Our Corporate Ebola is Failed Change

Just like the disease, corporate change has a 50% mortality rate

 

Boise, Idaho, 10/07/14 – Local management and organization specialist publishes a fascinating new book Focusing Change To Win. It provides a prescription for combating the risks inherent in organizational change. Risks like poor revenues, lost opportunity, competitive vulnerability, increased employee cynicism and fear. The endemic nature of these risks led Nick Anderson and his Nigerian co-author Kelly Nwosu to ask:

Why do some companies thrive on change while other just survive?

Answering this question led to a global study of 6000 comments from 1072 business leaders from 80 countries in 19 industry sectors with over 10,000 years of change management experience provided some powerful and practical advice and tools.

To reach this point, you have to go back to Nick’s experiences with failed change. The list, many of us can relate to includes:

• “Am I going to have a job tomorrow?”
• “Why did they let Sue go?”
• “How am I going to tell Bill he hasn’t got a job?”
• “What am I going to do?”
• “We tried this before…”
• “This (change) is only for them …..not us?”

Since those early days, his work with organizations across the business and public sector encountered a litany of failed change. His ongoing research shows survey after survey reporting that “People are the problem” (as the main reason). Percentages of failed change continue to this day ranging from 40% to 80% and many commentators agree that more changes fail than succeed. Only last September the Project Management Institute’s 2014 Report found that 56% of projects fail to meet their goals.
What is really thought provoking is that Nick and Kelly’s book show that there are those who do get it right.
But, really, isn’t comparing failed change to Ebola ridiculous? Nick Anderson doesn’t think so. The cost of a failed change can be staggering. Organizationally failed change can be fatal to both the organization and their people. Individually the stress of failed change permeates people’s lives, emerging as cycles of addictive behavior, broken relationships and financial hardship. For example, one Swedish study showed increases of heart disease was linked to poor leadership. Job insecurity has been linked to several different outcomes, such as:

• Negative attitudes towards work
• Turnover intention
• Health complaints.

Data from 400 nurses at a Swedish acute care hospital showed that job insecurity affects stress even after taking account for individual characteristics. (Naswall,Sverke & Hellgren)
A 22 country European study concluded that while job loss is traumatizing, it is not common. In contrast, the fear of job insecurity is widespread and its health impact is as bad as losing your job (Mathilde Godard). Or, how about a German study which concluded that after the 2008 recession

“People fearful of losing their jobs are 60% more likely to develop asthma”.

Closer to home, studies from Texas A & M and University of California add weight to the endemic nature of this corporate virus.

So, what can we do about this disease?

Clearly, the last 20 years demonstrates:

1. Current Theories and prescriptions are not working or user friendly.
2. The reliance on imported change processes alone are less effective.
3. Leaders are facing greater complexity, accelerating change, greater competition and more knowledgeable customers.

The critical point of staving off failed change is to recognize that there is no “cookie-cutter” “quick-fix”. Importing new theories from outside an organization increases people’s natural resistance. It truncates thinking about “why will this change work for us?” and creates divisions between the “Importers” from the rest of the organization.
So, this book advocates using facilitated discussions, questionnaires and other tools to engage people in creating their own change approaches, processes and protocols. You may be thinking.

“Why not use what’s worked from outside” “It’s cheaper and faster etc.”

Here’s what the authors concluded. Excluding people from deciding how their organization handles change risks creating greater resistance and less sustainability. Fundamentally, it excludes middle level leaders so they cannot develop to their leadership skills and risks their resistance to the point of ensuring that change will fail.
Those who thrive on change really understand this. They recognize that so many “imports” are too often seen as disrespectful of people’s skills and expertise, especially when those people have experienced failed change. Importing prescriptions needs far more thought on how to reduce the toxicity of past failures. So, why is this book important for leading successful change?
As Bill Connors, President & CEO, Boise Metro Chamber of Commerce) said:
“Focusing Change to Win is a must read and reference for business people regardless of their company’s size. Whether you run a family business or public corporation, this book has thought provoking tools and questionnaires you can use immediately. Nick Anderson and his co-Author Kelly Nwosu have done a masterful job in distilling over 6000 business leaders’ comments into such a practical set of tools. If you want your next change to be successful, this is essential reading.”
To find out more go to focusingchangetowin.com or amazon.com. Also Nick will be at the Boise Chamber of Commerce for a book signing on Wednesday 29th October from 8 am to 10 am.

For more information,
Nick Anderson
(616) 745-8667
nanderson@thecrispianadvantage.com
For more information on 10/06/2014:
http://focusingchangetowin.com

Self-Directed Learning Requirements for Learning Management Systems

Self-Directed Learning Requirements for

Learning Management Systems

(Adapted from research by Gerald Grow – Teaching Learners to be Self-Directed and others)

by Nick Anderson & Bruce Lewolt

In her highly regarded book, The End of Competitive Advantage, Dr. McGrath shows that the demise of once dominate companies, like Kodak, RIM (Blackberry), and Circuit City, was predictable due to their rigid structures that were designed to extract maximum value from what they thought was a sustainable competitive advantage. Further, that in today’s environment successful corporate structures must be designed to identify and quickly respond to a transitory competitive advantages and then move on to the next as the market changes. This means that the ability of the employees in the organization to learn and adopt new behaviors may be the only truly sustainable competitive advantage. Such an organization cannot survive with a minimalist approach to learning effectiveness. Instead they need systems that produce sustained changes in behavior, robust improvements in performance and that facilitate efficient self-directed learning.

All of this means that good learning management systems (LMS) need to produce deep and lasting learning and both guide and accelerate the learner’s progression from dependence to self-direction and learning independence. But, typically there are difficulties when an LMS adopts one-size-fits all approach that does not adapt to each learner’s developmental stage. For example, where a learner needs direction and the system is non-directive.

Another dynamic is that learners have varying abilities of self-directedness. The same learner can be very self-directive in subjects where they have both a robust knowledge level and a strong belief in their ability to perform (self-efficacy), yet need a high level of direction in subjects where one or both of these factors are missing.

So LMS design needs to reflect the stages of Self-Directed Learning (SDL) based on the Situational Leadership Model (Hersey & Blanchard). This means that LMS designers need to create an effective progression from dependence to self-direction that adapts to each learner and subject.

The first stage is to consider goals that are directly related to learning. For example:

1. To create self-directed and life-long learners
2. To create online learning that adapts to different learners
3. To allow self-directed and dependent learning to co-exist
4. To allow curriculum developers to easily create courses adapt to the individual learner.

If you are interested in having the authors speaking to your organization fill out this form.

How to Make Sales Self-Coaching More Effective

Self-coaching can be a like the blind leading the blind. At best, the rate of improvement is slow and inconsistent. At worst, the group perpetuates behavior that is not competitive. This is also true of peer coaching where they exert their influence based on equally inaccurate perceptions of what they do and too often steers the colleague in the wrong direction.What follows summarizes why self- and peer-coaching alone can be ineffective in developing sales peoples’ self-analytical abilities – A critical part of sales mastery. Then we overview how to solve this problem. The context is that since 2008 sales management can be summed up as, “Do More with Less” One result being that technology has accelerated the trend toward inside sales. In fact, there are now more inside sales people in USA than their traditional outside sales counter parts. In turn, this increasingly spawned the view that sales people can coach themselves entirely. This thinking is a logic based on increasing spans of control and a lack of sales managers both in ability and their inclination to coach their sales people

Key Account Management Series: How do you really improve sales mastery to win more deals?

Watch the video of this blog

Over the last 25 years, sales executives have become jaded about sales training’s contribution to the bottom line. For many, memories of being pulled from the field for some grizzly sales training remain.  Today there are hundreds such programs . . . from being customer value centered, to chasing foxes (tiring at best), to filling shark charts and don’t forget your green sheets!

Yes, these approaches point the way, but too many sales managers don’t realize how ingrained their salespeople’s habits really are. Even if they manage to get them to complete their “forms” they lack the awareness of when they are not in sync with different and changing customer needs. This is really prevalent in those sales people whose past success was in products that sold themselves. They got mentally lazy differentiating on value or service. For example, the telecommunications and IT markets in the early 2000s. Consequently, many are unaware changes before it’s too late, like:

Key Account Management Series: Why are Sales Compensation Hydraulics Still Leaking?

1.    Introduction

I developed this as a discussion paper for a client’s European Sales Management Effectiveness Project. The interesting perspective is how the issues raised in the early 90’s are still validated by Deliotte’s 2010 survey of 250 Sales VPs. It begs the question:

Why are Sales Compensation Hydraulics Still Leaking?

1.1.  How do you design a good sales compensation plan?

Specifically, a good plan:

• Uses performance metrics that drive the company’s overall strategy;
• Ensures roles, skills, selling, processes, internal culture, etc. are consistent with the overall sales force strategy
• Are mechanically sound ; and
• Can be administered efficiently.
• Fits for your sales organization?
• Can be administered with existing people, processes, data, and technology

(The following is based on Frank Cespedes book Concurrent Marketing, The Management of Major Sales (Neil Rackham) and 2010 Strategic Sales Compensation Survey by Deloitte & Varicent)

1.2.       Compensation Hydraulics springs a leak

Since the mid 90’s the great bulk of literature still emphasizes what might be called

“Compensation Hydraulics”: Push this pay lever and get this kind of behavior.

This type of thinking fails to recognize that sales compensation is dependent upon, data analysis, strategy, values and human motivation. Many forget to ask:

How should we pay our customer facing people? (Which inevitably involves a range of business issues?)

Presenting a Persuasive Case – How do you sell an idea?

INTRODUCTION

A frequent and often crucial situation in management today is one in which one person is seeking to persuade another to accept proposals for change.  This situation commonly occurs when a subordinate presents a case to his or her boss.

 Unfortunately, people usually spend a great deal more time and effort in collecting supporting facts and figures than in planning for the face-to-face interaction on which the success of the whole exercise usually depends.  Careful consideration of interactive strategy at the planning stage can both assist in the selection of effective arguments and result in more persuasive interactions.

Feature Dumping

This discussion of the issues involved concentrates on persuasion in the boss-subordinate context; but the principles considered apply equally well to any situation in which one person is seeking to gain the co-operation or the consent of another.

Complexity, the New Normal 4: Improving Sales Performance – Are you ready for the Challenge?

 This is the forth in a leadership series – Complexity the New Norm. This series is looks how we implement successful change that fulfills people and avoids human casualties.

Our question is, how do we create working relationships that are rewarding? (Rewarding not just productive).  Why?

It’s only by energizing people and harnessing technologies better than anyone else that companies can thrive.

Genuinely aligned, empowered and collaborative people will outperform the competition every time.

This month I consider probably one of the most difficult areas is sales, especially complex sales.

What makes sales complex?

Classically, “Many to Many” Think of it like a bow tie. On the left side you have the selling organization and on the right Complex Sales. Typical characteristics:

• Many decision makers
• Team selling
• Proposal or tender based selling (RFP)
• Post sales support requirements like after sales service
• Needs tailored solutions
• High value, e.g often needing board approval
• Long sales cycles
• Technical/knowledge based elements
• Consultative selling requirements
• Customer relationship focus

So, more people across the company need to communicate with customers and prospects before, during and after the sale. This increases complexity and the difficulty of “Keeping Everyone On The Same Page”

Complexity, the New Normal! 3: Listen to your guts – Are they really on the same page?

