After introducing the concept of “Transformation-Lag” – the time it takes for strategic thoughts to make impact – I had interesting conversations with executives, not only on the chronological aspects, but more so on the “shape” of their lag.
We decided shape determines what strategy and execution capabilities as well as methodologies you’ll need to get the job done.
Let me explain by comparing two very different shapes of Transformation Lag: Technology Services and Railways Operators.
In my model for Tech Services, the transformation-lag to get to 50% impact is approximately six quarters, and about eight quarters to reach 100%. Strategy creation, decision-making, implementation planning and enablement take up to 3-4 quarters; then the impact will generally percolate throughout the business.
By contrast, a Railways operator has a different shape of Transformation Lag. Major changes in this business are introduced with the yearly change of timetables. This is a binary event. The execution-phase lasts basically one moment – when the old timetable is replaced by the new one; then execution is done.
However, getting there involves an intense process which includes analysis of long-term market potential, short-term plans for all origins/destinations, and finally a comprehensive production plan for locomotives, personnel, and tracks. Quite a complex network planning exercise of 6+ quarters must take place before that specific day timetables are switched.
If you overlay these two shapes (see chart; normalised for comparison), you can make the following observations:
- Railway Operator has 9-10 month more planning time (1). Execution impact is binary from 0 to 100% in a day.
- Tech Services has an extensive learn & adapt (2) phase of up to 12 months whilst getting to 100%.
Railway Operators will have to excel in the strategy & planning phase. Execution capabilities may focus on escalation management post introduction of the new timetable. But mastering the strategy & planning phase is key to success.
Tech Services will have a more balanced shape between strategy & execution. The execution phase will likely involve large-scale enablement and mobilisation as well as building mechanisms to loop in any needed adaptations. Mastering the execution phase is key to success.
Therefore, mastering your transformation lag chronologically is one key to execution success. But, understanding the shape of the lag is the other. It will define in which phase you must put resources, and what methodologies you must deploy to maximise impact.