Reasons tend to vary from:

• Lack of stakeholder alignment – the strategic intent is interpreted in an inconsistent manner
• Lack of sound planning – the strategy is not being implemented as stated
• Lack of ‘line of sight’ between benefits and project deliverables – the implemented organisational changes are not linked to the benefits being sought
• Failure to address the ‘people’ issues – change is being constrained by the environment
• Not taking into account dependencies between projects in the change portfolio – strategy implementation is flawed.

From our experience working on large transformation projects, we have found that implementation effectiveness can be markedly improved by testing whether the stated strategy and vision can be executed through the designed Target Operating Model (TOM) for the ‘new’ organisation; our strategy implementation planning model is depicted in the schematic:

Confirming the organisation’s current (‘as is’) and future (‘to be’ – the vision) states enables the identification of the gap between the future and current organisational states leading to a thorough understanding of what needs to change and how. Having confirmed the changes that the vision demands of the organisation, the next step involves the mapping of the intended benefits to necessary organisational changes and to project deliverables, developing the ‘value model’ of the programmatic change.

During this process questions that should be asked include:

• What type and balance of benefits are we interested in?
• What changes do we need to introduce to our current operating model?
• Which project deliverables will induce the desired organisational changes?
• What business areas are going to be affected by the change initiatives and by how much?
• What types of resources do we need to successfully implement the projects and realise the benefits?

Validating the benefit claims using fundamental parameters (factors in the business and the market environment that underpin the assumptions for benefit statements) is a powerful way to help prioritise the ‘right’ projects in the change portfolio based, among other things, on the benefit realisation profile.

The outcome of such an approach is the design of the new TOM which describes at a high level, the future structure of the organisation, setting out the relationships between people, culture, skills, processes, technology and products.

Such an approach can add value to the organisation in several ways:

• Testing whether the articulated strategy is executable through the designed change programme
  strengthening stakeholder buy-in by aligning the vision and expectations
• Enabling the execution of ‘what-if’ scenarios optimising the change portfolio and reducing risk and complexity
• creating a proven plan to deliver specific types of benefit.

Costas supports clients in the private and public sector throughout their change initiatives from the initial vision setting stages, to identifying and clarifying the anticipated benefits, to establishing the right metrics to track benefit realisation, to facilitating conflict resolution amongst stakeholders.

First posted on LinkedIn here:
https://www.linkedin.com/pulse/why-does-strategy-implementation-seem-issue-costas-chryssou

Costas can be contacted by email here cchryssou@citi.co.uk

The post Why does strategy implementation seem to be such an issue? appeared first on CITI consultancy solutions.

A recent PMI survey [1] reported that 55% of organisations frequently use formal portfolio management, a 5% increase over the previous year. Similarly, a PwC survey [2] reports that 53% of respondents across industries and sectors from retail, insurance, auto, banking to manufacturing and telecommunications, use portfolio management techniques and methodologies.

Effective portfolio management entails the constant allocation of scarce resources to projects by balancing cost, risk, and financial or strategic benefits or risk avoidance and any dependencies between projects. The task is complex and onerous since many options of viable combinations of project portfolios are present and multiple stakeholders, sometimes with conflicting agendas, compete for scarce resources.

Portfolio management allows the executive team to obtain a holistic view across the group of projects and programmes allowing them to understand the portfolio’s value and strategic alignment – ‘show me your project portfolio and I will show you your strategy‘. Portfolio management employs three basic approaches:

• value maximisation
• resource optimisation
• risk diversification.

Portfolio management involves ‘art’ and ‘science’ skills.

I used in the blog’s title the question “portfolio management: ‘art’ or ‘science?’” because a colleague of mine pointed me to an article explaining how Google has built  image recognition software that enables an artificial neural network of computers to see shapes in images; the by-product of this is some surprisingly creative and unusual pictures [3] – culmination of ‘art’ and ‘science’! This is also the case with portfolio management.

The ‘science’ part may entail plotting all possible portfolio combinations to identify those that represent best value for money; based on the constraints we have imposed (cost, benefit, risk, resources and inter-dependencies, and any possible mandatory projects). These value-for-money portfolio picks represent the ‘efficient frontier’ of the portfolio – the portfolios along the top edge of the plot cluster, as shown in the schematic.

Such an approach not only allows us to identify the most high value portfolio combinations, but also to directly compare portfolio picks that include both financial and strategic benefits, and plot risk-adjusted values against risk-adjusted costs on a scale of arbitrary units; the scale will be a reflection of the value that the organisation puts on the various benefit categories.

And here is where the ‘art’ part comes into play. The efficient frontier methodology, although powerful and value-adding, cannot substitute for effective decision-making from the senior executive team. It is senior executives that need to select the most appropriate portfolio best aligned to the strategy of the organisation and it is for them to determine the type and balance of benefits they are looking to realise by executing the ‘right’ portfolio of projects.

[1] http://www.pmi.org/~/media/PDF/Research/2012_Pulse_of_the_profession.ashx

[2] http://www.pwc.com/mx/es/industrias/proyectos-capital/archivo/2013-08-insight-trends.pdf

Costas supports clients in the private and public sector throughout their change initiatives from the initial vision setting stages, to identifying and clarifying the anticipated benefits, to establishing the right metrics to track benefit realisation, to facilitating conflict resolution amongst stakeholders.

First posted on LinkedIn here:
https://www.linkedin.com/pulse/portfolio-management-art-science-costas-chryssou

Costas can be contacted by email here cchryssou@citi.co.uk

The post Portfolio management: art or science? appeared first on CITI consultancy solutions.

