The Journey To A Customer Driven Marketplace

Published: August 17, 2022

Read Time: 39 minutes

Do you have a strong understanding of the fundamentals of Good Governance?

Does your board and executive understand what it needs to do to win in the new customer driven marketplace?

The strategic and organisational impacts and implications of the new customer-driven, competitive marketplace are profound. Never before and probably never again will the boards, chief executive officers and senior managers of Australian community businesses (NFPs) face such a cataclysmic shift in the way they need to think, behave and operate.

The shift from a government-funded, welfare paradigm to a customer-driven, competitive market paradigm should not be underestimated – there are immense strategic and organisational challenges as well as significant opportunities.

For leaders of community businesses the need to understand the realities and practicalities of re-engineering your business model, transforming your culture and reinventing your organisation is vital if your organisation is to be successful and sustainable in this new world order.

Transcript of The Journey To A Customer Driven Marketplace

Michael: Welcome colleagues, new and existing colleagues from all around Australia from various towns and states and regions. I trust you’re receiving our webcast today from Better Boards in a nice clear crisp way and the video is coming through okay. Please let us know if you have any technical issues. Today, we’re squarely focused on the realities and practicalities of transforming your organisation, of reinventing your business model, and most importantly addressing and bringing along people. That is the culture of the organisation. Today’s webinar is broke into various sections. Before I move on to that, I’d like to just take the time to acknowledge a couple of scene setters. Number one is there’s a range of organisations online today, mainly human service organisations but not entirely. We’ve got people from age care, from child care, from disability home care, mental health, community care, community health but we’ve also got a range of colleagues from such other organisations as animal welfare, from consulting groups, sport and recreation. I’ll be speaking a little bit later on in setting the scene primarily about the reforms around human services as a quick recap.

If colleagues who are not in that industry or space can bear with us we’ll then move on to much greater detail around the transformation and it’s processes.Today we’ll also be, not only going through the presentation, but we’ll be taking questions and having discussions fire the chat room. The chat room is on the right hand side of your screen if you have that button clicked on. We’ll also be looking at a few tools that will be provided along with either the audio or in fact this presentation if you’d like to use them. Let’s move on to a quick couple of other acknowledgments in setting the scene. I just want to acknowledge that different directors will be in different places or, in fact, senior teams in their process of transformation. You might be starting to think about it and plan for it or you might be already starting to re-engineer your business model and reinventing your culture or, in fact, you may have a great understanding and looking for further information and knowledge or you may be trying to really build your knowledge about this transformation processes. I suppose most important the other aspect to talk about is clearly the different industries or sectors will be on different time frames, different reform time frames, and different activities. Some industries or sectors are clearly are in the new world of a customer driven competitive market place and others are moving toward that. I’d also just like to acknowledge that this is really the second presentation, it follows on from my first presentation around the bigger strategic frame of transformation.

If you haven’t got that presentation, we can certainly send that to you but this presentation blends with that first one and leads into [figrated 00:03:46] detail around the steps, activities, and processes of actual transformation. We’ll be looking at those in some detail. In terms of the webinar objectives, three of them have come up there on the screen if you’re following the screen. Primarily focus on trying to enhance or support new learnings and understandings about transformation. Number two’s obviously around [avarting 00:04:14] information documents, articles, or tools that might assist you on your journey or your team’s journey. Last but not least, of course is most importantly I suppose reflecting on some of the learnings that I’ve personally gained over the years particularly more recent years around very serious transformational processes and activities and bringing to you, what I believe, is a well proven process that you might like to consider to actually be used.In terms of webinar resources, there’s a range of resources here. The top one probably doesn’t reflect the full depth of what’s available. We’ve put together a package there for you of tools, articles, documents that if you like those let us know and we can certainly send you them to you straight away. Of course, there’s a range of other resources on Better Boards, my own website, or flip side feel free post-webinar to email me as you require.Let’s just now move into setting a quick scene around the bigger emerging picture of that strategic environment, that stage and backdrop. Some of you will be well familiar with this situation, for others it might be new, and for a couple of people there may well be a situation where you might just have to hold fire for a moment as we just quickly set the scene given we’ve got so many organisations and individuals on today who come from the human services industry. All of you or most of you will be aware that there’s been major reform going, not only in your own area, [EGA’s 00:06:10] care or disability, but in fact, reform across human services across all fronts of human services.

