CIO Dashboard » Business Change Management Using Weak Signals

Business Change Management Using Weak Signals

post by Chris Curran on August 2, 2010

Guest post by Anand J. Rao and Anwar Haneef

A Fortune 500 company embarks on an ambitious program to implement a Master Data Management solution. Three years and a $100M later, executive leadership decides that too much money has been sunk into the program and the anticipated objectives have not been realized. The program is shut down. How often have you seen this? Why haven’t we got better at detecting problems before they happen? With all of the talk of business change management over the years, does anyone even know what it means or how to do it?

Too much emphasis is put on a project’s scope, schedule and budget. We believe that the organizational, cultural, and political issues are as important - a project’s early warning signals, or weak signals. The divisive issues are not technology in nature, but around goals, incentives, executive buy-in, decision-making, resources capacity and skills.

How Can Project Managers Detect Weak Signals?

We recently helped a Fortune 500 insurer canvas the crowd for areas that their enterprise web initiative might not be set up for success. Within a few weeks of initial conversations with the Chief Internet Officer and the CIO, we had surveyed 65 project stakeholders, consisting of executives, managers and professionals across business and technology on 7 dimensions:

Program Economic Model
Executive Buy-in
Stakeholder Engagement
Execution Management
Business Change Management
Resourcing
Vendor Engagement

Here are some of the things we heard:

“No one has ever explicitly explained to me what the ownership is. I know Marketing has ownership and I’m assuming the joint ownership with IT and Business but I’m not sure.”
“IT areas don’t seem to be cohesive. Their structure, areas of ownership and processes are not understood by the business partners. The dysfunctional feel of the organization leaves one to question their competency.”
“I am not aware of the chain of command in terms of decisions. Hopefully this will be communicated once the Program Manager comes on board”

The biggest issues were the lack of clarity around the leadership and management structure and lack of consensus across functions and management levels. The business management group was hugely skeptical while the technology management group was quite optimistic. But when responses averaged out, the insights revealed the following:

Lacking clarity on the means to achieving goals
Uncertainty around cost-benefit analysis
Limited consensus on scope, duration, and timing
Concern over skill and capacity
Limited definition of business data integration needs

Some of our recommended immediate follow-up actions were to set up meetings amongst key stakeholders to clarify scope, start benefits case validation, and start a proof of concept for business data integration. Another set of actions addressed communications and recommended publishing a year-by-year set of objectives, sending weekly program status report to the steering group, and developing a communication plan to coordinate and align relevant stakeholders. The program leadership took immediate action on the diagnostic recommendations to ensure tighter cross-functional alignment and buy-in from its various stakeholders.

We worked with project management expert Michael Krigsman and his best-in-class company Asuret to conduct and analyze these surveys. It would also be possible to roll your own using Sawtooth and Tableau for example.

Ultimately, the results from the diagnostic itself were not surprising; however they provided validity to constituents’ concerns in a neutral and non-threatening way. It is a simple and effective tool for organizations to monitor warning signals within their large investments.

What is your experience from large and transformational programs? How have you watched out for weak signals in your programs? What would you have done different in the programs that have failed to realize its stated objectives? What other creative project management approaches have you used to improve delivery success?

http://www.emgc.com Jim Smith

Ever wonder why there aren’t hundreds of uncompleted commercial buildings in every city with $100’s of millions of sunk costs? After all ,many have been worth $100 million and more, usually involved far more people than the typical IT project; trades, government inspectors, a budget, a schedule, not to mention unions.

And yet these buildings get completed! In fact, many companies who successfully manage large building projects regularly screw up IT projects.

With $500 million in reclaimed projects and way too many sunk costs I remain convinced that if the CEO required the the same diligence regarding benefits from the requester as costs from the CIO many projects project failures could be eliminated.

It always rests with the top, what leader gives a team with little experience, no clear leader, and only a vague idea of the benefits a $100 million with no oversight. I’ve seen at least six over $50 million where that’s exactly what happened.

If the CEO required a weekly stats report that answered only one question the success rate would go up.

Does the “XYX” project remain on budget and schedule to deliver exactly the benefits utilized to justify the capital, If no, explain fully.

If requirements were added, who approved the delay/dollars
If the changes affect the benefits, who approved if lessened.

