The problem with traditional programme management constructs is that they are slow, inflexible and inefficient. They end up delivering the wrong thing or only partially realise the benefit.
Organisations that want to compete at pace create nimble and small change teams that can efficiently pivot to meet evolving priorities. The teams are multi-functional, and are organised around business value and cut across traditional functional silos.
This requires a fundamental revolution of the operating model and a vast simplification of budget and cost accounting practices to foster agility. This means that organisations need to structure themselves around value rather than around programmes of change.
We have identified four key problems endemic in traditional programme constructs.
1: Converting ‘non-producers’ to ‘high-producers’
Traditional programme constructs are costly to maintain. They typically require 20% - 30% additional people to sustain the governance, control, reporting and cost accounting practices required to manage and control a ‘programme’. Organisations that have a high producer to non-producer ratio know that they need to fundamentally change their operating model to deliver at pace and complete efficiently.
There isn’t yet an industry-defined definition of the producer to non-producer ratio. Each organisation we have worked with has developed their own definition with the following rough guidelines:
- Producer: An individual that is directly building or developing value. Producers typically include technical engineers, developers, testers, business designers, business subject matter specialists, and product owners.
- Non-producer: Anyone in a management, governance, administrative, risk, control, finance, reporting, or assurance role on a programme. They are not directly involved in producing customer or business value.
A Baringa client reversed the producer to non-producer ratio from 30:70 to 70:30 resulting in immediate efficiency gains and improvement in delivery reliability and predictability. To do this, they changed their operating model and adopted scaled agile delivery techniques.
2: Losing admin and focusing on value
Traditional programmes often have a fixed scope and agreed set of outcomes, requiring cumbersome formal requests to alter the direction or get permission to start delivering value. On average, it takes between 14 weeks and 12 months for a typical change programme to shift direction fundamentally once underway.
At one large financial services firm, we quantified it would take 3 FTEs a year to complete the governance administration just to get initial funding approval to mobilise a new initiative. We also found that typical business and IT architectural governance decisions required six separate governance boards and took at least 15 weeks (and up to one year in the worst case) for approval, with no challenges. We cut this to less than one week by providing delegated authority and a clear set of business design guardrails for business units to operate within.
Another simple change is to stop reporting progress of programmes using traditional stage gate milestones. Programme sponsors should instead ask for proof points or outcome based measures of success to monitor progress. Transparent information enables appropriate risk-based decisions to be made.
3: Keep effective change teams together and create enduring change teams (tribes/squads), organised around value
In traditional programmes, individuals often form temporary working groups and then disband upon handover to ‘Business As Usual’, creating multiple issues:
- A focus on delivering to a specific date rather than sustained business value, creating a ‘them-and-us’ mentality between programme and supporting business operations;
- Knowledge and learning is not fostered, the organisation remains over-reliant on point specialists;
- Teams are constantly changed, causing lost productivity and inefficiency. It typically takes six weeks to get a team operating at peak performance again if a team member is changed.
Agile organisations contain high performing change teams that can solve different types of challenges, flowing the work to the teams rather than people to projects. Knowledge is retained and a culture of continuous improvement and learning is fostered. Think twice before disbanding a high performing team. Next time a high performing change team is formed, keep them together and simply give them another problem or challenge to work on.
We are currently supporting a number of clients in Financial Services to create enduring multi-disciplinary agile change teams to deliver business outcomes organised around value. Our clients are increasingly calling these change teams of teams ‘value streams’, ‘tribes’ or ‘squads’. The key principle is to break through inherent waste caused by organisational / functional silos to create high performing client centric delivery teams organised around value.
4: Stop starting and start finishing
The rotation of business experts to change programmes on a part-time basis is a major source of inefficiency, as invariably they do not finish what they were previously working on. Context switching can cause an individual to lose up to 80% of a day in productivity1), causing business costs to rise in parallel.
We have observed specialists running up to 12 different initiatives in parallel, plate-spinning, and often competing against themselves to find the relevant help to execute a task.
Baringa has worked with a number of clients to increase throughput by between 20% and 40% by embedding ruthless prioritisation practices and eliminating the concept of multi-tasking.
Leaders must provide clarity on priorities and give individuals permission to finish a task before starting the next initiative in parallel. The simple mantra ‘stop starting and start finishing’ really works.
||From traditional programme construct
||To agile organisation construct
|The producer versus non-producer ratio.
||High non-producer to producer staff ratio to sustain.
||Non-producer to producer ratio of 70:30.
||Non-producer to producer ratio of <30:70.
|Lose the admin and focus on value realisation.
||Hindered ability to rapidly pivot in line with business needs.
Typical time to pivot = 14 weeks to one year depending on the nature of the challenge.
Slow governance/decision making.
Phase gate style milestone tracking.
Time for agile organisations to pivot = 1 sprint to 10 weeks depending on the nature of the challenge.
Fast decision making within guardrails.
Outcome/evidence based proof points.
|Moving the work, not the people.
||Stunted organisational learning and hindered continuous improvement.
Minimum time for a new team to reach productivity: 6 weeks.
Over-reliance on point specialists causes delays.
Siloed functional teams organised by department/function.
High performing change teams already in place – they are effective immediately.
Knowledge is retained and learning fostered. Single points of failure eliminated.
Multi-disciplinary client centric teams organised around value.
|Stop starting, start finishing.
||Asking subject matter experts and teams to context switch causes delays.
If a person is working on three initiatives in parallel, each task will take on average 20% longer than estimated due to context switching2)
In more severe cases, context switching can cause an individual to lose up to 80% of a day in productivity3)
The role of leaders is to provide clarity of vision and ruthlessly prioritise. Initiatives should be planned together to avoid experts being asked to switch context.
Baringa have found that the ‘Stop starting, start finishing’ mantra typically results in 20-40% increase in productivity of change teams organised around value.
Source: Jory MacKay, Context Switching can kill up to 80% of your productive time a day, May 2019
Leading SAFe, 2019