Executive Insights

Talking transformation with Phil Clayson, CIO, SSE Energy Services

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Phil Clayson, CIO of SSE Energy Services, discusses how CIOs and organisations worldwide can successfully navigate the complexities and shifting dynamics of transformation.

Transformation, for any company of any size, is no small feat. The transformation conversation, understandably, often focuses on the positives and the outcomes but it is important to recognise the challenges; the work and the drive required to achieve those outcomes. One of the key challenges, often cited as the most significant challenge in any transformation, is one of culture.

A transformation asks an organisation to redefine how it operates and of course asks its stakeholders, from the top down, to rethink the way they work. Add to that the pressure to transform in the ‘right’ way and the determination to establish what the ‘right’ way is and it becomes clear just how complex the journey ahead really is.

Phil Clayson, an experienced CIO, has overseen a recent transformation of TalkTalk software and data estate and crowned Transformation Leader of the Year 2019 for his efforts, has transformation in his blood. Now CIO of SSE Energy Services, Clayson finds himself amidst transformation once again, with the company currently undergoing a publicly announced trading separation from SSE Group, as it enters a new phase in a rapidly changing energy industry.

This multi-million-pound migration journey will require pace and tenacity and is cultural on many levels, representing a massive opportunity for technological debt removal, and a chance to move SSE Energy Services closer to a digital-enabled and data-driven world.

We sit down with Clayson to discuss how CIOs and organisations worldwide can successfully navigate the complexities and shifting dynamics of transformation. A technologist at heart, Clayson’s career has been defined by technology and transformation. Through his roles with NewsCorp, Oracle, BT and more recently TalkTalk, Clayson has played a key part in a number of significant transformations and mergers and acquisitions and has a broad understanding as to the true impact of digital disruption and what that means for the business from both an internal and external perspective.

“When I first started in the world of transformation and delivery, the largest part of £bn+ M&A deals was all very much about the technology or the structure of the company,” explains Clayson.

“These journeys were all about buying technology or an asset and then integrating that. The culture was to some degree a secondary consideration in terms of acting out the integration of the deal.”

Today, the transformation conversation is very much alive across a number of industries, with an increasing number of businesses navigating their own journeys to redefine their operations and achieve their goals but as Clayson highlights, the complexities and nuances within those transformation journeys tell a very different story to his earlier days.

“The complexity in the market, be it energy, telecommunications or banking, is so much deeper than it was over 20 years ago,” he says. “It’s now culture led. I’d say that my biggest driver right now in transformation is the people. We’re looking at their emotional curve, where they are along the journey and who is on the metaphorical ‘bus’. People have been conditioned by their companies to operate in a specific way and are quite happy in doing that, but they are now heading into a new world, one that is almost the polar opposite.

“Getting the people and cultural agenda right in any transformation or acquisition journey or even an unexpected external event such as a cyber attack, that to me is the biggest part of transformation.”  

A core challenge at the heart of any transformational journey is understanding and defining exactly what transformation means to a business. Clayson admits that it’s a word used so much that it has become somewhat ubiquitous, and perhaps been downgraded; so many businesses and people will use ‘transformation’ for varying reasons that it in fact it loses any true meaning.

He points to the fact that, in his experience, whenever someone speaks of a transformation or a transformational programme, one would be forgiven for thinking that it was referring to a situation where a company is completing re-inventing itself, when many are simply using the word transformation to represent small adjustments in normal day to day business trading; Transformation is also used to facilitate the need to become better at digital, or use data more effectively, none of which are really transformational on their own anymore.

“Transformation as a word almost becomes synonymous with attempts to get things approved internally or accelerate an initiative,” he says. “But it’s often misleading, because every industry is delivering massive operational changes, and not all of these have enough dramatic effect to be labelled transformational.

“Transition is often a better word; it implies a more definitive one-way movement to a new state. But, before you can judge if an organisation has an inherent transition or transformation capability in its blood, you need to review the people and culture within an organisation; do people see transition (or transformation) as a one-time thing or an ongoing operational mode.”

“There are some people that do see it as a one-off and that eventually, the ‘transformation’ elastic stops stretching and you can often return to the same cultural state you were in prior to this journey.”

Despite being a technologist by trade, Clayson is the first to admit that in actual fact the technology is often not the hardest part of a transformation – it is most certainly the culture and the DNA of the business that needs the most energy and commitment to achieve success.

In order to define what the end-state transition will be for a business, it is necessary to understand an organisation’s own propensity to be able to continuously change and define the initial end state strategically, and then question how people and culture can be positioned so transition becomes iterative.

With SSE’s migration journey, Clayson finds himself navigating the complex nature of change and calling back on his experience across multiple sectors to be able to do so effectively.

During his early days within the telecommunications industry, the UK had introduced further deregulation which saw an explosion of new entrants in the market. Fast forward to recent years, and most, if not all, of these entrants have been acquired by multinational telecoms companies. A similar shift has happened in the banking and financial sector, with smaller start-up banking companies offering new and exciting services and solutions, and then slowing down as they scale with some being ‘caught’ or acquired by the larger incumbents. But what of the energy sector?

