Welcome to the September Bulletin
With the new academic year on us we thought it might be timely to look at the theme of work-based learning. At CITI we have always believed that practical application of sound principles is a powerful development approach. We’ve never had faith in the ‘sell a man a fish and your feed him for a day’ philosophy; we’ve always preferred to ‘teach him how to fish so that he is fed for life’. But such an approach means breaking out of the confines of the classroom and putting a rod in the student’s hand and stand with them at the water’s edge; you can’t learn to fish in theory alone.

Enough of the analogies, lately, over the last few years, we have seen an increasingly common trend amongst several of our clients who are benefiting disproportionately from experiential learning based approaches. The latest epitome of this is the 70:20:10 model of individual and corporate development so this month we are going to focus on this.

Some might argue it is a formalisation of what already happens in reality; others that there is nothing new under the sun as 70:20:10 harps back to the day of the old-fashioned apprenticeships and yet others might suggest that it is little more than management consultant hyperbole and ‘spin’. Whatever the truth, In this issue of the Bulletin, we’ll take a look at some of the pros and cons of such an approach.

In addition we provide a round-up of the latest Project Challenge and also offer access to CITI’s new corporate video.

We hope you enjoy your copy of Bulletin and, as ever, look forward to your feedback and input.

Your comments and questions are welcome – or feel free to join the debate by commenting in the linked articles!

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The CITI Change Diamond® model was developed to structure the different facets of projects and change, linking value to costs, strategy with operations , and delivery to adoption, so that the investment of effort, time and money is channeled into the realisation of benefits not producing outputs – and thus focused on delivering effective and valued change.

The ‘change’ lifecycle in the CITI Change Diamond® is separated into three stages:

1. The first stage is to make the change wanted – this is the fundamental step of engaging stakeholders, establishing the value and aligning the outcomes with the values and needs of the business. From this come the benefits and business cases, the enterprise portfolio and the translation of the deliberate strategy to the emergent or delivered strategy.
2. The second stage is to make the change happen. Though much of the cost arises in the delivery side of the diamond, much of the really important work in structuring the organisation to achieve the benefits is done during this step. For many IT-intensive organisations, the management focus and urgency of making the delivery overwhelms the attention needed by the change process leading to its neglect – which is the cause of real difficulties later in converting the project deliverables into valued outcomes. The change diamond draws attention to change governance concerns that are often overlooked. Experience shows that by giving the change agenda primacy during this stage; reversing the common approach of defining the project and its strategy from an analysis of deliverables, tasks and resources and instead using the temporal and logical needs of the change to shape the way the project is planned and executed yields far better results.
3. The third stage, and the one least well addressed by many change processes, is making the change stick. Though this is where the value of the investment is returned, it commonly receives the least senior management attention. Making it stick means passing the baton on from informed teams heavily involved in delivering the change – whether as members of the project or as part of the change agency – to business-as-usual individuals with considerably less participation to date. ‘Tacking on’ benefits realisation to the end of project delivery is an unsafe and uncertain process.

The change diamond illustrates the linkages that can and should be established, and the impact on the flow of governance of the delivery and adoption processes of focusing on realising the value of project investment.

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This free event with 40 inspiring presentations also includes a seminar by CITI Principal Consultant Bernard Murray-Gates will be speaking on “Holding difficult conversation with senior managers” at 2:00pm.

This scenario occurs in projects and programmes time and again…At the outset of a change initiative, disagreements about a business change project or programme must be handled wisely to retain high stakeholder commitment and engagement.

Later in the change lifecycle (as setbacks and ‘bad news’ inevitably emerge) the project team can find themselves in the ‘firing line’: this situation also needs careful handling.

Bernard Murray-Gates, Principal Consultant at CITI, will discuss what you can do about some of the trickier challenges that can predictably arise when dealing with senior business stakeholders.