That’s been going for some three to five years depending on what industry or sector you’re in. Ultimately it’s creating one big paradigm of all those different colours and principals and practises in each area, but essentially it’s one big paradigm around, what I call a customer, or you might call a client or the resident or the consumer and their choice in how they receive services when they receive services et cetera and of course, the entry into a new market approach. It’s clearly not by coincidence that sees all these reports have come together at the same time. As I touched on customer driven competitive marketplace, customer choice and control. Where funding and decisions are really increasingly in the hands of the customer not the organisation. It’s time in which boards or COs or executive teams will need to, if haven’t already, seriously transform their organisations. It’s really a case of adapt or die. We’ve certainly got this new competitive environment coming up.Just on that term as we move forward on the same approach around reform, clearly the reforms are really focused on four things, as most of you are aware.

There’s a set of national strategies for each, or reforms for each industry or sector. There’s a whole raft of new structures and authorities and different government entities are being set up. We’ve also got a range of new systems for example in the health side of things, we’ve got the e-Health system, or in aged care we’ve got My Aged Care and of course there’s parallel systems in many other human service areas increasingly but not only run by the Commonwealth. We’ve also got that great opportunity to reinvent our own services and most go from there in terms of developing new business models and taking our organisations forward. Let’s just move on from there and think about some of the big strategic impacts, they’re certainly profound, they can’t be underestimated. In many ways when you really take a global look across Australia, it’s really what I’ll call a cataclysmic shift in the way that we’re currently thinking versus what we’re going to need in the future and the way we think, behave, and operate. Of course, never before really have such giant challenges, none of us have ever been immersed in this significant change. There’s unbelievable transformation of the industries that we’re in. We’re also in a situation where that brings immense opportunity but it also brings challenges. Let me just move on from there. Before I zip into the six major challenges, I’m just going to check and see whether there’s any particular questions there that people have, technical questions, I presume everyone’s moving okay from what I see on the screen. A couple of people have sound problems. Let me just see there if we can address that in any way. I’ll leave you to talk with Raphael if you have any technical questions.

Let’s look at now the six big challenges that we’re facing whether you’re board, director, CO, or a senior manager. Challenge number one is this giant paradigm leap. It’s not to be underestimated. If you really took the time with your staff or you executive team to think about the characteristics or the assumptions or the parameters of the world you operate in today versus the new world, straight away that puts some detail behind each paradigm and the recognition that really this is a very big transformation journey. It certainly, at a high level, is it easy to say we’re moving from one paradigm to another, but to actually unpack some of those characteristics and behaviours and elements is really important. If you’re not in that space of human services than clearly [inaudible 00:11:00] the industry or well sector that you operate in may well be able to recognise some paradigm shifts. We’re seeing those paradigm shifts everyday.

When you think back to the horse and buggy, to the car, and here we are now moving to electric cars, and even in fact flying cars, which have been developed. Paradigm shifts are important consideration. Challenge number two is really providing transformational leadership that actually supports serious business re-engineering, a serious transformation of the organisation and it’s leaders who are ultimately going to do that. No one else. That transformational leadership is about recognising change, working through it with people that develop a process and a plan and about, of course, adapting to a whole new environment. There are a couple of articles on transformational change that we’ve put in the pack for you. They’re written by McKenzie and Harvard. Short chop articles but based on very solid research and certainly well worth a read. Challenge number three is the fact that we, at the end of the day, need to get up a new business model and when you look on the screen closely at the little model I’ve got there for you, you can see an axis of new business models versus existing business model and you can see existing services versus new services.

Now I presume most of you, but not all of you, are either down in the left hand corner or you may be travelling up above to the top left hand corner or maybe a couple of you have even made it to the best position, the top right hand quadrant. It’s certainly not possible to have an existing business model operating in a new paradigm. A practical good example of that would be that if you went to Harvey Norman or a Telstra store today you certainly would not be buying, or could not get, what used to be called a brick phone or in fact the old bag phone. They had to, in reality, have a new approach, not just a new product but a whole new business model as things progressed. Determining your organization’s pathway’s a critical thing. Do you want to be a leading organisation or are, in fact, you are a following organisation as you gradually move toward a better position.

