As with climbing in the “Death Zone”, successfully executing business transformation programs demands a fully aligned team equipped for any eventuality.
Yet true alignment in an organisation can be an illusion. There may be consensus on high-level objectives – the “why”. But when it comes to execution – the “how”- cracks start to appear.
Opinions carry the day over facts—ego over evidence.
Senior management has its perspective. And those doing the work have theirs. They are frequently in opposition – a clash of perspectives.
Unless these opposing positions are brought together with fact-based evidence, transformation programs will always struggle.
In this article, Mentor CEO David Hilliard explores this phenomenon and how to stop it from becoming a drag on successful program execution.
No one sets out to screw up a program
In every case we’ve been involved in during the last thirty years, there’s always been a genuine commitment to the goals of transformation – programs that can turn a company’s fortunes around, open-up new markets and underpin future success.
After all, who wouldn’t agree with that?
Yet, McKinsey and plenty of others will tell you that only 30% succeed. Most transformations experience overspends in the “tens of millions”, and delays are often measured in years.
And it happens too frequently to be an accident. Noble objectives for business-critical programs are rarely matched by successful execution.
The illusion of alignment
As execution practitioners, we see the same issues time and again.
Let’s take alignment. There’s universal acceptance that a transformation program needs everyone involved to be aligned to deliver success.
Alignment is central to execution success.
So, the first question we always ask senior management when we get involved in a program is – how well are you aligned?
We always get the same answer – “everyone is aligned and on board.”
That’s good to hear. After all, we’re operating in the business equivalent of climbing in the “Death Zone”, where disunity results in disaster.
But you don’t have to be Sherlock Holmes to discover that alignment typically only exists at top levels of management.
Everyone buys into the program “headlines” – the vision, objectives and broad strategic approach.
But true alignment tends to break down in areas where the nuts and bolts of the work are done – who does it, and when. These are the seeds of inter-functional strife.
That’s because there’s a clash of perspectives. It’s worth exploring this in a bit more detail.
How cognitive bias drives this clash of perspectives
Here’s a typical scenario of how “alignment” goes awry.
Senior managers have a very clear perspective. Unsurprisingly, their focus is on successful outcomes. They usually have a single-minded view of how success can be delivered, but they tend to overlook key facts and only hear what they want to hear to support their point of view.
This is known as “cognitive bias” – people’s tendency to selectively embrace information that supports their beliefs and reject any contrary information.
As John Galbraith succinctly put it, “Given the choice between changing one’s mind and proving there’s no need to do so, most people get busy on the proof.”
But those doing the work are closer to the coalface and usually have a different perspective. While they may not say it, they often think senior management grossly oversimplifies complex projects.
Yet, these people must deliver programs in the business equivalent of the “Death Zone.” A harsh environment where the landscape and terrain are constantly changing.
And guess what? People at the coalface also hear what they want to hear – to support their position. Cognitive bias kicks in.
It’s “Catch-22.” And here we have the seeds of an epic clash of perspectives.
Why a clash of perspectives is a good thing – but timing is everything
Yet, a clash of perspectives is inevitable and a good thing … if managed correctly.
It forces a conversation between the black-box thinking of senior executives and the practical issues facing those doing the work. Both perspectives need to clash, be debated – and then get aligned and integrated for successful program execution.
However, in practice, this rarely happens. Here’s why.
Integration of contrasting perspectives must happen as early as possiblein the set-up phase before ignorance – or the lack of shared understanding – causes serious problems.
This presents challenges for both senior execs and those at the coalface.
At that stage, those doing the planning work and setting timescales and key milestones can only make educated guesses. Typically, this type of program work has not been done before, and they don’t understand it well enough to “defend” their estimates so early in the cycle.
They want to do more spadework and will update estimates when more reliable information is available. Estimates become firmer as a program definition develops and more accurate information becomes available.
Yet, spare a thought for senior management. They must put a stake in the ground. They can’t wait for the spadework to be done. They have to go with a “best guess” for now. Even though key milestones, timescales and costs are based on little more than heroic assumptions in the early stages.
So, the reality is that senior management has no choice but to set stretching objectives and, in the process, impose “unrealistic” timescales on those doing the work.
Whenever opinions are being traded between groups of people, senior management always wins. Yet, fact-based evidence always trumps opinion – even if the facts come from the most junior person in the room.
The initial rough-cut plan always startles those who have to deliver it. They’ll typically say, “the work is more complicated. It’s going to take longer and cost more”.
But savvy execs know there will be (unfavourable) differences between heroic first-cut plans and future versions based on validated assumptions.
Unfortunately, the pressure to hit senior management’s initial business targets means common-sense deserts many senior executives at a crucial time. They get wedded to the original “unsound estimates” and usually attempt to pressurise the team into meeting impractical plans.
This is the first clash of perspectives. Where disappointment meets reality.
This clash of perspectives is rarely bottomed out
Execs want to set challenging targets, but in what is a cultural challenge in many organisations, teams are reluctant to express candid views about the practicality of these so-called “stretching” plans.
So, this mismatch remains a running sore throughout the program.
An unresolved mismatch that everyone bellyaches about, but nobody is brave enough to stick their head above the parapet. Equally, this is also where senior execs can start to reveal ostrich-like behaviours.
The result? Those doing the work become demoralised and feel they have no voice or, for that matter, no choice.
