INPACT Capability Assessment slide presentation - the key models and tools

1. INPACT
Integrated Process and Culture
Transformation
Find out how
our INPACT consultants
could save you £000s
INPACT

2. What is INPACT Consultancy?
 An INPACT consultant has the training in INPACT methods and
tools and the experience to be able to rapidly and cost effectively:
 Assess your transformation project
 Identify the barriers to success
 Quantify the impact these barriers will have on costs, timescales
and planned benefits
 Help you develop an action plan to overcome the barriers and save
you £000s
In this presentation we will show you some of the
models and tools we use to achieve these results
INPACT

3. But first…
What is a transformation project?
 The term “transformation” means different things to different people:
 “Making significant changes that fundamentally alter the way business is done”
 “Changing something for the better within our organisation”
 “Making continuous incremental improvements within our products and services”
 Clearly there is a scale difference between:
 a project to re-engineer the way an organisation carries out core
business processes
 a small, incremental change to a particular aspect of its business
 But the leading management gurus (Hamel, Kanji, Kotter, Pascale,
Senge, Tushman etc al) recognise that the success of any business
change project is dependent on how it changes the way people
think and behave
INPACT

4. What is a transformation project, cont…?
 We believe that it is this dual focus on
 a) business process and structure change, and
b) corporate culture change
that defines a business change project as transformational
 Hence we have adopted the term Transformation Project to
mean:
“any change project or programme that introduces
significant change to the way an organisation works”
 This includes process improvement projects, introduction of new IT
systems, restructuring and rationalising organisations and supply
chains etc
INPACT

5. Why do transformation projects fail?
 A recent CIPD survey of 800 executives found that reorganisations
failed to deliver real improvement in performance in 40% of cases
 Standish Group surveys confirm that:
 In large companies, only 10% of IT projects are completed on-time
and on-budget
 Average completion time exceeds twice the original estimate
 An average 90% project contingency is required to achieve 100% of
planned benefits
 The Harvard Business School tracked the impact of change efforts
among the Fortune 100 and found that only 30% produced a
positive bottom-line improvement
INPACT

6. Why do transformation projects fail, cont…?
 A recent survey of change programmes in <400 European
organisations quoted by Prof. John Oakland, Emeritus Professor,
Leeds University Business School found that:
 90% of change programmes faced major implementation problems
 Only 30% delivered measurable business improvements
 Management consultant PricewaterhouseCoopers claim that 25%
of IT projects succeed. 25% fail and 50% are late or over budget
(March 2007)
Why is this?
INPACT

7. Why do transformation projects fail, cont…?
 Here are some of the reasons we all know about:
 a focus on the technology instead of the business benefits
 poor specification of the system and lack of due diligence on supplier
capability
 failure to gain senior management championship
 Inadequate resources
 poor project management
 lack of user involvement
 But if we all know about the reasons, why are transformation
projects still going wrong so often?
INPACT

8. Why do transformation projects fail, cont…?
 It turns out that success rests as much on the capability of the
organisation to cope with change and take advantage of new
systems, as on how well the project was planned and implemented
 John McKean, Executive Director of the Ohio-based Center for
Information Based Competition is quoted as saying that 85% of project
success is dependent on factors related to people
 AMR Research found that even amongst successful implementations,
47% of companies reported serious challenges with end-user adoption
that often put projects in jeopardy
 Gartner believe that companies that spend less than 17% of ERP
implementation budgets on training put their projects at increased risk
of failure
INPACT

9. The INPACT Approach
 So the INPACT Assessment focuses on:
 The Organisation
• Management culture
• Business process capability
 The Project
• Complexity
• Benefits realisation
• Suitability of IT system
• The relationship with partners and other external stakeholders
• etc
INPACT

10. The INPACT Approach
 The INPACT models and tools provide a framework for:
 identification of the barriers to successful delivery of a change project
 assessment of the impact these barriers can have on the costs,
timescales and planned benefits
 The INPACT Assessment delivers a quantified output to enable
objective discussion and mitigating actions to be agreed
 at the planning stages of a project to focus attention on the actions
needed to deal with the risks
 as a healthcheck to an ongoing project, to monitor progress
 to rescue a project that has failed
INPACT

11. The INPACT Approach
 In this presentation we will describe how we use three of the
INPACT models:
 Mapping the organisation’s management culture
 Mapping the organisation’s business process capability
 Assessing the relative complexity of the project
INPACT

12. Why do transformation projects fail?
1. Management culture
 There is an underlying tension between the individual and the
organisation which affects every aspect of the way that
organisation works and its capability to introduce - and take
advantage of change
 The nature of this tension needs to be understood, brought out and
dealt with, to be successful in bringing change into the organisation
 The INPACT Management Culture model provides a framework for
us to identify the dominant management style and indicate how
well the organisation will cope with change
 The model is based on an evolutionary spiral, with each style
building on the previous styles, as shown in the following slides
INPACT

