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Transformation Leadership: Retaining Critical Capability
By James Bawtree
Several years ago, I was the PMO Manager for a major foreign exchange transformation within a large Australian bank. It was one of the largest programs of its kind in the southern hemisphere and was described internally as the most complex integration program the bank had undertaken.
The program introduced a new front-to-back-office system while updating, replacing or decommissioning more than 100 associated platforms and products. Unlike many ERP implementations, there was no realistic option to roll back once the new environment went live. It was a complex transformation with significant consequences for the bank and the people who would operate what we delivered.
A highly capable markets General Manager was appointed as Program Director. He understood the business, had credibility with senior executives and was prepared to make difficult decisions. The Program Director set up a core leadership team and between us, and with the support of the wider program team, we successfully delivered the transformation winning a major Australian bank CEO Annual Award for Delivery Excellence.
By the usual measures, the program was a success. The work was completed, the new operating arrangements were established and the organisation moved into its intended future state. Yet the story did not end well for the person who had led it.
When the target operating model was developed, the Program Director did not include a specific future role for himself. Once the program was completed and the temporary delivery structure was dismantled, he was made redundant.
I found that very difficult. Here was someone who had taken responsibility for a complex and demanding transformation, put the organisation’s interests first and delivered what had been asked of him. In doing so, he had effectively designed himself out of the organisation.
At first, this appeared to be a personal loss for the Program Director. What happened next demonstrated that it was also a significant loss for the bank.
What the bank lost
A second program was established to update one of the bank’s major trading platforms. Rather than using the governance and operating model that had worked during the transformation, the new program adopted a different and less transparent delivery approach.
The original transformation leadership had previously challenged this approach because it did not provide the clarity, control or accountability required for work of that complexity. After the original Program Director had left, however, there was no longer the same strength of leadership to resist it.
Some operational executives resisted the level of transparency created by the transformation program. The governance model made ownership visible, exposed dependencies and required decisions to be documented. In my view, the alternative approach reduced this scrutiny, but it also left the organisation with less effective control.
The alternative approach did not succeed.
Members of the original transformation PMO were then asked to help recover the second program. They reintroduced the governance arrangements and operating model developed during the earlier transformation. With that structure in place, the second program was ultimately delivered successfully.
The irony was difficult to miss. The bank had removed the leader who had helped establish an effective transformation model, allowed a less robust approach to be adopted and then returned to the original model when the new approach failed.
Had the former Program Director been appointed to lead the second program, I believe the bank would have achieved its benefits sooner. He already understood the organisation, the platform environment, the governance model and the people involved. This cannot be known with certainty, but the later decision to restore the original governance model suggests that much of the delay was avoidable.
The executives involved subsequently left the bank, while the additional cost and delay were absorbed within the wider organisation. There was no visible point at which the bank acknowledged that it had lost valuable capability or repeated an avoidable mistake.
In a large organisation, the cost of poor transformation decisions can disappear into annual budgets, revised forecasts and changing executive accountabilities. The program eventually reports success, the people involved move on and few outside the delivery team understand how much time and value were lost along the way.
The real villain
There was no single villain in this story. The deeper problem was organisational resistance to transparency, combined with a failure to retain and reuse successful delivery capability.
Transformation governance creates visibility. It shows whether decisions are being made, whether risks have owners, whether workstreams are genuinely aligned and whether the organisation is ready to absorb the change. Good governance can be uncomfortable because it makes performance and accountability difficult to avoid.
When leaders experience transparency as a threat rather than a source of better decisions, they may favour approaches that appear more flexible but provide less organisational control. The reporting becomes more positive, challenge reduces and difficult issues remain hidden for longer. The program may feel easier to manage until the consequences become too significant to ignore.
This is not an argument for excessive bureaucracy. Governance should support delivery rather than slow it down. However, removing transparency is not the same as removing bureaucracy. A program can have fewer meetings and documents while still maintaining clear decision rights, reliable information, visible dependencies and honest reporting.
The original transformation model had achieved that balance. The second program moved away from it, discovered why it had been necessary and eventually rebuilt it.
Complicated delivery versus complex transformation
A complicated program can have thousands of tasks, large budgets and multiple technical dependencies. It may be difficult to deliver, but much of that difficulty can be analysed, planned and managed. Complexity is different because it involves unpredictable interactions between people, decisions, systems and changing conditions.
