In accounting terms Goodwill isn’t having nice thoughts towards other people. It’s what you pay for the intangible stuff. When you buy a business you don’t just pay the book value of the tools, stock and all the things you can see and touch. You also pay for the staff’s brains, the brand, the established customer base, the intangibles.
Individually they’re unquantifiable, priceless. Mrs Jones is indispensable and everyone loves the company logo. Together, you know exactly what they are worth because you’ve just paid it.
So why don’t we do this in our business cases? It would give us a consistent way to benchmark programmes and work to a common hurdle rate or value for money ratio. It might save a lot of grief and gaming around the enabling and infrastructure programmes where the direct identified benefits are less than the costs. It might also cull a few pet projects where saying we don’t need to count anything hides the fact that there is nothing to count.
Usually, we garner the benefits for a typical public sector business case in the following order:
Cash-releasing, the hard savings that we can tick off against the costs
Non-cash, the efficiency and productivity gains described in money terms, not quite as good as real money though
Societal, the stuff outside our budget. “Do it online – save a bus fare!” again in money terms
Quality, just possibly the big strategic reason to do the project in the first place. Health and happiness, that sort of thing
I dare say the private sector cases aren’t much different.
All those quality benefits sitting in a table at the back of the business case. We can’t possibly price them but they must be big because they’ve a weighted score of 852/1000, whatever that means.
We know what the programme has to deliver in RoI or VfM to meet the hurdle rate target it has been set. We have quantified the tangible benefits (cash, non-cash, public). So, the shortfall is the price of our intangible quality benefits. That’s the goodwill, the overall value we put on all the hard to measure stuff to justify our investment.
Once the quality benefits have been costed like this, we have a way to benchmark our programmes. We can set a common hurdle rate. We don’t need different rules where the mundane stuff must make a profit but the innovation doesn’t have to break even. Instead, we can see how crucial the quality benefits are to each programme. How big is the goodwill relative to the quantified benefits and the costs? Is it a figure we can live with? Are we comfortable that our quality benefits will be sufficient to justify it?
So, what gets in the way? Goodwill is the programme’s willingness to pay. To find it, you get the relevant people together and ask, “How much would you pay for X?” It’s open to anchoring, group-think and a host of other errors and abuses but it’s not alone in this. The programme cost estimates will be going through exactly the same set of biases. In this case we’re not asking, “How much would you pay?” but, “Would you pay this much?”. A much more closed and leading question.
The accuracy and consistency of the price will vary widely over time and between situations and individual opinions. The market we work in isn’t perfect. The analogy here is more the Stock Market than the Supermarket. With stocks and shares things are much more fluid and the prices are nowhere near as stable. So long as we treat our intangibles more like shares than cereal there’s no reason why we can’t put a price to them though.
I suspect that what will really get in the way is its transparency. It opens up judgement calls to scrutiny, which is not the greatest motivator.
“We’ve agreed what sort of benefit it is, now we are simply haggling over the price.”
If you look hard enough, there are no qualitative benefits. How should we measure the benefits we create for our customers / service users? If the new system will improve lives, how much of an improvement will it be? Where’s the breakeven point that shows if we’ve spent wisely?
Instead, I see business cases that say this stuff is qualitative and shouldn’t be given a money value. If it’s to be measured at all then it will be in a table of weighted scores buried in an appendix where no-one will give it much thought. There we can compare quality benefit A against quality benefit B. What we can’t do there is compare quality benefit A with cost £C.
So how can we ever tell if the investment is worthwhile? When we make comparisons between our quality benefits we create a currency for them. A is worth more quality points than B so within our business case we have a local currency of ‘Quality Points’.
That currency can be converted to any other and at some point we can match our Quality Points for £s. I know that it’s not real money. We won’t end up with a bag of cash. What we will get is a sense of scale, a feeling for just how relatively important these benefits are. We have a means to compare our local project against all the others.
The exchange rate depends on the market involved. I accept that the market is going to be small and imperfect. It’s going to be the stakeholders in the portfolios around our project. It will be their willingness to pay for all the various options they face that will determine the relative value of our benefits.
