First appeared in ‘CEO Refresher’ (U.S.A.)
Change, change, change. There seems to be so many change programmes, change initiatives, strategic transformations, right-sizings, administrative reforms, re-engineerings, reorganisations these days that you’d be forgiven for thinking that this had been totally done to death now and there was no way you could cope with any more. Unfortunately not. Change initiatives are not going away – they’re coming thicker and faster than ever.
So what do you do about it? There’s one tried and trusted option I learnt from a senior manager in the Civil Service; “Keep your head down”. This seemed to work for a while. Statistics suggest that 80% of change initiatives fizzled out within six months. However it’s becoming less and less of an option now as there are fewer people to hide behind. The only thing to do these days seems to be to stay ahead of the change. As a manager you have a slight advantage over your staff, in that you’ll (usually) know what’s about to happen before them. This can be extremely useful, as we’ll see later.
You need to manage it effectively is what you need to do. If you are the initiator you need to make sure it happens. You need to truly understand the benefits of the change and sell them to all the stakeholders – especially your staff. If you aren’t the initiator but are the one that has to make it happen, i.e. a manager, this applies twice as strongly. As a manager in an Organisation you have to get things done you may not necessarily agree with. In fact there will be times, as you know, when you’ve had to do things you definitely don’t want to do. Ah well. What can you do? You take the corporate money at the end of the month so you need to toe the party line now and again. I’m not suggesting for one minute that you have to accept and agree with everything ‘they’ throw at you. On the contrary you have to argue, negotiate, influence, cajole to try to get your ideas implemented. However, if you lose I don’t see a great deal of point going half-heartedly at the decision and ensuring no one wins. (Unsurprisingly this happens a great deal). No, once the battles are over it’s cabinet responsibility and you have to do your best to make it happen.
There’s a nice little four step plan based on some work by Costas Markides I would recommend. I like it because it’s simple and it works. You can also add a variety of your own bits and pieces to it which gives it flexibility and your own feel to it. The stages are;
1. Rational acceptance
2. Emotional acceptance
3. Light 1000 fires
Seems straightforward enough. It’s one of the few models I’ve seen that seems to recognise there’s a difference between hearts and minds and you have to appeal in different ways to each aspect. You start with peoples’ minds.
You start by selling them the benefits. You need to do the sums and show them that the end result is an improvement somehow. Either in terms of hard cash, quality of work, standard of living, self improvement or something. If you can’t do this then you’d better be asking yourself some hard questions. Why are you imposing this change then?
Take time to work through this. People, being people, are a lot like you and me. We tend not to like change for many, many reasons – all to do with being vulnerable. They will have vulnerability about losing their job, their self-esteem, their comfortable way of life and many other things you can’t even think of right now. So once you’ve spelt out all the changes, rationally, analytically – drawn maps, used Gantt charts, analysed the costs, looked at all the logical business you need to dig a little deeper.
Try this with your team; at the end of a team meeting, or some occasion where they are all together, ask them a question;
“You have a cake and can make 4 cuts. What are the most pieces you can have? You have 3 minutes to work this out.” There are no tricks.
After a minute and a half stop them. Invariably they’ll be many of them really concentrating and slightly annoyed that you’ve stopped them. Tell them you’ll let them complete it later but for now ask them what would be the most effective way they could have solved this. After a number of ideas you should have a good list. Ask what the most important reason on the list is. I bet it’ll be that they should have worked as a team. In this exercise 99 times out of a 100 people try to complete it on their own. Ask them why they didn’t work as a team. You will get some answers pointed at you – “You didn’t tell us to.” “You said we couldn’t”. Eventually you’ll start getting to the heart of it.
It’s to do with conditioning. People have had 30, 40, 50 years of working on their own. In school if you collaborated it was called cheating. At an interview you’re not allowed to take a friend. You can explain that n this environment it’s OK to help each other. Let them now complete the task and they’ll find they get a much better result (answer below).
In a similar vein you’ve got to deal with each barrier that gets in the way of people changing. These changes may often appear small or silly (“I didn’t know it was OK to work as a team”) but they do stop change happening. Rationally dealing with all these barriers takes time. However, if it’s not done you know what will happen don’t you? The change either wont work or it’ll work but be half-hearted with people still going on about the old days and the old system.
In a Government Office I once worked at I saw a huge red book with hand written details of certain aspect of marriage regulation. Someone was methodically and painstakingly writing twenty or so new entries.