These may seem elementary, but not one client has had a failed IT project following these rules. It’s just delivering accountability at a level above the politics and culture. In fact, these questions are published for comment on the intranet at each company. The light of day works wonders on project management!
http://www.emgc.com Jim Smith

Ever wonder why there aren’t hundreds of uncompleted commercial buildings in every city with $100’s of millions of sunk costs? After all ,many have been worth $100 million and more, usually involved far more people than the typical IT project; trades, government inspectors, a budget, a schedule, not to mention unions.

And yet these buildings get completed! In fact, many companies who successfully manage large building projects regularly screw up IT projects.

With $500 million in reclaimed projects and way too many sunk costs I remain convinced that if the CEO required the the same diligence regarding benefits from the requester as costs from the CIO many projects project failures could be eliminated.

It always rests with the top, what leader gives a team with little experience, no clear leader, and only a vague idea of the benefits a $100 million with no oversight. I’ve seen at least six over $50 million where that’s exactly what happened.

If the CEO required a weekly stats report that answered only one question the success rate would go up.

Does the “XYX” project remain on budget and schedule to deliver exactly the benefits utilized to justify the capital, If no, explain fully.

If requirements were added, who approved the delay/dollars
If the changes affect the benefits, who approved if lessened.

These may seem elementary, but not one client has had a failed IT project following these rules. It’s just delivering accountability at a level above the politics and culture. In fact, these questions are published for comment on the intranet at each company. The light of day works wonders on project management!
Steve Romero, IT Governance Ev

I believe the fundamental problem lies in the fact that so many technology projects are just that, technology projects. These types of problems and results will continue until Enterprises realize and embrace the fact that ALL projects are business projects (with varying levels of technology implications).

I have found business process change is consistently at the root of “technology project” debacles. It is rarely addressed within the confines of the defined effort. How many of these projects answer the following questions:
- What business process changes are required to ensure success?
- Who is responsible for business process change?
- Are the business process changes within the scope of the project or will they be addressed by an overarching program?
- Who is responsible for ensuring business value is on track and ultimately delivered?
- How will business value delivery status be measured and reported back to the project sponsor, steering committee and Project and Portfolio Management (PPPM) leadership?

The last question includes reference to the governance process that ensures these questions are asked and answered. Each of these aspects, and many more are addressed within the context of the four basic but critical PPM questions for any and every project and program effort:
- Should we?
- Can we?
- Are we?
- Did we?

Each of these questions is applied to every aspect of the effort - which includes technology change and business process and organizational and cultural change. Most of the PPM processes I have seen only address the first question, Should we? And in the case of “technology projects,” the “should we” question rarely includes consideration of the required business process and organizational changes.

Last note, I have seen a demo of Michael Krigsman’s Asuret tool. I concur it does a masterful job of detecting and exposing the deficiencies you describe in your post.

Steve Romero, IT Governance Evangelist
http://community.ca.com/blogs/theitgovernanceevangelist/
Steve Romero, IT Governance Evangelist

I believe the fundamental problem lies in the fact that so many technology projects are just that, technology projects. These types of problems and results will continue until Enterprises realize and embrace the fact that ALL projects are business projects (with varying levels of technology implications).

I have found business process change is consistently at the root of “technology project” debacles. It is rarely addressed within the confines of the defined effort. How many of these projects answer the following questions:
- What business process changes are required to ensure success?
- Who is responsible for business process change?
- Are the business process changes within the scope of the project or will they be addressed by an overarching program?
- Who is responsible for ensuring business value is on track and ultimately delivered?
- How will business value delivery status be measured and reported back to the project sponsor, steering committee and Project and Portfolio Management (PPPM) leadership?

The last question includes reference to the governance process that ensures these questions are asked and answered. Each of these aspects, and many more are addressed within the context of the four basic but critical PPM questions for any and every project and program effort:
- Should we?
- Can we?
- Are we?
- Did we?

Each of these questions is applied to every aspect of the effort - which includes technology change and business process and organizational and cultural change. Most of the PPM processes I have seen only address the first question, Should we? And in the case of “technology projects,” the “should we” question rarely includes consideration of the required business process and organizational changes.

