How to Manage ‘BAU Change’ vs ‘Strategic Change’

While both are essential to an organisation’s health, they serve distinct purposes, require different approaches, and compete for limited resources. Navigating these priorities is critical for organisations to drive success and maintain operational resilience.

How to Distinguish BAU Change from Strategic Change

At its core, BAU change refers to modifications and improvements made to everyday processes and systems that support the ongoing delivery of services. Examples include routine system upgrades, hot system fixes and patches, or incremental process improvements that enhance operational efficiency without fundamentally altering the organisation’s trajectory. These changes are necessary for maintaining competitiveness and ensuring regulatory compliance.

Strategic change, on the other hand, is transformative. It is about shifting the organisation’s direction, positioning it for long-term success, and responding to external challenges or opportunities. Examples include mergers and acquisitions, digital transformations, or the launch of new systems or products. These changes are often high-risk but high-reward, requiring extensive planning, cross-functional collaboration, and senior leadership buy-in.

Prioritising BAU Change vs. Strategic Change

Given the finite resources in any organisation, prioritisation is essential. Executives must weigh the benefits, risks, and urgency of both BAU change and strategic change initiatives to determine what’s in the best interest of the organisation. This requires a structured approach that considers the organisation’s overall strategic objectives.

One well-known, simple method, involves using a prioritisation matrix:

• High-Impact, High-Urgency: These initiatives, such as critical compliance or regulatory updates (BAU change) or time-sensitive System or Data transformation efforts (strategic change), should receive immediate focus.
• High-Impact, Low-Urgency: Projects that offer significant long-term benefits but do not require immediate action should be planned carefully. An example might be a future-facing initiative, like developing a new customer engagement platform.
• Low-Impact, High-Urgency: These are generally smaller BAU changes that need to be executed efficiently. Streamlining such tasks ensures they don’t divert attention from more strategic efforts.
• Low-Impact, Low-Urgency: These initiatives can be deprioritised or eliminated to free up capacity for higher-value projects.

Executives should conduct regular reviews using this matrix to adjust priorities based on evolving business needs and external conditions, ensuring alignment between BAU and strategic change owners and priorities.

Managing Resource Capacity: Balancing Change with Daily Operations

One of the most significant hurdles in balancing BAU and strategic change is resource capacity. Executives often expect employees to take on additional responsibilities associated with strategic change while maintaining their BAU duties. This dual responsibility can lead to overstretched teams, decreased productivity, and even burnout, undermining the effectiveness of both BAU and strategic projects.

To address this, senior leaders, change managers and project teams must conduct capacity assessments to determine whether teams can handle additional workload. If capacity is limited, organisations should consider strategies such as:

• Augmenting Teams: Bringing in temporary or contract staff for specific skills or as a resource ‘backfill’, can relieve pressure during peak periods. This approach is particularly effective for project-based roles within strategic initiatives.
• Outsourcing Non-Core Activities: By outsourcing certain BAU tasks, companies can free up internal resources to focus on high-priority strategic changes.
• Cross-Training Staff: Building flexibility within teams allows staff to transition between BAU and strategic roles, providing relief during high-demand periods and promoting skill development.
• Rationalising Pipeline: in rare occasions it can be better to select fewer initiatives to ensure teams can focus on higher quality execution of BAU and strategic change than attempt to much, resulting in lower quality outcomes for the organisation.

Research from consulting and project management firms, suggests that successful organisations prioritise resource flexibility and proactive planning. Regular capacity reviews and resource planning aligned with the organisation’s strategic roadmap can prevent burnout and ensure critical projects receive adequate attention.

Ownership of BAU Change vs. Strategic Change?

Ownership is a critical factor when it comes to managing the positive tension between BAU and strategic change. Typically, BAU change is owned by operational and technical teams, as they are best positioned to understand and manage the processes requiring modification. For instance, a Responsible Investments team might handle target setting for a particular ESG management measure or a Technical team might manage a system upgrade to the newest version, that fall under BAU change.

Strategic change, however, is generally owned by senior leadership with support from transformation teams, or specialised project offices. These entities have the authority and visibility to steer the organisation in new directions, aligning resources and initiatives with the company’s long-term strategy. They are responsible for the planning, coordination, and execution of strategic projects that may span multiple business units and require significant cross-functional collaboration.

A common challenge arises when the boundaries blur between BAU and strategic change. For example, if a superannuation fund is implementing a new investment execution platform to internally trade equities (a strategic change), it will impact BAU processes such as governance, liquidity, exposure management and investment operations teams.

Without clear ownership and alignment between these teams, resource conflicts and miscommunication can occur, leading to delays, inefficiencies and a rise in tensions between teams.

Best Practice: To avoid this, organisations should establish a clear project governance framework that defines ownership for both BAU and strategic change initiatives. Involving BAU leaders early in strategic projects helps align expectations, manage resource expectations and ensures operational teams are prepared to integrate the changes while minimising disruption to day-to-day activities.

Best Practices for Managing BAU Change vs. Strategic Change

Effectively managing BAU and strategic change requires an integrated approach that aligns operational stability with long-term growth initiatives. Based on research and insights from project management experts like PMI (Project Management Institute) and Deloitte, the following best practices are recommended:

1. Establish a Unified Governance Framework: A centralised governance structure provides clarity, aligning both BAU and strategic change initiatives with organisational objectives. This approach ensures accountability, consistency, and efficiency in decision-making.
2. Foster Collaboration Between BAU and Strategic Teams: Cross-functional collaboration bridges gaps between BAU and strategic teams, fostering a culture of shared responsibility. This approach encourages BAU teams to support strategic initiatives, while strategic teams remain aware of BAU dependencies.
3. Implement Continuous Monitoring and Review: Regular performance reviews using key performance indicators (KPIs) for both BAU and strategic change can help identify bottlenecks, reallocate resources, and ensure that initiatives stay on track.
4. Communicate Clearly and Frequently: Effective communication ensures that all team members understand priorities, expectations, and progress. Transparent communication builds trust and encourages a cohesive approach to balancing BAU and strategic change.

Support for Managing Change

Navigating the tension between BAU change and strategic change requires strategic foresight, clear governance, and resource management. Oryx Consulting specialises in helping financial organisations like yours align operational efficiency with transformative growth. We partner with senior leaders to develop tailored change management strategies that integrate BAU and strategic change seamlessly.

If your organisation is grappling with the complexities of BAU and strategic change, reach out for a consultation. Together, we can develop a plan that drives your business forward while maintaining the operational excellence you’ve built.