PE-backed scale-up's 10x growth to become a unicorn after IT/Product transformation
The Situation
Newly hired CTO of a PE-backed, InsureTech-wannabe inherited an IT department that was underperforming the business to the point where outsourcing was being considered. Executives and investors were frustrated at the situation 2 years into the 5 year PE investment cycle.
The Task
Turnaround the effectiveness and efficiency of the IT and product delivery world, scale the capability and embed it in the heart of the business model to drive the commercial success via technology innovation. This would establish the right conditions for the next investment round to be highly successful.
The alternative for the client’s leadership was to outsource technology, losing direct control on their potential competitive advantage.
The Action / Approach
As the only external consultant, I worked with client staff in the following ways.
Leadership:
- Architected and proposed a 5-phase transformation strategy to the board
- Coached the CTO and IT Leadership Team through the transformation
- Applied Organisational Design principles to shape a management hierarchy that provided psychological safety for team members and a healthy balance of concerns at the Leadership table
- Introduced and implemented the use of metrics across software delivery to allow Leadership and teams to inspect the state of their world, bringing a shift in mindset to being data-first
- Worked with leaders and staff across the business to explain and promote the new Ways of Working
Teams:
- Coached teams in the practical application of agility
- Moved teams away from manual testing to automated testing via TDD and BDD
- Hired a number of new roles in the organisation to drive the transformation, including Scrum Masters
- Worked with leadership to end some roles that weren’t needed, offering incumbents new roles or favourable exit
Product capability:
- Introduced a product mindset across technology and the wider business, building a product capability
- Formed dedicated, long-standing teams around products
- Introduced a front-door and lightweight process for capturing and prioritising work requests
- Introduced portfolio management
- Instigated a cross-team synchronisation mechanism to ensure alignment towards business goals
- Coached the product leads in bringing data into the prioritisation process
Future capabilities:
- Setup a Continuous Improvement culture and cross-team alignment process via the use of OKRs
- Built out the company’s first future-technologies capability to bring machine learning to key products
The Result
After a 2.5 year engagement (multiple renewals), the turnaround had a huge impact on the business and technology.
The business outcomes:
- The company achieved a 10x growth in valuation over the 5-year investment cycle, to be valued at £2.5bn. The improvement in technology delivery and innovation was credited as heavily underpinning this valuation.
- The client is now actively promoting itself as a career destination for technologists and product roles
The product delivery capability outcomes:
- The client has a “Product” organisation which removes the silos between IT and the rest of the business
- The Product Delivery function scaled 3x in 3 years, and continues to grow at a similar rate, a complete turnaround from the outsourcing threat
- The client has continued to invest heavily in the Product Delivery organisation, moving them into their own customised office, an innovation hub, decked out with everything needed, including PlayStations
The delivery outcomes:
- Predictability of delivery went from 40% to over 90%
- Increased the output and quality of software delivery, measured by system downtime
- Increased the commercial thinking of the software delivery teams
- Enabled an architectural shift to event-driven microservices utilising cloud technologies, furthering the transformation into a modern, fast, competitive product delivery organisation
Overall:
- Due to the Continuous Improvement ethos put in place, the “transformation” continues at pace without the need for external guidance
Focus In On: Responsible for Digital Business Transformation
New Areas of Value:
Gain access to additional budget through success
Improved business agility and ability to rapidly respond to change and opportunity
Digital transformation that drives, moves and resets the organisation’s vision
Direct positive impact on internal and external customer satisfaction
Increased credibility, confidence and influence across the business
More consistent and sustainable profitability and business growth
Driving a culture of innovation for easier and faster adoption of future digital trends
More satisfied and engaged employees with increased retention and productivity
Successful, timely delivery of evidence-based digital transformational outcomes; beyond digitisation
Creating a culture of involvement, empowerment and connection to the business
Better employer brand recognition from improved reputation and or culture
Improvements around:
Budget availability affected by external change drivers and uncertain resource estimates
Lack of availability of the right people at the right time across both business and technology areas
Leaders mandating a change management and implementation approach that’s not appropriate to the organisation
Lack of transformation, change and agility mindset in leadership
Lack of clarity around existing operating model, internal business ecosystem or cross-functional teams
Lack of sufficient customer and market insight to inform digital transformation
Conflict between perception and reality of digital skills, tools, methods and talent required and available
Unclear and siloed business strategy leading to misaligned goals across the organisation that conflict with transformation
Lack of exec sponsorship and ownership
Cynicism, lack of buy-in and resistance to change
The IT function is not aligned to the digital business strategy and vision
Lack of agreement of transformation governance and stakeholder understanding leading to a fragmented approach
