If you want to deliver a change successfully, start your project with PACE.
When we have a new idea about a product or service or a solution to an existing problem, the natural tendency is to want to get it done as soon as possible. We tend to think about the desired change as a straight line, from problem or opportunity to remedy. And that’s usually where we get ourselves into trouble. Instead of casting a wide view up front to ascertain and understand the implications, we charge ahead with oblivious tunnel vision. Or, at least that’s what the projects that fail tend to do.
In this story, we’ll look at a cable company’s attempts to deliver an Internet Protocol Television (IPTV) service to respond to their competitors’ offerings, the choices it made and the unfortunate and costly end that resulted. We’ll also look at what it could have done differently to realize a more acceptable result.
Thanks to R.H. for the details on this story.
In the early twenty-first century, traditional phone companies ventured into the cable companies’ territory by launching IPTV services. This allowed them to deliver television services to multiple screens – smart phones, tablets, desktop and laptop computers and smart televisions - over their internet networks. That left the cable companies at a competitive disadvantage.
The company in question decided to develop their own IPTV solution rather than acquiring an off the shelf offering. They believed a custom platform would provide a better long term service for their customers, offer the flexibility and agility to keep pace with changing technologies and better serve the appetites of television consumers.
Develop and deliver an open-ended, flexible and adaptable custom built IPTV solution by 2015.
The company launched the IPTV project to great expectations in 2011. They built up their in-house house team and started contracting with vendors to provide the numerous technology elements required for a robust, high performance, competitive solution.
However, the development effort struggled and missed numerous deadlines. The company's engineering team had to coordinate with over 70 external vendors for a wide array of software, network and hardware components. Over 1,000 people worked on the project, although less than 200 of those were company employees.
Interestingly, in spite of the missed deadlines, progress reports from the numerous teams continued to report green status. Leaders who reported issues were replaced to remedy the problems. The culture became more and more dictatorial, less and less collaborative. And still, deadlines were missed.
As the final deadline approached with an expected launch in the near future, extensive training sessions were offered to those affected within the organization. This exposed the fact that many of the affected departments were not ready. The growing number of defects identified through testing was not being addressed in a timely manner. That meant that the final product could not be shown or used in training sessions. As well, because of the number of vendors involved and their web of relationships, the contract landscape to support such a complex solution was extremely difficult to manage. The Operations teams targeted to support the product did not have adequate time to understand the solution or determine which support contracts to trigger.
And then the plug was pulled!
Over a year after the IPTV solution was to have been delivered, as they were closing in on the finish line, senior management realized that the solution they had built would not meet the initial business objectives - to be more flexible and agile, to keep pace with changing technologies and the appetites of television consumers.
The solution was so complex that it would be very difficult to support and very laborious and expensive to continue to enhance. They realized after looking at what they had built that partnering with a bigger, more established partner in the space would deliver a higher quality solution with much less overhead.
The company’s board sacked the CEO and cancelled the in-house development effort after five years of work, taking a write down of hundreds of millions of dollars. The company then partnered with an IPTV vendor to deliver a solution by early 2018.
How a Great Leader Could Have Succeeded
Any time we see a sizeable project failure like this, we can be pretty sure that the causes for the costly catastrophe were in place at the very beginning. How does your project avoid that fate? Start your project with a framework like PACE, an acronym for the Project, Assets, Change and Environment domains in the Project Pre-Check Decision Framework. It is powerful, proven and wonderfully productive.
PACE is a checklist with related practices. It presents vital questions for stakeholders to consider, to shape and guide their desired change. If you’re not familiar with the amazing value a well-designed checklist can deliver, check out an earlier post, The Checklist Champion.
What does a checklist do? It asks questions! Matthew E. May, in his article The Power of Asking the Right Questions on americanexpress.com, reviews Warren Berger’s book, A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas. “Berger takes us inside such red-hot businesses as Google, Netflix, IDEO and Airbnb to show how questioning is baked into these companies' organizational DNA. He also shares dozens of inspiring stories of artists, teachers, entrepreneurs, basement tinkerers and social activists who changed their lives and the world around them by starting with a beautiful question.”
Berger defines a beautiful question as a question that challenges assumptions, that shifts the way we think about something and often sets in motion a process than can result in change. The intent of PACE and similar frameworks is to pose those “beautiful questions”, to ensure, in response to a desired change:
- All key stakeholders are identified and engaged
- All the relevant decisions are identified and addressed
- All key stakeholders agree with the relevant decisions, throughout the project.
Let’s take a look at the four domains – Project, Assets, Change and Environment – and some of the factors that would have been addressed on this project if the project’s stakeholders had used a framework like PACE. Also consider how their inclusion early on could have changed the outcome for the better.
- The Project Domain covers the project management parameters to enable effective decisions on time, cost and function delivery. It includes twenty-two Decision Areas within the Planning, Organization, Control and Communication factors. While all of the Decision Areas appear relevant to this project, four in particular are noteworthy: business and technology alternatives, release plan and risk plan.
