30 June 2011

When should you worry about your internal projects?

Many of you are in a situation where the number of complex issues that need to be dealt with outside of the standard organizational structures is growing. For different reasons, some economic and some related to a wish to build up internal capabilities, less projects are being outsourced to external consultants. Due to this, the number of internal teams dealing with complex projects is growing dramatically.

If you have a portfolio of complex projects then there are almost certainly one or more projects within the portfolio where you have a “gut feeling” that the project is not going well. Since you do not have any conclusive evidence it is difficult to do anything but to hope the best and see what the teams come up with.
Based on my experience, I believe that there are eight warning signals for projects that are not going well. The more warning signals that apply, the more urgent it is to intervene. The eight warning signals are:

1.    The project-team appears to be dealing with a very broad range of issues
2.    The project team does not seem to be spending much time together
3.    The team is spending a lot of time carrying out “interviews”
4.    The team does not appear to be doing any meaningful analytics
5.    The team has very limited interaction with you(and other sponsors )
6.    Key stake-holders, who's by-in will be required for the project to be a success, are not aware of the project
7.    The project is not meeting agreed deadlines
8.    It is difficult to pin the team down on any meaningful conclusions

Dealing with a broad range of issues is a danger signal as it very often means that the project is too broadly scoped to deliver concrete results and/or the team will need to carry out more work that is feasible within the agreed deadlines. The required action is to carefully consider what the project needs to deliver and ruthlessly reduce any activities that do not directly lead to this result. See an earlier blog spot for more detail how to deal with this issue.
If the project team is not spending much time together it either means that they are not spending enough time on the project, or that they are working alone. In my experience achieving strong conclusions and recommendations requires bouncing ideas off each other, combining insights, and jointly developing an understanding of the most appropriate conclusions and recommendations. The best way to deal with this is to ask the team why they are not spending time together, and "gently" push them to do so. See an earlier blog spot for more detail how to deal with this issue.

Interviews are often an integral part of the work required to carry out a complex project. However, I have often seen teams that spend too much time talking to other people (within the organization or externally) without having a clear goal for what they want to get out of the interviews, without writing up the results of the interviews in a structured manner, and without getting any data or support for key assumptions from the meetings. Often, carrying out interviews is a way of looking busy and not having to do any "hard" work related to developing conclusions. My recommendation is to suggest that the team develops an overview of all the interviews they have carried out and what has come out of them. If the team has a program of interviews planned, ask them to provide a structured overview of what is the expected outcome / value added of each interview. Based on this, interviews can be prioritized. See an earlier blog spot for more detail how to deal with this issue.

In my experience it is impossible to develop strong conclusions and recommendations to a complex issue and convince key stakeholders without carrying out a fairly deep and complex analytical process (otherwise the issue is not really that complex……….). Therefore, if a project team is doing a lot of brain-storming and thinking, and is developing a lot of conceptual slides, but is not doing any analytics to really understand the issues and develop support for their hypothesis it is unlikely that the project will be successful.  This type of team will need to be forced to do the analytics that are required, and must be given help if they are unable to do so. See an earlier blog spot for more detail how to deal with this issue.

If the team has very limited interactions with you and other sponsors this can be a sign that the team is uncomfortable with the progress that they are making. If this is not the case then there is a high risk that they are not getting enough feedback on the direction they are taking and/or the key assumptions that they are making. In my experience, this often leads the team to take off on a tangent that is very different from the expectations of the sponsors. The easiest way of correcting this is to force the team to sit down with you and give an overview of their hypotheses and analytics. See an earlier blog spot for more detail how to deal with this issue.

If key stakeholders are not aware of the project it means that the team is not communicating with them. I have seen very many projects where the internal teams thinks that they only need to present their results at a final presentation without any previous communication with key stakeholders. Usually these projects do not get the agreement and acceptance that is necessary for a good implementation of required activities as expectations have not been managed, ideas have not been tested, understanding of "hot-buttons" not developed, etc. The best way of correcting this is to make communication an integral part of the team's workload, and follow up (and help) in this process. See an earlier blog spot for more detail how to deal with this issue.