When our projects take this approach, the portfolio doesn’t have to choose between your weighted score and mine without knowing how we picked our weights. Their choice won’t be perfect but it will be a bit more rational and fair.
“Would you pay £50 for this benefit?”
“Certainly”
“Would you pay £50,000?”
“Of course not”
“Then we’ve agreed what sort of benefit it is, now we are simply haggling over the price.”
Means, motive and opportunity, it works for murderers so why not for managers? • Motive, the force (external or internal) that gives you the need to take action • Means, the relevant physical and intangible resources you have that enable you to take action • Opportunity, the suitable time and place where you can take action
The Modus Operandi
No good detective thriller is complete without a decent modus operandi, the killer’s cunning combination of means, motive and opportunity. The motive sparks their desire. It may be as simple and obvious as the need for money. It can be subtle, personal and indeed perverse (given that murder is in itself wrong, we might be looking at degrees of perversity here). The means, as cheap and brutal as Cluedo’s trusty old lead pipe or as convoluted as an Agatha Christie plot. The opportunity may be a one-off set of circumstances where the killer must decide and strike on an impulse. Or it may be a regular occurrence that gives them time to plan and practice for the perfect crime. Is Professor Plum a casual visitor to the library or can you set your watch by him?
So that’s the story for murderers, where do the managers come into this? The motive also sparks managers’ desire. Where managers differ from murderers is that their motive may not come naturally. If you don’t have a spark of inspiration then go looking for ideas. It’s important to have a motive though. You can’t afford to sit back and let events wash over you. If you do then you will become the victim of other people’s motives. Creativity doesn’t have to be a flash of inspiration, it can come from a thorough analysis of what’s gone before and what the future looks like with all the things you have at your disposal. The means shows you what’s feasible, and it may be more than you first thought. Consider the resources you have or can obtain. It’s not just a question of assets, it’s a matter of capability as well. Back in criminal terms, get the best accomplices you can. The opportunity, strike while you can. Recognise that there will be a limited window of opportunity of time and place when things are just right. Act too soon and you’ll blow it. Wait too long and you will miss your chance. As a rule of thumb, act sooner, rather than later. Even if it all fails, you will be happier knowing that you tried.
How do you choose between options when you can’t put a price on them? When you are comparing the multiple criteria in your decisions, what currency do you use? How can you make it ‘common currency’?
You’re building a case to invest and you use points to prioritise the results we want to see and the extent to which each option will deliver them.
It’s a good way to add some rationality to the business case but it might not paint the whole picture of how important your project is in relation to everything else you have to do.
Money is tokens of relative value. It is the middle-man in a barter system. I swap the stuff I do / make for money that I then swap for stuff you do / make. So, if money is just tokens then it’s basically no different from gold stars, Brownie Points or whatever currency we use for quantifying the intangible things we seek.
In my imaginary Bureau de Change I can convert any currency to another once I know the market rate. Sadly, we work in imperfect markets that make it difficult to convert between these currencies. I can ask what you would be willing to pay but willingness to pay is subjective. It is limited by the players involved, the context in which they operate, even the time and place where they make their decisions. It’s too hard and costly to do so people don’t use it in their options appraisals.
However, willingness to pay in £s really isn’t much different from assigning point values to options. The points will also depend on people and circumstances. We just feel more at ease with points because they are not real money.
Maybe it’s because we’re not playing with real money and can’t be held to account for the points we ‘spend’ that we inflate the importance of the quality options. When we pick up to 100 points on our options, we are only ranking them against each other. Nowhere does it say that the best option is only worth 50 points in the whole scheme of things.
An alternative is to use money. Instead of 100 notional points, allocate the actual discretionary spend budget. How much free money do you have to splash out on something new? If you have £50k to spend then decide how much out of the £50k each option is worth.
You are now starting with a sense of proportion. It’s now real money, not imaginary tokens. If you’ve got £millions to play with then it’s serious. If you’ve only got a couple of hundred then stop sweating blood over trivia.
