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Newco for Agile Implementation

Updated: Oct 17, 2023

What if you didn't need to manage process change, data migration, and live cutover? What if you did your change project like a start-up? Introducing NewCo - an innovative approach to business change; designed for the agile age.


Some years back, I was the Assurance Lead for a major project with a high degree of complexity. We were migrating from multiple different older systems to a single, new platform. The data structures in each system were very different and the data quality wasn’t great.

The Problem

In business terms, each of the in-scope units had more or less the same business model but vastly different processes for achieving the same outcomes. They were, of course, arguing over whose process was best for the new platform. So we were process mapping all the “as-is” states, before we could even think about a single “to-be” process and the complex transitional maps from many to one.

We had already done several change requests; de-scoping several requirements, and adding to the duration and cost of the project. It wasn’t really anyone’s fault. This was just complex stuff.

The Possible Solution

One morning, whilst shaving, a simple thought came into my head. What if we could run this like a startup? Just set up a new business entity, with simple processes, and a SaaS platform with out-of-the-box functionality and no data. Then just gradually start writing (only) new business through the NewCo. Whilst running-off (only) old business on the old systems. In much the same way as a Financial Services firm might run-off an old fund.

Bravely, I decided to talk to my boss about it. And no - before you ask - I am not going to share which Company! To my surprise, exactly the same idea had occurred to him. We hatched a plan (perhaps it was the strong coffee) to persuade our business colleagues to give this crazy new idea a try.

We built on the idea further; including how the new company might have different values, a different branding, a better tax structure, different employment contracts and supplier relationships. It didn’t have to just be about systems, after all.

The Outcome

To cut a long story short, we made some very real progress with selling this. But ultimately failed to convince. Sorry. Not all stories have a happy ending.

It seemed just a little too novel an idea to many. Too risky. And too many people were already super-invested in process mapping, or requirements gathering, or whatever. But - to this day - I remain convinced that NewCo was actually by far the lowest risk option. I hear that the company in question recently gave up on its third attempt at that project. Perhaps never to try again.

(Limited) Prove Points

Over the years since, I find myself coming back to NewCo in my mind. I have seen almost the same things done for real. For example, the business of an acquirer reversed into the business of the acquired (after an M&A). The logic? “Their systems were better than ours”. Or wholly new business lines set up with partners and then older business lines ultimately managed through that same partner.

I also found some parallels in the teachings of Clay Christensen (whilst enjoying a Disruptive Strategy course at Harvard). In the "Innovator's Dilemma", he argued that disruptive innovation from within an existing business is best done through a new company vehicle (as otherwise the initiative would be killed by the vested internal interests of the current profit model and a preference for sustaining innovation).

My Challenge

So really, there is no reason why NewCo wouldn’t work for change projects. And I dearly want to see someone do it. Perhaps in my advancing years, it may not be me. But perhaps it might be you? And perhaps I will help. Yes. I think I shall.

© David Viney 2023. Licensed for re-use with attribution under CC BY 4.0

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The <a href="">Newcco for Agile Implementation</a>, by <a href="">David Viney</a>, licensed under <a href="">CC BY 4.0</a>

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