10 questions the Board should ask projects.

FullSizeRenderIn the fast paced world of disruption, trade liberalisation, technology innovation and the availability of cheap capital competition faced by business is unprecedented in scope, scale and speed. This has driven management and Boards towards larger and more transformational projects to remain relevant in this new world. The following are my starting 10 questions when faced with the difficult task of approving such complicated projects.

1.     How does this project fulfil our strategy?

This assumes that the organisation has a well-considered, articulated and up to date strategy. Without this there is precious little criteria that a project’s merits can be tested against except basic financial measures. Management have a myriad of projects it could consider and are entitled to rely on an agreed strategy to guide the priorities.

Management has mastered the art of presenting the positive case and linking it to the business strategy. There is a tendency to be overly optimistic of the business case and the ability of management to deliver on it. (Read Thinking, fast and slow by Daniel Kahneman). This is not being deceptive but part of human psychology. It is up to the Board to recognise this, listen more deeply and rationalise more clearly the response to overcome the biases.

2.     What process and whose expertise was brought to bear on this proposal?

The Board needs to test if can rely on the information presented. Do the people involved have the requisite skill, knowledge, qualifications and experience to plan and execute the project? Is the process robust with external and internal due diligence? These are not superficial questions. Management need to understand that they must preempt these questions to ensure the process and expertise applied is appropriate for the nature of the project. From the Board’s perspective explicitly asking this question and applying appropriate consideration to the answer enables it to fulfil one of the basic director duties. It is more desirable to address this upfront rather than make regrettable assumptions. More mature organisations have a documented and well tested processes for project preparation and execution including the incorporation of lessons from previous projects.

3.     Is this a good deal?

This is the initial question of assessing the business case. Does this project meet the financial hurdles? Is the potential reward adequate to cover the potential risk? Has the cost and time been adequately assessed? What risks has the contingency covered and what risks it has not? Are the benefits real and have management signed up to deliver them? Which contractors will deliver the project? What due diligence has been done on the contractors that give you confidence they can and will deliver? How is it funded? These are some of the questions to test the efficacy of the proposal.

4.     What alternative outcomes are possible and how likely are they?

Projects by their very nature are uncertain beasts. Although management is likely to present a preferred outcome the Board must cast its attention to alternative outcomes that may be less desirable? Management typically use scenario planning or risk matrix tools to respond to this question. It is important that the work is robust and that management and the Board use their projection skills to experience what it would be like in the ‘alternative outcome world’. It is easy to overlook a critical scenario or underplay the effects of the realisation of an undesirable outcome. A clear appreciation of alternative outcomes is necessary to address the next question.

5.     What deviation from the parameters outlined in the business case is the Board prepared to accept?

With an appreciation of the response to question 4 the Board is in a position to address what is and is not an acceptable outcome. This could be in time, cost, quality, benefits or reputation terms. It is better to know at the beginning of the project what is tolerable to the Board and set up an option to ‘review and shutdown’ the project at the point it is forecast that the tolerances will be breached. The objective here is to keep it objective. It is much harder to address these questions in an unemotional way when a project has drifted off the business case parameters.

6.     How have the interests of the stakeholders (both internal and external) been considered and aligned?

Friction or misalignment costs are mostly hidden, unestimated and a huge burden on most projects mainly because the misalignment is not adequately addressed prior to commencement. Just because someone says it is aligned does not make it so. Words are cheap. What actions, resources, structures have management put in place to ensure alignment? Wherever possible, with external contractors, make that alignment contractual.

7.     What external factors will influence the success of this project and how will these be monitored?

Not everything is in the control of the project. A change in legislation, competitor landscape, technological change or even geopolitical dynamics can alter the success of the project. These need to be tabled and actively monitored to ensure that the project remains relevant. Its not about project failure but the world has changed.

8.     What is the organisation’s speed of learning?

The speed of learning is the pace at which the organisation can understand, absorb and adapt to change. It varies greatly by organisation. It may be a constraint, enabler or a cause to rethink the project or at least how the project is implemented. Most organisations fail to deal with this question appropriately. The consequences for some projects can be catastrophic. In Post Implementation Reviews (PIR’s) it is often described as high resistance to change, poor leadership from the top or the project was inconsistent with the prevailing culture. In my experience it is a failure in understanding how a particular organisation learns and at what pace. Drawing this out allows the sponsor to restructure the project in a way that raises its likelihood of success.

9.     What is the one question you were hoping we would not ask?

This is an excellent catchall question that I use every time I review a project. Look for incongruence between what is said and the body language of management. You will be handed strong indicators as to where to probe further.

10. What reporting and monitoring of the project does the Board require?

The answer will vary depending on the scale of the project, delegations, capability of management, trust in management and the inherent risks in the project. As a minimum I would require management to forecast and report against the tolerance parameters addressed in question 5, a schedule of future Board decisions for the project (a good way measure that progress is going to plan), monitoring of the external factors from question 7 and the other critical risks identified in the proposal.

