Introducing the INPACT Assessment Process

The Change Equation© Imaginist 2009 9/7/2010

Introducing the INPACT Assessment ProcessORGANISATI ONAL CAPABILITY

THE PROJ ECT

Culture Proce

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ORGANISATI ONAL CAPABILITY

THE PROJ ECT

Culture Proce

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The Change Equation

How to manage complex change projects – and succeed!

Peter DuschinskyManaging Director, The Imaginist Company


Who are we?

The Imaginist Company is a change management consultancy We specialise in helping private, public and non-profit sector clients

identify and overcome barriers to change and performance improvement

Imaginist undertakes projects and programmes which require: • ‘Quantum’ thinking and the creation of new approaches

• Research, diagnostic assessment, analysis and evaluation

• Development of clearly written guidelines and policy documentation

• Dissemination, facilitation and mindset change

We have just published ‘The Change Equation’, a new capability / complexity assessment methodology, created to help clients improve the success of their change and transformation projects.


Who are we?

Our Associates and Partners

The Change Equation© Imaginist 2009 9/7/2010 4

‘The Change Equation’ is based on some key contentions:1. The success or failure of a change project is dependent on the

complexity of the project being within the capability of the organisation

2. The management of change cannot be achieved within the lifecycle of the project – it has to start earlier and go on afterwards

3. A conventional approach to management of a complex project (i.e. control and intervention) will not achieve a successful outcome

4. Management typically:

• underestimates the complexity of the project,

• employs project teams with the wrong skillsets, and

• Is unwilling to invest in change management early enough

The Change Equation


So the objective of running an INPACT assessment is to change mindsets

In order to do this we need to provide clear and simple top-level indicators that managers can understand quickly

We use a dashboard approach, including route-maps and RED / AMBER / GREEN traffic light indicators

V.HighV.HighV.High

V.HighV.HighHigh

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HighHighHigh

HighHighHigh

HighHighMedMedMed

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MedLowLow

LowLow

5432Level 1

9. Pragmatic/Empowered

8. Systemist

7. Imaginist

6. Empiricist

5. Pragmatic/ Aligned

4. Aligned

3. Dialectic

2. Structuralist

1. Pragmatic/ Anarchic

Management Culture

Business Process Capability

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


9 Pragmatist/Empowered9

8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

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3Rationalist

4Aligned

Structuralist2

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8SystemistImaginist

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6Empiricist

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6Empiricist

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(Individual)

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3Rationalist

4Aligned

Structuralist2


9999

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7Imaginist

7

6Empiricist

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55555

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3Dialectic

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(Individual)

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(Individual)

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(Organisation)

EXTERNALFOCUS

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EXTERNALFOCUS

(Organisation)

Pragmatist1Pragmatist1

3Rationalist

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4Aligned

Structuralist2

Structuralist2

StructuralistStructuralist2


1.InitialAd hoc process

Chaotic

2.RepeatableStable process

Controlled environmentBasic

management control

3.DefinedStandard process

Consistent ExecutionProcess

definition

4.ManagedMeasured process

Quality and Productive Improvement

Process measurement

5.OptimisedEffective process

Continuing ImprovementProcess control


Chaotic



management control



definition



Process measurement




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Beyond this point your project is too complex –

break it down into separate projects

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- %Total potential impact on benefits

+ %Total potential impact on project timescales/costs

Other factors impact estimated at:

IT Solution9

Relationship with suppliers8

OTHER FACTORS

Delivery of Project Impact estimated at:

Benefits Realisation7

Distrust factor6

Visibility of process5

DELIVERY OF PROJECT

Project Impact estimated at:

Complexity of project4

Clarity of objectives3

PROJECT

Capability Impact estimated at:

Capability Maturity2

Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%

Potential ImpactStatusComponent




IT Solution9


OTHER FACTORS



Distrust factor6


DELIVERY OF PROJECT




PROJECT



Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%


Time & Cost

Distrust

(Trust % - 100)

People trust each other, relationships are good = Speedy change = Low cost = SUCCESS Levels of trust are poor, relationships

difficult = Slow or no change = Costs go up = FAILURE

Time & Cost

Distrust

(Trust % - 100)



Possible OutcomesAccountability?

Plan in place?

No

No

Yes

Yes

This project will not achieve its savings objectivesNo

Without formal framework, local managers will not be held accountable in practice – put one in place

Yes

Make local managers accountable for adopting the new processes and redeploying released resources to drive improved performance, or the benefits will not be realised

No

This project has a good chance of achieving the planned benefits

Yes


Plan in place?

