Theme 2, Article 5: Closing the Value Realisation Gap
Updated: Apr 14
This is the last of the Theme 2 articles on the Transformation Outcomes Value Chain.
All organisation, including the public sector invest heavily in transformation. Local authorities, for instance, redesign services, implement new systems, restructure teams, and commission major change programmes, all in pursuit of better outcomes for residents and more sustainable ways of working.
The Local Government Association has identified benefits realisation as one of the sector's most persistent transformation challenges, a finding that will resonate with many leading transformation in local government today.
My earlier article introduced the transformation programme Value Chain and the Value Dial as frameworks for understanding how value forms and is realised across the transformation lifecycle. This article builds on that foundation.
Readers unfamiliar with value chain formation are encouraged to read this article first.
THE GAP
The value chain describes how strategic intent converts, through a series of managed conversions, into Realised Value. Enabling Outcomes, the new or improved Capabilities built during delivery, are not the end point. Realised value is Latent, Contingent upon what happens after Transition: whether those capabilities are successfully Activated, and Embedded in operational practice, Optimised, and Sustained.
Understanding where the gap originates is necessary but insufficient. The more important question is why organisations that have invested heavily in transformation and demonstrably built the enabling capabilities they set out to create, so often fail to close it. Nine drivers contribute to this pattern.
THE DRIVERS
Leadership Understanding and Behavioural Inertia. Sponsorship effectiveness is not merely a structural question. Prosci found that effective executive sponsorship increases the probability of achieving intended outcomes from 25% to 85%. Yet the literature is consistent in finding that sponsors frequently conflate their role with their day job, and that benefits awareness is among the weakest dimensions of sponsorship capability in practice.
Transformation Fatigue and Commitment Deficit. Not all services that receive transformation programme capabilities will be fully committed to their aims at the outset. Political priorities, resource pressures, and the cumulative burden of successive change can produce a disposition compliant in form but passive in practice: surface engagement during delivery, with limited investment in the embedding and optimisation work that should follow. Kotter identified premature declaration of victory, and consequent failure to embed change in culture and practice, as one of the most consistent failure modes in transformation.
The Mandate Trap. Under sustained financial pressure, organisations facing difficult budget positions may find themselves committed to a transformation whose sustainability they have not fully tested, because there was no better answer available and the question was not asked. Honesty at that point risks losing the mandate; the uncomfortable question is therefore deferred. What follows is a programme designed around an outcome always contingent on conditions, cultural, structural, or financial, that it was not designed to address. The failure that emerges later is then explained by operational pressures that were, in part, predictable at the outset.
The Risk Assessment Gap. Business case risk assessments typically focus on delivery risks, the likelihood that the programme will complete on time, to scope, and within budget. They do not typically extend to the post-deployment conditions necessary to drive optimum and sustained value post transition. The risks associated with embedding, adoption, operational management, and sustained leadership commitment are therefore neither adequately assessed nor priced into the investment decision. The consequence is that programmes may be authorised on assumptions about post-transition performance that have not been explicitly tested. This is a foreseeable investment risk.
The Self-reinforcing Deferral Cycle. Services operating under significant capacity constraint face a structural disincentive to invest in the adoption and embedding work that follows transition. Prosci found that 73% of organisations report being near or beyond their change saturation point. The consequence is self-reinforcing: deferred embedding increases the cost of subsequent recovery, which further reduces available capacity, which makes deferral feel more justified at the next opportunity.
Premature Withdrawal of Early Life Support. The period immediately following transition is the most fragile point in the value formation chain. It is also precisely the moment at which delivery resources face the strongest pressure to stand down for redeployment. The structural incentive to close out programmes and return scarce specialists to other work is in direct tension with the embedding need.
The Sponsorship Accountability Gap. Programme sponsors hold formal accountability for outcomes during delivery. That accountability is rarely extended explicitly beyond programme closure. The point at which it effectively ends, regardless of whether outcomes have been fully realised, is seldom defined, negotiated, or subject to governance oversight. The practical consequence is that accountability for deteriorating post-programme value is diffuse at best and absent at worst, and deterioration therefore continues unaddressed.
Micro-Decision Erosion. Where rationalisation takes hold post-transition, deterioration characteristically occurs not through dramatic failure but through the accumulation of small operational decisions, each individually below the threshold of escalation, that collectively erode the benefit programmes deliver. By the time the pattern is visible, significant value has already been lost.
