Resource investments and adequate budget allocations are critical in ensuring successful transformational initiatives within organizations. However, as these elements are finite and often constrained, it is important to communicate the value of your initiatives to ensure buy-in.
This executive brief discusses how to highlight and leverage the potential value of transformation initiatives and gain a competitive advantage against other high-priorities projects, advocate the need for companies to continuously innovate and remain in competitive markets, along with the methods to measure and communicate outcomes to ensure continued funding.
This roundtable was held on October 10th, 2024.
Negotiation Tactics: Highlighting the Values of Transformations
1. Create a Solid Business Case
✔ Centralized Budget & Regional Alignment
A centralized budget ensures funds are allocated accordingly. Create business cases to highlight the value of unique, region-specific, or business-specific ventures especially when a centralized budget needs to be shared across and requires sign-off.
“If you are bringing in a new centralized global system to replace a bunch of other software, create unique business cases for each impacted region on top of the centralized business case. There might be some incremental investment required for certain locations with varying technological capabilities to ensure successful adoption.”
Jeffrey Barth - Strategic Advisor | The Rube Goldberg Institute for Innovation & Creativity
✔ Identify End Goals
Set clear goals and progress metrics at the outset to highlight the value of your transformation and track its success including revenue growth, cost-saving factors, or operational efficiency. Define SOPs and establish clear objectives within each transformation phase. Point out the differences between running the initiative and not running it as a point for comparison.
“Establishing transformation processes involves three key steps, starting with setting up a steering committee that includes the CFO and finance team. Next, outline standard practices and define potential benefits and ROIs alongside impacted business teams. Finally, create goals and OKRs with specific measurement metrics based on the formed hypothesis.”
CK Taneja - Senior Vice President Enterprise Resiliency | Northern Trust Corporation
Break projects into phases and present your business case with a milestone-based approach including a hypercare period specified for each launched phase. This will help heighten and direct focus towards tracking progress, addressing potential issues, and ensuring change is on track before moving on to the next phase.
“Manage expectations along the way up until the end of your project. Set up measurements and get estimates before signing off on the budget to keep people accountable.”
Sree Mikkilineni - CIO | Morton Salt
2. Prioritization & Investment Focus
Focus your resources on high-priority, high-impact initiatives that drive significant business outcomes. Point out to senior leadership what can and cannot be done with the current budget or resources you have and use that as a building block to advocate for more allocations. When facing backlogs or budget cuts, it is better to trim the number of initiatives instead of spreading the resources too thin by equally sharing the resources you have. Consolidating efforts on high-impact, above-the-line areas will help increase the chance of success and make it easier to demonstrate measurable results that justify further investments.
3. Gain Advocacy and Buy-In
✔ Incorporate Diverse Stakeholder Perspectives
Consider diverse perspectives to ensure a well-rounded transformation that addresses the needs of impacted stakeholders, ensuring a smoother approval process and broader support. These primary stakeholders include:
- Chain of command including the CEO or C-levels who approve and allocate necessary resources.
- Internal clients including different business lines impacted, regional leaders, etc.
- Finance partners that ensure credibility and alignment of change objectives.
“Make sure transformation needs have shared objectives and key results across multiple key executives. It is easier to secure higher budgets when it receives attention and agreement with the right people on board.”
Jamie Lee - Head of Corporate Strategy | Lucid Motors
“Leverage the ‘try before you buy’ approach. Give opportunities for stakeholders to test and assess the investment before committing further.”
Sree Mikkilineni - CIO | Morton Salt
✔ Enhance Close Collaboration
Building advocacy is not just about pitching the project and getting alignment, but also about fostering close collaboration. Harness the power of interdepartmental relationships to ensure all relevant parties are engaged beyond the initial investment and throughout the execution process.
“A big chunk of the work is about selling the need for transformation and continuous improvement. Certain departments are willing to invest their budget in a transformation as long as they believe in it. ”
Maureen Terralheiro - VP, Client Management Centre | A. Farber & Partners Inc.
“The transformation team needs to be their own internal sales team and change consultancy firm. You need to tell people nicely how they could be doing better. Make sure to make these departments ‘pay’ in credits for service rendered so they will value the work more and take it seriously since they have invested their resources into it. ”
CK Taneja - Senior Vice President Enterprise Resiliency | Northern Trust Corporation
✔ Foster Strong Rapport with Finance Teams
Have finance partners on board not only at the start of your project but throughout its lifecycle. This is significant especially when you are building the business case to ensure that the project is viable, receives the resources it needs, and aligns with the organization’s financial goals.
“While it is easier to calculate the potential ROIs for more straightforward cases such as software replacement or headcount reduction, complex transformations require closer collaboration with finance to enable more rigorous impact analysis in identifying the flow of opportunities within the initiative.”
Jeffrey Barth - Strategic Advisor | The Rube Goldberg Institute for Innovation & Creativity
“Other than approving funding, finance can help confirm past successes, vouch for potential savings, and validate outcomes. This provides credibility towards your transformation work and creates advocacy, all while ensuring transparency.”
Amit Mittal - Senior Vice President, Head of Strategic Execution | U.S. Bank
✔ Nurture Continuous Improvement (CI) Mindset
Emphasize the importance of evolving the business to avoid stagnation and continue to invest in the growth mindset. With a changed perspective, the number of active transformations will continue to grow along with increased budgets and investments toward change.
“Remember that as the organization progresses more, it will become more challenging to implement transformation since most of the low-hanging fruits have already been addressed, leaving tougher, less impactful changes to pursue.”
