BUSINESS OUTCOME MANAGEMENT

One of the greatest challenges for any company is the execution of strategy or the realisation of benefits from the implementation of large change programs. Frequently, the reason isn’t organisational resistance to change, a difficulty that is commonly referred to. Rather it is for a more serious reason: managers and management teams focusing dogmatically on what they are doing rather than what they want to achieve. This causes managers to narrow their thinking and, in effect, operate at a more junior level. They “can’t see the wood for the trees” and the return on investment from their time is diminished.

The more senior a manager, the more they  need  to  work  within  a team to achieve the business objectives. Irrespective of how siloed the organisation is, the silos have to come together eventually. The lower in the organisation that this cross-departmental engagement occurs, the better.

A major inhibitor to  cross-departmental  engagement  is  the  absence of common purpose. Frequently managers believe they are working cooperatively but when pushed they have difficulty explaining the interdependencies between the initiatives they are all working on. This is because they are working towards completing initiatives, rather than delivering outcomes.

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Initiatives are the activities managers and staff are engaged in. Outcomes are the result of one or more initiatives.

Consider the technology salesperson. Their role is to approach prospective customers and convince them that their technology solution will improve the prospects’ business operations.

For example, a CRM (customer relationship management) salesperson will state, “Buy my CRM software and you will have happier customers and improved revenues.”

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Anyone who has implemented a major piece  of  software  will  know how flawed this scenario is. The truth is that once you implement a technology solution, all you have is a database of names and files.

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To achieve the benefits promised by the CRM salesperson, the company must implement a range of complementary initiatives. The collective output of these initiatives will deliver the desired outcome.

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The approach of interlinking initiatives and outcomes is known as Business Outcome Management. It is fundamentally different from traditional approaches to project planning in that the emphasis is almost entirely on the outcomes required.

The principle is the same as it is for ball sport players in the sense that it is better to be where the ball is going to be rather than where it is.

Business outcome management is a methodology that assists management teams to establish a common purpose. It  produces  two  deliverables. The first is a two-dimensional mind map that graphically displays the outcomes and initiatives and the second is a document that transposes the map into a business plan.

The importance of having a two-dimensional mind map cannot be overestimated. When discussing the importance of business outcome management with my clients they generally point to a range of documents or a single thick document and say they have it covered. At this time I ask them what the relationship is between their various documents, or how page x relates to  page  y  in  a  single  document. The point is that documents are “three-dimensional,” making it exceptionally difficult to know or visualise the multiple many-to-many interrelationships that exist in a single document, and between documents.

A two-dimensional mind map surfaces the interrelationships  and explicitly reveals how a single business outcome is dependent on multiple initiatives. It highlights relationships that are not immediately obvious in a document. The following is a simple example of the concept. Initiatives are represented as a square and outcomes as a circle. Risks can be included as a different shape.

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The graphic details the basics of implementing a change program. The entire “island” is labelled change management.

For larger projects and programs of work, the map will comprise of multiple “islands,” each representing initiatives and outcomes of similar intent and strategic focus. They provide  an  additional  dimension  to the map and assist the process of aggregating the relationships found in traditional documents into an easier-to-read format. Each “island” is labelled to provide context for the outcomes within the island, and collectively these labels are the executive summary of the program of work. Each island will have its own owner, a manager who is responsible for ensuring all the outcomes in the island are achieved.

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Initiatives are written in the format: verb/noun. For example: “document the business process” or “administer  a  customer  survey.”  Outcomes are written in the past tense. “Staff morale has improved” or “customer requirements are understood” or “shareholder value has increased.” Using the past tense is important as it assists managers to clearly articulate the desired outcome.

Focusing on achieving the outcome encourages the manager to avoid tackling a project with a checklist mentality, as it is almost impossible to document all the initiatives required to achieve an outcome.

If you were focusing on initiatives you would work on “review and agree upon the business plan” and once completed you would consider that the business plan was reviewed and agreed.

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However, if you take a broader view, then you could only consider the business plan to be “reviewed and agreed upon” once all the indirect contributing initiatives were taken into account.