No

No

Yes

Yes



Yes


No


Yes

Complexity

Too ComplexComplex

Not SimpleSimple

Low

Med

High

Capability

Complexity

Too ComplexComplex

Not SimpleSimple

Low

Med

High

Capability

The Change Equation


Today we will look at how to take two models:

1. the Organisational Culture Evolution spiral

2. the Business Process Capability ladder

…and combine them to provide a baseline:the Organisational Capability Indicator

Then see how to assess the complexity and risks of a change project (3)

By analysing and quantifying the gap between Organisational Capability and Project Complexity, you can predict the likely success or failure of a change project

We can then add other tools to enrich the gap analysis

The Change Equation

ORGANI SATI ONAL CAPABI LI TY

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1 2

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Only 32% of change projects are successful

That’s not our opinion, it comes from accredited sources:

Standish Group annual survey 2009 confirms that:• Only 32% of projects deliver the full benefits, on time and within

budget • 68% of projects are late, over budget and deliver less than the

expected benefits • 24% fail completely and are abandoned before they finish!


Change projects often fail to deliver


More evidence of the same trend

The Harvard Business School tracked the impact of change efforts among the Fortune 100 and they also found that only 30% produced a positive bottom-line improvement…

A recent survey of change programmes in <400 European organisations quoted by Prof. John Oakland, Emeritus Professor, Leeds University Business School found that:

• 90% of change programmes faced major implementation problems

• Only 30% delivered measurable business improvements


More evidence of the same trend -2

Management consultant PricewaterhouseCoopers (March 2007) claim that:

• 25% of IT projects succeed

• 25% fail and

• 50% are late or over budget

A CIPD survey of 800 executives found that reorganisations failed to deliver real improvement in performance in 40% of cases

Why do so many change projects fail to deliver?

25% FAIL 25% SUCCEED50% PARTIALLY SUCCEED


Why do so many change projects fail to deliver?

Here are some of the reasons we all know about:

• a focus on the technology instead of the business benefits

• poor specification of the system and lack of due diligence on supplier capability

• failure to gain senior management championship

• inadequate resources

• poor project management

• lack of user involvement

But if we all know about the reasons, why are change projects still going wrong so often?


“The Terminal 5 debacle is a national disgrace” Daily Mail, 14 April 2008

Some examples… Terminal 5


So what went wrong?

1. Shortage of staff car parking spaces

2. Only one employee security checkpoint operating

3. Some staff unable to log on to the computer system

4. Hand-held communication software running slow

5. No managers on the ground to re-allocate work

6. Shortage of bar-reading storage bins

Baggage handling staff late in arriving

60 staff queue to get into terminal

6am: 3 planes leave without bags

Bags pile up, unattended

By midday 20 flights cancelled

4pm: baggage conveyor belt grinds to a halt, BA suspends all baggage check-in

The result: Over 28,000 lost bags, 700 cancelled planes and more than 150,000 disrupted passengers


C-Nomis

2004: HM Prison Service commissions C-NOMIS to give prison and probation officers real-time access to offenders’ records

June 2005: the approved lifetime cost of the project is quoted as £234m

March 2007: Home Secretary John Reid: “the main C-NOMIS base release, encompassing full prison and probation functionality, will be available no later than July 2008"

July 2007: [just 4 months later!] £155m has been spent, C-NOMIS is two years behind schedule; estimated lifetime project costs are now £690m. The Ministry of Justice suspends the project

How can they have let a Minister do that? Surely someone knew…?


What went wrong?

National Audit Office report:• The project board accepted assurances that the project was “all

going well” and nobody knew what was being delivered for the money being spent

• There were insufficient resources and structures in place to deliver such a complex project

• Over time policy developed and stakeholder requirements changed, but there was no cumulative view of the impact of change requests on costs and timescales

• No resources were allocated to simplifying and standardising business processes across the 139 prisons and 42 probation areas, each of which had their own ways of working

The Commons Public Accounts Committee report verdict: “a spectacular failure – in a class of its own”


More examples…

Passport Office: • In 1999 delays in processing British passport applications,

following the introduction of the Passport Agency’s new system, cost £12 million

• £16,000 was allegedly spent on umbrellas to shelter those queuing in the rain to collect their passports!

MOD: • In 2002 a project to replace the British Army, Royal Navy and

Royal Air Force inventory systems with a single system (the Defence Stores Management Solution) was brought to a halt after £130 million had been spent

• Hardware worth a little over £12 million was able to be used elsewhere but the remaining £118 million was written off as a loss.


