Recently we shared Five Keys to Powering a Transformation Effort, where we outlined strategies and tactics for getting operational transformation right. We also shared a sampling of recent transformation projects in HPA’s Transformation Highlights, including operational transformations, with representative levers.
In that vein, we’ll continue to share transformation engagement examples that illustrate how HPA and clients applied these strategies. See below for a look into an HPA-supported transformation.
Client Need
One client, a Private Equity-backed Equipment Outsourcing and Maintenance company, needed to accelerate EBITDA growth by transforming their operations and reducing costs, while also improving their customer service. The EBITDA expansion needed to include both cost reduction and revenue growth as the company prepared for a liquidity event.
Project Overview
The HPA team assessed client operations for highest impact opportunities and formed a Transformation Management Office with representation from the business and its Finance, Communications, HR, and IT functions. With feedback and input from those functions, they chartered and launched initiative teams in waves to analyze, pilot, and roll out each initiative across the distributed equipment leasing network. The main focus areas for improvement centered on Capital Productivity (adjusting equipment type based on throughput), Intelligent Service Routing to optimize travel for service teams, Service Tech GPS monitoring, remote monitoring of equipment for maintenance early warning, and dynamic tiered pricing.
Transformation Management Office (TMO) – Success Factors
The TMO was staffed by a cross-functional team, with a full-time lead and part-time representatives from the functions mentioned above. The TMO established charters for each initiative team, named champions to drive those initiatives forward, and managed dashboards and escalation processes. Initiative teams employed an Agile approach and set aside dedicated team working time with explicit commitments for participation. Team members’ managers were aligned around prioritization, with a clear understanding of the balance and expectations between work towards the transformation project and their “day jobs.”
What distinguished the TMO from a PMO?
HPA and the client named the cross-functional team a TMO to differentiate from a PMO and emphasize the key role of the TMO: rapid escalation and resolution of issues to keep the initiative teams moving efficiently. PMOs have acquired a reputation for managing dashboards, milestones, and action items. The TMO did all of these things; however the real focus was on managing information flow and problem solving with client executives to enable rapid de-bottlenecking.
Key Learnings
Issue selection and prioritization: The HPA team and client stakeholders used a data-driven and collaborative process to choose the high priority initiatives. Good ideas that did not make the cut for the initial wave of initiatives were recognized, then put “on deck” for future launch. This enabled all voices to be heard and energized while maintaining focus on the prioritized initiatives.
Initiative Champions: Champions were chosen to lead initiatives based on future leadership potential, with an understanding that this was an opportunity to demonstrate capability and results outside of their usual job. Many of these leaders were assigned to areas in which they had little direct experience. They proved to be fast learners and were incentivized to show their readiness for larger roles.
Slowing down to speed up: Initiatives were given the necessary time to pilot new approaches and iron out issues, despite the temptation to roll out everywhere at once for quicker results. Often in fast-paced transformations, there is a tendency to try to do everything in parallel. The team found success by slowing down – planes can get in the air faster and safer if Air Traffic Control is helping them take off in turns.
Peer-to-Peer Change Management: We then assigned location managers at successful pilot sites lead roles to help roll initiatives out to the broader network. This proved far more effective than directives from the corporate center – people respond better when they hear from someone to whom they relate.
