Ibm Case Study A Lesson In Social Business Transformation


John Ward (Cranfield University, School of Management) and Axel Uhl (SAP AG)

12.1 Overview

As part of the development of BTM2, 13 case studies of different types of business transformation in large European corporations across a range of industries were conducted. The industries were: automotive, pharmaceuticals, construction, food, oil and chemicals, financial services, telecommunications and IT. The cases included transformations to develop new products and services as well as restructuring and reorganizing core business functions and introducing global processes and systems.

All the transformations involved changes in organization structures and individuals’ roles, responsibilities and behaviors. In a few of the cases this led to large-scale staff relocations and redeployments. All the cases included new and significant investments in IT to enable the business transformation, but, in all but one of the cases, IT benefits were not the main rationale for the transformation.

The cases were used to test, validate and enhance BTM2. This was possible because the cases demonstrated different levels of success:

  • Four were very successful achieving all the main objectives of the transformation.

  • Five cases were partially successful as some expected benefits were achieved, but not all.

  • Four were unsuccessful, achieving none of the transformation objectives or were not completed. Most incurred substantial costs.

This ratio is typical of the overall statistics of success rates for projects, programs and business transformations.

The cases were developed and analyzed by teams consisting of experienced academics, researchers, consultants and senior company managers. They involved interviews with those involved in the business transformation and reviews of relevant documentation. Each case was written up in detail by the team and verified as an accurate record of events by the organizations concerned. Some have already been published in 360° – The Business Transformation Journal1[20] and others will be published in future editions.

The cases have been analyzed using a number of the BTM2 models described in earlier chapters in this book. Initial assessment considered the strategic positioning of the business transformation, then each was analyzed in terms of how extensively and how well the eight BTM2 disciplines, such as Value Management and the subdisciplines within each, were performed. The analyses for all the cases were compared to identify significant aspects which appeared to affect the level of success achieved. Summaries and examples of these analyses are included in this chapter. The companies have not been named since the details are confidential.


  1. Demonstrate how the evidence from a range of business transformation case studies was used to develop and evaluate BTM2.

  2. Understand the lessons learned from case studies of successful and unsuccessful transformations.

  3. Learn how each of the BTM2 management disciplines can influence the success of a business transformation.

12.2 An Overview of the Cases and Outcomes

12.2.1 The Successes

Case 1

Global HR system and reorganization, implemented top-down in response to external criticism of the company’s corporate governance. Organizational changes preceded the IT implementation. The organization had learned from a previous expensive failure to achieve the same transformation.

Case 2

IT enabled sustainability program which has been successful so far in creating initiatives and structures to address sustainability issues and reduce environmental impact for the company and its customers.

Case 3

Global customer service process transformation through new IT foundations and business changes to act consistently as one global organization. It was an extended change program, which was based on collaborative process redesign and implementation through compromise not confrontation.

Case 4

Reorganization and rationalization into shared service centers for support functions and implementation of new operational model with standardized processes and common systems. The reorganization preceded the introduction of the new systems and processes.

12.2.2 The Partial Successes

Case 5

The implementation of a corporate HR database, but the roll-out across all business units was deferred due to lack of local benefits and increasingly difficult trading conditions. Project is seen as a relatively low cost, learning experience.

Case 6

Implementation of global HR excellence function, new HR database and systems: 50 percent of HR tasks worldwide supported by the new systems and further benefits have been identified. Initial programr was IT-led and achieved little until taken over by HR function as part of global business transformation.

Case 7

The development of a service business capability to complement a successful product strategy by creating a global center of excellence, sharing knowledge with customers to develop high-quality valued services.

Case 8

The creation of a new product concept to meet demands of a different customer segment, to be manufactured and delivered through a new business model: the product proved popular, but the business model could not be made profitable.

Case 9

The reintegration of the new product (Case 8 above) into the main manufacturing, logistics and sales organization to exploit traditional competences through the adoption of standard processes and systems, to stabilize costs and reduce losses.

12.2.3 The Unsuccessful

Case 10

A very expensive investment in a global HR system, functionally led, aimed at reducing systems costs. There was no real business justification, few achievable benefits and it was abandoned before completion.

Case 11

Another failed global HR system: overspent, late and only partially implemented prior to abandonment; it was a system few parts of the business wanted and the benefits were very limited (the failed transformation that preceded the success described in Case 1).

Case 12

Rationalization and centralization of finance and accounting functions across Europe, accompanied by new systems and processes. The program was abandoned due to lack of business buy-in to a weak business case. A second attempt is now underway, adopting a different approach.

Case 13

Introduction of common production planning and control processes and systems across global manufacturing units. There was no real business case, due to variations in products and manufacturing processes, no stakeholder buy-in and no internal transformation capability. Pilot implementations failed and the project was abandoned.

In the figures used to summarize some of analyses that follow, the cases are known by the numbers above.

12.3 Strategic Positioning of Business Transformations

The transformation portfolio matrix shown in Figure 4.2 in Chapter 4, Value Management, was used to position the transformations based on the expected strategic impact as expressed in the transformation objectives. Figure 12.1 shows the results of that analysis.

Figure 12.1 shows that those considered as both strategic and high potential, aimed at creating or identifying competitive advantages were all at least partially successful. It could be concluded that the “positive” nature of the business transformation intentions meant that there was little stakeholder resistance to the initiative and hence the organization was able to deploy its most capable resources.