More examples…

The London Ambulance Service Computer-Aided Dispatch System

October 26, 1992: the London Ambulance Service CAD system goes live – and fails

A total of 46 people didn’t get an ambulance in time and DIED!


What went wrong?

The sequence of the collapse was:1. Poorly trained staff did not update system with location and

status of units

2. The increasingly out-of-date database meant units were being despatched non-optimally and multiple units were being sent to the same calls

3. A software bug generated a large number of exception messages– and un-responded exception messages generated repeat messages…

4. Lists scrolled off the top of the screens and were lost

5. The public repeated un-responded calls, adding to the chaos


What went wrong? cont…

6. The system grinds to a halt:• One ambulance arrived to find the patient dead and taken away by

undertakers• Another ambulance answered a ’stroke’ call after 11 hours, and 5 hours

after the patient had made their own way to hospital

7. CAD system partly disabled. Part-manual system seizes up completely

8. Operators now using tape recordings of calls, then reverting to a totally manual system

9. 29 October 2002: (3 days after confidently launching the system) Chief Executive resigns

The original estimate for the work was £1.25million. By the time the project was abandoned, £7.5million had been

spent. A total of 46 people didn’t get an ambulance in time and DIED!


Some conclusions

“The the small software error was the straw that broke the camel's back, but the responsibility for the LAS's CAD system failure does not lie solely on the single developer who made the error or even the developing organization to which he belonged. Rather, the attitudes of key LAS members toward the project and the unreasonable restraints they placed on the project allowed the failure to occur.” National Audit Office report


Projects don’t just fail in the public sector!

MFI• 2004/05: MFI’s new ERP system brought in - and crashes• Total loss of customer order data reported• 2005/06: UK retail division reports a ‘substantial loss’ following

the discovery of significant issues with the system which are affecting its ability to dispatch orders

• MFI said they needed to spend another £30 million on it• 26 Nov 2008 - MFI goes into administration with the loss of

1,500 jobs • Coincidence?


HP• In 2004, HP's project managers knew all of the things that could

go wrong with their ERP centralisation programme. But they just didn't plan for so many of them to happen at once.

• The project eventually cost HP $160 million in order backlogs and lost revenue—more than five times the project's estimated cost.

• Gilles Bouchard, then-CIO of HP's global operations, says: "We had a series of small problems, none of which individually would have been too much to handle. But together they created the

perfect storm." There’s a clue in there, somewhere…

Projects don’t just fail in the public sector!


Complexity is EXPONENTIAL!

Conclusion?


We’re surrounded by examples of exponential growth: For example, compound interest:

• "Scientists have developed a powerful new weapon that destroys people but leaves buildings standing – it's called the 17% interest rate.” Johnny Carson, The Tonight Show, 1980

• All that we had borrowed up to 1985 was around $5 billion, and we have paid about $16 billion; yet we are still being told that we owe about $28 billion. If you ask me what is the worst thing in the world, I will say it is compound interest.

President Obasanjo of Nigeria, 2000

Complexity is Exponential



The world population is growing at an exponential rate:

…and consumption of resources is following close behind -our energy usage is depleting the world’s natural resources exponentially

You are here!

(6,792,142,533)



And climate change is also following an exponential runaway profile



"The greatest shortcoming of the human race is our inability to understand the exponential function.

We live in a world that can change exponentially – but we have brains that are hardwired to plot things out linearly - the software in our brains compels us to think about progressions as being simple arithmetic ones

So as a species, and a society, we deal poorly with uncertainty in non-linear domains.”

Prof Albert Bartlett, emeritus Professor of Physics, University of Colorado

As a consequence of this, the complexity of a project is usually UNDERESTIMATED


Managing Exponential Complexity

Exponential complexity = exponential RISK So we should be able to apply risk management techniques to

address it Everyone happy with that? According to David Christiansen, most risk management

approaches work something like this:• Make a list of risks• Estimate the likelihood the risk will occur (call it X)• Estimate the cost the risk will create if it occurs (call it Y)• Multiple X by Y (David Christiansen, Information Technology Dark

Side, a Corporate IT Survival Guide)

So let’s draw up a table with all the risk factors and score them…


Managing Exponential Risk

So let’s draw up a table with all the risk factors, score them and then add them all together:

