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.
But 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
These posts draw on decades of hands‑on experience applying Benefits Management in major programmes, across sectors and challenges. They capture the ideas, lessons and practical insights I’ve gathered along the way—what worked, what didn’t, and what genuinely helps people make better business decisions. If you want to deepen your understanding, sharpen your thinking and learn from real-world practice rather than theory alone, you’ll find plenty here worth exploring. Dive in and see what you can take into your own work.
The story-telling ape and how he spoils your choices.
“In last week’s email, we shared how different business owners were winning the selling game by telling great stories.”
A typical business development blog
Those of you who like their education with a bit of entertainment may well know the series of books on the Science of Discworld by Terry Pratchett, Ian Stewart and Jack Cohen. One of the minor items that falls out of their broad remit of the whole of science is Pan Narrans, the storytelling ape (The Science of Discworld II – The Globe). Very briefly, instead of being Homo Sapiens, mankind ought to be described as Pan Narrans as we’re not much above the chimpanzee, we simply tell stories more eloquently.
It’s this evolutionary development of storytelling and our dependence upon it that affects the way we act together and the choices that we make, not always in a good way.
“History is written by the winners. Though not greyhounds and racehorses.”
Alexei Sayle’s Imaginary Sandwich Bar – Britain’s place in the world, Radio 4, 09/11/17
What about the content of the story, the plot, the characters?
I once went to a business seminar, the sort where the panel of millionaires takes questions. Inevitably, the question arose, “As a truly successful businessman, what is your advice to an entrepreneur just starting out?”
Came the, also inevitable answer, “Don’t give up. Keep at it. Eventually, you’ll make a sale.”
Then the epiphany struck me. The answer boiled down to, “Keep pushing your stupid product until you find someone more stupid than you who will buy it.”
Stories have heroes who live to tell the tale, they have million to one chances, they have the rewards of perseverance. Reality has heroes who never come back, punters who bet all and lose, unrequited lovers who die old and lonely and unfulfilled. And it has many more of all three.
Two-thirds of companies fail within three years. Sixty per cent of projects fail. If we base too many of our choices on the stories we hear from the lucky few then we risk falling into the unlucky many.
That doesn’t mean we shouldn’t try, that we shouldn’t be inspired, that we shouldn’t hope. It means that we ought to consider the chances of success and the consequences for ourselves and those close to us. Re-possessed houses rarely have only one occupant. Bankrupt firms have workforces.
It means putting in the effort up-front to make the best choices in the first place. Von Clausewitz talks about the selection and maintenance of the aim. Maintenance is great if you selected the right thing in the first place. It has its downside when you picked the wrong one.
I know that stories appeal to our emotion, not our rationality. I’m just asking that we take a pause and put a little rationality into the mix before taking that leap of faith.
We’ll always need stories. We are Pan Narrans after all. What we need is the right sort of stories. “Once upon a time, a group got together and worked on a problem until they came up with a sensible solution…”
I’ve never been totally happy with the focus on benefits over objectives. It’s always felt incomplete. Benefits Realisation / Benefits Management doesn’t provide sufficient emphasis on purpose or strategy. Too often, benefits are rewards promised so people will permit, enable or justify decisions that have already been made.
The Benefits Map or Benefits Dependency Network ought to be a serious tool for selecting and delivering value from change. In many cases, it isn’t used at all. In others, it doesn’t produce the quality results that it could because people drift to the small tactical benefits (rewards to keep the users happy) instead of big strategic objectives.
The Goal Model is a type of Benefits Map. However, its scope is broader than benefits and it applies to more than projects, so I took ‘Benefits’ out of the name. By modelling Goals instead of mapping Benefits, I hope to keep the emphasis on purpose and strategy.
The Goal Model is a picture that shows the net of resources and their cause-effect applications between an initiative (process, project, programme, portfolio) and the strategic objective(s) to which it contributes.
Building the Goal Model
This is a general summary of what the completed Goal Model will contain. It’s a map of the cause-effect nets between the Concern(s) to be addressed and the Initiative that addresses it. It’s a picture of the ‘to be’ end-state. It doesn’t include any project or business change activity that gets you to this end-state. Between the Initiative and Concern are the Means, Ways and Ends that connect them. These are split into items such as Product, Activity, etc. with some example ways to categorise the items, e.g. people, process, technology Products or Balanced Scorecard Objectives.
Concern
The Concerns summarise the business environment, the context in which you operate, often described as the Problem Statement that triggers a change. They may be straightforward, such as a direct order from above, or more subtle like personal beliefs and mores. PESTLE is one method of categorising Concerns.
For the simplest change there may be only one Concern: “Our client demands that we do X”. You may face many Concerns. They will have to be sifted and prioritised if you are to manage them. Plotting them on the model is a strong visual way of appreciating what’s rational and feasible. The key Concern(s) sits closest to the Objective. The others sit further out, in decreasing importance.
