Creating customer value by leading

change

How to generate competitive advantage in an ever-changing brave new world

Written by Jan Willem Donselaar and Harrie KistersContributing Co-Author Bob Lindeman

Creating customer value by leading changeHow to generate competitive advantage in an ever-changing brave new world

Written by Jan Willem Donselaar and Harrie KistersContributing Co-Author Bob Lindeman

FOREWORDPreface‘Learning is not compulsory… neither is survival’

William Edwards Deming (1900 – 1993) was a visionary, whose quest for the ‘truth’ and unwavering belief in ‘continual improvement’ led to a set of transformational theories that changed the way we think about quality, management and leadership.

Who should read this book This publication is meant for everyone who is interested in the subjects of creating customer value and leading change. It is in particular written for those who are involved in strategic or tactical changes of an organization and those who are involved in portfolio, program or project management and support. Also, it is meant for students who want to learn from our experiences and ideas. This book will give the professionals of tomorrow understanding how they can create customer value, and how they can cope with an ever-changing brave new world at the same time.

Édouard Manet – The reader

Édouard Manet can be considered as the father of Modernism. Famous paintings are Déjeuner sur l’herbe, un bar aux Folies Bergère, and Olympia, just to name a few.His painting ‘The reader’ is made in a period without Internet, e-readers and tablets. However, reading a book still is a popular medium for obtaining knowledge!

Why you should read this book: Understand how to lead change We want to help you understand how you can create customer value and cope with an ever-changing brave new world at the same time. Keep in mind that this one-liner has a strong ethical component because not all change will lead to a ‘better world’. That is why we lend the notion ‘brave new world’ as something that has a lot of possibilities, but also might bring a number of threats and dangers.

Changes happen in our direct environment. They can be driven by all kinds of motives: economical, technological, political and societal, or just by the mere fact that you feel that something needs to be changed. In almost all situations this means that you, or the organization you belong to, will need to work for customers. You need to deliver value, or you will be running the risk that the customer will go elsewhere to get his value. Customers can be buyers of products and services, not limited to commercial organizations, and also people that use products and services from governmental organizations. Customers can be external to an organization or internal members of an organization.

We see many professionals struggle with an ever-increasing speed of change in what they are doing. The world of organizations is becoming more and more complex, and the risk of fail or even societal disruption, like the financial crisis, is growing. In addition to that, the way people work will undergo dramatic changes in the coming years. Due to automation of information-intensive activities and robotics, a lot of jobs will get lost, and new ways of working together will arise. Professionals need to understand how they can cope with an ever-changing ‘brave new world’.

Aldous Huxley’s novel ‘Brave New World’ (1932) sets in London AD 2540 and anticipates developments in reproductive technology, sleep-learning, psychological manipulation, and operant conditioning that combine to profoundly change society.

So change is an important driver for all our actions. Charles Darwin made this clear once and for all times: ‘It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.’

We consider the creation of customer value as the underlying driving force for deciding what to change. Of course, organizations want to survive by not going bankrupt, but the elementary basis for success is to deliver something that someone is willing to provide a financial or non-financial compensation for. Customer value is the value brought to a customer by fulfilling his needs, in such a way that the perception of the received value is consistent over a certain period in an ever-changing environment.

Michelangelo – The creation of Adam

This iconic fresco painting by Michelangelo on the ceiling of the Sistine Chapel in Rome shows a final act of creation: God’s right arm stretches a finger to a finger of Adam’s left arm, thus bringing the ultimate gift of life to man in accordance by the Bible book of Genesis.

Project Portfolio Management – Theory and Practice We will show you how Project Portfolio Management can be used together with Operations Management and Enterprise Architecture Management to safeguard good governance of the mission, vision, and strategy of an organization at one hand, and the customer value creation process on the other hand.

We as authors bring in a wealth of knowledge in the area of Project Portfolio Management. Knowledge that we want to share because we believe that Project Portfolio Management is a cornerstone in the knowledge base of every professional that has to cope with change. Although there are many books with an overwhelming number of detailed technical methods for project, program and project portfolio management, we see the real need in a publication that focuses on HOW to handle (complex) change.

We will zoom in on the crucial role of projects, programs, and portfolios when creating customer value in a continuously changing world. As the importance of results of projects, programs and portfolios have grown more and more; organizations have understood the need for an organizational unit to address administration, coordination, standardization, knowledge and expertise sharing concerning Project Portfolio Management topics: A Project Management Office (PMO).

Project Portfolio Management is the coordinated management of one or more project portfolios to achieve organizational strategy and objectives. It includes interrelated organizational processes by which an organization evaluates, selects, prioritizes and allocates its limited internal resources to best accomplish organizational strategy consistent with its vision, mission, and values. Project Portfolio Management produces valuable information to support or alter strategy and investment decisions.

