Getting The Biggest Bang For The Buck

So I had the opportunity to sit in on a colleague teaching a class in Performance Improvement. 


One tool that I really liked from the class was the Impact-Effort Matrix. 


To determine project worth doing, the matrix has the:


Impacts (Vertical) – Improved customer satisfaction, quality, delivery time, etc.


Effort (Horizontal) – Money, Time, etc. 


The best bang for the buck are the projects in upper left (“Quick Wins”) that have a high impact or return for not a lot of effort. 


In contract, the projects that are the least desirable are in the lower right (“Thankless Tasks”) that have a low impact or return but come at a high cost or lot of effort. 


This is simple to do and understand and yet really helps to prioritize projects and find the best choices among them. 😉


(Source Graphic: Andy Blumenthal)

What Are The Chances for IT Project Success?

So I was teaching a class in Enterprise Architecture and IT Governance this week. 


In one of the class exercises, one of the students presented something like this bell-shaped distribution curve in explaining a business case for an IT Project. 


The student took a nice business approach and utilized a bell-shaped curve distribution to explain to his executives the pros and cons of a project. 


Basically, depending on the projects success, the middle (1-2 standard deviations, between 68-95% chance), the project will yield a moderate level of efficiencies and cost-savings or not. 


Beyond that:


– To the left are the downside risks for significant losses–project failure, creating dysfunction, increased costs, and operational risks to the mission/business. 


– To the right is the upside potential for big gains–innovations, major process reengineering, automation gains, and competitive advantages. 


This curve is probably a fairly accurate representation based on the high IT project failure rate in most organizations (whether they want to admit it or not). 


I believe that with:

– More user-centric enterprise architecture planning on the front-end

– Better IT governance throughout

– Agile development and scrum management in execution 

that we can achieve ever higher project success rates along the big upside potential that comes with it!  


We still have a way to go to improve, but the bell-curve helps explains what organizations are most of the time getting from their investments. 😉


(Source Graphic: Adapted by Andy Blumenthal from here)

Beautiful Rise and Fall

fall-jpeg

Just wanted to share this beautiful Fall scene in Maryland.


While we are about to embark on a major infrastructure spending spree to make this country great again–and we need it to fix all the rot in our roads, bridges, trains, airports, marine ports, schools, utilities, and more–at the same time, we need to keep in mind the safeguarding of the beauty of our natural outdoor spaces and resources.


I heard President-elect Trump on 60 Minutes last night speak about the $6 trillion that we have spent in the Middle East fighting terrorism since 9/11, and that with that money, we could’ve rebuilt our infrastructure twice over.


While the amount is seen on the high end, the point is that while other nations are investing in their infrastructure, people, and future, we are wasting large sums of blood and treasure in a fight that in over 15 years, we haven’t won, and many question whether we are significantly even any safer.


We need to fight smarter, spend more strategically, and take care of America first.


BTW, what did we get from the prior investment from the American Recovery and Reinvestment Act stimulus spending of $831 billion in 2009…where did all that money go (uh, down the special interest drain)?


While the beautiful outdoors needs to stay pristine, our country needs to seriously rebuild with clear project expectations and results and at the same time wipe out the terror threats against us–no more dabbling, PC, Mr. Nice Guy (of course, we need to be nice to those that are nice to us, but also we need to fight for this country like we mean it)!


That’s a big agenda, but for under $6 trillion, we ought to be able to get some decent return on our investment please, 😉


(Source Photo: Andy Blumenthal)

Seesaw, Yeah It’s For Kids

There is an interesting new crowdsourcing application called Seesaw.

And like a seesaw goes up and down, you can take a picture and crowdsource decisions–thumbs up or down for what you should do.

Food, clothes, movies, more–I could imagine people even going so far as to use this for dating–Go out with them or not? Keep ’em or dump ’em?

While the possibility of having others chime in on your everyday life decisions is somewhat intriguing, social and fun…it also seems a little shallow and superficial.

Do you really need to ask your friends about everything you do or can you make simple day-to-day decisions yourself?

And when it comes to big decisions, perhaps you need more than a picture with a thumbs up or down to give the decision context, evaluate pros and cons, think through complex issues, and make a truly thoughtful decision–perhaps some genuine dialogue would be helpful here?

Finally, many decisions in life come at the spur of a moment–should I or shouldn’t I–and you don’t have the benefit of saying hold on “let me take a picture and get some of my friends opinions on this”–life waits for no one and timing is often everything!

It is good to get other people’s opinions (i.e. the proverbial “second opinion”) as well as to do what my father used to tell me which is to “sleep on it,” because things look different over night and in the morning.

