Business Model :Key to deciding what to change

As a response to my earlier post of how does one decide what to change in an organization, a colleague referred me to the book 'Confronting Reality'.

My colleague was  pointed out that a review of the 'business model' will enable one to identify what needs to be changed.

The authors ( Larry Bossidy and Ram Charan, 'Confronting Reality" 2005) define a business model as a statement of an organization's current reality and its likely-as opposed to hoped-for- future direction.
The business model ( see figure) has three essential components

• the environment in which the business operates
• the organization's financial targets
• Activities of the business:strategy formulation,operating activities,selection deployment,development of people, and organizational processes and structures

The authors believe the business model provides a blue print of taking action.Repeated review of the components of the business model till a harmonization can be achieved will throw up the factors that need to change..

Any thoughts?

The How Vs What of improvement

Most of my posts have been around how to enable change or improvement. Have a sponsor,engage him,create a burning platform,have a good project team etc etc. This approach,sort of,assumes that you know what to change or improve.

I guess this is far from true.

My gut feel is that most organizations and leaders (and managers) are faced with bewildering choices when it comes to deciding areas to focus for improvement.

There is a school of thought which attributes decisions on what to improve etc to leadership. The leader,(in many cases para dropped into a new situation) uses his intuition,previous experience,his reading of the context etc to make decisions on what to improve.Many of them go on safaris; meeting clients, analysts, employees etc, gather opinions and reach conclusions. And then rolls the improvement or 'transformation' journey.The levers available to him or her are many; people,organization structure,processes,product or services mix,support technology etc etc.

Is there an objective way to decide what to change? What sort of systematic analysis can identify the exact components that needs to change. Are techniques like benchmarking adequate to identify performance improvement opportunities. How does one identify opportunities to make quantum improvements that can help one leap frog over competition?

Any thoughts?

Quantifying benefits and the benefits dependency network

In an earlier note I asked about the importance of benefits calculation and demonstration for the success of an improvement initiative.One of our constant struggles have been to quantify benefits.

A benefits dependency network is a recommended tool to enable the investment objectives and their resulting benefits to be linked in a structured way to the business,organizational and IS/IT changes required to realize those benefits.John Ward and Elizabeth Daniel "Benefits Management" provides detailed instructions and examples for developing a benefit dependency model

The recommended steps to draw a benefit dependency model are the following

• Understand the drivers acting on the organization and identify the investment objectives for the particular project or initiative
• Identify the business benefits that will result if the investment objectives are achieved
• Identify the changes to the ways individuals and groups work that are a necessary part of realizing the potential benefits identified
• Business changes are those new ways of working that will be required permanently in the future if the benefit is to be achieved and sustained
• Enabling changes are one off changes necessary to allow enduring business changes to be brought about
• Identify IS/IT enablers that will support the enabling changes

How relevant is this model in a generic improvement initiative. Can this be used to develop a business case? Are there examples available to take the discussion forward?

Is there a connection ?

Between execution discipline and organizational change management?

Here is an interesting paragraph from an old book ,Execution ;The Discipline of Getting Things Done ( Larry Bossidy & Ram Charan 2002 Random House)

"Every body is talking about change.In recent years,a small industry of change meisters have preached revolution,reinvention,quantum change,break through thinking,audacious goals,learnings organizations and the like.....But,unless you translate big thoughts into concrete steps for action,they are pointless"

So..
Does the discipline of Organizational Change Management help execute better?

Is quantifying the benefits of improvement important?

I have been involved in what is be called 'model based' process improvement for a very long time.ISO 9000,14000,CMM,eSCM,ITIL...I keep getting asked about the benefits obtain-able from implementing these standards.Is knowing the benefits from implementation important? If some one else got a certain set of benefits does that mean that every one else will?

I have noticed that when it comes to implementation,organizations ( and teams and management responsible for implementation) fall in 2 categories

• Those who believe with conviction that implementation of these frameworks have benefits ( Who asks for return of investment on belief in God ?)
• and those who keep asking on what benefits ,how,when etc?

Though I am still struggle to provide a clear answer to the question 'what benefits? ( it depends/you get what you want..) I am increasingly convinced that, for the change initiative to be succesful, the improvements need to be driven with clear,tangible benefits in mind .

It probably has to do with the burning platform theory that John Kotter has, but establishing upfront goals for any improvement journey is critical for success. These goals cannot be related to process maturity (improve process maturity from 3 to 3.5 or related to certifications),but have to be related to tangible benefits that an organization needs to achieve ( reduced costs,improved speed,improved quality etc)

At a later point we will discuss what are issues in attempting to establish these goals

My personal change management check list

Here is my check list of issues I think lead to failure of many an improvement initiative

• Have you defined the change in terms of improvements and outcomes that the organization can understand?
• Have you identified a named “sponsor” for the project ?
• How are you going to keep the sponsor engaged for the project?
• Have you selected the right project team?
• How do you keep the project team engaged and motivated to undertake the project?
• Have you decided the right project implementation approach?
• What channels have you provided to surface and then manage resistance?
• What mechanisms have you established to reinforce change?

Improving a consulting organization

As you can see from the mandate I set for myself with the blog, the third area of focus of this blog is on improving my own organization. As some of you know, I anchor a small consulting team .Many of the conventional,transactional process improvement approaches,some how,just don't seem able to work with my team.

Thomas H. Davenport in his book "Thinking for a Living' provides some interesting insights on what works and what does not in improving knowledge work

What does not work

• Top down reengineering
• Scripting : (An expert lay out a script for others to use)
• Computer mediated processes for everyone
• Treating all knowledge workers in the same way

Distributed in the book are some directions on what works ( and I agree :-))

• Use of powerpacks ( a compilation of outstanding proposals, presentations, compettitive information, models,specialised tools and a variety of other relevant business resources)
• Adoption of agile methods :Replace detailed process flows with examples,ready to use tools,templates (e.g a checklist to gather role specific information in an interview),promote a highly iterative work flow,build straw-man's early,develop a culture of urgency etc
• Understand that certain parts of knowledge work can be process-ified and that enables knowledge workers to focus creativity on the difficult parts
• An appropriate technology support tuned to the level of 'rule based' decision making,which probably means google's desktop search running on a dump of information is probably what a consultant wants !

More to follow..

Review of Kotter's 'a sense of urgency'

Taking a diversion from the focus on self improvement, here is a note on another related area;enabling changes in organizations. An important recent addition around literature on Change Management has been 'a sense of urgency' by John P.Kotter.(2008, HBR Business Press). Kotter is known for eight steps for succesful large scale change ;

1. Increase urgency
2. Build the guiding team
3. Get the vision right
4. Communicate for buy-in
5. Empower action
6. Create short term wins
7. Don't let up
8. Make change stick

Kotter builds on the first step 'Increase Urgency' to write a practical book .Kotter first talks about complacency ( as a product of perceived success) and also about a false sense of urgency(activity vs productivity).He then goes on to describe one strategy and four tactics to increase true urgency

• aim for the heart ( and not just the mind)

and 4 tactics

• Bring the outside in (reconnect the outside and the inside)
• Behave with urgency every day(demonstrate your sense of urgency)
• Find opportunity in crises(crisis as friends)
• Deal with the NoNos (remove and neutralise all urgency killers)

The book goes on to provide practical 'to do' approaches and illustrative cases for all of the above. The stories around behaving with urgency every day are in some ways an eye opener.We will talk about some of the tactics in subsequent notes

A must read for any one involved in enabling organizational change in some manner