Conversely all three that best fit the support definition – to reduce costs or remove inefficiencies – were all unsuccessful. As will be argued later, in each case what could be considered as operational problems should not have become the argument for a major transformation, which increased the scope of the changes but not the business benefits. Senior management engagement and support was limited and the initiatives were given little priority, except in the functional area concerned.

Figure 12.1 The cases positioned on the transformation portfolio matrix

The five key operational transformations, aimed at overcoming or preventing real or potential disadvantages, had mixed fortunes and the reasons for this are in the detail of how they were managed, not in the strategic intent.

12.4 Transformation Need and Readiness

The importance of a clear understanding of the need to transform – the drivers and objectives – and the timescale within which it has to be achieved is discussed in detail in Chapter 3, Strategy Management. Then assessing the organization’s readiness or capability to make the changes is essential to decide not only the best approach to the business transformation, but also to define the transformation scope so that the chances of success are increased. An adapted version of the Strategic Options model (see Figure 3.9 in Chapter 3, Strategy Management) was used to describe each case in terms of the importance of the business transformation and the organization’s apparent readiness as shown in Figure 12.2. How the transformation need and readiness can be assessed is described in detail in Chapter 3, Strategy Management.

Figure 12.3 shows the positioning of each of the cases on this matrix to describe the situation at the start of each transformation, based on the evidence provided.

This analysis shows vividly that in all the unsuccessful cases the need for transformation was relatively low; either there was no pressing need or there was little agreement, at a senior level, that it was a business priority. In three of the cases the need was argued only by one business function or the IT department. As a consequence the rest of the organization was unwilling to do the low priority, but demanding and complex work involved: readiness was also low. Had the organizations undertaken such an analysis early in the business transformation, failure and the significant resulting waste of money and resources could have been avoided.

Figure 12.2 Strategic options: need and readiness

Figure 12.3 Transformation need and readiness in the cases

In three of the four successful transformations the need was high – clearly recognized as a priority – but initially the readiness was low. In these cases the argument for change was endorsed at executive level and time and effort spent in the engagement phase to achieve the buy-in of the rest of the organization and develop the organization’s ability to undertake the changes.

In the majority of those that were partially successful the transformation readiness appeared to be high as well as the need. The reason they were not entirely successful is perhaps best explained as over ambition or even over enthusiasm, due to rather too many “positive” assumptions being made at the start and little assessment of the potential risks involved. In one case this was compounded by the program team providing only positive feedback to management about progress and not reporting aspects that would cause concern. In some cases assumptions about the business environment were too optimistic and in other the envisioned new business model proved not entirely viable.

One “outlier” – Case 9 – shows that the analysis is not always precise and that a high does not always lead to increased transformation readiness: in this case due to major concurrent changes in senior personnel and the loss of key staff. The other – Case 2 – suggests that high readiness does enable opportunistic initiatives to explore new business options and prove the value they may deliver.

Some initial conclusions can be drawn from these analyses to suggest why some business transformations are more successful than others:

  • Business transformation needs to be driven by clear imperatives – the strategic reasons to do it – which should be easy for everyone to understand. If there is no clear strategic imperative, it is likely to get stopped or lose priority, as there is no real motivation to change.

  • All the successful ones had business imperatives that affected the whole corporation’s future not just a function – a clear need to “transform the business”. These imperatives were communicated throughout the organization. A lack of strategic alignment creates risks which cannot be addressed later in the program. Therefore initiatives need to be selected carefully.

  • The business drivers provide the “case for action”: strategic, tactical and operational issues should not be confused during the envision and engage phases. In some cases, what were initially operational efficiency issues were developed (sometimes with the help of the IT implementation partner) to become “strategic opportunities”, which were not justified. None of these were successful. There can be a tendency to make operational problems strategic, just to get them solved.

  • In most of the unsuccessful cases the complexity of the transformation was underestimated and the adaptability, or readiness to adapt, of the organization overestimated. Understanding the organization’s readiness to transform is crucial to deciding the transformation strategy. Transformation requires a lot of energy and resources and the amount of dedicated resource required increases when readiness is less.

  • The successful transformations had CEO sponsorship and a C-level executive leading or directing the transformation. Involvement should be real and visible: if not, other executives will not see it as important and not spend time on it. Leading the transformation involves communication of clear, consistent messages, time spent on the program details and being actively involved in solving issues that arise.

12.5 Analyzing the Cases Using the BTM2 Management Disciplines

In each of the sections that follow, how effective or ineffective management practices across the eight BTM2 management disciplines (which are described in detail in the preceding chapters) affected the evolution of the transformation and the eventual outcome, in terms of the level of success achieved are discussed.

An overview model of the discipline relationships is shown in Figure 12.4.

Figure 12.4 The direction and enablement discipline relationships (please also refer to Figure 2.1)

Figures 12.5–12.7 show the BTM2 disciplines and how they were performed in three typical, example cases – one successful, one partially successful and one unsuccessful. The analysis is based on the evidence presented in the case study write up and in some cases evidence about a particular subdiscipline was not available. In others a subdiscipline was “not applicable” normally because the transformation was not completed. The performance of the individual activities in each discipline is highlighted according to the color code at the bottom of each figure.

We differentiate between activities, which:

  • were performed and performed well;

  • were performed either only to some extent or not particularly well;

  • were either not performed or performed poorly;

  • do not provide any evidence in the case in order to decide; and

  • were not applicable.

The pattern of the extent and quality of the discipline and subdiscipline performances are typical of the cases in each of the three levels of success.

