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Author: Drew Davison

Drew Davison is the owner and principal consultant at Davison Consulting and a former system development executive. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check - The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath - The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at [email protected].

From the Sponsor’s Desk – Success is Relative

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We work hard on our projects to ensure all our goals and stakeholders’ needs are met. Yet, sometimes when we reach the end of the road, we find some of our goals have not been achieved and one or more key stakeholders are not happy with the outcome. How do we avoid that situation?

In this post, we’ll look at a company that had some pretty significant challenges. A new director, hired by the CEO to fix the problems, launched a project relying on Lean Six Sigma approaches and consulting expertise to lead her organization to the desired future state. She was able to achieve only one of her key goals but missed on others. Was she successful? Absolutely! Read further to find out how.

Thanks to J.Y. for the details on this case.

The Situation

This company was a for-profit provider of personal home care services for those with both chronic and acute illnesses. The company had been under attack by clients and the local community and press for poor service. Investors had also been challenging the CEO to reverse revenue declines and improve bottom line results which had been on a downward path for four years.

The CEO concluded that the negative press was the primary cause of the revenue and bottom line declines. So, he fired the Director of Client Care and hired a replacement to turn company performance around. The new director’s claims to fame were a passion for Lean Six Sigma practices and the turnaround of a chronic care facility she had managed previously. Lean Six Sigma is a methodology that relies on a collaborative team effort to improve end to end performance by systematically removing waste. The CEO hoped that the application of that discipline would improve client service and turn around the company’s flagging fortunes.

The Goal

The CEO challenged the new Director to achieve four goals:

  • Improve the client satisfaction scores from 2. 4 in the last completed survey to 3.8 in all segments at the end of the six months. The survey assessed client views on perceived professionalism, convenience, support for client needs, responsiveness, satisfaction with staff and willingness to recommend the company to others.
  • Improve the perception of the company in their clients’ eyes, the community and the press from 80% negative to 60% positive. That would be measured by the number of unsolicited letters, emails and articles praising the company, its staff and its services versus the total received.
  • Reduce the costs of Client Care operations by 10% within six months through streamlining, productivity gains and cost reductions.
  • Achieve these results in six months.

The Project

The new Director immediately announced to her staff and the company’s clients that she was launching a program to improve the company’s client care and asked for their help and support to bring the improvements about over the next six months. However, she didn’t tell them about the plan to reduce operating costs by 10%. She hoped that the reductions would come about as a result of the service improvements that would be implemented and wouldn’t have to be targeted directly.

Next, she contracted with the Lean Six Sigma consultants who had been instrumental in helping her improve operations at the chronic care facility. She had reviewed the complaint letters received from clients and their families over the last two years as well as the negative reports that had made it into the press and concluded that there were three primary challenges:

  • Professionalism – some of the company’s staff had not dealt with clients in a professional manner or had not had the necessary skills to treat the client’s needs
  • Timeliness – staff were often late for appointments and there were a number of no-shows that put clients in jeopardy
  • Scheduling conflicts – where more than one service was being provided to a client, staff often showed up at the same or overlapping times, annoying clients and wasting valuable resource.

The Director reviewed her findings with the consultants and asked for their recommendations. They did some digging of their own and proposed the following approach:

  1. Identify product lines and their priorities in terms of achieving the project’s goals
  2. Develop value stream maps for each product line to find out what was actually happening in the delivery of the services, from start to finish.
  3. Measure process performance in terms of time, costs and client perception
  4. Identify opportunities to improve performance
  5. Update value stream map to reflect improvement opportunities
  6. Plan and implement process improvements
  7. Monitor performance and revise as needed
  8. Implement on a product line by product line basis to gain experience, accelerate service improvements and reduce risks.

The Director, together with the consultants, identified five product lines: Home & Personal Support, Nursing, Physiotherapy, Occupational Therapy and Social Work. She picked Home & Personal Support as the priority line to study first because it accounted for almost 40% of revenue and over 65% of complaints.

The consultants brought together the managers and staff involved in that product line to help map out the process from the request for service to the discharge of a client. To get the client’s perspective, the consultants visited a number of current and past clients and asked them for their views on how the process worked from their point of view, the things that worked well, the things that didn’t and their suggestions for improvement.

