The Project Success Re-imagined Series – Part 6
This is the 6th article in the ValuePoint series on Value Delivery Management, and here we will elaborate on how the approach described in the earlier articles of this series can be used with great effect for strategy development and execution.
It is well known how strategy success rates compare to project success rates, and they both leave quite some room for improvement.
What projects and strategy have in common is that they are both an expression of business initiatives being developed and undertaken to create a positive impact, but at different levels.
As described in our previous articles, business initiatives, projects and programs can benefit hugely from applying the processes of the TOP Value Equation, as the methodology sets up these initiatives for a more controlled delivery, reduced costs, increased benefits realisation and thereby increased business value delivery.
As strategic initiatives are business initiatives as well, they too can therefore benefit from using the TOP methodology – and with even greater impact. That is what today’s article is about.
Outcomes, benefits and business value in strategic initiatives
Once a strategy has been developed, it usually results in several strategic business initiatives taking shape. Programs and projects are established and executed to produce the desired strategic changes, deliver the strategic outcomes that enables strategic benefits which create business value in some shape or form.
So, regardless of whether you carry out a business initiative at the tactical and operational levels or undertake a strategic business initiative as part of realizing your strategy, getting the outcomes and the related benefits and their value is what you’re after.
The TOP methodology, as described in previous articles, doesn’t just aim at delivering the outcomes, the benefits and the business value. It excels in identifying them all in a structured and methodical way through well-defined processes with the goal of maximizing them and securely delivering them to the organisation.
There is no magic involved and “maximizing” doesn’t include any kind of “hocus pocus” or hot-air-consultancy-selling-points, as the method guides participants towards identifying more outcomes, more benefits and thus more business value through structured processes that enable more efficient and controlled management of the delivery.
To briefly recap on the previous articles, here is what defines Outcomes, Benefits and Business Value:
Outcomes are what you will do differently, e.g.
A) that you expand into new markets,
B) that you successfully reduce emissions
C) that you enable the organisation to adopt more modern technology
Benefits are what you get out of delivering the outcomes, e.g.
A) that operating in new markets results in competitive advantages that increases revenue and supports organic growth
B) that the new green profile of the organisation results in reduced environmental fees, happier and healthier employees and your products being more attractive to the market
C) that the more modern technology results in improved competitiveness, cleaner production, increased productivity and more attractiveness among the kind of people you’d like to employ
Business value is the value you receive from realizing the benefits, e.g.
A) 5% revenue increase from being able to operate in new markets
B) 25% lower emissions taxes, 7% less employee absence, 10% increase in employee satisfaction, 6% increase in staff retention and a 4% cost reduction on the recruiting budget from successfully reducing emissions, thus strenghtening the green profile and becoming a more attractive place to work
C) 15% capacity increase, 17% waste reduction, 10% increase in innovation and a 5% reduction on the recruiting budget from adopting more modern technology and thereby becoming a more attractive workplace to more people
Applying the TOP methodology at strategy level thus provides you with the opportunity to maximize the total business value delivered by first applying the methodology to the strategic business initiative, where you identify and define your strategic business outcomes, identify the resulting strategic benefits, quantify their strategic business value, and identify exactly which strategic activities need to be executed to deliver these outcomes as shown in this diagram:
Once that is done, you identify which strategic activities are to be delivered at tactical and operational levels and these strategic activities then become business initiatives at the tactical level.
The same methodology is then applied to these initiatives at the tactical level, where – again – outcomes are identified and defined, benefits are identified, business value is identified and quantified, and activities are identified and executed as shown here:
The strategic outcomes, benefits and business value will reflect the desired strategic change, and will differ from the outcomes, benefits and business value identified, delivered and realised at the lower levels.
This means that achieving the outcomes, benefits and generating business value twice – at both the strategic level as well as on the tactical/operational levels – on the same business initiative suddenly becomes straight forward – and an opportunity not to be missed.
The job at hand at the tactical and operational levels when tasked with the delivery of a strategic activity is first to identify how to most efficiently and securely execute that strategic activity, and then to ask, ‘What tactical and operational level improvements can be gained from this delivery?’
This will include tactical and operational level outcomes that result in e.g. process improvements and improved productivity, local adoption of new technology, increased innovation and new product ideas, improved organisation, reduced waste, increased customer and/or employee satisfaction, etc.
Most outcomes identified from this process at this level will hold a great potential for further development of the operations and will represent a significant amount of business value that – when identified and managed properly – can make a huge difference in supporting the strategic goals of getting or staying ahead of the competition.
Improving on communicating strategy
Organizing the delivery of the strategic outcomes in this way will typically also change the perception of strategy in the organisation, as the strategy becomes much easier to communicate, and employees at all levels will become increasingly aware of how their tasks directly support the delivery of the strategic outcomes and thus the realisation of the strategy.
It becomes possible for the individual to see exactly how her or his effort contributes to the greater good – and that’s motivating.
Also, the organisation will benefit from the same processes being used at all levels.
All stakeholders will know how it’s done and will be readily able to participate in initiatives regardless of level as well as they will be able to provide their input and follow proceedings in the most optimal way.
Transparency will increase to the desired level, and shared language will dominate the initiatives, with less misunderstandings and less room for undesired interpretation – and a higher degree of alignment as result.
From an operational perspective, strategy will no longer be limited to managerial buzzwords on posters that are perhaps noticed but only seldomly fully understood by employees on their way down the hallway towards the canteen at lunch time.
Most of us have probably experienced it at some point during our careers and felt how it just makes strategy seem so far distanced from the tactical and operational levels, inevitably leading to inefficient strategy execution as so much more value could be generated from it.
Maximizing Business Value
A key benefit of applying the TOP methodology to strategic business initiatives is that it multiplies the business value gained from them, as benefits will be identified and realised at all levels. The strategy will benefit from the tactical and operational level support, and all levels of the organisation will feel more involved and engaged, as they will have more immediate gains from it.
Strategic business outcomes are still delivered on a long-term basis, but the benefits are realised, and the business value is delivered on an ongoing basis throughout the delivery process.
In this way, it becomes a real continuous improvement process where business value isn’t limited but multiplied, and where you ensure that you get the maximum result from your investments – often even without increasing the cost, as unnecessary tasks are eliminated during the change activity identification process and as the work that needs to be done will be done anyway, but with additional benefits and business value as the result.
Only benefits that are managed can be planned for delivery. The eventual realisation of un-managed benefits is entirely a question of luck.
The Value Delivery STaR model
What is described above in brief is the Strategy Transparency and Realisation Model, that we have been developing in-house on the basis of the TOP methodology over the past 1½ year.
If you didn’t get the opportunity to read the previous articles in this series, you can find the articles here:
Part 1 – The Power of Business Outcomes
Part 2 – Improve Project Deliveries Using Outcomes Roadmaps
Part 3 – How Business Outcomes Drive Benefits Identification
Part 4 – Giving Life to Benefits Realisation
Part 5 – Identifying Change Activities That Deliver Business Value
And if you should be interested in hearing more about it or need our help or advise in upcoming or already undertaken initiatives, projects or programs, simply reach out to us.