A strategic roadmap to operational transformation — 4 lessons to be learned
May 14 2025
Many organisations are striving to take advantage of transformational opportunities and are often starting from a place of operational complexity, particularly with respect to data, processes, controls and IT systems. Despite all the opportunities afforded by AI technologies and other priorities such as sustainability, the foundational principles of operational transformations learned by many large organisations over the past 2 decades remain relevant. These lessons have been summarised by KSIB from the experiences of team members with transformations over the last 30 years.
- Understand the global landscape
- Be honest about your current situation
- Operational improvements and cultural change are not mutually exclusive
- Persistence and repetition are your friends when embedding change
Lesson 1: Understand the global landscape
Many of the operational changes Australian organisations are either in the process of implementing, or need to implement, are already embedded in large American and European institutions. Regulatory focus areas are well mapped out and there are many lessons to be learned through understanding the playbooks of key international regulators, particularly in the financial services industry. These lessons learned are applicable for all industries. Data governance and management are prerequisites for transformations and systems implementations, especially where the goal is to take advantage of AI based technologies or to solve problems using AI agents. A general insight that can be gleaned is that those institutions which treat operational change as a necessary investment and use this to drive cultural change, as well as process change, benefit from this approach. Organisations that continue to live in silos find it difficult to understand how they fit within a changing global ecosystem and to implement the operational changes necessary to adapt to this new world.
Industry case study: Multi-national banks headquartered in the US or Europe have reviewed governance and operational arrangements in response to regulatory change and market pressure. Understanding critical processes and controls end to end have been a key part of this transformational journey. The application of program and project governance principles effectively has facilitated a deeper understanding of what needs to change and a willingness to embark on the transformation journey. The application of modern technology tools along with a risk based cut through approach to data integrity issues, can dramatically accelerate transformational activities.
Lesson 2: Be honest about your current situation
In large organisations with different functions and divisions, it is often difficult to gain a true assessment of how strong or weak an operational process is. This can be amplified if there are third party providers involved. An independent assessment of critical processes, looked at through an “end to end” lens, can easily be performed, particularly if lesson 1 is taken seriously and critical areas where others have reformed are considered.
Consider the following key questions as a starting point:
Is governance and accountability well understood throughout the organisation?
Do the board and management committees facilitate an effective governance structure with the right level of information and questioning/challenge?
Are the right accountabilities in place at the right level ?
How are data, key processes and controls considered? Is this siloed or end to end?
What is being simplified/taken away to manage risk?
What is your comfort level regarding the accuracy of external reporting (financial, regulatory, sustainability)?
Do you have a really clear picture of your network risk including third and fourth party risk and how this is managed?
Lesson 3: Operational improvements and cultural change are not mutually exclusive
Those organisations which have recognised that improving operational platforms can be transformational and provide a competitive advantage when seen through the lens of cultural change have enjoyed success. Organisations that look at operational improvement programs as a burden, forced upon them by regulators, often do not address underlying cultural issues, particularly as they relate to risk culture. The assessment performed as part of lesson 2 should highlight particular areas of focus.
A focus on risk culture as part of transformational change:
Consideration of how an organisation approaches risk management from a cultural perspective is a focus of prudential reviews both in Australia and globally. Common findings include the need to review organisational communications to reinforce “tone from the top” and the importance of mindsets and behaviours to prevent and detect control breakdowns.
Lesson 4: Persistence and repitition are your friends when embedding change
Successful transformations have 3 key elements: the change program needs to be well designed, effectively implemented and (the most difficult part) embedded throughout the organisation. If the risk culture elements of the operational transformation are considered appropriately (see lesson 3), this can help with embedding the change. A common mistake is for a leader to see change management and communication as “a nice to have” or “more of an art than science”. This can then lead to budgetary cuts and a lack of rigorous focus on what needs to be done and why it is necessary. If persistence and repetition can be reinforced in a disciplined change and communications plan - all levels of the organisation can understand the vision, the direction of travel and why it is important and ultimately their role in the transformation.
Why communication and change management matters and how to make sure it stays on track.
Paradoxically, many senior executives do understand the need for a clear communication strategy and change management supported by strong leadership but when technology implementations inevitably cost more than anticipated, the so called “softer areas” often get cut or streamlined. The best transformations are not all the same, but they do have a common feature - clear, strong leadership with a focus on communications and change management.
The four foundational lessons outlined above apply to all organisations seeking to successfully execute large operational transformations, including new technology implementations. The approach is industry agnostic and emphasises the common strategic elements that are important. It is important to learn the lessons of the past, at the same time as embracing new opportunities. How to safely navigate AI implementations is separately considered in another KSIB article.
To learn more about a strategic roadmap for your organisation, contact KSIB or email us directly
Kristin Stubbins AM, CEO and Founder
kristin@ksib.com.au
Sarah Kruger
Sarah is a transformation and people and change expert who has worked with financial services and other companies for over 30 years, including as a senior Managing Director at a large professional services firm. At KSIB Sarah focuses on helping clients with large transformation projects, including thinking through and executing the change necessary to take advantage of the AI revolution.
Ann Smith
Ann was Head of Policy at a major superannuation fund for several years and has had a long career focusing on policy and strategy development and execution. At KSIB, Ann brings deep superannuation sector expertise and a transformative mindset as to how the industry can reform at an operational level. She works closely with other KSIB team members to combine industry context with deep functional and consulting experience.