Feel free to add to the list!

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10 questions the Board should ask projects.

Banking culture. The root of all evil!

Skull thing.jpgEven if it were true is that the most helpful construct for addressing the issue? Blaming “it” on culture is a classic system 1 response (see Thinking fast and slow by Daniel Kahneman for definition). It sounds true, an alluring expression of the root cause of the problem. But is it?

Let’s assume that it is true for a moment. How should the Board respond to the ASIC challenge?

A culture problem warrants a culture response.

To respond the Board insists on a new corporate culture:

  1. A target culture is defined incorporating more system 1 words such as customer centric, agile, compliant, trustworthy, and courageous just to name a few.
  2. This is published with internal marketing and communications. Beautiful posters are up everywhere and executives are out in force like politicians espousing the merits, aspirations and expectations of the new culture.
  3. Scorecards and bonuses are linked to the new culture. The carrot and stick are in place.
  4. Performance is measured using employee surveys. Reports are incorporated into board papers.

Congratulations you have new culture! The Board has met it obligations.

Really?! A more in depth analysis of what is happening needs to be undertaken.

What is the purpose of enterprise including banks and how do they function?

  • The enterprise must fulfil a customer need at a price the customer is willing to pay. Even a monopoly must achieve this or face the threat of a potential competitor.
  • The enterprise must be efficient and effective. Without this, in time, they will be overtaken by a more competent competitor.
  • The enterprise must conduct its affairs within the law (as a minimum in the short term and within the expectations of society in the long term).

The modern enterprise achieves these requirements by taking a goal orientated approach. This means setting informed business targets and going about achieving those targets, often with bonuses at risk (but not necessarily so). By its very nature goal orientation creates tension. Without tension then the enterprise is baking in inefficiency and ineffectiveness and will ultimately fall.

Individuals have the potential to respond differently to that tension and sometimes that response is inappropriate for the situation. This is where the core of the issue lives.

An inappropriate response could occur because:

  1. The individual or group is overly invested in that particular outcome.
  2. In their mind the goal is beyond their reach through conducting business appropriately.
  3. The risk/reward profile is such that they are prepared to cross the line.
  4. Their personal values accept the inappropriate behaviour as “their normal”
  5. The individual feels threatened and is acting under duress.

In the end we can chose to lower the “performance tension” to such a level that enables everyone to exceed it. This has serious long term performance ramifications for the existence of the enterprise and is not in the best interest of society.

The better alternative, in my mind, is to deal with the underlying conditions through better quality management, coaching, and better selection of individuals for the job. Above all the enterprise should operate with full transparency and appropriate segregation of duties to ensure that failures are identified quickly and corrective action taken to minimise the damage.

How is that a culture problem?!

Banking culture. The root of all evil!

To PMO or not to PMO. Is that really the question?!

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The strategy consultants have weaved their magic with the Executive Team and the Board to define an exciting new direction. This typically involves pulling a number of  big strategic levers including downsizing, outsourcing, new market entry or old market exit and product reform just to name a few.

If you have participated in such an exercise you will know how intense that activity can be. BUT the heavy lifting of implementation is still before you.

At this point many organisations take a breath and really lose momentum or try to proceed without expert implementation management help which causes them to fumble the ball.

It is only natural for this to occur. When your management skills and mindsets are geared to managing the business effectively you are unlikely to be tooled up for the transformation and will generally focus most attention to BAU leaving the strategy implementation to piecemeal activity.

That is why it is a no brainer to deploy some form of PMO to drive, report and hold the implementation performance mirror up to the organisation. This is critical but the minimum standard stuff.

The most successful PMO’s add so much more:

  • An elegant balance of IQ/EQ to effectively navigate the inevitable tensions that will emerge.
  • Be behind the scenes to help struggling executives deal with their personal challenges of facing large scale change with poise and confidence building leadership.
  • To free up the CEO to be the point of escalation rather than the facilitator of resolution.
  • To be the tough guy when necessary allowing the CEO and others to maintain their relationships.
  • To leave at the end of the assignment and take any “lingering resentment” with you leaving behind a “clean”, high functioning executive.

The question should not be whether to have a PMO for implementation but who is the right person to be the temporary PMO leader and “extra executive” with the attributes to hold us accountable in a constructive manner?

To PMO or not to PMO. Is that really the question?!

Protect your PURPOSE in a CI transformation

IMG_3691 copyHave you ever led a Continuous Improvement transformation (CI), achieved considerable early success only to see it go off track and fail? If not then you haven’t lived!