Find out more by going to:
http://www.projchallenge.com/case-studies-expertise-zone/

You can register by going to:
http://www.projchallenge.com/register/

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How can my PMO add more value to the business? – By Costas Chryssou, CITI
Today’s competitive global environment is forcing businesses to be more flexible, responsive to change and efficient than ever before. Gaining and sustaining competitive advantage is one of the biggest priorities and challenges that all organisations, in both private and public sectors, face.

How can I create a business-focused PMO? – By Julie Black, OfGem
There is something gratifying in being able to create order from a previously erratic project management landscape. In 2009 I was part of a team which was specifically set up as a PMO in response to a business problem. It was exciting to be part of a developing profession in the organisation, and by the time I left change was better controlled and implemented.

You ask the questions – By Hilary Small, CITI
In this month’s questions and answers column, Hilary Small answers the question “How can my PMO start to add more value to the business?”

Your comments and questions are welcome – or feel free to join the debate by commenting in the linked articles!

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Stopping projects early whitepaper

By Louise Worsley

Project culling is an essential part of the portfolio management process. The challenge is to ensure it is systematically and beneficially applied. Recent work by CITI has focused on the need for a project ‘culling’ process which maintains the linkage to the normal portfolio decision-making processes while taking into account the ‘termination risks’, i.e. the risks associated with stopping the project and realising the benefits from stopping the project.

Stopping projects early poorly is a ‘double whammy’ hit on portfolio performance. Not only are the planned project benefits lost or reduced, but cost savings anticipated from the termination are not realised. In a recent analysis of a three large portfolios which had undergone a ‘torrid’ cut-back exercise, we found that over 30% of curtailed project activities were continuing under the portfolio radar. In these cases the project office was reporting the projects as finished while effort, directly trackable back to the project, was still being applied in the organisation.

In deciding which projects to cull, we must therefore also consider whether we can be successful in turning off the effort and expenditure being applied to the project. If the focus of the culling is on reduction in costs; then can CAPEX costs really be avoided? If the focus is on release of resources; then how quickly and effectively will these resources really be redeployed?

To view the full Stopping projects early whitepaper, please supply your email address (to prove you are human!):

Further reading

We also discuss Stopping projects early here:
http://www.citi.co.uk/2009-spring-bulletin/

Your thoughts?

What are your thoughts – do you agree with our approach on stopping projects early, or do the symptoms sound like the ones you are experiencing in your organisation? We would love to hear from you either by adding a comment at the bottom of the page or by emailing one of our consultants at consultants@citi.co.uk – or call +44(0)1908 283610

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In some circles PMOs have had a bad press. They have been perceived as collators of information, constrained by cumbersome reporting processes and detached from the business as usual activities. In striving to offer value to the organisation, the PMO can struggle to provide meaningful information to the top team and or influence positive change in the business. In essence the PMO can find itself operating in a project management and project management theory comfort zone, but in doing so is failing to maximise its true value by not driving the safe delivery of change into the business.

A year ago I joined Ofgem to take responsibility for the PMO. I found a team that had a great deal to offer the organisation, but they were operating under a cloud of low staff survey results and frustrated by not being able to sell a strong message of what it could achieve to senior management and across the business. Changes in top management and a new strategy provided us with a fantastic opportunity to change that. The primary focus was not to look inwardly to re-invent ourselves but to look at the organisation, identify what it needed and design a team with the right skills and approach to meet those needs.

As a regulator, Ofgem needs to direct its resources and activities to provide the best outcomes for consumers. We need to be agile, prioritising and responding to new requirements quickly, while remaining focused on delivering our core business activities in the most effective way. Through publishing our Forward Work Programme we outline our strategic outputs, the initiatives we think will make the greatest difference to consumers in the coming financial year and associated deliverables and KPIs. Our PMO has responsibility for authorship of the Forward Work Programme, and this held the key to our new approach – we needed to stop looking at individual projects and focus on the organisation as a whole.