Findings for each of the eight management disciplines are now discussed, in turn, before considering findings regarding the Meta Management aspects.

Figure 12.5 The pattern that is typical for a successful case

Figure 12.6 Typical pattern for a partially successful case

Figure 12.7 An unsuccessful case – not completed

12.5.1 The Direction Disciplines

These three examples clearly demonstrate a pattern that was consistent across almost all the cases:

  • If the majority of the directional disciplines were neglected or performed poorly, the transformation was either unsuccessful or not completed.

  • With one exception, even if a minority of the disciplines were neglected or performed poorly, or many were not carried out well or thoroughly the best that was achieved was partial success.

In essence, the outcome of the business transformation could be predicted from predominant color in the assessment of the directional disciplines. Hence an appraisal during the envision and engage phases of how clearly and comprehensively the transformation strategy, value and risks have been understood and communicated, will provide a strong indication of likely success.

Strategy Management

  • Transformations should start top-down with a vision of what the future will be, but decide the actual content and process for change from the “middle out”, during the engage phase, to make sure it’s doable, while also “keeping the shop open” and maintaining business performance during the transformation.

  • Having a clear vision of the intended future business and organizational models and then allowing compromises and trade-offs in the detail of how they are implemented, is more likely to achieve stakeholder commitment than imposition. In some cases, when the drivers demand urgent action a top-down, mandated approach to implementation can also work, but tends to achieve stakeholder compliance or acceptance rather than positive commitment.

  • Most business transformations involve at least two distinct and different phases – first to create a new capability and second to exploit it. In most cases the capability was created, but was not (yet) always exploited, hence the benefits achieved were often less than those originally envisaged. This is because creating a new capability can be done “off-line”, separately from business as usual, but using and exploiting it usually competes with other operational priorities.

Value Management

  • In those that were not successful the transformation objectives and business cases were often vague, based on a “benefits vision” rather than an evidence-based set of benefits and an understanding of how to realize them. This makes it difficult for some stakeholders to believe the transformation is worthwhile and commit the required time and resources.

    In some of the cases there was confusion between changes and benefits: for example introducing common global processes is a change, not a benefit. It may create the potential for benefits, such as reducing costs or higher service levels.

  • Very often business benefits were overestimated, while the risks and the problems in making the changes were underestimated, because otherwise it would be difficult to get funds and resources. Realistic and evidence-based benefits are needed.

  • Like many (so-called) strategic projects, instigated by senior management, the development of a detailed business case seems unnecessary. However, transformations are business investments so investment board/governance bodies should demand realistic business cases and also assess how successful the investments have been, by reviewing the benefits actually achieved. The successful ones all did this and most reviewed the progress of the investment, not just the change program during implementation.

Risk Management

  • Risk Management was often glossed over, but given that a high percentage of such programs “fail”, it is best to identify and anticipate what could go wrong, before it happens. The distinction between strategic and operational risks was often not clear. As a result many risks only became apparent during implementation leading to increased costs, delays, scope reductions and even abandonment. This reluctance to explore the risks earlier may have been influenced by executive instigation of the transformation, which can discourage negative feedback, making it inadvisable or even career limiting to point out the potential risks.

  • To reduce risks, the transformation should be planned in short deliverable stages if possible. This provides the following advantages:

    • – Earlier delivery of some benefits.

    • – Reduced vulnerability to changing business conditions.

    • – Easier to adjust the transformation to retain strategic alignment.

    • – Earlier learning of the implications of the changes.

    • – More manageable interactions with related programs.

    • – Reduced risk of wasting resources, if the transformation scope has to change. It provides more opportunities to review the expected value to be realized.

    • – Governance structures are more effective and can be adjusted as the transformation evolves.

  • Some business transformations are unduly influenced by changes in senior management personnel rather than changes in business strategy. The interests and priorities of individuals should not “corrupt” the organizational purpose of the transformation. However, this could be observed in a number of the less successful cases, especially where the transformation objectives could be interpreted in different ways.

12.5.2 The Enablement Disciplines

Business Process Management

  • The IT and process changes tend to be performed more successfully than organizational changes, resulting in some benefits being delivered, even in some of the less successful cases. But this rarely is enough to enable the transformation to achieve its strategic objectives and the majority of the benefits.

  • Established or proven methodologies were applied in most of the cases; however, in some the IT or process methodology dominated the overall implementation approach, making the implementation of other changes more difficult.

  • In two of the unsuccessful cases the IT function followed a “traditional” needs analysis approach and tried to satisfy all the expressed user needs, irrespective of whether the associated process changes would deliver business benefits. This increased the scope to the point where the costs considerably outweighed the benefits. In other cases, operational process issues were discovered (or deliberately introduced) during implementation causing a reduction in potential benefits or increased complexity and costs.

Program and Project Management

  • Transformations cannot be fully planned in advance and have to adapt to both changing business conditions and program achievements: this is not necessarily a comfortable position for senior management and requires a knowledgeable, accountable and empowered steering or governance group to oversee and, where necessary, adapt the transformation program.

  • Effective management of the change content and benefits delivery is more important than the efficiency of the process. The process should reflect not only the transformation required but the organization’s values, experience, capabilities and culture.