Once you are comfortable with the sense of proportion then there’s another piece of reality to bring into the mix. That’s the matter of comparing what you can spend on this project against what you are spending on everything else that you could do. Determine your total discretionary spend. Think about all the new stuff you want to do as well as this particular project. If you’ve got a formal costed list, all well and good. If not, just go with your gut feel.
Take your total discretionary spend figure and split it between this project and everything else. Say you have £1M and this project isn’t so big or important, so you split it £50k for this and £950k for everything else. Write at the top of all your options appraisal workings (put it in the document header if you must): “This project £50k, everything else £950k”
Use this as a reminder of your project’s relative worth before you even start appraising the options within it.
When you’ve done all this and quantified your options in terms of £s, remember that it isn’t real money and it can’t be put against your costs. At the end of the day, it’s all still a comparison of relative value using tokens. This time though, the tokens are more realistic and the final decision made with closer acquaintance to real life.
If you want to do that then you have to do the full SRoI, focus group, willingness to pay exercise to make a fair comparison between costs and benefits.
Have you ever read a business case, got to page 10 and still not understood what it was for? Worse, have you scrabbled to realise the benefits when no-one could explain why they bought the kit in the first place? We live in a complex world with no simple answers, but maybe there are some simple questions that could help.
Behind every business change there are six seemingly naïve questions:
What does ‘good’ look like around here?
What’s the point of this change?
Who is it really for?
What do they actually want?
How do we get this done?
What makes this option better than Plan B?
The questions are simple, so simple that they are rarely asked. There’s that nagging ‘Emperor’s new clothes’ feel to them:
“Am I the only one who doesn’t get this?”
“Are you really that ignorant or just causing mischief?”
“We’re committed now. How much trouble will I cause if I raise my doubts after we’ve invested so much?”
The answers aren’t simple at all though. Your environment is complex and the cost of investigation may be too high. You may have to compromise. That’s fine, don’t let perfection be the enemy of the good. On the other hand, answers like, “It’s priceless” and “How long is a piece of string?” really won’t cut it.
Your colleagues may not know the answers. They may know but not want to tell you. You may learn more about the culture of your organisation than you do about the change you’re planning to make. If asking your own organisation is awkward, asking your customers, suppliers and partners won’t be any easier.
So why ask the questions if they will bring such grief?
What does ‘good’ look like around here?
This sets the scene. Understand your Vision, Mission, raison d’être, the things you must do and how you know when you are doing them well. Let’s assume that the general reason for any change is to improve something. You’re not deliberately setting out to make things worse. You need to know the baseline of how things are now. You must be able to tell if things are getting better or worse and by how much. In other words you have to have KPIs that really indicate how you are performing against the key things that matter.
If you can’t measure the impact of any change, how will you know it’s been worthwhile?
What’s the point of this change?
The reasons why we make a change affect the way in which we go about making it. You rent a shop on the High Street for the ‘presence’, to let customers examine the goods before they order online. It will have the space and style to encourage them to stay and browse but it won’t need the storage and logistics to shift large amounts of stock. There should be a ‘because’ statement behind every objective, even if it’s implicit, “We will do this because…”
You start with the end in mind, so you need a clear, agreed understanding of what that end will be.
Who is it really for?
Who are the appropriate stakeholders for your change? Who wants it? Who controls how it will happen? Who should receive the benefits? When told that it’s for the customers, remember that there are a number of gatekeepers and advocates between you and your actual customers. You may not be giving the customer what they want so much as giving the Marketing Department what they believe the customer wants. This might not be a bad thing but it is something to keep in mind. Who it’s really for isn’t as obvious as it looks at first sight.
What do they actually want?
A benefit is a result that a stakeholder perceives to be of value. So, having identified the right stakeholders, what do they perceive as being valuable? Perception beats reality nearly every time and perception is subjective. It isn’t easy deciding who the change is for. It’s even harder working out what they genuinely want, whether you can feasibly deliver it and if it’s worth the cost.