Our new team has the Forward Work Programme at its heart. Our portfolio function is at the centre of the team, complemented by a BAU focused operational performance team and a delivery and assurance focused project management practice. Collectively we feel responsible for the safe and effective delivery of our organisational commitments and the team structure enables us to keep each other true by balancing attention on business change and operations.

There is a lot of groundwork to be done, mapping our business processes, creating meaningful performance measures and building a skilled and vibrant PPM community. But with a fresh look on the organisational world we are in a strong position to achieve real, lasting success.

If we focus on the business, we will see changes at every level. We will provide the tools and information the project managers need to deliver Ofgem projects in an Ofgem context. Our project managers will focus on why we are embedding these changes into the organisation, and will recognise the vital contribution of colleagues in the business who will turn those changes into operations. We must also consider our role from the perspective of our Board, the CEO and senior leaders, anticipating their needs and providing meaningful and relevant insights that will allow them to take the organisation forward.

Changing our approach will take time, but we have started with a few simple things. To focus conversations, everyone in the team has their own bound copy of the FWP and uses it to add context when engaging with the business. We have a “P word challenge”, to reduce our reliance on project management terminology and we are consciously looking for ways to communicate that will best resonate with our colleagues in the business.

I’m feeling very positive about the changes we are making and the impact our team will have on the organisation in the year ahead. Above all, I’m looking forward to seeing the impact on the team itself, after all, they are our future leaders and one day may rely on the insight provided by their own PMO.

Julie Black Associate Director, Project Management Group Julie Black is Associate Director, Ofgem

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Let’s expand on that a little. Taking the last part first, you have no business (without prior approval) changing the services that you provide for the worse in order to do something else in addition. So you might reasonably review what you do to see if some things can be done more efficiently (or perhaps not at all) without damaging the business in some way.

So now you have an idea of the resource, in terms of capability and numbers, which you can apply to new areas of activity. Remembering that most PMO activity can be classified under one of: administration, control and guidance, consider which of these is an appropriate target area for the resources at your disposal. Bearing in mind that this is also an opportunity for development, don’t be afraid to set your sights on a ‘stretch’ objective. You may be able to change the assignments of a number of individuals in order to free up resource for more ambitious (and, probably, more value-add) activity than would otherwise be the case.

The first part of the answer is intended to point out that just because something could or should be done, the PMO may not be the most effective centre for the activity. For example, establishing trends in the comparison of business cases with actual business outcomes may not be appropriate if there’s a business performance department which may have access to more data and can bring greater analytical power to bear.

So what might you be able to achieve? Rather than provide a list of candidates, I’ve identified a few areas which may contain opportunities:

1. CMMI. What processes could move up the maturity scale with a push from the PMO?
2. What activities require low FTE for any one project, but for all projects amounts to something substantive, and could therefore be provided as a service?
3. If your organisation’s activity regarding lessons learned doesn’t look for common threads and root causes, there’s a gap to be filled.
4. If innovation is taking place in the way change is delivered, who is monitoring and reporting on the effectiveness of the innovation?

What are your thoughts?

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Question

How can the PMO support the innovation process?

Our response

Today’s competitive global environment is forcing businesses to be more flexible, responsive to change and efficient than ever before. Gaining and sustaining competitive advantage is one of the biggest priorities and challenges that all organisations, in both private and public sectors, face.
Innovation, ‘…the process of translating an idea or invention into a good or service that creates value or for which customers will pay…’ is frequently seen as a tool to deliver and maintain an organisation’s competitive advantage.

However, experience shows that innovation, and particularly disruptive innovation, presents many challenges to organisations. Recent studies, conducted by Harvard Business School, show that a large percentage (70 – 90%)[1] of innovation products fail. Most organisations, over time, develop robust systems, processes and cultures suited to ‘steady-state’ operating conditions. High-risk discontinuous innovation projects do not fit well with the ‘traditional’ stage gate approaches to innovation, rendering their approaches unsuitable.

