Will you join the culture club?
On the evening of Thursday 18 March 2021, around 50 delegates from a wide range of industry sectors attended an excellent and informative evening webinar, ‘Changing Culture to Maximise Enterprise Value’, that described the origins of value and benefits management, the relationship between them and the key elements that typically enable the successful implementation of value and benefits management as a key performance measurement function of success. As an important collaborative activity, the webinar was jointly facilitated by the APM South Wales and West of England (SWWE) Branch and the APM Benefits and Value (B&V) SIG.
In order to maximise value, we must ask if the proposed benefits will be delivered at an acceptable cost with an acceptable level of risk over the full economic life cycle of the investment. To ensure that value is created and sustained from organisational change initiatives, benefits have to be managed throughout the entire investment life cycle. At its very fundamental level, we must actively promote and sustain a shift - from a culture of delivery - to one of value.
Our speakers for the evening, John Thorp and David Golding, kicked the session off by explaining the history and origins of value and benefits management and that whilst we have come a long way, there is clearly much more that must be done to change individual and organisational mindset and behaviours in this critical functional area. What is Value Management? The ‘linked-up’ thinking, mindsets, behaviours and practices that must be embedded in governance and management to create and sustain business value from all business activities, including but not limited to transformation and IT-enabled change. John explained that effective value management requires moving from a delivery culture or ‘build it and they will come’ attitude, to a value culture. John went on to explain that organisational culture is the collection of values, expectations and practices that guide and inform the actions of all team members or, to put it another way, it’s ‘the way things are done around here’. Change is invariably difficult because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up.
John explained that ultimately investments must be selected based upon the value to be derived and that strategic alignment, business worth and the associated risks were the important contribution and measurement factors in determining the future likely value of an investment.
Another essential area for reflection was the business case. How often do we create business cases just to get the funding for the investment we want as opposed to the investment we need and then, as soon as we get that investment approved, the business case then ends up as shelf ware never to be seen again? The business case must not be a bureaucratic hurdle; it must be a living, operational management tool, updated throughout the full life cycle of an investment decision, with timely corrective actions taken as required.
John described how benefits mapping should be undertaken and how this powerful technique can really help to understand the totality of change in terms of what needs to be created through new projects, how this transitions to new capabilities in the organisation and how this can help to identify and describe a clear understanding of business outcomes. The Results Chain approach developed at Fujitsu can really help to ‘complete and join the dots’ across the full spectrum of change. Managing the full life cycle of an investment decision from the initial idea or concept through to the retirement of the resulting new or improved assets is often a complex picture. John described the need to bring together all of the individual components of governance in to a single integrated multi-relationship model that ‘completes the picture’ through the objective selection of investments at the portfolio level, the management of inter-related projects that will realise the expected benefits and the management of the budget, schedule and resources necessary to deliver the required capabilities.
John then explained the concept of ‘value leakage’ at the strategic, structural and execution levels and that this was due to lack of business ownership and accountability, poor business or investment cases, failure to acknowledge and plan for complexity and failure to ‘manage the journey’. Individuals at every level of the organisation must change their behaviours in order to support and affect much better change outcomes. Unless individuals can see the value in change, they are very likely to resist initiatives and inevitably it can therefore take a huge amount of effort and many years to move an organisation from being delivery centric to value centric.
Culture eats strategy for breakfast
This is such a profound statement but it is absolutely true! Value and benefits management are much more than just a part of project and programme management; they are the fundamental and guiding behaviours that need to be embedded in all management domains, from strategy all the way through to business operations. Primarily, culture must be fostered at the individual level before the organisation can collectively change and the importance of leadership at all levels of the organisation will ultimately drive the best culture for the organisation. If value is to be created and sustained, value and benefits need to be actively managed throughout the whole investment life cycle. This requires an effective approach to governance, with a strong focus on ownership and accountability that promotes and supports a culture of value, such that the organisation has a shared understanding of what constitutes value for the organisation, clearly defined roles, responsibilities and accountabilities, processes and practices around value management with active benefits and change management and relevant metrics that have a baseline, an owner, a target, a trend and an appropriate measure where the underlying data can be trusted to inform business decisions.