13. Mapping the Organisation’s Management Culture - 1
We all start by doing
everything ourselves =
1. Pragmatist Style
This works for a while, but…
1 Pragmatist/Anarchic
INPACT

14. Mapping the Organisation’s Management Culture - 2
As we grow, we need to
delegate. This needs rules
and processes =
2. Structuralist Style
1 Pragmatist/Anarchic
2
Structuralist
INPACT

15. Mapping the Organisation’s Management Culture - 3
The problem with the
Structuralist style of
management is that it
3 becomes bureaucratic and
Rationalist
‘tribal’. So we reorganise,
streamline our processes
and develop a
3. Rationalist Style
1 Pragmatist/Anarchic
2
Structuralist
INPACT

16. Mapping the Organisation’s Management Culture - 3a
And notice where
this needs to fit… The trouble is, re-
engineering processes
doesn’t seem to work very
3 3
Dialectic Rationalist
well. Why?
Well perhaps we didn’t
spend enough time gaining
the ownership for the
changes =
1 Pragmatist/Anarchic
2 3. Dialectic Style
Structuralist
INPACT

17. Mapping the Organisation’s Management Culture - 4
Now we have aligned the
aspirations and motivation
4 of the individual with the
3
Dialectic Aligned policies of the organisation,
the Rationalist Style
becomes the
4. Aligned Style
1 Pragmatist/Anarchic
2
Structuralist
INPACT

18. Mapping the Organisation’s Management Culture - 5
And when everyone is
pulling in the same direction,
4 we can relax the rules, give
3
Dialectic Aligned people more control over
how they achieve results =
Pragmatist Style again, only
this time it’s aligned, not
anarchic, as it was in the
1 Pragmatist/Anarchic first cycle.
2
Structuralist = 5. Pragmatist/Aligned
5 Pragmatist/Aligned
INPACT

19. Mapping the Organisation’s Management Culture - 6
Now that the organisation is
working as a team,
4 communication can flow
3
Dialectic Aligned undistorted, across
functions as well as up and
down – so management
decisions can be better
informed and the
1 Pragmatist/Anarchic organisation can focus on
2 the real world outside itself
Structuralist = 6. Empiricist Style
5 Pragmatist/Aligned
6
Empiricist
INPACT

20. Mapping the Organisation’s Management Culture - 7
7
Imaginist A manager in an Empiricist
style organisation has the
4 information to make radical
3
Dialectic Aligned ‘leaps of faith’ and
innovative decisions =
7. Imaginist Style
1 Pragmatist/Anarchic
2
Structuralist
5 Pragmatist/Aligned
6
Empiricist
INPACT

21. Mapping the Organisation’s Management Culture - 8
7
8
Imaginist Systemicist Once the organisation is
working as well as this, the
4 captain at the helm can stop
3
Dialectic Aligned fire-fighting and intervening
and start navigating =
8. Systemicist Style
1 Pragmatist/Anarchic
2
Structuralist
5 Pragmatist/Aligned
6
Empiricist
INPACT

22. Mapping the Organisation’s Management Culture - 9
7 8
Systemicist
Imaginist Finally, we come back to the
place where we started, with the
4 individual now not only being
3
Dialectic Aligned fully empowered but supported
by visionary management =
9. Pragmatist/ Empowered
Style
1 Pragmatist/Anarchic Did you notice the way
2 these styles are distributed
Structuralist
in a spiral? There’s a reason
5 Pragmatist/Aligned
for that..
6
Empiricist
9 Pragmatist/Empowered
INPACT

23. Mapping the Organisation’s Management Culture - 10
Each of the styles on red
axis focuses on the
8 individual within the
7
Imaginist Systemicist organisation and their
INTERNAL responses…
while each of the styles on
4
3
3 the blue axis focuses on the
Dialectic Aligned
Rationalist
organisation and its
EXTERNAL or
organisational responses.
Imagine a pendulum
1 Pragmatist/Anarchic
swinging from INTERNAL to
2
EXTERNAL, and rising as it
Structuralist
does so - each style builds
5 Pragmatist/Aligned
on the last one, it doesn’t
6
replace it.
Empiricist
9 Pragmatist/Empowered
EXTERNAL INTERNAL
FOCUS FOCUS
INPACT
(Organisation) (Individual)

24. Mapping the Organisation’s
Management Culture
 In order to progress up the management evolution spiral we have
to recognise and fully deal with the underlying tension between
 INTERNAL FOCUS - the individual, playing a meaningful role in the
organisation, and
 EXTERNAL FOCUS - the way the organisation uses people to
succeed
 Having identified the dominant management culture, the focus
shifts to the organisation’s Business Process Capability
INPACT

25. Why do transformation projects fail?
2. Business process capability
 The second key factor affecting the capability of the organisation to
cope with change and take advantage of new systems, is the way it
manages its processes, or its business process capability
 The majority of larger organisations are working with a piecemeal
set of systems and ad-hoc processes still proliferate
 Even where ‘core’ systems such as finance and operational
processes have been standardised, there are many instances of
work-arounds and non-compliance
 And those organisations that have introduced sophisticated
enterprise-wide systems report that they are often not being
operated consistently across the organisation
INPACT

