In the first webinar we set out the importance of having a good operations strategy, and gave detailed guidance on the level of resources to be devoted to developing and updating a strategy. The second webinar looked at the important topic of managing the outsource suppliers that are an increasingly large part of most asset management operations.
In our third webinar we looked at Managing Major Change. Change in asset management is constant and pervasive; new products must be launched to respond to changes in customer preference, service features must be added in line with demand for more tailored service and service levels need to be continually upgraded to keep pace with customer expectations, at ever lower costs.
However the change process can fail if some basic tenants are not followed; requirements must be properly understood, scope must be fully defined and accurate estimates of the resources required must be produced. Moreover stakeholders must be fully engaged and the acceptance criteria defined.
So what do we mean by major change and why is it different to the change we see every day?
Major change takes an extended period of time to implement or requires a reallocation of tasks between teams or organisations and many projects combine both these elements.
With these elements bring a unique set of problems which needs to be analysed in isolation in order to present a solution frameworks and present solution frameworks.
The first of these two challenges is managing change that is delivered over an extended timeframe. The problem that many encounter is that although activities need to take place, the benefits can seem distant and remote. Particularly at the front end of a project, the impact of any delay or lack of clarity can be difficult to ascertain.
To provide some focus there is a need to present a timeline, so that the impact of any delay is visible which allows the necessary analysis to be performed. There is also pressure to create a detailed plan and project reporting structure. One should also bear in mind this may create a large spend ‘burn rate’ that achieves little whilst decisions are made, and multiple stakeholders are mobilised.
There are project methodologies, for example, that seek to insulate the project from
uncertainty. A complete plan is produced at the start, and each project stage is strictly gated. This approach is needed for large monolithic projects that could be likened to building a tower block. Each stage clearly supports the next, and the building of the top story must be planned in full detail before breaking ground.
However, many major change projects resemble the building of a town, rather than a tower block. It is important that an overall framework exists, but there is no need to plan the design of every building before constructing the first road. What companies need to be wary of is business change projects can often start to seem like public planning processes, taking years to be decided before being cancelled due to lack of funds.
What is needed is an approach that delivers the required flexibility, whilst preserving rigour and urgency. It is also important that there is an understandable language to ensure the right tools are used in the right circumstances.
To solve this apparent paradox, here at FusionExperience we use two complementary tools, the Roadmap and Sprint.
At the beginning of a programme of work it is not possible to write a plan. It is often not even possible to write a plan for a plan. However, work does need to be coordinated. A roadmap does not aim to set out the sequence of projects, neither does it aim to set out the duration of projects. What it does is set out things that need to be achieved and enable tactical projects to understand how they relate to each other.
A clearly articulated Roadmap that is kept up to date and communicated to all stakeholders is a powerful tool for ensuring that the strategic direction is maintained, whilst accepting that progress will always be driven tactically.
To inject urgency into processes we organise work into a series of ‘sprints’. A sprint has three components, a start line, a finish line and a duration that is as short as possible. Each of these three aspects is vital and needs to be properly structured. At the beginning we have a set of criteria that must be fulfilled before the sprint can start. Ensuring all entry criteria are met before starting a sprint ensures that resources will be best used, and project execution time will be predictable. Here at FusionExperience we have a comprehensive checklist to ensure we are ready to start a Sprint, but all organisations will develop their own approach.
A Sprint has a clear finishing line. There will be an unambiguous definition of success, endorsed by all stakeholders. Once a Sprint has started, the project team has only one goal. To get to the finishing line as fast as possible. The project team must be empowered to use whatever tools they think fit to achieve the defined objectives. Sprints can be used at any point in a project, but are of most use at the front end, when the environment is far from controlled and a schedule of activities difficult to derive. Examples include: Developing a business case for one element of the roadmap or achieving contract signature
The second feature that sets major change apart is that is reallocates tasks between teams.
Organisations grow organically and by acquisition. Scale benefits can only be realised by implementing best practice across the organisation. Further to this, processes can be rationalised into centre of excellence. However, these benefits can be difficult to achieve, difficult to implement quickly, and difficult to sustain. Again standard project methodologies help us with monitoring a schedule of activities to produce defined deliverables, but give little guidance in transforming organisations.
For this kind of project we advocate process driven transformation. In to many cases a firm attempts major organisational change by documenting the current state, mapping this to a future state, closing gaps, and then deriving a migration plan. In some cases however, the project is executed – maybe even to time and budget – but the expected benefits are not achieved. In this case companies need to ask themselves why.
If a firm tries to implement major process change without thinking about how it manages its processes, it is unsurprising that the change does not pan out as expected. It is therefore central when embarking on major process change, for a firm should consider how well it manages its processes
A firm’s ability to manage its process can be described in capability maturity levels:
Level 1 - processes are ad-hoc.
Level 2 - processes are well understood and managed.
Level 3 - processes are established and improved.
Level 4 - processes are quantitatively measured against customer relevant metrics
Level 5 - continual improvement is part of the DNA of the organisation.
What are the implications of this for major process change? If an organisation is not at least level 2 then the project will be required to invest a lot of resource in determining what the current state actually is. Furthermore, the investment in defining the target state will be quickly lost as ad-hoc process change renders this static document obsolete. So the project is simultaneously made harder, and delivers less value. An approach which has a much more certain outcome is, to develop the organisation to capability maturity level 2. Process change can then be implemented quickly, and above all confidently, with accurate prediction of the benefits to be achieved.
Managing major change requires an open minded approach. There must be an honest assessment of not just the ‘current state’, but the current capability of the organisation. No methodology is effective in all situations. Successfully managing major change requires the use of the most appropriate approach at each stage of the process.
Gordon Easden, practice head, FusionExperience