  • The transformation manager needs to have expert knowledge in the area that is being changed and also how to manage change in the specific organization. A key skill is being able to reconcile the differing views of the change and resource implications between senior managers and operational line management. Figure 12.8 shows the relationship triangle and research (Peppard and Ward, 2005) suggests that the priority early in the program should be to gain agreement between senior and line management as to what the transformation entails, before “negotiating” with senior management for the funds and dedicated resources required. In some of the less than successful cases the “contract” between the project team and senior management was agreed before the views of line managers had been taken into account.

  • In some failure cases the organization relied heavily on the generic knowledge and capabilities of a third party supplier throughout both the directional and enablement activities. In some cases this changed the nature of the transformation towards what the supplier could do, not what was required. External suppliers can only complement and not replace internal, organization specific knowledge and capabilities.

  • In other failures the organization relied too much on the existing IT project management approaches and hence did not effectively balance the IT and business aspects of the transformation.

Figure 12.8 The relationship triangle: transformation program manager, line managers and senior management

Transformational IT Management

  • IT change cannot be entirely delegated to a partner. An implementation partner is actually a supplier of products or services so there is always a potential conflict of interests.

  • The transformations whose main benefits were seen as IT cost reduction or rationalization or are led by IT (including the CIO) were not successful. Some business transformations become only IT transformations, as the first phase is about replacing old IT and exclusively IT methodologies and approaches are used. The result is that a transformation becomes just “IT replacement project”, with little or no business involvement (Ward et al., 2005). Transforming the organization’s IT, should be considered as an enabler of business transformation – not an end in itself (Gregor et al., 2006).

  • IT is often in a weak position in the context of a business transformation, due to a real lack of business knowledge, but a perception that they know how it works: but they only know how the IT systems work. This created conflict in some of the transformations. When IT “won” the argument the transformation was unsuccessful, but when it was clearly “business-led”, any potential conflict was easily resolved.

Organizational Change Management

  • These cases suggest that organizations should manage business transformations as orchestrated, continuous, incremental sets of changes – co-evolving and co-existing with business as usual priorities.

  • The successful transformations usually addressed the organizational, people and capability aspects of the first, then the process and IT aspects. The less successful tried to do the reverse. As mentioned earlier, in all the unsuccessful cases only a very limited or unrealistic organizational change readiness assessment was carried out.

  • Understanding and addressing stakeholder issues and having a strategy for accommodating or dealing with them as early as possible in the transformation is vital – it is the core activity of the engage phase. The longer the time available to transform, the more the stakeholder views can and should be included in how the transformation is conducted.

  • Stakeholder engagement is a critical success factor in almost every business transformation and early alignment or reconciliation of multi-stakeholder interests is very important. Getting this wrong will cause major problems throughout the implementation due, for example, to dominance by the interests of a minority of stakeholders or destructive negotiations between dissenting groups.

  • The methodologies used should enable all the main stakeholders to directly contribute their knowledge and plan their involvement, not rely on expert knowledge and interpretation of their “needs”. Outside or specialist parties are there to enable the organization to transform, not transform it.

  • The well-known “transition curve” describing how people and organizations experience major change should be respected in the change management approach adopted. The curve is shown in Figure 12.9 and Figure 12.10. A comprehensive and sustained approach (as summarized in Figure 12.10) should ensure that the period that people spend in the valley of tears characterized by uncertainty and even disillusionment, is reduced to a minimum. The other curve also shows that different groups reach this point at different times in the transformation: senior management concerns may have moved on, just at the time many line managers and staff are under stress, usually due to change and business as usual pressures colliding.

  • In some cases the performance measures used to assess the program teams’ performance were too supply-side biased – looking at costs and timescales – which did not allow sufficient flexibility to address unexpected change management issues sufficiently during implementation. This led to a protracted “shakedown” or optimization phase when aspects of the changes had to be reworked or further changes made. This even occurred in some of the successful cases, increasing the costs and causing delays, but not preventing eventual success.

Figure 12.9 The transformation experience curve (1)

Figure 12.10 The transformation experience curve (2)

Competence and Training Management

  • Assessing existing competences as part of the readiness analysis is important to determine the strategy, because what can be achieved is a function of the amount of work required to make the changes and the knowledge and skills that can be made available at the required time. If some essential competences or skills are limited or absent a strategy for developing them is needed early in the transformation. Insufficient “gap analysis” was a contributory reason for the failure in at least two of the cases.

  • In the successful transformations informing and educating people about what the intended future business should look like, helped them apply their existing knowledge to determining how it could be achieved, but also exposed where that existing knowledge was inadequate.

  • Where suppliers are providing essential competences those also need to be appraised and managed – suppliers tend to both overstate and overestimate their capabilities. Organizational and individual experience cannot always be transferred from other projects, especially in other organizations. And the transformation may compete with other priorities for the supplier, which can result in the substitution of less competent staff (the “B-team”) to replace the initial team that was expected to last the duration. And when people change, knowledge is always lost.

  • Suppliers, especially IT suppliers, can have undue influence over what is done rather than just how it is done. Clearly the supplier wants their role in the transformation to be seen as successful, but also profitable. As a consequence however, sometimes even when the supplier only provides the “how” (technology, methods, etc.) this can in effect determine what can actually be achieved – the how drives the what.

12.6 Lessons Learned in Relation to the Meta Management Key Themes

Chapter 2 (Meta Management) introduced the structure, rationale and key elements of BTM2 and meta management. It also considered higher-order organizational constructs or themes, which influence the performance of any type of business transformation and also each other: leadership, communication and organization culture and values. The underlying philosophy for the development of the approach described in this book to managing transformations is shown in Figure 12.11.

