WEBVTT

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So welcome to the webinar. Today we've got Ben Chamberlain with us.

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So for those of you who don't know, I'm Stuart, Stuart Easton.

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We do two webinars a month here at Transparent Choice.

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One of them is usually just pure thought leadership, and then we do something much

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closer to doing around portfolio management prioritization,

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something much more practical and hands-on.

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So this is very much the thought leadership one, and for many of you, this is going

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to be pushing you a little bit beyond your comfort zone, or at least I hope it will

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be. Because we're going to be talking about strategy execution, and I think in the

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PMO community, we sometimes think that strategy execution starts and ends with

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projects, but I hate to tell you it doesn't. Right?

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Just this morning, actually, I saw a survey from the PMO Leader community asking

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about strategy execution challenges, and it was all about projects.

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But that's only part of strategy execution.

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Not necessarily even the most important part.

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It might be, it might not be, depends where you are in your cycle.

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And so today we're going to talk a little bit more about the bigger picture, and

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we're going to talk a little bit about what Ben calls the leading indicators.

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So, we're going to share a couple of statistics that you see in the market,

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if you're in this sort of strategy execution game from the likes of Gartner or

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Yankee or some of the McKinsey guys like that.

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And the challenge is that those are such high-level numbers.

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The response to those numbers is, "Yeah, so what do I do about it?" Right?

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And we're going to dig into some of those, yeah, what am I going to do about it and

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why kind of issues today. And explore a little bit about how you

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can start to use that to build a case for strategy execution

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to be something that gets some real executive sponsorship.

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So if you're struggling to get sponsorship for your PMO, this should be a great

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session for you today. If you're trying to position your PMO as being about

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strategy execution, this is going to be a great session for you today because

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you're going to get a slightly bigger picture than you're perhaps used to, at least

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I hope so. And

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that will help you play that role more effectively.

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So Ben, why don't we kick off with just a little bit of a background on you, who

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you are and what StrategyFX is all about.

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Yeah, happy to. Hi, everyone. So Ben Chamberlain, I'm a co-founder of the Strategy

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Execution Forum. One of the key things we talk about at the forum is it takes a

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village to master strategy execution.

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I'm a firm believer based on that there's not one person, not one function, and

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certainly not one consulting organization that

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knows it all, right? Myself included, right?

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So when I think about my background, I've been in some flavor of strategy execution

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for longer than I can remember, so approaching 30 years or so.

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As Stuart said, I originated from the UK, so I started my career as a project

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manager in the construction industry in the UK.

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Soon realized that wasn't for me, ended up in some form of management consultancy

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and early stage PMO governance set-up.

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And then got mixed up in an organization in 2002 called UMT that

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actually came out with a product very similar to

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Stuart's product. And they had an opinion on what portfolio management should be,

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even back then. Much more than just dashboards and status reporting.

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They had an opinion in terms of how to align investments with

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strategy and focus on maximization of value on scarce

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budget and resources. So we built a framework of technology, whatever, became kind

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of the darling of Gartner back in the sort of 2004 timeframe, which resulted in

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Microsoft acquiring the product and the company, which had already moved

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to New York at that stage, and that's why I ended up on the West Coast here in

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Seattle. So I spent, for my sins, a couple of years at Microsoft running the

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product management for the integrated projects and portfolio management offering

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that is Microsoft Project Server, Project Online, soon to be decommissioned as time

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has gone by, right? Spun out of there

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in around 2010 timeframe because obviously Microsoft has always and always will be

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focused on task management, trying to be the ubiquitous toolset for project

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managers across the world, right?

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We wanted to finish our strategic portfolio management journey.

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So we embarked on picking up where we left off, building another product and

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framework around elevating the importance of portfolio management on top of any

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form of project execution, which encouraged Gartner then to bifurcate what the

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discipline is of projects and portfolio management into strategic portfolio

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management and adaptive project management and reporting two very important and

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integrated layers. So again, I built a product there, another listed as Gartner in

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one of the top four strategic portfolio management offerings for that's worth.

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And then ended up selling that company and deciding to establish the Strategy

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Execution Forum. And I can give you a little bit of insight, Stuart, if you like,

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into why I did that.

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Which is probably the reason for your question.

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Well, yeah. Absolutely. Before you do that, because that I think is going to flow

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quite nicely because the next question is going to be what the heck do we mean by

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strategy execution? So before we jump into that piece, I just want to pull out

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something that's really important.

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It's not often that I'm on one of these sessions where the guy on the other side

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has been doing this for more than a decade longer than I have. Right?

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And so Ben's had the kind of journey that has allowed him

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to learn, to try some stuff, to fail sometimes.

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And that usually is the path to wisdom.

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So, today we're not just listening to some talking head who's done a couple of

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things.

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Ben's been around for three decades doing this stuff, learning and developing.

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So I don't know, was it Donna Fitzgerald that was at Gartner when, was she running

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that practice when you were interacting with her?

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She was definitely involved, but back then it was Matt Light who-

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Okay

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... in 2004, actively encouraged by us, created the PPM disciplines

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we know. So smashed together the worlds of project and portfolio management, right?

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So here's the really interesting thing, right? So I know Donna really well.

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And the first time I met her, she ran over and she's like, "Oh, I've heard so much

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about you guys," gave me a big hug. She's a wonderful person.

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But sitting down with her, she's been around, right, so your 30 years, she'll take

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that and add another 20 years on top of that in terms of experience.

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And when you sit down with Donna, the thing that's really interesting is that none

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of this stuff's new, right? None of this is new.

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When these ideas were being formulated really early on, it was always

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about strategy execution. It was always about business results.

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It wasn't about project execution. That's just an enabler, right?

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But it was always about how do we maximize, I think you used this phrase earlier on

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something like this, how do we maximize the return on investment, the business

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value from the investment in our

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organization? And

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one of the things that I think we're going to lead into right now is that's more

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than just projects, right? So in your mind, over 30 years doing this, how do you

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think of strategy execution, and why did that lead to forming

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StrategyFX, XF?

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Yeah. Well, so when I decided what I wanted to do next, having sold and

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integrated the last company with the acquirer, I've had this twice in the last 30

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years. Now do I stay in this space or do I go and focus on something else I'm

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interested in? So I said if I'm going to stay in this space, then I feel like I've

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had an impact, maybe a big ripple small pond, but I want to have a bigger

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impact on the space. So it took about six months to do a retrospective in terms

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of what's going on and playing back the last sort of 10 years of customer

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interaction, right? And spent far more time on LinkedIn than I think I ever want to

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now and in the future, right? It was amazing to me and quite honestly frustrating

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the amount of people talking about the inability to bridge the gap between strategy

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execution. And not just the project management community or the PMO community, but

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the architect community and others, right?

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And all also professing to be the missing link, right, that critical bridge between

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strategy

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and execution. So I found that frustrating and also was like, well, as you say,

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organizations have been focused on this for a while. Before my time, right?

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Donna's time, whatever, she was a CFO wherever she was doing this stuff, right?

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So Despite all the investment that has been made, right, and there's been

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significant process and tooling investment made over the years, why hasn't the

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needle moved that much, right, in terms of an organization's ability to execute a

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strategy? Of course, there are pockets of excellence, right?

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But we're talking generally, right?

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And of course,

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coming from a kind of analytical mindset, you can drill down and identify hundreds

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of reasons why.

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But the reality is, I started to think about it at a more macro level and came out

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with three main reasons why organizations still struggle to bridge the gap between

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strategy execution. And first is I think it's a vantage point, and you've got to

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start with executives. I don't think the C-suite understand what strategy execution

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is. In fact, commonly, I think they think of it as more like program management on

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steroids, which that's part of it, but it's not its entirety.

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But the critical part is that they don't fully understand the amount of business

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value that is actually at risk due to suboptimal strategy execution capabilities.

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If you think of it as program management on steroids, and program management's not

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a perfect science, right? Some waste is acceptable, 5%, 10%, whatever.

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Let's write it off as a cost of doing business. It is much more than that, right?

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But not being able to understand the value at risk or see it or touch it, I think,

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is one of the reasons why it's not seen as an enterprise imperative or critical

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discipline. The next goes back to what I said before.

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It takes a village to master strategy execution.

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Reality is it's multiple critical functions of the organizations that need to come

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together to execute an organization strategy.

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And often what happens is we all optimize our own domains.

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The PMO does their thing, architecture does their thing, finance does their thing,

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HR. And there's nothing wrong with that, right?

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We're all looking to improve our contribution to the organization.

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But when you actually aggregate that, the superset of that, you end up with a

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fractured operating model, right?

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And one where these teams should perfectly adjoin. They're not.

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There's cracks in that operating model.

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And staying with a value analogy, value kind of continues to kind of seep through

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those cracks where those teams should perfectly adjoin.