Risk Factors Weight Risk Potential Total

Scores

Low 1 2 3 4 5 High

ORGANISATIONAL

Urgency of need to change Little Vital

Culture Innovative, lively Closed, dead

Climate / Politics Open / Friendly Conflict / Bad feeling

Business Environment Static Rapid Change

Competition Low High

Growth / Stability Slow / Stable Rapid / Unstable

Management Style Inclusive Dictatorial

Management Experience Highly competent Naïve

Responsibilities and Leadership Clear Unclear

Perception of problems Shared Disagreed

Staff characteristics Willing and Able Unmotivated, inept

Adoption of IT Effective Ineffective

Quality Assurance procedures Well established Rough and ready

Available Finance High Low



There’s more…

PROJECT

Definition of Aims and Objectives Clear Vague

Room for improvement Great Little

Project Plan Detailed Unprepared

Feasibility Certain Uncertain

Size Small Large

Budget < £10.000 > £1,000,000

Development Timescale < 3 months > 2 years

Operation / Delivery Date Flexible Tight / exact

Quality / Standards Minimal / Lax Strict / Rigorous

Monitoring and control mechanisms In place / Good Do not exist

Newness of project / Ambitiousness Familiar / Common Strange / Unique

Complexity Easy Difficult

Resource Availability Plenty Inadequate

Project Manager’s Experience Experienced Inexperienced

Project Team’s Competence Expert Naïve

Skills required Few Many, varied

Number of bosses / Owners One Many

No. of People / groups involved Few Many

No. of interfaces to other systems 1 > 10

Legacy equipment Integration None High / many

Need for Security Low High

Management Commitment Strong Weak

User demand Keen Hostile

Anticipated User involvement High throughout Minimal

Staff Capability High, adaptable Low, untrained



And still more…

You think this is daunting? Have you looked at government’s Gateway Review?

OPTIONS

Operational Matches objectives Fits few of the needs

Financial Well within budget Over budget limit

Economic return Good investment Poor investment

Social upset / Staff happiness Improvement Anger & disruption

Achievability of Schedule Easily on Time May be late

Amount of change caused Highly beneficial Little difference

Potential User Impact / Retraining needs

Low High

Legal / Ethical problems Few Many

Number of Suppliers 1 > 5

Supplier support High, reliable Low, inadequate

Security Risk Low High

Newness of technology Tried and tested Frontier breaking

Build or Buy Modular package Bespoke software



So what’s wrong with that approach?



Lets go back to that earlier slide – only this time, lets look at the whole quote from David Christiansen:

Most risk management approaches work something like this:• Make a list of risks• Estimate the likelihood the risk will occur (call it X)• Estimate the cost the risk will create if it occurs (call it Y)• Multiply X by Y - that is supposed to tell you something useful

- it might be the amount of contingency you need for the risk, or something like that

• When the risks you anticipated happen, they become issues• When the risks you didn’t anticipate happen, you become a

former project manager…



Wouldn’t it be great if we could find a simple, high-level indicator of project complexity?

It wouldn’t obviate the need for a detailed risk analysis But it would give us a high-level indication of whether the

complexity of the project had been judged correctly when allocating budgets, skilled resources and roll-out timescales

Well, we can…



If complexity is exponential, we actually only need 3 factors to build an exponential scale: X * Y * Z

That won’t represent all the risks, but if we select the right factors, it will give us a good indicator

So what are our 3 factors?

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Complexity Factor


Assessing Complexity

Which 3 factors? They must be:

• Common to all projects• Quantifiable (at least to a good approximation) by stakeholders• Sufficiently powerful in combination to lead to an accurate

assessment of the complexity of a project



The INPACT Exponential Complexity Tool uses the following 3 factors:

1. Number of people or Stakeholders involvedMore people = more complex = higher risk

2. Number of business activities or Processes affected More ambitious = more complex = higher risk

3. Elapsed Time to implement (in months) Longer to implement = more complex = higher risk


The INPACT Exponential Complexity Tool

Think about a project you are familiar with. Where do you think you are? Now do the numbers: Stakeholders x Processes x Time (in months) Where are you actually?

