According to a 2012 Gartner study, “Small is beautiful — or at least small projects are easier to manage and execute. The failure rate of large IT projects with budgets exceeding $1 million was found to be almost 50% higher than for projects with budgets below $350,000.” The survey was conducted to provide insights into IT project performance in organizations across North America, France, Germany and the United Kingdom.
A 2012 McKinsey & Company study in conjunction with the University of Oxford looking at 5,400 large scale IT projects (projects with initial budgets greater than $15M) found that 17 percent went so badly that they threatened the very existence of the company. On average, the study found large IT projects ran 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted.
And the problem isn’t just related to so-called “IT projects”. In a previous post, The Wonders of Wishful Thinking, on the challenges of managing mergers and acquisitions, I included a quote from Roger L. Martin from a Harvard Business Review article: “M&A is a mug’s game, in which typically 70%–90% of acquisitions are abysmal failures.”
What’s puzzling to me is how organizations can continue to deliver successful small projects yet stumble badly on large projects. Especially when the lessons from small projects are scalable! As we’ll see in the following case, the approaches that work on small undertakings are equally applicable to large scale projects, IT oriented or otherwise.
Thanks to R.A. for the details on this story.
This large, American based, worldwide technology organization was struggling with its sales performance. While sales were increasing in absolute terms, the rate of growth on a year by year basis was declining and that decline had been accelerating over the last four years.
Senior management had looked at the issue and had brought in a number of consulting organizations to assess the problem. The findings included well regarded and competitive product lines, good cost control, productive design, manufacturing and distribution practices and effective customer service. The primary problem most studies identified focused on sales staff productivity. That problem was compounded by the organization’s strategic reliance on the sales organization as the conduit for client satisfaction, retention and growth.
The organization had hired a new VP of Sales six months prior. He was fully aware of the studies’ findings and conclusions. He understood the strategic significance of the sales force’s performance and capability. He recognized that improving sales staff productivity was his number one priority. So he launched a program to remedy the situation. He called it Ever Better, or EB for short.
The VP of Sales established the following goals for his Ever Better transformation program:
• To increase sales numbers by 5% annually over the next five years
• The scope of the initiative would include all management, sales and support staff within the Sales organization with assistance from the Information Services organization and external consultants as required.
• The content would cover all policies, processes, practices, locations and technologies
• The direction and timing of the remedies would be determined through discussions with clients and then active engagement of all Sales Department personnel
• Solutions would be delivered in small incremental releases on an office by office basis.
• Success would be measured by annual sales growth, client satisfaction, retention and growth and sales force satisfaction, retention and growth.
The Sales VP established a budget of $2 million and a fourteen month target to complete the changes. He believed that would give him a one year payback, a necessity if he hoped to achieve his 5% annual sales growth goal.
The Sales VP had worked with a project manager on a similar challenge in a previous job. They worked well together and delivered terrific results. The PM was a straight shooter and outstanding leader, exactly what the Sales VP needed right now. So the PM was offered the position. He accepted.
As soon as the PM was on board, the Sales VP and PM closeted themselves for two days to plan their approach, shown below:
The PM charged ahead and booked meetings with their client executives around the globe over the first few weeks. He followed that up, booking meetings with all the sales and support staff. He also developed a structured facilitation agenda for the meetings to get the most out of the time available. And then the meetings happened. It was a whirlwind of flights, hotels and meeting rooms, facilitations, note taking and feedback. After five weeks, they had covered 90% of their clients and 94% of their sales and support staff. The findings were illuminating:
From the clients
• Inconsistent follow-up to replenish inventory and address issues
• Lack of information on new or enhanced products and services
• Unreliable fulfillment of orders
• Sales contacts were by product line. Sales staff lacked an overall view of clients’ dealings with the company.
From the sales and support staff
• Lack of an overall view of a client’s dealings with the company was often a source of embarrassment and ill will
• Time consuming process to access a client’s order history across products
• Information on a client’s communications was kept by sales staff and so not accessible by others
• Announcements about new products and services varied by product line, some going directly to the clients, some to sales staff only and some to both
From the sales managers
• Very little information was available on individual sales staff plans and performance to manage and guide development
• Organizing sales staff by product line made it very difficult to get comprehensive client views.
The Sales VP and PM saw four areas of opportunity to improve sales performance:
1. Align sales staff by customer, not product line, with appropriate adjustments to sales and service compensation and recognition programs
2. Provide sales staff with client views showing order history and client communications from all sources
3. Provide sales managers with comprehensive dashboards to plan and monitor performance by client, staff and product line
4. Improve new product introduction processes so clients and sale staff received the information they needed in a coordinated and timely manner.