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And then the last, maybe the third reason, maybe not the least important, but the

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third reason anyway, is that it feels like every 10 years I've been doing this,

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there's a new methodology that comes around, whether that's from project and

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portfolio management or other critical disciplines, that claims it's going to solve

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world hunger and world peace, right? The first, this one, last one failed.

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Believe me, PPM failed because it was waterfall.

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Let's go on

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an agile revolution, right, or agile transformation.

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Nothing wrong with that, right? But invariably, when I think about why PPM failed,

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or didn't fail, why PPM struggled, it was because when we addressed

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PPM, when Garner actually created the project and portfolio management discipline

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and smashed the two Ps together, we started bottom up.

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We started with the task, the time sheet, and kind of deferred portfolio

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management. I don't think PMIs started talking about it till 2010 plus, right?

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And then decided, not PMI, but then the world decided that PPM was wrong because

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it's waterfall. You need to do agile execution.

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And nothing wrong with agile execution, but the way we went about it was wrong.

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Again, we started bottom up, right, until we hit the portfolio management

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wall. So again, this one-size-fits-no-one approach that we always try and

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force down people's throats is holding organizations back.

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And I think it's mainly because to successfully enable strategy execution in the

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organization, it has to be heavily personalized to the nuances, idiosyncrasies,

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culture of an organization. So yes, there is no one size fits all, right?

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Mm-hmm.

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So with that in mind, that's why I decided, look, it's an exercise in futility for

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me, even though I've built frameworks that Garner have ratified to set up another

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consulting company. It's definitely an exercise in futility for me right now,

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right, because it's a

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busy space to go and build another software solution, right, that somehow is going

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to solve this, right? No, I can solve part of the problem.

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I'm not going to solve the entirety of the problem.

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So I said, look, based on it takes a village, what I'm going to do is create a

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forum called the Strategy Execution Forum, which will be the first community out

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there that's focused on uniting the multidisciplinary leaders.

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So people from strategy, people from operations, people from both flavors of

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architecture, business enterprise, or even op model design.

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The transformation office, the change management office, the enterprise PMO, the

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domain PMO, the change management folks, right?

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Going to bring these all into one community so we can figure out approaches for

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doing this. As you say, we've all been doing this for a period of time, whether

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it's 30 years, whether it's 10 years, right? We've all made mistakes.

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We've all had successes. So let's pool that knowledge to come up with approaches,

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and what we are doing is rejecting a one-size-fits-all approach completely, right?

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To say what are the different ways or best practices we can solve different aspects

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of strategy execution. And Kevin, Stuart, Al, and McCool here have

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been helping define what we call the universal standard of excellence around

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strategy execution, which are the 10 key principles for mastering strategy

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execution. It really is acknowledging we have a problem and where we have a problem

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before we figure out approaches, crowdsource through the community to address the

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problem. So I'll pause there and then go back to your actual question, which was

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what is strategy execution?

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Well, so okay, I'm going to pose that question again.

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We will get to it eventually. I just want to kind of ask a quick question of the

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audience for a second. So has anybody ever had a significant project or

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program derailed because some of the key resources you need suddenly get pulled off

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back into their day jobs, right? Has anybody ever had that problem?

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Just drop a quick yeah, me. Endlessly.

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Yeah. Anybody else? Yeah. Just drop a little message into the chat.

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Let me know if you've seen that. All the

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time. There we go. Okay. So anybody who's ever had that problem,

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right, and we're seeing this, it's really common. It happens all the time.

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Anyone who has that problem, this is exactly what Ben was talking about when he

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says it takes a village, and it's not just about the project execution piece,

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right? The reason that's happening is there's someone else who thinks their job is

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strategy execution in BAU who is executing the strategy.

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I mean, that's what they're doing in BAU.

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They're actually executing work, real work that brings in revenue, right?

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So of course, we are the engine of strategy execution, and your silly little

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project over there, that's just something that's happening in the background,

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right? And there are other communities that Ben talked about, the business

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architects and so on,

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all of whom have that same mindset of my silo, my discipline is strategy execution.

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Everything else is just kind of other stuff that happens so that I can do strategy

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execution. And I'm putting words in your mouth here, Ben, but what I think Ben's

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really trying to do, which is tremendously exciting, is bring those communities

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together

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to understand how to build an operating model for the organization, not just for

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any one of these silos. So not just the change portfolio, not just BAU, not just

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the business architects who are trying to...

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And the risk management team, and FP&A, and everybody else around the organization,

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right? They're all part of that solution.

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But how do we start to bring that together?

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And so

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the reason that I invited Ben here to talk to you guys is that the

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kind of the change and transformation part of strategy execution is absolutely one

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of the core pillars of doing strategy execution.

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But it is not all of strategy execution, right?

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So as I was saying earlier, I'm hoping we're all going to come up and out of our

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silo, the one that we live in right now, and think a little bit differently by the

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end of this session. So

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finally, what do we mean by strategy execution, Ben?

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I think you summed it up, right.

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Again, one of the things we're doing at the community, and one of the harder

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things, and I think one of the more enjoyable things is we're really trying to

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define this as a community. So if the first problem statement was

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C-suite doesn't necessarily understand what strategy execution is, we better come

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up with an evolving definition based on the community in terms of what strategy

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execution is. Now, I don't have it in front of me, and there's no point reading out

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whatever it is, 50 words. But the key part of that was the alignment of all

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activity and spend And the optimization of that against strategy.

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So yes, we can focus on the strategic or discretionary activities we often do, as I

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have done most of my career from a project, program, portfolio management

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perspective.

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But if we're not

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applying the same rigor and lens to the BAU or the operational activity and spend,

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we have a problem. I'm not just talking about how we execute on the operational

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side, but I'm talking about needing, from an architecture point of view, to align

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the operating fabric of your business, the op model, the business architecture,

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however you want to call that, with the strategy. So your target state is aligned.

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Because if you don't do that, it's equivalent to dragging anchor.

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You are going to be impeded in terms of the course of direction.

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So the simplest thing, to me, is we've got to look at the entirety

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of activity and spend relative to strategy.

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And one of the reasons I created the forum, I've spent most of my time looking at

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how to align investments, initiatives, programs, whatever you want to call it, with

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strategy, which represents whatever percentage of the problem you want to give it.

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Let's give it 30% of the problem. But as we were defining

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with our strategic portfolio management offering, we started to get into beyond

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that. To me, strategic portfolio management is two sides of the same coin of

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portfolio management on one side from a project, program, portfolio perspective,

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and architecture on the other side to get a view of all activity and spend.

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So it's critical to be able to get that architectural viewpoint so that we can

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align the operational activity and spend as much as we do the discretionary stuff.

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And I think that remains the biggest black box, which may equate to 70% of the

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overall budget, that we need to focus on as much as we do the other side.

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Because otherwise you are, as I say, dragging anchor.

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I can't think of a better analogy for that, but I'm sure there are.

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Yeah. There we go. So it's about bringing all these things

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together into a coherent operating model,

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which is great. So

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let's start with some of the statistics.

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So if you've had an expensive, shiny-suited consultant come in to present to your

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executive team, they will have heard statistics like

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70%

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of strategic investments fail from Gartner.

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Or

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67% of formulated strategies fail, and that's Harvard Business School.

302
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70%, McKinsey. 60%, "The Economist" . These numbers are huge.

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It's really

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not very impressive that here we are in sort of a quarter of the way through the

305
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21st century, and we still have numbers like this.

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And

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so you've taken an approach of those numbers are so big we don't really know what

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to do with that. How do we break it down into what you're calling these leading

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indicators, the key domains that are contributing to that failure,

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the sources of leakage of value, if you like.

311
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So why don't you just high level talk us through how you've broken it down,

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and then we might dive into some of those statistics

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once you've done that.

314
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Yeah. Happy to. Like I said, I think a lot of those stats you just mentioned have

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been around since the year of the flood, assuming they're still accurate.

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My issue with them, they're opaque.

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If you're a C-suite member that doesn't really understand what strategy execution

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is or just thinks it's a program management on steroids, what do you do about that?

319
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How do you fix that? One of the members said once that

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think of a manufacturing company with a production line, maybe a bottling plant.

321
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If there was one out of three, one out of five, whatever amount of waste you want

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to emulate, bottles were defective on their line, you're going to do something

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about it. Because you can touch it, you can feel it, you can see the problem,

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you're going to fix the problem. When we're leading with these kind of macro opaque

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stats, sort of fear stats, I don't understand how I fix that.

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So how do we communicate to the executives the amount of business value that's

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actually at risk to prove it is significant?

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And

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then from there,

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what's the impact that it's having and where the fixes lie

331
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across that operating system? Yeah, so I'm not sure. Is this the updated deck?

