The secrets of successful programmes

CranfieldI recently went to the International Centre for Programme Management (at Cranfield) for a forum on learning and knowledge management  and as part of that we were given a white paper called “Beating the odds – the secrets of successful programmes”.

The white paper describes the findings from a recent two-year study of 21 major programmes of many types, with varying levels of success in a wide range of organisations in Europe. Those findings explain many of the causes of the differeing levels of programme performance and how business leaders can improve the success rate for their own organizations.

Seldom do I read an article or paper with the words “Yes, yes, yes” ringing in my head. It is packed with useful insights and wisdom, gleaned for the programme teams who took part in the study. The wisdom in this paper won’t be found in methods and processes, they are more about how experienced and skilled people apply them and the issues they face.

I recommend this to any person who considers themselves to be (or aspires to be) a business leader. As expected, there is lots about vision, strategic alignment, business readiness, foggy objectives, stakeholder engagement, business cases, planning and behaviours. If, as a business leaders, you believe you have a great strategy, then good for you. On its own, however, that is not enough. You need to be able to convert your vision and your strategy into action on the ground. Do you have the right mind set, tools, methods to do this?  Read this article and decide for yourself.

This is the executive summary:

  1. Strategic alignment. From the programmes studied, those identified as integral to the future business strategy were all at least partially successful. It could be concluded that the ‘positive’ nature of the programmes’ intentions meant that there was little stakeholder resistance to the initiative and hence the organisation was able to deploy its most capable resources. Senior management and executive involvement was sustained throughout the programme. Conversely those programmes that had primarily ‘reductionist’ intentions, e.g. restructuring to reduce costs or eliminate inefficiencies, were less successful. Executive involvement in the programmes was weak and stakeholders’ commitment quickly waned.
  2. Need and readiness. Interestingly and perhaps counter intuitively, in most of the successful programmes the need was ‘high’ – clearly recognised as a business priority – but initially the readiness was ‘low’. In these the argument for investment and change was endorsed at executive level and time and effort spent at the start to achieve the buy-in of the rest of the organisation and develop the ability to undertake the changes. In the majority of those that were partially successful the readiness appeared to be ‘high’ as well as the need. Why they were not entirely successful is best explained as over-ambition or even over-enthusiasm; rather too many optimistic assumptions were made at the start with little assessment of the potential risks involved.
  3. Value drivers,benefits and business cases. The more successful programmes were also based on a clear strategic driver plus a strong financial business case. Those with weaker strategic drivers but good financial cases gained less commitment and were usually less successful. Very often financial benefits were overestimated, while the risks and the problems in making the changes were underestimated, perhaps because realistic estimates might have made it difficult to secure funds and resources. During the programme, as the scope becomes clearer, this inevitably leads to changes to the costs involved and the benefits that can actually be delivered, but only a minority of organisations revisit the business cases as programmes evolve.
  4. Foggy objectives. Programmes cannot be fully planned in advance and have to adapt to both changing business conditions and programme achievements. This is not necessarily a comfortable position for senior management and requires a knowledgeable, accountable and empowered governance group to oversee and, where necessary, adapt the programme. Rather than decrease during the programme, uncertainty can often even increase, especially due to changes in the external environment.
  5. Planning. Some organisations thought they may have ‘over-planned’ things at the start, due largely to the demands of some stakeholders for detailed plans, which were then not really used. However, the planning activities were seen as essential to bring stakeholders together and for reconciling their different priorities and interests. The process of planning was more important than the plans produced and helped address many of the initial uncertainties.
  6. vision and stakeholders. Having a clear vision of the intended future business and organisational models and then allowing compromises and trade-offs in the detail of how they are implemented, is more likely to achieve stakeholder commitment than imposition. The successful transformation programmes usually addressed the organisational, people and capability aspects first, before dealing with the process and technology aspects. The less successful tried to do the reverse.
  7. Learning and un-learning. Most ‘strategic’ programmes require the development or acquisition of new capabilities and knowledge in order to be carried out successfully. Management generally underestimate how much has to be learned by the organisation and individuals to define, manage and implement a major programme. Introducing new ways of working may also require considerable ‘un-learning’ by large numbers of professional people – not easy to achieve without actually removing the old processes. If the programme relies heavily on the capabilities of suppliers (especially IT suppliers), they may exert undue influence over what is done – the scope and achievable benefits – rather than on how the programme can be successfully delivered.
  8. Realising the benefits. Most business change programmes involve at least two distinct and different phases – first to create a new capability and second to exploit it. In most of the cases the new capability, for example a global HR database or Finance & Accounting Service Centre, was created, but not always used effectively, hence the benefits achieved were often less than those originally envisaged. While creating a new capability can be done ‘off-line’, separately from business as usual, using and exploiting it often competes with other operational priorities or can have negative effects on other aspects of operational performance, as was observed in some of the cases.
  9. Organisation and governance. Programme governance structures and staffing profiles are likely to change significantly over the life cycle. There seem to be three basic approaches to organising programmes: (1) a separate task force, (2) as part of business-as-usual (BaU), or (3) a combination (matrix). Not surprisingly the last of these proves most problematic. Some programmes have dedicated change managers, others have senior managers assigned to the programme, but they can find it difficult to reconcile achieving change at the same time as sustaining performance. Running change programmes in parallel with BaU causes tensions within the organisation and a clear statement of priority for which takes precedence is essential.
  10. Portfolio management. Few organisations, as yet, have the capabilities in place to manage multiple concurrent programmes with varying levels of uncertainty, competing for the same resources over extended periods. No organisation in the study had an effective mechanism in place for managing a combined large portfolio of ‘strategic’ programmes and more traditional projects – although some are trying to address this issue. Managing multiple programmes (Programme Portfolio Management) requires an additional governance structure or regular strategic and operational review and reconciliation at executive level especially if there are programme inter-dependencies or contention for critical and scarce resources.

