An interesting reflection of human nature is that most of us would rather put off a problem and deal with it later rather than address it today. Perhaps we believe it’s somebody else’s responsibility, or that if we leave it long enough it will go away, that it’s not urgent so it can wait, or that some benevolent soul might come along and do it for us? Whatever the reason, many of us conclude that we can afford to leave an unattractive activity until some future point in time.
Unfortunately, complex transformation programmes do not naturally align to human nature. Rather, success is dictated by proactive attitudes and practices.
Let’s consider how deferring problem-solving activities can affect a programme by way of an example. Today our Programme Manager, let’s call him Pete, is the head of a major programme which will deliver a vision of a sea change in customer service capabilities, resulting in a market-leading position in the company’s industry sector. To achieve this will require the transformation of his business’ culture and behaviours, organisation design, performance management, business processes and systems. It is generally accepted that the programme is complex and challenging, in fact, other programmes in the same portfolio are already ongoing and are experiencing significant delays and cost overruns. The consulting team working with Pete realise that his programme is also starting to underperform, even though they are just a few weeks in, and that corrective action is required – design milestones are being missed, resource contention is commonplace, particularly with other programmes, and cost forecasts are rising.
After examining diaries and taking into account the already mounting programme workload, scheduling an extended team drains-up meeting was proving a challenge – the team simply couldn’t fit in the two-day exercise required without major disruption to the schedule. Therefore, the consulting team approached Pete about everyone sacrificing one day at the weekend to proactively address the situation. Pete thought for a moment and responded, “I’m not working a weekend this early in the project, we’ll be doing enough of that at the end!”. In further discussions Pete points out that “all of our projects run like this. All the effort goes in at the end to make sure we deliver something, not necessarily what we intended, but something.”
And therein lies the problem that exists when projects and humans collide. In many people’s minds, a desire to put things off, or a failure to appreciate the gravity of the situation, outweighs the long-term benefits of early action to protect project outcomes. Figure 1, opposite, illustrates this by comparing an excellent programme to a poorly run one, which Pete’s will inevitably become. Fig. 1
Using our comparison model of programme lifecycles, we can contrast how Pete’s project unfolded against what would have happened had he given a different response.
Get ahead of the Game
In the early days of a programme there is a temptation not to run to fast, not to overload people and, indeed, a well-planned programme will not allow those things to happen. However, most programmes are not entirely sequential in nature, meaning there are opportunities to complete activities early, mitigate future risks, proactively avoid potential issues and so on. Proactively applying resources to these areas, increasing the % effort early in the programme lifecycle will pay significant dividends and should reduce its risk profile, resulting in a far more efficient programme lifecycle curve, as illustrated by Fig. 1 above.
However, Pete cannot see the big picture and lets things slide without addressing them. Offered the opportunity to head off an apparent problem at an early stage, he demurs, in the mistaken belief that he needn’t work too hard right now. Pete has failed to grasp a basic tenet of programme management: surprises always affect major transformation programmes, if for no other reason than the environment around them changes over the lifetime of a typical transformation. Being ahead of the game acts as a form of insurance policy, enabling you to absorb some or all of the impact without a major reset.
Instead, Pete is rushing the programme headlong towards the ‘Point of Panic’ and does nothing to prevent it from happening.
Point of Panic
The Point of Panic comes surprisingly early in a lot of transformation programmes; the moment where you wake up one morning, realising you are in trouble. If matters have been allowed to drift too far, for example, if risks continued unchecked and have amalgamated to become issues (as illustrated by the risk profile of the ‘Point of Panic’ in Figure 2 below), it is already too late to recover to the position of a well-run programme and the Theory of 6 Constraints kicks in.
As Fig. 2 shows, when the programme kicked off the risk profile was moderate. A well-run programme which uses its resources to get ahead of the game would expect to see a fall in its risk profile as mitigating actions take place, tasks are completed ahead of schedule (in turn reducing resource risk associated with remaining activities) and bumps in progress are smoothed out.
In Pete’s position though, having done little or nothing proactively to control risk, his programme has a high-risk profile, indicating that he is out of control and cannot act quickly enough to prevent some of the risks crystallising. The entire programme team immediately comes under pressure to drive harder and faster to make up for lost time and a business case which is clearly under threat. Tensions start to rise and working relationships are becoming strained as recriminations start.
From this position, Pete must sacrifice benefits, scope or solution quality, and most likely, increase costs and/or timescales, or take even more risks and hope he can pull it off. Given the company’s historic underperformance on transformation programmes, Pete expected to be able to go and ask for more money and time to finish things off.