332
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Doesn't matter if it's-

333
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I think it is. I think so

334
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All right. Okay. So then I started to think about, and again, it's actually

335
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something that the community has refocused on over the last couple of weeks.

336
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Every Thursday we meet for, we call a think tank Thursday session.

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Last week, we started to actually go back and look at these leading indicator

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metrics that suggest where value is being lost.

339
00:24:02.784 --> 00:24:04.584
Yeah, I think these are the older slides.

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Those are the old ones. Apologies.

341
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But it's fine.

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So

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what we started to look at, and I'll give you the running play where we're at now,

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is we started breaking down them into two camps.

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What we call portfolio structural risk and portfolio execution risk.

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I think more is known around execution risk.

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But portfolio structural risk is broken down into, as it stands today, which is

348
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being currently challenged by the community,

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three key metrics. Strategic misalignment of initiatives, redundancy,

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and discretionary budget increase from reallocating operational savings.

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So if you're thinking of portfolio structural risk, do you want me to share my

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slide, Stuart? Or do you-

353
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Yeah, whichever. Yeah.

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So when you think of portfolio structural risk, you can think of it as

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value that's either being left on the table,

356
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it's almost like an opportunity cost, value you didn't even know was missing in the

357
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first place, due to poor portfolio planning and poor

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architectural decisions. And portfolio execution risk, like I say, more

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is known about that. That's just due to the effective or ineffective execution

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capabilities within the organization. You'll see them there.

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Then on the portfolio execution risk side, more is known about this.

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Outright failures, cost overruns, schedule delays.

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So when we think about the portfolio structural risk, we started looking at common

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stats out there and other things. I'm not going to go through the slide on each of

365
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these, I won't spend too much here, but you start to see that it is actually fairly

366
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significant when you think about the actual value being lost or not even identified

367
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in the first place through poor alignment of initiatives and redundancy and overlap

368
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between initiatives. Now, this is just focusing on the side of the equation that we

369
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normally look at, which is the project or program or initiative side of the house.

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We wanted to dive a little bit deeper in terms of if we look at the operational

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cost, not just IT, which we normally focus on, but business and IT.

372
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What's the opportunity if we were to rationalize that to be able to free up funds

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to drive more growth and innovation? And it is significant.

374
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So if you look at the-

375
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Sorry, I'm just going to interrupt for a second, wave our flag a bit.

376
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So anyone who's seen one of our demos has seen how prioritization should be done to

377
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deliver the alignment, and Ben spent a lot of time thinking about this AHV

378
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methodology over the years as well.

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I'm sure there's got to be a cure for that, Ben, somewhere, but there we go.

380
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So if you've seen one of our demos, you've seen how to fix that piece,

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or at least a good way to fix that piece.

382
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But you'll also have seen something called the efficient frontier in there.

383
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And when you start to apply tools like the efficient frontier, you can really start

384
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to make these trade-offs where you're saying, "Okay, how much

385
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of this effort should we be putting into our change portfolio?

386
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How much into our IT portfolio? How much into our BAU operation manufacturing

387
00:27:13.254 --> 00:27:18.324
portfolio?" And start to make these trade-offs about how much extra business value

388
00:27:18.384 --> 00:27:23.454
are they driving? And you can only do that if you have a really good, solid way to

389
00:27:23.874 --> 00:27:28.134
quantify the contribution of your different activities, whether they're projects or

390
00:27:28.944 --> 00:27:34.465
BAU work streams or whatever they may be. You need to be able to quantify those.

391
00:27:34.584 --> 00:27:39.549
And using software like Transparent Choice is a great way to do that and to be able

392
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to make those trade-offs visible.

393
00:27:43.374 --> 00:27:48.432
But if you look at these numbers, they're huge A quarter of your portfolio

394
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is misaligned and the stat from PMO is, I know you know this one, Ben, is 20% of

395
00:27:55.092 --> 00:27:57.763
projects are so badly aligned with the goals of the organization, they should be

396
00:27:57.822 --> 00:28:00.162
stopped immediately. It's right there. There it is.

397
00:28:00.192 --> 00:28:01.692
All left them. Yeah.

398
00:28:02.352 --> 00:28:05.112
And there's probably another 20 or 30 that's poorly aligned.

399
00:28:05.592 --> 00:28:09.432
Right. Well, exactly. And this is not meant to be ...

400
00:28:10.482 --> 00:28:15.342
You can say to me, "I disagree with this to whatever percentage," 50%, whatever.

401
00:28:15.402 --> 00:28:18.072
It's still a significant number even if you do.

402
00:28:19.182 --> 00:28:21.342
But when you think about the misalignment one, right?

403
00:28:21.643 --> 00:28:26.232
It's due to poor portfolio planning techniques.

404
00:28:26.263 --> 00:28:30.177
And it's wrong to say that it's actually value that's lost, because value never

405
00:28:30.192 --> 00:28:31.542
identified in the first place, right?

406
00:28:31.572 --> 00:28:34.722
So it's an opportunity cost more than value that's actually getting lost in terms

407
00:28:34.783 --> 00:28:40.272
of poor execution. And a lot of it comes down to poor portfolio planning

408
00:28:40.302 --> 00:28:44.802
techniques, right? Often when we walk into organizations, Stuart, I'm sure you see

409
00:28:44.832 --> 00:28:48.102
this all the time, right? It's more of an annual planning technique, which is more

410
00:28:48.132 --> 00:28:53.203
bottom-up in nature, right? They've got the requests come in, an impact assessment

411
00:28:53.263 --> 00:28:53.802
into

412
00:28:55.092 --> 00:29:00.252
strategy. Maybe using sophisticated tools like you have in terms of prioritization,

413
00:29:00.313 --> 00:29:03.372
optimization, and efficient frontier modeling.

414
00:29:03.852 --> 00:29:06.357
But in essence, it's more of a bottom-up approach, right?

415
00:29:06.357 --> 00:29:09.522
It's what I call a project driven demand process.

416
00:29:09.942 --> 00:29:13.632
And so you end up selecting the best of whatever's been proposed, right?

417
00:29:13.932 --> 00:29:14.622
And you do.

418
00:29:16.063 --> 00:29:18.763
Based on limited budget resources, these are the best things that are going to

419
00:29:18.792 --> 00:29:23.563
drive the bang for the buck. But that in itself is a problem, right?

420
00:29:23.592 --> 00:29:27.522
Because I may not have had the right mix of work in the portfolio in the first

421
00:29:27.552 --> 00:29:32.953
place, right? Because strategic planning is often dealt with bottom-up and just

422
00:29:33.042 --> 00:29:34.752
using strategy as a filtering mechanism.

423
00:29:34.872 --> 00:29:40.332
Versus, as we move to what we call initiative driven demand process, where you

424
00:29:40.362 --> 00:29:42.432
start with the strategy, you decompose strategy.

425
00:29:42.462 --> 00:29:48.432
It's actually principle three of the strategy execution playbook of how do

426
00:29:48.643 --> 00:29:52.092
you clearly define, translate, and communicate strategy.

427
00:29:52.182 --> 00:29:57.462
So how do you decompose, set metrics, and communicate strategy rigorously across

428
00:29:57.522 --> 00:30:00.717
the organization? Because as you decompose strategy, the good chances are you're

429
00:30:00.732 --> 00:30:03.328
going to end up with the right actual project, right?

430
00:30:03.792 --> 00:30:05.472
So you don't have misalignment from the get-go.

431
00:30:05.533 --> 00:30:08.518
You've identified the right work to move the needle on the strategies and metrics

432
00:30:08.592 --> 00:30:14.442
that you have. So you think of that traditional annual bottom-up

433
00:30:14.472 --> 00:30:18.732
process where a lot of the value is being left on the table, but also that annual

434
00:30:18.763 --> 00:30:23.097
planning in terms of not revisiting that throughout the year on a continuous

435
00:30:23.143 --> 00:30:25.557
cadence, whether that's monthly, quarterly, doesn't really matter, right?

436
00:30:26.172 --> 00:30:30.927
And trying to avoid that sort of Q4 panic and reallocation of funds where value is

437
00:30:30.942 --> 00:30:35.772
definitely hemorrhaged, right? So obviously you see the stats here, you see the

438
00:30:35.802 --> 00:30:41.563
reasons for this. It is significant, right? So whatever.

439
00:30:41.862 --> 00:30:44.787
We're saying in this particular stat, you are going to get some value from these

440
00:30:44.802 --> 00:30:46.872
projects. They may be the wrong projects.

441
00:30:47.292 --> 00:30:49.287
You're leaving value on the table, so it could be worse.

442
00:30:49.692 --> 00:30:52.602
We're actually further discounting it based on the fact that even if you're

443
00:30:52.632 --> 00:30:56.953
delivering the wrong stuff, it is going to give you some value, right?

444
00:30:58.212 --> 00:30:59.772
Portfolio redundancy is important too, right?