“Some job.” I said “I bet you’ll be glad when the regulation changes and you can just use computers?”
“Oh there’s nothing in the law about this” was the reply, “We just do it.”
“But why? Isn’t the computer system up to it?”
“Oh yes – it’s a print off from the computer I’m using to copy from.”
“So why are you doing it?”
“Because we’ve always done it this way.”
At the same time as winning their rational acceptance for the change you’ll need to start winning their emotional acceptance. Even if people rationally accept the change and you’ve eliminated all the barriers – you’ve still got to win their hearts.
There’s a superb illustration of this by Adams, Hayes and Hopson called the Coping Cycle. It’s to do with the various stages people go through in times of change.
The premise is that we all go through these stages in times of change. Some of the changes we go through take the blink of an eye to go through – others take years, or maybe we never reach internalising.
Getting people through the defence and denial stages is difficult. Many of the people you need to change may well have invested a great deal of time and energy in the old system and here you are coming along and destroying it. Suddenly all the problems with the old system seem to have disappeared. People are finally accepting and using the old system really well. You’ll even notice an increase in efficiency and self-esteem. This, of course, is further ammunition for the “Why do we need to change. Things are working perfectly” and the “change for change’s sake” factions. The old system may well be working better, but it’s because people are now putting more effort into it. Left to their own devices people would stay here forever if they could (huge generalisation I know, but has lots of truth behind it).
There are many stories of people in defence and denial mode, my favourite was from a colleague who was a tax inspector in Wales – He used to go around West Wales inspecting betting shops and ensuring they had paid the correct amount of tax.
One day in 1976 he was working way up the Swansea valley visiting a small village (well more like a wide spot in the road) called Abercwmtoch – a few houses, 2 pubs, a church and a betting office. In the betting office he looks through the tickets and sees all sort of strange things; 2 shilling each way bets, 6d wins, 2/6 yankee. Bearing in mind this is 1976 – 5 years after decimalization, It hasn’t quite reached Abercwmtoch yet.
“Ah that new fangled decimalization” you can hear them saying “It’ll never catch on.”
I wonder if they’ve changed now.
At this stage there’s a lot of anger and blame – people are vulnerable. Eventually once it’s accepted and they have the new system it gets worse;
“It doesn’t do what we want”,
“You can’t even run that report we used to run”,
“It’s too slow”,
“It’s too quick”,
“I told you it was rubbish”.
People need more training, more listening to, more involvement. This stage is often referred to as ‘the pits’ – you can’t get any lower. Eventually people start getting used to it and things start working – easier, faster and you start hearing.
“I wish we’d had this last year”,
“You can even run that report we used to run”,
“I told you it was a good idea”,
“Can we have it in red?”
This coping cycle is excellent to help see what stage people are at and then help them through that stage. It’s that old, old thing I know but you’ve got to communicate with people. Tell them consistently what’s happening. Tell them if there’s nothing happening. No communication form the centre = communication on the grapevine. That’s how rumours start.
The next stage involves lighting one thousand fires. This is to do with letting go and empowerment. This is a brave step. It takes a very mature leader, or manager. They have to trust their staff. It’s still the manager’s fault if things go wrong – it’s delegation not abdication, and they have to let the staff take the credit when things go well.
“That’s anarchy” you say.
It’s not really. You as the manager, have to set the limits and let the people go. They need to know 2 things – the aim (measurable targets in terms of output, cost, time, etc.) and the parameters (what are they allowed to do / not allowed to do). Then off they go. You’ll be surprised at how much ingenuity, collective wisdom your people have.
The final aspect is support. This is the support you need to give your staff – clear, total and transparent. It’s a matter of trust and acceptance. You know there will be mistakes along the line. How do you deal with those mistakes – do you learn form them or do you punish people with them. You know the answer to that one.
Talking of answers – the cake puzzle. Generally people go through a number of stages in solving this;
Stage 1: 4 equal cuts 8 parts
Stage 2: 4 unequal cuts 10 parts
Stage 3: Then, a light bulb moment and someone realises it’s a cake (a 3 dimensional object) and they make 3 cuts on the surface then a horizontal cut to get 14 parts. They then tend to look snug for a while.
Stage 4: Someone really realises it’s a cake and cuts it in half, puts the one half on top of the other and cuts it again. Then they put the four pieces in a pile and cut through it again and so on – giving 16 pieces in total.
