Don’t Try This at Home

I’m a fan of the television series, Mythbusters… getting paid to blow things up is one of my dream jobs.

Sitting comfortably in my sofa, it’s temping to think, “Hey, I could do that!” Whether dynamiting a cement truck or creating a massive fireball from non-dairy creamer (really!), I’m tempted to dismiss their “Don’t try this at home – we’re professionals” warning as mere hype.

The source of this over-confidence is simply that I don’t know what I don’t know.

AWOL: Putting “Business” back in the “Business Case”

According to many CFOs, the firm really needs to set aside more of this money for investments that will move the business forward in growth and profits. This frustration is a reasonable sentiment. Diverting scarce capital into projects that merely “keep it running” are hardly awe-inspiring.

But what jumped out at me was one culprit, or should I say scapegoat, that many CFOs blamed. One respondent was quoted saying that the “basic foundational structure of IT is inadequate to take the company forward, but no one can build the business case to tackle it.” (emphasis added)

Really? The current infrastructure is holding the company back but no one can demonstrate the value of improving it?

Shoddy or Integrity?

Ancient Romans used integritas to describe pottery. Saying a ceramic piece had integritas meant the quality that appeared on the outside existed throughout the entire piece. There were no hidden weaknesses or imperfections covered by an attractive glaze. A vessel with integritas will hold up under stress.

Modelling Business Processes

Most, if not all organisations, constantly strive to improve performance. There are only three basic ways of doing this: reducing costs, improving income, or finding new ways to satisfy their customers. Out of these, cost reduction has been a dominant theme and is typically achieved by telling budget holders not to spend. But logically this can only go so far – at some point the impact on saving costs will be minimal. Also just cutting budgets could mean that some vital activities may become underfunded, which in turn will have an adverse affect on improving performance. But there might be a better way ….

Double Your Money In 7 Days Or Less!

Powerful pressures lure the most sincere project teams into over-valuing the projects they have been working on a long time. A simple question can alert leaders the numbers are unreliable.

You are the leader of a large organization and in front of you lies a proposal for a new IT project. You normally hate IT projects. They are usually are laden with incomprehensible acronyms & jargon and it is difficult enough trying to understand the problem they are describing let alone the solution. In this case, however, the team has done a smashing job: They have used plain English, all the right experts were involved, and the team achieved consensus for this recommendation. Best of all, the financials projected a credible and respectable 20% Return On Investment.

Now let me tap you on the shoulder and burst your bubble:

When Brains Are Not Enough

Even high intelligence and experience do not instinctively produce the BEST solutions.

Smarts and experience. Who could ask for anything more when assembling a project team?

How then do we explain the 70% to 80% failure rate on acquisitions? Don’t organizations assemble their A-team for acquisitions? Don’t they engage investment bankers– firms that hire the cream of MBAs from the top schools?

Straight From The Horse’s Mouth

What do you really want: great analysis or your first impressions repeated back to you?

If you lived back at in the 1890’s, you would have been extremely impressed with a horse named Clever Hans. This horse correctly answered math and current event questions posed by his master by tapping out the answer with a hoof. He could even read and answer questions written out on cards by people in the audience!

Clever Hans amazed audiences for more than a decade before the truth emerged. No, the owner wasn’t perpetrating a fraud… the master was as shocked as everyone else to learn that Clever Hans didn’t excel in mathematics and world events. Where Clever Hans did excel was in pleasing his owner!

In 1904 it was demonstrated that the horse was looking for cues of approval. After the owner asked a question, Hans tapped his hoof until he perceived approval – perhaps a smile or a raised eyebrow. He had learned that, by stopping when he saw these cues, he was rewarded with an apple or carrot.

It’s not just horses that watch their masters for the “right answer.”

No App For That

We are asking the wrong questions, not calculating the wrong answers.

During an initiative to improve capital project processes I was approached by a small cadre of project managers. They assured me that they understood the goal of improving problem solving and decision-making. Then, out jumped their true reason for our little meeting. “Dave, what we really need is our own spreadsheet template to enter the costs and benefits of our projects. We’ll be able to prepare proposals faster and won’t need finance analysts on our teams.”

This group misunderstood the initiative’s goals entirely. The overhaul wasn’t to make capital approvals easier or faster (although that was a collateral benefit). The overhaul focused on producing better projects. That doesn’t come from spreadsheet templates or black box analysis models. Better projects come from asking the right questions of the right people at the right time.

Corporate Culture: Your Organization’s Response to Stress

Culture is how an organization internally responds to things going badly. Revenue did not meet targets; the product was late to market; the competition beat us to market, our cost structure is out of line; our quality is suffering; we’re losing customers and market share; our web site is a disaster and our user interface isn’t much better; we’re being out sizzled and out sexied.

So what is the response? Panic? Anger? Fear? Denial? Not invented here? Blame and finger pointing? CYA? Retrenchment into process and bureaucracy? Freeze everything? Fire everyone? Reorganization? An investigative committee? An acquisition? Fraud/cooking the books? Surround everyone with everything we’ve got?