INPACT 1: How to avoid a failed project - Slidecast 1: Introducing the INPACT Assessment Process
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Introduction to the principles behind The Change Equation, the INPACT assessment process and the project complexity model

Introduction to the principles behind The Change Equation, the INPACT assessment process and the project complexity model

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  • Let’s look at what went wrong to case the entire system to collapse within hours on that first day: Things went wrong almost immediately. The first baggage shift, starting at 4.30am, was delayed by a lack of staff spaces in a specially-designated car park. Baggage handlers arrived late at the terminal's staff security checkpoint after being forced to park elsewhere. By this point, the first flight from Hong Kong was arriving and BA was already playing catch-up. Only one of the airport's employee security checkpoints was operating and at one point 60 people were queuing to get through. The bottleneck, BAA's responsibility, was exacerbated by airport and airline staff who arrived early in order to "rubberneck" and look around the new terminal. Once into the baggage sorting area, some staff were unable to log on to the computer system, which caused three flights to "cut and run" and fly off without bags - creating the first backlog of the day. Simultaneously BA baggage teams struggled immediately with an automated system that, via handheld devices, told them which flight to unload and which flight to put bags onto. According to staff, the devices told handlers to sort bags for flights that were already cancelled. This meant they turned up to load flights that were not there while, in other parts of the sorting area, bags piled up unattended. There were no managers on the ground to allocate work, which caused a communication breakdown between handlers and their supervisors in the BA control centre elsewhere in the terminal. By midday, 20 flights were cancelled as handlers frantically tried to reduce T5's inaugural baggage mountain. Throughout the day, two other overarching factors contributed to the delays. Some baggage teams were disorientated, despite months of training and were late turning up at loading areas. There was a shortage of special storage bins that all bags must be put in before going onto planes - a new requirement for T5. By 4pm, with too many bags, too few storage bins, an already clogged conveyor belt system and handling staff under severe pressure, all it took was a fresh wave of new luggage to choke the system to a standstill. The conveyor belt taking the bags ground to a halt as bags jammed the entire handling network. Minutes later BA suspended all baggage check-in. It was, according to one observer, "literally a case of the baggage computers saying 'No"'.

INPACT 1: How to avoid a failed project - Slidecast 1: Introducing the INPACT Assessment Process Presentation Transcript

  • 1. Slidecast 1: Introducing the INPACT Assessment Process and the Project Complexity model The Change Equation Or how to avoid a failed change project! Peter Duschinsky Managing Director, The Imaginist Company
  • 2. 70% of change projects do not deliver the expected benefits Is yours one of them? What would it be worth if you could avoid that happening? AND improve your project’s return on investment by 10%?
  • 3.
    • ‘ The Change Equation’ is based on three key contentions:
    • The success or failure of a change project is dependent on the complexity of the project being within the capability of the organisation
    • The management of change cannot be achieved within the lifecycle of the project – it has to start earlier and go on afterwards
    • Management typically:
      • underestimates the complexity of the project, and
      • Is unwilling to invest in change management early enough
    The Change Equation
  • 4. The Change Equation
    • So the objective of running an INPACT assessment is to change mindsets
    • In order to do this we need to provide clear and simple top-level indicators that managers can understand quickly
    • We use a dashboard approach, including route-maps and RED / AMBER / GREEN traffic light indicators
  • 5.
    • ‘The Change Equation’ shows you how to take two models:
      • the Organisational Culture Evolution spiral
      • the Business Process Capability ladder
    • …and combine them to provide a baseline: the Organisational Capability Indicator
    • It then shows you how to assess the complexity and risks of a change project ( 3 )
    • By analysing and quantifying the gap between Organisational Capability and Project Complexity, you can predict the likely success or failure of a change project
    • We can then add other tools to enrich the gap analysis
    The Change Equation 1 2 3 £
  • 6. Only 32% of change projects are successful
    • We claimed at the start that 70% of change projects do not deliver the expected benefits – that’s not our opinion, it comes from accredited sources:
    • Standish Group annual survey 2009 confirms that:
      • Only 32% of projects deliver the full benefits, on time and within budget
      • 68% of projects are late, over budget and deliver less than the expected benefits
      • 24% fail completely and are abandoned before they finish!
  • 7. Change projects often fail to deliver
  • 8. More evidence of the same trend
    • The Harvard Business School tracked the impact of change efforts among the Fortune 100 and they also found that only 30% produced a positive bottom-line improvement…
    • A recent survey of change programmes in <400 European organisations quoted by Prof. John Oakland, Emeritus Professor, Leeds University Business School found that:
      • 90% of change programmes faced major implementation problems
      • Only 30% delivered measurable business improvements
  • 9. More evidence of the same trend -2
    • Management consultant PricewaterhouseCoopers (March 2007) claim that:
      • 25% of IT projects succeed
      • 25% fail and
      • 50% are late or over budget
    • A CIPD survey of 800 executives found that reorganisations failed to deliver real improvement in performance in 40% of cases
    • Why do so many change projects fail to deliver?