The presentation covered several key functional areas including project, programme and portfolio management (P3M), the relationships between them and the tools and techniques that support them. A key component of this is the business case, value and benefits mapping, benefits registers, stage gates and relevant performance measurements. The necessary conditions for success were also identified, including proactive management of change, full-cycle governance and activist accountability and where benefits and value management must fit in to the broader context of enterprise governance.
Based on the speakers many years of experience in this space, they were able to explain the major challenges faced in getting these practices adopted, effectively applied and sustained in organisations, including the challenges of executive engagement, sustained sponsorship and stakeholder inclusion. Beyond frameworks, processes and tools, John and David stressed the importance of the need for a significant cultural and mindset change at all levels of the organisation if these practices are to be broadly adopted and effectively used to maximise enterprise value. There can be no doubts whatsoever that the real holy grail of change is fundamentally about the realisation of benefits and value. However, just knowing that this is largely true and just, doesn’t make it happen; you have to continuously look at value, plan for it, review its development and potentially change your approach before you begin to realise it.
The session presented on Thursday 18 March discussed the origins of value and benefits management, the relationship between them, and the key elements of successful value and benefits management. The key elements include project, programme and portfolio management (P3M), the relationships between them, and the tools and techniques that support them.
These included the business case, value and benefits mapping, benefits registers, stage gates and relevant performance measurements. It also identified the necessary conditions for success, including proactive management of change, full-cycle governance and activist accountability. It positioned where benefits and value management fit in the broader context of enterprise governance.
To ensure that value is created and sustained from organisational change initiatives, benefits have to be managed throughout the entire investment life cycle. In order to maximise value, we must ask if the proposed benefits will be delivered at an acceptable cost with an acceptable level of risk over the full economic life cycle of the investment. We must promote a shift from a culture of delivery to one of value.
Based on the speakers' many decades of experience in this space, it identified the major challenges faced in getting these practices adopted, effectively applied and sustained in organisations, including the challenges of executive engagement, sustained sponsorship and stakeholder inclusion. Beyond frameworks, processes and tools, was stressed the need for significant cultural and mindset change at all levels of the organisation, if these practices are to be broadly adopted and effectively used to maximise enterprise value.
John and David have very kindly allowed their material to be made available for viewing.
The webinar recording on YouTube is now available in our APM resources area and also embedded below for reference.
This content is suitable for professionals up to an intermediate level of experience.
John Thorp is an internationally recognised thought leader in the field of value and benefits management with over 50 years’ experience in the information management field. A frequent speaker and author of The Information Paradox, his passion revolves around helping individuals, organisations and society realise value from information technology enabled change. In today’s age of digital exploration, realising this value requires going beyond frameworks and methodologies, it will require a fundamental mindset shift around organisational governance, leadership and management. He is a Fujitsu Consulting Fellow and a Fellow of the Innovation Value Institute and the Institute for Digital Transformation.
David Golding is a Management Consultant who has worked in the construction industry for the past 35 years; 17 years in the public sector and 18 years in the private sector. He has worked as an engineer, designer, project manager, planning manager, PMO and management consultant. During this time, he has completed a BSc Hon Degree in Project Management and MSc in Strategic Project Management, along with being a member of APM and a Fellow in recent years. He first worked in Value Management during the mid-2000s for the Feasibility studies for minor road schemes and prioritising funding. After which he has been a part of the Value Management SIG and now APM Benefits and Value SIG where he is currently Co-Chair and Branch member of the APM Yorkshire and North Lincolnshire (YNL) Branch.
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APM Body of Knowledge 7th edition reference
|1.1.4||Benefits to the Organisation|