 This is the third in a leadership series – Complexity the New Norm.This series is looks how we implement

Seeing the Wood for the Treessuccessful change that fulfills people and avoids human casualties.Last time, I asked how we create working relationships that are rewarding. (Rewarding not just productive).  Our position is that it’s only by energizing people and harnessing technologies better than anyone else that organizations can survive and thrive.Genuinely aligned, empowered and collaborative people will outperform the competition every time.Many surveys show executives say that their people aren’t ready to handle this “new norm” So, what’s getting in the way?When the urgent drives out the important, many leaders ignore what their “guts” are telling them, even when they sense people aren’t on the same page. They’ve sensed it before and seen the results.  Yet, complexity and urgency mask how things accumulate, misalign and make each change more difficult.You know that feeling yourself. We’ve all worked in dysfunctional work places.  You pick up on people’s differences (often unstated in team meetings) and how they use their experience to justify their positions.  They are oblivious of others views. Worse still they believe that their views are shared by everyone.If leaders are aware of these things, why don’t they do something?I think it’s like how people put up with physical pain and stress – take the pain killers and go on. And I am not implying they’re weak but their strength to persevere can be a two-edged sword. Here’s some examples of what leaders ignore and don’t realize their effect:It’s expecting things to be done and repeatedly being disappointed.It is the lump in your stomach when they are handed  yet another impossible deadline.It’s feeling that they have to be a mind reader to figure out what is expected.It’s that welling anger they get when important decisions fall apart (because there really wasn’t any buy-in).These are all misalignments. People not being on the same page. It’s costly, pervasive and accumulates.Now, add increasing complexity and we need to say – we can’t go on like this anymore.  The busyness of complexity masks misalignments especially when wicked problems get into the mix.You’ve mentioned wicked problem solving before….But why is it so important in leading in complexity?Wicked Problem Solving

Horst Rittel coined the term Wicked Problems as he found traditional approaches to design and planning were not effective. It’s how we solve benign or simple problems.

• Gather data
• Analyze data
• Formulate Solution
• Implement Solution

This apparently very reasonable approach starts faltering  when you:

1. Don’t understand the problem until you have developed a solution.

You can’t search for information without having some sense of what a solution looks. Rittel said:

“One cannot first understand, then solve.”

And what ‘the Problem’ is depends on who you ask – different stakeholders have different views about what the problem is and what constitutes an acceptable solution.

2. Don’t have a nice neat ending.

If there is no defined ‘Problem’, there can’t be a definitive ‘Solution.’ So you can’t solve the problem with the ‘correct’ solution. Herb Simon, called this ‘satisficing’ — stopping when you have a solution that is ‘good enough’

3. Don’t have right or wrong solutions.

Solutions are simply ‘better,’ ‘worse,’ ‘good enough,’ or ‘not good enough.’ How “good” they are will vary widely and depend on different stakeholder values and goals.

4. Can’t draw on past experience

There are so many factors and conditions that no two wicked problems are alike.

Here are a few examples of wicked problems:

• Whether to route the highway through our city or around it?
• What should our mission statement be?
• What features should be in our new product?
• How should we respond to a competitors new…fill in the blank?

The point is managing complex and wicked problems shifts the center of gravity toward peoples’ relationships and interactions. It shifts from relying on expertise and pride in accumulating knowledge to learning with and from fellow learners, honestly disclosing doubts and admitting ignorance.

I am thinking leaders who are listening will be saying: OK, I get, it but where do I start?

As I said last time, complexity and misalignment is best handled by those directly involved. So, leadership should be devolved to the lowest level. This means expectations you have of your leaders need to be clear, agreed and tracked. There are several alignment areas that senior people need to address with lower level leaders, which I will cover in later programs. But, I will start with a key competence that leaders need improve in their teams and activities.  It’s a bastion against the confusion that comes from poorly managed complexity

Leading Learning

Leaders have to shed their prejudices and bad experiences of learning at school, – like cramming or memorizing, and that learning by doing is good enough. Many leaders will have to unlearn, and then learn about Leading Learning. There are five criteria you should expect your leaders to evidence in their learning expectations: Are they …..

• Planned?
• Action-Focused?
• Constructive?
• Social?
• Time-Bounded?

Using these criteria, leader expectations need to specify what they expect of their people and draw out what their people expect in return.

What do you see as the main areas for leaders to think about when it comes to leading learning?

Here are four things to reflect on about your organization. Ask yourself:

How do we really match-up when it comes to leading learning?

Learning team-based sense-making process.

1. Learning is team-based sense-making process.

• What expectations do you have of your people to develop shared knowledge from similar situations?

Why?

•  Shared situations builds shared sensing, which builds common frames of reference.
•  Positive shared experiences strengthen organizational culture.
•  Shared situations builds shared learning and reduces the exclusivity of individual experience

• Can you find expectations that say it’s OK for people to express feelings of being puzzled or being misunderstood:

Why?

• Such expressed feelings are often the tender shoots of learning and if subject to making people feel stupid will stunt learning before it has even got going.
• Sharing puzzlement develops learner ownership because there’s “gas in their tank” to do something about it.
• You don’t know how many others have the same feelings until they are expressed.
• Getting people on the same page only happens when people’s feelings are transparent to others. It takes the guesswork of where people are coming from. It reduces assumptions about people’s intention, motivation and agenda

 2.  Learning is a socially negotiated

• Leader expectations need to specify that making sense of problems and their solutions needs to be negotiated with the intention of reaching understanding, resolving differences and producing an agreed course of action.

Why?

• What’s agreed is far more likely to stick
• Stakeholder and team member interests of are more likely to be respected and served
• Better alignment leads to growing trust and openness which leads to people being less guarded

3. Learning is multi-level  sense-making

• Leaders, especially senior leaders, need to ensure that their expectations of learning are expressed to all levels both vertically and horizontally across the organization.  The belief that knowledge is only in one person’s head went out with the craftsman and his apprentice. Knowledge and reasoning need to be used for collective sense-making.

Why?

• It’s the social process that bonds people together. As we engage with others we influence and are influenced by our working community their beliefs and values.
• This type of participation is how we absorb and grow a healthy culture.
• This is how we grow as individuals and develop rewarding relationships

It’s crucial that leaders understand that activity constrains and defines the learning that can occur, so the last point

 4. Learning is a product  of activities, systems and processes

Learning through Activities

The blend of people, their experiences, values and beliefs are not reducible to individual actions in complex situations. So, leader’s expectations need to shift from the individual to the team.

Why?

 

• It’s not about you; it’s about us – “Leave your ego at the door!”
• Information isn’t any good if it is not shared, in ways that others can understand
• If you don’t interact with others your chances of building trust, respect and other relational glue is remote

If I am a leader or business owner listening to this today I might be saying that’s all very well but I have a business to run. What advice would you give them?

Do what you’ve always done, get what you’ve always got! – Not!

1. Hire people who evidence lifelong learning – if people aren’t curious they are not for you.

2. Make sure you pay people for doing different things not just doing what we have always done – cos if you don’t you will get what you’ve always gotten.

3. Ensure you make sure all people know learning is a priority and it’s not something left to chance or the competition

 

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© Copyright All Rights Reserved, PDS Group LTD and Walk the Talk – A Blog for Agile Minds, [2010-2011]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Nick Anderson, PDS Group LTD and Walk the Talk – A Blog for Agile Minds with appropriate and specific direction to the original content.

Getting the Best from your Sales Training: Methodological Agnosticism?

Designing Sales Training: Methodological Agnosticism

Sound weird, doesn’t it? Truth is . . .  being tied to one training methodology simply isn’t productive.

There’s no “perfect training methodology” – whether it be focused on selling, managing or coaching. Any training should  Advance Competence while Advancing Sales. Complex sales organizations need methodological purpose rather than one methodology piled on top of existing methodologies.

Additionally, people have been trained a lot in their lives. It seems obvious that we should also give them credit for the concepts, processes, and skills they have already learned. Adding methodologies (no matter how good they are) risks creating indifference. We know indifference does not change behaviors! Conversely, building commitment relies on giving your people and managers credit for what they already know, while at the same time changing behaviors that do not work.

Getting People on the Same Page – Preparing for Change

Listen to the Radio Show based on this Blog

In this blog I want to focus on Preparing People For Change by over viewing improving people productivity and it’s connection to gaining people’s commitment.

Why is this so important as we climb out of this recession?

It’s a good question…over the last 15 years the odds of making a successful change in North America haven’t changed appreciably. Two thirds of change initiatives fail, including family businesses trying to pass on their company to the next generation. Number 1 reason executives surveyed said “People”

What is your take on the reasons for such a high failure rate?

The performance challenge is greater than ever. How you rebuild and lead an organization to perform near its potential is even more difficult today.

As Tim Kite of Focus3 Consulting says:

It’s challenging because an organization is the sum of its parts piecemeal improvement doesn’t address the organization’s system. To meet this challenge you need to be really clear on the difference between performance drivers vs. performance indicators. Too many people focus on the numbers and too little on Drivers:

20 Communication Channels to Get Aligned

•         Key Drivers produce performance

•         Key Indicators only measure performance (even well designed ones)

•         You can’t manage indicators only drivers can be managed
There are Five Drivers that cover your business system

•         People – Selection, Development & Retention

•         Culture – Clarity, Consistency & Connection

•         Strategy – Value Proposition, Marketing, Sales Customer Care, Financial Goals

•         Processes – Work Flow

•         Structure – Organizational Design, Role, Relationships

When you align these Five Drivers you need to ensure that:

• Culture aligns and motivates people,
• Strategy delivers in line with Customers needs,
• Systems delivers high quality consistently,
• Structure empowers people and smoothes workflow
• People Driver recruits, develops and retains the right people.

How do you assess if these drivers are broken or needs repair broken?

Let’s take costs. To manage costs effectively across the Five Drivers you need clarity as to what are Core and Non-Core expenses or to put it another way what directly contributes to Top Line revenue vs. the cost of doing business which only indirectly contributes to revenue

Core Expenses are what drives Top Line Sales Revenue

So, Core and Non-Core Expenses first. You are likely to find functions which are internally misaligned present opportunities for improved productivity. Coupled with this is looking at inefficiencies when functions work collaborate with each other

Consider a company with nine functions, such as Production, Marketing, Finance. How many communications channels? You have 9  functions with 9 communication channels less 9 channels within each Function = 72 Communication Channels

Additionally, within one function say you had 50 people 2450 channels potentially.

As you look at these channels you find inefficiencies. Friction between Finance and Marketing is not unusual. So, what happens to communication flows? Communication reduces and fall back on being formal and response times get slower. We call these Expectation Gaps

Expectations Gaps Are like Pot Holes. Fill them quickly before damage occurs

 

It sounds like they don’t know “who’s on first” and even if they did no one is holding people accountable good starting point?

Exactly. It’s like many poor performing teams at least one of the following will apply:

•      Four Team members called Everybody, Somebody, Anybody, and Nobody.

•      There was an important job to be done.

•      Everybody was sure that Somebody would do it.

•      Anybody could have done it, but Nobody did it.

•      Somebody got angry about that because it was Everybody’s job.

•      Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn’t do it.

•      It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.

How expensive is that?

What signs should look for to see if think is going on?