Do you want to know more?

Cranfield had very kindly let me make the full article available to you here

So why was I saying “yes, yes, yes,” to myself? Many of the lessons are embedded in both Workout books:

  • vision, strategic alignment: are covered in the gated approach to projects, from the very beginning (The Project Workout Chapters 4 to 13) (The Programme and Portfolio Workout Chapters 8 and 9)
  • portfolio management is covered in Project Workout as “Business Programmes” in Chapters 11 to 16.
  • business readiness, is a prerequisite for the Workout’s Ready for Service/Release Gate (Project Workout page 126) (Programme and Portfolio Workout page 166)
  • foggy objectives, are discussed in the Project Workout Chapter 13 and The Programme and Portfolio Workout Chapter 9, along with other types of “Eddie Obeng” projects
  • stakeholder engagement, is covered in the Project Workout Chapter 26 and the Programme and Portfolio Workout Chapter 25 as well as threaded throughout the books
  • business case, is at the heart of the Workout’s business led approach
  • planning in the Project Workout Chapter 17 and the Programme and Portfolio Workout Chapter 22
  • behaviours are covered in The Project Workout Chapter 15 and The Programme and Portfolio Workout Chapter 7

Of course, in the “real world” these are not isolated activities but happen in a complex network of cause and effect and that is why it is all so difficult to do in practice.

A cautionary tale on business cases

Some years ago, a major communications company was expanding its network to gain access to potential customers. They prided themselves on having a good handle on cost management, especially capex. Each department knew exactly how much they could spend each year and it was tracked weekly. They held weekly Capital Approval Board meetings to control the release of the funds.

The business case
So, along came the project team and asked for a lot of money to buy a telecoms switch to handle the traffic from their five million additional potential customers. The revenue projections were good and return enormous . . . and the wise men on the Capital Approval Board approved the project.

The following week, another project team came along and said, “You know that lovely new switch you approved? It doesn’t like getting wet, so here is a submission to construct the building around it to keep it dry”. The revenue figure was the same as before as, without this building, the switch wouldn’t work and no customer revenue would flow . . . and the wise men on the Capital Approval Board approved the project.

A week later, another team arrived. “You know that lovely building and switch? Well, it won’t work without electricity, so here is the submission for the uninterrupted power supply electrical systems for it . . . and the wise men on the Capital Approval Board approved the project.

Yet another week or two later, yet another team arrived. “You know that switch, and powered building you approved? Well, switches don’t like getting hot, so we need you to approve the air conditioning system which is needed to keep it cool.  If you don’t, you won’t get any revenue . . . . the wise men on the Capital Approval Board were getting a little annoyed, but approved it as they really wanted all that lovely revenue.