How do we get this done?
Up to this point, you’ve got something aspirational, a great idea in theory. So, let’s spoil it all by dragging it back down to reality. “How do we get this done?” moves you on from design to implementation. It reminds you that the results (“What do they actually want?”) will have to be managed in. It’s not just the technology, it’s the objectives and the benefits and all the business change needed to achieve them. Do you control the levers, how far does your influence extend?
You’ve found out who it’s really for and what they actually want. What about all the others who will have to take part in delivering it? Will they do what’s needed? Does everyone involved understand and agree where the boundaries of responsibility lie and who must do what? Have you made promises that aren’t yours to keep?
These issues must be resolved before you can worry properly about the time and resources needed and start drawing up plans.
What makes this option better than Plan B?
Feasibility brings us to our last question, why is this change the best option to take? Why is it the best use of your scarce resources? When you are dealing with profit and finance then the comparison will be relatively (!) straightforward. If you’re looking at Social Return on Investment then life can get just a little more messy. That doesn’t mean that you shouldn’t try though. Unless you own your business, you’re responsible for spending other people’s money so you ought to spend it wisely.
Naïve questions but complex answers
It’s easy to ask the questions, not so easy to get good answers. Ask them at the start, before you’ve invested too much resource and emotion. Use them to select your projects rather than evaluate them after the event. If you do ask them late into the project, at least try to answer the questions honestly and as best you can. Once you know the answers you can improve the present situation and learn valuable lessons for next time.
Bad answers don’t always mean you should stop anything. You can always change the change, do it differently, do something different. Once you’ve got good answers then you’ll have the satisfaction that you’ve picked the right thing to do and the confidence that you can deliver it.
Everybody likes a Maturity Model these days. It’s the management version of Top Trumps. So before you worry about how mature your enterprise is at doing stuff, here’s where you consider the stuff you choose to do in the first place. How good is the process around the business choices you make? Would you like to make it better or are you happy that your luck will continue to see you through?
With a score of 5 being perfection and 1 being, “I’m sorry, were you talking to me?” what would you score against these topics?:
Depth and breadth of knowledge behind the decision
Application of knowledge to the decision
Stakeholder contribution to the decision process
Decision cycle speed
Giving direction
Confidence in delivery
Where do you sit on the maturity scale when it comes to making business decisions?
Where would you be on this chart? Does it give you pause for thought?
Waller’s Decision Maturity Model
Fives. Omniscience, omnipotence, alacrity and economy
Knowledge – You know all the relevant information that will inform your decision.
Application – You weigh it and apply it appropriately in making your best choices.
Contribution – All the relevant stakeholders contribute to the decision to the best of their ability.
Speed – Your decision cycle is minimised. Results are achieved as quickly as is possible.
Direction – You convert the decision to clear, concise direction that motivates your stakeholders to act towards a common goal.
Delivery – Stakeholders act on that direction to deliver your desired outcome in the most efficient manner.
Fours. On the upper slopes
You just about know it all. You meet very few surprises.
You use rigorous methods to apply what you know when making choices and you understand what the consequences will be.
You actively consult widely. Most stakeholders contribute to the decision to the best of their ability.
Your decision cycle is optimised with no un-necessary delay. You do not sit on decisions.
You give clear direction so people know what they must do.
Stakeholders act on your direction to deliver a satisfactory result within the tolerances you have set.
Threes. Middle ground
You are reasonably comfortable with what you know. You understand the situation better than most around you.
You apply what you know to your decision but recognise that you still have areas of uncertainty.
You have active contribution by some Stakeholders. The ‘usual suspects’ chip in with their ideas.
You have a recognised decision cycle and allow decisions to be reviewed iteratively, e.g. Plan, Do, Study, Act.
You put what you want into words that most of your people understand.
People mostly do what they should but you expect to make a few mid-course corrections when they stray from your path.
Twos. Mildly embarrassed by your performance
You know that you don’t know it all
There’s a nod towards strategy in your template Business Case.
You know you have some Stakeholders and you talk to your favourites.