However, innovation in the public sector is less about new products and more about improving efficiency and quality of outcomes. Innovation can therefore not only be linked to technological innovation leading to “Product Innovation”, but it can involve internal organisational processes and structures leading for example to new approaches to client services – “Client service innovation” – or new approaches to reaching clients – “Marketing Innovation” – or new methods for transforming information – “Information Innovation” – and so on.

The Publin report D20 introduces the concept of innovation in the public sector as a “…deliberate change (in behaviour) with a specific objective in mind “Innovation and change share a common DNA and in the public sector innovation and change are linked to improvements and novelty in systems, processes and products that add value to the public by allowing them to be more efficient and effective. In other words, innovation in public sector organisations involves the successful implementation of change.

So what can the private sector learn from the experiences of the public sector about the challenge of changing organisational structures, processes and behaviours?

Innovation examples in the public sector include: the use of new technology; the drive towards public-centric processes with the view to deliver simpler services and greater convenience; or the empowerment of staff and the public to better engage and participate in the design and implementation of new policies/services. To enable all these innovations to be successfully delivered in the public sector organisations we need effective change management methodologies and approaches.

Many of the barriers to innovation are common to both the private and public sectors; resistance to change, risk adverse cultures; centralised structures, internal politics, etc.

Some of the lessons learnt from the public sector innovations are:

1. Promote collaboration and collaborative working cultures within and across divisions and departments by identifying clear accountabilities and mapping (sometimes even creating) the cross-organisational interdependencies that need to work in order for the desired outcomes to be achieved
2. Beware that ‘fear of failure’ stifles innovation and change in organisations: in fact successful change organisations tolerate failure as part of learning, and growing change capability
3. Articulate an all-encompassing vision of what the change initiative will accomplish and align all stakeholders behind the vision
4. Capture all the expected benefits and the changes in the organisation that will realise the benefits and then establish the right metrics to monitor and track benefit realisation following the end of the change initiative
5. Smart individual and group incentives are needed to instil the desired culture. The most successful of these are about recognition of efforts and achievements, rather than financial reward.
6. Finally, be careful what you measure and what you reward, as this will strongly influence behaviours, sometimes in unintended ways.

Costas supports clients in the private and public sector throughout their change initiatives from the initial vision setting stages, to identifying and clarifying the anticipated benefits, to establishing the right metrics to track benefit realisation, to facilitating conflict resolution amongst stakeholders.

First posted on LinkedIn here:
https://www.linkedin.com/pulse/what-change-behaviours-can-private-sector-learn-from-public-chryssou

Costas can be contacted by email here cchryssou@citi.co.uk

The post What change behaviours can the private sector learn from the public sector? appeared first on CITI consultancy solutions.

I found myself carefully considering the various ways to establish benefit attribution – how much of the overall organisational value brought about by a change programme can be claimed to have been caused by the activities of a specific project as opposed to other things that were going on at the same time?

If this is what we mean about benefit attribution, does it matter how much change/impact was caused by a specific project out of the portfolio of projects of the change initiative? At one level the answer might be “no”; as long as the overall change programme resulted in the desired business and operational changes and brought about the improvement of value as determined by the change stakeholders then the value of the specific projects should not matter.

Although this might be the case, there are many projects that are required by their funders to demonstrate impact; how and to what effect they spent the funds allocated to them. This is particularly the case for public sector organisations that rely almost entirely on public funds to operate. In these cases specific project benefit attribution can be of particular importance, and managers may have to claim specific benefits in order to justify projects.

In our view the importance of benefit attribution lies on the fact that it should be linked, among other things, to organisational learning; if a project generated 80% or 90% of the organisational value then the organisation needs to identify this and learn from what went well as part of its improvement processes. At the same time if many projects resulted in the same benefit then questions need to be asked about appropriate prioritisation of projects and overall portfolio management within the organisation.

Regardless of the intentions, accurate attribution becomes increasingly difficult post project and it is therefore important to ensure that it is addressed within the lifetime of the project when there is a specific focus on the development area, further enabling better implementation of intended changes within the organisation.

One way we have found that helps to identify benefits and makes the benefit management and attribution process easier is mapping the overall organisational strategic objectives, to the benefits (B) that each planned change programme or project will realise, to the specific organisational changes (Impacts) within the business to be introduced and their specific and measurable Key Performance Indicators (KPIs), to the project deliverables (P).

Through the development of a ‘line of sight’ between the intended benefits, the changes to the organisational blueprint and the project deliverables it is possible to identify potential ‘widows’ – changes that are not associated with any mechanism able to cause or support the necessary changes within the organisation and ‘orphans’ – deliverables that are not linked or needed to deliver the changes and benefits being sought. This process will further identify which projects are responsible for which benefits making the benefit attribution process much easier.

The undertaking of such a process, apart from enabling easier and better benefit management and attribution has several other positive effects on change initiatives:

• It enables stakeholders to test whether the articulated organisational strategy is executable through the designed change programme
• It strengthens buy-in from all stakeholders through a compelling visual map of benefits, impacts and products with direct links between them
• It enables the execution of “what-if” scenarios optimising the project portfolio and reducing delivery complexity, risk and cost
• It creates a proven plan to deliver specific types of benefits (financial, strategic or risk avoidance) to the organisation.

Costas supports clients in the private and public sector throughout their change initiatives from the initial vision setting stages, to identifying and clarifying the anticipated benefits, to establishing the right metrics to track benefit realisation, to facilitating conflict resolution amongst stakeholders.

First posted on LinkedIn here:
https://www.linkedin.com/pulse/do-we-care-enough-benefit-attribution-should-costas-chryssou

Costas can be contacted by email here cchryssou@citi.co.uk

The post Do we care enough about benefit attribution? Should we? appeared first on CITI consultancy solutions.