Over a two week period, the consultants worked to get the process mapped accurately. All managers and staff involved in the process were asked to sign off on the accuracy of the portrayal, and they did. Armed with the process map, the consultants then started to measure the existing process, using actual process instances. They tracked the time each step took, all the way out to the client, calculated the costs and identified errors and the time and effort it took to remedy them.

The consultants then started the challenging yet exciting task of identifying opportunities to improve the process and the client experience. They involved a select number of managers and staff initially but took the same stance as with the current state map, that everyone involved would ultimately have to sign off on the revised process before it was planned and implemented.

The search for opportunities revealed a number of potential improvements, including:

  • Requests for Home & Personal Support services could come from the clients themselves, from a client’s family, from insurance companies or from other social service or government agencies. The intake process was very informal and didn’t take into account the different information needs for each type of requestor. In most situations, at least one additional contact was required to obtain the needed information.
  • The assignment of staff to a client was being treated as an administrative task rather than a triage function, which would have determined the priority of clients’ treatments based on the urgency and severity of their condition. As a result, clients were being assigned staff who were available rather than staff with the right skills.
  • There was no linkage to the processes supporting the other product lines. Consequently, when a client required more than one service from the company, there was a good chance that two staff would arrive at the same or overlapping times because much of the scheduling was dictated by client availability.
  • Linkages to the company’s support functions such as Human Resources and Accounts Receivable were, in some cases, almost ad hoc. Consequently, staffing for needed skills would not be addressed until long after the need was identified or invoices would not be sent out until long after a client was discharged, or, in some cases, not sent out at all.

Armed with these opportunities, the consultants, with the assistance of the process staff, set about to redesign the process flow to improve end-to-end performance, quality and client satisfaction. They received sign-off on the new design, developed a plan and implemented it. They monitored the new process, measured performance, revised it in a couple of spots and added additional support and training for a number of staff who were having difficulty with new roles and procedures. It took fourteen weeks from the start of the engagement to complete the first product line. They then proceeded to apply the same approach to the other four product lines.

The Results

The project was fully completed eight months after the new Director’s arrival. The CEO had given her six months. Client satisfaction scores improved to an average of 4.2 for the new processes versus the CEO’s target of 3.8. Community and client perception improved to 20% positive from the previous 80% negative but well below the target 60% positive. The actual costs of the Client Care organization actually increased a bit because of increased staffing costs to put product line owners in place to manage ongoing performance, support a more robust triage function and establish deals with temporary staffing agencies to ensure the needed skills would always be available when required. The target was to reduce costs by 10%. The Director missed three out of the four goals the CEO had set for her.

The Director argued that the six month window was too short a time to fully assess the contribution of the lean processes. She expected that the community and client perception would improve nicely as the client service improvements became more widely known and recognized. She also argued that, as those key measures improved, the cost-effectiveness of the processes would contribute positively to the bottom line beyond the targeted 10% cost reduction through increase revenue and lower unit costs.

How a Great Leader Delivered Results

Was this project successful? On the surface, it realized only one of the four goals set out at the beginning. On that basis, the project could be called a failure. However, things change during the course of a project. We learn things that influence our priorities and cause us to adjust targets and plans accordingly.

In this case, the Director kept the CEO totally tuned in to her thinking and to the project’s progress throughout. Early on, the Director recognized that there was a dichotomy between the six month target for project completion and full realization of the project goals. The CEO agreed. As well, the CEO agreed to focus on client service and process improvement on the assumption that the bottom line return would follow. The CEO was as much a decision maker as the Director. Collaboration was the key throughout. In the view of all key stakeholders – CEO, Director, managers and staff – the project was a resounding success. Success is relative!

I did an earlier post on a lean project, Ten Steps to Lean Success in November. While this is a very different case, the Director in this situation applied all of the ten steps, including sustaining lessons learned through the appointment of the product line owners. It was nicely done. I think it’s great when proven best practices, applied judiciously, yield terrific value in a wide variety of situations. I hope you do too.

So, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember, use Project Pre-Check’s three building blocks covering stakeholder, process and decision area best practices right up front so you don’t overlook these key success factors.

Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights. Thanks

Don’t forget to leave your comments below.

From the Sponsor’s Desk – The Importance of Principles

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In my last post, Guiding Community Change, we looked at how a community based initiative went from being a source of distrust and discord to a shining example of collective and collaborative community action. That fundamental change in direction delivered a community asset that will be enjoyed by present and future generations for years to come.

