The 3 Layers of an Organisation’s Processes

April 30, 2009

Look at the processes in any organisation and they can be split quite neatly into 3 layers.

  1. Operations. These processes are the lifeblood of the organisation. Each and every one of them contributes directly to delivering goods / services to the organisation’s customers. The people operating these processes are the organisation’s front line, and woe betide the organisation which doesn’t recognise this.
  2. Infrastructure. Any organisation has to be managed, so it needs management processes. Think of Finance, HR, IT, Facilities…. The processes behind these functions are not directly customer facing but they are still essential to the business.
  3. Change. The invisible layer, but a particularly important one as change and innovation becomes an increasingly important factor in the survivial of an organisation. Think of the 3 Ps – projects, programmes and portfolios. These activities bring change and these activities need to be managed. Any organisation undergoing change has a need for change processes.

It seems to the DeliveryDemon that many organisations struggle to optimise their change processes. Change activities are often tied to the business unit undergoing change, with limited links to the broader business, and little if any coherent attention to the change processes themselves. Strategic planning activity gives rise to change in both Operational and Infrastructure processes, but many organisations give little thought to the Change processes which form the bridge between strategy and delivery.

The Carnegie Mellon Software Engineering Institute’ Capability Maturity Model has been around for some time http://www.sei.cmu.edu/cmmi/. Although its roots are in software development it is in fact a widely applicable model. It classifies processes as:

  1. Initial
  2. Repeatable
  3. Defined
  4. Managed
  5. Optimizing

CMMI Models are a good foundation for assessing whether Change and other processes operate reliably and consistently. What they don’t provide is a model of good practice for the processes being assessed.

As change and innovation become ever more important to the success of commercial organisations, the DeliveryDemon is watching to see which organisations are leading the thinking when it comes to optimising change management in order to deliver strategy effectively.

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Seriously Extreme Project Management

April 24, 2009

Think of a project with all the odds stacked against it:

  • High profile
  • Highly competitive situation
  • Complex logistics
  • Short and inflexible time span
  • Small team of strong minded individualistic experts
  • Extremely high level of risk
  • Absolutely zero tolerance when it comes to simultaneous delivery of all 6 elements of the project

Photographer and elite athlete Tony Lamiche had 5 days to deliver a single photograph showing all 6 major mountain sports in action:

  • Climbing
  • Speedriding
  • BASE jumping
  • Skiing
  • Paragliding
  • Snowboarding

Look at http://tinyurl.com/6mountainsports for the most impressive example of project delivery the DeliveryDemon has ever seen.


What Price the Knowledge Economy?

April 23, 2009

Britains politicians have been loudly trumpeting the view that the country’s future lies with the knowledge sector.

What is this knowledge sector? It is basically those industries based on technical skills and understanding rather than physical goods. It includes areas such as IT, engineering, training, accountancy, HR. It covers the whole area of interim management, where an individual is brought in to carry out a piece of work, troubleshoot, or fill a gap, purely because of their skills and knowledge. It includes those with specialist skills and understanding in a whole host of other sectors. It is, as the politicians say, the future, and it’s growing.

A feature of the knowledge sector is the demand for flexibility, as a significant number of knowledge-based requirements exist for a limited period of time, and the company with the need is unlikely to take on a permanent employee only to make them redundant after a short period. To some extent, the gap is filled by the larger consultancy companies but their needs can fluctuate depending on the contracts they win and the requirements of their clients. The flexibility in the knowledge sector comes from the growing population of skilled and experienced individuals who work as independent contractors.

Many people look enviously at the day rate charged by such contractors, because they mistakenly equate it with the contractor’s salary. They forget that, unlike an employee:

  • The contractor bears the risk of economic downturns and changing client requirements, when there may be long, unpaid, periods when contract work is not available, and earnings have to cover that period.
  • The contractor does not get paid holiday or sick leave or training leave.
  • Contractors pay the cost of their own training courses.
  • Since most contractors have to work through their own limited companies, they have in effect a second job running those companies, and that job is unpaid.
  • There are costs associated with running a company – fees for accountancy and running a payroll, multiple insurances, legal fees for checking contracts….
  • While an employee pays Income Tax and Employee’s National Insurance, a contractor working through a limited company pays  Income Tax  Employee’s National Insurance, Employer’s National Insurance, and Corporation Tax.
  • Contractors frequently work away from home. With contracts often lasting only a few months it would be both impractical and unrealistic for the contractor to sell up and uproot the family every time they sign a new contract, so the contractor has to bear the cost of temporary accommodation.
  • Many contractors need to provide their own IT equipment and software.

Start taking this into account and a contractor’s earnings suddenly look much lower than the day rate might suggest.

