Fix it before it breaks

 |  By: Steve Johnson In: Agency management

What business wouldn't be delighted to make a change that resulted in a transformation for the better?

Lovely. But when should you make such a move? When you're struggling, or when you're doing well?

Boston Consulting Group’s think tank (BCG Henderson Institute) considered this very question in an interesting paper called ‘Preemptive Transformation: Fix it Before it Breaks’. The idea is based around this Chinese saying:

“Cure the disease that has not happened.”

They ask: Should business leaders engage in transformation pre-emptively, or wait for a degradation to trigger change? They considered the evidence, analysing hundreds of company transformations, and discovered this:

“We found that preemptive change does indeed generate significantly higher long-term value than reactive change, and it does so faster and more reliably.”

In case you’re wondering, for their analysis they considered a company’s transformation as reactive if it was launched while the firm was underperforming its industry.

They quote Giuseppe Tomasi di Lampedusa from his book The Leopard:

“If we want things to stay as they are, things will have to change.”

It means that if your company is doing well, it is time to change. ‘In order to maintain outperformance, companies should pursue preemptive transformation rather than relying on performance momentum to sustain itself.’

‘Furthermore, the preemption premium is continuous: the higher the relative performance of a company when it initiates change, the higher its long-term relative performance. In other words, the earlier a transformation is initiated, the better.’

But do businesses actually do that?

In reality only 15% of outperforming companies embark on transformation, whereas 20% of underperforming and 25% of severely underperforming companies do.

They also discovered that when outperforming businesses make the change, transformations take less time and are less costly than when underperforming ones do. They estimate the ROI to be 50% higher.

They have identified several steps to successful preemptive change:

  1. Constantly explore. Anticipate change by continually considering new options.
  2. Create a sense of urgency. When a business is doing well, there is the danger of complacency. Some tactics that help are studying maverick challengers, surveying dissatisfied customers and testing the business model.
  3. Watch out for early warning signs.
  4. Control the narrative. ‘Preemptive change may generate frictions with stakeholders who believe that prudence and continuity are the best policies. Leaders should take control of the narrative. Defining and conveying the purpose of the company, and relating change efforts to that purpose, can help energize employees for change efforts which may otherwise be perceived as threatening.’
  5. Choose the right approaches to change. ‘Preemptive change is more likely to rely on adaptive or visionary models of change, rather than heavy-handed, top-down approaches.’

The relevence to project management

Implementing a project management system can be transformational. Our users tell us so.

Julie Clare, Chief Executive of Clear B2B:

“Synergist has transformed the running of this agency and greatly increased our profitability."

Rebecca Frain, Managing Director of Electrical Safety UK, told us:

“It has revolutionised how we run our business. The transformation has been amazing! It's given us new confidence in what we can achieve."

And the Managing Director of a UK environmental consultancy said:

“Synergist changes everything.”

With growth being such a driver for us, Synergist’s ability to provide detailed visibility of our operations, enable project managers to make sound decisions – and of course its scalability are a big plus. 

But why would having a project management system have such a big effect?

Well, not all project management systems are the same. It takes a powerful system to make such an impact. It’s a matter of the breadth of features and the level of integration between them.

The transformational Synergist effect can be summarised like this:

For managers

It is a breakthrough to be able to steer the business forward and feel more in control. See which projects and types of projects are profitable, receive early warnings of problems, know what your business’s current capacity and staff utilisations are, check on your new business forecast, monitor your billings forecast and systematically pull the right levers to maximise profitability and drive growth. All in the knowledge that your system is scalable from 15 to 600 people.

For teams

It is an eye-opener to have the right information at your fingertips in order to do your job well. Make smarter decisions, avoid wasting time searching for things, discover that your actions make a real difference to project success, become commercially aware, have clarity of tasks and priorities, and see how scarce resources are allocated not to those who yell the loudest but those who need it most.

So, do you wait until you have outgrown your old system and things are breaking down? Not really. There is another factor to think about. When upgrading your system, it's a lot better to do it when things aren't falling apart. And underpowered systems or clusters of spreadsheets are indeed prone to cause exponential levels of problems when you reach a tipping point in business size or complexity.

We'll leave the last word to Synergist user Steve Revell, the Managing Director of Maleon, about his thoughts on timing.

"We decided that there’s no magic perfect time to install a management system.

"We’d recommend that firms should just do it as soon as they can. Bite the bullet!"