Depending on whether someone has asked about the shape of the cake and you’ve said “a round cake” you can give the stage 5 answer – “any number you like”. If the cake were from a child’s birthday party and the child liked caterpillars (it does happen) and the person baking the cake had baked a sponge body with 20 sugar legs you could cut the cake horizontally and have lots of pieces.
First appeared in ‘Business Day’ (South Africa.)
LEGEND has it that there was a high-profile meeting at Parker Pens Corporation in the mid 1980s.
Parker Pens had been successful for a long time. It had continued to be successful in the face of a number of challenges — cheap imports, ballpoint pens, roller-ball pens — yet somehow, by the early part of the decade, the company had lost its way.
The approach that had evolved was one of competing in foreign markets and neglecting its traditional markets. A strategic meeting was arranged with one item on the agenda: what market are we in? Answering this question transformed the business.
Someone asked: “When did you last receive a Parker pen?” Ask yourself that question. I guess, like most of us you will have a similar response to the people at the meeting: birthday present, Christmas present, presentation — a reward of some sort.
Parker concluded it was in the gift business, not in the market of competing with cheap pens. This insight transformed the business. Instead of continually cutting costs and quality, Parker spent more. Products and packages were redesigned and the advertising budget was increased by 60%. Prices were raised and Parker began to target the “style-conscious and affluent sector”. Despite a world recession, Parker increased turnover by almost 50% in the last half of the decade.
So, what market are you in? Do you know for certain what your unique selling point is?
MacDonald’s thinks it is in the real estate business. When I first read this I could not believe it. Then I thought about it and it made sense. If the fast-food industry collapsed, tomorrow MacDonald’s could survive. Think of the positioning of all their sites.
According to some you are either in the “fit” market or the “sexy” market. If you are in the fit market, you are continually adapting, changing, looking for new opportunities.
This would be an organisation like 3M. This $20bn company has proved incredibly adaptable over the years. It started in 1902 as the Minnesota Mining & Manufacturing Company, mining for material for sandpaper. For the next 100 years it changed and developed — from sandpaper to Scotch tape, magnetic tape, microfilm, overhead projectors, postit notes, respirators, pharmaceuticals and hi-tech products. One of its secrets has been the ability to adapt. This has not been an accident. There are research laboratories in 31 countries outside the US.
Or is it sexy like Ferrari or BMW, market leaders in a niche with a loyal following. These organisations work hard at staying sexy and making it look effortless. BMW employs more than 100 staff in its acoustics and vibration technology departments. It ensures everything from the sound of the windscreen wipers to the sound of the doors closing is acoustically perfect. Computer simulator designer Christian Muhldorfer said after one project, when describing the sound of a new development model: “The door now has a full, reassuring feel.”
If you are in the fit camp you need to spend as much time looking at the competition as you do at yourself. You may be the leader in a certain area but you know how quickly everyone catches up. Gary Dicamillo, CEO of Polaroid, said in 1998: “Some people think photography is going to go away as everything in our industry becomes digitised. But I disagree. I think analogue photography will endure.” Three years later it filed for bankruptcy with nearly $1bn in debts.
Even in the sexy camp you need to avoid complacency. Take the example of Coca-Cola and New Coke in 1985. Having survived as the number one soft drink since 1886, it was challenged by Pepsi. Pepsi came within 5% of Coca-Cola’s overall share of the market, and even overtook it in supermarket sales.
So what did Coca-Cola do? It panicked. It dropped the product that had kept it in business for almost a century and launched New Coke in a wave of publicity. People responded: “Tastes like sewer water”; “Two-day-old-Pepsi”; “Dear Sir, Changing Coke is like God making the grass purple”; and, “You have taken away my childhood”. After more than 400000 calls and letters to Coca-Cola headquarters CEO Roberto Goizueto made a U-turn just 78 days after the launch.
What are the lessons here for businesses? The key one is to ask yourself exactly what business you are in. Are you in the gift business, the unique craft business, the inexpensive, mass production business? Get as many people involved in discussing this. Who are your customers? What do they want? Who are not your customers? What is important to you as a business? What business are you in?
For the sexy elements of your business, you need to protect them. These are the areas that you cannot compromise on. These are the aspects of your business people buy. People stay at the Ritz-Carlton because they know they will be looked after. It may be expensive, but they know they will be looked after. If Ritz-Carlton suddenly started dropping its prices ….
For the fit elements it is a matter of looking outward as well as looking inward. What is there out there that could affect your business? Where is the next threat coming from?
Identify this threat before it ruins you, as Encyclopaedia Britannica found out when it ignored the threat of the internet.
