INPACT 2: How to avoid a failed project - Slidecast 2: Organisation’s capability

© Imaginist 2009

Slidecast 2: Assessing the organisation’s capability gap and its impact on the

project’s ROI

ORGANISATI ONAL CAPABILITY

THE PROJ ECT

Culture Proce

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ORGANISATI ONAL CAPABILITY

THE PROJ ECT

Culture Proce

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The Change Equation

Or how to avoid a failed change project!

Peter DuschinskyManaging Director, The Imaginist Company

© Imaginist 2009

Why else do change projects fail?

The last slidecast focused on project complexity – we typically underestimate it, so we under-resource it and our expectations of outcomes are too optimistic


Look at these quotes:

• “85% of project success is dependent on factors related to people” Ohio Center for Information Based Competition

• “Even amongst successful implementations, 47% of companies reported serious challenges with end-user adoption that often put projects in jeopardy” - AMR Research

• “Companies that spend less than 17% of ERP implementation budgets on training put their projects at increased risk of failure” Gartner

© Imaginist 2009


It turns out that success rests as much on the capability of the people in the organisation to cope with change and take advantage of new systems, as on how well the project was planned and implemented

The complexity of the project needs to be within the capability of the organisation

We’ve seen how to assess the complexity of a project How do we assess the capability of the organisation? By looking at its Culture and its Process Management

Capability ORGANI SATI ONAL CAPABI LI TY

THE PROJ ECT

Culture Proce

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ORGANI SATI ONAL CAPABI LI TY

THE PROJ ECT

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© Imaginist 2009

Assessing an Organisation’s Culture

There is an underlying tension between the individual and the organisation

Successful change needs an integrated approach encompassing people and process in a balanced approach

Point of balance

ORGANISATION‘External’ Focus:• The organisation’s

needs and direction• Systems and processes• Efficiency

THE INDIVIDUAL‘Internal’ Focus:• Culture• People’s perceptions, attitudes,

motivations, aspirations• Effectiveness

© Imaginist 2009

Imagine thependulum swinging and rising at the same time…






© Imaginist 2009

Looking at it from the top, you would see it a bit like this:






© Imaginist 2009

5

8

Systemist

Imaginist7

6Empiricist

3Dialectic

1 Pragmatist/Anarchic

4

Aligned

Structuralist2

5 Pragmatist/ Aligned

9 Pragmatist/ Empowered


That gives us the basis for our Culture Evolution Model

ORGANISATION‘External’ Focus

THE INDIVIDUAL‘Internal’ Focus

© Imaginist 2009

It indicates how well the organisation will cope with change

EXTERNALFOCUS

(Organisation)

5

INTERNALFOCUS

(Individual)

8

SystemistImaginist7

6Empiricist

3Dialectic


4

Aligned

Structuralist2

5 Pragmatist/ Aligned

9 Pragmatist/ Empowered

This model allows us to identify the predominant organisational culture

Each point on the spiral represents a separate, definable culture

Each culture builds upon the earlier ones, progressing up the spiral


© Imaginist 2009

Mapping your Management Culture

Which of the following descriptions most accurately describes your organisation (or your part of it)?• You might be able to identify more than one - that’s because

they are not discrete styles• Each is only achievable when those below it on the spiral are in

place• The chances are you will focus mainly on the negative aspects

of your management culture• But each style has positive and negative elements - if not

nurtured, they degrade over time

© Imaginist 2009

This is where we all start

In this entrepreneurial organisation, it’s results that count

The boss may be micro-managing everything or leaving members of the team to do more or less what they like, as long as they achieve results

Either way, success is what counts, not how you get there – ‘just do it’

There are some laid-down procedures, but people only follow them or takeup a new initiative if they see benefits for themselves in doing so

The Management Culture model: Level 1

8SystemistImaginist

7

6Empiricist

5 Pragmatist/Aligned

9 Pragmatist/Empowered

5

1 Pragmatist/AnarchicStructuralist

2

3Dialectic Aligned

4

© Imaginist 2009

Rules, devolved authorities and formal procedures govern how this organisation works

That has allowed the organisation’s operations to be scaled up, but it will also have allowed ‘silo working’ to emerge, hindering the sharing of ideas and knowledge across the organisation

Change is slow and painful; decisions are often passeddown, with formal but inadequate consultation;initiatives are not encouraged

8SystemistImaginist

7

6Empiricist



3Dialectic Aligned

4


Structuralist2


© Imaginist 2009

The organisation wasn’t efficient, so management brought in the Business Process Redesign consultants, the LEAN specialists and an ERP system

Your organisation is now streamlined, focusing on cost cutting and efficiency, with modern,rationalised and automated processes

But it still doesn’t seem to be working very well,does it?

