Program failure is an expensive education … and the fees are high
Ahead of Connected Britain 2020, Total Telecom interviewed David Hilliard, Chief Executive at Mentor Europe, 24th February 2020 – “Why do so many business-critical programs fail, damaging company valuations, financial results, reputation and brand image?”
Q: What are the biggest mistakes Telcos make in setting up business-critical programs?
A: “We took a long hard look at all the programs we’d seen over the past 30 years. There were 128 of them – and 117 of these were “rescue” situations.
In each case, a bunch of “age-old” failure patterns – repeated over-and-over again – caused these programs to pinball all over the place.
Our analysis showed there were five “bone-crushing” factors at play:
- Misalignment: Executive teams are not as aligned as they say they are.
- Ineffective organisations: Most program “organisation structures” are misleading and unworkable.
- Naïve plans: Most program “plans” are targets, based on someone else’s view of what “ought to be possible”.
- Poor supplier management: Reputable industry suppliers are just as prone to program misadventure as their clients, possibly more so.
- Weak dependencies: Fragile dependency management can hobble any program.
In every situation program failure was “designed in”.
In every situation, program failure was “designed in” from the start. Not just on a few programs – but on all of them. And this caused damage to company valuations, financial results, reputation and brand image.
Unfortunately, out-dated execution dogma allows companies to skate effortlessly over the 5 “bone crushers” I’ve just mentioned. And, once that happens, it’s just a matter of time before a business-critical program hits the buffers and heads for intensive care.
No company sets out to screw up a program and none of these companies did, of course. It wasn’t always their fault – yet this is exactly what happened.
The only question is – how long will the honeymoon period last before the downward spiral starts?
We’ve learned how to prevent these problems so companies don’t have to go through the misery of a program fiasco. And that’s reflected in the wins we’ve achieved for clients.”
Q: Why is it so important to get real alignment on a strategic program?
A: “Most organisations would say they’re aligned. They’re surprised (and irritated) if it’s even questioned. But what this usually means is that three or four senior executives meet regularly and agree on the way forward. But that’s a long way short of alignment.
Even with excellent intentions, we found some management teams were only superficially aligned. And, typically, some individuals had a limited understanding of what alignment meant, in the broadest sense. How would they know they had it – and what it takes to get it?
Misaligned executives always lead to out-of-kilter teams. If teams are not well-led, and there’s any ambiguity on direction, they tend to make whatever decision suits them. And this creates chaos in execution.
Middle management, in particular, is inclined to be over-protective of the status quo – and any conflict stemming from this always causes logarithmic effects downstream.
It’s relatively easy to get alignment around things like Vision and Strategy. But plans can start to unravel quickly once you get down to the gritty business of doing tangible work where hundreds of people are involved.
Even when management teams agree to invest the right level of time, resource and funds in vital programs – it still may not happen – because of personality clashes, priority conflicts and petty politics. But they will still say they’re aligned.
And while many senior executives feel their teams do a good job in all these areas, the evidence from across industry is pretty conclusive. It’s not as strong as people like to think.
Here’s a good test question which drives the point home: if a strategic program is not properly organised, funded and fully resourced, how can any management team claim to be aligned?
Alignment is binary. You’re either in or out. No half-measures. And teams have to be thoroughly united right across the spectrum – not just on easier stuff that top management agree on, like vision and strategy – but also on objectives, leadership, accountability, investment – and communication.
This is not easy to achieve but, if teams focus on the nuts and bolts, it’s very do-able.”
Q: What errors do companies make in planning for must-deliver programs?
A: “We know a Program Plan is really three interdependent plans. All three – the Work, the Schedule, and, the Budget – should be consistent with each other. Yet they rarely are.
As a rule, the description of the Work is the most thorough. People are good at describing what they want done. But if a program is transformational, at least 80% of the initial time schedule is bound to be questionable because of its uniqueness. A truth that’s routinely overlooked.
The time schedule too, is usually based on unrealistic expectations and rough-cut estimates which often shows how little is known about how long it takes to get work done. Not to mention the substantial program risks that may not have been understood either.
Obviously, the Budget depends on the precision and accuracy of the Schedule. And if this is way-off, the Budget will be dubious. Let’s face it, there’s always senior management pressure to manage to the initial “guess.” And this creates a whole new set of unhelpful consequences. Like management doublespeak and cover-ups, for example.
It’s important to remember just how superficial Schedule information actually is at the start – and hold off making high-risk decisions. First-cut plans tend to be a little naïve, unrealistic – and riddled with heroic guesses. And this simple truth is at the root of every Schedule debacle.