“That’s not what I meant…”

“This is not what I asked for!”

“My colleagues don’t seem to do what I expect…”

“They never tell us the whole story!”

“I can never do anything right!”

“They never send us information; we’re always sending information to them!”

Sound Familiar?

Yes, I know several organizations where those examples would get a lot of nodding. Do you have any idea what misalignment costs?

60%+ of change initiatives fail in North America

70%+ of leaders expectations are
not understood by their people about a major change

In the last 12 years, 2 in 3 failure rate has not changed Harvard (1996) to McKinsey (2009)

Executives surveyed continue to say the number one reason for such failures is PEOPLE. It really goes into the millions and can close businesses. In one survey 134 public companies average cost of failed IT projects was $12.5m. This does not account for the cost to their cultures and people.

What are the human costs of misalignment?

With misalignment the first to go is Trust coupled to a Fear Of Conflict. When these two exist, a Lack of Commitment grows and its partner Avoiding Accountability rears its ugly head. Finally, silos are reinforced, people do what they have always what they have always done and improved performance doesn’t happen. As these dysfunctions grow over time you will find that the 8OOlb Gorilla feeding on what’s left of your enabling culture.

800lb Gorilla of Mislignmenton a rich culture of unstated expectations and assumptions.

How many of these are due to people not being on the same page?

In our projects 70%+ of leaders’ expectations of each other and those implementing a change have not expressed. Apart from unstated expectations, how do you identify poor expectations

The biggest culprits are the expectations are ambiguous, lack specificity which leads to disappointment, failure and bad feelings etc. here’s some typical language that predicts performance improvement failure:

•  “Soon…….”

•      ASAP

•      “Right Away….”

•      “I’ll Try To Get To It………”

•      “Later….”

•      “By The End Of Next Week

So, Practically what can people do about this when they hear language like this?

First get key players get them to articulates and record expectations then apply:

“The three most important rules in creating accountability cultures are:

Specificity, Specificity, Specificity

Dealing with Expectations Gaps

1. Which expectations gaps are barriers to improving performance and reducing expenses?

2. Who do you need to gain agreement from?

3. Once agreed, ask them to tell you what evidence you will see that your expectation has been met?

4. Then, hold them accountable – “Inspect what you expect”

5. Then, what do you think others expect of you that is connected to these gaps?

6. Now, repeat steps 2,3 & 4

Have you done any projects locally where you have helped fill such expectation gaps?

 

Ken Genzink, Genzink Steel tried twice over the last five years to reduce his operational management of the Family Steel Fabrication business. On both occasions he had to reengage to save the business.

As says in his testimonial, “I realize now more than ever that many decisions and observations were assumptions”

This resulted in problems like:

•      Job Shop Scheduling software didn’t work

•      People were cynical about it ever being useful.

•      Structural Steel side of the business was losing money due to poor estimating

•      Difficulty in retaining skilled people

The Implementation consisted of the following activities:

•      Developing a vision for change to reduce dependency on the

•      Owner’s day-to-day management.

•      Isolate key Alignment Components and their definitions which Ken Genzink saw as crucial to achieving greater market responsiveness and help him devote time to his other businesses

•      AlEx™ was then configured specifically for Genzink Steel. AlEx™ is an Automated Accountability Tracking tool that identifies expectations gaps and monitors people’s progress in filling them.

Ken now works at another location devoting the time he needs to the other Family businesses. Gross Revenues have steadily increased from $20 to $30m, and

Genzink is now on the acquisition trail.

“104 jobs: Genzink Steel Supply and Welding Co., maker of metal wind turbines, and other fabrications”(GR Press Aug 2008)

Tip of the Month

If you are getting people ready for change

My Expectations of Others

•      What I expect you to keep doing

•      What I want you to start doing

•      What I want you to stop doing

Others’ Expectations of Me

•      What things I think others want me to keep to keep doing . . . .

•      What new things I think others want me to start doing . . . .

•      What things I think others want me to stop doing . . . .

Then meet with those who you need  to implement your change and compare your answers – be prepared for surprises.

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Great, but how can this help me?

This is probably the  first thing on your mind after reading this Blog.   How about asking us?  The first call is free!  Just email me to set it up.  Don’t wait, get TCA working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching improve bottom line results.
If that still doesn’t do it, we’ll work with you on a solution.

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Nick Anderson, Senior Partner, PDS Group LTD
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© Copyright All Rights Reserved, TCA and Walk the Talk – A Blog for Agile Minds, [2010-2011]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Nick Anderson, PDS Group LTD and Walk the Talk – A Blog for Agile Minds with appropriate and specific direction to the original content.

Ensuring Oilsands Project Success – Whitepaper

Authors: Brant Sangster, IMC (former Sr. VP Oilsands Petro Canada),Dr. Paul Clark, IMC (former CEO Nova Chemicals Technology, Board Member NRC, CCEMC),Dr. George Jergeas, Dept of Civil Engineering, University of Calgary, Nick Anderson, Senior Partner, PDS Group, Editor: Rolf Wenzel, IMC, Director Business Planning

Overview

Mobilizing armies of skilled labour from diverse locations and cultures, moving large equipment into remote locations in harsh climatic conditions and managing to budgets while costs are escalating make oilsands projects among the most challenging ever undertaken. Perhaps the most critical success factor  in managing such complex projects is establishing and developing productive relationships. This key factor is very difficult to measure yet is cited repeatedly as the number one reason for project failure. Consistently,  project  managers’  expectations  of,  colleagues,  teams,  subcontractors,  workers  and project  partners  are  substantially  different  from  what  they  actually  think  is  expected  of  them.    Such misalignments result in expected tasks not being completed in the way required for project success, tasks  being  completed  in  a  sub-optimal  sequence  or  excessive  time  invested  on  “low  return”  tasks. These  misalignments  cascade  into  scheduling  conflicts,  delays,  cost  overruns,  personnel  turnover, increased stress, safety and legal issues.

The take-away: New methods have been developed for the gathering and analysing of expectations from both the expectation originator’s and expectation receiver’s point of view. This enables the diagnosis of misalignments critical to project success, and facilitates the timely conversations required to align expectations and to keep projects on track before they become critical variables. Resource and competency gaps are exposed  and addressed. High achieving managers can be identified. A culture of communication, alignment and accountability can be measured and developed.

Listen to an introduction by Nick Anderson

CONTENTS

1.0 Oilsands Projects – What Makes Them Unique

2.0 Why do Projects “Fail”?

3.0 Expectation Alignment for More Effective Project Planning and Execution

4.0  Case Study – Large Construction Project

5.0 Project Teams as a Neural Network – The Foundation for a Culture of Alignment and Accountability

6.0 The ROI for Oilsands Projects

1.0 Oilsands Projects – What Makes Them Unique

The Opportunity

With over 170 billion barrels of recoverable reserves, the Alberta oilsands represent a unique opportunity for North America to achieve a greater degree of energy independence in a low risk operating  regime.    Total  oil  supply  from  Western  Canada  is  expected  to  grow  from 2.4 million barrels  per day  in 2005  to  over  3.6  million barrels  per day  (bbl/day)  in 2015,  an increase of 50%.  This requires an investment of between $94 and $125 billion.1 While  some  bitumen  reserves  are  accessible  using surface mining  techniques,  most of the recoverable reserves  are  deeper  and  accessed  using  Steam Assisted  Gravity  Drainage  (SAGD)  technology  that requires far less surface land disturbance. While not without  reservoir  risks,  SAGD  enables  operators  to expand  production  more  gradually  than  mining operations because the minimum economic size of a SAGD  project  can  be  scaled  down,  perhaps  even below 10,000 bbl/day.

 

Suncor Oilsands Plant

The Challenges

Size – These large projects are large, with capital budgets currently ranging from $250 million to $7  billion,  or  US$25,000  to  US$70,000  per  flowing  barrel.    Projects facilities range  in  size from10,000  bbl/day  to  over  100,000  bbl/day.      Every day  of  schedule  slippage  could  cost between $1 million and $10 million in lost revenue. Complexity  –  These  projects  are  characterized by  a  large diversity  of functional  areas  each with  separate  project  managers, budgets  and  schedules.    There  are  many  project  elements, requiring  a  long  build  schedule  with  the  possibility  of  multiple  EPCs  and  many  and  diverse suppliers and contractors.

For example: Designing and constructing a $3-billion oilsands project can involve the following:

(Why Cost and Schedule Overruns on Mega Oil Sands Projects?, George F. Jergeas, Ph.D., P.E.1; and Janaka

Ruwanpura, Ph.D., PQS2; Practice Periodical on Structural Design and Construction, ASCE / February 2010)

Engineering effort:

• 3.5 million work hours at a cost of $100/h.
• 40–50,000 design drawings.
• 10–20,000 vendor and shop drawings.

Construction effort:

• Typically runs at 5,000 work hours for each million dollars invested, i.e., 10–15 million man-hours at $85–$100 per hour for a $3 billion project..
• Supported by 500–800 staff personnel.
• Labor force of 10,000 workers with a turnover of 30,000 people. (Even using the lowest North American average estimates of replacement costs for $8.00/hr employees of $3,500, this equals a cost of $105 million!)
• Organize order, store, and retrieve 80,000,000 material items.

Procurement and transport logistics challenges to a remote location can be  exacerbated by long lead  times  on  key  equipment,  increasing  the  risk  of  scheduling  conflicts  and  slippage. Personnel training, scheduling and logistics are complex and include continuous flights bringing workers in from Eastern Canada and elsewhere.   There are complicated communications lines among the functional areas, contractors, locals business and governments.  The  involvement  of  multiple  equity  partners  with  substantial  financial  interests  adds  another level of accountability and can be a bottleneck in decision making.  Partner communications can add significant project overhead and makes it more difficult to respond to change, or innovations arising mid-project that could benefit the project.

Climate – Harsh climatic conditions affect productivity, health and safety, and project costs, especially for workers unused to working in these conditions. Health & Safety – In addition to working in a harsh climatic environment, cultural and language barriers with foreign workers can affect safety.  High turnover and inexperienced workers pose dditional safety risks.

Labour – Availability and Productivity – As projects begin to ramp up again, the risk of shortages of experienced project managers and skilled labour may again increase.  Personnel retention was a major issue during the construction boom up to 2008.  The cost effective integration of aboriginal  contractors  requires  special  attention.    The  balance  between  union  and  non-union labour must be planned and managed.   Housing and the cost of living are expensive in the Ft. McMurray area. Workforce scheduling and logistics are a major challenge and there has been  lack of  cooperation among operators  in this area,  largely based on concerns around  losing personnel to other projects.

Environmental – Oilsands projects have become the centre of media attention in the past few years.  Thus, even the design and construction phases of these projects must demonstrate a proactive stance, rather than just compliance.

“In summary, future oil sands projects are going to be more complex due to both a set of external and internal factors interacting dynamically with each  other.  This  means  that  the  industry’s  ability  to  manage  socio-political, economic and technological fluctuations over a project’s life will be  critical.  This  is  not  an  advocacy  for  throwing  out  the  tried  and  true project management disciplines but learning how to use them in far more fluid circumstances”

(Richard Westney, Westney Consulting Group)

2.0 Why do Projects “Fail”?

“Insanity: doing the same thing over and over again and expecting different results”

Albert Einstein

The State of Oilsands Projects

During the 2005 to 2008 period, oilsands  projects were notoriously over budget and behind  schedule.   With  the  current  ramp  up  of  projects,  can  we  face  similar  cost escalations and labour shortages  in the coming years?

