Business Masteries

1. Engage System™

Optimally solving a problem requires a deep understanding of the System in which one is operating. This is achieved by engaging in the System.

"A System is any group of interacting, interrelated, or interdependent parts that form a complex and unified whole that has a specific purpose." — Daniel Kim

To realize optimal ROI, continuous engagement among business, capability, IT, and relevant external organizations is necessary before, during, and after projects. Influence the System by acting on feedback, managing risks, responding to warning signs, communicating clearly, and constantly staying grounded in reality.

How Do You Influence Your System?

Projects continue to fail because we insistently examine root causes internal to projects, not external. Solving the dilemma of failed projects requires looking outside a project to the broader universe or System it operates within. It requires that malfunctioning Systems be influenced or changed. Influence requires:

• Courage and transparency.
• Nurturing people and team relationships.
• Educating people and teams.
• Promoting personal traits such as curiosity and cooperation.
• Mitigating institutional imperatives and maintaining a failure recovery plan.

Engage in Relationships, Process, and Requirements

Engage in Relationships: Engaged individuals and teams are more successful. If applied correctly, methods and software deliver positive capabilities. However, they don't matter if we can't work as a team.

Engage in Process: Most businesspeople understand why it's essential for them to engage early during scoping. However, many underestimate the importance of engaging in all project processes: Design, Develop, Deploy, and Operate.

Say No!: Every project will inevitably involve changes to scope. Say no to nonvital requirements, at least for now. Your goal is to enable the business case with the minimum set of business requirements while managing scarce resources.

Address Inner Orbits: The IT-Business Relationship

According to Gartner's research, effective IT–business engagement can increase IT performance by 54 percent. The nearest orbit we can affect quickly is the space between business and IT teams.

• Divorce My IT: Before you "divorce" your IT, understand why you're frustrated. Common challenges include frequent reorganizations, high turnover, mistrust, and poor communications.
• Engage My IT: Bridge relationship gaps by starting simple, building trust, realizing quick wins, and dealing with idiosyncrasies in a professional manner.
• Engage My Business: Set clear business expectations for IT and continuously manage them. Encourage IT to learn about your business outside of project work.

Act on Feedback & Manage Transitions

Conduct Action Dialogues to incorporate System feedback into your TOBA (thinking, organizing, behavior, and action). Clear, candid, and concise dialogue is necessary for projects to deliver successful outcomes.

• Lessons Learned: After Action Dialogues (AAD) capture a prior execution's essence to improve future performance. Common lessons include dealing with people turnover, overly optimistic schedules, and underestimating complexity.
• Minimize Transitions: Large projects may have up to 35 transitions between teams and roles. Transitions cause knowledge to be obfuscated, lost in translation, or not shared. Minimize transitions by getting the right resources engaged early and using versatile generalists.
• Transition to Design: Business requirements to design is a critical transition. It requires knowledge transfer of requirements, translation of business terms to technical terms, and an understanding of the Input-Process-Output application view.

Manage Risks, Issues, and Decisions (RID)

Clearly define how your project will manage risks, issues, and decisions. Weak or nonexistent RID processes will slowly kill your project over time.

• Risks: A potential adverse condition or uncertain future event that may impact the budget, schedule, or scope.
• Issues: A present situation or concern that requires an immediate leadership decision to resolve.
• Decisions: Timely decision-making is crucial to prevent unproductive time or rework.

Realize Reality: Avoid a Culture of Fear

Many projects fail because team members are afraid to speak candidly and communicate bad news early. Fear stifles communication and innovation. Managers who bark demands, intimidate, bully, and threaten people cultivate fear that constrains creativity.

Understand Project Health: Behavioral economists have shown that people hate to lose twice as much as they love to win (Loss Aversion). Similarly, many IT project teams fail to disclose problems soon enough to protect their project. Manage project health continuously by assessing deliverable quality, conducting independent objective assessments, and utilizing a "no blame" culture.

2. Develop Insight™

Continuously develop insight into your business capabilities and apply the knowledge learned to your projects before initiating them.

Technology isn't the culprit in most project failures. Organizational dysfunction causes most project failures. History tends to repeat or mirror itself when it comes to projects. Three critical actions before a project begins are to:

1. Find who has solved a similar problem in the past and understand their solution.
2. Orient business team members on the project process and its pitfalls, risks, and nuances.
3. Encourage team reflection and discussion on why projects fail and encounter trouble.