So if it’s not the money, what attracts contractors to the lifestyle? For many, it is the opportunity to focus on their professional area of interest and expertise, and they are prepared to take personal and financial risk to do so. It is not an easy life. As well as keeping up their technical skills, the contractor has to be company administrator, book-keeper and salesman, over and above the prime job of providing services to clients.

The knowledge economy is the future, and the knowledge economy needs a pool of skilled and entrepreneurial people to enable it to be responsive to the demands of the market place. It will be a major factor as Britain drags itself from the pit of the current recession. So what did the 268 pages of yesterday’s budget do to encourage this hard-working sector of the economy? Precisely nothing. In fact, less than nothing. Nothing to reduce the onerous taxation regime which targets the freelance contractor with ambiguous legislation, so that each and every contractor has to spend significant sums on legal and accounting advice on each and every contract, to clarify the tax position. Nothing to reduce the corporation tax burden. Not even a recognition of the value of freelance contracting to a flexible economy. Nothing to improve the existing situation, and nothing new to make things better.

There is an enormous gulf here between what the politicians say and what they actually deliver to support the knowledge economy. The DeliveryDemon is far from surprised that so many of her colleagues see the future as outside this country, and she regrets the environment which makes them take that decision.

[If you want to see how a 268 page budget can deliver nothing to support a sector which is critical to the recovery of Britain’s economy, the DeliveryDemon recommends PCG’s summary at http://tinyurl.com/PCGbudgetanalysis The DeliveryDemon’s head is still reeling from trying to disentangle the morass of overlapping numbers in the actual Budget document. And it’s too horrible to be a cure for insomnia.}


Surprise, surprise – Risk Management

April 22, 2009

The DeliveryDemon was interested to see some risk management being discussed in the US Treasury.

The US bank bailout includes the setting up of a public-private partnership to buy up toxic assets. As this Reuters article http://tinyurl.com/carurp explains:

  • The cost risk to taxpayers outweighs the potential for benefits
  • Conflicts of interest have been identified and recognised as a source of risk
  • The scheme is inherently vulnerable to fraud, money laundering and other forms of abuse
  • The ‘public’ element of the public-private partnership dilutes the risk for the private element, increasing the likelihood of a high risk approach to managing the overall funds

What is surprising is that these risks are being so publicly and simply stated. The early days of most public-private partnerships are normally wreathed in a mist of bonhomie as each party strives to protect and enhance its relationship with the other party. Reservations are rarely made public.

The DeliveryDemon will be interested to see how strongly this risk management and transparency is followed through. And whether the UK takes a lead from the US when it comes to acknowledging and managing the risks associated with the UK government’s bank bailouts.


Project Management Made Easy

April 21, 2009

Forests have been decimated and billions of pixels have been marshalled to document all the things a project manager needs to do. In fact, an effective project manager only needs to do 2 things:

  1. Create an agreed picture of the desired end state and the route to it
  2. Ensure that reality and the agreed picture remain in alignment

All the verbiage is about tools and methods to help a project manager carry out these two activities. Lose sight of these activities and the tools and methods generate value-free bureaucracy. Focus on these two activities and it immediately becomes clear how to select a tool kit which will help you deliver a project effectively.

Think about it. The DeliveryDemon has yet to see a project activity which doesn’t fit this model.


Whatever Happened to Quality Management?

April 2, 2009

A strange new convention has emerged during the last few years and the DeliveryDemon doesn’t think much of it.

It can be seen in many customer-facing organisation and it goes something like this:

  • Something goes wrong and a customer complains
  • The organisation investigates the complaint and gets back to the customer with an explanation of why it will never happen again. The customer gets a refund and possibly a gift ‘as a thank you for bringing the matter to the organisation’s attention’.
  • The same thing happens again and again with different customers. When the complaint level reaches a critical mass, the organisation does one of two things. The better organisations do some root cause analysis and make changes to get rid of the problem. Other organisations – and the number of these is increasing – stop responding to complaints, in particular those from customers who have been affected several times.

Two things are happening here.

  • The organisation is not bothering to carry out pre-emptive quality management processes
  • The organisation is assuming that it’s down to the customers to carry out quality checks.

It might be the bread from the supermarket not being properly cooked, or the bag of parsley containing fragments held together with numerous rubber bands. It might be the electricity supply which keeps cutting out because movement of nearby tree branches causes equipment to cut out. It might be diminishing pressure in the water supply caused by a type of pressure valve known to malfunction regularly. It might be the emailed or website link which doesn’t work. It might be the peak hour commuter train delays regularly caused by running freight on the same line. It might be the hospital which sends a letter cancelling a Choose and Book appointment and replacing it with an appointment for an unspecified procedure. Most people have a fund of similar examples.

There is something seriously wrong with this widespread custom of organisations delivering poor quality for as long as they can get away with it.