Of course, following organisations tend to take a more evolutionary approach where as leading organisations tend to have a much more of a proactive approach to developing and taking that journey. Challenge number four is the fact that everyone is faced with legacy issues if you’re going to make a paradigm leap. The paradigm leap brings about a recognition that there aren’t legacy issues and that reason is because ultimately new entrance to the market in all different areas, industries, and sectors we’re in, we’re seeing all sorts of new players enter. New entrants come with no legacy issues so all that time and human resources spent on capturing customers and capturing market share. Number five, challenge number five is squarely focused, once again, on this challenge of leadership but it’s about the fact that you’ve got to work on the business. Managing today’s business while you’re trying to grow and develop tomorrow’s business. It’s not an easy task and without additional human and financial resources, trying to do this off the side of a desk as a CEO and an executive team can be done but is one heck of a hard journey. Let’s look at challenge number six.

Of course challenge number six comes back to having those brave discussions, bold discussions but making awfully brave decisions. It’s really about putting the true state of the nation, the true state of your organisation, it’s services on the line and working through things, where things are at but also looking at both the internal and the external environment. Let’s now, before we move on to our next section, just have a quick check on if there’s any questions there that people or comments that people like to make around these large leadership questions or leadership challenges. I’m looking through my questions at the moment. You can ask a question or suggest a topic in the orange bar down below your video screen if you’ve got one. I have no questions coming through at the moment but if there are any in the moment or comments, I’ll address those shortly.

Just in conclusion, the cataclysmic shift as I mentioned and it’s a new way of operating and really it raises the question, particularly for directors, and for CEOs and executives I suppose, but particularly for boards, who I’ll speak about in a moment, it’s really about step up or step off. You, the CEO, or the executive team needs a clear unequivocal mandate and additional resources and financial resources to really undertake what I’m about to present. Let’s now look at the actual board mandate that’s needed. In reality no organisations going to go forward on the type of organisational transformation or new business models that I’m talking about without board commitment engagement and without that mandate from the board. Otherwise a CEO or exec team will be pushing things up hill. That mandate needs to take on board additional financial and human resources and I make the point that that’s over and about the existing budget. If you’ve got your annual budget today and it’s approved and you’re operating it, great but if you’re going to be serious about transformation it’s really getting additional financial and human resources approved over and above that strategic transformational project and select existing budget. The other quick points about a board mandate is making sure, [inaudible 00:18:22] with the board, the senior team is working in a way that seeks support and guidance from the board. Doing it on your own can be a tough call, draw an expertise of the board or board members.

The other two comments around board mandate, number four is really getting some form of, what I call, strategic transformation plan up or project GANTT chart. We’ll go into a bit of detail around that later on. If you got to be successful in getting that board mandate, if you’ve engaged them and done the pre-work through the board that could be taken among tours or getting speakers in or getting them to understand this new world and what it really means. Then most importantly you can then, on that basis, get up some sort of transformational plan or presentation that really explains to them what you’re planning to do, how you plan to do it, when and what it really means for transforming that organisation. Let’s move in now to actually looking at the transformational, what I call the strategic transformational process. I’m going to be using a flow chart because it’s probably the quickest way that as we build this flow chart, you will see on one page and one picture a clear over view of the entire process. Obviously this process can be added to or deleted, modified, I’m just reflecting the process that I’ve developed and used. With fresh eyes you might want to do things in a slightly different way or adopt a different transformational process. Number one the first arrow across the page is about continually monitoring that external environment, not just today and then forgetting about it tomorrow, but really keeping a close eye on the overall layout of the emerging and future parameters, frameworks, trends, patents, players, competitors of the world you and your organisation operate in. Next one is making sure that as we’re doing that we have, as I previously mentioned, have got some form of strategic transformational plan and project GANTT chart actually documented, presented, agreed to, and both the board, yourself, the senior team, exec team are on board with all that. As the process evolves then you can clearly communicate and implement that particular plan.