Both parties are then guilty of resorting to “Groupthink” – where the desire for harmony results in unsound decision-making without any critical evaluation of the consequences, compounding the problem and widening the clash of perspectives.
Far from integrating the two differing perspectives, the gap rapidly becomes a chasm.
Having been alerted to more up-to-date facts, senior executives should grab the bull by the horns and recalibrate “hoped-for plans” with more realistic expectations.
And that’s when another issue can come into play.
Take shortcuts, but don’t cut corners
Left unchecked, the cognitive bias driving these two different perspectives will frustrate program success.
Dan Lovallo, Professor of Business Strategy at the University of Sydney, notes that:
“Confirmation bias is probably the single biggest problem in business because, even the most sophisticated people get it wrong. People go out, and they’re collecting the data, and they don’t realise they’re cooking the books.”
One way to overcome the dangers of ignoring facts and evidence is to get independent advice. Advice that’s honest and objective and helps to nullify cognitive bias.
Yet, we frequently find the opposite occurs. Because external advice is often sought from “biased advisors”, it reinforces cognitive bias.
Many companies cut corners to accelerate progress by seeking help from the major software vendors or systems integrators – but it’s inconceivable that either of these would recommend anything other than their proprietary solution. Software vendors and system integrators are not independent. They are biased and offer tainted advice.
Worst of all, they’ll usually tell you what you want to hear rather than what you need to know.
To companies desperate for a quick fix, it’s very tempting. On the surface, it seems attractive, but the danger is that you may not solve your unique problems. You are probably cutting corners rather than taking shortcuts. And there is a big difference between the two.
Cutting corners only kicks the can down the road until the fissures become so extensive that the program is in jeopardy.
By then, companies are highly vulnerable to the sunk-cost fallacy, which creeps into many major financial decisions. It’s a phenomenon where companies are reluctant to abandon a strategy because they are so heavily invested in it. This is true, even when it’s clear that stopping would be the wisest choice.
At this point, realisation dawns that “independent” expert help is needed. Typically, 8 -10 months after the program launch.
We should know. 117 of the 130 programs we’ve been involved in over the last 30 years have been “rescues”.
How to overcome confirmation bias and drive successful program execution
Getting agreement on the clash of perspectives and changing deep-rooted human behavioural traits – such as cognitive bias – isn’t easy.
There’s no silver bullet that will fix such ingrained behaviour. You can’t cherry-pick some bits of the program. It’s best to deal with it in its entirety.
Inspirational leaders know that succeeding in the “Death Zone” demands you pay attention to three major factors.
1. Get external “agnostic” advice
Transformation programs are nothing like “business as usual.” These are highly complex, fraught with risk and massive in scale.
Your people might not have experienced anything of this magnitude before. And frankly, they can quickly become intimidated by the scale of the challenges in front of them.
Just like climbing in the “Death Zone,” your chances of success would be much greater if you brought in external help from people with a deep fact base – who are already acclimatised to operating in harsh, unforgiving environments – and can help to target areas preventing success.
2. Apply a proven execution methodology supported by effective governance
Using a structured, proven program execution methodology with a clear roadmap to success – and effective governance – will instil confidence in everyone involved.
Traditional program execution methods, such as Prince2 and MSP, are helpful but do not address what we believe is the most critical factor in determining a transformation program’s success. That is – how humans behave under pressure.
An effective governance structure with regular reviews and reporting processes will ensure checks and balances throughout the program, reducing the likelihood that cognitive bias and “groupthink” will adversely affect decision-making.
3. Create a culture of cooperation
Program success will depend on how well the entire team performs.
This requires every individual involved to feel encouraged to contribute and give truthful feedback with confidence up and down the chain of command with confidence.
We’ve seen many programs fail because the people delivering them are positively discouraged from telling the truth and, instead, “encouraged” to have a tenuous relationship with the truth, telling senior leaders what they want to hear.
How smart decision-making can benefit your organisation
Most business-critical programs are proverbial high-wire acts – the business equivalent of climbing in the “Death Zone.”
No one sets out to screw up a program – but it happens. No one ever thinks their program is exposed to large overspends and long delays at the outset.
Yet the evidence is incontrovertible. If you are running a business-critical program where failure is not an option, the stakes are incredibly high.
Mentor’s independent and expert advice can safely guide you through the challenges you’ll face in the “Death Zone”.
We’ll work with you and your team using an approach that has stood the test of time – The Mentor Blueprint. It’s been refined over many years to ensure everything is covered for execution success.
Here’s what Derek McManus, formerly COO of Telefonica UK, said about Mentor:
“They don’t try and over fluff things; they give it to you straight, so you know what you’re dealing with. You get straight talking, a high degree of expertise and a real commitment to what the answer needs to be. And strong execution, so you get things done.”
One thing we’ve noticed in the digital transformation space is, many companies feel their success or failure in transformation is dependent on other parties.
The reality is that success vs. failure has more to do with your organisation and strategic goals than any third party.
If you are preparing for a digital transformation, feel free to reach out to me directly by replying to this email for independent, tech-agnostic guidance.
It won’t cost you a penny and there are no strings.
You can email me at email@example.com or call me on 07860 222282.
About the author
David Hilliard is the Chief Executive Officer of Mentor Europe – Business-Critical program execution experts.