lost in translation · 2018-04-03 · monika alder, mba ccmp™ director, transformational change...
TRANSCRIPT
Monika Alder, MBA CCMP™
Director, Transformational Change
Great West LifeCo.
May 23, 2017
Lost in Translation: Articulating & Measuring OCM’s Contribution to Value Creation
Lean in …
Today’s Conversation
• The World As We Know It
• “Lost In Translation”
• Building a Bridge
• The Path Forward
THE WORLD AS WE KNOW IT
Let’s Start with Value Creation
Value creation is the company’s raison d’ètre;
it is the ultimate measure by which the company is judged
Value Creation in its Simplest Forms
𝑉𝑎𝑙𝑢𝑒 = 𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑅𝑂𝐼 =𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
1
1. Investment is intended to refer to both operational as well as capital expenditures required to achieve benefits.
Common Measures for OCM Practitioners
Activities
Results Outputs Outcomes
Capabilities
Organizational Benefits
Project specific KPIs:• Readiness/ Preparedness• Adoption• Proficiency • Usage
INTANGIBLETANGIBLE
“I am not taken seriously”
“We still need to prove ourselves”
“They do notrecognize the
value we deliver”
“They still do not get what I
do”
Yet …..
“LOST IN TRANSLATION”
We are NOT an Island
OCM
Executives
Change Targets
Project Managers
Human Disciplines
Operational Managers
• Overall Experience / Engagement
• Learning & Growth / Capabilities
• Buy-in & Commitment
• Empowerment
Human Discipline Mindset
Operational Mindset
Functions of a Manager
Planning
Organizing
Directing
Controlling
The project is a temporary endeavor to create a specific product, service or result 1
Project Manager Mindset
SCOPESCHEDULEBUDGETQUALITY
RISKS
1. A Guide to the Project Management Body of Knowledge (PMBOK Guide), Fifth Edition
Financial Results
Executive Mindset
Bra
nd
&
Re
pu
tati
on
Op
era
tio
ns
&
Tech
no
logy
Pe
op
le
Cu
sto
me
r Ex
pe
rien
ce
Sustainable Value Creation
Plus There Are Incentives
Organizations and people do what they are rewarded for
Short-term measurement drives short-term thinking
Short-term thinking tends to under-emphasize intangibles and other hard to measure long-term items
What they hear is…
… but their mindset and language is about
BUILDING A BRIDGE
Not all Value Creation is Equal
• Certain outcomes are more attractive than uncertain ones
• If you can’t accurately measure the “return” the attractiveness of the activity is diminished
Can We Measure What Matters Most?
• Sometimes it is the things that are the hardest to measure that matter the most
What is the difference between “good” and “great”, “success” and “failure”?
Perspective Matters
• Do the measurers of value have the right perspective to see sustainable value creation?
• How do they account for risk?
How do you transform a line into a circle?
Risk from Executive’s Perspective
Systemic Risk
Financial Risk
Regulatory Risk
Credit Risk
Operational Risk
Execution & People
Risks
PATH FORWARD
The Perspective Paradox
1. Connect to the BIG Picture
2. Shift the Time Horizon
3. Reframe from ROI
Connect to the BIG Picture
Our Perspective Executive’s Perspective
Connect to the BIG Picture
How much of success:• Relates to people thinking,
behaving or doing their tasks differently?
• Is dependent on driving new or different capabilities?
Shift Time Horizon
Project management mindset frames the time horizon• Go-Live and typically short stabilization period define the end of
change and shift of priorities
When is value really created and when is risk mitigated?
Shift Time Horizon to Capture Value
Installation Phase Realization Phase
GO
LIVE
Focus of Project Management Delegated to Ops. Management
Primary OUTFLOW of $$$Risk Factor: Go Live Not Met
Project Management RisksSolution RisksPeople Risks
Primary INFLOW of $$$Risk Factor: Realized<Expected
BenefitsSolution RisksPeople Risks
• Risk and return are symbiotic
vs.
Which one do you want to rely on?
Reframe from ROI: Measure What Matters
The Pitfall of ROI
How does ROI account foruncertainty (i.e. risk) and time?
𝑅𝑂𝐼 =𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
Reframe from ROI to Value
Risk
BenefitsInvestment
Benefits Investment
𝑅𝑂𝐼 =𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑉𝑎𝑙𝑢𝑒 =
𝑡=0
𝑇(𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡)
(1 + 𝑟𝑖𝑠𝑘)𝑡
The Importance of Risk and Time
• The value framework explicitly acknowledges risk– Decreasing risk increases value
• Time is also a risk to realizing full benefits of change– If you can speed up benefit realization, it is worth more
𝑉𝑎𝑙𝑢𝑒 =
𝑡=0
𝑇(𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠 − 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡)
(1 + 𝑟𝑖𝑠𝑘)𝑡
Per
form
ance
Time
Reduce Risk
Shorten Time
OCM
People Mindset
Targeted Behavioral Strategies
Increased Change Readiness
Ownership, Adoption & Proficiency
Org System Alignment
OCM’s Value Proposition
OCM’s Value Proposition
We increase value by decreasing risk and shortening the time to benefit realization
What is Lost in Translation?
1. Our language and current measurement methods do not adequately capture our
contribution to value creation
2. The recognition of OCM as a core risk management function