Stakeholder
Stakeholders are the relevant actors, impacting and / or impacted by the Initiative. They may be individual people, groups or entire populations. The same stakeholder can play more than one role.
There is only one Client. The Client is the stakeholder who wants the initiative and pays for it. Sponsor or SRO are types of Client. They act for themselves, the consumers and influencers.
Consumers are the ones using the new initiative and / or receiving its effects, e.g. staff and their customers. They live with the results, but they may not have much direct control over it.
Suppliers give the Client what they want. Consumers acting in the design and implementation of the Initiative are temporary Suppliers.
Influencers is a much broader group of stakeholders, allies, adversaries and indifferents, some of whom play no practical role in the Initiative but who affect the client’s decisions. Consumers and Suppliers are groups of Influencers in that they can directly affect the Initiative. Your competitors are major Influencers.
Initiative
The Initiative is a bounded solution, the overall business change to be made, the programme or project. Naming it helps to set the scope and the boundaries. Its description must be concise and meaningful so people can understand what you’re making. The Client, as the ultimate stakeholder wants the Initiative for their own Objectives and Benefits. They permit the Objectives and Benefits of the Consumers, Influencers and Suppliers.
Ends are what you want to achieve. They are Outcomes that lead to Benefits that in turn lead to Objectives.
Objective
Balanced Scorecard is one way of categorising Objectives. Alternatively, you may have specific local categories, e.g. the organisation’s Five Year Plan. There may be separate sets of Objectives for each stakeholder group but the Client’s take precedence. These may all be shown in the single model or acknowledged and referred out to, e.g. Supplier’s profit is their worry and external to the Client’s Initiative.
Objectives should be SMART. Concerns might be nebulous, e.g. mission and vision statements, customer wants, etc. but Objectives must be pretty firm. If you are going to be judged on how well you achieved your Objectives, then you need an agreed way to measure them.
Benefit
Benefits can be split by the stakeholder group that receives them, and also by type (cash, non-cash, etc.) to inform the business case. A Benefit contributes to an Objective and comes from the Outcomes.
Disbenefits are the negative result or detriment to a stakeholder. Categorise them the same way as Benefits.
Outcome
Measurable outcomes are produced by the Ways. Outcomes may be resources created / released.
Activity
Ways are the Activities that consumers do and how they do them. They are business processes or personal actions that use the Means and produce the Outcomes. Note that they are not business changes. They are business activities in the new ‘to be’ state, after the change has been made.
Product
Means are the resources that consumers use. They are new or changed assets that enable the Ways. Means begin with the Product, something provided by the Initiative that is tangible like a machine or intangible like a service.
Feature
Each Product has Features. These are the specific things that make the Product relevant and useful in context. Typically, they may be speed, volume or relevant capability.
External
Some items may be marked as ‘External’, e.g. dependencies, Means and Ways that are outside the project’s control, or the Suppliers’ Objectives beyond the Initiative. They are shown in the model in an ellipse, so they stand out from the internal stuff.
Unlike some Benefits Maps, project work and business change don’t belong in the Goal Model. The Model is all about the ‘to be’ state and not the action that has to happen in order to get there.
Each Product in the Means will have Product and Work Breakdowns (or Agile equivalents) from the project that created it. It’s also likely that Activities in the Ways section will also have similar breakdowns for the business changes and assumptions around them. Behind each item and connection is a set of assumptions and risks. They can’t all fit in the model, but they are important things to consider and must be recorded somewhere. Putting them all in the Model will make it unusable. However, if you have one or two critical items that you can’t afford to ignore, then annotate your Model with some brief comments.
The Goal Model summarised
A picture paints a thousand words (more like 1500 in this case…) This is the Goal Model with explanatory notes. It’s worth study and it’s worth practice. Used well, it’s a terrific tool for making strategic choices and getting the value from your change.
For a deeper explanation of the Goal Model and how to build one, see The Goal Model in the Library.
Start with the end in mind – a good motto for life as well as work. It’s blatantly obvious but rarely done properly. 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 Florence Nightingale had set out just to make nursing a respectable job for the daughters of the lower-middle class then her achievements for patients would have been very different.
Here’s a sports analogy, a football manager’s side and tactics will adapt to the objective:
Win at all costs
Put on a show for the fans
Play for the league points
Pace yourselves for the next match
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.
Florence Nightingale and other examples are available as phone lock-screen pics:
Hypothesis testing is a way of testing new ideas against your strategy, objectives 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 you are and what you do.
No-one enjoys getting their homework marked, and the same applies with any business assurance process. By the time you hand over your business case to be sense-checked by colleagues, you will already have invested a lot personally, as well as financially. If it’s going through a formal approval process, you really don’t want to be rejected. If it’s the subject of an audit, then it’s probably too late to correct anything and your reputation will be defined by their findings.
