Testing the Big Idea - BCS

Slide 1

Testing the Big Idea

The Idea Test Hypothesis testing is a way of testing new ideas against your strategy, goals and context. Before running away with a brilliant new idea, it needs to be checked to see how good it really is and how well it fits with who we are and what we do.

Slide 2

Decision Making -by the book

Decision making is both science and art. Many aspects of military operations -movement rates, fuel consumption, weapons effects - are quantifiable and, therefore, part of the science of war. Other aspects - the impact of leadership, complexity of operations, and uncertainty regarding enemy intentions - belong to the art of war.

• US Army Field Manual FM101-5, Staff Organization And Operations, 1997, Chapter 5

You would expect the Military to do things 'by the book' so what does 'the book' say? Here's a quote from the US Army:

“Decision making is knowing if to decide, then when and what to decide. It includes understanding the consequence of decisions. Decisions are the means by which the commander translates his vision of the end state into action.” Decision making is both science and art. Many aspects of military operations ‐ movement rates, fuel consumption, weapons effects ‐ are quantifiable and, therefore, part of the science of war. Other aspects ‐ the impact of leadership, complexity of operations, and uncertainty regarding enemy intentions ‐ belong to the art of war.

So one could say that the predictable repetitive stuff belongs to science and the creativity belongs to art. But we can't rely on artistic genius to see us through. Assuming we could ever define and measure decision making skill it would still be a depressing fact that half of us would be below average. We need some structure to help us choose the right things to do.

Slide 3

Time Appreciation

Have you got the time to do this thoroughly?

• Urgency• Scope• People• Resources

This is the first thing you have to consider, is it urgent, do you have a deadline? If there’s no deadline then set yourself a reasonable one or things will drift. What is your deadline? Obviously, you are not going to be doing this in a time of crisis or emergency, like jumping out of the path of a bus. You should have at least a few minutes in which to decide. If someone is pressing you for an instant answer, then they probably know the answer they want and it’s unlikely to be a good one for you. What’s the scope of the task? How big a job is this going to be? Who else is involved? Is it something you can do on your own? How many other people do you have to work with? If other people are going to have to go away and do their bit then the Rule of Thirds can help you. Put aside one third of the total time for you to make your decision and two thirds is for everyone else to do their bit. What resources do you have? What have you got that will be of use to you? Working back from the deadline you know how much time you have to do the things that need to be done immediately. This part is all about getting the resources together to help you make your decision. It’s preparatory work.

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Idea Test

1. Set the scene 2. Choose to change

3. First filter - test the Hypothesis

4. Turn the Hypothesis into a Goal

5. Optimise the value of the Goal

6. Second filter - test the Goal

7. Plan to realise the Ends

8. Third filter - test the Goal

Hypothesis testing is a way of testing new ideas against your strategy, goals and context. Before running away with a brilliant new idea, it needs to be checked to see how good it really is and how well it fits with who we are and what we do. It contains three checks to take us from hypotheticals to practicality. First, we have to understand the context in which we operate. 1. Set the scene – the pre‐established context. Who are we, what do we do, what do we think? Understand the purpose and culture of the organisation (Vision, raison d’etre) . What drives us from outside? Know the externals we work with (customers suppliers partners society) 2. Choose to change ‐ A new idea, Base Hypothesis. At this stage, this is probably a loose statement of, “Why don’t we…?” 3. First filter ‐ test the Hypothesis against the context to see if it's relevant and feasible. Should we do it, can we do it? Silly example – you’re the local Temperance Lodge and you need to raise funds. Someone suggests opening a members’ bar. More sensible example – Tesco supermarkets is a giant grocer. Someone suggests selling financial services. At first sight there’s no connection but thinking about it, Tesco has a huge customer base and knows a lot about their financial state. It’s purpose is to make profit. The idea works. 4. Turn the Hypothesis into a Goal. “Why don’t we do X?” becomes, “We will do X, because…”

A Goal / Objective is something with purpose. Start with the end in mind.

Slide 5

Start with the end in mind

Why did Nelson fight at Trafalgar?

It’s not only what you do, it’s also why you choose to do it

B) Use up the old gunpowder before its sell-by date

A) Destroy the French fleet and remove the threat of invasion

C) Impress Lady Hamilton

Answer: A (if you didn’t pick A you are not taking this seriously)

Starting with the End in Mind The purpose behind any course of action has a direct and significant effect on the way it is undertaken. The reasons why affect the ways we go about things. If Nelson had gone off to Trafalgar simply with the intent of using up his budgeted stock of gunpowder then he would have fought a very different battle from the one that actually took place. The same applies for any project, the ends affect the means and ways. Projects talk of acceptance criteria, the things that decide when the project has ended successfully, a sort of, “No‐one goes home until…” Define your acceptance criteria in terms of objectives and benefits before you start. Don’t install the kit and then wonder what to do with it. Too often, projects leave benefits realisation until it’s too late, i.e. at the end of the project. That’s why benefits should be managed from the start. Some organisations demand a hard financial return. Some want intangible improvements like satisfaction and image. Usually, they want both. That’s when conflicting objectives throw a spanner in the works. That’s why clear objectives are crucial.

