A Lack of Executive Commitment Threatens Business Success

By Charlie Mayes, Managing Director, DAV Management

A new study by Accenture found that a disconnect between chief marketing officers (CMOs) and chief information officers (CIOs) is threatening the ability of companies to deliver effective customer experiences. The study, based on a survey of 400 senior marketing and 250 IT executives in 10 countries, revealed that only one in 10 of the executives believe collaboration between CMOs and CIOs is currently at the right level. They do, however, agree on one thing: 90 percent of the CMOs and CIOs surveyed admitted that they needed to improve their level of collaboration.

Charlie Mayes

Recent findings by the Project Management Institute (PMI) reinforce this need for effective communications.  According to PMI’s Pulse of the Profession™ research, for every £1bn spent on a project in the UK, £169m is at risk of failure. This is an enormous slice of investment, and a figure which is £34m higher than the global average which means that this is a problem that is worse in the UK than in other parts of the world.   The research found that fifty-six percent of that amount is put at risk by ineffective communications and collaboration, indicating a critical need for organisations to address deficiencies in this area.

By its very nature, a major transformation programme will affect large numbers of people in the client’s organisation and, as change management business, one of our first objectives is to establish an effective working relationship between all those that have an interest in the successful outcome of the programme.  But we’re dealing with people here and sometimes, I’m sorry to say, this is easier said than done. In my opinion, the issues around communication and dysfunctional relationships within stakeholder groups are broad and usually stem from a lack of involvement at the executive level.

I think there is a lack of understanding on behalf of executives about the reach and range of their responsibilities as sponsors or Senior Responsible Owners when it comes to business change programmes.  Being involved in the pre-contract stage is a given for most executives and likewise the initial stages of the programme.  What is really telling is how well the sponsor or SRO stays engaged as the programme moves forward.  Most will attend scheduled governance meetings (although I’ve had to deal with some situations where execs have gone AWOL for these too) but, for me, it’s what happens outside of these that sets the truly effective sponsors and SROs apart.  Those that continue to act as a visionary for the programme, inspire those around them and maintain their ambassadorial duties, are the ones that ensure everyone stays committed and, ultimately achieve the best results for the business.

In reality, for any large scale business change programme, decision-making is not a solo activity but rather an orchestrated process where collaboration is needed between all parties in order to reach a successful conclusion.  It would be wrong to conclude therefore, that traits of leadership outlined above are the sole responsibility of the senior executive.  Indeed, the programme manager must display equivalent characteristics.  Although without the exemplar of the senior executive, the programme manager’s efforts will be diluted and thus less effective.

Don’t get me wrong, I completely understand the constraints on time that senior executives are grappling with. Trying to steer the business on a daily basis and undertake a large change programme in parallel is not easy. But this is about having a long-term view of where the business needs to be and the critical part played by the change programme in getting there, rather than merely meeting the short-term demands on one’s time.  It is about prioritising and having the ability to stay committed, driving the programme hard internally to ensure the benefits are realised.

So how do organisations maximise the chances that their programmes deliver the expected value on time and within budget?  I recently read another survey undertaken by McKinsey & Company of senior IT executives which indicated that the key to success lies in:

• Focusing on managing strategy and stakeholders instead of exclusively concentrating on budget and scheduling.
• Building effective collaborative teams by aligning their incentives with the overall goals of the programme.
• Excelling at core project/programme management principles, such as shorter delivery cycles and rigorous quality checks.

According to survey responses, an inability to master the first two dimensions typically causes about half of all cost overruns. Ultimately a lack of demonstrable commitment from executive or senior sponsors will chip away at the integrity of a programme and inhibit the ability of the appointed steering group to deliver.  It is important for executives to remember that whilst they may have delegated the day to day management of the programme they cannot outsource their overall accountability. Key sponsors must remain actively involved, otherwise as the PMI research indicated, a substantial amount of investment can be lost or put at risk. In today’s highly competitive world that’s a big gamble for any organisation to take.

