The Risk Standard is a generic guide for managing risk. It caters for a wide range of needs and, therefore, assesses risks up to the point of organizational catastrophe.
Our approach to risk management has simplified the standard’s approach so that it is more relevant to projects. Our approach is designed to highlight high-risks to the project that may not rate as high-risk on the standard’s organization level-oriented scale.
Alignment and adaptations
The standard’s concept of ‘Context’ we have incorporated as project-specific, measurable “Environment” risks.
With the Likelihood ratings, in the standard there are up to seven levels (A->G; Almost certain to Barely conceivable). We have simplified these ratings as follows
| Standard |
VDM rating |
|
|
| A-B |
High |
Likely |
| C-D |
Medium |
Possible |
| E-F-G |
Low |
Unlikely |
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Val-IT is an extension of the CobiT IT-governance framework. CobiT covers ‘Are we doing projects the right way? and ‘Are we doing them well?’ Val-IT covers ‘Are we doing the right projects?’ and ‘Are we getting the benefits?’
While both VDM and Val-IT are value-oriented, Val-IT is very IT-centric whereas VDM is business-strategy centric. For example, in Val-IT the ‘Executive’ has no role in business case generation, in VDM the executive Sponsor governs and ‘owns’ the business case.
Val-IT is primarily a framework that says what needs to be done. VDM is a process that spells out ‘how to …’ deliver the value. The majority of the Val-IT components are included in one or more of our VDM processes. We don’t fragment the approach to project value as much as Val-IT does, we make it an end-to-end process.
VDM takes the Val-IT emphasis on value and provides the business strategy perspective and “How to..” guidance within an overall value and project delivery context — ie we translate Val-IT’s intent into practical business processes and value.
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PMBOK is a “body of knowledge that identifies the scope of project management activities” so as to foster comprehensiveness and consistency. Its aim is to be applicable to all types of projects and, therefore, it can tend to contain the lowest common denominator resulting in specialized needs (eg organizational change management) are not included.
It is primarily a guide to project management approaches (rather than a full-scale project delivery methodology) and is organized into nine primary areas. Value Delivery Management (VDM) impacts five of these areas.
VDM represents an overlay to PMBOK and adds a new emphasis on value management.
Alignment and adaptations
VDM adds and expands to the following five PMBOK areas:
- Communications
Enhanced communications and stakeholder management approaches to more specifically target, manage and leverage stakeholders to ensure the success of the project and the realization of its value.
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The ILM was launched in a book called “Benefits Management” which is unfortunate because people therefore think if is a benefits management tool. It is and it isn’t.
The ILM was designed by Cranfield University to enable IT departments to link IT investments to business benefits so as to overcome the often large conceptual gap between all of the investment in IT and the business results desired.
The ILM has five key sections
The idea is that you can read right to centre and left to centre to see the benefits that arise from your actions and technology investments. All of this is done in ‘loosey-goosy’ language that requires separate KPIs to be defined by which the benefits can be measured. All a bit vague and unmeasurable (the exact opposite to the Value Equation).
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Our new change triangle is now a double triangle as follows:
The double change triangle™
What this means is that
- if you are considering change you need to consider all seven dimensions.
- when you look at your change management processes they need to explicitly acknowledge and deal with each of the seven dimensions
- you need to be able to assess and address each of the seven dimensions in making change.
More experienced practitioners will immediately see why their people-process-technology approach to change has left holes and not delivered the desired smooth or effective change at times.
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Continuing our discussion of the people – process – technology triangle.
The final two elements are direction (strategy) and means (information).
Strategy Many organizations complain that they “don’t have a strategy”; by which they mean they don’t have a written, documented “strategic plan” document. But every organization has a strategy even if it is not written down or even consistent.
To effect change you have to understand the strategy, what’s behind the thinking and direction of the organization. Is it business unit autonomy or central services? Market leadership or specialized services the big boys don’t do? Product specific or outlet focused? And so on.
Actually you need to differentiate between what the strategy is (as is being done in practice) and the strategic intent (what is believed should be happening).
For example, an electricity utility had a strategy of becoming a multi-utility utility, taking on gas, water and telecommunications. Meanwhile, its real strategy-in-practice was focused on minimising the chances of power failure with no action being taken to realize the greater strategy. A change strategy to implement a multi-utility utility would not have gone far despite the strategic intent. If you believe the spoken strategy and ignore the actual strategy you will be undone.
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Continuing our discussion of the people – process – technology triangle.
People don’t work in a vacuum. There are two dimensions outside of their control that directly impact how they work — Structure and Culture.
Although structure is supposed to follow strategy this is not always the case; especially where the strategy is not clear or consistent. But your structure, how accountabilities and roles are divided up can directly impact how people work. And the visible structure does not need to change for things to change.
For example bank managers are still bank managers but their power and authority has largely been eliminated. They are now staff managers rather than lenders or account managers. From the outside the structure looks the same, but the reality is the accountabilities have been radically changed.
So, structure is more than just who reports to whom, but also how the roles relate and how accountability and authority is assigned.
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I was in an art gallery recently when I saw a painting that was inappropriately framed. “How should it be framed?” asked the gallery owner when I said this out loud, “I don’t know, but I do know that is not right,” was all I could say.
We all have situations where we know something is not right but don’t know what or how to correct it.
I’ve always had this feeling with the infamous “people-process-technology” triangle. I’ve always known it was flawed but did not know why.
Now, eventually, I’ve turned my mind to it and found it’s the wrong triangle!
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This week a slight divergence into the world of Governance.
If your organization wants to be sure that it is making the most appropriate use of IT, in the most appropriate way, and is protected against the risk of failure, Governance of IT will be of interest to you.
Governance of IT is a topic of significant importance for Board and Executive levels as they recognize the importance of IT to their organizations and move to effectively direct and control it.
Mark Toomey has been the pioneer behind firstly the Australian Standard for governance of IT and now the international standard. He also publishes a regular newsletter on the topic.
He has just published his latest newsletter which he has agreed to make available to you all. If you go to http://www.infonomics.com.au/Newsletter.htm you can sign up for this newsletter and access real thought leadership in this important area.
Mark also has a book coming out soon on Governance of IT which you can find out about by subscribing to his newsletter service.
Jed Simms
Our consulting company, Capability Management International, is 15 years old this year. So we start the year with 15 of our most critical insights.
“We need a new ‘Project Delivery Science™’”
I recently sat in on a project team management meeting. They agreed that the project (which was under 3 months old) was off the rails and they did not have the capability to deliver the expected benefits. I was thinking, “You could, but not with the conventional project and change management approaches you are using.”
Conventional project and change management approaches have been proven to be deficient. Although everyone works hard, is committed and tries to do their best, the results are poor. The current project methodologies focus project effort on the wrong outcomes, measure them with the wrong KPIs and wonder why they’re not a success.
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