Randy Ollenberger, (BMO Nesbitt Burns Inc.), points to the expansion of  the Athabasca Oil Sands Project as it was the biggest project to continue construction throughout the entire market crash. But  rather  than  costs falling, they  continued to  rise.  “If  there were great  savings to be had, they should have captured them. And clearly they haven’t,” he said.

Steve Laut, President, Canadian Natural Resources (05/21/10) fears that cost escalations may be an unavoidable outcome of the rush to get back into oil sands.

“There will probably come a point in time that people feel confident oil prices aren’t  going  to  fall  to  $30  [U.S.]  again  and  everyone  will  have  their engineering done more or less at the same time. So there’s potential that you could get some overlap in projects. Canadian Natural is already struggling with the lingering effects of the last boom, when triple-digit oil prices propelled a mad building scramble. That has resulted in operational problems at the first phase of its Horizon oil sands project, which Mr. Laut admitted has been “bumpy.”

A recent Booz Allen Hamilton report, “Capital Project Execution in the Oil & Gas Industry”, indicated that the majority of energy industry executives:

• Are dissatisfied with project performance (40% of capital projects overrun) his level of dissatisfaction is the highest ever.
• Agree  that  poor  project  performance  is  not  acceptable  when  the  market  expects predictability and strong returns.
• Accept that they cannot afford to miscalculate project risks, yet they do not have a good grasp as to how to manage them.

According to Richard Westney, Westney Consulting Group,

“Everyone in the industry is aware of the major cost overruns and schedule  delays  associated  with  major  projects  today.  An  often overlooked  fact  is  that  these  overruns  are  often  announced  when projects  are  well  into  construction—long  past  sanction  and  at  a  time when traditional project risks have (or should have) been mitigated. How is this possible when conventional wisdom suggests that all project risks should  have  been  understood  and  under  control  by  this  time? Conventional project risk management is based on two assumptions:

• Good “front-end loading” ensures a high level of confidence in the estimate of time and cost at sanction.

• Project risks decrease with time and progress.”

Since it is not uncommon for projects with good front-end loading to experience major  overruns  well  after  sanction,  we  must  ask,  “What  is  missing  from  the conventional approach?”

Symptoms and Causes

The symptoms of “project failures” or significant negative variance from plan are obviously manifested  in  easily  measurable  parameters  such  as  budget  overruns,  lateness  and  safety issues. However, problems can start long before these measurements of tactical activity are possible. Jergeas  et  al5  point  out  that  the  trend  towards  project fast  tracking  can  result  in  appropriate planning time being traded for overly ambitious construction schedules which can result in more overtime  and  higher  materials  and  equipment  expenses.  In  addition,  inadequate  time  spent planning  in  areas  of  risk  management,  project  control,  communications,  organization, contracting, design, procurement, site layouts, utilities, commissioning and external stakeholder  management, among others, can result in a fundamentally misaligned project strategy. Conversation  with  oilsands  operators  and  a  review  of  the  2004  multi-sector  study  by PricewaterhouseCoopers  (PWC),  “Boosting  Business  Performance  through  Programme  and Why Cost and Schedule Overruns on Mega Oil Sands Projects?, George F. Jergeas, Ph.D., P.E.1; and Janaka Ruwanpura, Ph.D., PQS2; Practice Periodical on Structural Design and Construction, ASCE / February 2010

Project Management”,  among  the  top  reasons  cited  for  “project  failures”  were  issues  and misalignments in the following areas:

• Late scope changes
  

  Nearly but Not Quite

• Change in environment
• Insufficient resources / Poor support
• Poor communications
• Poor project processes and controls
• Poorly developed teams
• Poor partnering strategies
• Poor contracting strategies
• Team turnover
• Inadequate definition of stakeholders

Late Scope Changes – To what extent are scope changes the result of inadequate communication of  expectations  between  owner  and  EPC,  or  EPC  and  contractors?    At  the earliest stages of the project, inadequate specifications can be a root cause.  The owner may expect the EPC to have conducted a thorough review of specifications prior to start of drafting. Was this expectation communicated and detailed evidence of completion requested?   The later in the project these sorts of changes occur, the more expensive they become. Attempts to appease, accommodate or just to get things done means change orders or scope changes  are  too  readily  accepted  without  sufficient  impact  analysis.  This  situation  is  often compounded by having no firm and set date beyond which no further changes are accepted.   It is  reminiscent  of  Mr.  Creosote,  a  fictional  character  in  Monty  Python’s  the  Meaning  of  Life. Creosote  is  an  impossibly  obese  man  who  is  served  an  enormous  amount  of  food  in  a restaurant. After being persuaded to eat one more mint, he explodes in a very graphic way. The key error is the consequent layering of changes creates an almost blinkered approach of approvals or rejections while losing sight of bigger, end repercussions.

Changes in Environment – It may be beneficial to ask the question, “How can we improve our  ability  to respond to  environmental  and other  changes”?   To  what  extent  could  improved communication of expectations mitigate these issues?  Have the owner and EPC clearly relayed their expectations of rapid communications from contractors and suppliers when circumstances change?    Does  the  project  have  a  change  management  plan  with  specific  communication protocols for managing crises?

Insufficient Resources  /  Poor  Support –  Supply  chain  logistics  are  both  critical  yet vulnerable aspect of oilsands project execution. It relies heavily on proper communication and tracking agreed and unmet expectations.    Shift scheduling and logistics optimization offer large opportunities for efficiency gains.  To what extent are the expectations of efficient and proactive communications  relayed  to  all  levels  of  the  project  structure?    What  mechanisms  exist  to facilitate this and ensure monitoring of logistics operations? Especially  lacking  are  those  inter-professional  expectations  which  don’t  really  specify  what  is being  agreed  to.  The  act  of  agreeing on  an  expectation  is  too  easily  accepted.  The problem emerges when the expectation’s Receiver doesn’t deliver what was expected by its Originator. The problems often lies when the Originator doesn’t ask the Receiver to state what evidence they think meets the given expectation. This  situation  is  often  compounded  under  stressful  and  changing  conditions  where  the ramifications of meeting the new expectation are not fully considered on existing commitments.

Poor Communications – The number of possible lines of communication in a project can be expressed as n2 – n, where “n” is the number of people assigned to the project.  Thus a 100 person project would have 9,900 possible communication links.   Regardless of matrix, project or siloed command structures, there are still many cross functional and contractor expectations that are not surfaced or managed and that impact project execution. These lateral links are so numerous and not so obvious that important connections for timely and  accurate  communications  are  missed.  Many  would  say  with  all  the  technology  now available, all those involved have access to what everyone else is doing or challenged by. The reality, as one Project Manager expected of a design engineer: “If you find out you can’t make your deadline, don’t email me – pick up the @#$% phone…” Communications technology has become a two- edged sword – efficient yet overwhelming. While  many  respondents  cited  poor  communication  a  significant  problem,  to  what  extent  are poor communications or processes a root cause of the other cited project failures?  Following are quotations gathered from participants in various projects:

1. “We could be better at identifying problems and their solutions before they actually occur.  We are too reactive and this slows us down”

2. “The way we allocate resources and feedback on their (subcontractors’) performance compounds problems in managing projects”

3. “People get so absorbed in what they are doing that Key Stakeholders are not actively involved. This has led to tension between them and the project team”

4. “We are reactive and respond too quickly to changes to understand the implications and impacts on other elements and groups”

5. “We don’t reuse what has been done before – “Reinventing the Wheel” is costly and takes time”

6. “Measuring the impact of what we do is too subjective and lessens our ability to stay within  budget”

7. ‘Cost overruns and missed milestones are too common and compounded by finger pointing”.

Some of which are directly attributable to expectation gaps:

Project Team Dysfunctions

Dysfunction #1: Absence of Trust

This occurs when team members are unsure what others really expect of them as opposed to what their company has committed to legally.

Dysfunction #2: Fear of Conflict

Teams that lacking trust are incapable of engaging in unfiltered, passionate debate about  key  issues.  This  causes  situations  where  team  conflict  can  easily  turn  into personal, veiled discussions and a retreat to pure self interest.

Dysfunction #3: Lack of Commitment

Without conflict, it is difficult for team members to commit to decisions, creating an environment  where  ambiguity  is  comfortable.  Lack  of  direction  and  commitment  can make project partners and teams disgruntled, fall into formal communication and lack of responsiveness.

Dysfunction #4: Avoidance of Accountability

When teams don’t commit to a clear plan of action, even the most focused and driven individuals  hesitate  to  call  their  peers  on  actions  and  behaviors  that  may  seem counterproductive early enough to correct a situation for the overall good of the project.

Dysfunction #5: Inattention to Results

Project team members naturally tend to put their own needs (ego, career development, recognition, etc.) ahead of the collective goals of the team when individuals aren’t held accountable. If a team has lost sight of the need for achievement, the project ultimately suffers.

The above dysfunctions are rooted in problems with aligning expectations.

(Adapted from Patrick Lencioni “Five Dysfunctions of a Team”)

“Expectation Gaps are like pot holes, the more you leave them the deeper they get. The impact of misalignment leads to projects overruns.” (Nick Anderson, PDS Group LTD)

Poor Project Process and Controls Execution – It is the daily execution using project process  controls  that  makes  the  difference.  Senior  management  can  be forgiven  for  thinking that if processes and controls are in place that they are being used diligently.   However, the early  clear  communication  of  specific  expectations  around  development  and  use  of  these systems is foundational to success. Increased complexity and changing dynamics in running oilsands projects means the industry has to pay more attention to the costs of misalignment.

Poorly Developed Teams – While projects of this size and complexity usually command the best available personnel, Alberta companies often have large experience gaps between senior managers and junior managers.   Bridging these competency gaps requires clear expectations communication  of  responsibility  not  just  tasks.    Then,  crucially,  conversations  must  align expectation originators with the expectation receivers, including deliverables. Only then can the originator effectively rate the receiver’s competence and performance.

Poor Partnering Strategies – Staffing for inter-partner communications, that add millions of dollars to the cost of a project, buffer the project teams from regular and ad hoc reporting and information requests.  The less work that is done up front in explicitly defining expectations in geographically remote and culturally different partners, the more cost in communications.  Far more  important  however  are  the  potential  for  delays  in  the  project  where  unexpected circumstances  need decisions  requiring  consent  from  partners.        These  may be  changes  in project  circumstances  or  opportunities  for  applying  improvements  or  innovation  with  potential positive economic impact on the project.

Poor Contracting Strategies – Failure to document performance guarantees and risk sharing  obviously  undermines  contractual  relationships.  However,  on  site,  it  is  really  about avoiding ever to having to use them.   As many say, “if you have to get the contract out then we really are in trouble!”. Partnering starts to fail when specific expectations aren’t communicated, agreed,  discarded  or  are  unresolved  to  avoid  using  these  contractual  devices.      Successful partnering is founded on: ”Getting personal to  prevent ever getting contractual”.