The indirect initiatives that contribute to “business plan reviewed and agreed” are:

  • Induct work package resources in project approach
  • Agree activities in scope and document approach to each
  • Establish change management program to mitigate risk
  • Review and agree risks to project
  • Agree approach to business planning
  • Socialise business planning approach
  • Prepare business plan
  • Review and agree business plan

These initiatives are part of two different strategic groupings (islands) but they all still contribute to the outcome and the manager who is signing off the business plan will expect to see contribution from all of those initiatives.

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An important insight is that if a decision is made to delete or not complete an initiative, the impact of its absence can now be traced to those outcomes that relied on the initiative being successfully completed.

To prepare a business outcomes roadmap requires a workshop of four parts.

Part one is to agree the “endgame”—the flag on the hill. This is the medium-to-long term objective for the company or, if it is for a major project, then it is a statement of what the project will achieve. It should be a “big statement” but equally one that is achievable.

Example: “A culture of delivering excellence is implemented and a collaborative unified management team that is the envy of the industry is established.”

The second part of the workshop is to discuss the current issues facing the business. This is because managers and staff frequently cannot discuss the future without first explaining the problems they face in doing their job. You have to give them the chance to “put their baggage down.”

Part three of the workshop is to capture intermediate outcomes, those outcomes that must be realised in order to achieve the end game.

Part four is to capture the initiatives collectively required to deliver the sub-outcomes.

The methodology for collecting the data is important and it starts with the room selected for the workshop. The room should be set up without a table and the chairs should be arranged in a semicircle or similar. This assists people to “open up” in the workshop.

Each person is given a felt-tip pen with a broad point and a pack of post-it notes. Part one of the workshop can be completed on a white board through normal facilitation techniques.

Parts two to four will follow the same approach. The facilitator requests that the participants write one issue, outcome, or initiative (depending on the session) on a post-it note and to keep producing post-it notes until they have exhausted everything they have to say on the topic.

While the participants are writing down their thoughts, the facilitator should walk between them collecting the completed post-it notes and placing them randomly on a wall or window. As the notes are placed, the facilitator should read aloud a selection of the notes. This will stimulate the thinking of the participants.

When everyone has written down everything they have to say, and the facilitator has stuck all the notes on the wall, then the participants will be asked to sort the notes into groups. The rule for this part of the workshop is that the participants must work in silence. They cannot discuss their thoughts on the grouping. Once everyone is happy, the participants take their seats. At this time the facilitator will review each group and agree on a title for the group. These groups will later influence the “islands” in the mind map.

When all three mini workshops are complete, the workshop is over.The facilitator types up the workshop and prepares the business outcomes mind map. This will include de-duping the lists. The issues list does not make the map. Rather it is used to validate that everything that is included in the map will address the issues. Microsoft Visio is a good application for preparing the mindmap.

An important feature of this approach is that the outcomes are collected independently of the initiatives. This means there is no direct link between the outcomes and initiatives. When the map is prepared, the author must draw their own conclusions on which initiatives are related to which outcomes.

Once the map is prepared, it is critiqued by all or a subset of the participants from the original workshop. It may take two or three iterations until the map is agreed upon by all.

Viewing the map for the first time can be quite confronting for the participants. The best personal example of this was when I presented a map to a group of executives in the aviation industry. When they first saw the map, the room descended into chaos as each manager tried to find their department or function in the  map.  When  they  couldn’t, they turned on me. I explained that each of their functions was spread out through the map and that they had to work as a team to deliver the endgame. It was a significant moment and once the emotion died down, they really embraced the concept. Later the managing director wrote to me to say that they were 27% up on the budget as a direct result of the workshop. He was ecstatic.

Once the map is agreed upon, it needs to be turned into a document. This document has two parts.

Part 1 focuses on outcomes and part 2 on initiatives. The layout is as follows.

For outcomes:

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The idea is to list all the initiatives that contribute directly or indirectly to each outcome. The “person accountable” refers to the outcome, not the initiatives.

For initiatives:

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This table relates all outcomes to a single initiative. This is important as it informs the owner of the initiative about which outcomes are dependent on their activity being successfully completed. The R.A.C.I. table describes who will own the initiative (accountable), who will deliver the initiative (responsible), who will contribute to the delivery, and who should be informed of progress.

This is a powerful methodology and the results will improve with practice.

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