It was the evening before the start of my new role as Foot Locker’s first Chief Strategy & Transformation Officer that I had an eye-opening realization about something critical for success. Something that would give me credibility at the company as I literally walked in the door. I needed a new pair of cool kicks! The current sneaker collection in my Manhattan sized apartment just wouldn’t cut it. I rushed to my local Foot Locker just a block away before it closed and brought my wife and two month-old son along for the adventure as well. The trip was a success and we eventually left the place with something for everyone, even my newborn whose sneakers wouldn’t be spending much time hitting the ground. Although I had yet to start in the role, I couldn’t help but make some mental notes at the store of opportunities to improve the customer experience. Waiting almost ten minutes for the store associate to check inventory in the stockroom for a pair of sneakers you like can feel like forever. Add the screaming sounds of a newborn whose sleep you just disturbed so you can get sneakers for the first day of work – now that feels like a lifetime!
Apart from ensuring you have the right footwear well before your start date, my experience driving ambitious global transformation efforts has taught me valuable lessons. Lessons I picked up across several industries from financial services (institutional and consumer banking) to CPG (beverage alcohol) to most recently retail (sneakers & apparel). Whether you’re a first-time Chief Transformation Officer (CTO) or seeking to elevate your impact in a role, the following five principles have proven effective for me.
1: Anticipate potential headwinds and focus on educating peers, demonstrating your value and staying connected with the CEO
The CTO role is a relatively new but rapidly growing addition to the C-suite. According to a recent McKinsey study, approximately a quarter of the top 100 consumer/retail companies have a CTO in place, with most appointees joining in the last few years. However, it is surprising that about 75% of leading companies do not have one, despite the evident impact this role can offer. Research by Bain indicates that a dedicated CTO can drive 24% more value and mitigate risks, especially considering that only around 30% of transformations achieve their objectives. Since companies have only recently recognized the necessity of a dedicated CTO, your peers in the C-suite may not fully understand this role or how to collaborate effectively with one. An effective CTO leads a 4-pillar holistic effort, encompassing growth initiatives, cost efficiencies, technology enablement, and organizational effectiveness. As these areas are already overseen by other C-suite executives like the Chief Operating Officer or Chief Human Resources Officer, your peers may find your involvement intrusive and be skeptical of how you will add value.
My guidance is to invest more time than anticipated in explaining and reinforcing the CTO’s role and its alignment with the company’s strategy. Assure your colleagues that you are there to support their success and goals, and that this is only possible through candid discussions and radical transparency about the transformation. Find ways to demonstrate your value as soon as possible. Understand their priorities, concerns, or areas where they may need help. After listening and observing, come back to your leadership team with tangible opportunities for improvement. For example, if competing priorities have led to cross-functional efforts getting stuck, offer a plan to solve the issue and then implement it. Demonstrating the ability to get things done and effect change early in your CTO tenure is paramount. If you’re new to an organization, mastering both content and process can feel daunting. Consider getting a mentor or buddy to help, as well as working with respected insiders. In my previous role, my right-hand person on the transformation was a seasoned leader within the organization. Despite not having a transformation background, he possessed valuable insights into past practices and had strong relationships, making his perspective invaluable in identifying organizational interdependencies.
Undoubtedly, the CEO and CTO relationship is vital for any transformation. Both leaders must be in total lockstep to effectively drive the change and role model the new ways of working and thinking at the company. Before accepting the role, ensure you have their unwavering support and commitment and that they have your back. I’ve experienced moments during a transformation when members of the leadership team become distracted or uncertain in their commitment to the program and I needed to partner with the CEO to reinforce expectations.
2: Respect the past while also making a strong case for employee-driven change
It would be great if companies initiated transformation programs from a position of strength when the business is thriving with a mindset to make bold moves and self-disrupt before others can. In reality, few companies undertake it until provoked by urgent situations like an activist investor or accelerating share decline to a competitor. In such cases, an anxious Board may express skepticism about the leadership team’s ability to navigate the transformation successfully. Moreover, the term ‘transformation’ can trigger employee fears of layoffs and cost-cutting, as they might have experienced in the past. Similar to how a CTO must explain the role to peers, you must also spend time defining what the transformation is and even what it is not.
Balancing the case for change with respect for the past is crucial. I’ve observed instances where leaders are overly critical and dismissive of the company’s position, which can alienate the very people needed for a successful transformation. A better approach involves genuinely acknowledging past efforts and the individuals responsible for those achievements. Subsequently, you can transition to explaining the strategy and vision for the company and why this path was selected. Based on my experience, as you move deeper into an organization, employees are less likely to understand this but they deeply appreciate the time spent discussing the strategy. When executed effectively, this approach makes the case for change easier to digest of why change is needed, what is changing and what’s in it for employees. While some individuals will offer immediate support for the transformation, the majority will likely wait to observe how things unfold. Certain individuals may remain unconvinced and resistant, and the key to success is maintaining their neutrality so they don’t actively undermine the program.