From the case studies a number of lessons can also be learned about these more general organizational topics.

Figure 12.11 The underlying philosophy of BTM2


  • While the successful transformations demonstrated the importance of involvement and leadership by a “C-level” executive, the cases also show that neither dictatorial or autocratic leadership nor micro-management from the top work well and can create resistance.

  • The early transfer of “ownership” to a consortium or coalition of business managers, who will actually deliver the changes or benefit from them and the establishment of the core transformation team is the best way to develop the capability to change. The leadership role is to provide a context for those groups to build the business case for the transformation and to trust and support their decision making. One key decision that needs to be taken by the transformation leader in consultation is the mode of “change agency” to be adopted. Our cases show that either an “expert task force” or devolving responsibilities, usually supported by peer-to-peer networks, can work, but a lack of role clarity is likely to cause fragmentation and even disintegration of the initiative. This is discussed further below.

  • The leadership role is particularly critical in the envision and engage phases, during which it is essential to achieve credibility for the program. A transformation leader who, due to role or reputation, has little personal credibility in the context of what is intended, is unlikely to achieve the necessary buy-in from other stakeholders. This was clearly a problem in three of the unsuccessful cases – two have been restarted under new leadership.

  • Probably the most testing challenge for the leadership role is identifying and resolving any power or interest conflicts among the key stakeholders and the business transformation team. This is never pleasant work but it often has to be done to prevent or limit the damage discordant relationships can cause.

  • Many studies have shown that senior management “commitment” is essential in transformation projects, but commitment is a vague term. The evidence from these cases suggests sustained, continuous personal involvement in the governance of the transformation is what it really means but it is not always easy for a busy, ambitious executive to sustain that over the extended period required for most transformations.

  • The business transformation leader, director or manager – many titles are used – needs explicit and visible public support from the executive team. Some executive teams are dysfunctional with individuals pursuing different agendas. As our case studies suggest, in such situations, undertaking a major business transformation is probably unwise.


  • A common lesson from many of the cases – even the successful ones – is that no amount of communication is ever enough. When asked, “What would you do differently next time?”, more and better communication was the most common response.

  • Informing everyone in the organization why change is needed and the consequences of not changing is one of the most important messages and needs regular repetition. Being equally open about what the transformation is going to mean, even if it will be unpopular with some stakeholders, is important if the credibility of the transformation is to be maintained. Evasiveness builds distrust or suggests ignorance, both of which reduce credibility and commitment.

  • In addition, ensuring the communication strategy explains what is going on and intended in the language of the recipients is essential – tailoring the messages to the different audiences. Delivering it at the appropriate times when it is meaningful in the working context of the recipients is also critical if it is to be effective. In a number of cases this was poorly done, creating undue expectations, unexpected concerns and even suspicion.

  • Remembering that communication is a two-way process is often a weakness in the transformation process and in a number of the less successful cases little attention was paid to questions, concerns or feedback that the project team felt were distracting or unimportant. It became clear later that if more attention had been paid, serious problems could have been avoided.

Culture and values

  • All the transformations included significant changes in organizational roles, responsibilities and behaviors, and in the process changed aspects of the culture at least in some parts of the organizations. In many cases the changes were counter to the prevailing culture or organizational norms. The successful transformations recognized this was either desired or inevitable and addressed the organizational issues first to create a new context within which to bring about further changes. As mentioned earlier, the less successful deferred those changes until the new processes and systems were defined. As a result the organizational changes and behaviors had to fit the new processes, causing a steep and difficult learning curve for the staff and managers involved or effective rejection of the new processes as unnecessary or not fit for purpose.

  • In a minority of cases the new business strategy that drove the transformation also demanded a change in the organization’s values: for example, loss of autonomy and reduced discretion for opportunistic and tactical investment, consolidation to achieve corporate control of resources and practices and the adoption of standard processes to achieve corporate rather local business advantages. Inevitably these changes created tensions and exposed cultural and value differences across the business units and functions, which had to be either reconciled or overridden to succeed with the transformation. In the less successful transformations these tensions either could not or were not addressed and existing power structures prevented or subverted the changes.

  • The structure and mode adopted to bring about the transformation should normally reflect the organization’s overall culture unless cultural change is essential to achieve the business changes. This concerns both formal and informal roles and the purposes of those roles in the exercise of power or the use existing or the creation of new organizational relationships during the transformation. The “task force” approach, which exercises the use of power, worked well when the need to transform was urgent, the objectives were very clear and the means of achieving them were known. In the opposite situations a more devolved approach enabled at least one organization to extend the ambition of the transformation through embedding learning and knowledge sharing processes into the program.

  • As the transformation proceeds it may be necessary to change modes and in turn the governance of the program. In particular the creation of a new capability can be carried out by a task force largely separated from day-to-day operations, but to exploit the new capability can require different types of changes especially in a multiunit, multinational organization where the units are of different sizes and maturities. This “transfer of ownership” from the transformation team to the business units has to be planned carefully and, as in some of the successful cases, tested through pilot implementations.

12.7 Conclusion

Every business transformation is different but not unique and lessons can be learned from the experiences of others. While it is not possible to prescribe a methodology that will meet the requirements of every transformation, the approach to developing BTM2 combined the knowledge of leading academics and experienced consultants and business managers plus lessons learned from studying a range of different types of transformations in different organizations and contexts.

Business transformation management is the holistic management of extensive, complex changes on which the organization’s future success strongly depends.