This post is a bit different. It’s not about a project or a major change. It’s a story about one man’s values and the lasting legacy he left through the actions he took over time. However, it does relate to project and change management in this sense, as Peter Drucker once so succinctly put it: “Culture eats change for breakfast”. Projects that fail to consider their relationships to an organization’s culture and core values are destined for trouble. Perhaps that’s a useful start for a new year.

Thanks to D.T. for the details on this story.

My friend, let’s call him Thom, was the owner of a retail franchise store for about thirty years. As a previous high school history teacher, he knew next to nothing about managing a retail operation so he had a huge learning curve to climb. And climb it he did, to the very summit. Even though he served a small market, his store was one of the most successful in the franchise. Thom was also an engaged leader in the community and a kick-starter and participant in many community initiatives.

How did Thom achieve his success? Certainly hard work and an ability to learn and adapt were fundamental. However, he had a strong set of values based on three principles:

  1. Do your very best to satisfy every customer’s needs
  2. Help, support, recognize and reward every employee fairly
  3. Be an active and valuable member of the community

He attributes his success to these principles and the values they helped instill in him, his company and his employees.

When my friend was telling me the story that follows, it occurred to me that he was doing business at the same time as Thomas Watson Jr. was running IBM. In 1962, Watson, IBM’s chairman, addressed an audience of future leaders at Columbia University. IBM had just turned 50, and he was invited to offer his thoughts on what half a century of corporate life had taught his company. He focused on IBM’s basic beliefs.

“I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs. And finally, I believe that if an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself except those beliefs as it moves through corporate life.”

In 1963 Watson published “A Business and Its Beliefs: The Ideas that Helped Build IBM.” In it, he wrote that IBM’s philosophy could be contained in three beliefs: One, the most important, was respect for the individual employee; the second, a commitment to customer service; and third, achieving excellence.

Wow! Sounds a lot like Thom’s principles. Thom claims he and Thomas Watson never spoke. And now to the story.

Early in his retail management career, Thom had a six week store refurbishing project that required extra temporary staff working the night shift so as not to disrupt the normal daily operations. He advertised for temporary workers, had lots of candidates and began the interviewing process. One of the candidates was a young, unemployed man named Sam. He was short and slight and didn’t appear to be physically suited to the arduous physical effort required in the refurbishing project. He didn’t even have a high school diploma. But for some reason Thom liked him. He was well spoken, personable, very eager and asked a bunch of intelligent questions about the project so Thom offered him a spot on the team. Thom stressed this was a temporary, six week assignment only.

The project went smoothly. Thom monitored the performance of the temporary staff he had hired, recognizing them as a potential pool for future permanent positions. Sam’s performance stood out. He was always early to the job and late to leave. He did quality work. He worked well independently and with his teammates. He was great with his full time staff and the few customers he came into contact with. At the end of the project, Thom offered Sam a permanent position. When Thom retired, Sam was still working at the store and would work there until he too retired. He was never a manager but he was a model employee, worked hard and always pitched in to helped customers and peers.

Recently, Thom received a phone call from a former manager at his old store to say that Sam’s wife, Sheila, was dying from terminal cancer. Of course, Thom knew Sheila from the many company and community functions they attended over the years so he decided to give her a call and offer whatever support he could. When Thom called, Sam answered. They chatted for half an hour about their many shared experiences. They talked about Sheila’s illness and how Sam was doing. Finally, Sam put Sheila on the phone.

Thom and Sheila chatted for another twenty minutes or so about old times, her cancer and how Sam was doing. Then Sheila said “Thom, I want to thank you so much for giving Sam that initial opportunity and helping us experience the wonderful life we’ve had together. Because of your generosity and caring, Sam will have no financial worries after I’m gone. We’ve managed to save all the profit sharing cheques over the years. That will give Sam more than $1 million to fall back on.”

Thom was overwhelmed. He had always believed in profit sharing and had offered a profit sharing program from the first year of his ownership. He believed it was one of the reasons his staff were so productive and so loyal and his turnover so low. But a million dollars in savings? Sam had never had a big salary but the profit sharing proceeds could amount to 20% of salary annually. Sam and Sheila had been frugal with their funds.