In any transformational process where you’re really looking to completely transform that organisation, it needs to be a staged approach. Before I unpack that, let me just quickly make a point about the word transformation. Probably one of the best examples I can give you is in fact, if you think of the red telephone box, and some of you will well remember the red telephone box and using it and what it was like, it wasn’t that many years ago versus now what we might call our mobile device not even mobile phone. That is definitely a transformation. It’s a paradigm shift, yes but it’s a transformation. If you think between the red telephone box and your mobile device today, we went through a second set of activities and that’s called discontinuous change. The first mobile phone was actually 55,000 dollars in the back of a land cruiser and they went to brick phones, the bag phones, and on it went, that’s the discontinuous change that happens along the journey of big industry reform or organisational transformation. Let’s move on to stage one. Stage one in this process, three steps, each one of these has quite a bit of detail behind them. There’s clearly reviewing existing customer brand experience and undertaking research. There’s addressing the new or inventing your vision and mission. I’m a strong advocate that a new paradigm, a new business model demands a new vision. Of course, there’s a market research existing in new and the sub-markets and market channels. If you’re not sure about what market channels are, I unpack that a little bit later on. Step two, you would undertake stage one first as you moved into then stage two.

Stage two, I’ve got the numbers 2.1, the code is out of a new business model, 2.2 looking at current and future services that fit to as markets in the model. Then of course, there’s dealing with the brand and image and, of course, the financial modelling, not the P and Ls or cash flows, the financial modelling of the new business model. Stage three is then 3.1 is the new organisational structure and positions because the new business model, new services set to require reinvented or new structure and positions. There’s the new PDs and employment mechanisms of that.

EG if you’re moving to twenty-four hours a day, seven days a week service then clearly an existing EBA or an existing employment mechanism probably, in purely financial sense, will probably provide you with serious financial challenges. Then of course there’s getting up your projected P and Ls and cash flows or capital plans for the next three or five years.Stage four is, in fact, the new business model and bringing together the existing business/services or products and transferring the new ones and growing the new ones and bringing those two lots of existing and new together. I’ll provide you, in a moment, with a little chart that shows how all that happens. That’s the sort of strategic transformational process or flow that I typically would use or have used with many players. You may wish to add, delete, modify that. At least it gives yourselves and your board or you exec team a feel for how this process would actually work and of course, you can obviously add time frames later on. Let’s look at [inaudible 00:25:44] number one quickly.

Stage one. I’ll just make some key points here around it. In the new world customers don’t care about past performance or let alone your legacy issues or constraints. They’re looking for a new brand experience, a new way of interacting. It’s important that you undertake research and analysis on existing and new customers, their brand experience, and if you’re not sure about those words, there are a number of articles on that that can assist you. The other consideration around the brand experience is tying it back in and understanding the organization’s value proposition to the customer because clearly the customer’s going to be looking out for the value proposition whether it’s price, performance, place, quality, style, unique factors et cetera. Stage 1.2 which is about the new vision or mission. As I previously mentioned, I’m personally a strong advocate of renewing or creating a new very powerful short sharp vision mission statements and I’m also, because of this process, a strong advocate of defining a core business statement.

Core business statement, let me just explain that to people that aren’t aware of what the actually means. Think of it as our reason for being, a raise on [detra 00:27:30]. It’s definitely not the products or services or what you do, it’s much deeper than that. The quickest one I can give you is if you think of ambulance, it’s not an ambulance service, it’s not to save lives, or provide first aid, it’s actually to run an efficient and effective medical transport system. That tells them, that gives them a basis for the mobile intensive care, the paramedic services, the first aid training or the [arrow 00:27:59] medical but it also tells them what services or business they’re in and what they’re not in.In this new world having a new business model anchored to a very well refined core business statement is extremely powerful, it’s a real anchor and your vision or mission and values or philosophy, whatever you use supports that. let’s move on quickly, 1.3 is around those new markets, sub-markets, and market channels. For many of you, you may have one or two or three or a multiple stream of income, possibly much of it from government. A new way to think about attracting new markets and new revenue streams if you’re not aware of it is a concept called market channels. Think of them as pipelines.

I’ve got a couple [inaudible 00:28:51] business to customer, business to government, business to business. I’ve given you a few quick examples there on the screen. If you really unpack it some length just even those three channels, you’ll find there’s some twenty-seven, thirty odd different markets, sub markets, or revenue streams against that thinking. It certainly is a way to lift your thinking outside your existing funding or government contracts et cetera. If you’re really have done your homework on your core business statement, you’ll be amazed how various market channels and the opportunities within them can actually relate back to your core business statement and back to the channels. Let’s move on to stage number two and some comments there. Co-designing a new business model, this is really the heart of that transformation.