Know Nine Unique Insights About Projects

• Use Project as a Verb: Projects propel your organization from its current state to a future state of compelling business benefits.
• Understand Project Anatomy: Projects are about effectively managing scarce organizational resources, commitments, expectations, and cross-functional relationships.
• Consider Project Constraints: Traditional thinking addresses cost, time, and scope. Time can't be replenished. Manage time first and aggressively; the other two will work out.
• Engage with Technology: Business teams must stay engaged throughout Design, Development, Testing, and Deployment to increase outcome quality.
• Step to Outcomes: Missed aggressive milestones are warning signs of deeper troubles.
• Undertake as a Sociological Endeavor: Most projects fail because of people and their inability to influence the System they're working within, not technology.
• Minimize Transitions: Limit the knowledge "traps" caused by handoffs between highly specialized roles.
• Choose Right Approach: High facts/low assumptions support major resource commitments. Low facts/high assumptions require discovery or feasibility projects.
• Reduce Project Proliferation: Leadership bandwidth is at a premium. Focus on the most compelling and impactful projects using assessment rigor.

Learn from History

Project fiascos have been reported for decades. Organizations keep repeating the same thinking, organizing, behavior, and actions that trigger failure. Collectively, the annual global cost of project failures exceeds $1 trillion.

• Failure Findings: Most failure is bad, enabled by losing touch with reality, poor problem domain knowledge, convoluted scopes of work, and team dysfunction.
• 7 Common Mistakes: Inadequate due diligence, vague roles, poor communication, factless plans, focusing on scope versus outcomes, unchecked poor behavior, and losing sight of reality.

Consider Historical Laws and Principles

Shift Your Mindset & Relate to Analogies

Transition from traditional project thinking to creative and pragmatic actions that are simple to implement, inexpensive, and based on business sense.

• Project is Theater: Casting a film is the most crucial decision any director makes. Projects are about people; void of the right people, they breed failure.
• Building a House: Building a home relies on mature standards passed down over 400 generations. Application software construction is abstract and less mature. It requires different competencies.
• Aviation System: Aviation safety impacts human life, forcing stringent risk mitigation. The tech industry must transition to a proactive approach focused on detecting risk before failures occur.
• Franchising: The organization between corporate staff and line business teams is similar to franchisor and franchisee. Top reasons franchises fail (inexperienced staff, lack of capital, flawed systems) mirror why projects fail.
• Team Sport (Golf): Individual talent matters, but it isn't the key determinant in winning. The ability for talented individuals to adapt to be capable team players shouldn't be a given on any project.

Understand SDLCs (Software Development Life Cycles)

The difference between structured (waterfall) and agile is how the four work cycles (Decide, Design, Develop, Deploy) are organized and executed.

When deciding between structured and agile, evaluate: Complexity, Criticality, Culture, Change, and Competency.

3. Embrace Mission™

Behavior without purpose is the essence of chaos.

Initiating the right mission is only possible after engaging in your System and understanding the problem/opportunity. Wrap your mission with differentiating and impactful TOBA — Thinking, Organizing, Behavior, and Actions.

Initiate the Right Mission

All organizations want to use their scarce resources to increase performance optimally. Assessing and prioritizing ideas is crucial, including saying no to the ones that aren't impactful to your organization's business needs.

• Understand the Problem: Is it valid? Are you using realistic assumptions? Are causes and effects understood? Do senior leaders appreciate the economic impact and scope?
• Do BAH HUM BUG: Leverage available internal and external artifacts early: Business Artifact Hierarchy, Hierarchy Unit of Measure, Business User Group.
• Think 80/20 (Embrace Less is More): Match business needs to a business case. Focus on minimum viable requirements. Industry research shows that, on average, 40 percent of requirements are never used in new applications.
• Consider Other Solution Levers: Is a technology project necessary? Assess nontechnology options: reengineer business processes, redesign organization, employ Lean/Kaizen methods, or sweat existing assets.

Define Succinct Outcomes & Confirm Scope

Look at the big picture to provide context using Context Diagrams (Inputs ➔ High-Level Capabilities ➔ Outputs). Use outcome models like SPRONTO™ to articulate dimensions of scope.

• Confirm Scope: Scope quantifies the work required to achieve the expected business outcome. Poor scoping results in increased costs, mismanaged expectations, underrealized benefits, and staff turnover.
• Define Requirements: A good requirement supports a vital business need, directly links to the business case, is reusable, and is testable.
• Avoid Rework (Ka-Ching!): "We'll just figure it out in Design" is a costly mindset. While you're trying to figure things out during development, your project is at its highest labor burn rate. Avoid this by testing requirements and creating prototypes early.

Minimize Resource Consumption

• Measure Value: Projects are justified only when they deliver value. Estimate total cost of ownership (one-time, recurring, and post-implementation costs) and secure funding based on a rigorously monitored business case.
• Estimate Work Precision: Understand the confidence of your estimates. Budgetary estimates have low precision (±100%), Proximate estimates have moderate precision (±30%), and Commit estimates have high precision (±10%).
• Sell Warren Buffett: Would Warren Buffett invest in your project? Choose simplicity over complexity, buy proven technology, practice independent thinking, and avoid the costly mistakes of others.

Define Clear Organization

Nothing saps the productivity of a project like vague roles and accountabilities. Ambiguous roles are the demise of many projects.

