META MANAGEMENT Connecting the Parts of Business - BTA online

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METHODOLOGY | RESEARCH
META MANAGEMENT
Connecting the Parts of Business
Transformation
The aim of this article is to introduce Meta Management in the context of business
transformation management and to show how it helps making business transformations
successful. Studies showed that there is no lack of knowledge about
change-management or other individual disciplines that comprise business transformations;
there is, however, a lack of integration between the disciplines which
eventually leads to a transformation failure in the majority of cases.
by Philip Stiles and Axel Uhl
Why Business Transformation?
Every business today is facing increasing
pressures from changing environments.
Take for example, the ever-growing imperative
for sustainable business practices
or technological innovations like
the increasing use of services for mobile
devices. Developments like these have
far reaching implications for businessmodels
and overall business strategies
and often open out into a transformation.
1 As a matter of fact, also endogenous
change like product innovation or
restructuring provides the potential for
large-scale transformation. 2 Business
transformations imply fundamental and
complex organizational changes alongside
the value chain and can also radically
alter the company’s relations with
the wider economic and societal environment.
It is obvious that the nature of business
transformations is highly complex
and that the results are directly influencing
future business success.
The ability of companies to manage transformation
has long been recognized as
crucial to their competitive advantage. 3
Responsiveness to changes in the business
environment and being innovative
not only in client offerings, but also orga-
nizationally, is an integral feature of sustainably
successful companies. At the
organizational level, there is a need to
build up a transformation capability in order
to provide the innovation for competitive
advantage. 4,5 What stands out in that
context is the fact that less than 40 % of
all transformation attempts can be called
a success. 6 Problems with change are
manifold, starting from wrong diagnosis
through to poor implementation and the
failure to win the staff over. In the course
of research on that topic it became clear
that the lack of a holistic point of view
for a transformation attempt has severe
consequences. Another major reason
for failure was poor management of the
transformation, especially in regard to
stakeholder commitment. 7
Methodologies on the Market
Transformation is a common feature for
most organizations. So it is rather unsurprising
that there is a profound research
base concerning practicing change. Traditional
regularities have accumulated
over a long period of time and represent
a solid conceptual knowledge of
the change process. Step models were

Abstract
the first to emerge with a classic formulation
of three phases: current state, future
state, and transition state. 8 Gap and
force field analysis usually accompanied
the models. 9 Inherent in the step models
is a combination of both rational elements
– for example diagnosing need,
shaping the vision, and monitoring progress
– and emotional elements, that is,
mobilizing commitment, engaging with
the vision, and building affinity and identity
with the change. The models have
produced a variety of patterns for managing
change, concerning leadership,
culture, and maintaining momentum.
However, there are a number of issues
raised by the use of step models. Firstly,
they imply a linear approach to changemanagement,
with each step leading
to the next. Though feedback loops
are nearly always included, essentially
these models are mechanistic in their approach.
Secondly, the links between the
steps are rarely described. So despite
the fact that each individual element in
the model is outlined, the overall change
process remains incomprehensible.
This is problematic, both theoretically
and practically. In theoretical terms it is
unclear how change is managed, as a
collection of routines is missing a crucial
linking part. Calls to approach change
from a more holistic point of view have
not been included in the tradition of step
models. In practical terms, how transformation
is enacted not just in a piecemeal
way but in a synchronized manner is not
answered.
METHODOLOGY | RESEARCH
Until now a number of approaches
sought to implement a holistic view and
to fill the afore mentioned gap. The “7s
framework” by McKinsey, the “Balanced
Scorecard” by Kaplan and Norton, and
“Lean” or “Six Sigma” are the most commonly
known ones.
The “7s framework” revolves around seven
core elements of an organization and
argues for their mutual linkage should
the organization be affected by change
drivers. 10 However, this tool is more a
diagnostic than an implementation technique,
and while useful in analytic terms,
it does not reveal specific aspects of the
change elements or their linkages.
The balanced scorecard approach identifies
a number of core areas, such as financial,
customer, process, and people. 11
This approach shows the inter-linkages
between the various areas and is helpful
in providing guidance to an overall integration,
but it does not present a methodology
for the process of transforming
organizations.
Lean, or Six Sigma, approaches try to
shed some light on change through
“business excellence” models. They provide
a number of standard tools, primarily
focusing on project management and
statistical control to manage change. 12
The emphasis lies clearly on the rational
side of change, with the emotional
aspects rarely addressed. Given that a
large part of change success rests on
the appropriate management of people,
more is needed to have a solid and effective
change process.