CK Taneja - Senior Vice President Enterprise Resiliency | Northern Trust Corporation
Buy-In Strategies While Competing with High-Priority Projects
1. Change Readiness & Organizational Priorities
Assess the business’ readiness for a specific change by evaluating leadership commitment, resource availability, and whether it is a good time to begin making changes. It is also essential to align with key organizational priorities in navigating cost decisions. Figure out the CEO’s top five business priorities and have your change align with them to make it easier to increase the transformation budget and make change happen.
2. Risk Analysis & Impact Assessments
Sell the need for efficiency by highlighting potential risks and communicating the consequences of doing less with fewer resources. To make a compelling case, clearly outline what will be sacrificed if cuts are made, potential cost avoidance, and the anticipated results when allocating lower vs. higher budgets.
“For instance, bring up the potential costs if the business doesn’t comply with regulatory compliance. Sometimes, the cost of compliance can be more expensive than the penalty. Identify if the business can afford to delay it to focus on higher-priority items. It all comes down to how much risk the business is willing to take.”
CK Taneja - Senior Vice President Enterprise Resiliency | Northern Trust Corporation
3. Quantifying and Leveraging Savings
Quantify savings to justify investment. Show how your approaches result in savings and how they can be reinvested into the business.
“Identify surplus budget from OpEx and check if you can leverage it as the CapEx to fund new initiatives. Clients are often willing to invest in new projects when they see solid ROIs from past savings along with the potential for further returns from reinvestment.”
Amit Mittal - Senior Vice President, Head of Strategic Execution | U.S. Bank
4. Tapping into BAU Resources
For non-financially quantifiable projects such as regulatory change and compliance, tap into your BAU resources to utilize staff and existing resources to support ongoing transformation. This is particularly relevant for regulatory change where the main focus may not be on direct savings but on ensuring compliance and managing risks.
However, it is equally important to be proactive with these changes to help the organization be prepared for them even when the cost specifics are unknown. Balance ‘proactivity’ for cost savings purposes with ‘reactivity’ in recognizing that some regulatory changes will require a quick response, especially with the number of regulations that must be complied with concurrently.
Measuring Transformation ROIs & Securing Additional Funding
✔ Quantify Tangible Gains & Showcase Intangible Benefits
Let the data do the talking instead of relying on personalities or subjective opinions. Track and report true impact at intervals throughout execution to identify leading and lagging indicators. Regular check-ins are important to assess progress against OKRs and make necessary adjustments.
“Fairly highlight both quantitative and qualitative metrics as the latter is equally important in demonstrating the success of change. Having qualitative insights defined will also help in demonstrating how changes are perceived on the ground and show the real-life impact of the change.”
Alvin Haygan - Organizational Change Management Principal | Pfizer
“It is important to consider how we can make the case for a transformation if the ROI is murky. For instance, it is a little tricky to identify cost avoidance compared to measuring cost savings since proving cost avoidance doesn’t show up as tangible savings. This makes it harder to justify and get credit for them.”
Amit Mittal - Senior Vice President, Head of Strategic Execution | U.S. Bank
“Compare the difference between doing the transformation and not doing it. That will be a good starting point when building the business case and pointing out how a project can fail without the support of change leadership.”
Annemie Verrijken - Senior Director Strategic Change Enablement | UNFI
✔ Custom Dashboard for C-Suite Executives
Create a tailored dashboard for C-suite executives to track the progress and outcomes of initiatives. Set the frequency of reporting at the beginning and use different measurement metrics depending on the transformation objectives such as the increase in sales, ease of data access, or time required for contract turnaround. This will highlight the differences before and after an initiative is implemented.
✔ Communication via Audience Segmentations
Personalize communications via audience segmentations to highlight transformational impact. Town halls and departmental updates can be used to communicate outcomes of change, ensuring the entire organization is well-informed about the success of the initiatives.
“Create different newsletters to share specific updates for segmented audiences. For example, initiatives impacting different departments should have separate updates distributed to emphasize relevant benefits and outcomes for each team.”
Sree Mikkilineni - CIO | Morton Salt
✔ Feedback & Sentiment Tracking
Leverage feedback surveys and similar tools to gain insight into overall employees’ sentiments and if the change is positively impacting the business. It is also beneficial to collect end clients' feedback on how they are experiencing the change whenever necessary. Feedback collection does not necessarily require a complex or elaborate process. Sometimes, a star rating is enough to gauge sentiments.
“Share positive feedback with the leadership to allow them to celebrate the achievements and validate change efforts, boosting morale, and reinforcing a transformation’s value.”
Alvin Haygan - Organizational Change Management Principal | Pfizer
Conclusion
Success in negotiating resources and securing budgets for change initiatives requires thorough management of transformation expectations via compelling business cases. This ensures buy-in, detailed risk analysis to identify potential impacts of fiscal constraints, and progress metrics to measure achievements. By ensuring clear communication across levels, fostering close partnerships, focusing on high-impact areas, and continuing education around the importance of change and transformation, change leaders can ensure transformation efforts are adequately funded and supported, enabling favorable long-term outcomes.
The Executive Council for Leading Change
The Executive Council for Leading Change (ECLC) is a global organization that brings executives together to redefine the landscape of organizational change and transformation. Our council aims to advance strategic leadership expertise in the realm of corporate change by connecting visionary leaders. It's a place where leaders responsible for significant change initiatives can collaborate, plan, and create practical solutions for intricate challenges in leading large organizations through major shifts.
In a world where change is constant, we recognize its crucial role in driving business success. ECLC’s mission is to create a community where leaders can excel in guiding their organizations through these dynamic times.
Interested in joining ECLC? Learn the membership criteria and sign-up below.
