Project Management

Shifting Change: Insider Tips from Project Leaders

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Today's world is influenced by change. Project managers and their organizations need to embrace and sometimes drive changes to keep up with the pace in highly competitive environments. In this blog, experienced professionals share their experiences, tips and tools to manage and exploit changes and take advantage of them. The blog is complimentary to the webinar series of the Change Management Community Team and is managed by the same individuals.

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Leadership Lessons on Project Management: What Project Sponsors Can Learn from Swiss Cheese

Leadership Lessons on Project Management: What Project Sponsors Can Learn from Swiss Cheese

 

Professional techniques for project management have made a huge impact on the success rates of projects in the past three decades, but there’s no denying that we still have a long road ahead of us. Statistical information from G2.com gives us a peek into this challenge. Most organizations have a 70 percent project failure rate, only 28 percent of companies use project performance techniques, on average one in six projects has a budget over-run greater than 200 percent, and only 2.5 percent of companies complete 100 percent of their projects successfully.

That’s probably not a surprise to you, since I’m preaching to the choir here. The question is what else we can do to improve project management reliability. I believe we can learn much more from a technique called the Swiss Cheese Model of Accident Causation which has been used to dramatic effect in several industries including aviation, to improve reliability.

 

Accident Prevention and Swiss Cheese

The improvement in aviation reliability from the early days of World War 1 where pilots flew “on a wing and a prayer”, to 99.999999% reliability today has been an inspiration to several industries, including medical safety and computer security. Flight safety in the early days of aviation was not a given. The airplanes which were made of fabric, glue and wood for the most part made flying more a game of skill than process. Takeoff and landing crashes were common. The intervening decades have seen an improvement in both design and methodology. The Swiss Cheese Model was one of the risk minimization techniques employed.

The Swiss Cheese model of accident causation states that human systems are similar to slices of swiss cheese that are placed vertically in front of each other. The holes in the cheese represent defects or weaknesses in each system and tend to be of different sizes and positions. If a line can pass through the stack of cheese holes then that represents failure of the system as a whole, leading to an accident. The goal in designing the system is to reduce the probability of an accident by improvements on both “holes” and “number of slices”.

James Reason, who created the Swiss Cheese Model (SCM), believed that accidents can happen for four reasons i.e. organizational influences, unsafe supervision, preconditions for unsafe acts, and the unsafe acts themselves.

 

Organization-centric vs. Individual-centric Causes of Project Failure

Let’s try and get this back to project management. There’s something intriguing about the number 70, which indicates the percentage of failures in project management. That number shows up in other industries too. In an interesting analysis by the Colorado Firecamp, called the Human Factors Analysis and Classification System, it is pointed out about 70 percent of aviation accidents can be partly attributed to human error (Shappell & Wiegmann, 1996). However, we know the attribution of a large percentage of failure to pilots alone is misleading. Their analysis rightly argues that to off-handedly attribute accidents solely to aircrew error is like telling patients they are simply “sick” without examining the underlying causes or further defining the illness. In other words, we need to look at not just the final visible cause (individual-centric), but also to the previous layers of issues (organizational-centric). It’s well known that aviation accidents are the end result of a number of causes, only the last of which are the unsafe acts of the aircrew (Reason, 1990; Shappell & Wiegmann, 1997a; Heinrich, Peterson, & Roos, 1980; Bird, 1974). That’s true in project management failures as well. Attributing most of the failures to the project manager and the project team ignores the three other preceding layers in the swiss cheese model i.e. organizational influences, unsafe supervision, and the preconditions for unsafe acts. That’s where project sponsors need to play an important role.

 

The Sponsor’s Role in Addressing Organizational Influences, Unsafe Supervision, and Preconditions for Unsafe Acts

Unsafe acts in Project Management are generally based on the foundation laid by Organizational Influences, Unsafe Supervision, and Preconditions for Unsafe Acts. So, for example, choosing a weak software solution in a given project is an unsafe act.  However, when we step back a layer it’s possible that the poor choice was based on lax procedures in either technology standards, or in matching-and-mapping process design to software solutions (precondition for the unsafe act). Step back another layer and we may find that the project board did not ask the right questions while overseeing the project (unsafe supervision). Go back yet another layer, and we might find that the siloes between the IT architecture group, the software procurement function and the project management group sub-optimized the software choice while trying to optimize individual department results (organizational influences). Who needs to help the project team across these layers?

I believe project sponsors play a key role here. To be clear, it is impossible for any given project sponsor to systemically fix all issues across all four layers. A good sponsor, however, is educated enough in these practices to work alongside the project team and guide them in avoiding these traps when they cannot be systemically addressed.

In closing

As Vice-President at Procter & Gamble’s famed Global Business Services and IT, I considered the ideal project sponsor to be a person who had four qualities. They had to own the organization that needed the project, they needed to have enough time to devote to the team, they had to have enough knowledge of the project’s subject matter to add value, and they had to be effective in breaking organizational barriers for the project team. This worked extremely well for us. Unsurprisingly, these are also the qualities that help project sponsors address all four layers of the Swiss Cheese model.

 

Posted by Tony Saldanha on: April 27, 2020 03:29 PM | Permalink | Comments (3)

How to Tailor Your Project Management Approach For Successful Digital Transformation

Digital Transformation is a 1.7 trillion dollar industry as of 2019, which has obvious demand implications for project managers. At the same time an estimated 70% of all digital transformations fail based on a Mckinsey report on retail. What can project managers do to stand out from the crowd on successful digital transformation?

Based on my own experience of having led multi-billion dollar organization transformations over a three decade career at Procter & Gamble, combined with industry research, project managers need to tailor project management approaches to complement mainstream methodologies with “transformation” related disciplines when managing true digital transformation efforts.