Slide 6

Endgame

• The game ends when:

a) You are checkmated, or

b) My King is in g3, my Queen is in c5, etc….

In the same way as we can have various reasons for the same outcome and find they affect how it is brought about, we can also affect the process through the way we describe the end state. Only a very confident (or deluded) chess player would describe the endgame in terms of where the pieces will be. Yet we are often very granular in describing our programme objectives. The NPfIT Output Based Specification ran to hundreds of pages with sheets of individual requirements, desires and benefits, a pound here, ten minutes there, etc. This sort of mass objective twists individual priorities and breaks down any common purpose. In the chess analogy it’s like having a different person responsible for each piece. Each heads for its assigned position and sits there without contributing anything to the whole or supporting its team mates in winning the game.

Slide 7

Idea Test








Second Filter ‐ Is the goal big enough to bother? 5. Optimise the value of the Goal ‐ analyse the benefits. Too often we do projects without a clear up‐front understanding of what benefits they will deliver. ‘Build it and they will come’ is a gamble that maybe we ought not take. 6. Second filter ‐ test the Goal against the optimised package of benefits and detriments to see if it is desirable. “If we do X, we will get Y, and we really want Y.” This brings us to what benefits and who benefits? 7. Plan to realise the Ends (Goal, Benefits, Outcomes) through the best use of Ways and Means

Slide 8

The measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders, which contributes towards one or more organisational objective(s).

APMG Managing Benefits 2012

A benefit is a result that a stakeholder perceives to be of value.

What is a benefit?

• Improve• Increase• Reduce• Eliminate• Stop

We use benefits as an aid to setting good objectives. It’s reasonable to expect that our objective will be something to do with bringing benefit to someone, even if it’s purely selfishly to ourselves. The moral and ethical issues can keep for another lecture. The key points here are a benefits needs a stakeholder, someone has to see its merit and perception is crucial. “What’s in it for me?” is a subjective judgement. Like morality, issues of relative value, altruism and perverse choices can be left for another day. However, the definition of benefit helps us define the things around it like outcome and objective. Definition We have to be clear on our definition, a benefit is:

A result that a stakeholder perceives to be of value We are talking about doing words; improve, reduce, stop. Value Note the careful use of words. Make sure there is a clear statement of the benefit, i.e. what makes it worthwhile. Get away from features and outcomes. It’s got to be perceived as being valuable. Years ago I left IT for Sales and was introduced to one of their reward schemes. If I won “Salesman of the Month” I got the use of a Porsche. Fortunately, I’m not that good a salesman. It was going to cost me extra insurance, I’d have

to park my own car on the street and what was I going to do with two kids and two dogs in the back? We are talking about improving patient health, reducing waiting lists, stopping un‐necessary procedures, not improving network performance, reducing down‐time and stopping legacy systems.

Slide 9

Features, Outcomes and Benefits

• Feature - my car is painted ‘Police Car’ white

• Outcome - people move over for me on the motorway so I get home for 6 pm

• Benefit - I get to watch The Simpsons on TV

it’s essential that we get a common understanding of what constitutes a benefit. Here’s a silly example to show the difference between features, outcomes and benefits. When you come to brainstorm benefits you will get a number of features and outcomes that will have to be weeded out as you go through the list.

Slide 10

Picking the right benefitsTactical benefits – getting the donkey to move

All too often we concentrate on the carrots, the treats we offer all the stakeholders to encourage them to take part in the project. We neglect the cargo, what the project is all about.

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Picking the right benefitsStrategic benefits – a cart full of valuable cargo

The cargo is what it’s all about.

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Key stakeholders’ benefits

Same project, different intentions

POWER, CONTROL!

LOOT, DRINK!

Different stakeholders want different things. Hence the need to work out who you are doing it for and what they perceive as being valuable

Slide 13

Stakeholder Analysis

•Who are the key stakeholders?•What will they gain/lose?

•What impact will they have upon your objectives?

Stakeholder Analysis: Think of all the people / groups that will be affected by the change. Who are the key ones who have a significant influence on the project? What business changes will they make for the project to be successful? What benefits and disbenefits will they get, “What’s in it for them?” How committed to success will they be? Where do they sit currently in terms of commitment and where do we want them to be? What would you (more correctly, their responsible manager) do to manage them to a more positive position? A common mistake going from no stakeholder analysis, giving people what’s good for them, “The man in Whitehall knows best…” to the other extreme of forgetting / ignoring the Man in Whitehall and concentrating on the benefits recipients. Two key groups of stakeholders who get lost in this approach are the project sponsors and the project team. Both have critical roles to play. Project X is not for ‘the patients’. Project X is for the commissioning body who pays for it so they can expect to have some influence over what their money is being spent on.