The Distinction Between Explanation and Rationalisation. Underlying all of the above is a pattern of reasoning that is individually rational but collectively destructive. Operational pressure is a legitimate explanation for deferral. But rationalisation constructs a post-hoc argument to justify inaction, putting target performance at risk. Left unchallenged, this pattern effectively licenses every other driver to persist: deferral feels justified, fatigue goes unaddressed, early life support is stood down prematurely, accountability lapses, and understanding never translates into action.
WHAT NEEDS TO CHANGE
The drivers identified above are not amenable to a single remedy. They reflect a combination of structural design failures, accountability gaps, and behavioural patterns that reinforce each other. The proposals below are practical starting points, not prescriptive solutions; the appropriate design in any given organisation will depend on scale, complexity, and the specific underperformance modes locally observed.
Understanding and behavioural shift. None of the above structural responses can be effective without a corresponding shift in how leaders understand and respond to the pressures they face. The self-reinforcing deferral cycle is broken not by removing the pressure, which is rarely possible, but by changing the reasoning applied to it. What produces the necessary shift is a leadership culture in which accountability for value, as well as delivery, is a substantive leadership responsibility, with the long-term consequences of deferral made visible through performance monitoring and governance.
This shift is hardest to make at the moment it matters most. That is precisely why governance structures that make the consequences of deferral visible are not an optional support to good leadership but a necessary condition for it.
Governance design for the post-transition period. Where transformation has introduced or materially changed operational KPIs, normal performance management arrangements should be the default mechanism for detecting acceleration, stasis, deterioration, or failure to reach target. Benefits performance should be added explicitly to SMT agendas and treated as a standing operational responsibility.
Risk analysis. This must extend beyond delivery to encompass the conditions necessary for full value realisation post-transition. Business cases should explicitly identify those conditions, whether they are currently in place, what it will cost to establish them, and what the realistic value trajectory looks like if they are not. Without such assessment, investment decisions are not fully informed. Absolute honesty free of optimism bias is required at this stage; the temptation to present an optimistic realisation case in order to secure approval is itself a form of the Mandate Trap.
The business case question should always be addressed during closure. To what extent has it been made out, and what steps can be taken in the face of underperformance, or indicative over-performance, to extract further value? Where signs of potential over-performance exist, stretch targets offer a proportionate mechanism for testing whether additional value can be extracted.
Where scale, complexity, or risk warrants additional oversight beyond normal performance management, defined and time-limited post-transition oversight may be warranted, convened at intervals during optimisation and stood down on confirmation of a stable performance baseline. A functioning CPMO may offer a proportionate alternative, provided it is clearly distinguished from operational ownership and does not compromise assurance independence. What matters is that the choice is made explicitly and before delivery structures stand down.
Formalising accountability before closure. The sponsorship accountability gap is, at its core, a failure of transition design and closure governance. The minimum requirement is that accountability is addressed explicitly during programme closure: named in closure reports and resolved in final handover to business as usual. Where the business case was constructed under significant financial or political pressure, the conditions that produce the Mandate Trap, closure governance should also address whether its sustainability assumptions were ever fully tested. Accountability at closure is not only who carries responsibility forward, but whether the projected value premise remains intact.
Where the programme sponsor already sits within the operational responsibility chain, as is typically the case, the natural position is continuity: accountability remains with that individual at programme closure, now exercised in an operational capacity. The cost of sustaining accountability then reduces or becomes negligible, and monitoring and reporting become part of the operational management agenda.
Embedding accountability in practice. Addressing the value realisation gap requires action at every level of the delivery system. CEOs, S151 officers, and the whole senior leadership team need to recognise the nature of this risk, understand the difference between explanation and rationalisation, and commit to action if the risk materialises. Their commitment needs to be visible, consistent, and modelled in the way senior leaders themselves account for performance.
Programme Managers should flag deferral-based risks converting into substantive issues: when underperformance is explained but absent corrective action, and when value realisation is drifting without a credible recovery plan. Assurance, including gateway reviews and benefits governance, should surface, test, challenge, and escalate all emergent risks. Where escalation reaches senior leadership, the required response is action, not return of the problem to service management, which would be the accountability gap remanifesting at a higher level.
CONCLUSION
The programme value chain makes the risk visible. The value dial makes it measurable. Closing the gap is not a technical problem. It is a leadership and governance challenge.
THEME 3 ARTICLES
Closing the gap depends not only on post-transition management, but on how the delivery system is configured. This is where Series 3 begins: designing an integrated delivery system that makes sustained value realisation more likely from the outset.
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