But why is innovation so hard to do well?

Keith Goffin, of the Cranfield School of Management, describes the innovation value chain as comprising the steps of ideation, project prioritisation, implementation and commercialisation (Innovation Pentathlon framework) [2]; these aspects are complemented by the organisation’s innovation strategy, culture and organisational structures.

For organisations to be successful in the innovation management process, they need to have the capabilities that will differentiate them from the competition. Studies have confirmed that these capabilities include:

• the ability to scan at the periphery with the view to identify emerging technologies and trends
• the development of ‘fuzzy front end’ approaches to include the seed funding of new innovative and risky projects involving cross-functional teams
• the development and nurturing of inclusive and ‘learning’ organisational cultures.

Can a PMO structure assist the innovation process in any way? Will the product or service development process benefit from a distinct organisational structure such as an innovation PMO? If yes, what would the innovation PMO look like and what characteristics would it have?

1) The innovation PMO should take a portfolio approach to innovation.

Traditionally PMOs tend to focus more on project management planning, establishing methodologies and tools whilst PMOs offering enhanced value to their organisations have extended this focus to include taking a more strategic approach to project management ensuring that the organisation, in addition to ‘doing things right’ does ‘the right things’.

Taking a portfolio approach to innovation, the PMO would ensure that a mixed portfolio of projects is progressing through the technology and product development pipelines; it would ensure that the innovation projects pursued are aligned to overall strategy and that the intended benefits are maximised taking into account investment required, project risk profiles, demand on resources and capabilities and any project interdependencies.

2) The innovation PMO should be involved more in the ‘fuzzy front end’ of the innovation process.

The role of the innovation PMO should include creating a ‘sandbox’ for ideation and experimentation to take place in a ‘safe’ environment involving cross-functional teams. The ‘right’ ideas can then be identified and elevated quickly to compete for resources. The innovation PMO working across silos and having responsibility for project resource management can further be a catalyst to accelerating innovation by involving the right people (with the right skills) at the right time. An innovative PMO would also support pro-active, non-committal explorative linkages with partners across the value chain in addition to long-term strategic alliances becoming an efficient integrator within the organisation.

3) The innovation PMO should become the Centre of Excellence for innovation within the organisation.

The role of the PMO should include making sure that the organisation develops, enhances and maintains critical innovation capabilities nurturing the right organisational culture and establishing best practice. The innovation PMO captures and disseminates success stories, and is also the conduit for establishing partnerships across organisational silos and with external partners.

Business strategy drives the need for appropriate capabilities which in turn drive the delivery of a specific portfolio of initiatives. These initiatives include innovation projects which are designed to support the development of products or services linked to gaining and sustaining competitive advantage for the organisation. The innovation PMO can play a vital role as an integrator, supporting and being involved in the innovation management process, especially in the ideation stage, providing effective use of resources and fostering the right cultures.

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.

He can be contacted on cchryssou@citi.co.uk

[1] http://theinnovationandstrategyblog.com/2013/04/innovation-products-fail-12/

[2] http://www.som.cranfield.ac.uk/som/p16897/Knowledge-Interchange/Management-Themes/Innovation-and-Operations-Management/Key-Concepts-Innovation-and-Operations-Management/The-Innovation-Pentathlon

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CITI Consulting Solutions is proud to be a member of the Milton Keynes Chamber of Commerce and as part of our commitment to the community, we want to give back to other local members in the form of:

• Free attendance to our Change Leaders Networking Event
• Free half-day project health-check workshop (hosted either at your offices or ours)
• Free sign-up to our monthly news Bulletin

We are also keen to help the local community and chamber members by offering discounted rates for our consultancy services, itemised billing for as little as half a day, and no re-chargeable travel expenses to any location with an MK postcode.

To get in touch feel free to contact Nadia Sylvester on 01908 283610, email NSylvester@citi.co.uk – or comment below!

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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

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