You’ve missed the boat a few times and you know you’ve got to be quicker next time.
You think you’ve said what you want doing.
Stuff happens but people keep coming back with difficult questions about what they think they should be doing.
Ones. What problem?
“I didn’t get where I am by sitting around researching stuff.”
“Something must be done. This is something. Let’s do it. Why waste time on a Business Case?”
“I know what people want.”
“This creative stuff is an art, you can’t rush it.”
“You all know what to do. Carry on.”
“Does anyone here know what we’re meant to be doing?”
Benefits Management and Change Management are complementary methods. They support each other and the whole is greater than the sum of its parts. Both are force multipliers in any change initiative. They are levers that leaders apply to the resources they have so they can achieve more with those resources and meet their objectives.
Both are force multipliers. They are not painkillers to take away the leader’s pain.
A story, adapt it to your own situation
Sir Harold Acme was in pain. He wasn’t sure of the cause but he was certain of the source – that consultant’s latest wheeze to inspire the staff, “Let’s all eat together in the canteen”. It was either the gruel itself that was poisoning him, or the sheer annoyance of sitting with the plebs, but the combined gut ache and throbbing temple were getting too much. He staggered to the medicine cabinet, saw the wide selection of painkillers on its shelves and grabbed the nearest.
An hour later, the pain was less, but still there. He returned to the cabinet. Sir Harold was wise enough not to overdose on the stuff he’d just taken (but not wise enough to check the NHS website for advice on combining painkillers), so he grabbed the next nearest packet and gulped a couple down.
Half an hour later, he was back to his normal dyspeptic miserly self, reading the latest report on his struggling cost-cutting programme. The objective was straightforward, a 10% cut in staffing cost, but it wasn’t happening. You find inspiration in the oddest places, and gazing at the medicine cabinet, the light bulb in Sir Harold’s mind flickered into life. There were two pains in his programme, and he could take two painkillers to fix them both.
First, the 10% cut hadn’t cascaded down the company properly. Half his managers hadn’t realised (or were in denial) that their teams had to go. They had made no plans, nor costed any savings. His forecast benefits were nowhere near the promises in the business case. They were all hopeless guesswork anyway.
Second, even where plans had been made, the changes weren’t happening. The staff couldn’t or wouldn’t get a grip of the new technology to make them more productive so he could sack their colleagues.
Two pains and he could fix both. Combined pains required combined painkillers. That consultant had colleagues she was always trying to sell to him, a Benefits Manager to sort out the promised savings and a Change Manager to see that they got delivered. He hit the intercom, “Tell that blasted consultant that I want to see her tomorrow…lunchtime, in the canteen.”
Six months later and progress has been mixed. The hired-in Benefits Manager has managed to persuade enough people to own enough benefits that his Benefits Register is full enough to satisfy Sir Harold that the programme appears on track. With his nervous repetition of, “That’s not a benefit” and “I wouldn’t have started from here” he’s not made many friends though.
Teams have downsized and productivity has improved overall. However, there are a few patches of resistance (or genuine misunderstanding of the new kit). Attendance at the regular ‘Off on your New Adventure!’ celebrations has become mandatory. Anyone who calls the Change Manager Tigger faces instant dismissal. At least Sir Harold’s remaining managers are happy that they can’t be blamed for any of this.
The moral of the tale
How much of project management exists in the hope of taking away a boss’s pain? Stuff needs to be done, but it’s difficult, new, takes up valuable time and effort. We can’t be everywhere and know everything, so we create roles and outsource tasks for other people to do it for us.
Sometimes, that’s good and sensible. Sometimes, it’s just buck-passing. Usually, it’s somewhere in-between:
“We need to change, but I’m too busy running the shop. Let’s get a Project Manager.”
“I’m too busy implementing the technology to worry about how it will be used. Let’s get a Change Manager.”
“I don’t know if it’s making a difference. Let’s get a Benefits Manager.”
“I can’t get anyone to own the business case benefits. Let’s get an Exec Sponsor.”
“No, I’m too busy running the shop.”