Pete’s consultants advised him that recovering the programme at the ‘Point of Panic’ would minimise the damage but failing to act quickly will lead to a further increase in the cost of missed opportunity. They advise that complex programmes can experience contagion risk, where the risks that have hitherto been contained within the confines of a single project or business area grow to such an extent that they crossover and affect other projects or the programme as a whole. Pete understands that the consultants expect this to occur imminently, resulting in a need for major remedial action, involving significant, compensatory moves in the other dimensions of the Theory of 6 Constraints. In other words, a major programme reset would be required.
Pete heads off to his next Programme Board and gets a surprise - he is told that this time he can’t simply have more cash and time, as underperformance of the portfolio as a whole has become an issue at the Group Board level. Pete is asked to take time out to do a full review of his programme and come back with a full set of recommendations within a week.
Cost of Missed Opportunity
Pete’s re-planning exercise takes most of his subject matter experts out of programme activities for a full week – because of the emergency, the team uses the weekend to piece together recommendations for the Board. A whole week is lost from the programme plan, which was already running significantly behind. Working relationships are further strained as people seek to deflect blame and look for scapegoats.
A programme recovery analysis produced as a result of the re-plan summarises some key facts:
the programme delivery date is unachievable and that a 6-month delay is the most likely scenario, even if the scope is reduced to a level which delivers a baseline capability (resulting in a separately funded, justified programme extension to complete Pete’s work and realise the originally intended customer service vision)
programme contagion risk has affected project interdependencies, meaning that delays in one project have cascaded into others, adversely affecting costs in several areas
actions must be taken immediately to reduce the risk profile and combat mounting issues. Addressing these points, baking resulting actions into plans, has pushed the projected cost up still further
the burn rate of programme resources is £10m per month. Having analysed staff reduction opportunities, this can be reduced to £9m per month. However, an extra 6 months will cost an unbudgeted £54m for staff costs alone
the original business case is now marginal: costs have increased, whilst necessary scope reductions to prevent further delays have cut the expected benefits.
Faced with this analysis, Pete realises that something has to give! Pete has no good update for his Programme Board, but his least bad option is to complete the programme with a reduced scope, accompanied by a £50-60m cost overrun, assuming nothing else goes wrong.
Scrutiny from the Group Board is applied as they send their own transformation experts to ‘audit’ the programme, which subsequently loses more time as it is forced to re-justify its existence. The audit concludes that the customer service vision has been compromised but remains viewed as a necessity if the company is to differentiate itself from the competition.
Reflecting upon the total ‘cost of missed opportunity’, it is clear that Pete not only vastly overspent, took far longer than required, compromised the business case and endured great personal stress………but had been in a position to prevent this from the outset. Had he acted early and gotten ahead of the game he could have run the programme in a way which followed a model lifecycle – minimising risk, cost and effort, whilst maximising benefits.
Unsurprisingly (except to him), Pete is offered the chance to look for other opportunities and the programme restarts without him.
Where has Pete gone wrong?
It is fair to say that Pete experienced a not untypical set of circumstances and several which you might recognise. Upon reflection, Pete would acknowledge he could have done things differently:
Pete failed to identify or proactively mitigate risks, leaving them to crystallise at a level which would have been hard for anyone to recover from, no matter how skilled they were
He failed to act on warnings received prior to the ‘point of panic’ and things quickly blew up as the entire team came under pressure for underperforming
The programme then experienced contagion and life became increasingly difficult, stressful, and combative as the team felt the pressure of a desperate effort to deliver something meaningful for stakeholders by the expected implementation date … and then the lid quickly blew off the pot when it became clear that the programme was no longer achievable as envisaged
Pete failed to appreciate the bigger forces at play. Executive leaders were watching the underperformance of the portfolio as it experienced leaking benefits, spiraling costs, timescales that were out of control and a business case being rapidly undermined. So, when Pete took his underperforming programme to the Executive Committee with no good options, he was placing himself in a challenging position
The moral of Pete’s story is that his situation was entirely avoidable. Advisers were making it clear that he had a problem and he chose not to address it, even when the scale of the problem increased and become more pressing he believed he could put things off and deal with them later. To his cost, he discovered this wasn’t the case.
In conclusion, the age-old mantra ‘never put off until tomorrow that which you can do today’ has never been more apt than for large-scale transformation. It is important to seize every opportunity to get ahead of the game, even if it means a little extra work up-front, if you are to insure yourself against risks, surprises and unforeseen events.
To find out more about any of the points covered in this blog, please contact us at info@clavertonconsulting.co.uk or call us on 0117 325 7890.