Category Archives: Management fad

The programme is not the problem

House fire momboleun

Programmes and initiatives are prone to fail. The best way to succeed is through rigorous thinking and relentless attention. This is hard. Getting an organisation do so is the mark of a modern leader.

Management fads. IT systems. Training.

What do these have in common?

Organisations deploy these things when they need to do something better or they need to do something new. Often, these are dressed up as ‘programmes’ or ‘initiatives’.

And they usually fail.

Why?

Two reasons.

First, initiatives lead organisations to stop thinking.

“We don’t have to worry about our problem,” goes the organisational line, “because my new management fad / IT system / training programme is going to fix it for us.”

Wrong. No matter which of these things we do, the problem will still be there.

If we are lucky, our initiative will have given us a tool or an approach or a data set that may make solving the problem easier. that’s all.

Second, they divert attention.

Management fads / IT systems / training programmes tend to be big and visible. Once committed, an organisation’s focus usually shifts from ‘solving the problem’ to ‘delivering the programme’.

This is normal – and almost always a mistake.

The programme is not the problem. These are not the same thing.

When the programme is over, what do you have? Some new management buzzwords or some new IT kit or some nice training materials and a new vocabulary, that’s all. Delivered on time and under budget (if you’re lucky).

The problem? Typically, it’ll still be there.

So what’s the solution?

Only one: an iron will and a relentless focus on solving the problem, not just completing the programme.

THIS IS HARD.

Because it means making our organisations think. Think with rigour. Think deeply. Sometimes for quite a while. This is painful and difficult to do.

And, once we have done this thinking, we need to do the the tough bit. We have to concentrate and pay attention to do the thing we have decided to do. For a long time. Until we solve the problem or we learn that we need to do something else.

This is even harder to do and much more difficult. Hence the need for an ‘iron will’.

Successful, modern leaders are, I believe, those who can get their organisation to do these things relentlessly. They may do other things, sure, but their success stands or falls by their ability to have their organisations think hard and pay attention to the things that matter.

If we don’t think hard, paying attention to a problem is like looking at a house burning down, without working out that the right thing to do is call the fire brigade.

On the other hand, thinking without paying attention to the solution is like knowing we need to call the fire brigade, but allowing ourselves to get distracted before picking up the phone.

Either way, our house burns down.

Yes, of course, we may well need some management tools or some IT or some training.

But let’s not confuse these things with the solution to our problem.

(Image: House Fire in Dillon Beach by Momboleum, https://www.flickr.com/photos/momboleum/3091269507/in/set-72157610892145416, used under creative commons license)

(A version of this article was posted in my LinkedIn feed:  https://www.linkedin.com/pulse/programme-problem-mike-bird?trk=object-title)

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Big Data: the new (snake) oil?

Data DollarIn God we trust.
All others bring data.

J. Edwards Deming

Data, we hear, is “…the new oil“.  It is the next big thing, the new realm of business opportunity, the them thar hills where we can all dig for gold.

Big Data, it is claimed,  shows us flu outbreaks before they happen, tells how the stock market is going to move today and knows if you are pregnant before your father does.

So does this justify the reported $125bn (or $50.1bn) (or $17bn) which is forecast to be spent on Big Data in 2015?  Perhaps, but I doubt it.

I remember another time when data promised us a brave new world. In the olden days of the mid-nineties, the story, cited by sources such as the Financial Times,  was how analysis of shopping baskets for a mid-range US store on Friday nights showed a previously unknown correlation between buying beer and buying diapers.   This story and others like it made the idea of data mining credible as it promised a whole new world of customer insight and understanding.

The beer/diaper story, it turns out, wasn’t true, but it didn’t stop the stampede.

Companies spent fortunes on things called data warehouses, invested in stuff called knowledge management and we were all supposed to make lots of money by having greater insight into customer behaviour.

And did we?

Did we heck.

But who did make money?

Consultants, vendors and the media who were all beating the data mining drum.

The consultants, who told us that this was the next big thing and that we would go out of business without it.

The vendors, who sold us the kit and the software and the maintenance contracts and the patches and who told us that the issue we were complaining about “…was a known bug that would be fixed in the next release…”.

The journalists and the advertisers, who sold ad space and wrote articles about “Making the case for knowledge management” and held conferences with titles like “Data Warehousing: A strategic imperative” or some such.

So we went to the conferences and read the articles and called in the consultants and bought the kit and installed the software and did the management of change and ran the benefits realisation exercises and employed new people with strange job titles and tried, as the dust settled, to see the step change in performance promised to us.

While the drum-majors walked away to do the same thing again with new clients.

Result? Billions of dollars siphoned out from the pockets of companies who were doing real things for customers and into the coffers of these drum-beating companies.

At the time, I recall that the consultants, tech companies and media companies in this space all posting phenomenal revenues.

What I don’t recall is reading so much about the great profits their clients made from all this knowledge management and data mining.

As far as I can tell, the promise of data mining and knowledge management was a promise unkept.

And now we have Big Data.

Perhaps Big Deja Vu might be a better term, because it all sounds very familiar.

Look: I get it. Big Data is a real thing.

The scale, depth, density and timeliness of customer data available to us is magnitudes greater than ever before.   Mobile data, geolocation, behavioural antecedents, digital payments, social media and evolution of the web are streets ahead of the consumer purchasing information upon which the promise of data warehousing used to rely.

I just feel we need to think harder about how we want to take advantage of it.  The same people are beating the drum and more and more companies are falling into step.

But the drum beat isn’t our drum beat. It’s the beat of market hype, of technologists seeking a market, of consultants seeking The Next Big Thing.

It’s not the drum beat of the customer.

What customer insight are we missing? Why does it matter? What could we do better for customers if we had it?

And (this is the kicker) what difference will it make? Really?