I really could be doing a webinar just entirely on the development of a business model. As you can see from my little diagram there, I’m going to give an example from Ballarat District nursing and health service up in Ballarat, Victoria. One of the great things about designing a new business model is you can get a whole process put around that, you can get a team working on it. I encourage people to undertake and develop diagrams and models as well as the model. You may well have a list of key assumptions or key characteristics of the new business model. You may also look at some key risks of the new business model. You’ll end up having both a visual diagram as well as obviously some [literal 00:30:55] perspective. Certainly, I found the drawing up a business model seriously helps people understand how all the bits are going to come together, all the elements, and you can even describe processes as well. Of course, ultimately that business model has to link back to those markets and sub-markets and revenue streams, et cetera, a few of the things we’ve talked about. Let’s move on from there and talk about the current and future services. The current and future services is an area which has to anchor strongly back to the business model. When an area or an industry or a sector is severely disrupted through paradigm shift or the transformational changes that are occurring, I often like to go back to thinking about Porter’s Five Forces. Some of you, I’m sure, will be well aware of what Porter’s Five Forces are.

Porter was an academic out of Harvard who basically said that when the paradigm shifts or big transformations occur, your normal markets and approaches and market channels will be severely tested or challenged. You can see the five points he puts there about the bargaining power of customers, the threat of new entrants, competitive rivalry that’s between yourselves, a threat of substitutes, and the bargaining power of suppliers. [Inaudible 00:32:32] quickly only in age care, the threat of substitutes, things like or you might even think of Net Health or Telstra Health for example. Certainly the thoughts around Porter’s Five Forces if you haven’t read about those, they are well worth doing a quick search on the web and understanding what they are when it comes back to thinking about your current and future products and services. Moving on to brand and image. Two key points initially, obviously in the new world the brand and image of an organization’s going to be absolutely critical. Some of you are already well down that track in the branding space and looking at this closely. I make the point that the brand is not just your logo or image, you need to be thinking as your brand as a tool box. I’ve popped in there, I haven’t put them all in there, but I’ve popped in a number of elements on what you might describe as your organization’s brand tool box, your brand identity, the name, the trademarks, the logos, et cetera. Your brand awareness. Are customers actually … How they recognise you. The loyalty, it’s not just the customer dedication to purchase continually but it might be that they actually cause you repeat or referral business.

Then of course there’s the brand management and brand equity, the total worth of your brand in the current market. When you think of undertaking a brand or review or research, as I mentioned earlier, go well beyond just your current logo, image, or a bit of associated marketing collateral. Let’s move on to the financial modelling of your new business model 2.4. I guess I’m at the point that financial modelling is not just getting up a set of projected profit and loss or cash flow statements, it’s work that’s done before that. It’s work that is getting into the financial detail of parameters, the elements that come together to make your new business model. In practical sense this will vary among different organisations and what services they’ve got and how they operate. Eg, I put there, it might be determining your two true cost margin and price of a unit and service. It might be about the billable hours and utilisation, it might be about the various financial parameters. I’ve put in the middle of that slide there some information just as a quick example of, if we had X number of carers, what would that mean in income? They are working at seven hours billable out of an eight hour day, suddenly you have a whole different parameter or way of thinking about ultimately the financial model that would support your new business model. There are people that specialise in this [inaudible 00:35:45] cost financial analysis and costings and financial modelling and it’s not typically just the work of an accountant. It’s typically a more specialist skill.Stage three, four elements that we’ll be looking at there. Clearly one is around the structure and positions, we’ll move on to the PDs, onto the systems, and then on to profit and loss and cash flow. New business model, new approach, a new paradigm then clearly a seriously reinvented or maybe even a new organisational structure, positions and functions or task will be required, it might be in whole or in part. There are a number of organisations throughout Australia who’ve gone through very significant, very very significant organisational transformation.

