, so challenge the assumptions, as uncomfortable as they may beand may be helpful. A prior career to this some time ago, when at one stage I wanted to be in equitiesand then moved into financial planning and a mentor I had at the time, he said,“Heath, you look too young and you need to drink,” you know? I said,“Well, you know, I enjoy, you know, maybe a glass of wine or vodka, lime and soda.” He goes, “No, no, no, you’re gonna spend a lot of deals and a lot of deals are gonna be done in the pub,” and I was going, “Yeah, okay.”Yeah, so maybe, you know, I do hold some value, the social aspect, a lot of ideas come out outside of the workplace, well, the four walls of the workplace, yeah.

Keith:And it has nothing to do with the alcohol, it’s just about the freedom to socialize and tostep outside the box and to allow your mind to range around and —

Heath: Yeah, having the creative space.

Keith: Yeah. Absolutely. And the freedom and the permissions todo that. Andsometimes, it’s not just about challenging the assumptions, it’s about knowing what the assumptions are. Because so often, when you ask the question, well, why does this happen or why do you do it this way, it’s kind of lost in the mists of time and no one knows why —

Heath: Yeah, yeah.

Keith: — what the assumptions are and we gotta tease into that.

Heath: Yeah, I can tell you about an assumptionI had at a UK government project. 53 locations around the country and I said, okay, I said to the sponsor, this is the approach we’re gonna follow, I recommend we follow, and we got a baseline, the current operating model, and he turns around and said, “Heath, I understand your process and understand logicallywhy we need to do it but I want you to start at number five, design.” And I said, “So you want me to design it off what exactly?What’s your current state?” And he goes, “Heath, there’s 53 sites around the country and they do the same thing53 different ways.” I said, “Great. Just give me one.”

Keith: Absolutely.

Heath: Just give me one, we’ll call it the baseline, some it’s gonna be aspirational for othersand some it’s gonna be below parbut it’s gonna be an agreed best practice. And there was no challenging of why they do anything, it’s just this is how they’ve done it.

Keith: Yeah. Lost in the mists of time.

Heath: Oh, yeah, yeah. And, actually, when I delivered that project, at the end, you know, everything in that organization is recorded, minuted, there’s a minute taker, and it was all official and so he asked the meditator to pause and say, make a special mention and he said, look, he goes, “I want all this to go down here, Heath, you did an amazing job, not only you gave us the target operating model and road map for implementation, but you also did the impossible. You documented the undocumented business.”They have not had this documented in 20 years. And I said — yeah, like how could businesses go like that? But it happens, right?

Keith:It does. Absolutely. And we’ve used a few medical examples en route but I think, you know, the word “diagnostics” is an important wordbecause a big part of what we’re doing in the early part of this engagement is a diagnostic process. And in the same way that in medical diagnostics, it’s not always a precise art, you have to, you know, you have to try things out and tease in because in the same waythat when a patient typically goes to see their physician, they go in and say, “Oh, I’ve got a problem in my knee,” but they really want to talk about something else and it’s often the thing they sayjust as they’re leaving the roomthat’s the really important thing. It’s knowing that — it’s that diagnostic artalmost of knowing the questions to ask to really get under the skinand you find out the elephants and the things that really matter. Yeah, that’s — and that is both a science and an art.

Heath: Yeah, yeah. Yeah, the science and the art. I tried to tell these guys in my team is that, you know, like business architecture is about making visible the invisible, you know?This stuff already existsbut you can’t see it right now.You’re looking at it through a particular perspective.

Keith: Completely agree.

Heath:I wanna cover as much as I can of what we’ve said and then I wanna ask your final question, Keith. Now that you — let me get through what we’ve covered. So really like the knowledge value chain. I think that’s gold. I think a lot of clients that I’ve been on recently and more likely to future clients that understanding that value chain of having your data, you synthesize it, you creating your knowledge base, you understand it, you interrogate it, sorry, then to get some understanding. And then, lastly, what you said was the wisdom and this is where you get the wisdomwhich is where you can understand and you would have the wisdom of,“Oh, this is probably good enough.”

Keith: Yeah.

Heath: Is good enough, yeah. Good enough is good enough. So these, quick covered there.The context you said up front, very first, is key. Everything — and for you to understand contextis you understand organization, the purpose, its people.You talked about asking the right questions, that’s right. The major issues of not just asking the question to the peoplebut asking — one, asking the questions, asking the right questions, and also with the technology side, the right questions of technology, how would that best enable the business as opposed to just designing technology and handing it over to the business and going, “There you go.”

Keith: Yeah.

