Growth in FTSE 250 directly linked to investment in business transformation

 

The Barometer on Change 2015/16 from transformation consultancy Moorhouse – and now in its fourth year – finds that 81% of those organisations which spent £25 million or more in such business transformation initiatives have grown this year, more than half of them by 5-25%.  Perhaps just as tellingly, nine in 10 of these organisations are also predicting further growth in the next three years.

The report also reveals that the average spend on change programmes has risen from £20.8 million to £25.4 million – an increase of more than 22%.

John Lunn, Partner at Moorhouse, explains: “The message here is clear: fragile as the recovery of the economy is often reported to be, the future belongs to the fleet-of-foot. Those organisations that have continued to watch and adapt to changing market conditions through investment rather than just words are reaping the dividends.”

“If the past several years of economic uncertainty have been a tempest, then adopting a ‘batten-down-the-hatches’ approach is clearly not the best way to steer the course.”

69% of respondents feel the pace of change over the last three years has increased, a marked jump from the 58% reported in 2014, and the highest level since the Barometer on Change was first published in 2012. Looking ahead, 80% are predicting a further jump in the next two to three years.

“The fact that we’ve seen such a big increase in spending on change initiatives also suggests we’re seeing more of the bigger, more strategic kinds of transformations that are vital to an agile and forward-looking organisation,” adds Richard Goold, Partner at Moorhouse. “And indeed, this is what we see when we delve a little further into this year’s research findings.”

The Barometer on Change 2015/16 survey spoke to 200 Board members and their direct reports in UK organisations. Respondents had a combined spend on change initiatives of £5.1 billion (compared to £4.2 billion in 2014), with an average project spend per respondent of over £25 million.