But while you should consider what others think–in a meaningful way–in the end, you need to trust your inner self and take responsibility for your own decisions. 😉

Apples or Oranges

Apples-and-oranges

There are lots of biases that can get in the way of sound decision-making.

An very good article in Harvard Business Review (June 2011) called “Before You Make That Big Decision” identifies a dozen of these biases that can throw leaders off course.  

What I liked about this article is how it organized the subject into a schema for interrogating an issue to get to better decision-making.

Here are some of the major biases that leaders need to be aware of and inquire about when they are presented with an investment proposal:

1) Motivation Errors–do the people presenting a proposal have a self-interest in the outcome?

2) Groupthink–are dissenting opinions being actively solicited and fairly evaluated?

3) Salient Analogies–are analogies and examples being used really comparable?

4) Confirmation Bias–has other viable alternatives been duly considered?

5) Availability Bias–has all relevant information been considered?

6) Anchoring Bias–can the numbers be substantiated (i.e. where did they come from)?

7) Halo Effect–is success from one area automatically being translated to another?

8) Planning Fallacy–is the business case overly optimistic?

9) Disaster Neglect–is the worst-case scenario imagined really the worst?

10) Loss Aversion–is the team being overly cautious, conservative, and unimaginative?

11) Affect Heuristic–are we exaggerating or emphasizing the benefits and minimizing the risks?

12) Sunk-Cost Fallacy–are we basing future decision-making on past costs that have already been incurred and cannot be recovered?

To counter these biases, here are my top 10 questions for getting past the b.s.
(applying enterprise architecture and governance):

1) What is the business requirement–justification–and use cases for the proposal being presented?

2) How does the proposal align to the strategic plan and enterprise architecture?

3) What is return on investment and what is the basis for the projections?

4) What alternatives were considered and what are the pros and cons of each?

5) What are the best practices and fundamental research in this area?

6) What are the critical success factors?

7) What are the primary risks and planned mitigations for each?

8) What assumptions have been made?

9) What dissenting opinions were there?

10) Who else has been successful implementing this type of investment and what were the lessons learned?

While no one can remove every personal or organizational bias
that exists from the decision-making equation, it is critical for leaders to do get beyond the superficial to the “meat and potatoes” of the issues.

This can be accomplished by leaders interrogating the issues themselves and as well as by establishing appropriate functional governance boards
with diverse personnel to fully vet the issues, solve problems, and move the organizations toward a decision and execution.

Whether the decision is apples or oranges, the wise leader gets beyond the peel.

>Personal Technology Trumps Work IT

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The pendulum has definitely swung—our personal and home technology is now often better than what we are using in the office.

It wasn’t always that way. Early on, technology was mysterious to those not professionally engaged as system engineers or IT professionals. Technology was expensive and made sense for business purposes, but not for home use. IT was a professional enabler to get the job done, but consumer applications were scarce and not intuitive for anything but the office.

The world has turned upside down. Now as consumers, we are using the latest and greatest computers, smart phones, gaming devices, and software applications, including everything social media and e-Commerce, while in the office, we are running old operating systems, have nerdy phones, locked down computers, applications that aren’t web-enabled, and social media that is often blocked.

The Wall Street Journal (16 November 2009) summed up the situation this way:

“At the office, you’ve got a sluggish computer running aging software, and the email system routinely badgers you to delete message after you blow through the storage limits set by your IT department. Searching your company’s internal website feels like being transported back to the pre-Google era of irrelevant results…This is the double life many people lead: yesterday’s technology for work, today’s technology for everything else…The past decade has brought awesome innovations to the marketplace–Internet search, the iPhone, Twitter, and so on, but consumers, not companies, embrace them first and with the most gusto.”

What gives and why are we somehow loosing our technical edge in the workplace?

Rapid Pace of Change—We have been on technological tear for the last 20 years now; virtually nothing is the same—from the Internet to cloud computing, from cell phones and pagers to smart phones and iPhones, from email to social media, and so much more. From a consumer perspective, we are enamored with the latest gadgets and capabilities to make our life easier and more enjoyable though technology. But at work, executives are tiring from the pace of technological change and the large IT budgets that are needed to keep up with the Jones. This is especially the case, as financial markets have seized in the last few years, credit has tightened, revenue and profitability has been under extreme pressure, and many companies have laid off employees and others have even gone kaput.