Slide 14

Means – what you useWays – what you doEnds – What you want

Benefits Dependency

Planning to realise the Goal through Means, Ways and Ends. A picture paints a thousand words. Mapping makes the links and dependencies clearer than tables in a business case. The Benefits Dependency Network is one of the key tools in the Benefits / Value arena. It shows the chains of cause and effect between what you want, do and use. In this generic example the Drivers, the outside influences that make you act, fall into PESTLE categories. They don’t have to. It’s just a good way of analysing the context in which you have to operate. Likewise, Objectives are split as per the Balanced Scorecard. Most objectives fit into quality of service, quantity of service, customer experience and finance. Benefits are split by stakeholder. There is one stakeholder per benefit. If X is a benefit to customers and staff then X is two benefits. More likely, X isn’t a benefit at all but an enabler or outcome, something to be used to deliver benefits. Ask ‘so what’ questions to decide where something fits in the chain. People often confuse outcomes with objectives. “The new clinic is opened”. So what? You can do lots of things with it. It treats more people, better and quicker. Then the objectives are to do with clinical outcome and efficiency. The clinic is not an end in itself. The distinction between benefits and objectives may not be so clear‐cut. Sometimes the benefit is proof that the objective is being met, e.g. individual cost savings to meet an overall budget reduction. Sometimes the objective is to deliver benefits, e.g. raise average survival period for terminal patients by 6 months. By thinking about the phraseology we become clearer about what we are going to do and why it is important to us. Activities may be in silos or multi‐agent. They can be as simple as one step in a process or as complex as public‐private partnerships.

Change managers split enablers into people, process, technology. Economists may use land, labour, capital, enterprise. You don’t work in a vacuum so there’s bound to be some outside dependencies to consider as well. These are all just tidy ways to help you break down your organisation in a logical manner. They are not mandatory but they do help.

Slide 15

This is manageable

Here’s a hypothetical example, based on an ISIP transformational change programme, March 06. The objectives are pretty generic and represent the high‐level stakeholder groups of patients, policy makers and the organisation itself. All the connections are made. There are no dead‐ends in the diagram so everything has a purpose and contributes to the objective to some extent. The diagram starts the discussion about the relative contributions and allows decisions to be made about priorities and allocating resources. This is manageable, a feasible amount of activity delivers selected benefits that are directly connected to the organisation’s objectives.

Slide 16

This is not

Imagine that the programme had chosen 50 benefits instead of 3. Life gets much more complex here. Many business cases get drafted on the basis of quantity, not quality. The more benefits you put in, the more likely you are to be picked from the pack of competing business cases. Delivery is another matter though. Once you take the table of benefits out of the business case and map it you begin to see how impractical your project is.

Slide 17

Idea Test








Third filter ‐ test the Goal against the Benefits Realisation Plan. Test the benefits it delivers against the costs involved to prove it is a worthwhile use of resources. You know the chains of cause – effect from Means to Ends. The benefits you have selected are feasible and properly quantified. You’ve accounted for optimism bias (and all the other psychology that affects what we think we can achieve) so the chances of success are reasonable. If it fits at this point then you’ve got the makings of a good idea and the start of a successful business case. Then all you have to do is plan, implement, manage, etc… No‐one said it was going to be easy.

Slide 18

Pre-Mortem

A way to assess your risks• Set the scene, “It’s a year from now, we

ran the project and it all went wrong”.• Describe how and why it went wrong• See what you can do now to prevent this

happening.

Original idea by Gary Klein, quoted in Thinking Fast and Slow, Daniel Kahneman

Once you’ve tested your idea and you think it’s sound, this is a way to assess your risks so you can prepare for the things that will spoil it. Set the scene, “It’s a year from now, we ran the project and it all went wrong”. Describe how and why it went wrong. Brainstorm all the potential crises, e.g. workforce, skills, competition, economy. See what you can do now to prevent this happening. What can you control, what can’t you? What are your reasonable chances of success? Is it still worth doing? If so, what mitigation can you apply to your risks?

Slide 19

David [email protected]

07780 533876

www.keldale.comwww.goalmodelling.com

www.hivemindnetwork.com

I hope you have found this presentation useful and that it’s given you something to think about. Obviously, there is only so much we can cover in a short session. I’d be delighted to discuss things in more detail with you. You can contact me at [email protected]

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Testing the Big Idea - BCS