If we are to avoid being vendor victims, we should begin – as always – with the customer. And if we can answer these questions properly, then perhaps Big Data may really be of value to customers and to the companies that sell to them – and not just to those who are selling tickets to the Big Data bandwagon.

Is transformation doomed?

Embed from Getty Images

The very nice folk at HP Business Value Exchange asked to me write a piece on transformation.  What emerged wasn’t really what they (or I) expected – but, very sportingly, they posted it anyway.

Transformation – to take advantage of Big Data or introduce cloud-based CRM or adopt Lean thinking or any of the other fashionable buzzword bingo terms –  is big business.  If we embark on a transformation initiative, we should be clear about whose agenda we are following if we are not to enter a world of pain.

Read more here. I’d really like to know your thoughts, so please add your comments there when you read it.

There’s an elephant in the meeting room, and it has many names.

Elephant in the Room - BanksyFor every complex problem, there is a simple solution –

– and it’s wrong.

(H.L. Mencken)

 

Elephants with many names

Let’s stipulate that most businesses aren’t charities.  They exist to make money.

With that in mind, what do the following have in common?

Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Balanced Scorecard, Management by Objectives (MBO), Lean, Cloud Computing, Total Quality Management (TQM), Human Capital Management (HCM), One-Minute Management, Bring Your Own Device (BYOD), Management By Walking About (MBWA), Matrix Management, Activity-Based Costing (ABC), Core Competencies, The Learning Organisation (TLO), Competitive Advantage, Benchmarking, Social Media, Organisation Development (OD), Net Promoter Score (NPS), Scenario Planning, Corporate Social Responsibility (CSR), Web 2.0, Business Process Re-engineering (BPR), Situational Leadership, Management of Change (MoC), Theory of Constraints (ToC), Just-in-Time (JIT), Single Minute Exchange of Dies (SMED), Statistical Process Control (SPC),  Data Warehousing, Projects in Controlled Environments (PRINCE), Big Data, Six Sigma, IT Infrastructure Library (ITIL), Myers-Briggs, Total Productive Maintenance (TPM) and – even – Customer Experience?

That’s right.

They are all management fads: labels for bundles of fashionable ideas, or processes, or technologies all sold on the promise that they will improve the business.

Most are based on some nuggets of common sense.  Some can point to businesses that will testify that they adopted the idea / technology / process / philosophy and things got better.

And yet, and yet…

The money problem

If you remember, we stipulated that businesses exist to make money.  If so, then the rationale for these silver bullets has to be that, in the end, the businesses which adopt them make more money.

In my experience, for most companies, these fads almost always end up being things which businesses do instead of making money.

If you add up the cost of the investment in technology, consultancy fees, corporate effort, time and disruption of attention associated with each fad listed above, across all the companies which have tried them, then I wouldn’t be surprised if the total spend per fad was some way north of billion dollars.

Each.

In some cases, much more.

I would be also be very surprised if the return per fad was anything like as big, even if we only look at those which have succeeded.

And this is before we take into account that most such management initiatives fail.

We need to do something different, to make things better. We adopt one of these labels, dress it up as an initiative and believe that it will give us a solid business return – but most of the time, it won’t.

This is the elephant in the meeting room. We think that doing these things will make our business better.  It’s the other way round: if we need to make our business better we should do whatever helps us get there best, and not just assume that management fashion will be the simple silver bullet we need.

I’m not saying that any of these initiatives are bad things. They almost always are are based on some nuggets of common sense or insight and a few can point to some companies that will testify to the results they achieved.

A hidden law of business

So what is wrong?  I think that what these good ideas into money pits, that they fall foul of one of the hidden laws of business.   Managing a business of any size is so complex, demanding and fluid that  success requires significant intellectual effort.  But this is where the law comes in:

Most people will do anything – including sustained hard work – rather than think.

Thinking about something – trying to work out the right thing to do, or solving a persistent problem, or trying to determine the best way to proceed, or working out what needs to be done if we are to succeed – all of these are very difficult.

This thinking is just hard.  So hard that most companies and most people find it easier to lose sight of the bottom-line returns they are seeking, and focus instead on successfully completing the big tangible milestones which each fad entails.

  • CRM system installed? Check.
    More sales as a result?  …err…
  • BYOD policy in place?  Check.
    Staff working more productively as a result?  Whoops.
  • Net promoter score programme installed?  Check.
    Customers staying with us longer and spending more as a result? Who knows?

It is just so much easier to focus on the deliverable, rather than the outcome.

Outcome-based thinking

How can we beat this problem?

Begin with the outcomes.  Before committing to any of these things – or any other change, we need to list the three to ten things which fit under this heading:

By the end of this activity / initiative / project, we will have..

For example:

  • By the end of this CRM implementation, we will be using it to increase sales revenues by 15%.
  • By the end of this Lean project, we will have applied it to reduce unit costs by 20% .
  • By the end of this customer experience programme, we will have increased customer lifetime revenue by 50%.

Not systems installed but systems used.

Not stakeholders trained, but stakeholders doing.

Not stuff delivered but value achieved.

Once our outcomes are clear, then we can by all means adopt the initiative we like; we just have to make sure that the focus is on the outcome, not the groovy new jargon / framework / system that the consultants are proposing or the technologists are selling.  And if our focus is on the outcome,  we can pay attention to other work we have to do if our project is give us the value we want.

Of course, I may barking up the wrong tree.   So please:  prove me wrong.  Are you implementing one of these fads (or some other)?  Do you recognise this problem?  If so, how have you overcome it? If not, what are you doing to ensure that real value is delivered?

Please do let me know – and good luck.

(Image credit: Elephant in the Room by Banksy, taken by Jdcollins13 and licensed under Creative Commons Attribution 2.0 Generic license)