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Posts Tagged ‘Organizational Change’

The PMO and the business model: A continuous interactive loop

Posted by Ammar Mango on June 19, 2014

PMOs are responsible to execute strategy.  But what if the business model is flawed? Most organizations are not ready to deal with this risk.  They always assume the business model is fine, when in many cases it is not.  So what is the role of the PMO in validating the business model assumptions? And how can an organization ensure they are functioning based on value-adding business model that works.  

Strategies are put based on where the organizations want to be in the future and what they want to offer.  However, some strategies prove not feasible, even if executed perfectly.  To demonstrate here are a couple of high level quick examples:

– Company A had a business model that would work perfectly well today, but they had one problem: they implemented the model 20 years ago.  So what they offered 20 years ago would have been perfect today, but not when they offered it back then.  They went bankrupt.  Do not get me wrong; they had a perfect PMO setup.  Their PMO sat on board meetings, ensured projects are proposed evaluated, and selected in alignment with strategy.  Then the PMO ensured the projects were successfully executed.  Unfortunately the whole model was flawed.  It took a marketing executive to come in and give them the bad news.  And by the time they got it, it was too late.

– Company B developed an ingenious software application in the 1980’s.  It was perfect for the mid 90s market.  He was ahead of the market.  

– Some are late for the market.  Company C came in with a different twist on the services it wants to offer.  It looked good on paper, but the customer did not feel their product wad different enough to leave their existing suppliers and work with them.  

All these are examples of flaws in the business model.  Usually, it takes a special kind of expertise to catch such flaws.  It usually is a mix of experience, understanding of the market, and partly luck.  Most of the time, such expertise and capability is not in the PMO.  So, how can a PMO help in ensuring the company has the right business model?  Another pressing issue is how do we ensure our model will work?  The problem is that you cannot be 100% sure.

I have rarely seen a PMO capable of contributing effectively on this issue.  I think the main problem is that most PMOs see themselves as executors, not strategists.  Even when hiring PMOs most companies do not look for a strategist.  They want a doer.  At one point the market will start realizing that we need a doer yes, but we cannot do much without a good business model.

There is good news and bad news in this.  The good news is that in a dynamic environment, a business model can be flawed and then refined.   The important thing is to setup the organization where continuous short loops of feedback are available so we do not invest too much too soon in a wrong business model.  So, organizations need to setup in a way that ensures the business model is always challenged and refined, then reflected in execution. This requires high level of maturity and willingness to change on the part of the executives first as well as the whole organization.  

Even if a company had a good business model for a while, things do change fast in today’s environments.  So, we need a continuous challenge of the way we do business and for that challenge to be encouraged across the organization.  

Setting up such an environment requires executives who have enough confidence and conviction in the importance of change, to allow such changes to take place.  

 

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Change and Sustainability remain an illusive goal for organizations

Posted by Ammar Mango on June 3, 2013

They seem to be pulling in two different direction but they do not have to if managed properly; Sustainability tries to maintain improvements  and value gained from initiatives, while change management pulls the organization towards something new and further improvements.  How can organizations maintain the balance under such pressures?

The answer starts with the right attitude at the executive level, but cannot stop there.

First, we have to make sure that the new improvement initiative is designed and carried out properly.  Meaning by a competent supplier who built the system based on best practices, culture of the organization, and the organizational level of maturity.  This is a big assumption, and many initiatives fail this test of quality.

Even if the initiative was carried out properly, sustainability remains an illusive goal.  The main reason for that is its strong ties to change.  A situation that needs to be sustained is usually unstable, otherwise sustainability would be an easy task.  The reason for the instability is that the organization is new to this new improved state of operating.  So, tendency is to go back to the old, after the pressure from upper management to adopt new systems cools down.

One of the main reasons for the inability to sustain is that the belief in the change is only at the upper management or even just the sponsor level.  So a strong sponsor will push the organization and force it to use the new system and will ensure that happens as long as the sponsor is in power.  But as soon as the sponsor moves out of the position, or a new management gets in, almost all previous improvements are abandoned.  This is very common in organizations.