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Not simple –needs

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A complex project –

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Beyond this point your project is too complex – break it down into smaller

projects and employ a skilled programme

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Simple project – needs some

project management

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needs dedicated

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needs dedicated

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manager



manager


project management


project management


project management


The model can also be used to understand whether a project that is going wrong can be rescued - or needs to be stopped

The INPACT Exponential Complexity Tool

Premature Termination

Possible Recovery

Conventional Management


Complexity and the Implications for Change Management

“Complexity arises through connectivity and processes of feedback and emergence” Eve Middleton-Kelly, Director, Complexity Research

Programme, London School

of Economics

This feedback loop is also a feature of Chaos Theory But in Chaos Theory, new, coherent and stable patterns eventually

arise through repeated cycles of iteration In a change project, the participants are constantly evolving, so the

rules of interaction are in flux, making the final outcome ultimately unknowable• “Technically complex projects are complex because of the human

aspects and not the technical intricacies, which are just complicated” Thomas Docker, citi, 2008

- Complicated = not simple, but ultimately knowable

- Complex = not simple and never fully knowable



In a complex project, new ways of working are created and new forms of organisation will emerge which are attuned to the culture of the organisation – and will therefore work

These need to be recognised, supported and embedded, not managed and controlled

This has important implications for Change Management



Conventional change management interventions attempt to design and control the outcomes

This imposes changes in behaviour and over-rides the individual’s need to ‘invent their own route to the future’

That approach blocks and constrains the naturally emergent patterns of behaviour…so people give up, fall back on ‘what’s in it for me’ and the change project fails

However, if the right enabling infrastructure is put in place to facilitate, nurture and support the new relationships and behaviours, the change project will have a good chance of succeeding

Are “nurturing” and “enabling” descriptions you would use of most project managers you know?


Why else do change projects fail?

So that’s complexity – we typically underestimate it, so we under-resource it and our expectations of outcomes are too optimistic


Look at these quotes:

• “85% of project success is dependent on factors related to people” Ohio Center for Information Based Competition

• “Even amongst successful implementations, 47% of companies reported serious challenges with end-user adoption that often put projects in jeopardy” - AMR Research

• “Companies that spend less than 17% of ERP implementation budgets on training put their projects at increased risk of failure” Gartner



It turns out that success rests as much on the capability of the people in the organisation to cope with change and take advantage of new systems, as on how well the project was planned and implemented

The complexity of the project needs to be within the capability of the organisation

We’ve seen how to assess the complexity of a project How do we assess the capability of the organisation? By looking at its Culture and its Process Management

Capability ORGANI SATI ONAL CAPABI LI TY

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Assessing an Organisation’s Culture

There is an underlying tension between the individual and the organisation

Successful change needs an integrated approach encompassing people and process in a balanced approach

Point of balance

ORGANISATION‘External’ Focus:• The organisation’s

needs and direction• Systems and processes• Efficiency

THE INDIVIDUAL‘Internal’ Focus:• Culture• People’s perceptions, attitudes,

motivations, aspirations• Effectiveness


Imagine thependulum swinging and rising at the same time…


ORGANISATION‘External’ Focus:• The organisation’s

needs and direction• Systems and processes• Efficiency

THE INDIVIDUAL‘Internal’ Focus:• Culture• People’s perceptions, attitudes,

motivations, aspirations• Effectiveness


5

8

Systemist

Imaginist7

6Empiricist

3Dialectic

1 Pragmatist/Anarchic

4

Aligned

Structuralist2

5 Pragmatist/ Aligned

9 Pragmatist/ Empowered


That gives us the basis for our Culture Evolution Model

ORGANISATION‘External’ Focus

THE INDIVIDUAL‘Internal’ Focus


It indicates how well the organisation will cope with change

EXTERNALFOCUS

(Organisation)

5

INTERNALFOCUS

(Individual)

8

SystemistImaginist7

6Empiricist

3Dialectic


4

Aligned

Structuralist2

5 Pragmatist/ Aligned

9 Pragmatist/ Empowered

This model allows us to identify the predominant organisational culture

Each point on the spiral represents a separate, definable culture

Each culture builds upon the earlier ones, progressing up the spiral



Mapping your Management Culture

Which of the following descriptions most accurately describes your organisation (or your part of it)?• You might be able to identify more than one - that’s because

they are not discrete styles• Each is only achievable when those below it on the spiral are in

place• The chances are you will focus mainly on the negative aspects

of your management culture• But each style has positive and negative elements - if not

nurtured, they degrade over time


This is where we all start

In this entrepreneurial organisation, it’s results that count

The boss may be micro-managing everything or leaving members of the team to do more or less what they like, as long as they achieve results

Either way, success is what counts, not how you get there – ‘just do it’

There are some laid-down procedures, but people only follow them or takeup a new initiative if they see benefits for themselves in doing so

The Management Culture model: Level 1

8SystemistImaginist

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6Empiricist


9 Pragmatist/Empowered

5

1 Pragmatist/AnarchicStructuralist

2

3Dialectic Aligned

4


Rules, devolved authorities and formal procedures govern how this organisation works

That has allowed the organisation’s operations to be scaled up, but it will also have allowed ‘silo working’ to emerge, hindering the sharing of ideas and knowledge across the organisation

Change is slow and painful; decisions are often passeddown, with formal but inadequate consultation;initiatives are not encouraged

8SystemistImaginist

7

6Empiricist



3Dialectic Aligned

4


Structuralist2



The organisation wasn’t efficient, so management brought in the Business Process Redesign consultants, the LEAN specialists and an ERP system

Your organisation is now streamlined, focusing on cost cutting and efficiency, with modern,rationalised and automated processes

But it still doesn’t seem to be working very well,does it?