Why not?

8SystemistImaginist

7

6Empiricist



Structuralist2

Aligned4


3Dialectic


4Rationalist

© Imaginist 2009

Well perhaps we didn’t spend enough time gaining the ownership for the changes…

It might be better if:

Then silo working might stop being such a significant barrier to change

8SystemistImaginist

7

6Empiricist



Structuralist2

Aligned4


3Dialectic


People were valued more than processes

Sharing knowledge wasvalued, as opposed to having (and protecting) knowledge

Managers and staff were encouraged to network and exchange ideas and information across the organisation

© Imaginist 2009

Now, as a result of strong leadership and a good level of dialogue between people, the values and aspirations of the staff in your organisation are in line with its policies and strategic direction

People feel valued and understand how they fit into the scheme of things, so are more motivated to accept change that will benefit the organisation, even if it doesn’t reduce their workload.

Because people and processes are aligned, things work well

Sounds like a good place to work, doesn’t it?

8SystemistImaginist

7

6Empiricist



Structuralist2


3Dialectic

4Aligned


© Imaginist 2009

Once people feel valued and share information the organisation starts to function differently

Managers trust their staff to act in the best interests of the organisation

Decisions can be made closer to the customer, quickly and effectively

Staff are actively encouraged to get involved in innovation and performance improvement initiatives

Things get done, change becomes easier

The Management Culture model:Level 5

8SystemistImaginist

7

6Empiricist


Structuralist2


3Dialectic Aligned

4


© Imaginist 2009

Now the organisation is not so inward-facing and obsessed with internal power-plays, it can function better in the ‘real world’

Key information about your customers, suppliers, competition etc. flows across departments, as well as up and down the management hierarchy

Because it does not suffer delays or distortion from passing through departmental silos, the information is timely and accurate, which means that management decisions are well-informed and effective


8SystemistImaginist

7


Structuralist2


3Dialectic Aligned

4

6Empiricist


© Imaginist 2009

Because your organisation is working well, senior managers are not focused on short-term fire-fighting and intervention, allowing them the time to concentrate on longer-term planning and more important issues

They are operating with timely and accurate information, which means they can make intuitive, high quality and far-reaching decisions - and that means the organisation is able to cope well with change

This requires a different calibre of manager, the Imaginist


8Systemist


Structuralist2


3Dialectic Aligned

4


7Imaginist

6Empiricist

© Imaginist 2009

The organisation now recognises its place in its business, economic, social and community contexts – and plans and manages accordingly

Your CEO makes him/herself visible and available, and is vocal in championing changesand issues that are critical to the organisation’s success, but his/her leadership style is to steer from behind and focus on building longer-term capability, rather than intervening in operational issues

This works because the organisation has a strong and effective Board and an aligned workforce



Structuralist2


3Dialectic Aligned

4

5 Pragmatist/Aligned6

Empiricist

Imaginist7 8

Systemist

© Imaginist 2009

Finally, if you are lucky enough to be working in an organisation that has set itself the challenge of being the best in class:

You are fully empowered to plan and manage your own workload, within a supportive management culture

This includes working collaboratively in teams and leading and participating in change projects, to continually improve the effectiveness of the organisation to meet its customers’ needs

This is a learning organisationWe’re a long way from the culture of blame and focus on short-term gain, where we started


Structuralist2


3Dialectic Aligned

4

5 Pragmatist/Aligned6

Empiricist

Imaginist7


8Systemist

© Imaginist 2009

Structuralist


3Dialectic Aligned

4


6Empiricist

Imaginist7


8Systemist

EXTERNAL AXIS

(Organisation)

INTERNAL AXIS

(Individual)

Where are you?