When Thom ended the call, he was saddened but gladdened. Saddened by Sheila’s looming death, of course. But his heart soared with the realization that running his business and managing his relationships according to three principles formed and acted on so long ago had had such a positive and appreciated impact on a valued employee and his family. It was a fitting stamp of approval to a long and successful career.

The moral of the story for project managers and staff, change practitioners and stakeholders is perhaps best summed up by this quote from Gandhi:

“Your beliefs become your thoughts,
Your thoughts become your words,
Your words become your actions,
Your actions become your habits,
Your habits become your values,
Your values become your destiny.”

And remember, use Project Pre-Check’s three building blocks covering stakeholder, process and decision area best practices right up front so you don’t overlook these key success factors, including culture and core values.

Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights. Thanks

Don’t forget to leave your comments below.

From the Sponsor’s Desk – Guiding Community Change

davison Dec10.jpgIn my last post, Ten Steps to Lean Success, we looked at the approach new owners took with a successful, forty year old, formerly family owned manufacturing company to improve bottom line results. They used just the right blend of project and change management best practices and lean techniques to transform the organization and improve performance while retaining and growing their customer base.

In this post, we’ll see how a community based initiative went from being a source of distrust and discord to a shining example of collective and collaborative community action. That fundamental change in direction delivered a community asset that will be enjoyed by present and future generations for years to come.

Thanks to L.P. for the details on this case.

The Situation

Community initiated projects can be as challenging as major business or technology changes. Local community groups with volunteer boards and volunteer members often tackle major new facilities or services, whether it’s a park, a playground, a swimming pool, community center or arena. However, there’s typically no one individual who has the final say (although some try and act the part), there are generally few specialists within the organization to address the unique needs of the project and there is often little money available to fund the planned venture. No final authority, limited skills and little money usually equals big risk.

Such was the case for a small waterfront community of mostly summer residents. A couple of board members wanted to build a basketball court in the existing recreation complex. Their kids played the game and missed the activity when they retreated from the city to the cottage for summer weekends and vacations. The idea had been raised a number of times over the years but had received little support. The basketball advocates vowed this time it would be different.

In an effort to improve their chances of success, the advocates chose to combine the basketball facility with the replacement of a decaying children’s playground, redo of the baseball backstop and the addition of new facilities including a soccer net, tables, seating and shade trees around the playground. The whole project would be financed with volunteer donations.

The advocates presented their proposal to the board of directors for approval and requested authorization to proceed with fundraising immediately. Was there some pushback from the directors? Of course. It was a contentious meeting. One of the advocates claimed that the board had the authority to go ahead and make all the decisions necessary. A nonaligned director pointed out that the community’s bylaws required majority approval by all association members.

Questions focused on the up front and ongoing costs and need for the facilities – how much use would the new facilities get when so much of the community’s activities were focused on the water. There were also concerns about the advocates’ desire to raise funds from outside the community and what that would mean in terms of outside use and expectations. One nonaligned director suggested a questionnaire to determine the level of interest. The suggestion was rudely rejected.

In the end, the board authorized the advocates to form a committee to develop the proposal further and determine the willingness of the community to fund the project.

The Goal

To build a basketball court in the existing recreation complex in combination with the replacement of the playground equipment and the addition of soccer net, refurbished baseball backstop, tables, chairs and shade trees. The project would be financed with voluntary donations from members of the community.

The Project

After the board meeting, the advocates formed a committee with two more supportive board members and three interested members from the community. They designated one of their committee to sample a number of community leaders to gauge their willingness to donate for the cause. The designated fundraiser was politely rebuffed. The individuals she talked to wouldn’t commit until they knew more about the project, the costs, the timeline and level of support. Back to the drawing boards!

The advocates brought this result back to the board. After more contentious and heated debate, the board challenged the committee to communicate with all community members about the planned facilities, establish the potential demographics and ascertain current use and preferences for future expansion. A questionnaire was developed with twenty-three questions covering demographics, levels of use of the current facilities, opinions about possible new and expanded facilities and willingness to donate. The basketball court had transformed into a multi-use sports court. The questionnaire was distributed to all association members in early November with a requested return date in six weeks.