Last note, I have seen a demo of Michael Krigsman’s Asuret tool. I concur it does a masterful job of detecting and exposing the deficiencies you describe in your post.

Steve Romero, IT Governance Evangelist
http://community.ca.com/blogs/theitgovernanceevangelist/
http://ciodashboard.com/ Chris Curran

Thanks Jim and Steve.

In both of your posts, you highlight the people - leadership, ownership, responsibility, communication. I couldn’t agree more. The trick is in figuring out how to understand these aspects of each project in a more systematic way. I’m proposing the weak signals diagnostic as a way to make this more tangible.

The biggest real hurdle I see in implementing corporate strategy is the “mobilization” of the people, dollars, vendors, etc. so that everyone is at the same starting line when the execution work begins. Too often, everyone has their own starting line and the first 3-6 month (or more) is spent getting everyone on the same page while the program is burning big bucks.

-Chris
http://ciodashboard.com/ Chris Curran

Thanks Jim and Steve.

In both of your posts, you highlight the people - leadership, ownership, responsibility, communication. I couldn’t agree more. The trick is in figuring out how to understand these aspects of each project in a more systematic way. I’m proposing the weak signals diagnostic as a way to make this more tangible.

The biggest real hurdle I see in implementing corporate strategy is the “mobilization” of the people, dollars, vendors, etc. so that everyone is at the same starting line when the execution work begins. Too often, everyone has their own starting line and the first 3-6 month (or more) is spent getting everyone on the same page while the program is burning big bucks.

-Chris
http://www.emgc.com Jim Smith

Chris,

At the risk of grossly over simplifying the answer, this really works. Just consider how much time, effort, and money goes into developing the typical corporate or project strategy. It is indeed a big deal, but once developed execution seems to be even a bigger deal, as you stated in your reply, how to get everyone on the same page.

Keeping it simple can actually work. Suppose that the strategy has been cast. Now comes the hard part, getting the team on board. We assign at least five “objectives” to each department head, approval comes from the CEO only when each officer can describe exactly how each “objective” supports the strategy.

The next level of management developing their annual goals for bonus now has to describe each activity as a “TASK” with a direct connection to one or more of their boss’ “objectives”.

Again, sounds simple, but it’s tough to implement unless the CEO really believes in the strategy. It’s just too easy for everyone to keep focusing on what they are used to. Having to tie your bonus directly to an ability to demonstrate how your accomplishments (TASKS) supported the strategy keeps everyone focused on what’s important.

Where this approach has not worked was where the CEO and most of the officers gave lip service to the strategy focusing instead on the current quarter’s results. If a manager two or three levels below the CEO is on a compensation plan and can’t directly connect his or her goals to the “objectives” which support the strategy, who’s going to be surprised when the strategy isn’t realized. This approach works wonders for teamwork, the objectives are no longer personal.

I’m open to discussing offline if this isn’t the venue for continuing.
http://www.emgc.com Jim Smith

Chris,

At the risk of grossly over simplifying the answer, this really works. Just consider how much time, effort, and money goes into developing the typical corporate or project strategy. It is indeed a big deal, but once developed execution seems to be even a bigger deal, as you stated in your reply, how to get everyone on the same page.

Keeping it simple can actually work. Suppose that the strategy has been cast. Now comes the hard part, getting the team on board. We assign at least five “objectives” to each department head, approval comes from the CEO only when each officer can describe exactly how each “objective” supports the strategy.

The next level of management developing their annual goals for bonus now has to describe each activity as a “TASK” with a direct connection to one or more of their boss’ “objectives”.

Again, sounds simple, but it’s tough to implement unless the CEO really believes in the strategy. It’s just too easy for everyone to keep focusing on what they are used to. Having to tie your bonus directly to an ability to demonstrate how your accomplishments (TASKS) supported the strategy keeps everyone focused on what’s important.

Where this approach has not worked was where the CEO and most of the officers gave lip service to the strategy focusing instead on the current quarter’s results. If a manager two or three levels below the CEO is on a compensation plan and can’t directly connect his or her goals to the “objectives” which support the strategy, who’s going to be surprised when the strategy isn’t realized. This approach works wonders for teamwork, the objectives are no longer personal.

I’m open to discussing offline if this isn’t the venue for continuing.
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