From my experience there are 4 categories of causes:

  1. The intervention team lost sight of its purpose and therefore shifted its posture
  2. The intervention team failed to morph as the organisation developed its CI abilities
  3. Executive interest was lost or lost the executive.
  4. The sustaining systems of the organisation were not treated to effectively support the CI transformation.

In this article I will be dealing with the intervention team losing sight of its purpose.

If the organisation is shooting for true CI then the intervention team’s purpose is likely to be something like:

“To be the catalyst, coach and mentor to initiate and embed CI in the organisation so that it delivers the required business value in a self-sustaining way”

After intervening in  about 3 locations  the team will see a few patterns emerging and an opportunity to make changes to the approach. This, of course, should be encouraged. We should all be seeking to find better ways. The problem starts when those changes are inconsistent with the purpose of the intervention (purpose drift).

By way of example. The training modules for a particular program were designed to be a deep discovery and learning experience. This enabled participants to gain a better appreciation and integration of the learning into their daily work practices. This was consistent with the purpose and the learning posture of that intervention. It was very successful.

After the 3 cycles it was decided to simplify the approach to save time and codify the training into detailed manuals so that a general trainer could recite the material. This saved time and cost of implementation (or so they thought). What occurred here was a drift in purpose away from being a catalyst to embed an improvement system to being an efficient delivery of information. A significant part of the learning posture was lost and the meaning of that training diminished. The recovery work to achieve a successful implementation far exceeded any perceived time and cost saving in the training.

Things to consider to prevent Purpose Drift:

  1. Will the change being considered further the purpose or compromise it?
  2. Be alert to attempts to be more efficient in delivery at the expense of effectiveness of take up.
  3. Each “client” assignment must start where the client is at not where the intervention team has evolved to.
  4. Don’t get too smart. What you have learnt may be perceived as arrogant and damage the long term goal.
  5. Avoid the complacency of success. You should remain as alert and attentive in your next assignment as the first. You owe it to your new client team.

 

In summary, protect your purpose and hold your learning posture. To do otherwise will result in an intervention team that is mechanistic rather than a catalyst for transformation.

Protect your PURPOSE in a CI transformation

Break the spiralling demand for meetings!

IMG_6821Dad blog.jpgHave you ever wondered why you spend so much time in meetings? I have watched many executives become slaves to their diaries.Hourly meetings were the norm.

To try and free up some time new norms were developed and became common place such as:

  • 30 min meetings
  • Send out agenda before the meeting
  • Start on time and finish on time
  • Allocate a chair and time keeper
  • Select attendees carefully to those necessary to achieve the agenda objectives
  • Review actions at the end of the meeting
  • Learning loop on how to improve the meeting next time
  • Issue action list within 24 hours of meeting

These are all very good practices to improve the value of meetings and should be adopted. Some organisations even insist on meetings being conducted standing up so that they are more focused and reduce the duration.

However, these norms do not reduce the number and amount of time spent in meetings. If meetings get shorter then you can fit more meetings into the day. Hooray! Not!!

What is the root cause of this growing need for meetings? I believe it is a downward spiral caused by deteriorating access certainty. If I need to speak to another executive that person is always in a meeting. I leave a message. The call is returned and I am in a meeting and the merry–go-round continues.  I resort to email or messaging but in many situations that is not a good medium for the issue at hand.

The only way I can have that conversation with certainty is to coordinate a time to do so i.e. a meeting. This perpetuates the problem rather than solve it. It gets me what I need but I have contributed to the deterioration of the “system.” Everything slows down.

Here is the story of how one executive broke the destructive cycle and freed up his diary on a daily basis without slowing down (in fact speeding up the organisation).

He hypothesised that if he could increase the certainty of access his diary pattern would change significantly (and it did). He would invest this additional free time in being more proactive with his interactions with others. See my blog “Let every interaction be an inquisitive one!”

The executive’s workplace had a café at the front entrance to the building where 90% of employees would pass on their way to work. He would have breakfast each morning at a table facing the crowd of people entering the building greeting people waiting for their coffee order. This signalled he was  happy to have a conversation on the fly. It became the place and time where conversations were certain to occur. People, who had appointments that day, would stop and have a short conversation about that appointment.

The executive would ask the appropriate questions, debate issues etc and achieve what the meeting was set to achieve.  “Now that we have had this conversation do we still need to meet?” Invariably the meeting would be cancelled and everyone was free to get on with other pressing issues. At most this took 5 minutes.

Better still others would stop by and say “I need to meet with you regarding X.” The action was to do it then and there relieving the need for a scheduled meeting at all. Again only 5 minutes consumed and there was no hold up waiting for an agreed time to have the meeting.

You may not find this a suitable practice for you but think strategically about your time and create certainty of access.

 Take charge and break the pattern!

Break the spiralling demand for meetings!