Magnificent Technology Failures—Along with the rapid pace of change, has come huge IT project failure rates. The Standish group reported this year that 82% of IT projects are failing or seriously challenged. Why in the world would corporate executives want to invest more money, when their past and present IT investments have been flushed down the toilet? Executives have lost faith in IT’s ability to upgrade their legacy systems and fulfill the promises behind the slew of IT investments already made. Related to this is the question of true cost-benefit and total cost of ownership of all the new technologies and their associated investments—if we haven’t been able to achieve or show the return on investment on all the prior investments, why should we continue investing and investing? Is the payoff really there? Perhaps, we are better off putting the dollars into meeting core mission requirements and not overhead, like IT?

Security Risks Abound—With all the technology has come a whole new organizational risk set in terms of IT security. Organizations are hostage to cyber criminals, terrorists, and hostile nation states who can with a few keyboard strokes or mouse clicks disable the company transaction capability, wipe out its memory, steal its information, or otherwise neutralize it from functioning. And the more technology we add, the more the risk level seems to increase. For example, the thinking goes that we were safer when we ran everything in a locked down, tightly controlled, mainframe environment. The more we push the envelope on this and have moved to client server, the web, and now to even more transparency, information sharing, and collaboration—through social media, cloud computing, and World 2.0—the thinking is that we are potentially more open to local and global threats than ever before. Further, with the nation under virtually constant cyberattack and our capabilities to slow or stop these attacks seemingly not existent at this time, executives are reluctant to open up the technology vulnerability spigot any further.

While there are many other reasons slowing or impeding our technology adoption at work, we cannot stop our march of IT advancement and progress.

We are in a global competitive marketplace and the world waits for no one. The problems resulting from the speed and cost of change, the high IT project failure-rate, and the cybersecurity danger/challenges cannot be allowed to inhibit us from progress. We must address these issues head on: We have got to achieve efficiencies from technological advancement and plow the cost-savings into next generation technologies. We have got to drastically improve our IT project success rate though mature implementations of enterprise architecture, IT governance, project management, customer relationship management, and performance measurement (Reference: The CIO Support Services Framework). And we must invest heavily in IT security—with money, people, policy, training, new technology safeguards, and more.

Innovation, technological prowess, and information superiority is what gives us our edge—it is tip of our spear. So yes, we must carefully plan/architect, wisely invest, execute well, and secure our IT. But no, we cannot dismiss the evolving technologies outright nor jump in without proper controls. We must move rationally, but determined into the future.

>Taking the Politics out of Enterprise Decision Making

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Some people say power is primarily exerted through military might (“hard power”), others says it is through use of diplomacy—communications, economic assistance, and investing in the global good (“soft power”). Then, there is a new concept of employing the optimal mix of military might and diplomacy (“smart power”).

It’s interesting to me how the Department of Defense—military approach—and the Department of State—diplomatic approach—is as much alive and well in our enterprises as it is in the sphere of world politics to get what we want.

At work, for example, people vie—some more diplomatically and some more belligerently—for resources and influence to advance their agendas, programs, projects, and people. This is symptomatic of the organizational and functional silos that continue to predominate in our organizations. And as in the world of politics, there are often winners and losers, rather than winners and winners. Those who are the “experts” in the arts of diplomacy and war (i.e. in getting what they want) get the spoils, but often at the expense of what may be good for the organization as a whole.

Instead of power politics (hard, soft, or smart), organizations need to move to more deliberate, structured, and objective governance mechanisms. Good governance is defined more by quantifiable measures than by qualitative conjecture. Sound governance is driven by return on investment, risk mitigation, strategic business alignment, and technical compliance rather than I need, want, like, feel, and so forth. Facts need to rule over fiction. Governance should not be a game of power politics.

Henry Mintzberg, the well-known management scholar, identified three mechanisms for managers to exert influence in the organization (Wall Street Journal, 17 August 2009):

1. Managing action—“managers manage actions directly. They fight fires. They manage projects. They negotiate contracts.” They get things done.

2. Managing people—“managers deal with people who take the action, so thy motivate them and they build teams and they enhance the culture and train them and do things to get people to take more effective actions.”

3. Managing information—“managers manage information to drive people to tale action—through budgets and objectives and delegating tasks and designing organization structure.”

It is in the third item—managing information—that we have the choice of building sincere business cases and creating a genuine call to action or to devolve into power politics, exerting hard, soft, and smart influence to get what we want, when we want it, and how we want it.

When information is managed through the exertion of power, it can be skewed and distorted. Information can be manipulated, exaggerated, or even buried. Therefore, it is imperative to build governance mechanisms that set a level playing field for capturing, creating, calculating, and complying with a set of objective parameters that can be analyzed and evaluated in more absolute terms.

When we can develop decision support systems and governance mechanisms that take the gut, intuition, politics, and subjective management whim out of the process, we will make better and more productive decisions for the enterprise.