The Two Most Important Decisions Organisations Face When Embarking on a Transformation.
Updated: Sep 9
Every transformation turns on two decisions made before the work begins – which consulting firm helps steer it, and who inside the organisation leads it.
The somewhat overused term transformation is seeing a renaissance as organisations hear talk of the “next industrial revolution”, the “AI apocalypse”, explosive growth in data centres, the massive migration to cloud computing, and advances in quantum computing, robotics and chip capacity.
The investment behind this shift is significant: a 2025 IBM study of 2,000 CEOs found that respondents expected the growth rate of AI investment to more than double over the following two years.
Geopolitical conflicts, industry events, climate change and ageing populations are also driving a complete rethink of organisational supply chains, operating models, organisational constructs and disruptive strategies, providing another impetus for transformational change.
The transformational influences today are very different from those of the past, when strategic pivots, productivity, mergers and acquisitions, globalisation and outsourcing were fundamental drivers. Today’s transformations often need to address ecosystem as well as organisational change and have a heavy technology component.
As Boards and management teams consider whether a full-scale transformation is the path to position their organisation for a very different future, the first major task is to clearly state the objectives of the transformation, the metrics to be targeted and the scope of the change required. Two critical decisions then emerge:
Decision 1: Choosing a Consulting Firm to Help Steer the Transformation
Past experience has demonstrated to many organisations the value of external consulting support. Consultants offer:
Learnings from multiple experiences dealing with transformation issues
Capability in the specific skills required to execute transformative change
Independence of judgement to break through organisational politics and resistance to change
Analytical decision-making frameworks that can address the tough decisions required
It is the organisation’s task to choose a preferred consulting provider that can support the execution of a transformation. We have found five critical questions Executive teams need to consider when selecting the provider best suited to their needs.
Question 1: Who does the Consulting Firm see as the Client?
Is the Consulting Firm an incumbent or a new provider? Have they demonstrated the value of their incumbency or, if new, are they offering compelling reasons to be considered?
Does the Consulting Firm see its relationships with individual business units as more important than the CEO’s agenda, and will it avoid driving decisions that may damage those relationships in the future?
Does the Consulting Firm have relationships with third parties or vendors that may influence its objectivity? Does it have close ties with IT vendors already selected that could be beneficial?
Is the Consulting Firm willing to risk its long-term relationship to drive the right outcome from the transformation?
Question 2: Is the Consulting Firm aligned to our vision, culture and values?
Has the Consulting Firm demonstrated an understanding of our values and culture and reflected this in its approach to the transformation? Are we getting a uniquely designed roadmap or a standard template?
Will the Consulting Firm work collaboratively with our team and effectively build organisational ownership of the outcomes?
Has the Consulting Firm expressed a point of view on the outcome? Has it demonstrated that it will provide challenge as well as support?
Will the Consulting Firm drive for results or simply produce reports?
Question 3: Am I getting the A Team?
Where has the Consulting Firm done this before?
What is the experience of the specific team members proposed for the engagement?
Where else in my industry is similar work being undertaken by the Consulting Firm?
Have they mobilised the best available talent?
Question 4: What level of automation, tools, models and policies/processes am I going to receive to embed the transformational change? The implications of AI for consulting are already extending well beyond the technology itself.
What approach to AI adoption is envisaged?
How will the Consulting Firm align with our IT architecture and automation strategy?
Question 5: What are the critical success factors that will lead to a successful transformation outcome?
What elements does the Consulting Firm see as most critical and why?
What does the Consulting Firm see as the major risks to the program, and what mitigation plans is it suggesting be put in place?
What are the Consulting Firm’s knowledge-transfer approaches? Will it be a partner in achieving outcomes or an arm’s-length adviser making recommendations?
Executive teams will, of course, receive assessments from their procurement teams of relative costs, timings, methodologies, contractual commitments and protections, which will also require consideration. We believe that, at the C-Suite level, for both the Consultant pitching a deal and the Executive team considering it, the answers to these critical five questions can count the most. Consultants can work on conveying their position on these questions long before the final presentation.
Decision 2: Identifying the Internal Lead for the Transformation Program
Organisational teams proposing a transformational change program need to consider a range of project constructs, either with their Consulting Firm or in advance of its selection. Issues to be resolved include:
A centrally driven versus decentralised approach
The scope of organisational coverage
Internal versus external resources
The level of budget required (capital and operating expenditure)
Incentives and rewards to be implemented
These decisions tend to be made collectively by the Executive Team, with some level of business case presented to the Board for approval.