26. Mapping the organisation’s
business process capability
 So understanding how well an organisation is managing its
business processes will provide a useful reference point for
assessing its capability to manage the transformation project
 The model we use to assess an organisation’s process capability is
the Capability Maturity Model
 It is adapted from a generic model, originally developed by Brett
Champlin at the Software Engineering Institute (SEI), Carnegie
Mellon University
 The model comprises a 5-step classification system to describe
processes, from Ad hoc to Integrated, and associates the capability
to manage processes, from Chaotic to Cooperative Optimisation
INPACT

27. Capability Maturity Model
Process control
5.Optimised Continuing
Effective process Improvement
Process measurement
4.Managed Quality and Productive
Measured process
Improvement
Process definition
3.Defined Consistent Execution
Standard process
Basic management
control 2.Repeatable Controlled environment
Stable process
1.Initial Chaotic
Ad hoc process Source:Brett Champlin
INPACT

28. Organisational capability:
Putting them together
 The majority of organisations that are at levels 1 and 2 on the
Management Culture model are also at levels 1 or 2 on the
Capability Maturity Model
 Those that have moved up the management culture spiral to
Dialectic and Aligned styles are also likely to have developed more
defined and standardised systems and processes
 Combining the two models provides a useful baseline for an
organisation to assess its capability to manage change and how
successful it will be in introducing cross-department systems and
processes – see next slide
INPACT

29. Organisational capability:
Putting them together
Business Process Capability
Management Culture Level 1 2 3 4 5
1. Pragmatic/ Anarchic Low Low
2. Structuralist Low Low Med
3. Dialectic Low Med Med Med
4. Aligned Med Med Med High High
5. Pragmatic/ Aligned High High High
6. Empiricist High High High
7. Imaginist High High V.High
8. Systemist High V.High V.High
9. Pragmatic/Empowered V.High V.High V.High
In this example, management culture is Aligned and process capability is at level 3
INPACT

30. Why do transformation projects fail?
3. Project complexity
 Having looked at the organisation’s capability to manage its people
and its business processes, the third area of focus is the project
itself
 The literature is full of cases where IT-based change projects failed
or were late and over budget, due to a combination of factors. It
didn’t seem to matter how well a project was planned, at some
point, if it was too complex, it would ‘go off the rails’
 So project COMPLEXITY is a key factor
 The INPACT assessment looks at project complexity in its own
right and in the context of the capability of the organisation
INPACT

31. Project complexity
 The complexity of projects depends largely on the combination of
three factors:
1. Number of People or functions involved
• an approximation might be those stakeholders represented on
steering and project groups
2. Number of business Activities or processes affected
• for example the number of manual processes an automation project
will ‘touch’ and change
3. Elapsed Time (in months) to implement
• from issue of spec/ITT to planned roll-out
 Put these into an equation: P x A x T Where does this put your
project on the Complexity scale? (see next slide)
INPACT

32. Exponential Complexity Tool
Beyond this point your
project is too complex –
break it down into
1200 separate projects and
employ a programme
manager
1000
2500
Complexity Factor
A complex
project – needs
800
2000 an experienced P
project manager
A
600
1500 Not simple -
needs some T
1000
400 project Factor
Simple management
project
500
200
0
1 2 3 4 5 6 7 8 9 10
INPACT

33. Mapping project complexity on to
organisational capability
 Projects that are more complex than Not Simple are unlikely to be
fully successful in an immature organisation i.e. level 1 or 2
Management Capability and anything lower than level 3 Process
Capability
 So the relative relationship between project complexity and
organisational capability needs to be understood
 This can be done by taking the combined Organisational Capability
value and plotting it against the Complexity value as the two axes
of a simple chart - see next slide
INPACT

34. Mapping project complexity on to
organisational capability
In this example, project complexity is Complex and organisational capability is Medium
High
Med
Capability
Low
Not Too
Simple Simple Complex Complex
Complexity
KEY Go ahead, the project looks as if it’s within your capability
Be careful, this project may not succeed fully in realising its benefits
Stop! This project is not within your organisation’s capability. Carry out an assessment and
adjust your plans
INPACT

35. How can an INPACT Consultant help you?
Project Managers
 Planning a project?
 Or worried about a project that is not delivering planned benefits?
Solution Providers
 Facing the prospect of delays and lower than expected returns on a
fixed price contract?
An INPACT consultant has the training and the experience to:
 Assess your transformation project
 Identify the barriers to success
 Quantify the impact on costs, timescales and planned benefits
 Help you develop an action plan to overcome the barriers and save
you £000s
Contact us for more information – see next slide for details
INPACT

36. INPACT
Integrated Process and Culture
Transformation
For more information contact
peterd@imaginist.co.uk
Or visit our website: www.inpactuk.net
Our consultants could save you £000s
INPACT