Benefits and Change Managers are good when you bring them in as subject matter experts to assist the organisation’s leaders. A Benefits Manager who’s brought in at the start will raise the quality of your business choices. They will tell you what good benefits should look like. They will map out how your programme will achieve them, and they will monitor its progress as it gets there. A Change Manager will plan a transition from old ways to new that works for your people. They will educate, advise and motivate them to make and accept the necessary change that gets you to your chosen end-state.
Both are force multipliers, support functions like Finance and HR. You don’t expect Finance to spend your money or HR to hire your team for you (I hope). But you do take their professional advice so that you can spend and hire wisely.
The same should apply to Benefits and Change. Neither of them should exist so leaders can abdicate their responsibilities. Benefits and Change Managers are not there to replace leadership. If you think you can outsource the removal of your pain, you will be disappointed.
The Mandate says what you want so it pays to take it seriously.
You’ve patented a widget, you obviously want to do something with it, and you will need help. What do you want to happen next? Here are three alternative mandates.
I’ve patented a new widget:
It’s going to be good. Who’s with me?
Build me your finest widget making machine
Set me up a profitable widget business
Which one comes closest to what you actually want to achieve?
You want support but you haven’t defined any objective and you’re not leading.
The vague mandate gets you a bunch of widget enthusiasts but no tangible results. It’s going to be some time before they make anything. And by that time, it might not look like your widget, and you might no longer be in control.
You obviously want widgets, and you assume the reason why is obvious.
You didn’t think this one through fully. You get the machine you asked for. It might be a very good machine that can make huge quantities of fine widgets. Once it’s working properly, the engineers will move on to their next machine. You have no-one to run yours, so you won’t get much more than a pilot batch of widgets.
This mandate has got a long-term purpose and it recognises that there’s a lot to be done.
In this case the programme covered the whole piece. Discovery did the market research to confirm that widgets would be profitable. Alpha and Beta built a whole profitable enduring business.
As Benefits Managers, we’re always saying, “Start with the end in mind.” The mandate is your first chance to get across your idea of what that end will be. That’s why the mandate matters.
Having looked at some useful tools and techniques, how do you use them in practice? Here are some suggestions that work in an organisation and at a personal level.
Benefits-Oriented Enterprise
This diagram tries to show this by overlaying Benefits Management onto the Inbound / Inside / Outbound model (Buy Side / Inside / Sell Side that some of you will recognise from business studies courses). I’ve drawn it as a Venn diagram because these items are rarely isolated from each other, there’s always a fair amount of overlapping between them.
Even deep within any organisation we have internal customer / supplier relationships. The Buy Side / Inside / Sell Side model is appropriate to all sorts of business units.
Looking at this from a personal point of view, the model still holds up if you consider the following loose definitions:
Strategy = Who you want to be
Inbound = What you take
Inside = What you do
Outbound = What you give
Performance Management = Being who you are
The emphasis here is on the management of benefits, doing the right thing, getting the most good. The other tools we’ve looked at, such as quick decisions, goal setting and hypothesis testing will all help.
Strategy Development (Options & Choices, Who You Want To Be)
This is taking time to think about what affects you, what objectives you want to achieve, who gets the benefits and the pain. Goal Contribution is a strategic business planning tool you can use for selecting and delivering successful business strategies and portfolios. Your Realisation Plan for the new strategy comes from Benefits, not pet projects, fair shares or face saving.
It is using benefits to decide the best course of action to take, doing the right thing.
Use the decision making tools, the time appreciation, quick decision to manage the process of choosing. Then test your hypothesis to check how good an idea you’ve just had. The Goal Contribution Map shows what you’ve chosen, why it’s a good thing and who it’s going to be good for. Adding them all together helps you choose to do the right thing.
Strategic choices overlap all the three key areas, inbound, inside and outbound.
Inbound (What You Take)
This deals with how you act as a customer and take things from other people. If you know the benefits then you know the reasons why you want something and so can negotiate better with your suppliers. You will know the value of what you want and the price you are willing to pay for it. You will decide what you must have and where you can afford to compromise.