Put another way: transformation is a way of achieving accelerated business evolution whilst not damaging the current business performance. BTM2 not only includes theoretically sound and recognized best practices in each discipline, but also how those practices can be combined and integrated into an overall approach to successful transformation management.

The evidence from the case studies shows that the organizations whose approach to managing transformations included management attention to the majority of the BTM2 management disciplines were more successful than those that did not.


Business Transformation Academy (2011), 360° – The Business Transformation Journal: (accessed March 2012 ).

Gregor , Shirley , Martin , Michael , Fernandez , Walter , Stern , Steven and Vitale , Michael (2006), The transformational dimension in the realization of business value from information technology, The Journal of Strategic Information Systems 15, no. 3, 249–70.

Peppard , Joe and Ward , John (2005), Unlocking sustained business value from IT investments, California Management Review 48, no. 1, 52–70.

Ward , John , Hemingway , Christopher and Daniel , Elizabeth (2005), A framework for addressing the organisational issues of enterprise systems implementation, The Journal of Strategic Information Systems 14, no. 2, 97–119.

Late last year, I started watching and monitoring the #socialbiz hashtag on Twitter.  I was in the middle of writing my book and conducting in depth research of companies that were at least talking about or referring to a social business. One company seemed to dominate the conversation, IBM. I watched more closely and realized that there were literally hundreds of IBM employees collaborating with the community and adding value to the “social business” conversation. I was really impressed and wanted to learn more.

Even with over 400 thousand employees, sadly I didn’t know anyone who works for IBM. And then one day, I met Dana Carr on Twitter and we started emailing back and forth.  She was able to get me exclusive access (well, not really) with Jeff Schick, Vice President of Social Software who has been working for IBM for the last 23 years for an email interview.

1. What is your definition of a social business? Is IBM a social business? Please explain.

Social Business is the world of possibility that occurs when all of the energy and opportunities that have been generated around consumer-side models such as Facebook and Twitter are focused, and brought to bear on business challenges. The stuff that has sprung up on the consumer side is just the tip of the iceberg. The real mass, the real power to transform, is on the business side. This is where a social framework can create new ways to enable sales forces, new ways to discover expertise, new ways to understand your organization’s culture, new ways to establish brand trust with your customers, and much more.

IBM is most certainly a social business and a pioneer at that. We’re the largest consumer of social technologies, and a case study for this transformation. This goes beyond our business in social software and services (IBM’s collaboration software, consulting services, analytics/social media research, conducting Jams for clients). We’re leading social business on all fronts – technology, policy and practice.

Our social initiatives started over a decade ago and really date back to the 1970’s when our mainframe programmers started online discussion forums on the System 370 consoles. For 15 years, IBM employees have used social software to foster collaboration among our dispersed 400,000+ person global team — long before Generation Y became fixated with social networking sites like Facebook and MySpace. In 1997, IBM recommended that its employees get out onto the Internet – at a time when many companies were seeking to restrict their employees’ Internet access. A few years later, in 2005, we made a strategic decision to embrace the blogosphere and to encourage IBMers to participate. In 2008, we introduced the first social computing guidelines to encompass virtual worlds and sharing of rich media. These guidelines aimed and continue to provide helpful, practical advice to protect both IBM’ers and IBM the brand. In 2008 and again in 2010 we turned to employees to re-examine our guidelines in light of ever-evolving technologies and online social tools to ensure they remain current to the needs of employees and the company. These efforts have broadened the scope of the existing guidelines to include all forms of social computing.

In late 2007, we opened the IBM Center for Social Software to help IBM’s global network of Researchers collaborate with corporate residents, university students and faculty, creating the industry’s premier incubator for the research, development and testing of social software that is “fit for business.”

Recent projects we’re pursuing focus on the concept that IBM is experienced through the IBMer. People get to know IBM through our consultants, speakers, salespeople and researchers. Within our walls, we have huge stores of accrued expertise embodied in several Nobel laureates and thousands of doctors. We’re working to best utilize our most important asset, our people, helping to identify their strengths and expertise and then connecting them with potential customers, partners and the knowledge seeking public visiting We call it the Expertise Locator.

So you can see, our social initiatives run deep and have evolved with the times. But, there is one constant, as you hear about IBM’s approach to Social Business, you’ll notice that our thinking isn’t document centric. It’s people centric.

2. I believe a social business is built upon three pillars – people (culture/leadership), process and technology. In your opinion, what should be the first priority?

People. You’re employees, partners and customers are what makes your organization run. You can’t forget about them when launching a social push, they drive the engine. When we talk about social business we talk about embracing the networks of people you have to create business value. We believe the most effective approach to enabling a social business centers around helping people discover expertise, develop social networks and capitalize on relationships. It helps groups of people bind together into communities of shared interest and coordinate efforts to deliver better business results faster. Culture is of course all part of this. An effective social business embodies a culture characterized by sharing, transparency, innovation and improved decision making. Such a culture enables deeper relationships within the organization and with customers and business partners.

a. How important is culture change to the evolution of social business?

Culture change may be the most challenging component of successfully transforming into a social business. In order to influence a cultural change you have to educate and encourage. Social tools provide a gateway for information exchanges across geographies and organizational silos. Building trust and encouraging social interactions are essential to driving a social change in the workforce. To become a social business you have to recognize that employees need to be agile, informed and able to work beyond their specific job descriptions. In order to support this, you must provide tools and the cultural incentives that allow employees more access to the right information and the right people. You must reduce both the cultural boundaries as well as the technical obstacles for people to connect with people and information, allowing unprecedented access.

