Today organisations are told that they need to focus on Business Value, and are berated for not being more Value driven. In reality most organisations probably struggle to understand what this means, mainly because they already believe that they are delivering value.
I can’t imagine an organisation upon seeing either of these phrases, thinking:
“Yep that’s our problem, we don’t deliver value, we need to start doing that”
So what are we really talking about when it comes to business value?
Having helped a number of organisations through transitions both from a business and IT perspective, I have gathered a number of insights into the unending challenge of attaining sustainable business value. I would suggest that from an organisational perspective what this boils down to is ensuring that the work we do is the right thing. The right thing being that which gives the organisation the most benefit, whether that is financial or otherwise.
The hard part is not the initial assessment of what the value of an investment is worth. It is afterwards, when the change has been implemented and we try to determine if what was delivered did bring value to the organisation.
Why is it so difficult?
There are plenty of ways to measure the value or lack thereof, the problem often lies in actually doing the measuring and doing it consistently and then acting upon the results. For large organisations this can be very hard, usually because by the time we have managed to get our changes prioritised, fought our way through the political warfare of our organisation’s change processes, we are exhausted! There is a sense of jubilation that despite all the odds we have managed to conquer the process.
So eventually we get our product changes out, and we get some insight into how it's performing. Maybe it’s not performing as well as we hoped, maybe it's not quite hitting the revenue figures we predicted. Then we remember how difficult it was to get the changes out in the first place and we feel rather protective. So we start making excuses, we fought long and hard for this, it is making some money, if only the process to get this out hadn’t taken so long, etc. Before we know it we are not thinking about being Value driven anymore, we are now in protectionism mode.
This happens across the organisation, we forget what we set out to achieve, the process is long and arduous, and without realising it, our expectations have dimmed. Our perception of value has been warped, and our bright eyed optimism of yesteryear has been slowly chipped away.
"If it’s the right thing, why do I have to keep fighting for it?"
So why is it that despite the fact that our investments have been prioritised by the organisation as “the right thing”, we still have to fight through our internal processes to get the work done? For most organisations this quite often boils down to the fact that, there is very little alignment between what the business prioritises as important and what actually gets executed on the “factory floor”.
Often the reason for this is due to a lack of transparency. There is no overall picture of all the work that is happening within the organisation. The prioritisation of new work comes in addition to what is already ongoing, and as this is not visible, it is therefore not taken into account when planning for new work. This is a very easy trap to fall into as it is difficult to know that the work we make visible, is often only half the story.
The visible work is typically the ongoing product changes, new product launches and general high profile change work. Whereas the hidden work is typically operational type work , maintenance, technical debt, bug fixes etc. The operational work is not made visible, which leads to an unrealistic expectation as to when work can actually be delivered. We need to understand why this type of work is not made visible and therefore taken into account during our planning and prioritisation.
In my experience, some of the root causes boil down to a number of key factors:
- the culture of the organisation
- senior management communication style
- insufficient understanding between business, IT
- Human optimism
Let's have a quick look at each of them in turn.
An organization's culture
When we talk about the culture of an organisation we look at what the “norms” are. For example how decisions are typically made within the organisation. Is a manager always required to explicitly provide approval for changes in how teams work, or do teams have the freedom to make the necessary changes as they see fit?
Senior management communication style
This is a very subtle but important tell within an organisation, and often drives both the culture and to a certain degree the communication style within the organisation. So if the department heads are used to a combative communication style between each other, this will have a major impact on how well departments collaborate.
Insufficient understanding between business and IT
This is an all too familiar issue and often difficult to resolve as both parties expect to be understood without having to make too many adjustments. The bottom line here is that businesses need to understand that IT is a core part of the business and not a cost center while IT needs to understand that they are working within the context of a business and phrases like business value and return on investment apply to everything that they do.
This is the unrelenting optimism that sometimes grips an organisation or department. They believe that somehow, their problems aren’t that bad, or that they will magically disappear if they buckle down and do nothing, or worse: their problems will be fixed by someone else.
The underlying thread is “people”. Unless we change our behaviours, our focus and our priorities, it will continue to be difficult to truly focus on creating business value.
Published: May 25, 2021