The final straw came a month later. “You know that lovely switch in its cool, dry environment with lots of power? Well, it’s useless unless it is connected to the core network; the calls and data will have nowhere to go. If you really want the revenue (which we have attributed to this project’s business case), you have to approve this business case as well. The CEO (who chaired the Capital Approval Board that day) exploded.

True business led project management
The result was that from then on, projects were not bounded by departmental budgets (opex or capex) but by the work needed to get the revenue or other benefit. Projects became bigger as they included all the work needed, across any departments needed, and only ONE business case was developed to cover the lot. There were also far fewer projects, making it easier to see what was going on and the multiple counting of revenue and benefits decreased dramatically. Individual departments contributing to a project could no longer veto or reprioritise the “portion” as they no longer owned the project.

Look in the mirror – what do you see?
This blog is based on a true story from the 1990s, but even now, I see companies which fall into the trap mentioned above. Are all your projects “complete”? Do they include all the work needed to achieve the benefits? Or has the project been “salami sliced” into smaller “enabling projects”, each of which, in isolation, contributes nothing and just consumes resources?

Business cases, lies and gambles

Earlier in the year, I was at an Isochron forum at which Simon Harris gave his personal perspective on “business cases”. His presentation didn’t pull any punches; he described most business cases as lies on the basis that most of them are constructed to “clear a hurdle”. A little bit of “optimism” or a smattering of “delusional thinking” was all it needed to create a great case and get a pat on the back . . . . and the funding. His recent article in Project Manager Today takes on the same topic but with slightly less colourful language. Basically, he is challenging organisations’ attitudes and values around deciding their futures. Looking at Simon’s list of “headlines”, it becomes apparent that a portfolio, programme and projects approach is a great vehicle for managing investments. Not only can they deal with capital efficiency, but also cash, risk, resourcing, cross-company working, capital efficency to name a few.
Here is my “listening” on Simon’s points. Do you agree? Do you take a different view?

Facts, not justification
Most business cases are written by the advocate to “justify” an already fixed view , rather than presenting an unbiased appraisal of the actors influencing the investment decision.

Investment, not gamble
When betting, you place a known amount of money with the bookie, for a known return, should you win. In business cases, you spend an unknown amount of money (it keeps changing!) for an uncertain return. It makes the business case sound worse than a gamble, doesn’t it? This is where good project governance comes in. In a gamble you spend all the money NOW.  A wise buiness leader (project sponsor), manages the risk by taking a staged approach and makes incremental decisions as he or she gains more information. That is what project lifecycles are for!

The place of portfolio management
The responsibility of those appraising business cases is to compare the return on this one, against everything else we are doing and could do. This requires a “portfolio management” approach. Without a portfolio approach, you have no context for the decisions – it is merely a “one at a time” game.

Sunk costs are really sunk
As a project progresses, the amount being spent decreases (unless you really have a disaster on your hands!). The money spent is “sunk”. What is important is the return on the “still to spend” amount and how it compares with other options. Of course, if you do not have a portfolio approach, you can’t do this. If the return is poorer than other options, then terminate the investment. Of course, the sunk costs will have to be written off (if they are capital) but risk provisions should take account of that.

Money is easier to deal with than people

Oddly, money is usually the easiest thing to deal with, if you have sufficient cash. You can store it and it is very simply what it says it is – money. Naturally, accountants like to treat some as “capital” and some as “opex” but that is another game. If money is all that is looked at when appraising business cases, then an organisation is in big trouble. Unless there is the right number of skilled people to work on the investment and operate/use its outputs, there will be no benefit, just a cost. It’s why the government business cases look at “achievability”.

Be sensitive to sensitivity
One thing is certain, the forecast of both costs and benefits will be wrong. This why it is better to think in terms of ranges and envelopes, within which an investment is still viable. This is where sensitivity and scenario analyses come in. As time progress, the future should become clearer and the return on the “still to spend” amount stabilising. It’s all about risk management.

Of course, you also need to keep track of costs on “project investments”, wherever they are spent. That is what modern matrix accounting is for.