The Chief Skeptical Officer – A New C-Level Role

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(Microsoft PowerPoint - The Chief Skeptical Officer \226 A New C-Level Role.ppt)

Chief Skeptical Officer A New C-Level Role

Alan McSweeney

October 18, 2011 2

Why Does This Happen?

The Big Idea

The Big FailureAnd Continue To

Happen Time and Again?

And What Can Be Done to Stop It?

Reduced Functionality

Requiring Manual

Workarounds

Not What Is Wanted Or

What Was Required/ Envisaged

Too Late

Too Expensive

High Cost Of Operation

Not Scalable And/Or Poor

Performance

Lack Of Integration

Requires Rework Or

Replacement

October 18, 2011 3

Spectrum Of Failures

Complete Project Success:

On-time, On-budget and Delivering

Specified Benefits

Project Late and/or Over

Budget

More Expensive to Operate Than

Planned

Performance and/or Operational

Problems

Specified Business Benefits

and Savings Not Delivered

Functionality Delivered Does not

Meet Business Requirements

Significant Rework

Required

Solution Largely Unused And/Or

Unusable

Complete Project Failure: Cancelled,

Unused, Rejected

Increasing Frequency/ Probability of

Occurrence

October 18, 2011 4

What Is The Role Of The Chief Skeptical Officer?

Role with end-to-end view and responsibility from idea definition to delivery

Provide positive skepticism around idea definition and solution specification

Be an independent voice

Be an advocate for and champion of standards

Maintain a repository of learning and standards

Embed learning into the organisation

October 18, 2011 5

The Key Functions Of The Chief Skeptical Officer

Provide Independent Oversight of Decisions

Ensure Rational Decision-Making

Remove Arbitrariness, Relativity And

Subjectivity

Identify and Eliminate Behavioural And Other

Biases On Decision-Making

Ensure Evidence-Based Judgements

Require Assertions To Be Well Supported By

Evidence

Track End-To-End View From Concept To

Delivery

Question Assumptions, Attitudes Of

Knowledge, Opinions and Beliefs Stated As

Facts

Avoid Systematic Distortion and

Misrepresentation

October 18, 2011 6

The Journey From Idea To Successful Operation

Idea, Business Need, Business

Benefits

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Solution Operation

Benefits Realised

October 18, 2011 7

The Journey From Idea To Successful Operation

Idea, Business Need, Business

Benefits

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Solution Operation

Benefits Realised

But Promised Benefits All Too

Frequently Not Delivered

October 18, 2011 8

Frequently Too Many Handoffs On The Journey From Idea To Successful Operation

Idea, Business Need, Business

Benefits

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Solution Operation

Benefits Realised

Handoff and Information Loss

Handoff and Information Loss

Handoff and Information Loss

Handoff and Information Loss

Handoff and Information Loss

Chinese WhisperEffect as Initial

Concept Moves to Implementation

October 18, 2011 9

What Causes the Disconnect From Idea To Delivery

Idea, Business Need, Business

Benefits

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Solution Operation

Benefits Realised

Too Many Handoffs Between Stages, Too Often Separate Teams,

Miscommunication, Issues Left Unresolved, Assumptions M

ade, No One With End-

To-End View or End-To-End Responsibility

October 18, 2011 10

What Can Go Wrong Along The Journey From Idea To Successful Operation

Idea, Business Need, Business

Benefits

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Solution Operation

Benefits Realised

Poorly Defined Need, Benefits Exaggerated

Inadequate Analysis, Poor Or Incomplete

Design

Overly Optimistic Initial and Operational Cost

Estimates

Poor Requirements Analysis, Poor Design,

Poor Management

Slow, Unreliable, Expensive To Operate,

Not Integrated, Requires Manual

Workarounds

Promised/Expected Benefits Not Delivered

October 18, 2011 11

Cost of Fixing Errors During Project Lifecycle

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Benefits Realised

Idea, Business Need, Business

Benefits

Solution Operation

Errors/ gaps/ omissions become

significantly more expensive to fix at

later stages of the solution

Relative cost to remediate errors at the end can be 50-

100 (or more) times more expensive than at the start

October 18, 2011 12

Chief Skeptical Officers Role Is To Take End-To-End View To

Ensure That The Start Delivers And Can Deliver The End

Role Of The Chief Skeptical Officer Is To Take End-To-End View, Enforce Discipline and Perform Reviews

Idea, Business Need, Business

Benefits

Process Definition and

Solution Design

Costing -Implementation

and Operational

Solution Implementation

and Delivery

Solution Operation

Benefits Realised

Getting It Right Here

Reduces/ Avoids Problems

Here

October 18, 2011 13

What Is The Chief Skeptical Officer Trying To Protect You Against?

Cognitive Bias Poor or inaccurate judgements, illogical interpretations and decisions, characterised by patterns of

behaviour

Strategic Misrepresentation Deliberate misrepresentation in budgeting caused by distorted incentives

Planning Fallacy Systematic tendency to underestimate how long it will take to complete a task even when there is past experience of

similar tasks over-running

Optimism Bias Systematic tendency to be overly optimistic about the outcome of actions

Focalism Systematic tendency to become inwardly focussed and to lose situational awareness and appreciation of wider context during times of stress

October 18, 2011 14

Cognitive Bias - Types

Many classifications and types of cognitive bias

Can be very difficult to avoid because of their embedded nature and emotional/irrational basis

Decision-Making and Behavioural Biases - affecting belief formation and business decisions

Probability and Belief Biases - affecting way in which information is gathered and assessed

Attributional Biases - affecting the determination what was responsible for an event or action

Cognitive biases are very real and can have damaging effects

October 18, 2011 15

Decision-Making And Behavioural Biases

Relying too heavily on one piece of information when making a decision -

Anchoring

Believing things because many others believe the same Bandwagon

Assigning greater weight to apparently dominant factors Attention Bias

Interpreting information so as to that confirms preconceptions Confirmation

Seeing oneself as less biased than others Blind Spot

Strong preference for immediate payoffs relative to later ones Hyperbolic

Discounting

Greater preferences just because of familiarity - Exposure Effect

Paying more attention and giving more weight to the negative rather than the positive Negativity Bias

Looking for information even when it cannot affect action Information Bias

Placing too much importance on one aspect - Focusing Effect

Looking to reduce a small risk to zero rather than a greater reduction of a larger risk Zero-Risk Bias

Rejecting new evidence that contradicts an established paradigm Semmelweis Effect

Making decisions based to what is pleasing to imagine instead basing decisions on evidence and rationality Wishful Thinking

Assigning a higher value to disposal/loss compared with cost of acquisition Sunk

Cost Effect

Viewing a harmful action as worse than an equally harmful omission or inaction Omission Bias

Justifying increased investment based on the cumulative prior investment despite new evidence suggesting that the decision was wrong - Irrational Escalation

October 18, 2011 16

Probability And Belief Biases

Excessive or inflated belief one's performance, ability Overconfidence

Effect

Belief gaining plausibility through increasing repetition - Availability

Cascade

Assigning greater weight to initial or recent events more than subsequent or later events Seri