Optimising financial processes

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SEVEN key lessons on how transformations deliver value – McKinsey

Exploiting Data is CRITICAL to our business” is an assertion that is not going to shock anyone. It’s like saying “we are

I was tempted to write “SE7EN” key lessons after the 1995 movie with Morgan Freeman and Brad Pitt about two detectives, a rookie and a veteran, who hunt a serial killer who uses the seven deadly sins as his motives.

But NO. That would be a step too far . . .

A report from McKinsey details the results of a strategy survey looking at technology enabled transformations and whether, and how, they are proving their worth.

It is worth a read but, like me, you may not agree with all of it. And that’s OK.

As you know by now, I see the world of business and technology as highly nuanced. I have some thoughts on these seven deadly sins, sorry, lessons . . . . in my own priority order, below.

  • Lesson #5: No silver bullets – the top performers execute more transformation plays than othersIt’s a marathon not a sprint. Top performers make a habit out of transformation and change. Leaders run more transformation initiatives and learn continuously. 
  • Lesson #7: Bridging the business-technology chasm is critical to outperformance. Top performers foster a stronger partnership between technology and the business. They are business process focused first, and are more than four times likelier than their bottom-quartile peers to have a digitally integrated or fully digital operating model.
  • Lesson #2: People-focused plays result in the most value. People-focused initiatives link most closely with value creation. This is counter-intuitive at first sight in our drive to greater digitization. The more we digitize the more, not less, dependent we become on talent, skills and culture. Interestingly, people focused initiatives are the least likely ones that companies plan to pursue in the future, with “digitizing end user experience “ and “scaling data and analytics” being the highest priority strategies. If these are focused on enabling and supporting the talent, then this is a positive move.
  • Lesson #1: Technology investments are creating significant business value. A bit of truism, this. There is still a lot of “tail wagging the dog” in many technology investments today. The single biggest benefit reported is “improvements to employee experience”, which I doubt was the primary driver in the business case. Process change drives more value than technology investment alone.
  • Lesson #3: Talent remains the holy grail of technology transformations—valuable to pursue but difficult to execute. The war for talent is intensifying – but developing our own pays off more. The majority of respondents feel that skill gaps and cultural change from “project” to “product” (outcome) focus are the biggest challenge.
  • Lesson #4: The talent challenge has clear implications for sourcing. Reliance on external providers to support digital activities has increased, with a range of sourcing models, from traditional time-and-materials to managed services and joint ventures
  • Lesson #6: The broader use of advanced technologies supports greater value creation. Advanced technologies are powerful, but without a strong executive and operational coalition on the business WHY, the process WHAT, the technology HOWwill always deliver sub optimal results.

One thing we know for sure is that transformation, sustained change and agility is not an intellectual pursuit. Success lies in perseverance and determination. As Atul Gawande wrote “We always hope for the easy fix, the one simple change that will erase a problem in a stroke. But few things in life work this way. Instead success requires making a hundred small steps go right. No slip-ups, no goofs, everyone pitching in.

You can read the original McKinsey article here . . . it’s a 15 minute read . . .

Or you could check out Se7en on Netflix?

Thanks for reading . . .