And then silence. There was no further communication on the project or the results of the questionnaire until a brief mention in the president’s newsletter in May that indicated the committee was hard at work tabulating the results of the survey and taking these into consideration in making a presentation to the board. The next general communication took place as a formal presentation to the assembled members at the association’s annual general meeting in July. That did not go well.

The assembled members learned that 76 of the 100 or so questionnaires distributed were completed and returned. Regarding upgrading the playground equipment, respondents were in favour, 42 indicating yes and 28 no. On the question of the sports court, 31 were in favour and 35 against with 3 saying maybe. On the soccer net, 41 said yes, 31 said no. And so on.

But there was considerable rancor between the audience and the committee spokesman. Well-meaning questions from the floor regarding up front and ongoing costs, anticipated levels of use, the approval process and a variety of alternatives to the proposed layout were met with platitudes or dismissed entirely. One of the most contentious aspects of the proposal was the committee’s insistence that the project was an all or nothing affair.

As the immediate next step, the committee promised to provide every member of the association with a report of the statistical analysis and findings from the questionnaire, and a summary of the committee’s proposed vision. But the damage had been done. Many members were suspicious of the committee’s motives. There was even talk of a proxy fight. And then a new president took over.

A president’s term lasted for one year. The new president knew the history of the project and the issues that had festered over the previous year. He set out to help the committee deliver fully supported assets for the community and worked with the board to guide the committee to that conclusion. His mantra: full disclosure on all matters; frequent, open communications; approval by a majority of the members; majority approval required on each component.

The Results

The project was fully approved at the next year’s annual meeting – each of the three stages received majority approval. The facilities were all delivered, mostly as planned and mostly on budget. They are being used and appreciated by the community’s members and guests. Over 90% of the community donated to the project, contributing more than the estimated cost. The excess was set up in a reserve fund to cover ongoing operating expenses. Not bad results for an undertaking that had initially threatened to split the community!

How a Great Leader Delivered Results

The new president was aware of the lack of support for the project and the lack of trust in the project’s advocates. So he set out to build the support and trust to improve the project’s chance of success through the following actions:

  • He sold the other directors and the project’s committee members on the need for full disclosure of the project plans, costs and progress
  • He convinced the committee to communication widely and often with the community, in person and in writing
  • He insisted that approval of the project would be determined by a majority vote of community members
  • He insisted that the three major components of the project – the sports court, the new playground equipment and the remaining elements be voted on and approved separately.

In spite of the fact that this was a relatively small community undertaking, the actions taken by the president are essential and relevant to just about any kind of project or change. Full disclosure of a project’s costs, plans and progress, effective stakeholder communication, active stakeholder engagement and participation, a formal gating mechanism and staged delivery are all proven best practices on any kind of change initiative. So, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember, use Project Pre-Check’s three building blocks covering stakeholder, process and decision area best practices right up front so you don’t overlook these key success factors.

Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights. Thanks

Don’t forget to leave your comments below.

From the Sponsor’s Desk – Ten Steps to Lean Success

In my last post, Beware the Change within a Change, we looked at the damage done when one organization didn’t pay sufficient attention to a change within a change. It’s easy to get distracted when dealing with a major project, like an acquisition. But, as we learned, being busy with a big change is no excuse for ignoring other significant changes that are going on concurrently. Appropriate oversight and diligence is always needed.

In this post, we’ll review the approach new owners took with a successful, forty year old, formerly family owned manufacturing company to improve bottom line results. They used just the right blend of project and change management best practices and lean techniques to transform the organization and improve performance while retaining and growing their customer base.

Thanks to D.N. for the details on this case.

The Situation

This manufacturing organization had been recently acquired by a private equity firm. The acquirers justified the acquisition on a number of factors: the company had a long history of success, profitability and growth; it had a diverse and loyal customer base; it had narrow but very competitive product lines; the family wanted to sell. In addition, there was an expectation that profitability could be boosted significantly by improving manufacturing productivity and quality and offering a suit of new products.

The purchasers installed a new CEO and board. In the first few months of the new CEO’s tenure, he did a lot of walking, looking and listening, with his management team, his customers, his engineers and design staff, with staff on the production lines and with his suppliers. He even chatted with a few of his competitors.