Why not?

8SystemistImaginist

7

6Empiricist



Structuralist2

Aligned4


3Dialectic


4Rationalist


Well perhaps we didn’t spend enough time gaining the ownership for the changes…

It might be better if:

Then silo working might stop being such a significant barrier to change

8SystemistImaginist

7

6Empiricist



Structuralist2

Aligned4


3Dialectic


People were valued more than processes

Sharing knowledge wasvalued, as opposed to having (and protecting) knowledge

Managers and staff were encouraged to network and exchange ideas and information across the organisation


Now, as a result of strong leadership and a good level of dialogue between people, the values and aspirations of the staff in your organisation are in line with its policies and strategic direction

People feel valued and understand how they fit into the scheme of things, so are more motivated to accept change that will benefit the organisation, even if it doesn’t reduce their workload.

Because people and processes are aligned, things work well

Sounds like a good place to work, doesn’t it?

8SystemistImaginist

7

6Empiricist



Structuralist2


3Dialectic

4Aligned



Once people feel valued and share information the organisation starts to function differently

Managers trust their staff to act in the best interests of the organisation

Decisions can be made closer to the customer, quickly and effectively

Staff are actively encouraged to get involved in innovation and performance improvement initiatives

Things get done, change becomes easier

The Management Culture model:Level 5

8SystemistImaginist

7

6Empiricist


Structuralist2


3Dialectic Aligned

4



Now the organisation is not so inward-facing and obsessed with internal power-plays, it can function better in the ‘real world’

Key information about your customers, suppliers, competition etc. flows across departments, as well as up and down the management hierarchy

Because it does not suffer delays or distortion from passing through departmental silos, the information is timely and accurate, which means that management decisions are well-informed and effective


8SystemistImaginist

7


Structuralist2


3Dialectic Aligned

4

6Empiricist



Because your organisation is working well, senior managers are not focused on short-term fire-fighting and intervention, allowing them the time to concentrate on longer-term planning and more important issues

They are operating with timely and accurate information, which means they can make intuitive, high quality and far-reaching decisions - and that means the organisation is able to cope well with change

This requires a different calibre of manager, the Imaginist


8Systemist


Structuralist2


3Dialectic Aligned

4


7Imaginist

6Empiricist


The organisation now recognises its place in its business, economic, social and community contexts – and plans and manages accordingly

Your CEO makes him/herself visible and available, and is vocal in championing changesand issues that are critical to the organisation’s success, but his/her leadership style is to steer from behind and focus on building longer-term capability, rather than intervening in operational issues

This works because the organisation has a strong and effective Board and an aligned workforce



Structuralist2


3Dialectic Aligned

4

5 Pragmatist/Aligned6

Empiricist

Imaginist7 8

Systemist


Finally, if you are lucky enough to be working in an organisation that has set itself the challenge of being the best in class:

You are fully empowered to plan and manage your own workload, within a supportive management culture

This includes working collaboratively in teams and leading and participating in change projects, to continually improve the effectiveness of the organisation to meet its customers’ needs

This is a learning organisationWe’re a long way from the culture of blame and focus on short-term gain, where we started


Structuralist2


3Dialectic Aligned

4

5 Pragmatist/Aligned6

Empiricist

Imaginist7


8Systemist


Structuralist


3Dialectic Aligned

4


6Empiricist

Imaginist7


8Systemist

EXTERNAL AXIS

(Organisation)

INTERNAL AXIS

(Individual)

Where are you?