- The Assets Doman includes the people, processes, products and tools that can be leveraged to support a planned project or may require changes for the project to succeed. In essence, the Assets Domain is the supply cabinet to the project world. It includes forty-six Decision Areas within the Resources, Delivery, Project Management, Business Operations, Security Administration, Technology Operations and Infrastructure factors. Again, most of the Decision Areas look to be relevant. Some that would have sparked healthy discussion and debate early on include resource procurement, contract management, management of change, software delivery and technology change. In all cases, the question would be what do we do presently and what do we need to do in the future to manage the upcoming change effectively. Beautiful questions!
- The Change Domain encompasses the factors that enable the stakeholders to shape the planned change to deliver a responsive, cost-effective, quality solution that maximizes value. Its focus is to ensure change parameters are fully defined, assessed and controlled in the context of sponsor, change agent and target expectations and capabilities. It includes forty Decision Areas within the Dimensions, Stakeholders, Investment Evaluation and Quality factors. While most of the Decision Areas in this domain are probably relevant to the IPTV project, the key ones include worth (how much the company can afford to spend), phasing and staging, stakeholder roles and responsibilities, the questions around sponsor, change agent and target commitment and capability and competitive advantage and risk.
- Finally, the Environment Domain addresses key dimensions of the current state enterprise, the future state target and the business plan that will move the enterprise from the current state to the desired future state. It covers seventeen Decision Areas in the Current state, Future state and Business Plan factors. I expect, if the company had an opportunity to go back and consider this venture all over again, they’d want to address each and every one of those seventeen questions.
The whole point of a framework like PACE is for it to be ever present - to ask these questions at the start to launch the project effectively and to review each decision as the project progresses, as components are delivered and experience gained and as changes (external as well as internal) are assessed and introduced. That discipline ensures decisions are still relevant and appropriate to the current circumstances.
Stop Doubling Down on Your Failing Strategy, an article by Freek Vermeulen and Niro Sivanathan in the November-December 2017 issue of Harvard Business Review offers some interesting reinforcement to the potential power of PACE.
In the article, the authors described why people commit to a strategy, even when it appears flawed. “Escalation of commitment is deeply rooted in the human brain. In a classic experiment, two groups of participants were asked whether they would be willing to invest $1 million to develop a stealth bomber. The first group was asked to assume that the project had not yet been launched and that a rival company had already developed a successful (and superior) product. Unsurprisingly, only 16.7% of those participants opted to commit to the funding.
“The second group was asked to assume that the project was already 90% complete. Its members, too, were told that a competitor had developed a superior product. This time 85% opted to commit the resources to complete the project.
These results underscore the fact that people tend to stick to an existing course of action, no matter how irrational.”
In this story, even though some competitors had implemented IPTV solutions and others were well advanced, the company chose to build their own solution. It took five years and hundreds of millions of dollars before it decided to change that direction and buy a solution instead.
Vermeulen and Sivanathan identify six biases that contribute to these kinds of outcomes; the sunk cost fallacy, loss aversion, the illusion of control, preference for completion, pluralistic ignorance and personal identification. The descriptions are mostly self-explanatory. The biases were alive and well on this project.
The authors present six rules for overcoming these biases:
- Set Decision Rules
- Pay Attention to Voting Rules
- Protect Dissenters
- Expressly Consider Alternatives
- Separate Advocacy and Decision Making
- Reinforce the Anticipation of Regret
Again, the rules are mostly self-explanatory. What’s important to remember is these rules for overcoming decision-making biases are thoroughly enabled by frameworks like PACE. As the authors state, “overcommitted executives are prone to ignore signs of their company’s imminent collapse. That is precisely why companies need to establish organizational processes and practices of the kind we’ve laid out—to encourage managers at all levels to make decisions more objectively and explicitly consider alternative strategies and perspectives.”
While these rules and practices help immeasurably, the most significant condition for a successful project is still the commitment of key decision-makers to deliver on a common vision. Nobody articulates this need better than John Kotter, the renowned Harvard professor, consultant, author and thought leader. His 8 Step Change Model has been used widely and successfully across a range of industries and situations.
If we look at his model (at left), there are three steps that are most applicable to the IPTV case. Step 1 – Create a sense of urgency is tellingly absent from the evidence we have available. Five years to cancellation without any major implementations is not a sense of urgency. Step 2 – Build a guiding coalition across the affected organizations appears to be another significant gap. That helps explain why key segments of the business claimed lack of readiness to implement late in the game. Lastly, Step 6 – Short term wins is all about incrementally building the change. That didn’t happen here.
There is no question that building and delivering an IPTV system for millions of clients is a huge undertaking. By that very fact, it also needed massive due diligence right up front. Fortunately, there are innumerable best practice sources to help lighten the load and ease the journey to successful delivery.
So, be a Great Leader. Use PACE and those “beautiful questions” to start and guide all your projects. Put the energy up-front into laying out a route that everyone commits to follow. Keep asking those “beautiful questions” and checking your answers throughout the project. And, put these points on your checklist of things to consider so you too can deliver a successful change.
Remember, use Project Pre-Check’s three building blocks covering the key stakeholder group (including the key stakeholder roles), the decision management process and Decision Framework (PACE) best practices right up front so you don’t overlook these key success factors. Or those beautiful questions.
Finally, thanks to everyone who has willingly shared their experiences for presentation in this blog. Everyone benefits. First time contributors get a copy of one of my books. Readers get insights they can apply to their own unique circumstances. So, if you have a project experience, good, bad and everything in between, 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