Team Turnover – Poor communication and alignment of expectations often causes of turnover.    When  expectations  like  budgetary  discretion,  scheduling  flexibility  and  safety protocols are not only agreed but managed to, employees may not wish to stay and face the consequences. This will be a major factor again if the industry goes back to its practices of the last boom in Alberta. Apart from cost and experience and project knowledge “walking out the door” from the project managers risk losing well  established relationships  both  within  and  outside the  team.  They  then  hobble their replacements with no clear commented expectations to help new team members get up to peed with the right people.

Inadequate Stakeholder Engagement – Oilsands project stakeholders are diverse, typically  including  owners,  EPCs,  contractors,  suppliers,  logistics  providers,  regulators,  local communities, local businesses, aboriginal communities, environmental groups and others. It’s  natural for those  planning projects  to focus on  project execution.  Yet  how  often  has  their apparent disregard of some stakeholders led to delays, scope creep and cost overruns?  Here the illusion of efficiency fails to take into account those that need to be onside for the project’s success.    This  then  creates  a  corrosive  element  to  relationships  when  stakeholders  feel disregarded.  By  the  time  Project  Staff  realize  the  need  to  align  they  have  an  uphill  battle  to convince these parties of there inadvertent lack of alignment. The key concern is: How many of these stakeholders and project staff will then be involved on subsequent projects. Mutual suspicion built up from one project bleeds over to the next project.

Summary

In summary, planning, whether “fast track” or not, still requires a clear concise and communication  of  expectations  by  stakeholders  along  key  aspects  of  the  project strategy.   While  this  paves  the way  for  successful  project execution,  simply  allocating the resulting tasks does not ensure success. Without project   manager’s expectations being  understood  and  “bought  in  to”  by  the  engineering  or  construction  domains, improved performance will not occur.   Fast Tracking methods of strategic planning and construction  risks  getting  ahead  of  stakeholder’s  ability  to  measure,  manage  and facilitate communication. New methods of more effective communication and alignment of  critical  expectations  are  needed  to  cope  with  this  decade’s  accelerating  project dynamics.

3.0 Expectation  Alignment  for  More  Effective  Project Planning and Execution

You Can Only Manage What You Can Measure

Effective interpersonal communications is  a  recognized  cornerstone  of successful  project  management.    Why then  is  it  so  metric  and  data  starved? How  can  we  manage  what  we  cannot measure?

Many people who run projects will tell you:

“Building the thing is not difficult compared  to  managing  all  the  people involved”

So,

• How do we develop measurable ways of working more effectively?
• How do we assess people’s expectations  of  others  with  those  others have of them
• How can we help people be more aligned and focused
• How can we drive performance discussions  between  groups  and individuals  on  their  expectations  and assumptions that result in:

o Specifying clearer performance criteria against which individuals/groups will be measured

o Removing expectations that are non-value added and not strategically aligned

o Identifying significant issues to address for project advancement

o Creating an accountability framework

The AlEx™ Expectation Alignment Methodology

The AlEx™  Expectation  Alignment  methodology  is  a  key  driver  of  change  which  accelerates alignment  and  tracks  the  development  of  working  relationships.  Such  tracking  includes:

• Distractions that impact work loads
• Misaligned expectations which reduce flexibility, risk rework and cost overruns
  

  Human glue

• Factors that reduce cross functional competitiveness
• Misalignment with organizational principles and strategies
• Productivity issues between managers and their staff
• Quality of interpersonal communication
• Integration of new team member
• Performance tracking & management
• Recruitment & talent management

The impact of this approach is:

• Insurance against projects delays
• Faster project execution
• Better productivity
• Improved employee retention
• Attracting people who are naturally better aligned

Essentially these benefits accrue when all people understand:

• What is expected of them
• What they can expect from others
• How well they are strategically aligned
• How their performance is measured and compensated
• What they can stop doing
• What they need to focus on
• What information and resources can be used to achieve their goals
• How they are going to be supported and coached

How AlEx™ Works

Using the AlEx  Easy Entry™ web application, individuals  identify  their  expectations  of  others and what they think is expected of them. AlEx™  is  then  used  to  analyze  content,  quantity,  and quality of the Expectations generated. AlEx™ Cross-Hairs Alignment Tool™ provides targeted data pictures of groups and one-on-one relationships as shown on the right.

For  example,  the  relationship  between  Tom and Cliff  looks  aligned  if  you  only  look  at  Tom’s expectations of Cliff (13) and what Cliff thinks Tom expects him (12). But, Cliff’s expectations (22) & What Tom thinks Cliff expects of him (4) tells a different story. Users are then shown how to use their AlEx™ Cross-Hairs Alignment Tool™ to “rifle-in” on data  to  prioritize  which  alignment  meetings  are  really  needed.  Then  users  meet  and  decide which of their expectations are:

• Discards
• Unresolved
• Agreed

This ability to “rifle-in” on key issues before they cause entrenched discord is much like “clash identification” in BIM (Building Information Modeling).

” AlEx™ is the “human cousin to BIM”

Dick Ortega, President, Alternative Mechanical

Building Information Modeling (BIM) is the process of generating and managing building data during its life cycle[1]. Typically it uses three-dimensional, real-time, dynamic building modeling software to increase productivity in building design and construction.[2] The process produces the Building Information Model (also abbreviated BIM), which encompasses building geometry, spatial relationships, geographic information, and quantities and properties of building components.

AlEx™ Outputs

1. Distraction Index

The Distraction Index identifies which individuals  or groups are aligned or distracted from achieving strategic goals:

Closing the Distraction Gap

• Aligned,  and  Doing  Things  that  are  Expected —  expectations  and  assumptions  of  these expectations are in balance.
• Distracted,  and  Doing  Things  that  are  Not  Expected —  individuals  are  making  incorrect
• assumptions about what others expect of them
• Distracted and Expecting Things that are Not Done — expectations exceed assumptions of those expectations.

 

Designers & Owners Tension Ratings

2. Tension Ratings

Expectation originators rate each of their expectations on a scale from High (project critical) to

Low Tension if an expectation is not met. Tension rating filtering enables users to see how well they are aligned

in terms of stress and the importance others place on different areas of the construction process.

3. Cross-Hairs Communication Channel Analysis

Un-Channeled

In a construction project, groups are often expected to change who they communicate with and about  what.  If  for  example,  the  General  Contractor’s  Project  Executive  is  expected  to  work closely  with  the  Chief  Superintendent  to  adopt  Lean  Construction  practices  to  meet  Owner expectations and they d 

Misaligned Core Group

o not have any expectations of each other! Conversely, if the Design Engineers  now report directly  to  the newly appointed Owner’s  Engineer and  not  the  Owner’s Facilities Manager then you would not want to see people still having expectations of the GM.

4. Cross-Channeled

Medium levels of expectations are often needed between different professions and trades as the main construction phase begins. This is especially true in Design-Build Projects

Highly-Channeled

High levels of expectations are needed where people work in the same function or project, e.g. Owners and EPCs.

5. Dealing with Change

Changing project circumstances require timely responses. AlEx™ is a real time system that enables adaption of existing or creation of new expectations to handle change.  E-mail updates of  such  changes  can be automatically  broadcasted.   AlEx™  has  adjustable granularity,  i.e.  it can  deal  with  high  level  expectation  alignment  through  to  execution  level  task  alignment, depending on the changed circumstance.

6. How Does AlEx™ Integrate with MS Project™ and Other Project Management Systems?

AlEx™ acts as a project management “front end” to keep existing project reporting systems updated with not only task completion status, but also with changed expectations required by changing internal or external circumstances.   Thus expectation alignment can be maintained without having to change pre-existing reporting systems. The interface between AlEx™ and existing systems is done via scheduled batch file updates. Thus  even  if  the  project  “playing  field”  changes,  the  benefits  of  aligning  team  members  are realized  continuously  throughout  the  life  of  a  longer  project  using  existing  reporting  systems. Adding  AlEx™  can  make  existing  project  management  systems  more  than  just  dashboards, they can become navigation systems, to keep the project on course as circumstances change.

4.0 Case Study – Building Construction Project (See Case Study)

Symptoms

This large construction firm manages and constructs large projects around the world. Some of their most complex work is on hospital projects. In  this  case,  the  number  of  change

orders, RFI’s (Requests for Information) and building decisions awaiting government  regulatory  agency  approval had  pushed  a  $500  million  hospital project into crisis.

The owners and prime contractors were faced with escalating change orders brought on by a number of factors including drawing quality, owner groups changing their specifications and a series of contractual changes. Consequently, the overall contingency fund for a three hospital project was being depleted at an accelerated rate.

Relations between owners, engineering firms, architectural design professionals, subcontractors and the general contractor had become strained.

The leadership group representing the major players became increasingly concerned about the ineffectiveness of OAC meetings (Owner/Architect/Contractor), and the cost of having so many rofessionals/consultants on hand, all charging professional level hourly rates.

Diagnosis and Therapy

The AlEx™ Expectation Alignment methodology was employed with the following approach:

• Facilitation of meetings with each of the main group’s leaders to elicit their perspective on the key issues and what they wanted to be better aligned on with other groups/individuals.
• Development of consensus of six key issues or “components” on which all 7 groups (a total of 35 people from 17 companies) agreed would require alignment
• Coaching of all these players in generating expectations for each of these components (within and between groups)
• Providing analysis and feedback to the leadership team, isolating several key initiatives.

For example:

• Aligning OAC representatives to focus on key initiatives in each of the three projects
• Setting up structured coaching within owner, general contractor and architectural firms
• Aligning the change order process across the three projects
• Accelerating the decision to replace the incumbent architects and help integrate their replacement
• Aligning three architectural firms on fostering better co-ordination and common design policies

Outcome

The leadership group recognized the following tangible benefits from applying the AlEx™  system:

• Cost hemorrhaging was stopped.
• The project was completed on schedule.
• There was no post project litigation among the 17 organizations involved in project planning and execution.

Other intangible benefits noted by the client:

• Created a more productive environment for all of our building Partners Reduced or eliminated conflicts of all kinds by improving the way we communicate with each other
• Reduced schedule blocks and re-work, thereby maintaining the approved construction  schedule
• L ed the way for our partners (Client, Design Team, Inspection Agencies, and Subcontractors) in conducting business in a fair, open, and trusting way as the means to eliminate profit erosion, conflicts, and claims
• Utilized “Partnering” as the means to accomplish our initiatives In a “design-build” environment which included a government owner, we were able to resolve several major conflicts using AlEx™ to expose hidden and unspoken expectations in “real time.
• Ongoing communications became much more interactive and without conflict.
• Tools from our partnering sessions are long lasting were used by all parties almost daily to insure the success of each stake holder. A reduction in lost time and resources resolving “festered” conflicts, because most were resolved before they reached such a state.”

5.0 Project Teams as a Neural Network – The Foundation for a Culture of Alignment and Accountability The Project “Brain”

Consider each team member a neuron in a “Project Brain” and the lines of expectations with other team members as synaptic connections. A one  way  expectation  will  be  a  weak  synaptic connection

Project Synapses are essential to neuronal function: neurons are cells that are specialized to pass signals to individual target cells, and synapses are the means by which they do so.

until it is acknowledged and accepted by another neuron.The AlEx™ expectation alignment process facilitates  and  measures  the  creation  of aligned expectations  so  the  Project  Brain  grows  and learns to better able to handle change. Thus,  like  brain  plasticity  now  being  discovered  in  humans,  the  Project  Brain  will  adapt  to changing circumstances by discarding synaptic connections (fulfilled or dropped expectations) or making new connections (new or altered expectations).The Project Brain is effectively self-diagnosing, exposing the squandering of energy (on unnecessary tasks) or resource deficiencies (lack of materials, knowledge or support).  It can also regulate the release of hormones to stimulate action (tension ratings).