© Imaginist 2009


THE PROJ ECT

Culture Proce

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THE PROJ ECT

Culture Proce

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Organisational Capability- the next step

We have looked at management culture Now let’s focus on the organisation’s capability to manage its

business processes

© Imaginist 2009

Organisations with aspects of their operation at levels 1 and 2 will find it difficult to introduce standard systems and processes

Assessing an Organisation’s Process Management Capability

1. Initial Ad hoc process

Chaotic

2. RepeatableStable process

Controlled environment

3. Defined Standard process

Consistent Execution

4. Managed Measured process

Quality and Productive Improvement

5. Optimised Effective process

Continuing Improvement

Software Engineering Institute

We use the Process Capability Maturity Model (CMM) to assess the organisation’s process capability – the discipline and consistency with which processes are managed

© Imaginist 2009

The Organisational Capability Indicator

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1

9. Pragmatic/Empowered

8. Systemist

7. Imaginist

6. Empiricist

5. Pragmatic/ Aligned

4. Aligned

3. Dialectic

2. Structuralist

1. Pragmatic/ Anarchic

Management Culture

Business Process Capability Combining these two assessments gives us a high level indication of the Organisational Capability

© Imaginist 2009

The Organisational Capability Indicator

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture

Business Process Capability Combining these two assessments gives us a high level indication of the Organisational Capability

So, for example, a level 2 culture and level 3 process capability suggests a Medium overall capability to cope with change

© Imaginist 2009

Where on the exponential complexity scale was your project?

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1000015000

20000

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3500040000

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50000

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6500070000

75000

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1 2 3 4 5 6

Not simple –needs

experienced project

management

A complex project –

needs dedicated

project team

Beyond this point your project is too complex – break it down into smaller

projects and employ a skilled programme

manager

Simple project – needs some

project management

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Not simple –needs

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management

Not simple –needs

experienced project

management

Not simple –needs

experienced project

management


needs dedicated

project team


needs dedicated

project team



manager



manager


project management


project management


project management

?

Was it significantly further up the scale than you had thought?

© Imaginist 2009

Combining Capability and Complexity

Capability

High

Med

Low

SimpleNot Simple Complex

Too Complex

Complexity

= The project looks as if it’s within your capability

= This project is at risk of not realising expected benefits

= This project is not within your organisation’s capability

Put the project’s complexity status into the context of your organisation’s capability, to show the relative complexity of the project - the gap between the organisation’s capability and that required to manage the project and cope with the changes it requires people to make

© Imaginist 2009

Combining Capability and Complexity

Capability

High

Med

Low

SimpleNot Simple Complex

Too Complex

Complexity

= The project looks as if it’s within your capability

= This project is at risk of not realising expected benefits

= This project is not within your organisation’s capability

In this example, the project is at risk of not realising expected benefits and, as planned, may actually be beyond your organisation’s capability to cope with the changes it would bring

© Imaginist 2009

Other models and tools

We now have a reasonably good assessment of the likely success or failure of the project

A typical assessment process involves face-to-face interviews with stakeholders which would also provide the stories and rich detail that is needed to make sense of these top-line results

Two other models add further to our understanding:• The Trust/cost model• The Dynamic Benefits Realisation model

© Imaginist 2009

Measuring Trust

We measure the 3 dimensions of relationships to give a Cost/trust Indicator:1. How far do you trust your boss

to represent your interests, consult you when necessary and keep you fully informed?

2. How far do you trust your staff to work without your keeping an eye on them?

3. How far do you trust your colleagues to share accurate information and keep you informed about changes that might affect you?

Dimension 1:Relationship with my manager

Dimension 2:Relationship with my staff

Dimension 3:Relationship with my colleagues

© Imaginist 2009

Measuring Trust

Score each of these on a scalewhere:0 = not at all

1 = not sure

2 = mostly

3 = totally

Add these up (max 9)

Convert into %... eg 4/9 = 45%

Invert that to find your Distrust Factor

so 45% –100 = 55% distrust

Dimension 1:Relationship with my manager

Dimension 2:Relationship with my staff

Dimension 3:Relationship with my colleagues

© Imaginist 2009

Measuring Trust

The higher the levels of distrust, the more time and effort the project will require and the higher the cost, so add at least 55% to planned time and cost

55%

Time & Cost

Distrust

100%

People trust each other, relationships are good = Speedy change = Low cost = SUCCESS

Levels of trust are poor, relationships difficult = Slow or no change= Costs go up = FAILURE

0%

Time & Cost

Distrust

100%



Levels of trust are poor, relationships difficult = Slow or no change= Costs go up = FAILURE

0%

HighLow

© Imaginist 2009

With only two questions we can assess how well the project will realise ‘indirect’ benefits such as efficiency savings:

a) Does the project have a published benefits realisation plan?

b) Are Dept/Division heads formally accountable for achieving the performance improvements enabled by the project?