When you literally compare their old or past [old 00:36:51] chart, compared to their new one it is categorically different. That’s your biggest asset test. It’s not just adding a new position here or we added somebody here and we took somebody away here. If you’re serious about really transforming your organisation, there will be a major piece of work around new structure for a new business model, new positions, and in fact you may well introduce some new players, eg. a chief customer and innovation officer or an innovation and business development manager, let alone looking at other positions. Of course that new business model will mean a new structure will mean a fairly serious piece of work. It’s no use having a new business model and new structure and a whole new way of operating but we’re actually operating in old position descriptions or old employment mechanisms or old policies or procedures. There’s five steps there and pretty well everyone on today’s webinar will be well and truly aware that there is very significant pieces of work when you start rewriting position descriptions, employment mechanisms, or actual policies and procedures. There’s no getting away from it if you are serious about transforming your organisation and really driving a whole new business model. Let’s just quickly look on systems because the systems approach is not the only but it’s certainly proving to be throughout Australia a defining factor for many organisations who either are or have gone through this transformation. It’s about not just having that robust IT or integrated systems but it’s about the collection of data, it’s about the provision of that data, it’s about getting intelligence on services or customers or markets. It’s about more importantly enabling and supporting the services that you deliver. Whether it’s digital health solutions with staff or others are using the field or in the facilities or whether it’s actual systems within your organisation, you need to be thinking about the organisational systems, the digital systems, and also of course, how that all ties back to that customer gateway or approach entry point of your organisation and how these all go in to support the work of managers and staff in the work they do. Profit and loss, my key point here is that from experience, I see it all over Australia from human services, a significant number of organisations still operate only on a manual budget. Not to be too fickle about it but in reality it is just a shopping list of expected income or revenue and expected expenses versus, of course as time goes on, the actual. I [behose 00:40:16] you really to go well beyond the annual budget. Many of you will know that you either have moved off or will be moving off contracts, you’ll be moving off payments in advance.

You’ll be moving off of [inaudible 00:40:33] situation to where you’ve actually got to earn your own income increasingly, whether it’s through fees and service type charges or whether it’s through charging on a billable hours basis, whatever it is but we certainly need to go well beyond that annual budget and predicted P and Ls and cash flows are critical. My little model describes there that if we’ve got the new business model up and we got the new financial modelling done, it’s a heck of a lot easier to then build your projected P and Ls and cash flows because we got assumptions, we got parameters, we got characteristics and of course eventually that, some organisations they’ve even got into trial balance sheets or projected balance sheets as well. Once again another serious piece of work needs to be done if you’re going to transform the new business model and the transformation of the organisation.organisation but not least is stage four, which is really bringing all this together in a business sense. Along that journey I’ll refer you back to the second long arrow crossing your screen and if you look closely there, once we have a project plan and a GANTT chart, I briefly mention there about the communication, the engagement of staff, volunteers, managers, et cetera. We’ll unpack that a bit later but this whole process ultimately is a people process. Let’s go though to stage four. I’m going to look at stage four from a different point of view. On the left hand side of the screen you should be seeing what I just broadly call the rusted on phase. That is your clients, your consumers, your residents, your patients, whatever words you’re using are typically rusted on to you particularly if you’re government funded and you’ve got an existing business model with existing services.That’s where you possibly are now or maybe you might be actually moving into what I call the WD 40 de-rusting phase.

For those people have used WD 40 you’ll know exactly the power of that product. This stage is the beginnings of the organisational transformation. You’ll still be on your existing business model but you’ll be starting to think about all the thing we’re talking about today. The red dotted line as you’ll see a little bit later on really give us indications of the best case, the medium case, or the worst case as we move through this transformational phase.The second last slide is that as we move into these customer driven or competitive approach, if we just remained only with our existing business model, then because of all the various forces at play, we’re probably going to go into a worst case scenario because we’ve said before, you cannot operate in a new environment, a new paradigm with an old business model. There’s a real danger in hanging on. We looked at that before on the danger zone in a previous slide.Let’s move on to the last segment of this stage and you’ll see a white area in the model where over time, possibly during even the rusted on phase some of you or maybe you need to start now, if you haven’t already, some of you may have been working on the new business model, the new services, or at least thinking about them. Of course as time progresses through the transformation phase, we bring on new services and the beginnings of the new business model and the work we’re talking about at the moment. Eventually when we get into the rust free phase, the customer phase, then clearly the old business model drops away, the new business model takes over and existing services are melded and combined with new services around a new business model.We’ll move from there on to the next slide which is really just putting at a high level this whole process across a GANTT chart. You’ll see the four stages there, stage one, stage two, stage three, and stage four. You’ll see on the left hand column, the titling of all those little boxes we covered off and I’ve just put an indicative time frame here. For your own organization’s transformation you need to be very clear about, not only the activities and flow and processes, but you need to be clear about the time frames and the sequence of events and the interrelationship of events because some parts of this transformation process are interrelated to other parts.