 

What’s Missing in Current Digital Transformation Approaches?

To understand why current project management approaches need to be complemented, we need to dig into why 70% of all digital transformations fail. The answer comes down to two issues – a lack of clarity on the definition of digital transformation and the use of incomplete methodologies to execute it.

  1. The first issue is easy to understand. The term “digital” as applied to business operations has been around for over five decades. Unsurprisingly there’s a spectrum of definitions for digital transformation ranging from executing small IT automation projects to changing the DNA of established enterprises to become more “Amazon-like” in their business models, products and operations. To cut through this confusion and to avoid the trap of the IT software and consulting industry hype, I suggest using the attached five-stage definition of digital transformation in Figure 1. The five stages are as follows:
  • Foundation: Projects to automate processes in the organization (e.g. selling, manufacturing, finance.) These are the usual IT projects which are often misquoted as being digital transformation.
  • Siloed: Siloed or departmental programs for transformation (i.e. the creation of new dramatic but siloed, digital products, customer propositions, or agile operations)
  • Partially Synchronized: Coordinated programs for strategic transformation across the enterprise
  • Fully Synchronized: Completed digital platforms, products or processes for digital transformation
  • Living DNA: Perpetual living culture of constant digital reinvention as the backbone of the business model

 

Figure 1: Five-Stage Digital Transformation Model

Figure 1: Five-Stage Digital Transformation Model

  1. The second issue is related to the execution methodology. If we define true digital transformation as changing the DNA of the enterprise in order to succeed in the fourth industrial revolution, then the execution methodology needs to be based on scaling organization change, not just technology implementation. That’s what you need to tailor when leading true digital transformation.

 

How to tailor your approach for leading digital transformation programs

In 2015 Procter & Gamble’s Global Business Services (GBS) unit set out to digitally disrupt itself. The 5,000-strong GBS organization provided more than 160 business services worth multi-billion dollars of operations including IT, finance, facilities, purchasing, employee services, and more. Despite GBS’s already best-in-class capabilities, we wanted to transform it into what we called Next Gen Services (NGS), capable of delivering long-term operational superiority. To avoid the trap of the 70% failure rate of digital transformations, we started by examining what had driven successful transformation in the past.

  1. Create the conditions for “pull” based change: An analysis of the company’s history found that successful transformations had one big thing in common. They had all begun by focusing on “change demand”—the degree of enthusiasm within the core operations for disruptive change on top of continuous improvement. We therefore determined that the percentage of projects rooted in internally-sponsored, big but tough problems (as opposed to externally identified cool possibilities) had to be greater than 95%. What’s more, if a big, new possibility had been identified externally but operational leaders were not sufficiently moved to sponsor it, then the idea was quickly dropped.

To increase change demand, we brought in leaders from disruptive companies to talk to our operational leaders about looming digital disruption. In addition, operational leaders made consideration of disruptive innovation goals part of routine annual strategy reviews.

  1. Design for immune system responses. Traditional approaches to change management recognize the natural tendency of individuals and organizations to resist change. But they often treat immune responses as a problem to be circumvented rather than as an opportunity to be seized. The pejorative term “frozen middle” is sometimes heard, referring to the resistance to change often found among middle managers, who are then kept at arm’s length during the transformation.

 

But such attitudes to middle managers unfairly penalize them for doing what their reward systems dictate—running stable operations and being wary of destabilizing effects. So we identified the middle management leaders affected by each project, involved them in the initial “fun” of designing the disruption, and jointly designed the risky roll-out of disruptive projects that could destabilize ongoing operations.

 

  1. Choose a situational change management model. Digital transformation demands a dispassionate assessment of its urgency, and how receptive the prevailing culture is to change. Depending on the intersection of urgency and change acceptance, an organic, inorganic, or edge organization change management model will be called for.

If sufficient time, internal capability, and a relatively straightforward path forward are available, then transformation can usually be handled via organic change. After the 2008 economic crisis for instance, Fidelity Investments increased its investments in digital capabilities while competitors were slashing budgets, giving the company room to move forward with a deliberate organic transformation. That consistent focus on digital transformation strategy has pushed them ahead of competition in areas like blockchain, artificial intelligence, and crypto currency.

If existing capabilities, time, and internal resistance to change are all a challenge, then your best bet may be inorganic change—look for an acquisition or partnership with an external entity, as Walmart did in acquiring Jet.com. Inorganic change comes with its own risk, since a majority of acquisition-related changes fail. However, by giving the acquired entity a strong mandate and change-management support, this approach can jump-start new capabilities quickly.

If there is little time and the prevailing organization culture is partly resistant to change, then organic change won’t work. In such cases, edge organizations, given full freedom to operate differently from the rest of the business, are the preferred approach. At GBS, we felt that time was at a premium. We knew that our real standard of comparison wasn’t just other large companies any more, but digitally native startups with far more cost-efficient and agile internal business operations. Resting on our laurels—our superiority to peer companies—would be risky. So to drive disruptive change faster than an organic approach could, we set up NGS as an edge organization. To facilitate agility, NGS would be allowed “amnesty” on purchasing standards, IT architectures, and even some HR practices in the early stages of idea development.

As a successful project manager of complex digital transformations, your methodology needs to complement best in class thinking on project and portfolio management with the latest approaches on scaled organization change leadership. Most executions of digital transformations fail due to organizational reasons, not work-process or technology design. That issue becomes much more material when leading transformations to overcome existential threats caused by digital disruption.

Posted by Tony Saldanha on: February 04, 2020 09:25 PM | Permalink | Comments (3)
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