The added value of a Project Management Office is to be of assistance to Project Portfolio Management. It is by no means a unit that takes over and controls the core activities of Project Portfolio Management; it is rather a broker that takes an active role to produce specific project deliverables and thus creates customer value.

Canvas model, communication, leadership, and measurement The Canvas model (Osterwalder, 2010) is a practical tool that can be used to visualize the way an organization creates value for its customers. The Canvas model can be used for all kinds of organizations, e.g. corporations, governmental, profit and non-profit. We will use the Canvas model to describe how a Project Management Office delivers value to an organization. The Canvas model as a method for business model generation has proved its value when inventing ways to bring (new) products and services to markets. However, what lacks in the Canvas model is the linkage between all kinds of creative initiatives and a more stable organizational context. In addition to the Canvas model, we will bring insights from the Project Management Institute (PMI) in place; insights that are necessary to understand how real value can be delivered to customers in a sustainable way.We will bring in practical experiences regarding the communication between people. Communication should especially be dealing with the human aspects of operations and change. In many publications on change management this element is in our view insufficiently addressed.People are considered an important factor when creating value, and thus for the resulting performance of an organization. Focus, therefore, is needed on effective communication, beside procedures, methods, and techniques, standardization, instruments, plans, and templates.We will zoom in on meeting management as an important tool for efficient and effective communication. Also, the importance of good leadership when generating changes will be addressed. Leadership styles and the importance of emotional intelligence will be discussed.

Last but not least we will share our insights on two important instruments to measure whether things are done well are: Benchmarking; Maturity measurements. Keep in mind: You cannot manage what you do not measure and compare. And if you cannot manage, then you definitely will have issues when realizing your vision and mission.

Topics that will be covered We will start with an introduction of our vision on customer value, change, and governance in Chapter 1. In the remainder of the book we will elaborate on these topics in a number of steps: Chapter 2: The relationship between change and the chain of vision, mission, strategy and objectives.

In this chapter, we will discuss vision, mission, strategy and objectives as guiding principles for organizations. An explanation of this guidance is needed to put our ideas on the internal governance and external governance in its right perspective. In addition to this, we will emphasize the importance of good leadership.

Chapter 3: The role of the internal governance that is needed to do the things right.

We will zoom in on internal governance as the coordinated effort to manage change by using Project Portfolio Management, Enterprise Architecture Management, and Operations Management. We will describe the Project Management Office as an important instrument supportive to Project Portfolio Management when managing change via the internal governance.

Chapter 4: The role of external governance that is needed to do the right things.

This chapter will show you how to lead organizations by adapting vision, goals, and mission to an ever-more rapidly changing environment. This should safeguard that the right things are done. We will decompose this external governance in the following underlying elements:

Self-preservation and Ecology; Technology; Information; Communication.

Chapter 5: The change engine and the change agent. Where Project Portfolio Management can be considered the ‘change engine’, a Project Management Office will act as the ‘change agent’.

The Project Management Office is in the center of a network of complex relations that links Project Portfolio Management, Enterprise Architecture, and Operations Management.

Chapter 6: Customer value and communication with customers. We will show you how to do this by putting a customer always first, listen to the voice of the customer, describe the customer journey and

demonstrate how value is experienced based on the Peak-End Rule principle. We will also zoom in on communication via meetings. Chapter 7: Bringing it all together. How to establish changes that successfully deliver value. We will also zoom in on a number of new developments in the area of customer

value generation.

Changes happen in our direct environment. They can be driven by all kinds of motives: economical, technological, political and so-cietal, or just by the simple fact that you feel that something needs to be changed. In almost all situations this means that you,or the organization you belong to, will need to work for customers. You need to deliver value or you will be running the risk that the customer will go elsewhere to get his value.

Many professionals are struggling with an ever-increasing speed of change in what they are doing. The world of organizations is becoming more and more complex, and the risk of fail or even societal disruption, like the financial crisis, is growing. In addition to that, the way people work, will undergo dramatic changes in the coming years. Due to automation of information intensive acti-vities, a lot of jobs will get lost and new ways of working together will arise. Professionals need to understand how they can cope with an ever-changing ‘brave new world’.

We consider the creation of customer value as the basic driving force for deciding what to change. Of course organizations want to survive by not going bankrupt, but the elementary basis for success is to deliver something that someone is willing to provide a financial or non-financial compensation for. Customer value is the value brought to a customer by fulfilling his needs, in such a way that the perception of the received value is consistent over a certain time in an ever-changing environment.

So be prepared to learn more about the following:

The relationship between change and the chain of vision, mission, strategy and objectives; The role of the internal governance that is needed to do the things right; The role of external governance that is needed to do the right things; Customer value and communication with customers.