By Charlie Mayes, Managing Director, DAV Management

A new study by Accenture found that a disconnect between chief marketing officers (CMOs) and chief information officers (CIOs) is threatening the ability of companies to deliver effective customer experiences. The study, based on a survey of 400 senior marketing and 250 IT executives in 10 countries, revealed that only one in 10 of the executives believe collaboration between CMOs and CIOs is currently at the right level. They do, however, agree on one thing: 90 percent of the CMOs and CIOs surveyed admitted that they needed to improve their level of collaboration.

Charlie Mayes

Recent findings by the Project Management Institute (PMI) reinforce this need for effective communications.  According to PMI’s Pulse of the Profession™ research, for every £1bn spent on a project in the UK, £169m is at risk of failure. This is an enormous slice of investment, and a figure which is £34m higher than the global average which means that this is a problem that is worse in the UK than in other parts of the world.   The research found that fifty-six percent of that amount is put at risk by ineffective communications and collaboration, indicating a critical need for organisations to address deficiencies in this area.

By its very nature, a major transformation programme will affect large numbers of people in the client’s organisation and, as change management business, one of our first objectives is to establish an effective working relationship between all those that have an interest in the successful outcome of the programme.  But we’re dealing with people here and sometimes, I’m sorry to say, this is easier said than done. In my opinion, the issues around communication and dysfunctional relationships within stakeholder groups are broad and usually stem from a lack of involvement at the executive level.

I think there is a lack of understanding on behalf of executives about the reach and range of their responsibilities as sponsors or Senior Responsible Owners when it comes to business change programmes.  Being involved in the pre-contract stage is a given for most executives and likewise the initial stages of the programme.  What is really telling is how well the sponsor or SRO stays engaged as the programme moves forward.  Most will attend scheduled governance meetings (although I’ve had to deal with some situations where execs have gone AWOL for these too) but, for me, it’s what happens outside of these that sets the truly effective sponsors and SROs apart.  Those that continue to act as a visionary for the programme, inspire those around them and maintain their ambassadorial duties, are the ones that ensure everyone stays committed and, ultimately achieve the best results for the business.

In reality, for any large scale business change programme, decision-making is not a solo activity but rather an orchestrated process where collaboration is needed between all parties in order to reach a successful conclusion.  It would be wrong to conclude therefore, that traits of leadership outlined above are the sole responsibility of the senior executive.  Indeed, the programme manager must display equivalent characteristics.  Although without the exemplar of the senior executive, the programme manager’s efforts will be diluted and thus less effective.

Don’t get me wrong, I completely understand the constraints on time that senior executives are grappling with. Trying to steer the business on a daily basis and undertake a large change programme in parallel is not easy. But this is about having a long-term view of where the business needs to be and the critical part played by the change programme in getting there, rather than merely meeting the short-term demands on one’s time.  It is about prioritising and having the ability to stay committed, driving the programme hard internally to ensure the benefits are realised.

So how do organisations maximise the chances that their programmes deliver the expected value on time and within budget?  I recently read another survey undertaken by McKinsey & Company of senior IT executives which indicated that the key to success lies in:

• Focusing on managing strategy and stakeholders instead of exclusively concentrating on budget and scheduling.
• Building effective collaborative teams by aligning their incentives with the overall goals of the programme.
• Excelling at core project/programme management principles, such as shorter delivery cycles and rigorous quality checks.

According to survey responses, an inability to master the first two dimensions typically causes about half of all cost overruns. Ultimately a lack of demonstrable commitment from executive or senior sponsors will chip away at the integrity of a programme and inhibit the ability of the appointed steering group to deliver.  It is important for executives to remember that whilst they may have delegated the day to day management of the programme they cannot outsource their overall accountability. Key sponsors must remain actively involved, otherwise as the PMI research indicated, a substantial amount of investment can be lost or put at risk. In today’s highly competitive world that’s a big gamble for any organisation to take.