The ROI of "Just Say No"
I recently interviewed a senior change leader, retired from one of the largest technology firms in the world. She described in detail a cultural reality that costs her firm well over $100 million dollars each year. "When we have spent $2 or $3 or more million on new product development..." she explained, "...and all the research shows that the product is clearly going to fail, we should reward a product leader who will stand up and say that we should kill the product and save the $25 million plus that we would spend on production, distribution and promotion. Instead, we have a culture that brands that person as a failure who cannot get a product to market. So, naturally, nobody speaks up early. As a result we incur not only financial losses- but the negative impact on our corporate brand as well."
I see this same principal as a key culprit in why failure rates continue to soar for change initiatives in companies of all sizes. The action orientation of leaders and continued pressure to cut costs often cause planning to be compromised- putting a program at risk before it ever starts. A simple (if not easy) way to improve your ROI on change initiatives is to rethink the role of planning. A leader who is considering any kind of change program should:
- Ensure that a charter and launch decision is made only after planning is complete.
- Undertake planning as a cross functional, outcomes based activity.
- Be certain that he/ she is fully committed before launching the program.
Undertake Planning Before Project Launch Decision is Made
One of the most damaging things that I see companies do on a regular basis is to bypass planning as a predecessor to chartering a program office and launching. Often, an executive will see the need for a change in process, organization, technology or performance metrics and simply launch a project. In some cases, where scope and implications for failure are manageable, this is a fast track that can work. If the scope of the project involves more than one process, group or function, then by rushing to a project launch, the sponsor has almost always stacked the deck against the program team.
One way to avoid this trap and to begin to build consensus for the program among peer level executives, is to commission planning as a separate activity. The planning team is created and assigned to report to the sponsor, and an executive steering committee as an input to that groups' decision to launch or not. In general, the first outcome in the plan delivered is a fully functional, properly chartered program office. In other words, the organization is very clear that no change initiative has been launched- only a planning process.
Use Cross Functional, Business Outcomes Based Planning
Another area where I see organizations get in trouble early without realizing it is with the planning methods used. In general, task forward planning will not produce a clear map of what will be needed to create the business outcomes desired by the sponsor. Yet, this is the way most planning teams operate. If there is a technology change involved, this condition is often more extreme. In the absence of a methodology that keeps the team focused on all components needed for successful change, the planning process can quickly devolve into a budgeting exercise for installation and deployment of software, with a modest allotment of task lines to organizational change and training. This is how project teams end up scratching their heads- with a successful software installation and no sustainable business benefits to show for it. (The surgery is a success, but the patient dies!)
To stay out of that mire, employ a process that ensures that the team remains focused on clearly articulating the measurements and observable changes created by accomplishing business outcomes. Then, decompose those outcomes into their components, ensuring that organizational issues, performance measurement, technology, customer experience, economics, cultural considerations and all other factors which could impact success are engineered into the plan in parity. For more information on program planning, see Outcomes Based Planning on the Entelechy Partners website.
Tell the Truth
Larry Bossidy in his recent bestseller Execution, The Art of Getting Things Done made a very powerful statement about launching a change initiative. Bossidy says "And never launch an initiative unless you are willing to personally support it until it is embedded in the DNA of your organization."
Segregating planning from the launch decision and getting an accurate read on what will be required for success is not a guarantee of an initiative's future. In fact, it is my belief that this kind of exercise would increase success rates by reducing the number of programs that actually get launched. However, killing an idea is often a difficult challenge for many sponsoring executives.
A leader has to tell the truth- to himself and his team. If there is insufficient consensus, resource or commitment, then no matter how critical the executive in charge thinks the program outcome is, it will fail. Often, the leader must reach a compromise with his own vision, working with the planning team in an iterative process until there is both an ambitious and practical plan about which the leader and the team can be passionate. Then, and only then is it time to charter the program office and launch.
Consider the case of a global bank with the desire to put in a CRM system. The Managing Director sponsored the project and announced it as a key goal for the coming year with little more than estimates for the cost of technology to go on. The planning process became a software implementation project and was based on templates supplied by the software vendor and their integration partner. The plan called for building a core product which would then be rolled out by business unit through an internal team. Plans and costs for the configuration and housing of the software were clear and concise; however, the sponsor stepped over critical planning processes. He had built no real urgency for the initiative, laid out no clear plan for adoption and stepped completely over the organizational implications of what he was doing. Moreover, this executive had a reputation for staying in his office and letting others do the more visible organizational communications- something deadly for a CRM program.
Had the planning not been a scantily disguised budgeting exercise, but a full on planning process, this initiative might have looked quite different. The sponsor would have known what kind of consensus would have been needed- and what was missing in his organizational model to create it. He would have had a clear picture of what his own personal involvement would have to be. If his planning team had been sharp, he would have had the heads up on the organizational demons that the project would assuredly awaken but not exorcize. Had all that information been available before the project was launched, either the sponsor would have moved to be certain he had all the ducks lined up before he chartered a program office, or he would have reluctantly said "nevermind" and saved his company about $80 million that went into the failed project over the next 24 months. That level of planning effort would have added between $4 and $5 million to the total price tag. And, it would have saved tens of millions in either program efficiencies or a vastly reduced scope.
Increase Your ROI on Change Work
This is about bringing discipline to the planning process. You cannot make a credible decision about whether to put your imprimatur on a project until you are clear about what it will take to be successful. And you cannot understand what it will take to be successful if your planning work does not suffiently disclose all of the necessary components necessary. If you do not kill or radically rethink projects after seeing an initial plan on a regular basis, it may be an indication that there is not enough rigor in your planning. Or, it could be that your culture will not let anyone safely say, "This dog won't hunt!" If you want to make a huge impact on your ROI for change programs, separate the planning from the project and say "no" until you are certain you can see the initiative through to success. Then, you can say "yes" with confidence.