THE PROJ ECT

Culture Proce

ss

£


THE PROJ ECT

Culture Proce

ss

£

Organisational Capability- the next step

We have looked at management culture Now let’s focus on the organisation’s capability to manage its

business processes


Organisations with aspects of their operation at levels 1 and 2 will find it difficult to introduce standard systems and processes

Assessing an Organisation’s Process Management Capability

1. Initial Ad hoc process

Chaotic

2. RepeatableStable process

Controlled environment

3. Defined Standard process

Consistent Execution

4. Managed Measured process


5. Optimised Effective process

Continuing Improvement

Software Engineering Institute

We use the Process Capability Maturity Model (CMM) to assess the organisation’s process capability – the discipline and consistency with which processes are managed


The Organisational Capability Indicator

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture

Business Process Capability Combining these two assessments gives us a high level indication of the Organisational Capability


The Organisational Capability Indicator

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture

Business Process Capability Combining these two assessments gives us a high level indication of the Organisational Capability

So, for example, a level 2 culture and level 3 process capability suggests a Medium overall capability to cope with change


Where on the exponential complexity scale was your project?

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mp

lexi

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ac

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50000

55000

60000

6500070000

75000

80000

1 2 3 4 5 6

Not simple –needs

experienced project

management


needs dedicated

project team



manager


project management

Co

mp

lexi

ty F

ac

tor

75 4803600

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0

5000

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20000

25000

30000

3500040000

45000

50000

55000

60000

6500070000

75000

80000

1 2 3 4 5 6

Not simple –needs

experienced project

management

Not simple –needs

experienced project

management

Not simple –needs

experienced project

management


needs dedicated

project team


needs dedicated

project team



manager



manager


project management


project management


project management

?

Was it significantly further up the scale than you had thought?


Combining Capability and Complexity

Capability

High

Med

Low

SimpleNot Simple Complex

Too Complex

Complexity

= The project looks as if it’s within your capability

= This project is at risk of not realising expected benefits

= This project is not within your organisation’s capability

Put the project’s complexity status into the context of your organisation’s capability, to show the relative complexity of the project - the gap between the organisation’s capability and that required to manage the project and cope with the changes it requires people to make


Combining Capability and Complexity

Capability

High

Med

Low

SimpleNot Simple Complex

Too Complex

Complexity

= The project looks as if it’s within your capability

= This project is at risk of not realising expected benefits

= This project is not within your organisation’s capability

In this example, the project is at risk of not realising expected benefits and, as planned, may actually be beyond your organisation’s capability to cope with the changes it would bring


Other models and tools

We now have a reasonably good assessment of the likely success or failure of the project

A typical assessment process involves face-to-face interviews with stakeholders which would also provide the stories and rich detail that is needed to make sense of these top-line results

There are other models we use to add further to our understanding:• The Trust/cost model• The Dynamic Benefits Realisation model

etc


Measuring Trust

We measure the 3 dimensions of relationships to give a Cost/trust Indicator:1. How far do you trust your boss

to represent your interests, consult you when necessary and keep you fully informed?

2. How far do you trust your staff to work without your keeping an eye on them?

3. How far do you trust your colleagues to share accurate information and keep you informed about changes that might affect you?

Dimension 1:Relationship with my manager

Dimension 2:Relationship with my staff

Dimension 3:Relationship with my colleagues


Measuring Trust

Score each of these on a scalewhere:0 = not at all

1 = not sure

2 = mostly

3 = totally

Add these up (max 9)

Convert into %... eg 4/9 = 45%

Invert that to find your Distrust Factor

so 45% –100 = 55% distrust

Dimension 1:Relationship with my manager

Dimension 2:Relationship with my staff

Dimension 3:Relationship with my colleagues


Measuring Trust

The higher the levels of distrust, the more time and effort the project will require and the higher the cost, so add at least 55% to planned time and cost

55%

Time & Cost

Distrust

100%

People trust each other, relationships are good = Speedy change = Low cost = SUCCESS

Levels of trust are poor, relationships difficult = Slow or no change= Costs go up = FAILURE

0%

Time & Cost

Distrust

100%



Levels of trust are poor, relationships difficult = Slow or no change= Costs go up = FAILURE

0%

HighLow


Calculating the Impact

This is where we calculate the potential impact of these indicators on the business case

We consider the status of each of the elements identified in the assessment and calculate the impact on costs or benefits, or both

This gives us an overall impact on the project’s bottom line

That’s the language senior managers understand!




IT Solution9


OTHER FACTORS



Distrust factor6


DELIVERY OF PROJECT




PROJECT



Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%



Deliverables: Action Plan & Route Map

Organisation

Component Implication Action required

Management Culture

The lack of information-sharing, alignment and empowerment will jeopardise the success of the project. At the very least it will mean poor take-up and a lower than planned level of benefits.

A programme of interaction and dialogue across the organisation is urgently needed to improve the management culture. This needs to include increasing trust, see below.