445
00:30:59.832 --> 00:31:02.022
And again, this is much bigger than just the project side.

446
00:31:02.082 --> 00:31:06.102
This also features on the operational side to a larger degree, too.

447
00:31:06.132 --> 00:31:08.893
When you think about the core contributors to portfolio redundancy from an

448
00:31:08.922 --> 00:31:13.542
initiative or project perspective, if you don't have that enterprise function that

449
00:31:13.602 --> 00:31:16.152
is looking across everything, right? All investments.

450
00:31:16.197 --> 00:31:19.422
The chances are you're going to have duplications in investments.

451
00:31:19.542 --> 00:31:20.847
If you don't have

452
00:31:22.632 --> 00:31:26.772
more standardized or mature business and architecture capabilities, it's going to

453
00:31:26.802 --> 00:31:29.563
be very difficult to see if you are investing in the same thing or whether you are.

454
00:31:29.622 --> 00:31:33.252
You may have duplicate capabilities in different parts of the organization or

455
00:31:33.283 --> 00:31:37.152
whatever else, right? So redundancy is a big deal.

456
00:31:38.322 --> 00:31:41.832
BizDesign, one of the architecture tools out there, equates things here.

457
00:31:43.453 --> 00:31:47.816
McKinsey and LeanIX did a study that also looks at best practice can save you

458
00:31:47.832 --> 00:31:50.412
around 15% around operational redundancies.

459
00:31:51.763 --> 00:31:56.292
The reality is, surprisingly, there's not a huge amount of stats out there outside

460
00:31:56.352 --> 00:31:59.052
of IT that confirm the challenge here, right?

461
00:31:59.082 --> 00:32:02.772
And again, I think because Gartner and others have spent 75% of their time, because

462
00:32:03.013 --> 00:32:08.607
75% of their customer base focused on IT, less on the overall operating expenses

463
00:32:09.432 --> 00:32:13.632
of an organization. However, the problem is still there, right?

464
00:32:13.662 --> 00:32:19.572
So whatever you want to put a percentage here, say like 15% of risk around

465
00:32:20.052 --> 00:32:22.422
redundant or overlapping initiatives.

466
00:32:22.453 --> 00:32:26.263
And again, let's equate some value to at least one of those initiatives, right?

467
00:32:26.682 --> 00:32:29.953
Even if they're overlapping. So again, further discounting the impact.

468
00:32:30.013 --> 00:32:34.332
But without that enterprise function, looking across all investments, without

469
00:32:34.422 --> 00:32:38.352
strong structured business enterprise architecture capabilities, redundancy is

470
00:32:38.382 --> 00:32:41.442
going to be hitting you in the back pocket from a value attainment point of view,

471
00:32:41.772 --> 00:32:44.802
and you're leaving value on the table, or you're leaving funding that could have

472
00:32:44.832 --> 00:32:47.082
been applied to another growth

473
00:32:48.672 --> 00:32:49.962
initiative. Now,

474
00:32:51.672 --> 00:32:52.316
this-

475
00:32:52.842 --> 00:32:57.102
Sorry, Ben, just to jump in. So as we're going through this, right, what I want

476
00:32:57.162 --> 00:33:01.752
people to really be thinking about is the fact that what we're actually doing here

477
00:33:01.813 --> 00:33:04.542
is we are building a case for change, right?

478
00:33:04.572 --> 00:33:10.242
We're building a case that we can take to the leadership team that says, "We

479
00:33:10.302 --> 00:33:15.882
know we're leaking value, we know we're not executing the way we need to be,

480
00:33:16.482 --> 00:33:20.712
and here is a case for how much that's actually costing us." So as we're going

481
00:33:20.742 --> 00:33:24.643
through this, I want to challenge everyone to try and convert some of these numbers

482
00:33:24.672 --> 00:33:26.082
into things that you know about.

483
00:33:27.522 --> 00:33:33.402
And if you want help doing that, I'll put a link in the chat again, so you can book

484
00:33:33.462 --> 00:33:36.703
a meeting and I'll help you go through some of this stuff.

485
00:33:37.033 --> 00:33:41.052
We've got a little thing that we do to help you build a case for change.

486
00:33:41.188 --> 00:33:44.802
So this isn't just talking head Ben

487
00:33:46.962 --> 00:33:52.242
giving you some numbers. These numbers are here so that we as a community can start

488
00:33:52.302 --> 00:33:57.492
to take them to shift the mindset of the leadership teams that we all work

489
00:33:57.522 --> 00:34:03.447
for. To start trying to pull together this story about strategy execution being

490
00:34:03.492 --> 00:34:08.502
a joined up model. That there are components that we can identify and address to

491
00:34:08.533 --> 00:34:12.567
make a difference. So as we're going through this, please be making notes.

492
00:34:12.763 --> 00:34:18.521
Be making comments, whatever it is that make this applicable to

493
00:34:18.612 --> 00:34:24.013
your organization, because these are not academic irrelevant numbers that are

494
00:34:24.312 --> 00:34:25.722
interesting, but don't apply to me.

495
00:34:25.873 --> 00:34:30.552
They absolutely apply to you, and these are the numbers that you can use as the

496
00:34:30.612 --> 00:34:34.482
benchmarks to drive the case for change within your organization.

497
00:34:35.203 --> 00:34:37.123
Sorry, Ben, to interrupt.

498
00:34:37.632 --> 00:34:43.138
No, no problem at all. Now, something we're diving into this week as a community is

499
00:34:43.272 --> 00:34:46.332
yes, listen, there's more stats out there we just went through in terms of the

500
00:34:46.572 --> 00:34:48.013
project side of the equation, right?

501
00:34:48.522 --> 00:34:53.802
But again, whether that represents 30% of the overall budget, it's still important,

502
00:34:53.832 --> 00:34:59.352
but it's still insignificant. We're not applying the same lens or rigor to the true

503
00:34:59.412 --> 00:35:02.952
operational activity and expenses.

504
00:35:03.012 --> 00:35:07.527
And we are looking at this through more deeper lens than just this metric here that

505
00:35:07.572 --> 00:35:12.927
I'm going to share, right? But there's an opportunity, and I put this little

506
00:35:12.942 --> 00:35:17.172
hypothesis out there. If we were able to rationalize the operational expenses, how

507
00:35:17.202 --> 00:35:20.292
much more could we fund in growth and transformation, right?

508
00:35:21.792 --> 00:35:26.893
And so think about why does that operating spend remain such a black

509
00:35:27.552 --> 00:35:33.507
box or bucket, right? Every year we introduce new capabilities

510
00:35:33.552 --> 00:35:38.052
and additional technical debt and business debt, right?

511
00:35:38.143 --> 00:35:40.692
To not just the technical IT stuff, but also

512
00:35:42.102 --> 00:35:46.812
capabilities, business processes on the business architecture side, too, right?

513
00:35:47.232 --> 00:35:48.522
So without strong

514
00:35:50.532 --> 00:35:55.842
business and enterprise architecture capabilities, it remains a black box, right?

515
00:35:55.873 --> 00:36:00.162
We don't fully understand or can see the full operating model, or what we say in

516
00:36:00.192 --> 00:36:05.262
the community, the operating fabric of our entire business that needs to be

517
00:36:05.352 --> 00:36:07.272
optimized relative to our strategy.

518
00:36:07.332 --> 00:36:10.422
Otherwise, we are going to be dragging that anchor.

519
00:36:10.482 --> 00:36:15.912
So obviously, over time, that operating fabric becomes bloated

520
00:36:16.692 --> 00:36:20.217
with debts on both sides of the equation, business and technical, right?

521
00:36:20.442 --> 00:36:24.552
Can I put that a different way, or at least ask if this is appropriate then, Ben?

522
00:36:24.792 --> 00:36:30.762
So, we all know that in your change portfolio projects, we

523
00:36:30.792 --> 00:36:34.992
should be investing disproportionately in projects that add the most business

524
00:36:35.082 --> 00:36:35.562
value.

525
00:36:36.882 --> 00:36:42.867
And we should be killing off projects that are not going

526
00:36:42.882 --> 00:36:45.612
to add as much value and maybe are getting into trouble or whatever it may be.

527
00:36:45.672 --> 00:36:47.037
We should be killing them early. Get rid of them.

528
00:36:48.570 --> 00:36:51.150
And this is basic portfolio management.

529
00:36:51.390 --> 00:36:54.270
So hopefully nobody's surprised by those statements.

530
00:36:54.330 --> 00:36:58.710
And what I think I just heard you say is that we need to apply that same logic

531
00:36:58.741 --> 00:37:02.205
within BAU, within the operating framework of the business.

532
00:37:02.280 --> 00:37:06.750
We should be looking at the processes and the services and the tools that we have

533
00:37:07.500 --> 00:37:10.140
that are maybe not pulling their weight, and we should be killing them off.