Even when all goes well and assurance re-assures you that you’re doing things right, there’s always that period of doubt and anxiety until you get the OK.
If re-assurance is someone taking away your worry after the event, then ‘pre-assurance’ is what you do to take away the cause for worry in the first place. Pre-assurance is all about testing your decision before you pass it over to someone else for comment.
The Idea Test is one way to pre-assure your initiative. It’s a way of testing new ideas against your strategy, objectives 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 you are and what you do.
The Idea Test contains checks to take you from hypotheticals to practicality. There are four filters for your investment decision to pass through or fail:
First filter –If you’re looking for change, but you don’t know what it should be, pass your desire to change through your business context. Focus on something that demands action and find your new idea or hypothesis.
Second filter – pass the Hypothesis back through the context to see if it’s relevant and feasible.
Third filter – test the Objective against the benefits and detriments to see if it is desirable.
Fourth filter – test the Benefits against the Plan to prove it is a worthwhile use of resources.
The Idea Test
Pre-established Context
To begin with, you have to set the scene, to understand the context in which you operate. If you don’t know where you are, you can’t be sure where your change will take you.
Who are you, what do you do, what do you think? Understand the purpose and culture of the organisation. What’s your Vision and Mission, your raison d’être? What drives you from outside? Know the externals you work with (competitors, customers, suppliers, partners, society). What resources do you have, physical and intangible, kit and people?
Optional Start-point 1, Desire to Change
Then you can choose to change. At this point, you may not have a particular change in mind. You just know that you can’t stand still, something must be done. Start here if you’re looking for inspiration.
First filter – pass your desire to change through the context to see where the opportunities or gaps lie. Use the Context for some horizon scanning. “What’s happening out there?” “What could be better…?” “What should we fix…?” Try some SWOT analysis. If you don’t already have a Problem Statement, this is where you can create one.
Optional Start-point 2, the Base Hypothesis
The first filter takes your vague desire to change and turns it into a Base Hypothesis, “Why don’t we…?” “Wouldn’t it be good if…?” Often though, someone’s already had the idea and you start here with the Base Hypothesis. If you’re lucky, it’s come from a workshop of rational experts. If not, it’s probably something your boss heard at the Golf Club. Either way, it needs to be checked.
Second filter – pass the Hypothesis through the context to see if it’s relevant, appropriate and feasible. Will your new idea be good for your business? Do you have the capacity and capability to do it?
Are you comfortable that it fits with the sort of people you are? A silly example – you’re the local Temperance Lodge and you need to raise funds. Someone suggests opening a members’ bar. It really doesn’t fit that well with your mission. A more sensible historic example – the supermarket Tesco was basically a giant grocer. Then someone suggested 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. The company’s purpose is to make profit. The idea made commercial sense and Tesco Bank still exists.
Turn the Hypothesis into an Objective. Go from, “Why don’t we do X?” to, “We will do X because…” The ‘because’ is vital, even if it’s implicit. The purpose behind any course of action has a direct and significant effect on the way it is undertaken. The same applies for any project, the ends affect the means and ways. That’s why a few, clear, SMART objectives are crucial.
You have an objective, a result with a significant and agreed purpose. The next step is to establish the benefits. Most ‘Benefits’ you will see aren’t benefits at all. They’re system features or outcomes, it’s small, fast, painted in friendly colours… So, what is a benefit?
A benefit is a result that a stakeholder perceives to be of value
A benefit needs a stakeholder, someone has to see its merit. “What’s in it for me?” is a subjective judgement.
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 article. The key points here are a benefit 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. Get away from features and outcomes. It’s got to be perceived as being valuable, e.g. improving sales, reducing complaints, stopping costly processes, not improving network performance, reducing down-time and stopping legacy systems. Use a Benefits Map to plot the cause – effect links.
A basic Goal Model (benefits map) template
A Generic Benefits Map
Third filter – test the Objective 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.” Is the Objective big enough to bother? 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.
Different stakeholders want different things. Work out who you are doing it for and what they perceive as being valuable. 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’s in it for them?” How committed to success will they be and where do we want them to be? Are the benefits appropriate? “You’re doing this because it brings substantial benefit to the right people”.
Knowing if the benefit will be substantial means putting a price on it. Your benefit may not be cash in the bank, but you still need to know what it’s worth, what you’d be willing to pay if you had to. Later, you’ll have to show that the benefits will outweigh the costs.
Now you have a good feel for what you want, plan to realise the Ends (Objective, Benefits, Outcomes) through the best use of Ways and Means. This is where the Benefits Map comes in useful again. Mapping makes the links and dependencies clearer than tables in a business case. Your plan must include costs and risks so you will know the expense and the chance of success.