A decision that appears reasonable within one part of the organisation can create an unexpected consequence elsewhere. Removing the Program Director reduced an employment cost and closed a temporary role, but it also removed experience, authority and organisational memory that the bank soon needed again.
Similarly, allowing the second program to use a less transparent delivery approach may have reduced tension with some operational stakeholders. At the same time, it weakened the controls needed to manage the program successfully.
Each decision could be defended in isolation. Viewed as part of the wider system, they contributed to delay, duplicated effort and slower benefits realisation.
The people delivering change are also affected by it
Most transformations recognise that operational employees will be affected. They undertake business-impact assessments, develop communications, arrange training and monitor readiness. The same discipline is not always applied to the program team.
Program directors, business representatives, change managers and subject-matter experts may spend several years delivering a transformation. During that time, their previous positions can disappear, their teams can be restructured and their knowledge can become essential to the future organisation. They are not standing outside the change. They are part of the organisation being changed.
This raises a governance question that is often overlooked: who is responsible for considering the future of the people who are fully occupied delivering the transformation?
It should not be left to individuals to create positions for themselves in a target operating model. Apart from being uncomfortable, this can create a genuine conflict of interest. The responsibility should sit with the sponsor, Program Board, business leadership and HR, supported by a transparent assessment of the capabilities the future organisation will require.
This does not mean that everyone working on a program should automatically receive a permanent role. Programs are temporary by design, and some roles will no longer be required. It does mean that workforce transition should be planned rather than left until the program closes.
In this case, the question should not only have been whether the Program Director had a role in the completed operating model. The bank should also have considered whether it needed his leadership for the next major transformation already on the horizon.
Retain the capability, not necessarily the structure
Organisations often treat program capability as temporary. Teams are assembled, methods are developed and hard-won lessons are captured in closure reports. The team is then dispersed and the next program starts with new consultants, new terminology and a new delivery model.
The documents may remain, but much of the practical knowledge leaves with the people.
A better approach would identify which elements of the program’s capability should be retained. This includes governance arrangements, decision pathways, reporting disciplines, stakeholder relationships and the people who know how to make them work in practice.
The aim is not to preserve a large program structure indefinitely. It is to retain enough leadership and institutional knowledge to avoid relearning the same lessons during the next major initiative.
Where another transformation is planned, the organisation should assess proven internal leaders before defaulting to external appointments. Consultants can provide valuable expertise and independence, but they should complement organisational capability rather than replace or overlook leadership that has already demonstrated its value.
Measure adoption and benefits, not activity
This experience also reinforced why transformation governance must look beyond traditional delivery reporting.
Training attendance, for example, is useful, but it only shows that people attended a session. It does not demonstrate that they adopted the new way of working. Better evidence comes after implementation. Are employees following the new standard operating procedures? Are they continuing to use legacy systems or spreadsheets? Are managers reinforcing the change? Are workarounds revealing weaknesses in the design? Has critical program knowledge transferred into operational teams?
The same principle applies to the program itself. A new governance approach should not be judged by whether stakeholders find it more comfortable or whether reports contain fewer problems. It should be judged by whether decisions are made more effectively, risks are addressed earlier, delivery remains within agreed tolerances and benefits are achieved sooner.
The second program eventually succeeded after returning to the original transformation model. That outcome validated the model, but only after the bank had incurred avoidable delay and cost.
The lesson I carried forward
The Program Director did not fail. He delivered what the organisation asked him to deliver. The bank then lost his capability, moved away from the governance discipline he had helped establish and later relied on members of his former PMO to restore it.
The failure was not simply that one executive was made redundant. It was that the organisation did not recognise the value of proven transformation leadership until it needed the same capability again.
My lasting lesson is that the people delivering transformation also need to be considered as part of the transformation. A target operating model is not complete because every box has been drawn and every reporting line agreed. It is complete when the organisation has the capability, knowledge and leadership needed to make it work and to deliver what comes next.
Large organisations can absorb the cost of relearning old lessons. That does not make those lessons free.
Is your organisation ready for what comes after transformation?
At PMLogic, we help organisations strengthen transformation governance, retain critical capability and turn delivery experience into lasting organisational value.
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