While the last item about product introductions was outside of the Ever Better program scope, it was low hanging fruit that couldn’t be ignored. The Sales VP and PM met with executives in the product development organizations to apprise them of their findings and get their commitment to improve the process. They were met with enthusiastic responses and promises to revise and standardize their processes.
The Sales VP and PM continued to work the plan, organizing a talented group of business, IS and contract resource to develop the target architecture including:
• organization changes to bring a client orientation to all sales activities
• resulting process changes
• new technology solutions to provide sales staff and managers with anywhere, anytime access to their information and functionality
• new web functions for clients to review product specs and order online
• interface changes and conversions from existing sales applications
The architecture group recommended two SaaS solutions to address the technology needs of the sales staff and managers. They were market proven and would allow the project to deliver quickly. They also accelerated and shaped the follow-on discussions about priorities and phasing and staging options.
Throughout these stages the PM organized and ran the day to day efforts. The Sales VP communicated and dialogued broadly with his staff, keeping them up-to-date on progress, soliciting feedback on plans and proposals. He engaged with his clients on plans and progress, in person and remotely. He kept his executive colleagues in the loop on a regular basis. Almost half of every day was committed to the Ever Better program.
Initial implementations involved an office at a time and a subset of the planned functionality. In fact, the first implementation occurred in month five with a limited slice of functionality and barely satisfactory results. But, pizza and beer with the Sales VP along with lots of laughs and rapid fixes left everyone feeling much more positive about the future.
That story was repeated across the sales organization and created a culture of openness and problem solving that paved the way for future iterations. Extra attention was given to the sales managers and staff and their clients. Facilitated feedback sessions highlighted successes and brought out opportunities to improve the introduction and implementation processes and the delivered solutions. Learnings and findings were applied to subsequent rollouts. And so, the Ever Better program progressed through to completion.
The Ever Better program was completed in sixteen months versus the planned fourteen months at a cost of $2.3 million, $300,000 over the original budget. The extra time and cost was due to expanding the scope to integrate product launches and enhancements into the program. Total sales increased by 4% in the first year, 9% in the second year and were trending well above the target 5% in the third year when I was given this case.
There were some challenges. Sales on a couple of product lines actually fell as the sales force was transitioning to a client centered organization. There were some resignations among the sales staff, also because of the client orientation. The problems were addressed expeditiously and the fixes included in future rollout practices. Most impressively, client, sales management and sales staff satisfaction levels all experienced double digit gains each year to midway through the third year.
The Title of this post is “Lessons from Small Projects Are Scalable”. At $2.3 million, the Ever Better program isn’t a small project. Yet, costs through the first few implementations were only $450,000. The costs incurred after that were simply replicating and expanding a proven, tried and true solution. The foundation had been laid. What came after was simply building on and benefiting from a solid, comprehensive base. The lessons did scale remarkably well.
How a Great Leader Succeeded
There is no question the Sales VP owned this problem and this project. His influence was felt throughout, from the project’s goals and scope to the selection of the PM, the discussions with client executives, sales managers and staff and ongoing updates to all concerned. There are ten factors that help explain the project’s success.
1. Executive sponsorship – ownership, passion, promotion, enlightened leadership
2. Clarity of vision – end results, road map, priorities and context – relations to corporate mission, vision, goals, strategies, priorities, culture and core values
3. Small is beautiful – time, cost, scope, impact, phased and staged
4. Focus on results – benefits, practices, behaviours, attitudes
5. Understanding worth – realistic benefits, relevant budgets and timelines
6. Engagement – commit, socialize and celebrate with everyone affected
7. Talent – the right skills, the right attitudes, when needed, in the quantity required
8. Collaboration – active participation in problem solving and solution development
9. Communication – up, down, sideways, in writing, in person, over social media
10. Measurement – overall sales, sales by product line, by client and satisfaction levels all around
So, be a Great Leader. Put these points on your checklist of things to consider on your next project so you too can successfully scale from small to large. And remember, use Project Pre-Check’s three building blocks covering the key stakeholder group (including the key stakeholder roles), the decision management process and Decision Framework best practices right up front so you don’t overlook these key success factors.
Finally, thanks to everyone who has willingly shared their experiences for presentation in this blog. Everyone benefits. First time contributors get a copy of one of my books. Readers get insights they can apply to their own unique circumstances. So, if you have a project experience, good, bad and everything in between, send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights. Thanks
Drew Davison is the owner and principal consultant at Davison Consulting and a former system development executive. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check – The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath – The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at firstname.lastname@example.org.