The West Australian Newspaper: TMA interviewed on the rise of the Chief Transformation Officer
Recently, TMA Board Directors spoke with the West Australian Newspaper on the rise of the Chief Transformation Officer in corporate Australia. The article details how these “change agents” can assist with turnaround in the broader corporate context of stakeholder and financial management. The article also references the TMA’s CTP course in conjunction with the University of Technology, Sydney.
Read the article in full (text version below):
TMA: Fix-it role helps growth
12 June 2017
(c) 2017, West Australian Newspapers Limited
Companies bringing in experts to turn business around
In current challenging economic conditions, companies struggling to achieve a profit or remain solvent are appointing highly specialised experts to turn their business around.
It may be little more than semantics, but the chief transformation officer (CTO) is replacing the role of chief restructuring officer (CRO) for many businesses, according to two board directors at the non-profit Turnaround Management Association (TMA) in Australia.
FTI Consulting senior managing director Marcus Derwin and WA-based Vantage Performance executive director Andrew Birch agree the CTO role is not easily or clearly defined.
“In essence, I see the CTO as a very experienced and credentialed change agent and thereafter it depends on circumstances,” Mr Derwin said.
“The role is stakeholder management in its simplest form, to mobilise and direct strategy to achieve what a company’s board, management and stakeholders expect — whether that’s a profit, rescue or growth objective.”
Mr Birch said the role also depended on the type and extent of challenges confronting a business — from perhaps not being in distress at all, to really being in difficult financial straits.
“If the company is bleeding to death you need to have a very swift response to reassure stakeholders that someone is in control and command (such as a CRO). If the company is going OK, to all intents and purposes and as far as external stakeholders are concerned, the board may look to put in a softer-titled change agent, such as a CTO.”
The role of CTO was increasingly important within the global economy, Mr Derwin said.
“We are not as immune to economic changes as we once were and it’s hard to find growth and stimulus platforms in Australian businesses at the moment,” he said.
“A lot of people aren’t well versed to deal with this volatility and these roles have started to come together because you need people who have actually worked through cycles, across geographies and sectors, and with different business models to understand and appreciate what is required to respond to this change.”
Mr Birch said a lot of WA companies seemed to be treading water and the entrepreneurial spirit that had driven the State’s growth in the past was less evident.
“It feels to me like it’s a confidence thing for WA … and some companies that relied on entrepreneurial activity in the past are struggling to navigate the way forward,” he said.
Mr Derwin said stabilisation and prioritisation of objectives and needs were the first responsibilities of a CTO.
“You really need to understand what resources are required and how to prioritise and mobilise those resources in the right direction,” he said.
For Mr Birch, the way the role worked also depended on how long a company’s CEO had been in their seat.
“If the CEO has only been there for a short while, the chances are they are part of the board’s initiative to transform the company and the CTO would work alongside the CEO, reporting to them and the board,” he said.
“But if the CEO has been there for a long time and may be part of the problem, the CTO probably has a direct reporting and accountability role to the board — and that might include assessing whether the CEO is capable to lead the business going forward.” Experience is key
To be suitable for the role of transformation officer, individuals need a cumulative set of experiences acquired over a number of years, according to Marcus Derwin.
“I don’t think you can single-mindedly go into one undergraduate or postgraduate degree in business or another field,” Mr Derwin said.
“I would argue that you’ve got to have say 15 years of corporate experience to understand what works and doesn’t work.”
For Andrew Birch, a number of areas of knowledge and experience would be useful for the role, including accounting, business, commerce, law or psychology.
“It’s not so much a specific degree that you can complete. It’s more that you develop an inquiring mind and an attitude based around solving problems and wanting to be interested enough to understand a problem before you solve that problem,” Mr Birch said.
The University of Technology Sydney(UTS) teaches a tertiary course in turnaround and restructuring, developed in conjunction with the Turnaround Management Association (TMA) Australia.
The UTS course is accredited by the TMA’s global headquarters, and offers tailored modules for management, finance and law, to provide a formal qualification for turnaround practitioners and restructuring advisers.
Some of Australia’s major trading banks, investment banks and leading law and accounting firms help with the course design and provide guest lecturers.