The most important signal signifying that a project is not going well is if it is not meeting interim deadlines. Sometimes I have seen internal projects that have not even set internal deadlines. These are extremely likely to fail, as there is not even an opportunity to check if the project is on track. The best way to avoid this danger is a) to set clear intermediate milestones that involve developing and presenting clear results, and b) ruthlessly follow up on the agreed deadlines. See an earlier blog spot for more detail how to deal with this issue.

I have often seen teams that are very good at communicating about the process they are going through (we have talked to ten people, we have developed a model, etc, etc) but are unwilling to say anything about the real results (conclusions) coming out of their work. Very often this is a sign that they are not going to present strong conclusions and recommendations at the end of the project. The reasons for this vary. Sometimes it is uncertainty that the leads to believe that they are not "ready" to present conclusions, other times it is mainly driven by the team being uncomfortable with the results and conclusions that are expected of them and/or coming out of the analysis (opportunity to reduce staffing by 20%, etc). The best way to deal with this is to force the team to present conclusions at interim meetings. See an earlier blog spot for more detail how to deal with this issue.

The more of these symptoms that a team shows, the more likely it is that drastic intervention will be required in order to give the team a chance at achieving its overall goals. The earlier such an intervention takes place, the more likely that it will be successful.

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07 June 2011

When should you not use consultants?

In my previous blog-post I described how you can decide whether a project is complex and therefore either should be outsourced to experts (i.e. external consultants) or be carried out by an internal team, but given special care and attention. Once you have decided that the project you are considering is complex, the next question is therefore how to carry it out.

I have led consulting teams carrying out a broad range of complex projects across Europe for LEK Consulting, PwC, and A.T. Kearney (where I ended up a Partner). The projects I carried out always added value to my clients, but I am convinced that the clients I worked for could have carried out a fair portion of these projects themselves.
What did these projects have in common? Essentially, the answer boils down to the companies in question not having a truly good reason for using the external consultant. In my view companies should only use external consultants when they provide something (knowledge, experience, tool/process, etc) which the company does not have itself. At LEK I carried out numerous projects that helped companies identify and value potential acquisition targets in other countries. This was clearly a task which required local knowledge and specific experience which the clients usually did not have. At A.T. Kearney a number of companies hired us to carry out a cost benchmarking using an extensive database that had been developed by A.T. Kearney. This was clearly an activity which a company could not do itself.

Sometimes there are political reasons for using an external consultant. Examples of this are companies that use a report from a well-known consultant to either get a "quality-stamp" on their plans or to have somebody to blame ("according to Consultancy-A we have to reduce staff by 2000 employees"). While "political" has a certain association with something unsavory,   I do not see anything intrinsically wrong in this type of use of a consultant if it helps speed up decision making and the implementation of difficult change.
The projects I felt that could have been done by the clients themselves where the projects that did not fall in one of the two previous categories. In my opinion, in these cases, the only reasons for bringing in an external consultant (i.e. a team led by me) was doubts about the ability of an internal team to structure the issues, carry out the required analytics, develop conclusions and recommendations, and communicate these in such a way that buy-in and action is created. If this is the case, the focus should then be on understanding why your company does have these abilities and capabilities, and what can be done to improve this situation.

If the key issue is basic capabilities, then there are organizations specializing in improving the capabilities of companies to carry out complex projects. An example in Europe is ICS, based in Belgium but working internationally. If the problem is not so much the available skills and capabilities but rather the ability to define and carry out a successful project then my input is probably better suited. Please go to www.teambasedconsulting.com to get a better understanding of why internal projects tend to underperform, and what to do to improve this situation. Another possibility is to take a look around this blog, as I have written about a large number of specific issues and challenges and how these can best be dealt with.