Turbo Mentoring @ 6 minutes per month!

huskySenior Executives in large corporations understand the development of others is a part of their responsibility. Unfortunately they execute that responsibility by delegating it to HR because they are time poor. This leads to a suboptimal outcome. It is not that HR is incompetent, far from it. The issue is that who the teacher is matters. It matters a lot.

We are efficient creatures and that efficiency means we filter out most stimuli.  Further, HR and L&D lean towards packaged solutions which are efficient to deliver but not necessarily relevant right now. For most the learning opportunity is missed like film on the editor’s cutting room floor.

One executive approached this challenge of being time poor and being responsible to contribute the development of others in quite a novel way. In most situations people see mentoring as a one to one experience. This executive flipped to a one to many model and it worked.

His rationale was this:

  • Success is a team sport so the mentoring experience should be a team activity.
  • Broadening and deepening our network should form part of that team development so the participants come from varied backgrounds and parts of the organisation.
  • Part of the network effect is that the team should be self-selecting. In other words the group choose to work together. In forming the group the individuals had to use their network and network of networks in order to find each other.
  • Experience the process of establishing effective trust in a business context. It is not blind trust but trust built on strong and mutual obligation.
  • The executive contributed his face time (one hour a month per group of ten mentorees) so the members did all the other things necessary to succeed. The beneficiaries do the prep work.
  • Each member needs to be ready to table a problem, challenge or opportunity they are facing right now to the group for  debate, feedback and contribution. This means the group directs the learning. I need it now is a powerful incentive to learn!
  • Each member becomes more conscious about their competence and it raises their confidence to act.

The impact was obvious and immediate. The participants were deeply engaged in the sessions, the network of each participant grew markedly, the problem articulation and solving skills matured, implementation follow through was strong and promotions followed quickly (not influenced by the executive). The ROI is extraordinary!

The small executive investment of 4 hours per month covering 4 groups of 10 was the equivalent of 6 minutes per person. Which executive does not have 6 minutes to donate to the long term development of the organisation?

Turbo Mentoring @ 6 minutes per month!

Transform @ the speed of learning!

IMG_6750I have participated and led numerous transformations in my career including new business models, M&A, cost take out, performance and productivity initiatives (LEAN, 6σ), technology led initiatives etc. One thing they have in common is an underestimation of what it takes to transform a large organisation.

There are many reasons for this including:

  • A weak learning culture.
  • The existing systems and processes are so ingrained in the organisation and the people that it is very difficult to un-program and reprogram.
  • There is a very strong emphasis on compliance.
  • A developed distrust of major change.
  • The sheer number of people that have to make the transition.

Often the transformation effort involves a study of the issue within its business context, solution definition, action plan and estimation of the benefits followed by implementation including some training. When presented this way it appears that all you need to do is follow the bouncing ball, create tension by implementing the changes and watch the employees’ catch-up. Unfortunately this rarely leads to true transformation.

Why is this unlikely to be the complete answer?  I think one of the main reasons is that the organisation’s ability to change is determined by its speed of learning (not to be confused with the speed of training). Training is an action taken to impart knowledge. Learning is a human state that enables new knowledge to be absorbed and integrated into actions.

Learning involves motivated enquiry, a deeper understanding of the environment, a healthy dissatisfaction with the status quo, a desire to know and solve problems, courage to experiment and a sense of empowerment within an effective control framework to achieve the right things. It also requires trust within the group. I call this the learning posture.

The deeper the learning posture is engrained in the organisation’s culture the faster transformation can be effected. If the organisation learns too slowly it is likely that the CEO will kill it off believing the transformation is not working. The good news is that with careful design and implementation a strong learning posture can be developed and nurtured as part of the transformation. The faster a transformation is expected to occur the greater the emphasis should be placed on actively nurturing a learning posture.

To develop a learning posture:

  1. Create little hubs as a starting point so people can see and experience the learning posture and what the transformation means. Showing people is far more powerful than trying to explain it.
  2. Let the work be the learning and the learning be the work. This means creating and maintaining a short cycle review and learning process that the workgroup conducts on itself. The role of the leader is to encourage a constructive mindset that involves honest critique in a safe environment. In this situation the work experience is also the learning experience.
  3. Introduce short duration training as appropriate. This training should occur after the need is experienced by the team rather than in anticipation of the need. This is counterintuitive but will yield better results. Participants are more likely to be attentive and in a learning state if they have a personal felt need for that training.
  4. Training should be experiential rather than information sharing. It should be designed for participant discovery not a platform for the trainer.
  5. Develop skills in how to ask effective questions. Extensive real time coaching should be incorporated here especially for managers who are accustomed to directing action rather than creating a learning environment.
  6. Maintain an environment of mutual respect and trust. Again real time, in the field coaching may be necessary.

 

In summary, to achieve a high impact and speedier transformation then the design and implementation of the transformation should have at its core the establishment and maintenance of a learning posture.

Transform @ the speed of learning!