    25% FAIL 25% SUCCEED 50% PARTIALLY SUCCEED
  • 10. Why do change projects fail to deliver?
    • Here are some of the reasons we all know about:
      • a focus on the technology instead of the business benefits
      • poor specification of the system and lack of due diligence on supplier capability
      • failure to gain senior management championship
      • inadequate resources
      • poor project management
      • lack of user involvement
    • But if we all know about the reasons, why are change projects still going wrong so often?
  • 11.
    • “The Terminal 5 debacle is a national disgrace” Daily Mail, 14 April 2008
    Some examples… Terminal 5
  • 12. So what went wrong?
    • Shortage of staff car parking spaces
    • Only one employee security checkpoint operating
    • S ome staff unable to log on to the computer system
    • Hand-held communication software running slow
    • No managers on the ground to re-allocate work
    • Shortage of bar-reading storage bins
    • Baggage handling staff late in arriving
    • 60 staff queue to get into terminal
    • 6am: 3 planes leave without bags
    • Bags pile up, unattended
    • By midday 20 flights cancelled
    • 4pm: baggage conveyor belt grinds to a halt, BA suspends all baggage check-in
    • The result: Over 28,000 lost bags, 700 cancelled planes and more than 150,000 disrupted passengers
  • 13. C-Nomis
    • 2004: HM Prison Service commissions C-NOMIS to give prison and probation officers real-time access to offenders’ records
    • June 2005: the approved lifetime cost of the project is quoted as £234m
    • March 2007: Home Secretary John Reid: “the main C-NOMIS base release, encompassing full prison and probation functionality, will be available no later than July 2008&quot;
    • July 2007: [ just 4 months later! ] £155m has been spent, C-NOMIS is two years behind schedule; estimated lifetime project costs are now £690m . T he Ministry of Justice suspends the project
    • How can they have let a Minister do that? Surely someone knew…?
  • 14. What went wrong?
    • National Audit Office report:
      • The project board accepted assurances that the project was “all going well” and nobody knew what was being delivered for the money being spent
      • There were insufficient resources and structures in place to deliver such a complex project
      • Over time policy developed and stakeholder requirements changed, but there was no cumulative view of the impact of change requests on costs and timescales
      • No resources were allocated to simplifying and standardising business processes across the 139 prisons and 42 probation areas, each of which had their own ways of working
    The Commons Public Accounts Committee report verdict: “a spectacular failure – in a class of its own”
  • 15. More examples…
    • Passport Office:
      • In 1999 delays in processing British passport applications, following the introduction of the Passport Agency’s new system, cost £12 million
      • £16,000 was allegedly spent on umbrellas to shelter those queuing in the rain to collect their passports!
    • MOD:
      • In 2002 a project to replace the British Army, Royal Navy and Royal Air Force inventory systems with a single system (the Defence Stores Management Solution) was brought to a halt after £130 million had been spent
      • Hardware worth a little over £12 million was able to be used elsewhere but the remaining £118 million was written off as a loss.
  • 16. More examples…
    • The London Ambulance Service Computer-Aided Dispatch System
    • October 26, 1992: the London Ambulance Service CAD system goes live – and fails
    • A total of 46 people didn’t get an ambulance in time and DIED!
  • 17. What went wrong?
    • The sequence of the collapse was:
      • Poorly trained staff did not update system with location and status of units
      • The increasingly out-of-date database meant units were being despatched non-optimally and multiple units were being sent to the same calls
      • A software bug generated a large number of exception messages– and un-responded exception messages generated repeat messages…
      • Lists scrolled off the top of the screens and were lost
      • The public repeated un-responded calls, adding to the chaos
  • 18. What went wrong? cont…
      • The system grinds to a halt:
        • One ambulance arrived to find the patient dead and taken away by undertakers
        • Another ambulance answered a ’stroke’ call after 11 hours, and 5 hours after the patient had made their own way to hospital
      • CAD system partly disabled. Part-manual system seizes up completely
      • Operators now using tape recordings of calls, then reverting to a totally manual system
      • 29 October 2002: (3 days after confidently launching the system) Chief Executive resigns
    • The original estimate for the work was £1.25million .
    • By the time the project was abandoned, £7.5million had been spent.
    • A total of 46 people didn’t get an ambulance in time and DIED!
  • 19. Some conclusions
    • “ The the small software error was the straw that broke the camel's back, but the responsibility for the LAS's CAD system failure does not lie solely on the single developer who made the error or even the developing organization to which he belonged. Rather, the attitudes of key LAS members toward the project and the unreasonable restraints they placed on the project allowed the failure to occur.” National Audit Office report
  • 20. Projects don’t just fail in the public sector!