534
00:37:11.910 --> 00:37:16.140
Yeah. Again, where there's redundancy, yes, we should. Exactly.

535
00:37:16.170 --> 00:37:20.790
We need to understand, isn't it? It's easy to think of strategy execution as

536
00:37:20.851 --> 00:37:23.010
program management on steroids. That's the easy way to think about it.

537
00:37:23.280 --> 00:37:26.520
Because we have these big bets, strategic bets as an organization.

538
00:37:26.550 --> 00:37:29.745
We need to execute them, and it requires strong program management or

539
00:37:29.820 --> 00:37:33.390
transformation management, whatever terminology you want to use.

540
00:37:33.450 --> 00:37:35.670
And ignoring that operating fabric.

541
00:37:36.300 --> 00:37:40.410
But that operating fabric is as important, if not more important in my mind, in

542
00:37:40.471 --> 00:37:42.630
terms of how you execute as an organization.

543
00:37:42.991 --> 00:37:48.780
From the sort of primary strategic capabilities all the way down to the

544
00:37:48.870 --> 00:37:54.540
BAU operational capabilities that an organization needs to run on.

545
00:37:54.991 --> 00:37:59.010
So this is applying a similar level of rigor, not the same techniques, but a

546
00:37:59.070 --> 00:38:03.660
similar level of rigor to hold every dollar accountable or whatever currency we

547
00:38:03.675 --> 00:38:07.935
want to denominate in to the same level of rigors we do in terms of value cost from

548
00:38:07.980 --> 00:38:13.260
a project point of view. But to do that, we have to understand

549
00:38:14.640 --> 00:38:17.820
how that spend is being broken down. It can't remain a black box.

550
00:38:18.241 --> 00:38:20.580
And so one of the things we're working on in the community is exactly that.

551
00:38:20.640 --> 00:38:24.690
How do we bring together the architects that have been saying this forever,

552
00:38:26.221 --> 00:38:28.290
and are positioning architecture as that missing link?

553
00:38:28.380 --> 00:38:30.540
How do we bring them together with finance?

554
00:38:30.601 --> 00:38:32.790
Because it's going to require a different budgeting technique.

555
00:38:33.060 --> 00:38:36.750
Not organizational budgeting, budgeting by capability or product or whatever.

556
00:38:37.260 --> 00:38:41.130
We're not prescribing a one-size-fits-all architectural approach here.

557
00:38:42.420 --> 00:38:48.015
What we are saying is we need to get visibility into the operational activity and

558
00:38:48.090 --> 00:38:52.230
spend, and build a model that provides an objective alignment to strategy the same

559
00:38:52.260 --> 00:38:57.780
way we're used to doing through models like you have around the project side

560
00:38:58.170 --> 00:39:02.640
of the equation. And capabilities may easily be that bridge to achieve that.

561
00:39:02.670 --> 00:39:08.400
Obviously, we need something that is static and won't change that much over time.

562
00:39:09.180 --> 00:39:12.991
But again, when I looked at the stats out there, even going into all the great

563
00:39:13.050 --> 00:39:16.530
tools that focus on business enterprise architecture, there's very few stats out

564
00:39:16.560 --> 00:39:20.460
there that really delve into the extent of this problem. On IT side, absolutely.

565
00:39:20.550 --> 00:39:26.310
Everyone's talking about the 30% redundancy or 30% ability to

566
00:39:26.520 --> 00:39:31.471
rationalize the IT operating costs to a degree for whatever reasons.

567
00:39:32.280 --> 00:39:34.741
But less more on the business side, and IT is a rounding error.

568
00:39:34.770 --> 00:39:38.610
We talk a lot about technology because the technology is so important.

569
00:39:38.640 --> 00:39:41.655
When we actually look at technology spend relative to the overall operating budget,

570
00:39:42.241 --> 00:39:45.315
it's actually a rounding error in the grand scheme of things.

571
00:39:45.330 --> 00:39:48.360
But obviously technology is a key enabler.

572
00:39:48.420 --> 00:39:50.640
So you see some stats here that brought this out.

573
00:39:50.670 --> 00:39:54.255
So I've really kind of lobbed all this to a degree and said, look, high-performing

574
00:39:54.300 --> 00:40:00.270
organizations need to have strong business and enterprise architects or business

575
00:40:00.300 --> 00:40:03.855
and technical architecture. Trouble is that most of the time we think of

576
00:40:03.855 --> 00:40:07.455
architecture, it is the sort of solution or technical architecture.

577
00:40:07.471 --> 00:40:10.590
To me, business architecture needs to lead technical architecture the same way

578
00:40:10.650 --> 00:40:16.230
portfolio management needs to lead project execution with that alignment back into

579
00:40:17.520 --> 00:40:21.360
strategy. So if you look at that, and there's a whole model around here I built off

580
00:40:21.420 --> 00:40:24.330
a $6 billion organization. I won't get into that.

581
00:40:24.601 --> 00:40:25.920
But at the highest level,

582
00:40:27.270 --> 00:40:32.820
you can look to save around 9% costs and 25% of the

583
00:40:32.880 --> 00:40:38.265
IT operating costs. Now, what's interesting about that is when you, because IT is a

584
00:40:38.310 --> 00:40:42.795
rounding error, so that gives you about a 9.8% total opportunity savings of your

585
00:40:42.810 --> 00:40:46.304
operational costs. What's interesting about that is if you then look at that

586
00:40:46.410 --> 00:40:51.241
relative to the discretionary budget and say, okay, if I make a 9.8 saving and then

587
00:40:51.300 --> 00:40:52.814
I apply that to more

588
00:40:54.030 --> 00:40:58.290
growth versus just banking it. You can actually increase your discretionary spend

589
00:40:58.380 --> 00:41:01.500
significantly, around almost 40%.

590
00:41:01.545 --> 00:41:05.370
So that's 40% more funding to drive growth initiatives.

591
00:41:05.415 --> 00:41:08.040
So we talk about leaving value on the table.

592
00:41:08.101 --> 00:41:11.715
There's the strategic misalignment in terms of the funds that we already have that

593
00:41:11.730 --> 00:41:15.570
we're leaving value and there's potentially another 40% bucket over time that we

594
00:41:15.601 --> 00:41:19.335
could fund as well. Now this is one way of looking at the problem, rationalizing to

595
00:41:19.380 --> 00:41:23.040
drive more growth, but there's also other ways we want to rationalize to then

596
00:41:23.160 --> 00:41:27.570
optimize the environment too from a target state architecture point of view.

597
00:41:28.050 --> 00:41:30.930
All right. At the risk of us running out of time, I'm going to inject one quick

598
00:41:30.945 --> 00:41:34.050
thing. So you said a couple of times that IT is a small number.

599
00:41:34.620 --> 00:41:37.471
However, there was a really interesting

600
00:41:40.650 --> 00:41:43.770
paper I read, piece of research I read a couple of years ago.

601
00:41:43.860 --> 00:41:45.915
Well, I can dig it out for you, Ben, at some stage.

602
00:41:47.221 --> 00:41:49.366
And it was looking at

603
00:41:50.670 --> 00:41:55.485
the contribution, the correlation between alignment of IT with

604
00:41:55.500 --> 00:41:58.471
business and the performance of the business.

605
00:41:58.530 --> 00:42:04.320
So it might be a small percentage in terms of spend, but having IT be

606
00:42:04.500 --> 00:42:09.630
well-aligned with business goals actually is correlated at about 20%

607
00:42:09.690 --> 00:42:14.101
level with overall performance of the organization's profitability or shareholder

608
00:42:14.130 --> 00:42:15.900
value, whatever you want to look at.

609
00:42:16.695 --> 00:42:22.260
So it might be small as a percentage of the spend, but it's

610
00:42:22.380 --> 00:42:27.330
huge. It's way out of all proportion when it comes to its impact on your ability to

611
00:42:27.420 --> 00:42:29.280
actually achieve your business goals.

612
00:42:29.340 --> 00:42:29.670
And so-

613
00:42:30.510 --> 00:42:33.000
And I think they're two distinct things, right?

614
00:42:33.255 --> 00:42:34.320
They are. Absolutely.

615
00:42:35.101 --> 00:42:39.241
But I think a lot of times we think of enterprise architecture as focused on that

616
00:42:39.270 --> 00:42:45.030
kind of rationalization of the IT spend versus the true architecture, which

617
00:42:45.180 --> 00:42:50.730
is business architecture that brings together people, processes, and tooling.

618
00:42:51.300 --> 00:42:56.730
Three legs of the stool. Tooling is obviously important, or very important to your

619
00:42:57.241 --> 00:43:03.120
point. To be able to optimize that target state operating model

620
00:43:03.210 --> 00:43:04.410
to drive value.