Tools Facilitating a New Project Execution Culture

We have seen how one of the most important aspects of project management, expectation alignment, can now be measured and managed.  However, a toolkit and system to enable this does  more  than  measure  and  manage,  it  promotes  a  culture  of  communication  and accountability. Aculture of accountability is fostered  by AlEx™ because it ensures team members gain a feeling of control over what is expected of them but also that their expectations of others are understood  and  evidence  of  task  completion  documented.      As  the  entire  AlEx™  process requires more effective communications, team members must incorporate it in their regular work activity.

Competency Development

Like any habit, coaching and repetition are key factors in adoption. Initially, facilitated expectation  alignment  sessions  are  combined  with  training  on  the  web  input  of  expectation parameters.    Periodic  monitoring  of  alignment  progress  then  helps  ensure  the  most  efficient adoption  of  this  methodology.      Corporate  internalization  of  the  system  is  accomplished  with relatively  simple  “train  the  trainer”  sessions  that  enable  provision  of  in-house  facilitation  and monitoring services. AlEx™ identifies  communications  weaknesses  among  managers,  where  coaching  may  be needed, thus strengthening the project team going forward.

Optimized Resource Allocation – Top Down and Bottom Up

For an improved accountability culture to take root, it must be not only top down and bottom up but  omni-directional.    It  takes  root  because  expectation  originators  are  accountable  to  the expectation  receivers  to  ensure  they  have  the  required  competencies  and  tools.  This  is  the neural connection that builds the Project Brain’s capacity because people explicitly know:

• What leaders expect of them (typically 70% of leaders’ expectations are either not known or understood by those executing the project)8
• What team members expect of their project leadership.

6.0 The ROI for Oilsands Projects

Sources of Payback

Adoption of any new process must have a return on investment. While Expectation Alignment has  been successfully  employed midstream  to  “projects  in  crisis”,  it’s  highest  ROI  is  realized when  used  in  real  time  to  diagnose  and  address  communications  weaknesses  and  enable proper project planning and execution. Reviewing our key sources of failure, we can now see where payback can be expected applying Expectation Alignment:

Project Planning – Early alignment of all stakeholder expectations avoids expensive surprises and delays. Alignment facilitates “faster track” planning while reducing the problems of rushing to “Get on with it”, then paying the price later in areas ranging from design, project control and procurement.

Minimized scope changes – The owners’ expectations of the EPC  to have conducted a thorough review of specifications can be conveyed in a very detailed manner using Expectation Alignment.  This can avoid delays due to RFIs and change orders on critical path items.  With delayed revenue costing millions of dollars per day, the investment in expectation alignment can payback in a single avoided change order.Expectation alignment can facilitate  efficient assessment and incorporation of innovation that may  have  a  significant  long  term  benefit  to  the  project  economics.    This  is  accomplished  by enabling faster alignment and decision making among multiple project partners.

Change in environment – Even with a change management plan in place, a methodical and efficient way to incorporate new and discard old project expectations can mitigate costs by:

• Improving response time,
• Discarding activities quickly
• Refocusing project teams to the new realities

Resource and support issues- – Early definition of resource expectations all the way down the chain of command can avoid costly delays and expenditures.  Similarly, competency gaps

can be identified sooner by engaging in expectation alignment processes.

Improved communications – With numerous stakeholders involved in planning, financing, permitting, engineering, procurement, construction, commissioning and operation of an oilsands asset,  static  definitional  documents  such  a  project  charters  and  conventional  project management  tools  are  not  designed  to  manage  thousands  of  changing  expectations. successful  project  execution  rests  on  agreeing,  discarding  or  identifying  the  unresolved. Expectation alignment methods identify managers who are especially strong or weak at communicating with their teams.  Coaching or other remedial actions can thus be undertaken and the results monitored. Employing Expectation Alignment in materials supply chain and personnel scheduling / logistics stakeholders can have big paybacks in avoided scheduling problems. Improved  project  processes  and  controls  –  Expectation  Alignment’s  regular  and measurable  process  of  developing  and  agreeing  project  expectations  are  taken  to  a  level needed  for  a  given  project.    Unlike  project  reporting  which  can  often  identify  symptoms, Expectation  Alignment  tools  also  make  accountability  for  task  execution  highly  visible. Expectation Tension Ratings may also reveal important tasks that are not necessarily on the critical path but can have huge ramifications to project schedules or budgets.

• Late scope changes
• Change in environment
• Insufficient resources / Poor support
• Poor communications
• Poor project processes and controls
• Poorly developed teams
• Poor partnering strategies
• Poor contracting strategies
• Team turnover
• Inadequate definition of stakeholders

Stronger teams – The Expectation Alignment process demands that Expectation Originators ensure  that  Expectation  Receivers  have  the  competency  and  resources to  complete  the required  tasks.      In  situations  where  senior  managers  are  working  with  junior  personnel, assumptions  are  often  made  on  their  level  of  process  knowledge  and  industry  practices. Expectation Alignment addresses these issues by facilitating the alignment conversations that reveal experience gaps early enough to develop people and avoid later termination.

Stronger partnering strategies – Early definition of equity partner expectations among all key project themes and issues can be achieved using expectation alignment.   This can reduce inter-company  communications  staffing  requirements,  but  most  importantly  accelerate partner decision making when circumstances change or opportunities arise.

Improved contracting strategies – Incorporating  subcontractors and  key suppliers  in the Expectation Alignment process often reveals owner expectations and other stakeholders are not captured  in  specifications  and  contracts,  yet  play  a  significant  part  in  them  being  effective. Diagnosing and addressing these issues avoids later conflicts and delays.

Retention of talent – Again consider the 5 key” Project Dysfunctions”. ( Absence of trust, fear of conflict, lack of commitment, avoidance of accountability and inattention to results). Getting teams  participating  in  facilitated  expectation  alignment  sessions  creates  an  objective assessment of  team  stressors  and progressively  builds  a  more robust and  productive  project team culture. Based  on  this  foundation,  Expectation  Alignment  becomes  an  effective  tool  to  getting  new people up to speed and address competency gaps before their credibility is damaged.

Better  stakeholder  engagement – while  inclusion  of  all  stakeholders  is  an  obvious apparent  remedy  to  avoiding  later  project  problems,  the  explicit  definition  of  mutual expectations,  especially  of  external  stakeholders,  can  yield  big  paybacks.  For  example, proactively  establishing  a  local  community’s  expectations  before  major  decisions  are  taken builds inclusivity and provides a more objective basis with which to resolve later conflicts and political  changes.    Projects with  international  partners  can  address cultural and other barriers with explicit expectation alignment methodologies.

Summary

In summary, where delays are measured  in millions of dollars a day, improving  the  speed  and  agility  of  construction  has  been  the  “holy  grail”. This pursuit encourages putting in place more controls and systems which often  fail  to  adequately  cope  with  increasing  project  complexity  and dynamics.  Effective  decision  making  needs  the  marriage  of  authority  and accountability  on-site,  not  its  divorce  to  some  remote  decision  maker. Simple, methodical alignment and monitoring of expectations reinforces this marriage to yield very tangible savings in time and money.

Great, but how can this help me?

This is probably the  first thing on your mind after reading this Blog.   How about asking us?  The first call is free!  Just email me to set it up.  Don’t wait, get PDS working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching on change, alignment, and executive performance that improve the bottom line.  If that still doesn’t do it, we’ll work with you on a solution.

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Ian Murray & Company Ltd.
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© Copyright All Rights Reserved, IMC & PDS Group LTD and Walk the Talk – A Blog for Agile Minds, [2010-2011]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Nick Anderson, PDS Group LTD and Walk the Talk – A Blog for Agile Minds with appropriate and specific direction to the original content.

Who’s got the best mouse trap? or How do Consultants Differentiate?

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This month’s topic looks at Competitive Differentiation in the Professional Services Sector. This sector typically includes accountants, lawyers, bankers and financial services, like planners etc. All these professionals offer very similar services due in part to regulations, certifications, disintermediation and the power of technology.

Go to any law firm’s web site like Varnum and Clark Hill, or large consulting firms and they look the same. They apparently have the same  mouse trap.

Why did you choose your….attorney, accountant, financial planner etc?

So, how do professionals differentiate themselves?

On the basis of their expertise and their ability to develop Trusted Adviser status. David Meister asks: What benefits would you obtain if your clients trusted you more? For example, the more they will:

• Treat you as you wish to be treated
• Lower the level of stress in your interactions
• Be comfortable and allow you to be comfortable
• Involve you early on when their issues begin to form, rather than later (Open up)Share more information that helps you to help them, and improves the quality of the service you provide
• Be inclined to accept and act on your recommendations
• Bring you in on more advanced, complex, strategic issues ( Your are in the board room not waiting in the corridor awaiting instructions)
• Refer you to their friends and business acquaintances

What characteristics would you look for in selecting your trusted adviser

Here are some of David Meister’s traits that Trusted Advisers have in common. Clients say they:

• Make us feel comfortable and casual personally (but take the issues seriously)
• Seem to understand us, effortlessly, and like us
• Act like a person, not someone in a role
• Are reliably on our side, and always seem to have our interests at heart
• Don’t try to force things on us
• Help us think things through (but emphasize that it’s our decision)
• Criticize and correct us gently, lovingly
• Don’t pull their punches: we can rely on them to tell us the truth
• Are in it for the long haul (the relationship is more important than the current issue)
• Give us reasoning (to help us think), not just their conclusions
• Give us options, increase our understanding of those options, give us their recommendation and let us choose.
• Are always honorable: they don’t gossip about others (we trust their values)
• Help us put our issues in context, often through the use of metaphors, stories and anecdotes (they recognize that few problems are completely unique)

You said he listed “traits” as in a person’s character? So for example the adviser who is not honorable can’t be trained to be more honorable, right?

It’s a good point, in last month’s blog I made the distinction. Candidly, Meister’s list is mixture of Competencies and Traits.  “So what?” you must be thinking,” I said, “Bottom line, you hire traits and develop competencies! Remember:

Competency : “The ability to do something successfully or efficiently.” ”Having the necessary ability, knowledge, or skill to do something successfully:”
Trait: “A characteristic or quality of a person.” (They are wired that way

For all intent and purposes professional advisers  reading this should focus on what they can learn and develop to be competitive differentiated trusted advisers. But, here is the rub. Developing trust is not well defined. For example, research I did with Linda Marsh into Mortgage Loan Advisers we found that the customers trusted those who used more “Transitional Structuring” WHAT! (Some people call it sign posting). Like,

“We have now covered David’s Trusted Adviser traits and we are now looking at Adviser Competencies…

We and others have identified observable and trainable behaviors that impact those traits that David mentioned like making the client “feel comfortable”. Now, here’s the fundamental point about  developing trusted adviser status:

How do you balance helping potential clients feel understood while ensuring they understand the issues and options available?

