If you're a change leader with responsibility for change portfolio management, Head of Internal Audit (HOIA), Chief Risk Officer (CRO) or a Board member (incl. Non-executive Director) then this article is for you.
We live in a constant state of flux. Delivering strategic change is a journey and few journeys go according to plan.
A change portfolio is a collection of initiatives often structured as programmes, projects and epics (in agile delivery this term describes a significant solution development such as a new customer mobile app), used to deliver the organisation's strategic objectives and desired changes. A key goal of this approach is to balance the change initiatives alongside the maintenance of Business-as-Usual (BAU) while optimising return on investment.
Organisations don't deliberately increase their complexity, however with an ever-increasing number of interconnected change initiatives, limited budgets and resources, we're often asked by our clients: "How do others successfully manage their change portfolio to improve the value being delivered...and recognise early when it isn't?".
Where change portfolio is not optimised, this can ultimately result in the organisation's strategic objectives not being met. This can mean delays in delivering customer value, not realising operational efficiency gains, and in some cases not meeting regulatory deadlines.
What are the early warning indicators that change portfolio management may not be working in your organisation?
Buy-in: Delivery stakeholders not attending or contributing to governance groups.
Mix and flexibility: Few change initiatives stopped or re-prioritised (as well as the portfolio focusing on incremental growth rather than balanced with a healthy pipeline of disruptive new products and services).
Collaboration: Functional silos, project funding (rather than organising around a value stream) and ongoing portfolio politics.This is often compounded by middle and lower-level management practices and underlying mindsets and behaviour not shifting appropriately.
Pilots: Testing ideas, learning from failures, and scaling up successes quickly is a great approach that reduces risk and builds an appetite for change. However, implementing pilots too quickly can distract focus and resources, and sometimes has bypassed portfolio governance all together.
Outcome focused: Ongoing outcomes (value being delivered / benefits realisation) unclear, not measured and not informing portfolio decisions early enough.
Status reporting: Status reports that change unexpectedly over short time periods with little warning (e.g. 'green' to 'amber' or even 'green' to 'red').
Frustration: Staff on the ground viewing portfolio management as adding unnecessary complexity and cost.
It's really all about focusing on strategic goals and driving better decision making, enabling leaders to make a call on what starts, what stops and what resources should be transferred between change initiatives to meet the organisation's goals more effectively.
For example, a small financial services firm may have a single change portfolio, while a larger retailer or global insurer is likely to have several change portfolios focused on different strategic themes. The themes influence the portfolio strategy and provide business context for portfolio decision making. In both cases they should be aligned to the organisation's wider corporate governance processes (e.g. enterprise risk management, the change framework and Board oversight).
The objectives of change portfolio governance are to:
Ensure the change initiatives are continually aligned to deliver the organisation's strategy e.g. focused on value creation or risk reduction.
Make decisions with regards to the organisation's overall resource and funding to prioritise the change and value being delivered (start, stop, continue).
Align delivery across the change portfolio by challenging critical areas such as inter-dependencies (including balance of strategic and BAU change).
Challenge and support the ongoing delivery of the outcomes and benefits.
Ensure transparency and control over delivery by having a clear view of significant milestones and risks.
There isn't a one size fits all approach and this is influenced by the strategic ambition of the organisation, as well as the scale, complexity and pace of change required.
There are three key areas of responsibility needed for change portfolio governance to achieve its objectives:
The DCR team also identified the following seven success factors for change portfolio governance during projects undertaken in 2022/23 at UK banks, building societies, insurers and retailers:
What makes us unique? We're Professional Services done differently.
Robust independent change advice and assurance does't happen by accident. Our team have extensive experience of working in both a 'hands on' delivery, advisory and assurance capacity across all industry sectors to help enable successful change.
We can work collaboratively with your own team to plan, execute, quality assure and provide assurance over your change portfolio governance and practices.
Change is inevitable and we therefore focus on building your own sustainable internal capability for the long-term - we want you to measure us not just on the quality and insight of our deliverables and outcomes, but also on the successful knowledge and skills transfer with your own teams.
We are passionate about building a change community and have established a quarterly roundtable where we aim to build our collective skills, experience and knowledge together. Are you responsible for leading, delivering or assuring change and would like to join our community of change professionals? Get in touch to let us know!
If you're looking for support in this area, please reach out to a member of our team.