621
00:43:04.425 --> 00:43:05.070
Exactly that.

622
00:43:07.020 --> 00:43:12.870
One of the key things we're trying to do here is IT-- Listen, working in IT

623
00:43:13.260 --> 00:43:14.910
put a roof over my head for many years.

624
00:43:14.971 --> 00:43:20.851
I think that in between 2004 and 2012, a lot of portfolio management was

625
00:43:20.910 --> 00:43:25.260
done in IT. As IT was looking to show the value that IT was providing to the

626
00:43:25.320 --> 00:43:28.020
business and stack rank initiatives coming from the business.

627
00:43:28.260 --> 00:43:32.400
And there was a lack of professionalization in terms of IT.

628
00:43:32.790 --> 00:43:36.991
And so we spent a lot of time as consultants working to professionalize IT in terms

629
00:43:37.020 --> 00:43:42.570
of their overall capabilities. I think there's the same

630
00:43:42.780 --> 00:43:45.960
void today at the enterprise level, and the enterprise needs to be

631
00:43:46.020 --> 00:43:49.110
professionalized, and this needs to become an enterprise discipline where

632
00:43:49.170 --> 00:43:54.810
technology and IT is a critical component, but is just a component alongside

633
00:43:54.840 --> 00:43:59.640
everything else. And that comes down to why these metrics are being established by

634
00:43:59.670 --> 00:44:04.140
the community. Because what we want to do is be able to report back in actionable

635
00:44:04.260 --> 00:44:10.200
terms to the C-suite what strategy execution is, identify the areas of

636
00:44:10.260 --> 00:44:15.060
value that's being lost today, and quantify its impact to get C-suite

637
00:44:15.090 --> 00:44:19.290
sponsorship to address this problem top-down, which rarely happens.

638
00:44:19.680 --> 00:44:23.101
Versus people within the middle of the organization trying to solve it from their

639
00:44:23.130 --> 00:44:25.320
vantage point, relying on influence only.

640
00:44:25.620 --> 00:44:30.090
And then creating a strategy execution function or similar enterprise, whatever you

641
00:44:30.120 --> 00:44:34.560
want, the name is irrelevant, that has the right mindset, the value architects to

642
00:44:34.620 --> 00:44:39.510
be able to build that cohesive operating system across the village.

643
00:44:39.601 --> 00:44:41.849
So let's move on to the next one, Ben.

644
00:44:44.040 --> 00:44:45.660
I'm just conscious of the fact we've got 10 minutes left.

645
00:44:46.471 --> 00:44:50.445
Well, yeah. I said these ones are

646
00:44:51.750 --> 00:44:54.450
more understandable. Not that the other ones were

647
00:44:55.741 --> 00:44:56.400
not. But

648
00:44:58.080 --> 00:45:02.460
portfolio execution risk. So this is poor execution capabilities.

649
00:45:02.520 --> 00:45:05.640
These kind of stats have been around since the year of the flood, where we look at

650
00:45:05.700 --> 00:45:09.060
sand, or chaos, or whatever it may be.

651
00:45:09.540 --> 00:45:13.770
So obviously as we start to pin our ears back and execute, value's being lost

652
00:45:13.830 --> 00:45:16.110
through outright failures. Or whatever.

653
00:45:16.380 --> 00:45:19.380
The stats are consistent in terms of failures.

654
00:45:19.471 --> 00:45:23.400
Obviously, X percent is being lost through failures alone.

655
00:45:24.255 --> 00:45:28.530
More value is also being lost in terms of cost overruns.

656
00:45:29.221 --> 00:45:32.430
And I think we should talk about that a little bit. Because budget is finite.

657
00:45:33.060 --> 00:45:38.145
If one project increases its costs or requires more incremental funding,

658
00:45:38.580 --> 00:45:41.730
something's got to give. We're going to de-scope another, we're going to delay

659
00:45:41.760 --> 00:45:47.190
something. So it is having an impact on the value achievement of your portfolio.

660
00:45:47.760 --> 00:45:49.410
Budget utilization is a major issue.

661
00:45:49.471 --> 00:45:55.351
One customer once that was only utilizing 80% of their funds each year

662
00:45:55.440 --> 00:45:58.500
on a $4 billion, it was a $2 billion portfolio.

663
00:45:58.920 --> 00:46:02.910
So leaving a significant amount of money on the table relative to deriving value.

664
00:46:02.971 --> 00:46:06.120
So we need to look at that, and that's why that continuous planning process is so

665
00:46:06.180 --> 00:46:10.044
important to ensure that every dollar Whether that's on the project side or the

666
00:46:10.074 --> 00:46:15.355
operational side, is continuously optimize against the strategy at any given point

667
00:46:15.384 --> 00:46:18.714
in time. So going back to your fishing frontier, that we're getting the best bang

668
00:46:18.744 --> 00:46:23.679
for the buck, right? Continuously, not just this is what we thought, we're going to

669
00:46:23.724 --> 00:46:27.355
put our ears back and go, right? So the cost overruns are significant too.

670
00:46:27.669 --> 00:46:29.739
And then of course, schedule delays, right?

671
00:46:29.784 --> 00:46:35.244
Schedule delays in itself, let's just be kind and just say that all that's doing is

672
00:46:35.304 --> 00:46:37.643
delaying or deferring value, right?

673
00:46:38.574 --> 00:46:42.204
But that assumes that when the actual thing is launched, the value opportunity is

674
00:46:42.234 --> 00:46:46.194
the same. You may actually be losing value because you were late to market or

675
00:46:46.464 --> 00:46:49.794
whatever else, right? So I won't, I mean, we're short on time, so I'm not going to

676
00:46:49.824 --> 00:46:54.954
go through the slides that break these down, but they should be understood.

677
00:46:55.254 --> 00:46:58.674
One of the really interesting things here is I want to try and connect some of the

678
00:46:58.734 --> 00:47:02.304
dots here. So this, that feels like a story about

679
00:47:04.105 --> 00:47:08.499
project management. We've got project failures, and that's leakage, right?

680
00:47:08.708 --> 00:47:12.204
So we've got projects that are just failing to deliver the benefit or projects that

681
00:47:12.234 --> 00:47:16.059
are failing, that are going over budget and deferring the benefit, going over,

682
00:47:16.824 --> 00:47:19.898
delivered late, deferring the benefit and all that kind of good stuff.

683
00:47:19.944 --> 00:47:23.949
So, the logical thing to do there is to say, "Great, let's go and do more project

684
00:47:23.994 --> 00:47:29.874
management." But actually, what the data tells us is that that's not

685
00:47:29.964 --> 00:47:30.954
often the problem.

686
00:47:33.025 --> 00:47:37.464
Of course, you need to have reasonable project execution hygiene.

687
00:47:38.514 --> 00:47:44.484
But when you look at the data, what really drives more project completions on

688
00:47:44.543 --> 00:47:49.704
time and on budget and actually delivering the benefit is the bit you were talking

689
00:47:49.734 --> 00:47:51.564
about earlier, the portfolio management.

690
00:47:52.525 --> 00:47:56.199
And the reason for that is that when you have really clear priorities, it means

691
00:47:56.244 --> 00:48:00.384
that you can then sequence your projects so that your people aren't overloaded.

692
00:48:00.444 --> 00:48:03.819
And as soon as you do that, then people, your projects stop colliding.

693
00:48:05.334 --> 00:48:10.374
And it's the collisions very often that are causing projects to be late,

694
00:48:11.514 --> 00:48:14.694
right? And, or that are causing them to fail outright.

695
00:48:15.294 --> 00:48:20.244
So if you have this clarity over priorities and help use that to drive your

696
00:48:20.694 --> 00:48:24.114
sequence your projects so you're not overloading your people, you can actually

697
00:48:24.174 --> 00:48:27.174
accelerate. So I was talking to somebody just about a month ago.

698
00:48:27.564 --> 00:48:29.064
They'd implemented some of these techniques.

699
00:48:29.154 --> 00:48:33.159
They got about an 82%, I think it was 82, 84, I forget which one of those two, it

700
00:48:33.159 --> 00:48:37.584
was one of those two, increase in the flow of projects, project completions, right?

701
00:48:37.944 --> 00:48:43.014
That's not a small increase. There's a bunch of research out there that looks at

702
00:48:43.074 --> 00:48:48.864
this across many portfolios and typically what you'll see is

703
00:48:48.924 --> 00:48:54.084
somewhere between a 30 and a 50% increase in the flow of successful project

704
00:48:54.144 --> 00:49:00.099
deliveries. So this stuff, and that's by fixing the portfolio management, not by

705
00:49:00.174 --> 00:49:04.599
fixing project management. And of course, I'm saying that because we sell portfolio

706
00:49:04.674 --> 00:49:07.929
management software, but actually the point I'm trying to make is that these

707
00:49:08.004 --> 00:49:10.614
different domains that Ben's talking about are all connected.