Supplier Relationships
Building a relationship with your suppliers is often a better way of doing business than haggling with them. Talking openly to get agreed joint aims and mutual benefits will build a solid working relationship with your key suppliers. As the customer, you create the right hand side, the goals and benefits half of the Goal Contribution Map. The supplier can then map their offered solution as the left hand side. Working together, the diagram can be improved to develop the optimum solution and a strong working relationship into the bargain.
SLAs & Contracts’ Acceptance Criteria
Acceptance Criteria set the boundaries of what a good solution must contain. They become a sort of, “nobody goes home until we’ve achieved…” statement. Define them in terms of the benefits to be delivered rather than the resources input to the system. Formal agreements (contracts, service level agreements) can then be made on the basis of reward for results. Your suppliers get paid on what you get out of the deal rather than how much they put into it.
The relationships you build will influence the ‘paperwork’. Performance against paperwork in turn influences the relationships so it pays to start these well.
Inside (What You Do)
Business As Usual Working Practices
Processes should be viewed from the value they add to the enterprise. This value may not necessarily be in hard financial terms but must be expressed as a benefit that managers feel is worth having. Once established, the aim of any practice must be documented in its works instructions. Stating the ‘ends’ as well as the ‘means’ reminds people why they are doing what they do. Remember that an objective is a result with a purpose. If it’s your job to give orders then, “Just do it” is out. You have to be prepared to explain why an action is necessary and how it connects to the desired result. And the first person you have to explain it to is yourself.
Continuous Improvement
Existing working practices should be subject to continuous improvement. Quality improvement exercises must remember to consider the ‘why’ as much as the ‘how’. Knowing your objectives also helps you improve what you do. It helps you decide the priorities of what things to improve first and suggests what the improvements should look like.
Outbound (What You Give)
Though I will refer to external ‘customers’ here, remember this applies just as well within the enterprise where some of us have to ‘sell’ our services to our colleagues.
Partner Relationships
Open dialogue with a clear understanding of agreed joint aims and mutual benefits will build a solid working relationship with our key partners. The same processes are applied here when you are the supplier as above when you are the customer.
Customer Relationships
If you are actively selling something then Goal Contribution is a pre-sales tool to build a solid relationship with your customer. Together you work to determine their goals and develop a solution that meets them. Shared goals and open discussion help build a partnering relationship that is more likely to succeed than the old ‘hard sell’ routine.
The two sides of the Goal Contribution Map can be constructed in a reasonably straightforward and logical manner. The brainpower comes in making the connections from one side to the other. Having identified the customer’s needs, which alternative solutions can we offer? Having identified a feature of a new disruptive technology, which problem could it solve? If nothing more, the map can act as a conversation piece to start the customer and supplier talking to each other.
Solution Design
Having started the dialogue, Goal Contribution provides a good base on which to develop solutions with customers. Before they put the work out to tender, you can be actively involved in defining the customer’s needs as we work with them to map solutions to goals. This can take significant time and effort if done properly and the customer is unlikely to have the resource to duplicate this sort of exercise with our competitors. The required solution is going to have your imprint simply by your involvement in its definition. However, it will still be expressed in terms of customer benefits, meeting their goals. It will be the solution they want to buy, not apparently the one you want to sell. You should be at an advantage when the Invitation to Tender is issued.
The best way to use the Goal Contribution Map in developing solutions is in partnership with the customer, working through a series of passes back and forth across
Solution Development
As we deal with innovation and disruptive technology we are faced with recurring questions about how it is to be used. Working through the left hand side of the Goal Contribution Map builds reasons for why you should want to use a particular technology. Creating solutions in search of problems is bad if we try to force the solution onto any problem that comes our way. However, Goal Contribution provides a set of potential problems we can solve.
You can see the organisation’s actual priorities from where they are prepared to spend their money. The targets they set define the benefits they want delivered.
You can do this for any customer group, from Board level right the way down to an individual with a project and some money to spend.