Why?

Benefits Realisation

© Imaginist 2009

A common barrier to change is the perception that:

“change is something that is done to you”

This is the ‘push’ dynamic found in most change programmes

Wouldn’t it be better if the changes were being PULLED by the operational managers and staff?

That’s what the Dynamic Benefits Realisation model helps us to do

The Dynamic Benefits Realisation model

© Imaginist 2009

It is often hard to demonstrate the efficiency benefits from a change programme

Business cases can claim these as cashable benefits, but most organisations do not check whether the benefits have been realised - they simply cut budgets to reflect the theoretical improvement and leave it to the local staff and managers to cope

This puts managers under pressure to cut corners, so the quality of performance goes down

So what’s the alternative?• Hold local managers accountable for the changes in their part of the

organisation • Don’t try to measure indirect ‘savings’, focus on improvements to

core performance targets, enabled by the new system and processes


© Imaginist 2009


1. Identify potential impact on core processeseg Speeds up or eliminates process (typically up to 50% average time savings achievable)

2. Calculate resources potentially available for redeploymentWho (how many affected in group)? How much time saved?

5. Prioritise roll-out Based on the relative value of the benefits identified in [4]

4. Agree who is accountable for its realisationIdentify key System/ Process users and ensure representatives are on Project Management Board

3. Agree measurableimprovement and by whenQuantify value; use existing service level improvement KPI wherever possible

6. Manage project with System/ Process user representatives driving it, not the Project ManagerHold local managers accountable at Board level for core KPI improvements

© Imaginist 2009

Benefits Realisation Indicator

Plan in place?

Accountability?

Possible Outcomes

Yes YesThis project has a good chance of achieving the planned benefits

Yes NoMake local managers accountable for adopting the new processes and redeploying released resources to drive improved performance, or the benefits will not be realised

No YesWithout formal framework, local managers will not be held accountable in practice – put one in place

No No This project will not achieve its savings objectives

© Imaginist 2009

Calculating the Impact

This is where we calculate the potential impact of these indicators on the business case

We consider the status of each of the elements identified in the assessment and calculate the impact on costs or benefits, or both

This gives us an overall impact on the project’s bottom line

That’s the language senior managers understand!

- %Total potential impact on benefits

+ %Total potential impact on project timescales/costs

Other factors impact estimated at:

IT Solution9

Relationship with suppliers8

OTHER FACTORS

Delivery of Project Impact estimated at:

Benefits Realisation7

Distrust factor6

Visibility of process5

DELIVERY OF PROJECT

Project Impact estimated at:

Complexity of project4

Clarity of objectives3

PROJECT

Capability Impact estimated at:

Capability Maturity2

Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%

Potential ImpactStatusComponent

© Imaginist 2009

Deliverables: Action Plan & Route Map

Organisation

Component Implication Action required

Management Culture

The lack of information-sharing, alignment and empowerment will jeopardise the success of the project. At the very least it will mean poor take-up and a lower than planned level of benefits.

A programme of interaction and dialogue across the organisation is urgently needed to improve the management culture. This needs to include increasing trust, see below.

ProcessCapability

The organisation’s process capability is poor. This means that any projects which seek to standardise and improve processes to achieve greater efficiency will be very difficult to achieve.

Consider carrying out a programme to raise the levels of process capability ahead of implementing the project or using the project itself to inject the necessary disciplines. In this case it is crucial for the Board to make compliance to the new processes mandatory.

We develop an Action Plan to overcome the barriers, mitigate the risks and help clients plan for success

© Imaginist 2009

Using the Culture Evolution model, we develop a Route-Map to improve the organisation’s capability for change

We ask two questions:

• If you are here now, where do you need to be?

• What will happen if you don’t change?

The first question identifies what needs to change

The second gives you the ammunition you might need to defend the change – it describes the future if you stay where you are

Structuralist2

3Dialectic

Structuralist2

3Dialectic

The more mature the management culture, the better the organisation will adapt and respond to change

Deliverables: Action Plan & Route Map

© Imaginist 2009

The Change Equation is about changing mindsets

Is your organisation underestimating the complexity of its change project/s?