    • MFI
      • 2004/05: MFI’s new ERP system brought in - and crashes
      • Total loss of customer order data reported
      • 2005/06: UK retail division reports a ‘substantial loss’ following the discovery of significant issues with the system which are affecting its ability to dispatch orders
      • MFI said they needed to spend another £30 million on it
      • 26 Nov 2008 - MFI goes into administration with the loss of 1,500 jobs
      • Coincidence?
  • 21.
    • HP
      • In 2004, HP's project managers knew all of the things that could go wrong with their ERP centralisation programme. But they just didn't plan for so many of them to happen at once.
      • The project eventually cost HP $160 million in order backlogs and lost revenue—more than five times the project's estimated cost.
      • Gilles Bouchard, then-CIO of HP's global operations, says: &quot;We had a series of small problems, none of which individually would have been too much to handle. But together they created the perfect storm.&quot;
    • There’s a clue in there, somewhere…
    Projects don’t just fail in the public sector!
  • 22.
    • Complexity is EXPONENTIAL!
    Conclusion?
  • 23.
    • We’re surrounded by examples of exponential growth:
    • For example, compound interest:
      • &quot;Scientists have developed a powerful new weapon that destroys people but leaves buildings standing – it's called the 17% interest rate.” Johnny Carson, The Tonight Show, 1980
      • All that we had borrowed up to 1985 was around $5 billion, and we have paid about $16 billion; yet we are still being told that we owe about $28 billion. If you ask me what is the worst thing in the world, I will say it is compound interest.
      • President Obasanjo of Nigeria, 2000
    Complexity is Exponential
  • 24. Complexity is Exponential
    • The world population is growing at an exponential rate:
    • …and consumption of resources is following close behind - our energy usage is depleting the world’s natural resources exponentially
    You are here! (6,792,142,533)
  • 25. Complexity is Exponential
    • And climate change is also following an exponential runaway profile
  • 26. … but we don’t really understand it
    • We live in a world that can change exponentially – but we have brains that are hardwired to plot things out linearly - the software in our brains compels us to think about progressions as being simple arithmetic ones
    • &quot;The greatest shortcoming of the human race is our inability to understand the exponential function.&quot; Prof Albert Bartlett, emeritus Professor of Physics at the University of Colorado
    • So as a species, and a society, we deal poorly with uncertainty in non-linear domains.
  • 27. Managing Exponential Risk
    • Most risk management approaches work something like this:
      • Make a list of risks
      • Give them a weighting
      • Add up the scores
      • That is supposed to tell you something useful – it might be the amount of contingency you need for the risk, or something like that
      • When the risks you anticipated happen, they become issues
      • When the risks you didn’t anticipate happen, you become a former project manager!
    • Source: David Christiansen
  • 28. Managing Exponential Risk
    • So let’s draw up a table with all the risk factors, score them and then add them all together:
  • 29. Managing Exponential Risk
    • There’s more…
  • 30. Managing Exponential Risk
    • And still more…
    • You think this is daunting? Have you looked at government’s Gateway Review?
  • 31. Managing Exponential Risk
    • But if complexity is exponential, we actually only need 3 factors to build an exponential scale: X * Y * Z
    • That won’t represent all the risks, but if we select the right factors, it will give us a good indicator
    • So what are our 3 factors?
  • 32. Managing Exponential Risk
    • The INPACT Exponential Complexity Tool uses the following 3 factors:
      • Number of people or S takeholders involved
        • More people = more complex = higher risk
      • Number of business activities or P rocesses affected
        • More ambitious = more complex = higher risk
      • Elapsed T ime to implement (in months)
        • Longer to implement = more complex = higher risk
  • 33. The INPACT Exponential Complexity Tool
    • Think about a project you are familiar with. Where do you think you are?
    • Now do the numbers: S takeholders x P rocesses x T ime (in months)
    • Where are you actually?
  • 34. Why else do change projects fail?
    • So that’s complexity – we typically underestimate it, so we under-resource it and our expectations of outcomes are too optimistic
    • Our next slidecast focuses on the other half of the Change Equation – the capability of the organisation to cope with the changes needed to succeed.
  • 35.
    • Thank you for listening!
    • Peter Duschinsky
    • [email_address]
    • ‘ The Change Equation’ is now available from Amazon.co.uk
  • 36. Who are we?
    • The Imaginist Company is a change management consultancy
    • We specialise in helping private and public sector clients identify and overcome barriers to change and performance improvement
    • Under our 'bethechange' brand, we work with non-profit organizations across the world, advising them on strategic development and transformational fundraising programmes
    • Working with a team of associates and partners, Imaginist undertakes projects and programmes which require:
      • ‘ Quantum’ thinking and the creation of new approaches
      • Research, diagnostic assessment, analysis and evaluation
      • Development of clearly articulated guidelines and policy documentation
      • Dissemination, facilitation and mindset change
    Contact us at: [email_address]