Identifying the Internal Lead for the Program is a very difficult decision and can be a factor in its success or failure. That risk should not be underestimated: McKinsey research has found that less than one-third of respondents said their organisations’ transformations had both improved performance and sustained those improvements over time. Issues to consider include:
Most transformation roles run for defined periods of time, with an end point where transition back into the business is required
Many internal staff are reluctant to be involved in transformation roles where high levels of headcount reduction may be involved
The success rate for major transformations is not high, and prospective leaders may not choose to risk their careers by taking on the position
Many staff are reluctant to be placed in “special project” roles and prefer line roles with budget responsibility
The role is often at a level below Executive, which can bring frustration for the transformation leader when Executives “pull rank” in difficult moments.
Chief Executive options for filling the position of Chief Transformation Officer include:
Pull an Existing Executive Off-Line to Do the Role
The Executive may not be invested in the program and may have other career ambitions
The Executive may be inexperienced in dealing with organisation-wide transformation
It is difficult to guarantee a return to a line role three to five years out
There may not be a good backfill option
The Executive may be loyal to their previous Business Unit and may be perceived as lacking objectivity in decision-making
Hire a New Executive from Outside the Organisation
The same problem arises of finding a position when the project is completed
It can be very difficult to be immediately effective without organisational experience
There is an unknown “fit” with other Executives
The timeframe to find the right person can be lengthy
Promote an Existing Employee to an Executive Role
They may be seen as junior to the rest of the Executive team and lack the leadership necessary to drive the transformation
The same problem arises of finding a fit after program completion
They may not have the diversity of experience to manage all components of the transformation
The Consulting Industry has responded to these issues with some interesting new initiatives. The role itself is also becoming more prominent: Deloitte’s 2025 Chief Transformation Officer Study reported that transformation budgets had increased by up to 2.5 times over the previous two years and highlighted the importance of experienced leadership.
Managed Services Contracts
Several consultancies have announced the expansion or development of their managed services offerings. Through a Managed Service, they can offer a Build / Operate / Transform / Transfer model where they take over a range of functions, transform them and then transfer them back to the client AI-enabled and transformed. A recent example is HCLTech’s US$1.14 billion, five-year contract with Mercedes-Benz, under which HCLTech will establish an AI-driven operating model to transform and manage the company’s global digital workplace and enterprise networks.
Joint Ventures
The concept of a Joint Venture is that the Consulting Firm and the client form a transformational entity that takes responsibility for executing the transformation. Traditionally applied in some IT outsourcing contracts in days gone by, it is now being seen as a model for executing AI transformational change. A prominent recent example is Telstra and Accenture’s seven-year, $700 million AI joint venture, established to accelerate Telstra’s data and AI transformation.
Secondments
Some consultancies are offering a partner-level consultant to be placed on secondment to the client as the Chief Transformation Officer as part of a large consulting contract. The secondee performs an Executive role, generally reporting to the CEO, and manages both internal and external resources. This appears to be an effective way of addressing the need for an experienced, Executive-level lead, unconstrained by the limitations of a set project duration and with the capability to manage a complex transformation.
Multi-Consulting Partnerships
The scale of some transformations has seen competing consulting firms work together to provide a best-of-breed approach. Clients are also seeing advantages in having different perspectives on transformation options. A recent public-sector example is the UK Government’s contracts with KPMG and EY to train civil servants in priority skills including AI.
The Emergence of Executive Advisors
Many Consulting Firms have brought Executive Advisors onto their teams, retired Executives with experience leading major transformations in their organisations. These advisors provide additional levels of client support and coaching for the CEO and Executive team in executing change, managing stakeholders and communicating with the market.
Other models may emerge as we go deeper into the AI-generated transformational change expected to be faced by many organisations, but clearly the early movers are seeing both innovation and creativity in the response of the consulting profession.
In summary, successful transformation requires much more than a compelling strategy, significant investment and the right technology. Two decisions can have an outsized influence on the outcome: choosing the consulting firm best equipped to help steer the transformation, and appointing the right internal leader to drive it. As transformations become larger, more complex and increasingly shaped by AI and technology, organisations should be prepared to think differently about both decisions. The traditional models will not always be the right ones, and the organisations that get these choices right at the outset will give themselves a much stronger foundation for delivering lasting transformational change.