They’re not all just stand alone lego pieces that fit together. Simply, they are cross referring and most importantly some of them can’t be finalised until some part of some other section of the process actually occurs. Let me just stop there for a moment and swing back to the screen and see if we’ve got … We might take a breath there. We had a fair bit of information. Maybe there’s some questions there or comments that people have liked to ask around this transformational process. I’ve put up the steps or activities or in fact maybe there’s some comments of experience there that people might like to put forward. I’ll just wait for a moment to see if any questions, comments, or queries come through. No one seems to have put any forward at the moment. Once again feel free to take those questions or put those questions forward as we go. Nothing seems to have come through so we’ll keep moving on. Let’s go on to our key learnings or reflections about this process. Things that we need to think about if we’re going to really seriously transform the organisation, bring on a new business model, make it a successful process, and level that project on time within [inaudible 00:47:53] and to the specifications. I’ve touched on in the opening on a number of points around the board, not only the board, it’s also the executives as well, or senior managers. I’d make a strong point about the board before because they tie back so much to the mandate [inaudible 00:48:15] just significant reform, that’s that significant reform and additional human and financial resources. I count the key points around, going forward on this sort of process, it’s pretty clear we need to understand the environment which we’ve said at the very beginning of this session. A number of you have heard me speak before or read other articles in and around the topic of the changing landscape.

One area of great discussion in the reality check is really identifying what the mission criticals are, that is those things that are absolutely fundamental to our future success and sustainability and, at the moment, are critical. That is things we need to deal with today or over the coming twelve months or so. Once again in that reality check is checking on who’s on board and who’s off, whether that’s directors or executives. Once again particularly boards, if your board’s not all there with you, it’s quite a challenge for you, the CO or senior manager. Number two, learning number two or lesson number two is probably is around what I can bring to you, is around solid documentation which really can only be founded on the serious discussions, research planning. Planning about the process, the activities, the time, what it takes, et cetera. There’s a number of COs in Australia who I’m sure would be happy to speak with you if you needed some of the experience or advice or a case study or two on transforming human service organisations. In terms of actual documentation, if you can develop some form of strategic transformational plan that’s not a twenty or fifty page document, it’s typically a short sharp document.

I often develop them with quite a series of each page whatever question in them, just one question per page. Why do we need to change? How will we transform? What are the key processes and activities, et cetera? Then of course that leads into the rest of the actual plan and what’s being proposed. That’s more of a preparatory document for the journey, for the process et cetera. The overall architecture. The next one is really making sure that we’ve got some sort of flow chart and you’ve seen my example of the flow chart and you’ve seen an example of a GANTT chart or you’ll be familiar with other GANTT charts or software like project managers, et cetera, where you can GANTT chart up the overall activities and time. For all these projects because of their significant reform or invention, such a significant turn around, getting some form of working group up is definitely a way to go. That working group needs some sort of mandate or terms of reference to actually assist them. Of course then there’s the tools to actually implement and report on. Of course sometimes people use internal people or sometimes they use a combination of internal and external consultants or advisors, whatever, that ultimately somebody needs to facilitate and project manage this transformation. Another third one is really making sure the project overall really does come in on time, on budget, and to specifications.

As I briefly mentioned before, it’s properly project managed and you’ve got the right people engaged at the right time. Any of these big transformations may well involve other parties, whether it’s unions or government or banks, whatever. We need to make sure we’ve got the right people engaged but most importantly, as I move on later on, we’re going to need your people engaged. Number four, the fourth big learning out of all of these projects that I can bring to you is that really in spite of all the technicality and all the business language and the process, management, words we’re using, change [inaudible 00:52:56] descriptors we’re talking about today, at the heart of this transformation is really that I’ve seen the greatest success of these where people recognise first and foremost this process is really about taking people on a journey. Whilst you may have the working group doing the work, they’ve got to be able to connect to and engage with different groups of people across the organisation as the process rolls out and goes forward. So that people understand why we’re moving from a lemon to an orange, or a mango to a pineapple or whatever analogy you want to use but they are clear about the why, the what, the how, the when, et cetera. That engagement, that education, that communication is probably the most paramount thing to bring about a successful transformation. Why? Because ultimately individual workers on the ground, managers, coordinators, leaders, et cetera, or volunteers need to continue their work but they won’t be working necessarily in the same way. Eg, change job descriptions or using new technologies, et cetera.