Fourth filter – Test the benefits against the costed plan. Is the cost (money, time, stress, lost opportunities) outweighed by the benefits? Will your Big Idea add value?
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 risk and dependency, so the chances of success are reasonable. All things considered; will you get a satisfactory return on your investment? If not, what can you change in the scope or funding to make it worthwhile?
When your idea has passed through the four filters you know that it is:
Appropriate – it’s the right thing to do
Feasible – the effort required is manageable and within your capabilities
Worthwhile – benefits outweigh the costs and will satisfy the people you want to keep happy, (including you)
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., the entertaining stuff…
The Idea Test was introduced to the NHS in England to support the NHS Change Day campaign of 2013. It was updated in 2024 to include the initial desire to change.
Dr Johnson said that patriotism was the last refuge of a scoundrel. In business, I think it’s Executives’ implicit willingness to pay.
Willingness to Pay is often cited as a method to set a monetary value on an intangible result like satisfaction. You get the relevant people together and ask, “How much would you pay for X?” Ok, it’s open to anchoring, group-think and a host of other errors and abuses but it’s not alone in this. Asking people what score (of whatever measure) they would give X has all the same caveats. And it’s definitely better to ask than to assume.
Unfortunately, projects don’t make much formal use of Willingness to Pay. It’s considered too subjective and tenuous a way to quantify the value they add. They don’t like asking, “What would you pay for this new capability?”, and they avoid financial measures for intangible results. Yet perhaps the ultimate ‘Willingness to Pay’ is the project sponsor who says, “I’ll buy the story I’ve been given.”
The shoddy project starts when a sponsor is given a sales pitch or a business case and says, “I’m willing to pay £X for the comfort / satisfaction / personal gain I will get from the story I’ve just been sold.” Then it’s disguised in a raft of ‘benefits’ to justify this decision. All the output measures and PR stories that the project will generate as it proceeds won’t hide the sad fact that it all hangs on a single decision based on an unconscious willingness to pay. A bit of sensible, honest analysis at the start can prevent this.
I work from the basis that a benefit is a result that a stakeholder perceives to be of value. Where I think we often go wrong is that we don’t identify (or admit to) the genuine stakeholders or understand their perception of value. Even the most shoddy and disastrous project will deliver some benefits. Unfortunately they will be the wrong benefits for the wrong people.
Typically, we believe our programme is so wide ranging, so culture-changing and so flexible that we couldn’t possibly put a price on the benefits. That’s when we should look at the stakeholders and make an honest admission of just who benefits from all the work. That’s when we might discover that the stakeholders who gain financially are the people being paid to do the programme. The people who gain satisfaction are the ones who sponsor the programme. As for the people being done to, the end users and customers, they’re not getting much out of it at all.
Let’s look at value. I believe that any benefit can be expressed in financial terms. It’s simply (simply!) a matter of currency conversion. That said, the accuracy and consistency of that financial value will vary widely over time and between situations and subjective opinion. Our personal willingness to pay varies with our knowledge of the market, our mood and the cash in our pocket. Multiply that by all the people involved in a business programme and financial value will always be a moving target.
This is why some people argue against hard cash statements. Within programmes and projects it’s possible to compare benefits by means of local weighted scoring systems. In the end though, these turn out to be a local currency. Be they Brownie Points, Beer Tokens or Corporate Achievement Indices, they are still a currency and as such, can be converted by market forces into other currencies just like £ to $.
Market forces set the value of products and services. The numbers drop out of the system. At least they do where the market is established. In creative and innovative projects the firm numbers just won’t exist so we have to stretch the error bars and invest a bit more to mitigate the extra risk.
The Public Sector has its own, unique problems here. Putting a value on human health, wellbeing and happiness in a political context is never going to be straightforward. However, there are ways and means. It is a matter of coming to an agreement on some common standards. Given the size of populations involved, even rough statistical estimates will do. After all, the accountants have been apportioning costs this way for years. Unfortunately, rational argument alone will not suffice here. Politics, pressure groups and personal agendas all get in the way of a common agreement.
If we accept that any common standards are going to be loosely defined to begin with then we can do something here. NICE know about the cost effectiveness of medicines, HSE can tell you how much to spend on avoiding death and injury. Ask DfE what illiteracy will cost someone over their lifetime.
A catalogue of reference benefits would be really useful. It will need both credibility and content though. I suspect the content exists in penny packets. Apart from the Civil Service examples there must be plenty of big firms’ economists and little firms’ Benefits Managers who’ve got their own ready-reckoners. I know I’ve got mine. That’s where the credibility falls down at the start because no-one knows what’s already out there.
So, if this article strikes a chord get in touch. Let’s see what we can create to make our Willingness to Pay explicit and give our programmes and projects a more rational value.
Meanwhile, as Dr Johnson didn’t say, “Implicit willingness to pay is the last refuge of a scoundrel”.