I’ve found that employees respond positively when they recognize themselves as the drivers of transformation and change with the company. While leadership sets the long-term vision, targets and program timing, employees execute the strategic vision within their current responsibilities. For instance, the e-commerce team may explore new distribution avenues for growth, the technology team optimizes cloud spend, and the procurement group consolidates vendors for cost reduction. The transformation empowers employees to enact long-desired changes, previously hindered by factors like limited resources or lack of prioritization. An effective transformation is an unlock for employees to identify and assess ideas, turn them into real initiatives with a business case and implementation plan, and take ownership of the delivery so they realize their intended value and impact. Beyond the numbers the cultural impact of this cannot be understated in giving employees stronger purpose and agency in driving change.
3: Establish a diverse Transformation Office focused on problem solving not status reporting
The Transformation Office (TO) functions as an air traffic control, orchestrating the take-off and landing of all initiatives. The TO acts as the global single source of truth, cultivating a culture of accountability and effective delivery. The TO should comprise experts in various functional areas. Finance is crucial for tracking program impact and results. Technology expertise is essential as a large number of initiatives are IT enabled. Communications play a key role in facilitating change management.
The weekly workstream meetings with the TO are fast-paced, designed to drive progress and alleviate roadblocks. This shift might feel dramatic for those accustomed to snoozy PMO status meetings where all initiatives appear ‘green’ but in reality are juicy watermelons splattering ‘red’ upon closer examination. Ideally, workstreams eagerly anticipate TO meetings as valuable opportunities for gaining insights and resolving challenges. They should respect that in driving accountability and pushing on progress you’re helping them achieve the results they seek. However you’ll inevitably see workstreams disengage or leaders cite conflicts to avoid attending the TO meetings. Addressing these issues early on and reinforcing ownership is important. It’s also an opportunity to pressure check that you’re running the meetings in a way that is adding value or explore if there is another issue at play. Workstream sponsors must have full C-suite support and be empowered to make decisions that influence the entire company. If they don’t then it might be a contributor to their disengagement. Finally, you can infuse creativity into TO meetings to strengthen engagement such as surprise visits from the CEO or other leaders to reinforce the priority of these sessions. This also allows the leadership team to project a strong sense of unity and direction to the rest of the organization.
4: Reinforce the company’s ownership of the Transformation (i.e. it’s not a consulting firm’s transformation)
Partnering with an external consultancy especially when initiating the transformation program can accelerate efforts and enhance internal credibility, particularly if past attempts faced challenges. Many consultancies structure transformation support differently and are willing to put fees at risk so you pay when you see actual results hit your financials.
While I advocate exploring external support, it’s crucial to prioritize the company’s leadership in designing the transformation program. This entails having top and emerging talent at the helm of the Transformation Office and workstreams. I’ve winced too many times when employees say we’re doing the “McKinsey transformation” or “Bain transformation”. I emphasize that it’s OUR transformation, with consultants providing support and expertise to complement our in-house capabilities. Transparently communicating the plan to phase out external support will encourage internal alignment and preparation to fully take over the effort. It’s advisable to include in the consulting contract a clear expectation that the firm will assist in designing the transformation organization and facilitate a smooth transition of work to the internal team. Transformation should be an “always on” capability. Employees often ask, “When is the transformation over?”. I respond with a smile, “It’s never over!” Just like planes taking off and landing, transformation is an ongoing process.
5: Engage hearts & minds through recognition, incentives and communicating across every corner of the company
Transformation success is through winning hearts & minds. You want people to feel connected with the transformation. Highlight success stories and how the transformation has made someone’s job better or improved a customer’s experience or reduced costs in the business. Identify where to get some early wins and build momentum. Communicate through every medium possible to get your message out. For example, I would post a weekly Teams message to recap transformation progress to all team members. I would recognize people whose behaviors & actions were aligned with the new way of working and thinking at the company and also provide the CEO a few names of people who had an outsized impact on the transformation for them to call and thank personally. Those were always great moments as people many layers below in the organization were in disbelief that the CEO was calling to recognize their work. People usually thought it was a spam call or a prank! I would also instill some healthy competition between workstreams with fun incentives connected to the company’s product or service. I was always amazed at the lengths people would go to win access to a new sneaker drop or to secure a bottle of wine.
Ensure effective communication reaches all corners of the company. If you’re US based but with a global presence you might be neglecting those in other geographies. I’ve made it a point to travel outside the home office and pull together a cross-section of people to get to know them and to answer questions and solicit candid feedback. During these visits, I often discovered pain points and identified opportunities to address them. In one memorable visit my colleagues in Europe were pointing out how US-led workstreams were imposing solutions that didn’t take into account regional complexities such as the two dozen official languages spoken on the continent!
Overall, the mandate and scope of the CTO role is one of the most dynamic in the C-suite. As an extension of the CEO, the CTO is empowered and accountable to drive meaningful impact, change and capability building in the organization. By nature the role is uncomfortable because large scale change is uncomfortable and requires the CTO to question and challenge the status quo. Hopefully some of these principles will help make the journey a little easier to navigate, just like a good pair of sneakers.
Connect with Neil Bansal on Linkedin.