The Smartest Businesses Know How to Learn

Leveraging the information already resident in your people and company may be one of the most effective things you can do to decrease waste, increase productivity and even the longevity of your people’s commitment to the organisation.

Is a reluctance to change holding you back?

In most cases, people are busily getting on with what they do in the way they’re most comfortable. And that just happens to be the way they’ve always done things. A natural resistance to change (or uncertainty), coupled with the tendency not to do things until they have to be done (which is often too late), can result in errors and inefficiencies that seem to be built into the system.

Many companies struggle with instituting change, let alone a practiced philosophy of continuous improvement. Yet, as we move at a faster pace and competitive advantages become more and more focused on efficiency, making change on a regular basis and constantly improving is almost essential.

According to Hunter Dean, a Knowledge Management expert and Lean Enterprise consultant at Systemix, the role of business leaders today is as much about providing vision and the traditional aspects of leadership as steering an organisation toward effective knowledge management and leveraging learnings.

Knowledge is power

“Organisations that can truly learn from their experiences, both good and not so good, become very smart, very fast. This gives them confidence and agility which makes them very difficult competition”, Hunter explains.

Knowledge management and actively leveraging learnings are both critical factors at an organisational and project level to competing successfully in today’s market. So how do you approach this in your business?

Information is not enough

Your servers and people are no doubt full of information. But unless this information is retrieved, managed, shared and integrated in an effective manner it cannot translate to knowledge.

When it comes to determining if your information is truly knowledge, consider these few questions:

If your team learnt something of value today, how likely is it that…

  • They will still be using it still in six months?
  • That new recruits or people in other business areas will learn this too?
  • They will still be using and refining this information in 2 years or 5 years?

Knowledge is something that is resident in the company, not just the people or one or two divisions. It’s like the corporate wiki that everyone turns to and learns from.

So the key competency becomes: ‘How do we embed know-how for the long haul?’

Embedding know-how for the long haul

Systemix uses the ‘Know-how Pyramid’, an illustration of how information becomes knowledge that can reduce risk, increase productivity and overall business performance. Developed by a partner organisation, Information Leadership © 2012

Pyramid full size

Working through the pyramid, Systemix move organisations from the informal know-how space to the ‘definitive’ space where knowledge now underpins the fundamental functions of the business. Archicad 22 price

The process to achieve this involves the thorough investigation of either a project team or organisation as it is now in relation to the pyramid. This will reveal critical insights into the areas where knowledge is seeping away and how it can be harnessed more effectively. Then, through collaboration and communication, people can see the insights for themselves and design a new pyramid to work toward.

“Once we have communicated the insights we gain from this process, we focus on training and developing a roadmap to strengthen the method for learnings staying learnt,” says Hunter.

Through tightening business processes and workflows, implementing mechanisms to drive improvement, measuring the right things, making information more available through hard systems and zeroing in on key messages to communicate, an organisation or team can quickly become ‘smarter’ and more effective in a short space of time.

The Cascading Effect of Poor Project Governance

Projects can fail as a result of poor decisions or management at any stage from the initial tendering through to procurement and delivery. Almost always, the delivery team gets the blame, but a closer look reveals there may be other issues.

According to recent research by Caravel Group and Melbourne Business School, major project success rates in Australia are around 40-50% and this poor result can be attributed primarily to failures in governance.

These are the findings of a ‘self-assessment’ survey of approximately 100 public and private sector board, CEO and senior management-level project participants across a range of industries.

Governance at it’s worst?

We’ve seen the catastrophic results of poor governance play out with the Queensland Health Payroll disaster. In his recent report into the matter, Former Supreme Court judge Richard Chesterman QC plainly states “The replacement of the Queensland Health payroll system takes a place in the front rank of failures in public administration in this country. It may be the worst.”

In his report, Chesterson identifies numerous failures on behalf of both the State’s management and the supplier, IBM. But regardless of the blame and finger-pointing that takes place in the aftermath of a failure like this, it’s difficult not to draw the conclusion that better Project Governance could have led to a much different outcome.

Lessons to learn

The payroll fiasco will most likely be remembered for the pricetag – an estimated $1.2 billion in taxpayer dollars to remedy a $98m project – but according to Ken Lowe, Managing Director at Systemix, a Melbourne firm specialising in the management of complex projects, those close to the industry can learn much more from the findings.

Ken has been brought in to recover more projects teetering on the edge of failure than he can remember and in picking back over what’s gone on, he has to agree that in too many cases, governance was almost always found lacking.

“Often it takes some time before a (governance) team can acknowledge something is seriously wrong, even though failures usually don’t just happen. There is always a string of poor decisions that ultimately culminate in issues that simply cannot be ignored any longer.” says Ken.

Time Pressures and Project GovernanceThe real reasons for failure

It would appear that in many cases, human issues can get in the way of making good decisions or failing to recognise bad ones quickly enough in a governance team.  The reports highlighted in this article, as well as Ken’s experience reveal that good governance can be hijacked by conflicting motives, team dysfunction, accountability issues, poor leadership and even a lack of understanding of the true meaning of governance.

Graeme Cocks, Melbourne Business School Professor says “Too many governance teams are stacked with ‘stakeholders’ to secure buy-in rather than people with proven ability to govern projects. These people are often heavily conflicted and have no accountability for their project governance role.”

There are numerous instances in the Health Payroll Enquiry that also highlight how human issues impacted on outcomes. In fact, the summary of the enquiry is littered with human failings, stating that much of the trouble came down to ‘unwarranted urgency and a lack of diligence on the part of State officials.’ And in relation to a particular aspect of the IT, it is believed that fear of failing motivated poor decisions; ‘Decisions were made to press on regardless of other considerations which ought to have had a bearing on the direction of the Project.’  Lines of responsibility were blurred, and obvious conflicts of interest ignored.

“There are two key elements to good governance. The quality of the decisions made, and the quality of the team making those decisions: The two work hand in hand.” Says Ken Lowe.

The purpose of governance is to ensure a project meets the desired outcomes. The governance team is the advocate of the owners. It is tasked with the role of providing clarity around accountability and responsibility, and ensuring clear lines of communication exist at all levels.  Once this framework is in place the governance team provides oversight and monitoring around fulfillment of the strategic intent as defined in the agreed business case.

A governance team should operate within an agreed governance plan.  Its members should have a mix of skills and experience to ensure that there is an understanding of all aspects of the specific project and (importantly) of governance principals.  The most common departure from these principals is around conflicts of interest, usually arising from stakeholder representatives.

Systemix works with large organisations, public and private, on high-yield project performance solutions. The Systemix heritage was built largely on our expertise in commercial modelling and commercial alignment processes.  With a deep understanding of the systemic interplay between the commercial and psychological contract, Systemix has successfully established the commercial basis for many projects, programs and services agreements.