Few small businesses are totally sexy or totally fit in this sense. There will be elements of each and you will need to pay attention to each.
Learn from the companies that thought they were fit or sexy but ultimately were not: Bethlehem Steel, Polaroid, Trans World Airlines, Delta Airlines, Encyclopaedia Britannica, Baring’s Bank, Arthur Anderson, WorldCom, Lucent … and so on.
First appeared in ‘Management Today’ (Australia)
Managing complex long-term projects is difficult, and the results are often less than spectacular. How come we often can’t get project management right?
When it comes to project management, Rod Vawdrey, CEO of Fujitsu Australia, says that generally the technology industry disappoints with its inability to deliver on promised outcomes. He dryly states: “Around 54 per cent of projects don’t deliver on their promise – I am glad we are not in the airline industry.”
A whole range of major projects around the world regularly hit the headlines for being either over budget on expenditure or seriously behind on timetables.
Everything from Olympic Games budget overruns, to Multiplex’s Wembley Stadium delays, to a whole raft of delayed Australian defence force projects indicate that big projects aren’t that easy to manage. Apparently the UK 2012 Olympic Project is already £1 billion ($AUD2.45 billion) over the original bid budget – and counting.
This is not just a media beat-up. The KPMG Global IT Project Management Survey 2005, which combined insights and trends from more than 600 organisations internationally, reported that, generally speaking, projects are not delivering on their promises.
About 50 per cent of the survey’s participants experienced at least one project failure.
In the same period only two per cent of organisations achieved targeted benefits all the time.
Eighty-six per cent of organisations lost up to 25 per cent of target benefits across their entire project portfolio.
The survey found that, to the detriment of stakeholders, organisations are making commitments, but not always delivering on outcomes; and while organisations are getting some value from their IT project investment, it clearly showed that most cannot determine exactly how much.
According to Egidio Zarrella, KPMG Global Partner in Charge, Information Risk Management, many companies do not even try to measure the value of a project, especially across the globe. He says project performance appears to be substandard.
Looking at a range of statistics there are varying estimates of projects that fail. The general estimate is that last year between 60 and 80 per cent of all projects failed to achieve their targets. A typical analysis of IT project failure appeared in The Guardian in the UK in November last year: “This year, the world’s IT expenditure is projected at about $AUD2.3 billion. About one-third of projects fail completely and another third have complicated problems. Those that finish are likely to be completed several months or years late, on average 180 per cent over budget. These figures do not include hush-hush corporate projects or projects started at home.”
The problem seems to be that the next project starts with a clean sheet and a renewed optimism that this time things will be different. “This time” the project will take place in that parallel universe where key staff don’t change roles, project managers don’t find another post in another organisation, and resources are always available when and where they should be.
Organisations from all over the world have had to deal with some spectacular failures.
Paris Euro Disney was another financial disaster. The project itself was initially costed at $AUD3 billion and finally cost about $AUD5.3 billion. Executives seemed to make a number of wrong assumptions based on a poor grasp of the cultural differences. For instance, in the United States the customers stayed longer (four days), didn’t mind that there was no alcohol on sale and were willing to pay higher prices to stay at the Disney Hotels. These and other factors led to a downward spiral and excessive spending to “buy themselves” out of trouble.
So, whilst most projects may not make the list of grand failures there are lessons that can be learnt.
One key element in the sinking of projects is the internal momentum they build. At a certain point the project seems to take on a life of its own and the reason for the project existing seems to become almost secondary.
There’s a three-step approach that can help organisations gain control over projects, especially for SMEs:
1. You need to establish exactly where you are. This sounds so easy and obvious that it’s often ignored. The consequences of ignoring this aspect can be dramatic.
This is an area mostly neglected because assumptions rule the roost here. For instance Paris Euro Disney’s cultural assumptions is a classic example. People assume they know where they are and become so excited charging after the vision that they overlook important details. After all it’s far sexier, more exciting talking about your hopes and aspirations for the future rather than working out exactly where you are now. Yet this is vital. Where exactly are you in terms of skills, resources, etc? Who’s in charge? What are their strengths, weaknesses, etc? What assumptions are you making?
2. The second step is to determine exactly where you’re going. This is your vision. This should be inspirational. You need to take your people with you. Above all the vision must be defined clearly. People need to see the end product, what it will look like and what’s in it for them. As a leader this is probably your number one job. Leaders lead by having compelling visions.