Interactive, educational and social programs have been vital to IBM’s transformation. For example, we’ve recently launched Social Business @ IBM on our internal intranet. This is a resource for IBM’ers that aims to educate them about social media and various social initiatives taking place internally while enabling them to participate. We host modules that provide the IBM’er with an introduction to the social web. They learn how to use social computing tools to foster collaboration, disseminate and consume news, develop networks, forge closer relationships, and build credibility. As a result, they’re better informed and prepared to take action. By making these types of tools and information available, we’re changing how the IBM’er approaches social and twofold, changing our culture.

b. How important is the creation of processes to the evolution of social business?

The evolution of social business is a process in itself. An organization must go through the process of identifying market factors that are generating the need for a transformation, it must recognize the social objectives it needs to accomplish, then establish social outputs that will support the objectives and finally, executives need to determine which platforms, applications, and features they’ll need to meet desired outcomes. These basic principles or processes are vital to the success of a social business. Similar actions must be taken for each department and social initiative.

c. How important is technology to the evolution of social business?

Technology is certainly a key factor in the evolution. An organization must adopt tools that work efficiently in order to successfully make this transformation. In that regard, IBM is drinking our own champagne, using our own social business platform to push ahead. In 2010, with 35 percent of Fortune 100 companies using IBM social software in the enterprise, IDC named IBM as the #1 social software platform company in the industry. Just this month, IDC put us on top again, so we feel pretty confident that our technology plays a vital role in the social business transformation.

While social software adoption is on the rise, a growing challenge for global organizations is the ability to manage risk while harnessing insights from a wide variety of social communities and remaining compliant with their own governance policies, including practices dictated by their regulatory requirements. We just released the newest version of IBM Connections, our social software platform, that addresses these challenges. The new IBM Connections > allows organizations to track and trace data on the fly throughout their organizations, then analyze in real-time using the IBM Connections active compliance service versus waiting until day end for analysis. With these new advancements around compliance enablement, a social business can confidently activate networks of people to use a variety of collaborative tools, to improve and accelerate innovation.

Social business technology is also vital in supporting the mobile workforce. We’re witnessing an explosion in the number and type of computing devices in the market today. Just one example is the growth of tablets. Up to 47.9 million tablet PC units are expected to be shipped this year, and 79.6 million next year, according to the latest J.P. Morgan forecasts. In all, this represents a $35 billion annual revenue opportunity, says the investment firm. And they are not all iPad’s. This dizzying influx of new devices is causing a major disruption in the enterprise. With the mobile workforce expected to reach more than 1.19 billion by 2013, nearly 1 trillion Internet-connected devices will be in market by next year, generating 20 times more mobile data by 2015. Social enabling these workers to be effective, collaborate and innovate is a major requirement for organizations. IBM is delivering a broad range of social software and collaboration capabilities to employees to better connect through mobile devices. Whether it be iPhones, iPads, BlackBerry, PlayBook, Nokia or Android. For example, through our Connections software we are enabling mobile employees to create networks, documents, share files through a community that they can access and manage on their mobile device. The software delivers features that enable mobile employees to collaborate on the fly this includes developing social networks, sharing files, locating business experts, participating in online discussions and conducting in web meetings. Mobile is the future of the workforce and organizations must learn how to support them with social technology.

3. I believe that the growing influence of the social customer, among other things, is what is causing business today to humanize its operations. Do you agree? Why or why not?

Absolutely. You have to go to where your customers are. Today, customers are out on social networks looking for information. In order to successfully reach them, we need to be active on those platforms, and most importantly engaged with the knowledge seekers. Most business leaders understand this. In fact, 88 percent of all CEOs who participated on the 2010 IBM CEO study picked “getting closer to the customer” as the most important dimension to realize their strategy in the next five years. But understanding the importance and actually knowing how to act on it are very different. Consumers are connecting with brands in fundamentally new ways. Customers rely on digital interactions, peer evaluations, social media and online after-purchase support to make decisions. Organizations have to become customer centric to survive. Social media tools must be ingrained in an organizations end-to-end business. Organizations also have to be good listeners, and instead of pushing out messages and offers, engagement through open dialogue integrated with rich media capabilities should be implemented.

a. What has caused IBM to evolve into a social business?

IBM has always been about innovation, pushing the envelope. But there’s no “i” in innovation at IBM, its always been about the collective, creative mind – collaboration. So becoming a holistic, social business has been somewhat of a natural transformation for the organization – we want to work together to achieve our goals.

The new workforce has also played a part in our transformation. The younger generation of workers demands tools that help them do work better, communicate with their peers and connect with IBM’ers with similar interests. In order to appease this new workforce, we had to develop tools they were familiar with (Facebook, blogs, Twitter) and relate them to business goals. What better asset does an organization have than its employees? Its the IBM’ers that have pushed us as an organization to develop these social tools, social media guidelines, etc. We recognize that our employees are our what makes the IBM brand and services the best in the world.

4. IBM is a huge organization; and spread out globally. How is social media managed internally? What does the organization look like (i.e. centralized, decentralized, matrix)? Is there a Center of Excellence?