708
00:49:12.144 --> 00:49:12.504
Right?

709
00:49:12.654 --> 00:49:14.724
Yeah, and that's a portfolio management domain, right?

710
00:49:14.784 --> 00:49:18.984
I mean, there's a strong argument to say too, I mean, so again, as a PMO, yes, you

711
00:49:19.014 --> 00:49:22.674
should be. If you're not focused on portfolio management integrated with project

712
00:49:22.733 --> 00:49:24.534
management today, you're missing something, right?

713
00:49:25.119 --> 00:49:30.084
But there's also a lot of outright failures and delays are to do with poor

714
00:49:30.114 --> 00:49:33.834
architecture, right? Inability to see the operating fabric of the business.

715
00:49:34.404 --> 00:49:34.824
Exactly.

716
00:49:34.838 --> 00:49:38.289
So as a PMO, you have to influence that change or connect the dots with that

717
00:49:38.304 --> 00:49:40.284
change, right? That's why it's a village, right?

718
00:49:40.794 --> 00:49:45.789
And that's why, to a degree, I think we are challenged in getting that C-suite

719
00:49:45.834 --> 00:49:49.463
buy-in because every function is running to the C-suite through their direct

720
00:49:49.494 --> 00:49:53.304
report, whatever, saying, "We need to invest in architecture as a critical missing

721
00:49:53.334 --> 00:49:56.904
link" or "It needs to be an enterprise PMO or a VMO" or whatever you want to call

722
00:49:56.964 --> 00:49:59.619
it, right? Although we're going to go about project status reporting the same way

723
00:49:59.694 --> 00:50:00.954
we've done since the year of the flood.

724
00:50:01.404 --> 00:50:06.338
No, it's all of those people coming together because every function has a piece of

725
00:50:06.384 --> 00:50:10.974
the puzzle, right? And then building that cohesive operating model that gets the

726
00:50:11.004 --> 00:50:15.204
multiplier effect by integrating these, and so we perfectly join, right, in terms

727
00:50:15.219 --> 00:50:20.754
of like a, it's critical. But not necessarily imposing a one size fits all approach

728
00:50:20.784 --> 00:50:23.514
to them because everyone has their day jobs still, right?

729
00:50:23.934 --> 00:50:27.564
I mean, to me, one of the critical things around strategy communication, right?

730
00:50:27.624 --> 00:50:32.844
To me, if you fix translate and communicate strategy, you fix 50% of the problem,

731
00:50:32.964 --> 00:50:36.624
maybe, right? Because that's done very poorly, even though you and I should have

732
00:50:36.684 --> 00:50:39.054
been focused on this for forever, right?

733
00:50:39.324 --> 00:50:41.034
It's still done very poorly in organizations.

734
00:50:41.484 --> 00:50:44.139
But HR has a huge role to play in that, right?

735
00:50:44.214 --> 00:50:46.959
The continuous communication of strategy, the alignment of the incentive and

736
00:50:47.004 --> 00:50:47.484
performance

737
00:50:48.775 --> 00:50:54.294
models relative to the strategy so that as coin-operated individuals, individual

738
00:50:54.324 --> 00:50:59.304
incentives don't somehow have six degrees of separation or whatever, or diverge,

739
00:50:59.424 --> 00:51:03.234
drift from the strategy, right? So everything's connected.

740
00:51:03.355 --> 00:51:06.894
All these functions need to come together to build that cohesive operating system.

741
00:51:07.404 --> 00:51:11.424
Otherwise, you will end up with execution drift at any given point, right?

742
00:51:11.484 --> 00:51:17.275
100%. So, if you want to do something with this, and Ben, I'm going to

743
00:51:17.574 --> 00:51:20.319
give you this question in a second, so I'm going to give you some advance notice so

744
00:51:20.334 --> 00:51:25.434
you can think it through. Right? What should everyone on this call do tomorrow to

745
00:51:25.525 --> 00:51:28.405
start the journey? Right? That's the question.

746
00:51:29.244 --> 00:51:31.494
Now, if your answer to this,

747
00:51:33.354 --> 00:51:36.984
most of the people on here are in the PMO, right, PMO leadership role.

748
00:51:37.734 --> 00:51:42.190
And so the logical place for a lot of people to start will be in making sure that

749
00:51:42.234 --> 00:51:47.650
at least the PMO and project land is delivering their part of strategy execution

750
00:51:47.664 --> 00:51:52.674
well. And even doing that requires a case for change, right?

751
00:51:52.764 --> 00:51:56.304
Because it's not actually about software.

752
00:51:56.394 --> 00:51:59.094
Software is an enabler, but it's actually about having the right

753
00:52:01.584 --> 00:52:06.504
processes and people and everything in place, proper decision-making structures and

754
00:52:07.525 --> 00:52:09.684
governance processes and so on, right?

755
00:52:09.744 --> 00:52:13.614
That and not overloading people and all this kind of good stuff, right?

756
00:52:13.644 --> 00:52:16.389
So doing the portfolio management well is a really big piece of that.

757
00:52:16.434 --> 00:52:19.719
So if you would like some help to build your case for change,

758
00:52:21.025 --> 00:52:24.400
at least for the PMO, because that's something you can control, right?

759
00:52:24.414 --> 00:52:28.389
You can't control what business architecture do right now, but you can control what

760
00:52:28.405 --> 00:52:32.244
the PMO does. Then go book a meeting with me using that link.

761
00:52:32.633 --> 00:52:36.684
I'll just put it in the chat. And I'll help you build that case for change.

762
00:52:36.775 --> 00:52:41.664
We allocate about an hour to that. I have a limited number of those sessions a week

763
00:52:41.754 --> 00:52:44.244
that I can do because we don't charge for them.

764
00:52:44.304 --> 00:52:47.604
It's sort of a free, no strings attached kind of thing.

765
00:52:48.474 --> 00:52:52.344
So I have a few slots each week that I allocate to doing that.

766
00:52:52.434 --> 00:52:57.714
So if you would like help kicking off your own case for change, use that link.

767
00:52:57.744 --> 00:52:59.694
Let's book a meeting. Let's get going.

768
00:53:01.494 --> 00:53:05.304
Ben, so answer to the question, if you please, sir. The answer is, drum roll.

769
00:53:07.405 --> 00:53:10.989
Oh, yeah. I'll ask a simple question first is,

770
00:53:12.204 --> 00:53:14.334
do you have C-suite buy-in to solving this problem?

771
00:53:15.174 --> 00:53:18.954
Because if you're a PMO within one of the departments, yes, you can effect change

772
00:53:18.984 --> 00:53:23.094
within that department. But what we're talking about here is effecting change in

773
00:53:23.125 --> 00:53:26.035
terms of how the entire organization executes on its strategy.

774
00:53:28.359 --> 00:53:31.989
So does the C-suite understand what strategy execution is, right?

775
00:53:32.530 --> 00:53:35.934
And do they understand, and if they do, if the answer is yes to both these

776
00:53:35.994 --> 00:53:37.809
questions, then the answer is simple, right?

777
00:53:38.184 --> 00:53:42.174
Do they understand the amount of value that is at risk?

778
00:53:42.339 --> 00:53:45.954
If so, then they should be elevating an enterprise function, right?

779
00:53:46.554 --> 00:53:51.744
To become the value architects of that cohesive operating system, right?

780
00:53:52.944 --> 00:53:56.065
If the answer is no to those, then I would be starting to

781
00:53:57.954 --> 00:54:01.869
talk to architecture. I'd start to talk to FD&A, I'd start to talk to the other

782
00:54:01.914 --> 00:54:03.984
critical components and form a coalition.

783
00:54:04.104 --> 00:54:08.155
Principle one of the ten principles of mastering strategy execution is how do we

784
00:54:08.544 --> 00:54:10.464
expose the cost of poor strategy execution?

785
00:54:10.704 --> 00:54:15.204
How do we build a value case that can be pitched to the C-suite so they understand

786
00:54:15.234 --> 00:54:18.804
what it is, they understand the criticality of the thing, and will form an

787
00:54:18.834 --> 00:54:24.025
enterprise function to become those architects of that cohesive operating system.

788
00:54:24.054 --> 00:54:28.405
Which is not an enterprise PMO, it's not a change management office, it's not a

789
00:54:28.464 --> 00:54:30.114
one-time transformation management office.

790
00:54:30.504 --> 00:54:34.914
It's the architects of the value flow in the organization by unifying those teams.

791
00:54:35.334 --> 00:54:38.454
And I agree 100% with that, and I'm going to raise it a little bit.

792
00:54:38.574 --> 00:54:42.264
I like to think of it as the head, the heart, and the heartbreak. Right?

793
00:54:42.354 --> 00:54:44.214
So what Ben just said is you need a head argument.