You’ve got to be able to take people along that journey and then ultimately bring it back to how they operate.As we move toward a closure, let’s just see if there’s any questions. Question one here, what can we do to engage the board, prepare them for the transformational project? Just off the top of my head, number one tours, visits, guest speakers, joint board meetings, conferences, even this sort of presentation or the presentation before this document I’ve presented today. There’s some articles, for example, in that tough hack that we’re giving out today as well. Somehow you’ve got to get them into an educative frame to understand where they’re industry or world is at today. Number two, where’s it going? And number three, what does it actually mean for our organisation? You must get them prepared and well on track. Let’s move on to having a look at a couple of tools that we’re popping together now. I haven’t listed all the tools here because it’s a bit of a list of them. I’ve pulled together a simple little tool there on the achievements, disappointments, which sounds pretty basic but it’s really just a recognition factor of how we’re travelling at the moment. What are the big achievements, disappointments, concerns, et cetera? It’s a reflection of who we are, what we are, and where we’re at. The next one is a tool around … Some of you will know the business canvas tool or the business mapping tool, these are two A3 sheets that are broken up into various sub sectors, current customers, future customers, current markets, future markets, current market channels, future market channels, current assumptions, future assumptions, [inaudible 00:56:28] those.

On a page and you can blow … I’ve actually done workshops where we’ve taken that tin plate and brought them up into joint [gandage 00:56:36] sheets of card board. The white card where we’ve had working groups actually fill out these tin plates today and tomorrow. Couple of those work and believe me there, they’ve actually got a whole picture there of words around current business model, future business model, and all the different descriptors of services and markets and products and tools. That’s a very very useful set of tools. There’s the strategy stress test tool there to actually an article there from McKenzie’s but I’ve developed a tool, a questionnaire against that, no right or wrong but certainly a really powerful way of testing your strategy against [inaudible 00:57:20] seriously and rigorous international research on what makes a decent strategy or strategic plan. Another tool there, no right or wrong on this one, is the comparison tool, which is often, this is a really great tool to get that board engage or exec team engaged. How do we compare against our peers in the market? There’s twenty-five, what I’ve titled it as differentiators that actually enable you to compare yourselves against the peers on the market. You either don’t know or we’re behind our peers in the market, or we’re equal to our peers in the market, or we better than our peers in the market, or we’re exemplary, woven above our peers in the market.

That tool creates a conversation, that’s the real issue. There’s a range of project GANTT charts that I’ve propped in the pack as well. As I mentioned, there’s other tools in the packet [inaudible 00:58:21] today that are all there for you, some articles. I haven’t put the full listing but it just gives you a sense of some of the tools. As we move toward a close in the next couple of minutes, I’ll just ask again if there’s any particular questions, comments, or reflections that would people like to put forward. Remember you can ask a question when you go to the orange bar below the video screen picture that you are receiving. Have we got any questions there for anyone? Nothing coming in at the moment. If there’s no questions we won’t delay matters but if you’d like … No, there’s one here that just come in. I will take this one before we close off. To [reveal 00:59:20] the front line staff of this transformational change is a great challenge, any good suggestions to engage staff?

Absolutely. Number one, yes you can give them short presentations or articles but they’re all probably a bit too technical and too difficult. I’d be getting some conversations going around tables with staff, whether it’s at sites or facilities or whatever. Those conversations about where we’re really at number one. Number two, what understandings they’ve got about this new world and what will it practically mean for the services or the work they undertake. That will then lead on to a deeper conversation around how we might actually go forward. Happy to talk to you further on that point though, [Ada 01:00:13], about front line staff by email if you’d like to. Colleagues that brings us to the conclusion of this Better Boards seminar on transforming your organisation. I trust that number one, both the video and sound has actually come through clearly or best you can receive it, wherever you are in Australia. Definitley this presentation’s available. The little tool box is available and if people would like, particular questions or comments or other information answered please feel free to email through and I will follow up best I can. Thank you for joining us today and we trust you found it practical, useful, and most importantly strengthens your knowledge and understanding of transforming your organisation, re-engineering your business model, re-inventing that culture. Thanks very much.


Principal Consultant
Australian Strategic Services

As Chairman of Better Boards and Managing Director of Australian Strategic Services, Michael Goldsworthy’s passion for community businesses (NFPs) cannot be underestimated. For thirty years he has advanced their cause, strengthened their governance and delivered pragmatic solutions; ensuring community businesses remain a vital part of Australian communities and the economy.

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