That’s difficult because if they don’t feel understood they aren’t really going to retain what they are told AND won’t likely see you as a trusted advisor. It takes me back to the most fundamental process of when people make a decision to change. They have to be sufficiently disturbed or concerned about their current condition that they look for a solution that enables them to resolve their negative condition. If Advisors, don’t know how to locate where a client is in this process and help them through at their pace any residual trust will be eroded.

What competencies have you and PDS identified to help develop competitive advisers?

In the world of Professional Services regulations dictate levels of certification – so the expertise playing field is level, for the new client looking for an adviser. So, we at PDS isolate “Competitive Competencies” which:

• Make a disproportionate contribution to customer’s perceived value
• Are “competitively unique” or superior
• Are extendible: providing “gateways to tomorrow’s markets”

The Value of Effective Competencies

• Greater objectivity – less biased by the manager’s interpretations of what happened but what actually happened
• More Useful –  less dependent on the manager’s judgment, more on the Adviser assessment (crucial if they are to learn)
• More focus – less overwhelming as it encourages managers to match the feedback to the Adviser’s ability and their willingness to receive it
• More quantifiable – greater understanding what of works and what doesn’t under defined conditions and allows people to compare themselves against a standard
• More effective – less guess work about how outcomes are achieved. (How you Win and Lose)

It suggests that Advisers needs someone to coach them?

Yes, it is essential. All those firms we have worked with try to get people effective coaching to secure and retain clients from their competition, like, Ernst & Young, who I helped develop their Relationship Management Program, Watson Wyatt, Royal Bank of Canada, JP Morgan Chase

In your experience, what traps do advisory firms fall into?

To put our recent study in context, most professionals we work with  love to do a great job. As one senior adviser said to me “I treat my clients as my children…”

But, being a trusted adviser today is not enough. We surveyed advisers to see how they were competitively differentiating themselves. In summary.

1.  Most do not truly understand what a competitive Client strategy is.

2.  People don’t understand the difference between Competitive Value Discovery and Differentiation.

3.  They do not understand the difference between preparation and planning.

4.  They do not understand the difference between offense and defense

5.  Because any strategic plans were not common amongst the troops, the plan is not maintained or advanced.

Can you explain the difference between Competitive Value Discovery and Differentiation?

Competitive Value Discovery helps you increase value potential. The idea of finding value that Client’s had never thought of before is competitively differentiating. So, we can introduce clients to ideas they may never have thought of and help them see the competition as “not on the ball”. Whether it’s your client or you are trying to secure a new client, they always weigh your value against the competition. What we have more more control over is what they weigh, how they weigh it. Additionally, we need to plant what the competition plants in the client’s mind. Then, we have far better intel and a better sense of the client’s changing priorities to influence their Decision Guidelines both offensely and defensively – Competitive Differentiation.

“Given the same amount of intelligence… timidity will do a thousand times more damage than audacity” “The best form of defense is attack.”
Karl von Clausewitz

What else did you find out?

1.  Their language is predominately about reacting to clients’ needs with no language of competitiveness.

2. No sense of doing things in a relational way but with competitive intent.

3.  They see the activity of competing as separate from looking after the client.

4.  The idea of decision guidelines and working to putting value behind them is a language that is foreign to them.

5.  They don’t have a competitively strategic context for their day to day client interactions.

6.  Largely, they have a passive position without having a strategy to extend the services they offer outsourcing.

What did you say to them about these findings?

• How much profit are you leaving on the table because you are not managing our relationships with competitive intent?
• So why are you not purposely discovering client value that will allow us to “Differentiate the Firm?”
• How much more intent and purpose can we build if we develop our competitive competencies?

Tip of the Month:

What can Advisers start doing to differentiate them?

Get Competitively Aligned. For example:

• In your firm, are you Competitively Aligned?
• To what extent does management understand how to think and act competitively . . . with competitive intent?
• How well aligned are your competitive account strategies with other parts of your firm
• How many of your top client plans have an offensive element to their strategies?
• Where do you see the main competitive misalignments within your practice or firm?

Then develop Clear Competitive Expectations

• Validating & agreeing about what people expect of each other competitively
• Developing effective deliverables that will demonstrate offensive or defensive actions against selected competitors

Competitive Accountability

• Accepting responsibility for agreed competitive expectations for tasks performed & results achieved
• Accepting that Win/Loss Reviews are not personal but are a natural process of getting more competitive

Evidence-Based Change

• Gaining & maintaining competitive differentiation must show measurable proof to the firm and its clients.
• Proving differentiation requires constant change & must be “evidenced” to:
  • Management
  • Organization
  • Customers

What evidence of change do we show?

Listen to the Radio Show

Great, but how can this help me?

This is probably the first thing on your mind after reading this Blog.
How about asking us?  The first call is free!  Just email me to set it up.
Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching improve bottom line results.
If that still doesn’t do it, we’ll work with you on a solution.

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Have you got your Change Shoes on? –

Now, that’s a change shoe!

Sustainable change is based on leaders having a radical vision and building a pathway to that vision one step at a time.

Just as you wear a pair of shoes, this change walk has the left shoe – radical, right shoe gradual –  Radical Gradualism

That got me to pose this question:

“What is the glue that holds an organization together while it goes through change?”

Relationships – the golden triangle of your people, your customers and your partners.So, that’s the pathway today – creating and holding on to that human glue that produces success

“Where’s the evidence to support your track this month?”The answer seems obvious…but…why is this facet of business becoming more important?

Traditional rationalization and cost cutting strategies fail too often – too many business turnaround failures. These traditional approaches, which are predicated upon cost efficiencies, have left companies demoralized, distracted and less productive.

If you look at the data – pure light

Successful leaders transform their organizations doing several things, like:

• Building closer relationships with customers while harnessing human talent to deliver greater customer satisfaction: HP’s competitive strategy vs. IBM Mini Computers
• Leveraging internal resident talent and expertise to resolve business problems and capitalize on opportunities: 3M Post-It Note
• Fostering a climate that results in personal ownership for doing what’s needed:  HSBC’s Customer First Change Process in the UK
• Devolving responsibility to groups and teams create a project based organization: Volvo pioneered work cells – one team-one car
• Raising the importance of individual and organizational learning, ensuring learning and working are integrated: KPMG link learning to career progression
• Secure changes in attitudes and behavior: Fred Smith, FedEx “Anywhere,Overnight, Guaranteed”

“In the military, leadership means getting a group of people to subordinate their individual desires and ambitions for the achievement of organizational goals. And good leadership has very measurable effects on a company’s bottom line.”

My call to action: Challenge your attitudes, values and your behavior. They are the sole of your change shoes, rather than just focusing on your technology, products and services – all of which can be copied.

Some would say that other things like the right “goto” market strategy with the right distribution channels etc. So, have we got a chicken and egg situation like what comes first

People or Process or Structure?

Good point, but consider this: the days of ready, aim, fire have long gone, it’s been ready, fire, aim for some time. Few startups succeed – e.g. new restaurants close before their first anniversary. The change paradox is this “hurry slowly” – radical gradualism is a simple concept rigorously implemented

Let’s put it another way: At least three separate disciplines drew essentially the same conclusions about change and project management:

WYSIWYG-( What you see is what you get) is no longer reality. It’s IWKIWISI (I’ll Know it When I see It!) that reflects our world today

Like a lot of what you say seems common sense…why don’t more companies take this approach…?

Many factors….one telling fact  is that average age of senior executives while falling is between 46-50 yo.So, they graduated between 1978 – 1982….Who had a laptop let alone a cell phone? At that time business schools still held on to a Fortune 500 view of the world and seeing the world through the lens of the Harvard Business Review. Let me ask you – What percentage of businesses is of this size in West Michigan? – Not many. So, the enculturation of managers was still “ready, aim, fire”

Bosses are turning still turn a deaf ear…Bosses are ignoring a wealth of creative ideas from
their employees

• 1:4 people believe that they are never listened to by superiors
• Among older people the proportion rises to nearly 1:2!
• 1:4 never been asked by their bosses for their opinion or actively encouraged to offer up ideas, no matter their length of service.
• 1:2 Canadians surveyed believe that their companies use half or less of their brain power
• Surveys – NOP Survey 1000 (London & South East) & “Report on Business” Magazine Dec 1998)

Do you see this trend getting worse?

 

Employees want bosses to listen better

In the Leadership Digest, in 2006 – While employees gave their bosses “high marks” in a recent study of worker satisfaction, staff still suggested areas for improvement:

• 43% want bosses to use their employees’ skills and abilities better.
• More than 35 % want the boss to step in more often to resolve conflicts.
• Just over 25 % wish bosses would ask for their ideas and listen more readily.

So, it depends on how business leaders react. Let me explain, based on James Brian Quinn, Philip Anderson, Sydney Finkelstein,with rare exceptions, productivity lies more in intellectual and systems capabilities than say raw materials, land, plant, and equipment. Intellectual and information processes create most of the value-added for firms in the large service industries–like software, medical care, communications, and education–which provide 79 percent of all jobs and 76 percent of all U.S. GNP.

In manufacturing as well, intellectual activities–like R&D, process design, product design, logistics, marketing, marketing research, systems management, or technological innovation–generate the real value-add. McKinsey & Co. estimates that by the year 2010, 85 percent of all jobs in America and 80 percent of those in Europe will be knowledge-based. Yet few managers have systematically attacked the issues of developing, leveraging, and measuring the intellectual capabilities of their organizations.

What are the other pitfalls in creating this service based economy and how does it relate to relationship development?

The more knowledge workers, the flatter the organization which impacts the style of leadership and how wealth transitions from one generation to the other or to new owners. This economy is and will become more dynamic.

Can you explain what you mean wealth transition?

Dynamic = more transitions – buying and selling, merging acquiring. But, What gets missed? Capital is no longer about bricks and mortar – it’s Human Capital

So, what challenges does this present? What can you do to build value in these circumstances?

The greater reliance on human capital for valuing an organization the more PE firms, M & A need to look at tools to assess the real value. This means doing the obvious things of doing inventories of the people, their skills, competence and certifications, where needed to redress findings like:

• Only 1  in 10 can consistently achieve their Strategy’s  full potential
• Non-Financial Factors valued most by investors
  • Strategy Execution
  • Management Credibility
  • Innovativeness

What are the main things executives have to do better?

Fulfills others: Take risks, trust each other, take  proactive approach that we will work together on solving problems, share considerable confidence in their own and others abilities, have enthusiasm for their jobs.

Providing effective feedback is one of a manager’s most important tasks; it’s also one of the most difficult. Here’s a six-step model, proposed by Jack Stahl, current CEO of Revlon and former president of Coca-Cola, to facilitate feedback and make it more effective.

1. Value the individual. Begin by affirming what the employee contributes to your organization. Be sincere and thorough. This step is critical because it frames the conversation.
2. Ask the person to identify his/her biggest challenges. Ask the employee to assess his/her performance, including both strengths and challenges. This will help you pinpoint areas for targeted coaching.
3. Provide targeted feedback. Give specific examples of behaviors to change.
4. Agree on areas to develop for the future. The objective here is to focus the individual’s development and encourage him/her to practice specific new skills. You could also point him/her to training opportunities.
5. Agree on the benefits of improving and the consequences of not improving. This step is designed to fuel the employee’s motivation to improve or change.
6. Commit your support and reaffirm the person’s value. “When people feel valued, they can hear difficult feedback without being demoralized by it.”