Plans are also announced publicly too early – often when there is no urgency to do so. And this immediately creates external expectations and organisational pressure which have to be managed.
Making life even more difficult, schedules are normally based on the crazy notion nothing will go wrong. And when it does, the business has zero surge capacity to handle the crisis.
But the most disturbing feature of first-cut plans is they take for granted the company will achieve standards of delivery brilliance it’s never achieved before. With no real foundation for believing it’s going to be so much better this time.
There are proven techniques for improving estimating accuracy, but they’re all based on slashing guesswork and understanding much more about the work you have to do.”
Q: How do you get the best out of the critical suppliers to a program?
A: “Almost every business-critical program these days is built around a set of major deliverables from one or more hardware or software vendors. Access equipment, billing systems, and so on
Increasingly, vendors offer “out-of-the-box” solutions which are attractive to telcos. Yet, often it’s not clear what’s “in-the-box” and what’s “out-of-the-box”. Sometimes, there’s less in the box than clients expect. And this can cause unexpected program delays.
Suppliers don’t usually provide full visibility of their development progress for “commercial reasons.” But this alibi can mask development delays and reveal annoying surprises late in the day. This happens because Telco procurement functions tend to favour commercial and procurement activities, sometimes at the expense of getting critical technical features delivered to a program when they’re needed.
What’s more, massive cost pressures on suppliers, in recent years, means they have significantly less margin to contain changes which may have been absorbed in the past. Equally, they tend to be less flexible about what can be delivered and when.
The point is: the interdependence between network, IT and key supplier organisations is now so finely tuned that supplier plans must be fully integrated with the company’s main program plan – and “governed” in the same way as every other workstream.
Gone are the days when a telco could take the view that because they’ve paid for an outcome, they don’t need to worry about the detail of what’s going on with suppliers. They do. Contractual remedies dealing with delays and cost overruns are a very poor substitute for making sure the job is done when the program needs it. Supplier deliverables are always central to business-critical programs and there should be complete transparency between both parties.
Practical considerations mean every client can’t have a supplier’s “A” team. Just remember all teams are not the same. There’s always a genuine chasm in experience between the “A” team and the “C” team. So, never back away from asking “who are we going to get?”
Supplier management works best when relationships are good – when there is honesty and frankness on both sides. No one should ever take any comfort from the blame game. It never produces any winners.”
Q: How do you organise your team to give your must do programs the best chance of success?
A: “Business-critical programs are not “business as usual” (BAU). They need to be treated differently. This is so obvious – I don’t know why people argue about it.
But many companies still do everything they can to limit the programs’ impact on normal business operations.
Typically, they shoehorn the program organisation into a creaking functional structure which always has “higher priority” work to do. This blindspot virtually guarantees the program won’t hit its objectives, because BAU always dominates new programs.
What’s more, most of the critical program resources are part-time and controlled by someone else. Often, they just have dotted-line relationships to the Program Director – and only work on the program when they’ve done their “day job.” So, how much of an individual’s time are you really getting? Not as much as you think.
I’m sure most senior executives would have seen this movie before.
Typically, Program Directors are coordinators – just like the “War Correspondents” on the TV news. They’re at the battle – they speak well, they see what’s going on, talk to a few people, and duck when they hear a bang. But that’s the extent of their contribution. Coordinators are not in a position to exert enough influence on a cross-company program.
Instead, a Program Director should be like a “General” – with all the organisational authority and resource that’s essential to program success. Yet, appointing a superbly qualified Program Director is the one thing companies can do which will lead to greater success, faster.
Think about it…
Would you want to get operated on by a surgeon who ISN’T certified – and who couldn’t guarantee skilled help would turn up at the right time to assist with your heart bypass surgery?
I’m pretty sure we wouldn’t get many takers.
But guess what? This is what many companies do. It’s as serious as cancer.
They appoint untested Program Directors to business-critical roles. While they may have been terrific functional leaders – they don’t have “heavyweight” program execution experience.
Rising stars, Directors without portfolio, (or someone who gets on with the CEO) are fashionable choices for the lame duck club.
In tough cross-company roles they will always thrash about – because the program role has little in common with what they were doing before. They are “lightweight” and don’t have the hard-won experience to tackle “the north face of the Eiger”.
Surgeons put in thousands of hours of highly specific training before being let loose on real people – because failure costs are catastrophic.
This is a massive opportunity for companies to make better decisions about program leadership and dramatically improve execution performance. Program Director roles should attract the same level of attention a new “C” level executive appointment would.”
For more information on David Hilliard or the Partners at Mentor Europe visit our “Who we are” page.
Come and see us at Connected Britain 2020, 18-19 June. Business Design Centre, London.