We’re structured as a matrix. We have regional social media managers and teams supporting them based on geography (for example US or Europe) who are working to educate and enable IBM’ers and identify “experts.” Its these managers who are behind the Social Business @ IBM project where IBM’ers can go to become educated and start to engage on social platforms. This program serves as our “Center of Excellence”. Our social business strategy seeks to focus interactions on concrete outcomes, enhancing each IBM’ers social presence, projecting their expertise, driving innovation and ultimately, delivering business value. With the Social Business @ IBM site, IBM’ers can achieve these goals more effectively than if they were on their own. Whether they’re a newcomer to social media, an expert seeking to project their expertise over social channels, or an active social business practitioner who wants to engage in specific IBM programs – everything they need is in one spot.

5. There are several hundred IBMers engaged on Twitter and within the social web. Is this by design or did it happen organically?

Actually it’s closer to 25,000 IBMers actively tweeting on Twitter and counting. Not only are we present on Twitter but we also have over 300,000 IBMers on Linkedin and 198,000 on Facebook. This is just our external social media footprint. Some examples of IBM’s internal social media footprint today include:

  • 17,000 individual blogs
  • 1 million daily page views of internal wikis, internal information storing website
  • 400,000 employee profiles on IBM Connections, IBM’s social networking initiative that allows employees to share status updates, collaborate on wikis, blogs and activity, share files.
  • 15,000,000 downloads of employee-generated videos/podcasts
  • 20 million minutes of LotusLive meetings every month with people both inside and outside the organization
  • More than 400k Sametime instant messaging users, resulting in 40-50 million instant messages per day

We don’t force anyone to participate in social media externally or internally, but its a natural curiosity and interest for IBMers, so we educate and enable them.

We were one of the first organizations to embrace the blogosphere and encourage our employees to participate. Our own IBM bloggers were the ones to develop the company’s Blogging Policy and Guidelines which has evolved into the social computing guidelines as external social platforms have sprung up and evolved.

So our social web engagement is a little bit of both organic interest and careful design and education.

6. Can any IBM employee engage externally with partners, suppliers and customers?

Essentially, yes, and we aim and work to provide the necessary tools and education so that any IBM’er can effectively engage. In 2007 we realized that our client-facing teams were on the front lines for engaging in meaningful conversations with customers about this emerging technology, social software, and we knew we needed to equip these teams with the skills and experience to drive business growth, so we created the BlueIQ program. The BlueIQ team consists of eight worldwide employees who have been tasked with enablement, education, consulting, support, mentoring, and coaching of IBM employees on how they can use social tools in their daily work to help them improve collaboration and share knowledge across the company. At first the target audience for BlueIQ was 16,000 traditional salespeople and technical salespeople (populations that historically do not share knowledge or relationships due to perceived impact on quotas and commissions). Based on the viral adoption of the initial program, BlueIQ extended support to IBM’s 400,000-plus workforce. This program has given our employees the knowledge they need to effectively communicate with our constituents – customers, partners, suppliers, etc.

7. Please explain IBM’s journey to social business transformation. Are there any gaps?

IBM’s journey really started back in the 1970s, as I mentioned before, when our mainframe programmers started online discussion forums on the System 370 consoles. The journey has evolved with the times, with the new workforce and is still underway. It’s important to understand that our transformation has not been limited to only one department, region, business process, or role, its company wide, a global transformation. It’s also important to note that our transformation is not without its challenges. IDC published the results of their Social Business Survey* identifying that the top three challenges associated with using enterprise social software, they are getting people to participate, measuring the impact on business goals, and finding the time to use another tool. Other challenges include security, governance, and privacy concerns. IBM has not been immune to any of these. Realistically, any company making the transition to a social business will face some issues along the way.

8. How do you measure the effectiveness of a social business?

We measure the effectiveness in very traditional ways – is it ultimately affecting our bottom line, and the answer is yes. For example, using our own social business platform, more than 130 communities of IBM professionals around the globe are collaborating virtually. This has reduced the time it would have taken to complete projects by 30%, increased re-use of “software assets” by 50%, and cut component costs by 33%. But we also take into account less quantifiable effectiveness like increases in employee satisfaction, new relationships, and expertise.

9. What advice can you give to other executives who want to transform their organizations into a fully collaborative social business?

We’ve learned many valuable lessons along our social business transformation journey. One of the biggest lessons learned was that social business transformation involves more changes to culture than technology. Remember that your employees are your most important asset. Shift your focus from documents, project plans and other temporary artifacts to the source of the energy, creativity and decision making that moves the business forward: people. Remember that trust is a key element to becoming a social business. An organization needs a certain level of trust to empower its employees to share their ideas and expertise and it must demonstrate this trust by rewarding behavior. At the same time, this trust must be balanced with an appropriate level of governance or discipline that sets the parameters of appropriate actions. Lastly, becoming a social business is not simply a matter of deploying some collaboration tools and hoping for the best. It is a long-term strategic approach to shaping a business culture and is highly dependent on executive leadership and effective corporate strategy, including business processes, risk management, leadership development, financial controls and business analytics.

*Source: IDC’s Social Business Survey, September 2010

IBM Case Study on Social Business


Thank you Dana and Jeff for providing me with this information. It was truly enlightening to learn about IBM, its culture and journey to become a fully collaborative social business.

I write at length about this very topic in my upcoming book , Smart Business, Social Business: A Playbook for Social Media in Your Organization scheduled to be released in July 2011. You can pre-order by clicking on the below social business book cover. 100% of all book royalties are being donated to Not For Sale; a global non profit organization trying to abolish human and sex trafficking. Thank you for your support.

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