Great, but how can this help me?

This is probably the first thing on your mind after reading this Blog.
How about asking us?  The first call is free!  Just email me to set it up.
Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching improve bottom line results.
If that still doesn’t do it, we’ll work with you on a solution.

Name(required)

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Feedback(required)

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_________________________________________________________________________
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Getting Committed People on the Same Page – Disturb First, Enable Second?

Last month I looked at why so many changes initiatives fail. One thing that struck me after the program was the inability to gain others commitment lies at the heart of so many failures. This is often due to the lack of interest paid by those leading change for those who have to make the change.

Previously, one stat sticks out from our work in aligning companies for change is that over 70% of leaders expectations are not known or realized by those affected by a change. Their people are not on the same page!!

Now, add to that apparently unrelated data…

An estimated 247 billion emails are sent each day

“The number of worldwide email users is projected to increase from over 1.4 billion in 2009 to almost 1.9 billion by 2013. In 2009, 74% of all email accounts will belong to consumers, and 24% to corporate users.
Worldwide email traffic will total 247 billion messages per day in 2009. By 2013, this figure will almost double to 507 billion messages per day.
In 2009, about 81% of all email traffic is spam Source: Press release from The Radicati Group, 6th May 2009 Quoted by Digital Stats.com

Stats vary but most people seem to say each person gets 5000 ads per day.

Now here’s my point in both your personal life and at work how much time do you have to spend listening to somebody drone on about:

The latest, greatest, best, more, more…Their solutions for you….

How often, in your personal and work lives, do you have to spend listening to somebody drone on about  the latest, greatest, best, more, more…their solutions for you….

So, How do you typically react? Why should it matter to Change Management?

It reminds me of a cartoon of a family sitting at a meal table (rare enough of itself) with heads bowed and the son texts mom to pass the fries! This would be funny if I had not enforced a “no device” rule at our family meals – me included!! So, my reflections as to why we get resistant to change are these:.

Firstly, People overall forget what it’s like to be in somebody else’s head, like the research I referenced two months ago. “There’s not enough time…they cry”

Second, instantaneous communication reduces people’s patience from more deliberate consideration – we drift into the white noise, the buzz of attention deficit….but Are we challenged to really think?

Third, access to the internet has produced the most mature and knowledgeable change audience in history.

Why should this matter?

In terms of influencing people to even consider buying into your change process, be careful you are not:

Doing what you’ve always done… not getting what you want …

Whether you are influencing people in your own organization or trying to sell your service or product you will need to be more skilled at understanding where people are in their heads about change than ever before.

Change in West Michigan has come in many forms….change leaders ignore at them at their per. For example, Gilder’s vision of the future of “Cathedrals of bandwidth” will affect how people see work and how they see change. trends of exponential growth in technology and application will continue as far as we can see into the future.

The Technology Horse has looong bolted and the “Control Door” is hanging off its hinges……

So let’s stand back and see if we can start being practical. As the snow melts, I am reminded of when it snows. Each snowflake has a similar structure, yet is infinitely complex, and as each falls leads to complex behavior. If each person is a snowflake we must treat them as similar yet unique. (This is Fractal Theory..if you’re interested.

When managing change I find it’s helpful to look at how people change in a rigorous yet flexible way. It can be used to locate where individuals, groups and you are in terms of seeing the world, state similarly. This snowflake or fractal is based on a series of questions which follow a sequence – often shown as a ‘U”. The “U” is one of the most fundamental concepts in the psychology of learning and change. Readerers may remember in the last program that  we consistently think we are better than we actually are – in psychology it’s called “self serving bias”. For Example: 94% of men rate themselves in the top half of male athletic ability

Change Management’s Foundation

So, I am going to make a claim that I have never done before:

If you use the following six questions in your life, it will change your perspective of others and most importantly yourself:

Now let’s use this “U” Map to can locate yourself and those you are trying to bring to your point of view and be committed to the change

1. What is the problem?

• Do you have one and others don’t?

2. How is it a problem?

• Do they see the same linkage as you? Structure, recurrence, competitively weak?

3. What are the consequences?

• Can they see the ramifications that you do?

Now, let’s pause and ask: If you’re at 3. and those you want to influence can’t answer 1 – What is likely to happen?

If they are OK, but are they  disturbed to the degree they are willing to consider changing? If yes, we are at the bottom of the U at the Change Pivot when momentum or change energy starts to be

Now, let’s look at how people are enabled?:

1.  Why solve this problem?

a.  Do they see this change as a priority

b.  Or, Do they think we should do something differently?

2.  How to solve the problem?

a.  Are your technical people see a solution in the same frame from those in other functions

3.  What will be solved?

a.   Does cost of the present outweigh the cost of change?

So, Let’s say you are at 3. and I am at 6. Giving you an ROI ?….

What is your likely reaction?

Resistance; which I have created!

So, now you have the U – Ask yourself how many times has a sales person “Crossed the U” with you?  Ask yourself, How many times have we as change agents “Crossed the U”? with the leadership team? Only to find we left the group “not getting it!” “not on the same page” Yet it was us that left them behind

Great, but how can this help me?

This is probably the first thing on your mind after reading this Blog.
How about asking us?  The first call is free!  Just email me to set it up.
Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching improve bottom line results.
If that still doesn’t do it, we’ll work with you on a solution.

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© Copyright All Rights Reserved, The Crispian Advantage and Walk the Talk – A Blog for Agile Minds, [2010-2012]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Nick Anderson, The Crispian Advantage and Walk the Talk – A Blog for Agile Minds with appropriate and specific direction to the original content.

 

Aligning Expectations in Construction Projects

Your Line of Sight to Successful Projects

Getting & Keeping People on the Same Page

Clarifying and improving performance contracts between critical relationships, such as:

• Architects and their Design Engineers
• General Contractors and their Sub-Contractors
• Managers and Subordinates
• Leadership Teams
• Cross-functional groups

Groups have successfully used AlEx™ to:

• Improve competitiveness
• Deliver more customer-focused solutions
• Deliver a building on-time, on-budget and no legal

issues

• Accelerate and build partnerships
• Integrate new Architects
• Streamline Change Order & RFI Processes

Potential Benefits of the Eternal Triangle: Owner, Architectural Design Team & General Contractor

The Goal: a perfect building with proper design, highest quality, constructed on time and last but not least, built within budget.

 Introduction

What follows are three areas where AlEx™ can potentially help the “Eternal Triangle” of tension and mistrust that pervades many construction project relationships

1. Managing Conflict and Relationship Tension

2. Managing Complexity

3. Improving Building Performance

1.    Managing Conflict – Benefits of AlEx™

1. Helps develop a healthy attitude to managing rather than hiding conflict.
2. Reduces the distracting and destructive products from poorly handled conflict situations.
3. Helps harness diverse views and experience in the project team for the good of the overall project and Owner.
4. Helps handle change as the project progresses and manages the constant flow of information between Owners, consultants and contractors.
5. 5. Addresses the tensions in managing the dynamic and transient nature of the project life cycle process.
6. Recognizes that as work precedes the relative bargaining strengths of the parties are constantly adjusting. Standard approaches to contracting simply do not take this into account.
7. Overcomes, the inflexibility inherent in standard building contracts. For example, one contract assumes that the design is complete at the time of bidding and that the contractor employs most of the resources that will be required for the project. The fact is, design is rarely 100 % complete at the time of bidding and contractors subcontract most of the work.
8. Develops Project Teams while recognizing their different rules of engagement. AlEx™ recognizes and helps facilitate different project needs and rules of engagement, like:

• Changing Owner demands
• Rapid learning
• Generating and maintaining effective interaction between team members so that they can exchange views and debate the consequences of their decisions in an open and honest forum.
• Changing circumstances over the project’s life cycle.
• Shifting relationship tensions between the major members of the project team.
• Building trust for when things do not go as planned.

2. Managing Complexity – Benefits of AlEx™

1.    Designs in flexibility in management structure and style that is essential in dealing with complex and changing business environments.

2.    Deals with the reality that construction contracts are based upon industry-wide standards that often are hastily modified and executed during a hurried design and bidding process. AlEx™ picks up where the contracting process stops. Every project needs a legal contract and a guide to monument – AlEx™ is the formative process to get the contracting parties into alignment.

3.    AlEx™ helps harness conflict that causes the distress and low productivity associated with escalating conflict. AlEx™ helps to develop open, skillful discussion that is needed to turn differences into synergistic gains rather than squabbling losses.

4.    The use of AlEx™ helps project teams build Partnering, a process of building up long term business relationships that reduce the adversarial nature of construction. The expectations approach helps shift the emphasis from a contractual focus to a results orientated management focus.

5.    AlEx™ takes the heat out of how to convert business deals into good contracts which produce lasting positive relationships.

6.    Helps develop the close working relationships needed between all designers and contractors in order to produce an integrated building in which all building services, structural and building elements are fully planned, systematically organized and combined, and brought to fruition as required by an Owner. It really produces teams that actually communicate effectively with each other.

7.    Helps develop the processes needed to cope with the growing complexity of design and Owner needs, e.g. as hospital buildings grow in size and complexity, building services also tend to be more sophisticated and difficult to manage from design to certificate of occupancy.

8.    Helps develop coordination to ensure that services and other building elements are properly planned, managed and coordinated.

9.    Develops protocols for coordinating multi-head Owner, changes of design, conditions of engagement of designers and contractors, division of design responsibilities, allocation of risks, early incorporation of specialty contractors/consultants, forms of contract and quality of design and construction management.  AlEx™ can also have a positive effect on coordination of building services within the General Contractors office.

10. Examines ways in which Owners and various designers, contractors and equipment suppliers can work together as a team in line with the projects procurement path or strategy (The whole process of creation, communication, response and integration in    the context of the project can be defined as procurement).

11. Helps develop Procurement Strategies by guiding decisions early in the project influencing risk allocation, design strategy and consultant/contractor hiring. This ensures that throughout the project the following are all consistent with the selected procurement route:

• Roles and relationships
• Project management approach,
• Communication channels
• Information systems,
• Forms of contracts, and
• Overall management of the project organization

3.    Improving Building Performance – Potential Benefits of AlEx™

1.      Identification of problems and their solutions before they actually occur. This is a proactive approach toward building solutions to performance issues.

2.    Improved space utilization and feedback on building performance.

3.    Improved attitude of building owner through active involvement in the evaluation process.

4.    Understanding of the performance implications of changes dictated by budget cuts and scope changes, add-ons, contract extensions, and government intervention.

5.    Built-in capability for facility adaptation to organizational change and growth over time, including

• Recycling of facilities into new uses
• Significant cost savings in the building process and throughout the building life cycle.
• Accountability for building performance by design professionals and owners.
• Long-term improvements in building performance:
• Improved measurement of building performance through quantification.

1. Exposing and Expelling Pre-Conceived Notions

Project Owners believe Contractors to be _____________.

• Architects believe Contractors to be _________________.
• Contractors believe Architects to be _________________.
• Contractors believe Owners to be ___________________.

Great, but how can this help me?

This is probably the  first thing on your mind after reading this Blog.   How about asking us?  The first call is free!  Just email me to set it up.  Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching on change, alignment, and personal and executive performance that improve the bottom line.  If that still doesn’t do it, we’ll work with you on a solution.