This exercise builds up the right hand side of the map. We know what they want to achieve so now we can look at propositions to fit their needs. Knowing the customer side of the Goal Contribution Map will prompt for enablers and features that will connect. Features that lead to dead-ends can be dropped. A feature linked to many or major benefits is likely to be the ‘killer app’ and you can concentrate your effort on it.
Again, the best way to use the map in developing solutions is in partnership with the customer, working through a series of passes back and forth until both sides have their optimum solution.
Bid Summary
When an organisation has a big piece of work to be done, they invite suppliers to bid or tender for the job. Invitations to Tender are often large, complex documents written by a number of authors. A number of people have written a lot of jargon to describe what they think they want. Suppliers submit bids responding to them which are much larger and more complex. Bids contain more jargon describing how the supplier will deliver what they think the customer thinks they want. The opportunity for poor communication and misunderstanding is tremendous. Suppliers may miss the customer’s key drivers. Customers may miss how your solution meets their needs better than your competitors.
The Goal Contribution Map is a very strong tool for displaying graphically how our proposed solution will meet the customer’s requirements. At a glance you have the Executive Summary on one page. Obviously, you need the story to back-up the boxes on the map but the customer can wade through that for the specifics of what we will deliver, not to answer the simple question, “Will this do what I want?”
Again, it is best built in collaboration with the customer. This not only creates the optimal solution, it helps build the relationship.
Project Management (Solution Delivery)
IT Project Management is the ‘home’ of benefits realisation. It’s where the original ideas came from and, I must be honest, executives still struggle to appreciate its wider appeal. You can use Goal Contribution as a differentiator between yourselves and other Project Management providers. Using what you’ve read here you can turn your projects into ones that don’t just build things and install kit but deliver actual benefits.
Performance Management
Performance management is a matter of measuring what’s going on and making changes to fix or improve things. There are shelf-loads of books on managing the performance of an organisation but the same principles can be applied personally as well.
A rational scheme of performance management underpins the entire system. If you can’t measure the benefit, how do you know it’s occurred? This means having baseline figures before you make the business change and on-going measures to show the impact of the change. We need to measure the right things for the right reasons and prove that the benefits are as valuable as we expected and are actually being delivered.
We often narrow down the things we think we can measure so far that we forget their original purpose. Customer spending that contributes to profit becomes customer satisfaction which in turn becomes number of rings to answer or sales visits per week. That’s when people start ‘gaming’ with the targets they’ve been set. The Call Centre answers instantly then fobs you off with an abrupt and wrong answer so they can get straight on to the next caller.
Benefits management helps you choose the appropriate performance to measure, not the easy one. As mentioned earlier in the paragraph on contracts, we measure what we get out of the system, not just what gets put in. Performance management shows how well the benefits are being delivered and enables you to do something to improve the situation.
Is a ‘Benefit’ a benefit until it’s actually used in practice?
When does your Benefit become beneficial?
Those of us who watch popular science programmes will have heard of Schrodinger’s Cat as it gets rolled out whenever someone mentions ‘quantum’. The mythical beast resides in a state of life/death that cannot be resolved until its box is opened and the poor cat examined.
I was looking through a benefits register recently and it struck me that all the familiar ‘benefits’ about the time saved, processes improved and knowledge gained exist in a business version of Schrodinger’s cat-box. You can’t value them properly until you open the box, see what state they’re in and put them to some use.
You can put the cat to 101 uses (or maybe all you can do is apologise and shield your face as it leaves the box). Likewise, the typical non-cash releasing time-saving has many uses and its value depends on what you choose to do with it and for whose benefit.
Until you make that choice, what you have is an asset. It’s potentially useful and in many cases, you can make a fair estimate of its value but it’s not a benefit. Very few projects claim that their ultimate purpose is to create assets. Benefits Management should be even more rigorous in defining its purpose. If we can’t get the benefits right, why should we expect other people to do so?
Image used within copyright guidelines, with thanks to Cristineagoe at English Wikipedia / CC BY-SA (undefined)
