January 3, 2014
What's the value of being able to operate at the peak of fitness and health? Is it less stress? Is it longer life? In an organizational sense, is it being able to change and adapt more easily? Is it being able to outperform your competitors in a race? Is it being able to set appropriate expectations for projects? Does organizational health lead to better longevity?
A recent crop of customer conversations prompted this line of thought. One customer asked how to prove the case for cultural change. Another wanted to quantify the value of successfully introducing a new set of IT systems. Another wanted to develop a solid business rationale for getting organizational functions to work together – to stop playing silo-oriented games where the chiefs fiercely protected their fiefdoms at the expense of the overall enterprise. Others have asked about project failure rates.
This prompted me to draw the analogy of trying to prove a negative. In one of those conversations, I found myself challenging the client to answer the question of quantifying not having functions work together; of not implementing change in a robust fashion. To be honest, this could have easily been any number of conversations over the last 6 months.
Really, these questions were about proving the ROI disciplined change. We have become so besotted by cost reduction, that we fail to see the value side of the equation (if productivity=value/resources). And while we might all agree it’s blatantly obvious that having organizational functions that work well together, and having successful projects … it’s quite hard to put figures around that.
These sorts of conversations have forced me to challenge that oft quoted statistic that 70% of change programs fail (largely attributed to HBR). I wanted to debunk that myth touted by just about every consultant you can name. The number just felt wrong to me … so in a recent survey carried out in conjunction with IQPC’s PEX Network, we went looking for the evidence. We surveyed 172 organizational change programs across a wide spectrum of industries. Only two respondents sat within IT, the rest were mostly business process executives, program managers, business executives, business architects, quality or Lean Six Sigma types.
Published today, the report Focus On Customer Value To Grow Organizational Maturity captures a wide range of insights related to organizational health and maturity. The finding, that really surprised us, was that organizations with even moderate maturity around business architecture and project governance … almost always succeeded in their change programs. Only 5% of these projects fail outright, 11% delivered unexpected benefits (but failed to meet initially stated goals). However, a whopping 84% either met their initially stated goals, or exceed them.
So what's the value of good health? The research data confirms our hunch – that business architecture is a necessary ingredient for project success. The alignment created through business architecture leads to better governance and creates the right conditions for success – there is less backtracking and fewer false starts.