ProcessCapability

The organisation’s process capability is poor. This means that any projects which seek to standardise and improve processes to achieve greater efficiency will be very difficult to achieve.

Consider carrying out a programme to raise the levels of process capability ahead of implementing the project or using the project itself to inject the necessary disciplines. In this case it is crucial for the Board to make compliance to the new processes mandatory.

We develop an Action Plan to overcome the barriers, mitigate the risks and help clients plan for success


Using the Culture Evolution model, we develop a Route-Map to improve the organisation’s capability for change

We ask two questions:

• If you are here now, where do you need to be?

• What will happen if you don’t change?

The first question identifies what needs to change

The second gives you the ammunition you might need to defend the change – it describes the future if you stay where you are

Structuralist2

3Dialectic

Structuralist2

3Dialectic

The more mature the management culture, the better the organisation will adapt and respond to change

Deliverables: Action Plan & Route Map


To summarise:

Projects fail when the complexity of the project exceeds the capability of the organisation to cope

Complexity is exponential and is typically underestimated Conventional change management interventions which attempt

to design and control the outcomes can cause a change project to fail

Capability barriers (comprising both organisational culture and process management weaknesses) - the focus of ‘change management’ - can be assessed

A ‘gap analysis’ will predict whether a project is likely to fail and what to do about it

But the barriers and risks cannot normally be overcome within the implementation lifecycle of a project – you have to start earlier and continue after the completion of the project


The Change Equation is about changing mindsets

Is your organisation underestimating the complexity of its change project/s?

Does it have the capability to cope with the changes? Are you investing in change management early enough? What more do you need to do to ensure that your change

project/s will succeed?

V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


V.HighV.HighV.High

V.HighV.HighHigh

V.HighHighHigh

HighHighHigh

HighHighHigh

HighHighMedMedMed

MedMedMedLow

MedLowLow

LowLow

5432Level 1


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture


8. Systemist

7. Imaginist

6. Empiricist


4. Aligned

3. Dialectic

2. Structuralist


Management Culture



8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

Pragmatist1

3Rationalist

4Aligned

Structuralist2



8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

Pragmatist1

3Rationalist

4Aligned

Structuralist2



8SystemistImaginist

7

6Empiricist

5

3Dialectic

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

Pragmatist1

3Rationalist

4Aligned

Structuralist2


9999

8SystemistImaginist

7Imaginist

7

6Empiricist

6Empiricist

6Empiricist

55555

3Dialectic

3Dialectic

INTERNALFOCUS

(Individual)

INTERNALFOCUS

(Individual)

INTERNALFOCUS

(Individual)

EXTERNALFOCUS

(Organisation)

EXTERNALFOCUS

(Organisation)

EXTERNALFOCUS

(Organisation)

Pragmatist1Pragmatist1

3Rationalist

3Rationalist

4Aligned

Structuralist2

Structuralist2

StructuralistStructuralist2



Chaotic



management control



definition



Process measurement




Chaotic



management control



definition



Process measurement




Chaotic1.InitialAd hoc process

Chaotic



management control



management control



definition



definition



Process measurement



Process measurement





75 4803600

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05000

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2000025000

3000035000

4000045000

5000055000

6000065000

7000075000

80000

1 2 3 4 5 6

Simple project


project management


experienced project

manager




manager

75 4803600

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3000035000

4000045000

5000055000

6000065000

7000075000

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1 2 3 4 5 6

Simple projectSimple projectSimple project


project management


project management


experienced project

manager


experienced project

manager




manager




manager




IT Solution9


OTHER FACTORS



Distrust factor6


DELIVERY OF PROJECT




PROJECT



Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%





IT Solution9


OTHER FACTORS



Distrust factor6


DELIVERY OF PROJECT




PROJECT



Management Culture1

ORGANISATION

Benefits-%

Time/Cost +%


Time & Cost

Distrust

(Trust % - 100)



Time & Cost

Distrust

(Trust % - 100)




Plan in place?

No

No

Yes

Yes



Yes


No


Yes


Plan in place?

No

No

Yes

Yes



Yes


No


Yes

Complexity

Too ComplexComplex

Not SimpleSimple

Low

Med

High

Capability

Complexity

Too ComplexComplex

Not SimpleSimple

Low

Med

High

Capability


Any questions?

Peter Duschinsky

[email protected]

‘The Change Equation’

is available from Amazon.co.uk

Introducing the INPACT Assessment Process

Documents

Transcript of Introducing the INPACT Assessment Process