Falling trees – missing benefits

fallenTreeDid you hear that?

I am sure you are aware of the philosophical problem about a tree falling in a forest; if there is no one there to hear it, does it make a sound? Which amounts to the issue of if we don’t experience something then how do we know if it has happened. I propose the same thing applies to benefits arising from a change.

The reason why an organisation goes through the trauma of a change is to achieve some benefits. These benefits might be to improve efficiency or to introduce new capabilities that will ensure future survival. There has to be a reason and it is usually captured in the business case as an argument: give the team this amount of resources and and at this point in the future they will deliver these benefits the organisation needs. Since these benefits are of strategic importance to the organisation we really would like to be able to say they have been delivered.

To be sure the benefits are delivered two things are needed: someone to look at the measurements and say the benefits have been delivered; and some measures to show clearly that the benefits are there. Lets start with the people issue.

Someone needs to be listening

Benefits often appear after a change has been made in an organisation (people have changed their behaviour). So someone needs to be responsible for checking on benefits after the change, and sometimes for quite a while after a change. It is not uncommon to apply savings from reductions in staff levels for 5 years to generate a good financial benefit in a business case. This means that five years after the change is a good time to assess the delivery of this benefit.

Instead of having a passive review of the benefits over time; a better approach is to be proactive in realising benefits and protecting them when they are threatened by new changes or relapses in behaviour. For instance if three years after a downsizing it is proposed to grow again then the growth has to include the loss of 2 years of the benefit from the downsizing. The business change manager supported by the original change sponsor at senior level are ideal candidates to continue this benefits realisation into the business.

Which brings us to the project. A recent discussion about projects and change has risen again. Are projects a good vehicle for delivering change; well they can be. Are they a good vehicle for delivering benefits from change: probably not. As soon as the project is complete, even if that includes seeing the change through to completion, then the project resources need to be re-deployed. Benefits realisation is optimistically passed to the business, which has no ownership of them. Something beyond projects are needed if benefits are to be delivered.

Someone, some person, needs to be given ownership and responsibility for realising and protecting benefits as long as there are benefits to be realised. That makes sense doesn’t it?

How do you know its a tree falling?

It would be remiss of me not to bring in the problem of measurement. Measurement in organisations is based on measuring the effects of individual behaviours and accumulating them. We are measuring humans. Unfortunately the humans know they are being measured, and why, and often produce perverse behaviour to game the system to their (perceived) advantage. Sometimes the measured effect in one area of a business produces counter effects in other parts which are not measured.

In one organisation I worked in they introduced an all encompassing enterprise management system. It controlled and automated a lot of the work in HR, Finance, Purchasing, and Logistics. Consequently staff from each of these areas were made redundant and their salary saving (over 5 years of course) were to pay for the installation and running costs of the new system. Unfortunately the system was very difficult to use and the training was always a couple of versions behind the deployed system. So most managers in the rest of the business gave up using it. They employed someone in their department (as an admin assistant) to do all of the data entry and queries and present a human face to the system. The cost of all the additional admin staff more than compensated for the savings in redundant staff.

An earlier blog reported on the measurement error in the Hawthorne Experiment. For nearly 70 years psychologists assumed they had a scientifically proven concept — the Hawthorne Effect. In fact they had assumed they were measuring one thing (changes to the factory lighting) whilst in practice they were measuring something quite different (performance at the start and end of the week). I have also taken measures from an organisation to assess benefits; gone to the front line to see the behaviours generating the measures and found completely different behaviour invalidating the measures.

Knowing you have a benefit can be quite difficult to prove; a measurement is necessary but not sufficient. You might be listening to someone crashing through the undergrowth — pesky humans again.

 

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