This three-part Advisor series delves into a common challenge modern organizations face: successfully navigating digital transformations in an ever-evolving ecosystem. Part I explained the challenges associated with change in digital transformations and explored an innovative solution to those challenges that leverages data analytics and generative AI (GenAI). In Part II, we discussed how a reimagined change management office (CMO) is vital for digital transformations and looked at the CMO “solution catalog,” levels of program engagement, and enablers for a successful CMO. Here in Part III, we provide a real-world implementation success story and discuss the challenges associated with creating a CMO.

Real-World Implementation & Success Story

A transformation program in the energy sector spanned approximately 28 weeks, methodically covering three phases and five subphases, as illustrated in Figure 1.

In this case, the “evaluate” phase commenced with a comprehensive readiness assessment, focusing on people, processes, and technology to gauge the current state of readiness. This phase included a fit-gap analysis to identify discrepancies and preliminary solutions. After securing consensus from key stakeholders, the program transitioned to the “design” phase. Here, the target operating model and solution roadmap were developed, alongside crafting specific interventions and related content.

Following the “evaluate” phase, stakeholders approved the proposed direction, with budget-conscious adjustments. These modifications were meticulously analyzed in collaboration with the CMO. The development of change-related artifacts, such as communication plan, training materials, and engagement strategies, was initiated, forming the core of this extensive phase.

The final phase, “operate,” was marked by the implementation of interventions as per the target operating model. After the “go-live” event, the local change management team provided ongoing support, evaluating the end state against the initial objectives and monitoring performance. This phase benefitted from the CMO’s ability to analyze adoption patterns and provide actionable insights for continuous improvement.

Measuring CMO Success

For a CMO to function effectively, it’s crucial to have precise metrics and defined milestones. To enable this, the CMO should employ a multifaceted measurement approach:

• At the initiative level, key metrics such as time (tracked against milestones), cost (comparing planned versus actual expenditures), and operational performance (evaluating turnaround time, waste reduction, and quality improvements) should be monitored.

• The program’s health, indicative of the efficacy of management procedures and behavioral changes, can be assessed through a combination of data analytics, observations, interviews, and focused group discussions.

• To gauge the overall performance of a change initiative, the CMO should evaluate its impact on revenue, cost savings, and risk mitigation. A critical indicator of success is the adoption rate; a high rate signifies the CMO’s effectiveness in managing the change initiative. Similarly, a shorter implementation time reflects the robustness and control of the CMO over its processes.

The frequency of metric evaluation is a vital consideration. In large-scale programs, it’s advisable to review metrics weekly, depending on the complexity of the change, with fortnightly reviews by sponsors and steering committees and monthly or quarterly assessments by all program participants.

Challenges & Risks in Creating a CMO

A recurrent obstacle we encounter is resistance from stakeholders, often stemming from skepticism about the necessity of a CMO and apprehension about the changes it might entail. To manage this, unwavering leadership support is essential. Another notable hurdle in setting up a CMO is the scarcity of adequate resources, including funding and technological support. Additionally, global organizations often grapple with cultural barriers that can hinder the establishment of a CMO.

Effective operation of a CMO demands cross-functional collaboration and the seamless integration of various business units and departments. Consequently, organizations with compartmentalized operations might struggle to institute a CMO.

Establishing a CMO offers considerable benefits, but there are potential downsides to consider:

• The cost associated with setting up a CMO can be substantial, particularly if it necessitates hiring additional personnel or acquiring new software.

• Employees might resist the CMO’s formation, fearing it could encroach upon their autonomy and job security.

• The CMO can become overly procedural, focusing more on adhering to methodologies than on achieving impactful outcomes. This can foster a rigid, bureaucratic environment that inhibits innovation and creativity.

• The CMO might lack the authority to effectively address all necessary changes, leading to delays and missed opportunities.

To navigate these challenges and risks, organizations must thoroughly comprehend the value of a CMO and devise a detailed plan for its establishment and operation. 

Conclusion

Establishing a CMO emerges as a strategic solution for organizations navigating the complexities of digital transformation in an evolving ecosystem. The CMO serves as a strategic orchestrator, guiding diverse transformation teams with comprehensive oversight, thereby aligning various program goals. It centralizes and enhances change management strategies, methodologies, and solutions, becoming a hub for essential tools and templates. However, launching a CMO is not without challenges. Addressing these challenges and securing robust leadership support are critical for leveraging the CMO as a catalyst for successful digital transformations and achieving strategic objectives.

We invite your insights, experiences, and comments on this perspective and encourage a collaborative discussion on the evolving role and impact of the CMO in digital transformation initiatives.