In response to the limitations of existing methods and management approaches and in view of the
complexity of business transformation, successful business transformation management can be seen
as a Meta Management discipline that integrates and extends individual management disciplines. In
the course of the article, an overview of the current state of research is given and hence the causes for
creating a holistic approach. Then, Meta Management is briefly described and put into the context of
business transformation management. It is explained why Meta Management augments the likelihood
of a successful transformation. The authors emphasize that Meta Management may not be seen as
a cookery book for any intricacy during a transformation, but is well meant to provide a framework for
coherent, consistent, and successful business transformation management.
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METHODOLOGY | RESEARCH
The Missing Link
Contrary to the welter of books, cases,
and how-to manuals on managing
change, the integration of key concepts
and their execution within transformation
has been elusive so far. The nature
of transformation is to range across an
organization, which implies that transformation
will come about when different
disciplines come together and cohere
behind a common direction. 13 With the
inauguration of the Business Transformation
Academy and the inherent Thought
Leadership Network in 2009, one of the
first aims was to create holistic knowledge
about business transformation and to provide
the right means for orchestrating the
individual parts of business transformation
management. The first milestone of
the network was to create the Business
Transformation Management Methodology
(BTM 2 ), a comprehensive and holistic
methodology for managing business
transformation. Business transformation
itself has been defined as a top-down
phenomenon, starting at the C-level.
Some other key characteristics are that
business transformation management
needs to be business driven, value-oriented,
and an end-to-end process in order to
be effective. In addition to that, there are
many interdependencies between individual
management disciplines that need to
be orchestrated during a transformation.
BTM 2 incorporates a number of key features
from established transformation approaches,
such as stage models and balanced
scorecard approaches. The eight
disciplines are chosen in a logical way
and are of two types:
1. Directional. The Strategy, Value, and
Risk Management disciplines create
the case for action and vision of the future
and set the direction for the transformation
effort.
2. Enablement. The management of
changes ranging from IT through process
to organizational, plus the creation
of new competences through training
and education, supervised through an
organizational program management
capability.
Risk
Mgt.
Training
and Skills
Mgt.
Change
Mgt.
Strategy
Mgt.
Meta
Leadership
Mgt.
Program
Mgt.
IT Mgt.
Value
Mgt.
Process
Mgt.
These disciplines are chosen as components
of the transformation management
methodology because they are directly
connected and form a logical construct:
Every transformation starts with a formulation
of a strategy and a vision. Defining
a new business strategy often becomes
the only viable option to react to a
changing environment. Next, a strategy
can only be implemented if certain processes
change. These process changes
build the basis of additional benefits that
are generated (Value Management),
and frequently require changed behavior
among the employees (Change Management)
as well as new competencies
(Training and Skills Management). Each
change, however, also involves a certain
risk (Risk Management) and many process
changes are only possible using IT
(IT Transformation Management). Transformation
projects are also managed
from cost, benefit, and quality perspectives
and require program organization
and evaluation (Program-Management).
In this vein, the most important disci-
DIRECTION
ENABLEMENT
Fig. 1: The Meta
Management
framework

Fig. 2: Phase
model for
business
transformation
© 2010 SAP AG. All rights reserved. / Page 1
plines all find their place in the context
of business transformation management
and contribute to a holistic perspective
(see figure 1):
Beyond Linear Thinking
The central part of BTM 2 is seen in Meta
Management, which is the response to
the limitations of existing methods and
management approaches. In view of the
complexity of business transformation,
in essence successful business transformation
management can be seen as
a Meta Management discipline that integrates
and extends individual management
disciplines. At its core Meta Management
builds on a cyclic phase model
as opposed to linear steps. It incorporates
the notion by Peter Senge (author
of “The 5th discipline”): “Reality is made
of circles but we see straight lines”. 14 The
phase model consists of four parts (see
fig. 2): “Envision”, “Engage”, “Transform”,
and “Optimize”, which are cascaded
through all other disciplines and thereby
also part of the orchestration. Not only
does Meta Management link all parts
METHODOLOGY | RESEARCH
of business transformation, but it also
greatly emphasizes and deals with interdependencies.