794
00:54:44.275 --> 00:54:48.954
You need to bubble up that value at risk discussion. Right?

795
00:54:50.094 --> 00:54:52.344
So that's the head. That's the logical business case.

796
00:54:52.375 --> 00:54:58.044
But I think that in most cases, you also need a bit of a heart, an emotional

797
00:54:58.074 --> 00:55:00.309
case for someone to take ownership.

798
00:55:00.354 --> 00:55:03.804
Because at the end of the day, a lot of these senior leaders, they're being paid

799
00:55:03.834 --> 00:55:07.884
reasonably well. They're smart people, right? They're respected in their industry.

800
00:55:08.815 --> 00:55:14.763
And so they don't have to prove Anything in the way that

801
00:55:14.868 --> 00:55:17.268
perhaps some people further down the tree do.

802
00:55:18.138 --> 00:55:23.418
So maybe they have an incentive not to change stuff, but I bet you there's stuff

803
00:55:23.478 --> 00:55:28.098
out there that's driving them crazy, like a lack of visibility, a lack of control,

804
00:55:28.788 --> 00:55:31.893
right? A lack of understanding where decisions are being made, or how are my

805
00:55:31.893 --> 00:55:35.418
investments supporting my goals, right? Those are emotional issues.

806
00:55:35.478 --> 00:55:39.663
It's really hard to put a number on those things, but they're emotional things that

807
00:55:39.709 --> 00:55:42.739
can help you win the heart, right? So the numbers that we've gone through today

808
00:55:42.798 --> 00:55:45.408
will help you with the head. Those things will help you with the heart.

809
00:55:45.528 --> 00:55:51.048
And then the heartbreak I like to think about as go out and find a disaster,

810
00:55:52.308 --> 00:55:58.188
right? Something that was really an existential problem for someone and

811
00:55:59.538 --> 00:56:04.338
show how this lack of things being connected, this lack of coordination and

812
00:56:04.398 --> 00:56:08.239
strategy execution directly led to that disaster. Right?

813
00:56:08.748 --> 00:56:12.513
Use that heartbreak to say, "We really don't want that to happen again," right?

814
00:56:12.918 --> 00:56:16.968
So when you put those three together, it becomes a really, really compelling case.

815
00:56:17.028 --> 00:56:21.378
So that's what we do around the PMO and that workshop thing I just put in the chat.

816
00:56:22.098 --> 00:56:23.388
But I think it's-

817
00:56:23.538 --> 00:56:27.528
I think you've raised a very important point then, and not to run over time, but

818
00:56:28.878 --> 00:56:32.478
I think the problem is, again, a big problem is that often these things are

819
00:56:32.508 --> 00:56:35.463
reactively created after that disaster, right?

820
00:56:35.478 --> 00:56:38.959
And as we go, some major program went off the rails, so we need an enterprise PMO

821
00:56:39.018 --> 00:56:41.568
that comes up and creates what a PMO does.

822
00:56:41.628 --> 00:56:46.023
Too much structure, too much focus on just project management methodologies, right?

823
00:56:46.128 --> 00:56:50.898
Or we've got bad financial performance, so we have an operating model redesign

824
00:56:50.929 --> 00:56:54.334
where architecture is elevated to the top because we want to rip out costs, right?

825
00:56:54.348 --> 00:56:59.179
Or we have a transformation office is one key transformation that just can't fail,

826
00:56:59.298 --> 00:57:04.008
right? What I'm asking people to do here is proactively invest in this, and that is

827
00:57:04.038 --> 00:57:08.418
difficult, right? Because especially when there isn't a disaster or the disaster

828
00:57:08.478 --> 00:57:11.658
isn't in someone's short-term memory, right?

829
00:57:12.858 --> 00:57:16.878
Because especially if the business is performing okay, right?

830
00:57:16.908 --> 00:57:17.209
Gotcha.

831
00:57:17.298 --> 00:57:21.138
Because the big, I just put out a post about this, Gavin.

832
00:57:21.199 --> 00:57:24.288
We're doing a bunch of sort of comic skits coming out of the challenges identified

833
00:57:24.304 --> 00:57:29.239
through the community is you're always going to rush for Q1 or the next quarter's

834
00:57:29.298 --> 00:57:32.824
performance over understanding that there's a bigger prize in investing in

835
00:57:32.838 --> 00:57:35.329
developing this muscle in terms of total performance.

836
00:57:35.358 --> 00:57:37.608
You're leaving, celebrating the 4%

837
00:57:39.438 --> 00:57:43.848
growth for the quarter, not realizing you left 8% on the table.

838
00:57:43.908 --> 00:57:47.838
12% was actually lost, or 8% was lost, right?

839
00:57:48.498 --> 00:57:52.699
And I think that's, to me, one of the biggest things is we're asking for a

840
00:57:52.788 --> 00:57:53.628
proactive

841
00:57:54.918 --> 00:58:00.709
intervention to drive value by improving all these processes that

842
00:58:00.739 --> 00:58:03.977
these leading indicator metrics represent.

843
00:58:04.489 --> 00:58:08.508
Safe in the knowledge if you tweak that, more value's going to flow on the back

844
00:58:08.598 --> 00:58:10.459
end, maximize and acceleration.

845
00:58:10.728 --> 00:58:15.918
And so here's my response to that. And apologies, we're going to run over just by a

846
00:58:15.978 --> 00:58:18.949
minute or two. So if you can stick around, great. If not, thank you for joining.

847
00:58:20.808 --> 00:58:24.543
So here's a quick response to that, Ben, which I think is a really good insight.

848
00:58:26.358 --> 00:58:28.788
So this community here is all about project management.

849
00:58:29.239 --> 00:58:32.943
People in this community tend to be quite organized and they tend to plan things

850
00:58:32.989 --> 00:58:36.558
because that's why they've gravitated to this space.

851
00:58:36.648 --> 00:58:39.648
And so with that hat on,

852
00:58:40.848 --> 00:58:41.898
let's flip that around.

853
00:58:43.459 --> 00:58:48.528
Let us as a community be proactive in preparing so that when that next disaster

854
00:58:48.558 --> 00:58:49.998
happens and you know it's coming,

855
00:58:51.498 --> 00:58:56.508
instead of an executive bringing McKinsey in or Big Four in saying, "What should we

856
00:58:56.568 --> 00:58:59.492
do because we just had this disaster?" And they'll just give you a vanilla answer,

857
00:58:59.838 --> 00:59:05.478
right? We all know this. Instead of that, you do the root cause analysis

858
00:59:05.838 --> 00:59:06.123
now.

859
00:59:08.058 --> 00:59:10.368
You pull the numbers together now.

860
00:59:10.429 --> 00:59:14.628
So as soon as that disaster happens, you're ready with the analysis and you can go

861
00:59:14.658 --> 00:59:20.283
in and use that. Who was it who said, "Never let a good crisis go to waste"?

862
00:59:20.568 --> 00:59:24.018
I forget who it was. Sounds very Churchillian, doesn't it? Sounds like Churchill.

863
00:59:24.199 --> 00:59:26.838
Probably wasn't, but we'll blame Churchill, right?

864
00:59:26.898 --> 00:59:28.908
Never let a good crisis go to waste.

865
00:59:28.938 --> 00:59:34.398
So be prepared, and the next time one of those crises hits, use

866
00:59:34.459 --> 00:59:38.402
it. Use it to do the heartache part of the head, heart, and heartache.

867
00:59:39.199 --> 00:59:43.098
And make sure you've got the head ready, you've got the heart arguments.

868
00:59:43.788 --> 00:59:47.508
Start talking to people and building those heart arguments ahead of time, right?

869
00:59:47.568 --> 00:59:51.978
That's about understanding their personal pain is the heart.

870
00:59:52.638 --> 00:59:56.058
And then as soon as the heartache appears, you're ready to strike.

871
00:59:56.688 --> 01:00:01.608
So I think it's not just about the executive team proactively investing in this.

872
01:00:01.668 --> 01:00:06.858
I think the people on this call can do something proactively now to be

873
01:00:06.949 --> 01:00:11.209
ready to respond when something goes off the rails.

874
01:00:12.168 --> 01:00:17.778
So there we go. So as we're wrapping up, I want to thank you, Ben, for your time.

875
01:00:17.838 --> 01:00:22.068
Thank you for sharing that. I think this is one of the first communities to get

876
01:00:22.128 --> 01:00:25.638
visibility of this work, which is really exciting, so thank you for that.

877
01:00:26.688 --> 01:00:30.242
Really appreciate it. Thank you for sticking around for an extra five minutes at

878
01:00:30.288 --> 01:00:32.959
the end there. Ben, a million thanks to you, sir.

879
01:00:33.949 --> 01:00:36.378
And we'll see you all on the next one.