“Energy has been somewhat behind the curve on this journey,” says Clayson. “Around 2009, long after telecoms had mainly consolidated we saw the early entrant energy providers beginning to take some market share but in recent years, while some have really thrived, many have found themselves struggling to survive. Larger energy companies (and some of the thriving start-ups) are now acquiring these smaller brands and taking on their customers. It’s a cycle we’ve seen across all industries.”

What is interesting about this inevitable cycle is the bigger picture it reveals. Despite the start-ups and new entrants disrupting the market, consolidations and the huge changes that have been made within the existing incumbents, Clayson believes that things could have been different if only the incumbents had spent more time understanding the customer.

“If they had been more attuned to what the customer needed, those new entrants would have struggled to get a foothold in the industry,” he says. “The transformation (transition) and change that we are seeing in the industry today would have happened earlier and benefitted the customer.”

With constantly evolving marketplaces, thanks to new entrants and the developments of the incumbents, the modern customer has more choice than ever before. They are informed and do not necessarily have to move to a new bank, energy provider, or telco for a new offering. A customer’s existing suppliers are now more likely to offer what they need. The telecommunications and banking sectors have what Clayson describes as an ‘inertia’; customers who rarely move, they’re seen as very brand loyal. Clayson also feels many transformations fall into the trap of thinking about the process as a set of figures laid out on a spreadsheet, wherein the transformation will take a company from A to B and achieve certain measurable outcomes along the way. But, as Clayson has noted, it’s not that simple and it’s hugely important to consider the cultural changes and the people involved in transformation.

If a business does have large scale historical legacy, be it technology or experience, then it simply cannot just switch off what worked before and pave the way for a new way of working in the hope of entering a new world. Clayson himself admits that keeping a loyal and long-serving team engaged whilst also convincing people that what they’ve spent their careers doing – while valuable in that moment in time may no longer be as salient in the future – is difficult, functionally and emotionally. The new product or platform that we now need people to work with will change their personal values. Taking these diverse groups of people on that emotional and functional journey is a demanding and delicate challenge.

“Beyond the personal concerns of each person, you also have to look hard at and merge together what the board is also trying to achieve. It’s easy for a board to say they want to change but they need to be inspired and realistic in defining how an organisation will get to where it wants to be in this new world with a level of clarity and direction that will keep those loyal and long-serving people informed and aware of their roles, as much as continuing to keep engaged those already motivated and working on new technology in a modern way,” he says.

“If that foresight and strategy is well articulated, and consistently used, then everyone can engage and achieve their own outcome, while also achieving the board’s aim. Not all companies are as good at this as they should be, and teams and people get confused and lose focus.”

A strategy and a clear vision as to what an organisation is looking to achieve is key. The path is never a straight line and there will inevitably be external factors and shifting dynamics that will take an organisation into directions it may not have set out to take. The key here is in understanding the value that these shifts in course can bring to the overall journey. Clayson, throughout his career, has seen this happen first-hand and it’s a key part of his role as a CIO.

“You can’t always sail in a straight line. It doesn’t always work. Much of the time you have to take a longer route to your destination,” he says. “My role is often about unblocking obstacles impacting effective forward direction for the team around me. Accepting that moving left or right to get to your destination actually has great value in it.”

Clayson reiterated that an organisation must first be able to communicate a clear message that everyone can aspire, and bring something to. He himself believes that as a leadership team and a board, having this clarity means you’re more than 90% of the way there.

“If you can’t do it in an elevator pitch, then something isn’t quite right,” he says. With a transition of any size and at any scale, there is never a single way of delivering it. There is no one-size-fits-all approach that any company in any industry can follow in order to successfully deliver on their vision. For Clayson, who as we know has been there and done it a number of times now, this is still true but he has one key piece of advice that he will always look to follow.

“Take all the people with you that you can. It seems obvious but you need a team who are invested and ready for change,” he says. “If they aren’t and you have to hire, then look for great behaviours and attitude in your new hires; hire people ready for growth and change, and then look at their functional skill set. Sometimes you need some seed-help, short term burst of energy and expertise to help people see and feel what good looks like. You can train skills but you can’t change someone’s core attitude and receptiveness to change as quickly, so sometimes having short periods of external advisory support can leap-frog progress.

“In my current role I have used boutique firms to help accelerate some digital and modern architecture thinking, as well as strategic procurement and strategy. The key modern skills I need quickly are often more available from these types of boutiques than bigger providers, and they serve as a bridge while I then develop and re-skill my internal teams. These boutiques have to be good to survive against the bigger players, they need to mobilise faster, deliver quicker, and have a greater impact. I also have to look at myself occasionally, and test my behaviours and approach, ensuring they’re aligned with the needs of my teams of people, the current and future required culture and the board’s aspirations. I’m an engineer by trade, which gives me an advantage in the technology transformative leadership roles I take, but it’s not all about being a tech person. I need to lead and manage large teams of people to be open to change so that my team, as a whole can be effective. It’s about energising and engaging great people, and taking on their personal journeys, to the transitioned new future world.”

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