There’s a tale (probably apocryphal) of John F Kennedy walking around the NASA building in 1968 asking a toilet cleaner at NASA what he was doing. “I’m helping to put a man on the moon by the end of the decade,” was the famous answer the President got. Everyone involved in the Apollo project knew where they were going and what their role was. They didn’t need screensavers with the mission statement. They were involved.
3. Imagine the implementation process is the journey. You know exactly where you are and you know exactly where you’re going. So how would you plan on reaching your destination? Well, in a way you can’t. You can’t predict with any certainty what will happen in six months time. What you can do is plan the first few steps as accurately as you can. Then at a certain point you would reassess your position and plan your next few moves. Then reassess and replan. This is the only sensible approach. The danger of not doing this is obvious.
What happens with most projects is that “someone” expects the project to be planned out in the minutest detail for each day of the two, three or four years it takes to complete the project. This has to be carried out before the journey even begins. There will, of course, be stages built in, but each is dependent on the preceding one, which hasn’t been completed yet. Usually finances and other resources are all controlled at the beginning on the best guess. These guesses at resources are inevitably going to be wrong. How can you possibly know how many people will be needed to run an IT project five years from now given the rate of change in this sector?
In other areas, people will leave, new people will arrive, and resources will not turn up, or turn up early, late, and damaged. Everyone knows this, yet we still go along with it and throw in a few “contingency plans”, “risk analysis diagrams” to make us feel better.
If you have these markers in place then you are in a position to evaluate the project and make changes if they are urgent. Take, for example, the great Coca-Cola disaster of 1985. Coca-Cola was determined to beat Pepsi who had run the highly successful “Pepsi Challenge” campaign and brought Pepsi to within five per cent of Coca-Cola’s share. Coca-Cola panicked, dropped the product that had kept them in business for practically a century and launched New Coke. Although most of this process was a disaster they did have the sense and ability to make a complete U-turn in just 78 days. They’re still in business…
The corporate landscape is littered with the wreckage of spectacular project failures – often relating to IT. An article in The Australian in 2004 pointed out that a “rollcall of failed IT projects includes some household names”.
Taking pride of place among them was National Australia Bank’s announcement that it would write off $409 million in value from its key IT systems. In Melbourne , RMIT announced that it would spend $11 million reimplementing a failed enrolment system, while the Crane Group wrote down $28.8 million relating to the failed implementation of software for its Tradelink stores.
Another project that has gone into the “oh dear” annals is the Westpac C90 project of the 1980s, a rather costly example that came in at an estimated $300 million – loss.
To prove that we don’t necessarily learn anything from the past we can now add the Multiplex Wembley Stadium cost and time overrun disaster, the Australian Collins Class submarine project at about $3 billion over cost, the Anzac ship project at over $1 billion, and the Super Seasprite helicopter acquisition at another billion.
Although it relates to IT projects, the KPMG report probably summed it up best when it stated: “How can you make effective decisions when you do not know the project scope, key risks or key assumptions. These are missing in over one-third of organisations…”
Losing the skills
The retirement of up to one-third of Australia’s project managers in the next decade signals a serious skills shortage, according to Australian Institute of Project Management (AIPM) Chief Executive Officer Peter Shears.
Shears urges organisations to plan now to overcome the challenges. He outlines three solutions including a new approach to mentoring by senior project managers; new approaches to skills development to attract and retain talent; and the addition of project management skills to the core capabilities of all professionals.
Why projects fail
There are many reasons why projects fail. Gantthead (2003) lists the top 10 reasons for project failure:
1. Inadequately trained and/or inexperienced project managers;
2. Failure to set and manage expectations;
3. Poor leadership at any and all levels;
4. Failure to adequately identify, document and track requirements;
5. Poor plans and planning processes;
6. Poor effort estimation;
7. Cultural and ethical misalignment;
8. Misalignment between the project team and the business or other organisation it serves;
9. Inadequate or misused methods; and
10. Inadequate communication, including progress tracking and reporting.
$16 billion on the line
When it comes to big projects, the current $16 billion purchase of the Joint Strike Fighter (JSF) takes the biscuit. The Weekend Australian recently reported that the JSF had to be almost fully redesigned. A parliamentary research report questioned the wisdom of purchasing the JSF.
The Defence Department is arguing “contrary to media reporting that the Defence Science and Technology Organisation assessments showed the JSF program flawed, these findings are an example of best practice project management on identifying risk and taking steps to reduce it”. Only time will tell who is right.