Does it have the capability to cope with the changes? Are you investing in change management early enough? What more do you need to do to ensure that your change

project/s will succeed?

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture

Business Process Capability

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


9 Pragmatist/Empowered9

8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

Pragmatist1

3Rationalist

4Aligned

Structuralist2



8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

Pragmatist1

3Rationalist

4Aligned

Structuralist2



8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

Pragmatist1

3Rationalist

4Aligned

Structuralist2


9999

8SystemistImaginist

7Imaginist

7

6Empiricist

6Empiricist

6Empiricist

55555

3Dialectic

3Dialectic

INTERNALFOCUS

(Individual)

INTERNALFOCUS

(Individual)

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

EXTERNALFOCUS

(Organisation)

EXTERNALFOCUS

(Organisation)

Pragmatist1Pragmatist1

3Rationalist

3Rationalist

4Aligned

Structuralist2

Structuralist2

StructuralistStructuralist2


1.InitialAd hoc process

Chaotic

2.RepeatableStable process

Controlled environmentBasic

management control

3.DefinedStandard process

Consistent ExecutionProcess

definition

4.ManagedMeasured process


Process measurement

5.OptimisedEffective process

Continuing ImprovementProcess control


Chaotic



management control



definition



Process measurement




Chaotic1.InitialAd hoc process

Chaotic



management control



management control



definition



definition



Process measurement



Process measurement





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6000065000

7000075000

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Simple project

Not simple -needs some

project management

A complex project –needs an

experienced project

manager

Beyond this point your project is too complex –

break it down into separate projects

and employ a programme

manager

75 4803600

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Simple projectSimple projectSimple project


project management


project management


experienced project

manager


experienced project

manager




manager




manager




IT Solution9


OTHER FACTORS



Distrust factor6


DELIVERY OF PROJECT




PROJECT



Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%





IT Solution9


OTHER FACTORS



Distrust factor6


DELIVERY OF PROJECT




PROJECT



Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%


Time & Cost

Distrust

(Trust % - 100)

People trust each other, relationships are good = Speedy change = Low cost = SUCCESS Levels of trust are poor, relationships

difficult = Slow or no change = Costs go up = FAILURE

Time & Cost

Distrust

(Trust % - 100)

People trust each other, relationships are good = Speedy change = Low cost = SUCCESS Levels of trust are poor, relationships

difficult = Slow or no change = Costs go up = FAILURE

Possible OutcomesAccountability?

Plan in place?

No

No

Yes

Yes

This project will not achieve its savings objectivesNo

Without formal framework, local managers will not be held accountable in practice – put one in place

Yes

Make local managers accountable for adopting the new processes and redeploying released resources to drive improved performance, or the benefits will not be realised

No

This project has a good chance of achieving the planned benefits

Yes

Possible OutcomesAccountability?

Plan in place?

No

No

Yes

Yes

This project will not achieve its savings objectivesNo

Without formal framework, local managers will not be held accountable in practice – put one in place

Yes

Make local managers accountable for adopting the new processes and redeploying released resources to drive improved performance, or the benefits will not be realised

No

This project has a good chance of achieving the planned benefits

Yes

Complexity

Too ComplexComplex

Not SimpleSimple

Low

Med

High

Capability

Complexity

Too ComplexComplex

Not SimpleSimple

Low

Med

High

Capability

© Imaginist 2009

Thank you for listening!

Peter Duschinsky

[email protected]

‘The Change Equation’ is now available from

Amazon.co.uk

© Imaginist 2009

Who are we?

The Imaginist Company is a change management consultancy We specialise in helping private and public sector clients identify

and overcome barriers to change and performance improvement Under our 'bethechange' brand, we work with non-profit

organizations across the world, advising them on strategic development and transformational fundraising programmes

Working with a team of associates and partners, Imaginist undertakes projects and programmes which require: • ‘Quantum’ thinking and the creation of new approaches

• Research, diagnostic assessment, analysis and evaluation

• Development of clearly articulated guidelines and policy documentation

• Dissemination, facilitation and mindset change

Contact us at: [email protected]

INPACT 2: How to avoid a failed project - Slidecast 2: Organisation’s capability

Business

Transcript of INPACT 2: How to avoid a failed project - Slidecast 2: Organisation’s capability