What’s in this for me?
One of the more interesting errors of omission I encounter often in architecture or business transformation programs is the absence of a clear, well articulated value proposition for all interested stakeholders. We call this the “what’s in it for me” for each stakeholder from each of their perspectives. Why is this important? The benefits to the business should be obvious, right? We (the program team) firmly believe we can reduce costs, improve profitability, manage process compression, enable growth, and improve the customer experience as a result of our efforts. This is obvious, right? This is crystal clear to us. But what about the stakeholders outside of the core program team?
What is usually less clear to others is the impact and perception the proposed program or technology introduction will have across the organization. We are human after all, and the one thing I know is most humans are terrified of change – any change. This is compounded by the dynamics (some would say web) of conflicting agendas, misguided incentives, and a host of other perfectly natural attempts to optimize and guide an organization competing for scarce resources to meet its strategy goals and objectives.
Different Perspectives
For example, let’s just omit organizational (line of business) or geographic boundaries for a minute and just focus on typical roles we find in every organization and try to understand what is really important to each ( “what’s in this for me”). Examples here are vastly simplified for clarity (and generalized without industry specific needs) but I think they will help to illustrate my point.
Chief Executive Officer
- Earnings Per Share, Share Prices Appreciation
- Dividends Per Share
- Price to Earning Ratio and Market Book Value
- Value Drivers
- Leadership recognition and respect of peers in the industry
VP Operations
- Gross Margin
- Profitability (Margin e.g. EBIT, EBITDA, NOPAT)
- Operating Expenses
- Asset Turnover
- Working Capital Management, GMROI (for Retailers)
- Actual Employee Turnover Costs
Chief Financial Officer
- Cash Flow
- Debt to Asset, Debt to Capitalization, and Interest Coverage Ratios
- Cash Flow / Share
- Return on Total Net Worth, Return on Common Equity
VP Marketing
- Growth (lift, where is it occurring in the business and why)
- Market or Wallet Share
- Effectiveness of Campaigns
- Selling Together (propensity)
- Not Selling Well (end of life, uncompetitive)
- Selling in What Market
- Portfolio Erosion or Segmentation Trends
VP Sales
- Customer Intimacy (Satisfaction)
- Their Competition
- My Next Sales Opportunity (managing the pipeline)
- What is Selling Now
- Cross-Sell and Up-Sell Opportunity Realization
As you can see this covers a very wide range of needs at the executive level in this simplified view of the world. And why we need to be very careful about the law of unintended consequences. A growth objective for example, may adversely impact profitability in the near term or cannibalize an existing product line. Or what is more common, reducing key process cycles may expose or create stress in downstream consumers of key outputs, For example, sales may be overwhelmed by new channel development through an effective introduction of customer acquisition tools or a series of highly successful marketing campaigns driven by improved analytics, one right after the other, driving up working capital needs to support new business levels. This is what I call a “high quality problem”.
Solving for this is one of the real pay-offs for using the method I will share with you. Defining the “what’s in it for me” in our stakeholder community means we can gain a better understanding of what really drives decision making in an organization. And why people do what they do (even if it doesn’t make sense to us). This also explains the optimization trade-offs that are made that sometimes leave us scratching our heads and wondering why the “killer” no-brainer investment is shelved, orphaned, or simply encouraged to just “go away”. In some cases, what we thought made sense to ourselves is viewed a real and present threat to others – not exactly what we ever want when embarking on a long difficult transformation program.
More than benefits
We are probably much closer to the real benefits and costs than our peers (they have a business to run after all) having lived through the detailed planning and development of a defensible business case and program master plan. As a result of our hard work we should be able to begin to assemble a well defined set of generalized, quantifiable benefits. The usual suspects would include:
- Business
- Improve Customer experience and loyalty
- Shorten latency and response times
- Improve Quality in Delivery (e.g. perfect order fill rates)
- Improve Time to market (cycle compression)
- Improve productivity (more value-added activity)
- Preserve intellectual capital
- Encourage reuse – standardize on a repeatable processes
- Minimize Rework
- Improve management visibility into the business
- Technology
- Modernize and Simplify Business Processes and Systems
- Define core master data once and use everywhere
- Standardize tools and processes
- Adopt global data definitions, policies, and standards
- Adopt specific governance policies, procedures, and metrics
- Transform information and data from one structure and format to another
- Enrich the same data where needed or requested
- Reduce costs of operations and maintenance
This is not enough. What we have now is a solid starting point to begin associating each stakeholder to one or more of the benefits above expressed in their terms with specific examples we can all relate to.
What to do?
Armed with this understanding now it is time to roll our sleeves up and get to the real work. We should be able to tie each relevant (not all may apply) benefit to each stakeholder’s needs clearly and articulate the value proposition or “what’s in it for me” for each of them.
Using an IT Portfolio Improvement initiative as an example we would start with the collection of both direct and indirect stakeholders this program initiative would impact. More than likely based on their role they would probably agree with many of the generalized business and technology benefits cited earlier. For each of these stakeholders, we then need to describe their true interest as we understand it. For example the CIO’s true interest may be in realizing a reliable and dependable process is in place regarding cost performance of CAPx and Operating expenses for all IT investments. For project managers that want to see good performance data, there is clearly solid interest. On the other hand, other project managers may consider proper accounting a wasted exercise outside the area of project management with little or no value to themselves.
The next step is to understand where we need each stakeholder to help us succeed. In our example, the CIO is needed to sponsor the project, review and approve recommendations on implementing project solutions, and issuing communications directly to Project Managers or through a PMO group. In our example, we need to leverage those Project Managers that agree the process is broken and highlight their success to drive full scale adoption to other projects that may choose to ignore or block project recommendations and solutions.
After this is completed we need a strategy for communicating with each stakeholder to ensure success. For the CIO, we need to provide weekly updates through the PMO Director and monthly briefings we participate in directly to share project results and work products. Our strategy with the project managers is a little different. We would probably identify and include a selected group of project managers for test piloting proposed solutions. We would include this same group in progress reports throughout the project life cycle. In addition, we should plan on communicating updates and news alerts to the entire population of project managers as well to maintain a consistent repeated set of messages to encourage adoption of the piloted solution.
So when planning a program of any significant size and impact you must know your stakeholders. This means being able to clearly articulate the “what’s in it for me” for each of them, and actively managing this reality over the life of the initiative. Anything less and we risk the probability for reducing the successful adoption of our program or project.
