Part 4 of 4 in a series
Set Your Course
Turning it over in your mind, the functional advocate role seems to solve some very difficult problems. Failures of understanding across disciplines wastes time, energy, and materials. In these conditions, no matter what the scope or intent, departmentally aligned successes remain isolated. An enterprise endeavor launched under mysterious conditions is suspicious no matter the post hoc justifications. The advocate remains dedicated to spreading what riches can be gained. Engage your colleagues as partners in new adventures or at worst sail past passive leaders and let the advocate pull them in your wake.
The Devil’s Advocate to Pay
Can’t we solve this problem with existing organizational models?
Perhaps, but corporations aligned around business units bring disadvantages that the functional organization does not. Nothing in the nature of a divisional organization Read more ›
Part 3 of 4 in a series
Silos Isolate and That’s What They’re For
So let’s talk about the need for a new role, the functional advocate. Within every functional organization, knowledge domain experts lead a group of progressively more specialized teams consisting of various levels of responsibility. Variations of this model exist within finance, technology, marketing, operations, and administration. The weakness of this organizational structure is a function of the specialization. Functional areas develop special vocabulary, often shared across industries. Further, more jargon springs up and enforces exclusivity of objectives and processes. These phrases and terms thrive within the organization, location, and sometimes within small isolated teams. In addition to the foreign language requirement, departments self-segregate to increase cooperation and shared learning. If you’ve ever tried to suggest breaking a department’s cubicle continuity, bless your poor little heart for the abuse through which you suffered. Read more ›
Part 2 of 4 in a series
Something has to change. There it is, out in the open. Of course, it’s a reality that wrings anxiety from the stoutest heart. Pushing expectations forward seems troubling, but what’s the alternative? More failures and half successes lead to the same troublesome results.
As we set the stage for this new role in collaborative success, let’s face some unpleasant conditions that suck the momentum out of attempts to change how functional organizations structure themselves. The chart below identifies three major reinforcing influences on the traditional role and responsibilities structure.
Organizations exhibit characteristics and behaviors we can speak of as “culture” to set the baseline of accepted interactions among functional areas and between Read more ›
Part 1 of 4 in a series
Turn your mind’s eye to the history of innovation implementations in your organization.
- Do you see a line of progressive success stories?
- Has each produced efficiency and value in the daily routines of functional areas?
- Are implementation champions praised as valuable partners by staff?
- Have marketing, finance, operations, and upper management reconciled their skepticism based on personal recollection of previous projects and their unfulfilled promises?
I suspect that your heart drops at the spectacle. Today, a dilapidated and haphazard collection of tools and processes severely limits options for future productivity gains. Strategic initiatives, regardless of merit, reflect the “way things are” more than “the way things should be.” Sometimes, late at night, perplexed functional managers feel an acute absence. Each department feels it differently but they all sense the gap is within their power to fill.
Organizational synchronicity is readily available and it is simple in concept. The opportunity, even if implemented within a single functional area, brings immediate and long-term benefits to managers and individuals. Be stout of heart, face your fears, and read on…
Previously, I encouraged the use of critical chaining estimation when creating project network models as opposed to traditional project pathing.
The Agile Manifesto value to which that discussion pertains is:
Customer collaboration over contract negotiation
The ‘customer’ in this case is management and ‘contract negotiation’ is the product and capabilities required from an organizational standpoint. For instance, perhaps this product addresses the low-end of the market currently being serviced by an inferior. Executives want to service those clients to prevent the sort of entrant climb in capability that these unserved segments can fund.
At the level where individual contributors are pulling their respective implementation responsibilities, I agree estimates are superfluous. If the work can be delivered prior to the next delivery date, then it should be done. If it can’t then break the work down into properly scoped pieces or push it to the next cycle.
Realistically, Agile projects likely exist within a more traditional management structure. Some high-level of estimation will be required to win funding and support. Just as in all other projects, priorities may change. A feature that sold management on the idea may be abandoned due to external forces.
This becomes even more apparent when success depends on several sub-projects with different management styles. The existence of those buffers insulates the overall project from schedule changes at a much higher level.
It is in the context of these types of Agile project estimations that critical chaining becomes the more useful tool for project network models.
The sort of blind obedience required in traditional command and control hierarchies no longer protects organizations from disastrous decisions. When industries adopted this model of governance and management, only a very few were educated and networked enough to make decisions of strategy, tactics, and operations. This old dynamic dooms the fate of a strict hierarchical organization: it’s rigid, feeble, and inept.
Now, the wealth of knowledge and models of ingenuity spring from everywhere in an organization. Constant process reexamination and deliberate product retirement bring success to those companies that believe and practice it.
Fear of change because it is change is no better than change for its own sake. Neither of these biases yield acceptable returns when implemented.
The symbiotic relationship between EA and IT governance can be expressed in functions of input producing output from one to the other. Please note that I present the following as one example of that idea not a comprehensive picture of the yin and yang of the two overlapping disciplines.
IT governance outputs include reporting structure, roles, and responsibilities within the IT function whether there is an IT department or not. So in that sense, the output from IT governance is the establishment of an EA role or position within the corporate hierarchy.
On the other end of the relationship, EA produces models of the business processes, both “as-is” and “to-be”, within the context of governing structures. EA output could result in a “to-be” model requiring changes to the IT governance structure or process in order to realize added value.
I hate to get down on financial managers but why is IRR still being used? The fact that the presumption of reinvestment at the same cost of capital as when the project started is ludicrous should be enough to convince them to use any other method with the exception of payback. Is it just the organizational entropy or the fear of upsetting the status quo?
Even though net present value yields more conservative decisions, internal rate of return remains a more frequently selected method for evaluating financial advantages of investments. There may be a way to encourage use of present value without resorting to explaining dimensions of cash inflows. Using the present value (PV) and the investment (I), a profitability index percentage (PIP) can be calculated.
Instead of looking to the weighted average cost of capital (WACC) and comparing the difference between it and IRR, analysts could then compare the PIP of a project to other projects without considering WACC at all.
Note from investopedia.com:
The weighted average cost of capital is the average of the costs of the debt or equity financing used to determine the amount of interest the company has to pay per dollar it finances. This value is often times used to “determine the economic feasibility of expansionary opportunities and mergers.”
Whereas critical pathing in traditional project networks helps focus a project on those activities that could impact the delivery schedule, the structure imposed is too detailed, too rigid, and does little to integrate resource commitments. Critical chains integrate resource commitments to yield a much clearer awareness of Agile project resource constraints.
Critical chain project management (CCPM) leverages the concept of project (overall) and feeder (activity) time buffers. These buffers protect time priorities from unknown or unforeseen delays in spint execution. Moving half of the aggregate execution estimation durations from within the critical chain activities to the end of the chain allow individual activities to overrun without impacting the completion of the project. Feeder buffers isolate activities from the critical chain by moving half of the estimated execution time from within the feeding path to the end of the feeding path.
Understanding the critical chain technique empowers Agile project managers with greater flexibility in planning. At the level where the delivery planning process itself is negotiated will these estimates be invaluable. More info on the technique is at the following site: Critical Chain Project Management
I expound on this further in another post.