In the Envision phase the case for
change is examined, more often than
not leading to a sense of urgency, which
opens out into a vision or strategy. The
Engage phase is synonymous with the
mobilizing of commitment in the organization
and other stakeholders. Involvement
and communication are essential
here, as well as the establishment of discrete
projects to deliver change and drive
momentum. The Transform phase embraces
the actual transformation including
the change of behavior, processes,
technology, culture, values, and so forth.
In the Optimize phase the transformation
must be embedded and internalized as
the new “business as usual”.
Meta Management is meant to give the
transformation attempt a structure and
establish the guidelines for all management
layers, roles, and disciplines. To
achieve that, it utilizes dimensions of
the Balanced Scorecard, in particular for
planning and control measures.
Envision Engage Transform Optimize
Every Business Transformation is an iterative process and goes through different stages in recurring cycles.
Create case for change,
sense of urgency,
strategy / vision
Internalize,
institutionalize and
optimize transformation;
create stability
Empower people to act on
the vision and plan the
effort
Change behavior,
processes, technology,
culture, values …
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METHODOLOGY | RESEARCH
Another crucial part of Meta Management
is the focus on the people side.
Meta Management includes recommendations
for choosing the right leaders
and promoters for key positions. Leadership,
communication, and culture must
not be underestimated, especially during
a transformation. Above that, managing
change under conditions of complexity
also implies that change is not just within
the organization itself but also through
its relationships with key stakeholders,
such as customers, competitors, government
and regulators, and investors.
Meta Management, in other words, is enacted
within an ecosystem, and in order
to effect change successfully, the metaroutine
is necessary.
In summary, Meta Management provides
the following:
– It provides an iterative, cyclic phase
model (Envision, Engage, Transform,
and Optimize).
– It offers an overall business transformation
structure, including management
layers, roles and disciplines.
– It focuses on the dimensions of the
Balanced Scorecard for planning
and control measures.
– It delivers decision criteria for choosing
the right leaders and promoters
for key positions and facilitates transformation
leadership.
– It creates culture and values on the
basis of transformation principles
and guidelines to internalize and
institutionalize the transformation
goals.
– It provides communication and engagement
principles.
Despite the direction and coordination
that Meta Management delivers, it may
not be seen as a kind of cookery book
that helps prepare an exact transformation
for each specific case. It is much
more a coherent and consistent management
method that creates a framework
and helps to reduce complexity, but
which must also be adapted to the specific
context of the transformation.
Meta Management closes the gap in
the extensive transformation literature
as well as in a lot of company practice,
since a holistic or integrative business
transformation management methodology
was lacking so far. Meta Management
is meant to be used as an overarching
frame for effective business transformation
management. It offers linkages
amongst individual management disciplines
and focuses on highlighting interdependencies,
so that all parts of a
transformation endeavor are aligned and
managed properly. Finally, it addresses
the main causes for failing transformation,
which are a lack of consistency,
poor transformation management, and
too little attention towards stakeholders.
Key Learnings
ᐅ Business transformation management needs to be business
driven, value-oriented, and an end-to-end process in
order to be effective.
ᐅ Successful business transformation management can be
seen as a Meta-Management discipline that integrates
and extends individual management disciplines.
ᐅ Managing change under conditions of complexity also
implies that change is managed not just within the organization
itself but also through its relationships with key
stakeholders.
ᐅ Meta Management emphasizes the balance between
rational and emotional aspects.
ᐅ Meta Management provides the overarching frame for
effective business transformation management, including
leadership, communication, and culture.

Service
AUTHORS
METHODOLOGY | RESEARCH
Professor Philip Stiles is a faculty member at Cambridge Judge Business School,
University of Cambridge, UK. Philip’s research work focuses on international human
resource management, in particular the nature of performance management within and
across borders and the operation and performance of the HR department. He works
with a number of major companies worldwide and is currently Co-Director of the Centre
for Internal Human Resource Management at the University of Cambridge.
p.stiles[at]jbs.cam.ac.uk
Professor Dr. Axel Uhl is head of the Business Transformation Academy at SAP. He
is a professor at the University of Applied Sciences Northwestern Switzerland (FHNW)
since 2009. Axel Uhl received his doctorate in economics and completed his master
in business information systems. He started his career at Allianz and has worked for
DaimlerChrysler IT Services, KPMG, and Novartis. His main areas of research and interest
are sustainability and IT, leadership, and business transformation management.
a.uhl[at]sap.com
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