What he discovered confirmed the private equity firm’s hopes – there was lots of opportunity to increase profits. The company was functionally structured, with bottlenecks galore. There was very little tracking of unit costs, production times, defect rates or new product time to market. He also found very knowledgeable and loyal staff and mostly satisfied customers who all had lots of questions about the future direction of the company under the new owners.

The Goal

The new owners challenged the CEO to quadruple bottom line results over four years by improving performance of existing product lines and adding a range of new products. The new product offerings would be supported by capacity freed up from productivity and quality improvements on the existing lines. In addition, the organization should be capable of continuous improvement and renewal at the end of the change as a by-product of the project experience.

The Project

The CEO had previous experience with lean practices as a way of enhancing customer value and building organizational performance and agility in the process. He contacted a lean expert who he had worked with previously and discussed the challenges and opportunities. The lean expert supported the CEO’s views and suggested a session with the company’s management team to introduce the project’s mandate and lean concepts – the identification and steady elimination of waste resulting in quality improvements and reduction in production time and costs.

The lean expert ran the company’s senior executives through the eight-step process for guiding the implementation:

  • For each product line, identify the value delivered from the customer’s perspective.
  • Identify all the steps in the process and eliminate those that do not create value.
  • Organize the value-creating steps in tight sequence so the product flows smoothly to the customer.
  • Empower all stakeholders to discover and deliver the new processes, starting with the customers.
  • Deliver change in small, tightly defined increments.
  • Tackle the highest risks/challenges first.
  • Capture lessons learned and leverage in subsequent iterations.
  • As wasted steps are removed and value is enhanced, begin the process again.

The CEO added his own personal stamp – every senior executive in the room as well as their direct reports would be held accountable for achieving the target results and for their personal support and commitment to the project over the four years. Apparently, there was a bit of discussion about the goals, the mandate and the doability of the undertaking. In the end, however, all the targeted executives endorsed the plan. The lean expert was designated as the program director.

The lean expert worked with the executive team to identify the project scope and priorities. Product lines were assessed on a number of key factors to establish priority. Factors included customer complaints and returns, time to delivery, total product line revenue, estimated profit margins, perceived defect rates, competitive positioning and management and staff judgements on the size of the improvement opportunities.

Once product line priorities were established, the lean expert formed a team comprised of his own staff and subject matter experts from the first product line selected. For the first project, they analysed the entire end-to-end process, identified the areas of waste, and redesigned the process to eliminate the bottlenecks and detours. They then put together a release plan that would tackle the highest risks and opportunities first. The focus was on key pieces of the process that could be implemented in three to four months.

The Results

The program actually ran for five years rather than the planned four because the opportunities just kept on coming and the CEO kept on approving the incremental funding. Net profit after four years had increased over seven times versus the four times target. Three new product lines were implemented with no incremental costs because they were able to leverage resources freed up from the existing product lines. Customer satisfaction improved substantially across all product lines as did repeat business.

The original lean expert and his team departed after eighteen months but were called back to consult on a couple of occasions. The new organization formed to manage overall product line process performance picked up where the lean expert left off and carried the project to a very successful conclusion. In addition, a number of new projects were spawned in the spirit of continuous improvement. There were absolutely no layoffs during the lean transformation in spite of the significant productivity gains realized and the capacity freed up as a result. In fact, after five years, staff numbers were up 15% to handle increased product demands.

Finally, the culture of the organization did indeed transform. There was a collective obsession with customer value and end-to-end process performance. Corporate communications echoed and reinforced that obsession, focusing on process performance metrics and featuring customer, supplier and partner comments and insights. The private equity firm was most pleased with their investment!

How a Great Leader Delivered Amazing Results

The organization achieved its goals through a consistent and focused change program that succeeded because of the following ten factors:

  1. Committed sponsor – the CEO was the sponsor, the program initiator, the chief booster and the dominant communicator. He listened. He talked openly and honestly about the challenges ahead, the issues encountered as well as the successes achieved. He acknowledged key contributors throughout the endeavor and responded personally to issues and concerns raised by individual staff.
  2. Full decision-maker engagement – all senior managers (VP’s and directors) were challenged to make the project work and to support their staff in the changes they would be going through. They were also incented based on their perceived personal contribution and real results achieved. There were no laggards!
  3. Crystal clear goals – the new management team knew exactly why they were undertaking the change, what they were willing to spend and what they were intending to achieve. That information, along with monthly progress, was communicated widely and frequently throughout the change period. There wasn’t anyone in the company that didn’t know.
  4. Rational priorities – senior management looked at the comments and concerns from their customers, the moves from the competition and their own organization’s performance across its product lines. They tackled the biggest risks first. Everyone understood the rationale for the planned sequence.
  5. Frequent small wins – this project was a big cultural shift for the organization, going from a functional orientation to an end-to-end process perspective. Picking and delivering small, incremental changes helped the organization learn and evolve while improving service to its customers and delivering incremental bottom line value. With this mindset, even the occasional failure was celebrated as a valuable lesson learned.
  6. Staff engagement – engaging all staff, asking for their help and support, facilitating the contribution of their knowhow and ideas and addressing their issues and concerns created an amazingly open and forthright environment. Talking openly about the disruption in staff’s working lives resulting from the project and guaranteeing no layoffs during the change period helped reduce resistance and garner active support.
  7. Method experts – the company had no experience with lean practices so they brought in an expert. The expert’s mandate wasn’t just to deliver improved performance. His primary focus was actually on helping the organization transform itself, building internal knowledge and skills and putting an organization in place to sustain the changes.
  8. Clear roles and responsibilities – there was full understanding throughout the organization on who was doing what, from the CEO down to the newest recruit. That left no room for finger pointing when things didn’t go as planned. The individual responsible was the one doing the explaining and taking corrective action.
  9. Outstanding communication – perhaps the most critical component of the project’s success was the communication program that was put in place at the start and refined on an ongoing basis. At its core was a multi-way dialogue that engaged all corners of the organization and beyond. It established every stakeholder’s commitment to the endeavor and reinforced that on a continuing basis.
  10. Sustaining lessons learned – one of the key goals of the project was the transformation of the organization to a process oriented, continuous improvement culture. That goal was achieved in large part because of the new organization structure and roles that focused on process ownership and managing and leveraging lessons learned. Best practices were catalogued, communicated and celebrated. Every new project was framed by potential practice reuse. Reuse and refinements were targeted, measured and reported. It became the new way!

It’s clear. If you’re involved in an organizational transformation, a process re-engineering effort or a lean undertaking, make sure that these ten factors have been addressed and are sustained throughout the change effort. In fact, these factors are essential and relevant to just about any kind of project or change. So, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember, use Project Pre-Check’s three building blocks covering stakeholder, process and decision area best practices right up front so you don’t overlook these key success factors.

Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights.
Thanks

Don’t forget to leave your comments below.

From the Sponsor’s Desk – Beware the Change within a Change

In my last post, A Moment of Truth, we looked at a chance personal encounter – a moment of truth – that changed the lives of two people for the better. The post wasn’t about a project, or a major change. It was about how individuals react when faced with change. Sometimes, as in this case, all we need to move forward is the help and support from another person, to offer a different frame of reference for our consideration.

In this post, we’ll review the damage done when one organization didn’t pay sufficient attention to a change within a change. It’s easy to get distracted when dealing with a major project, like an acquisition. But, as we’ll see, being busy with a big change is no excuse for ignoring other significant changes that are going on concurrently. Appropriate oversight and diligence is always needed.

Thanks to A.T.P. for the details on this story.

The Situation

This bank purchased an investment organization that ran into difficulties as a result of the 2008 financial crisis. As the bank was dealing with the integration of the acquired company, they discovered that the investment organization had undertaken and were in the midst of a major upgrade to their core administrative system involving the software’s vendor and a sizeable in house team.

The bank inherited the $3 million contract with the vendor negotiated by the investment company. The original plan was to have the software upgrades completed and installed by the time the acquisition was finalized. That hadn’t happened. The price was based on specifications provided by the vendor detailing the changes that would be made to the application. Most of the $3 million had been spent at the time of the acquisition. It was estimated by the previous project leader that another $1 million in vendor charges would be needed to complete the upgrade.

As a result of the acquisition, the bank found it had excess management including the former Director of Operations from the investment organization. So, they assigned him to run the software upgrade as the project director and redeployed the previous project manager to another part of the overall acquisition project.

The Goal

With so much change going on as a result of the acquisition, the bank decided to let the software upgrade proceed as planned under the guidance of the new project director. The target budget for vendor expenses was $4.2 million. The project was planned for completion in ten months.