• RACI Matrix: A clear tool for assigning obligations: Responsible (does the work), Accountable (answerable for completion), Consult (opinions sought), Inform (kept up to date).
• Engage Sponsors and Owners: Never start a project without a sponsor. Every successful project has an engaged sponsor who is enthusiastic, influential, empowered, and visible.
• Leverage Standards and Assets: New technology can be fickle. Approach unproven capabilities cautiously. Standardize on proven architecture ("building codes") to deliver faster project results at lower costs.
• Control Your Destiny: If something doesn't feel right, chances are it isn't. You can control your destiny when working with technology partners through engagement, sound business acumen, and the courage to report reality.

4. Optimize Decisions™

Optimize vendor partner selection decisions by creating cooperative knowledge and engaging in an interactive dialogue.

Selecting software is more than just about the software and hardware. A vendor's service depth, stability, culture fit, financial viability, and commitments are just as important.

Establish Goals and Avoid Gaffes

Consider buying, rather than custom developing, software to accelerate your implementation timeframe, reduce long-term maintenance costs, and leverage enterprise-caliber solutions that streamline business processes out of the box.

• Gaffes to Avoid: Miscommunications, overpaying, Comflexity™ (too much software configuration flexibility creating complexity), transactional thinking, and venturing too far from a vendor solution's standard use case.
• Think Twice Before Creating an RFP: RFPs run the risk of creating misinformation. Organizations publishing RFPs aren't always knowledgeable about potential vendors, and vendors aren't knowledgeable about the requesting organization's needs. This leads to nondifferentiating "Yes" responses.

Do Your Due Diligence

• Research Your Problem: Identify viable vendors, understand emerging innovation, and benchmark the market. Avoid reinventing solutions and repeating mistakes others have made.
• Network with Peers: Conduct visits with customers of leading vendors early in your project process to factor real-world insights into your evaluation.
• Focus on Vital Needs: Your application solution is much more than just functional requirements. Understand the anatomy of your required solution, domain-specific nomenclature, and leading practices.

Align on Evaluation Process & Publish RFP

• Establish Guiding Principles: Adopt a partnering mindset, define vendor minimum requirements, ensure consistency, and mitigate biases.
• Align on Scoring Methods: Create a scoring team, establish decision factors and weights, and define a rating scale before creating and publishing an RFP.
• Design Questions: Do not copy your entire requirements list into the RFP. Ask open-ended, contextual questions that force the vendor to think and formulate a tailored response, rather than simple "Yes/No" checklists.

Evaluate and Select Vendor Solution

• Assess Vendor Proposals: Winnow vendor candidates using a minimum requirements assessment. Read, evaluate, and assign preliminary scores as a team.
• Conduct Interviews and Software Demos: Prepare specific software demonstration scripts for the vendor to demonstrate critical functions and features. Do not rely on standard marketing demos.
• Conduct Vendor References: Contact known past and current customers that the vendor didn't provide as a referenceable account to gain unfiltered insight.
• Engage in Sandbox Experience: Request the vendor to configure requisite functionality in a dedicated demonstration environment so your team can explore the application hands-on.
• Conduct Site Visits & Negotiate: Visit the vendor's headquarters. Engage legal counsel with experience negotiating agreements with large ERP and cloud vendors to handle deal economics.

Skip RFP and Accelerate with JITDE™

JITDE™ (Just-in-Time Decision Evaluation) is an agile, partnerial process that leverages intense vendor-partner dialogue to optimize vendor selection decisions rapidly, bypassing the bloated RFP cycle.

• Don't create and publish an RFP. Confirm the top three viable vendors using research and benchmarking.
• Partner interaction is collapsed into two to three intensive days.
• Dialogue on contract matters begins immediately and runs parallel with assessing vendor options.
• Turbocharge and optimize your vendor software selection decision using agile methods and techniques.

5. Think Capability™

Capability Thinking® constantly optimizes the utilization and further extension of business capabilities to increase organizational performance and value.

Practice Capability Thinking®, the Fifth Mastery™. Projects will not achieve their objectives without all 3 phases being successful: Flawless Setup (Initiation), Execution, and Organization Adoption.

Extend Business Operations Agilely

A crucial tenet of Capability Thinking® is to appreciate that everything doesn't need to be included in the project scope.

• Focus on delivering capabilities comprising the vital few requirements first.
• Add and refine capabilities and requirements based on actual use, learning, and experience.

Return on project investments often struggles or fizzles post-implementation. Ensure job aids, supplemental training, and additional support are available to sustain business performance.

• Capability Thinking® promotes constancy of purpose. Implementation begins with the hard lifting of leveraging capabilities delivered to optimize investment return.
• It facilitates agile pivoting and improvisation to extend business operations capabilities. Post-implementation productivity troughs often arise, and business dynamics require agile changes in strategy and execution.