Some middle and functional managers have become so skeptical of change and its possibility that they play along with the zealous sponsor knowing that soon enough he will go away or give up.  Once a manager in private told me “We (managers) are like wheat stalks in a field.  We will bend with the wind of change so not to be broken , but as soon as the wind stops blowing, we will go back to our old ways.

Ironically, some organizations become so accustomed to this cycle of new initiatives that soon cool down, that they become experts in the politics of dodging the change.

I am a strong believer in executive support for change initiatives and believe it is a key ingredient for success.  However, when that support does not yield real buy in across the organization, chances for success are really dim.

This is why I believe the real champions of change are the middle managers.  They are close enough to the work that they can influence it, and close enough to upper management to understand the strategy.  The executives have to bring management into the loop early and ensure buy in.  Not by force, but by ensuring that middle and functional management is a partner even in identifying the needed change initiative.  If this is not possible the executives have to bring fresh blood from outside who have the vision and experience in the new proposed system, and give them the power to carry out the change.  This surgical maneuver at the organizational level can be tricky and dangerous but sometimes it is necessary.  Some organizations bring in outside consultants as surrogate managers to lead the change initiatives with the right levels of power within the organization to carry out the change.  This also can be done, given the right level of support to the “outsider” is given by executives.

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Organizational Change is Like Riding a Bicycle

Posted by Ammar Mango on June 11, 2012

One of the toughest challenges on projects is managing the change that the project work and deliverables bring about. There a lot of similarities between organizational challenges from change and the challenges of riding a bicycle:

1. Expect to fall a couple of times before you get used to it:  Same with new systems and processes; be ready to be clumsy using them.  However, we need to remember that once you learn the new ways, they will bring better results.

2. In the beginning, walking is easier:   Just because we are really good in the old ways of the organization, does not mean we should not change.  We think we are good in the old ways, but that will do us no good if the whole way we are doing business is not fit for the new work environment.

3. In the beginning, walking is faster:  Change helps us do things more professionally, and even if we probably can get short term benefits faster taking shorcuts, however, learning how to do things the right way and professionally will pay off.

4. Doubting our ability to ever do it right: Other bicyclists make riding seem so easy.  Until we try it.  Then we find out it is not as easy as they make it look.  So, we get disappointed and not want to do it anymore.  If you want to master your profession, you need to put in the time to learn how to do things right.

5. We want to break records after first day of riding: We are used to see bicyclists zoom through the finish line and being hailed by the crowds.  However, we do not see the years of hard work and sweat and exercise that precede the events.  Same thing with change.  do not think that organizations who master their work got there without the hard work, the mistakes,

6. Someone running along holding the bike: It is OK to gradually build capacity, by bringing in consultants, trainers, support people, who have experience, until we are able to do it ourselves.

7. Do not buy race bike from day one: It is OK to get a bike with training wheels, or an easier to ride bike.  Same thing with organizations, do not rush into using complex tools and processes from day one.  Start with a simplified system, and build up into something more sophisticated as your team get the hang of it.

8. Get the right size bike: You might want a bike like the one your neightbor has.  However, you might need something higher or a thicker tire, then you need to get that.  Same with organizational change.  Do not borrow another company’s system and assume it will “fit” yours.  Customize your system to fit your needs and requirements and organization.

9. Don’t go off track too soon: Going on rough terrains when you did not get enough training will result in problems.  Same with organizational change.  try to tackle safer, easier projects rather than challenged projects, especially in the beginning, to build momentum and small success.  This will motivate team and prepare you for bigger more challenging projects.

10.  Try and Try again: Imagine if you stopped trying after falling off the bike for the first time.  No one would have ever learned to ride a bike.  Instead persevere and be ready to fall off and get back on track several times until you do it right.

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