The Project

As the project progressed and the project director started to get acclimatised to his new role, a number of concerns began to surface:

  • Apparently, the software vendor wanted to exit the market for the particular product being used by the investment company. It was doing the project under some duress and with the benefit of a sizable bonus above and beyond the actual project costs.
  • The vendor had pulled key resource off the project in the past and continued to do so. That was a major contributing factor to the cost overruns and extended schedule.
  • The bank’s quality assurance staff found that the specs didn’t provide the necessary insight to support testing to confirm the software addressed the company’s needs.
  • When the director starting chatting with the business executives about their goals for the project and their operational requirements and priorities, he uncovered a quagmire. The executives had different views on why the project was launched, what the benefits were, what organizations were affected and how much.

What seemed like a reasonably safe and routine project was turning out to be anything but. The project director assigned a team of analysts to work with the business units affected to go back to basics, get agreement on the opportunities being targeted, the projects goals, benefits, priorities and flesh out the specifications so the testing could be carried out expeditiously. Now that the business units were being engaged, the business heads started demanding significant changes in the software beyond what had already been delivered.

The project director started negotiations with the vendor to add the additional functionality and ran into road block after road block. Their quotes to include the additional functionality were excessive (an additional $2.5 million), the time frame unacceptable (two additional years). He wanted them to leave current staff on the project and bring back some key resources that had been reassigned. They refused. The vendor made it perfectly clear that they had no interest in expanding the project beyond the original scope.

The Results

Fourteen months after the decision was made to continue the project, and four months after the revised completion date, having paid the vendor $4.6 million plus the bonus, the project director recommended pulling the plug on the project. His exit strategy included:

  • Negotiating the purchase of the source code from the vendor, including the current production version and the development version with all applied changes to date.
  • Completing the project with in house resource only after a rigorous priority setting process to ensure real value from the investment.
  • Development of a phasing and staging strategy to accelerate benefit delivery and reduce risks.

The project director was able to negotiate a non-exclusive purchase of the code and related utilities and documentation for $425,000. He was also able to hire three key staff from the vendor who had years of experience with the system. With the help of senior business managers he was able to prioritize and value the remaining work and package it into three distinct releases. The final release was implemented a year after parting ways with the vendor at an internal cost of $900,000.

How a Great Leader Could Have Changed the Outcome

Isn’t hindsight wonderful! We now know that this project was in trouble when the bank took over the investment company. It was still in trouble when the bank made the decision to let the project run its course. This $3 million project that was to be completed prior to the acquisition actually cost over $6 million and finished over two years late.

The steps the project director eventually took to reign in the runaway project were the right ones. Unfortunately, he waited too long to get up to speed. What could he have done differently?

  • He sought to get the vendor on side and ultimately realized the vendor had other priorities and wasn’t interested in the market, the software or the project. The vendor had been saying all along that it would not continue to support the software. Why then did the investment company decide to proceed? Why did the project director pursue the purchase of the source code as his only option? Both occasions were perfect opportunities to look at other alternatives that would offer long term value including other vendors and other platform offerings.
  • He got the key business decision makers together to make the call on priority, value and packaging. Unfortunately, that should have happened as soon as he took over the project director role. He would have discovered that they had not been actively involved, didn’t have a consensus on what they were trying to achieve, didn’t know how well the revised software would satisfy their needs and hadn’t participated in any implementation planning or priority setting.

There is some key knowledge that is required about every project by all key stakeholders. If it’s not captured up front, invariably it will create difficulties later on. To remedy those problems, the missing knowledge will have to be acquired and revisions will have to be made in light of that knowledge, costing time and money. In this case, that’s exactly what happened. It seems everyone was too preoccupied with the big change, the acquisition, to spend quality time and effort on a smaller but still substantial project.

So, whether you’re starting out on a new project or getting involved at some later point, whether you’re looking after a smaller part of a bigger change, do a checkpoint. Make sure that essential knowledge is available and assimilated by the key decision makers. That includes the following:

Davison Oct29

The framework above includes a portion of the full Project Pre-Check Decision Framework.

So, if you find yourself in a similar situation, don’t hesitate to do a checkpoint. Check that the essential knowledge is available and agreed to by all the key decision-makers. Finally, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on.
Thanks

Don’t forget to leave your comments below.