Heath: What else do we cover there? The classic knee jerk reactionwhere consultancies may have a tendency to — or clients have a tendency to, okay, this is my problem, therefore, this is the solution.

Keith: Yes, obviously.You jump in confirmation bias, you know, prediagnostics. Yeah, all of those things.

Heath:Okay. So if I say, there’s a lot here, if I say to you there, knowing what you knownow, many years in the practice, you are the most qualified, academically qualified, and probably also, you know, practically qualified person that we’ve had on the podcast so you have a wealth of knowledge. So knowing now whatyou know, what would the three things be that you would either do differently or continue doing to help your transformations, help your clients figure transformations?

Keith:Gosh, that’s a really tough question to boil it down to three. I don’t want to be trite but I think I’d saylisten, listen, and listen.

Heath: Oh, gold.

Keith:You know, as sort of — and by listen, I meanactive sort of listening. I mean, you know, listening to the probing responses to the questions you’re asking. And the reason I say it three times is I thinkall the way through this process that you’re doing diagnostics, you’re offering the challenges, and at each point, you need to be triangulating and correlating what’s coming backbecause that helps you to refine your process. And actually, while we were doing that summaryat the end, I came up with four C’s: culture, context, challenge, and construct. And I think maybe that’sa framework, I know, it’s four rather than three, but I’m trying to understand the culture, and from that, trying to understand the full context in which we’re operating, and then within that, I can offer the challenges that allows me to get under the hood and really understand the nature of the problem and only then can I construct the solutions. And, you know, that order it’s quite important.We shouldn’t be tempted to go in and construct the solution —

Heath: Before the others, yes —

Keith: — we’ve done those other pieces.

Heath: That’s gonna be the —

Keith: So I’ve not answered your question, but notice that the art of the politician is not to answer the question you ask.

Heath:Yes. Yeah, that’s — hey, whoa. Yeah, no, that’s great. So the four C’s, you hit the nail on the head theretoo, because order is important, likethe sponsor on that previous project wanted to start at number five, it’s like there’s a process for a reason and he said there’s a funny little thing in front of that name, design, it’s got a number, and the number — there’s an order to a number and the order is usually there for a reason. So if you wanna start at five, we’ve skipped number 1, 2, 3, and 4, so like, yeah, so the order.Culture first, understanding the culture. Two, the context of how you’re operating in.The challenges, number three, of now that you’ve understood culture and context, what challenges are they facing so that you do what you talked about or you don’t have your perception bias, then you don’t jump to conclusions so you’re asking the right questions. And then you can come construct, you know, constructing the process that you’ll go through, the approach you go through to get to understanding more of the problem or constructing then the solution. But, yeah, that’sa really quick way to — okay, guys, presentation, 4 C’s, guys.

Keith: Yep. And actually, I guess it ought to be five C’s.The final one ought to be collaborate. You know, the whole thing ought to be is co-owned, co-created. I mean, maybe co-creation is a better word than collaborate but —

Heath: Okay, I expect to see a paper coming out shortly on the five —

Keith: — as we speak.

Heath: Yeah, yeah, because I tell you what, in terms of your own knowledge value chain, you’re probably, you know, not probably, you’re at the wisdom part so —

Keith: If only.

Heath: People, I say that in jest, but, you know, I’m also serious.For the wealth of knowledge you have, some people would think that, okay, you’re just pulling a string and here it comes.It’s like they see, they archive this number, yeah, yeah.

Keith:I have a full head of hair when I started this process.

Heath:Okay, I must be only halfway through. Yeah. Okay, Keith, Keith Straughan, thank you very much for your time. It’s been invaluable. That was amazing. Usually, we go for a short time, but, geez, we’ve gone over time. So that was easy to do. Keith Straughan, thank you very much.You have been amazing to have on. I will let you know when we go live and the podcast goes offand then we’ll send you a link and you can send it out to your network and tell them that you’re on here and all the rest of it. By the way, I’ll put the links in the show notes, we’ll find some of the references to some of the quotes you’ve talked about, maybe the sources of some of the — well, maybe of your own site, if you’ve got any more information on, if you’ve got it documented or some presentation video of the valley knowledge chain, that I think is very insightful, especially, you know, for the viewers, Keith’s background and education. You’re getting a free masterclass here. So, we’ll wrap it up while we can.

Keith: Heath, it’s been my great pleasure. Thank you so much for having me.

(outro)

What is business transformation? This is a two-part answer. The first part is what is business transformation, and then when is the change the organization goes through deemed a transformation? Firstly, the definition. Business transformation is where business changes the way it does business. That is, it changes how it creates and delivers its products and services, its CVP, its customer value proposition to its customers. It doesn’t necessarily change what it does, but it changes how it does it.