There has been a lot of chatter recently about rebooting GDS (Government Digital Service). Don’t get me wrong, GDS has made mistakes but some were actually my fault. I made a terrible assumption in writing the “Better for Less” paper to do with mapping and how much people were aware of it. In hindsight, I should have pushed mapping into that paper rather than leave it in the background. So, in order to avoid making this mistake again, I want to extend this question of rebooting GDS and tackle the scenario of a newly minted executive (CIO, CEO et al).
The first thing you’re probably going to feel is a bit of panic. Who put me in charge? I know there is the temptation to stamp your mark on organisation, to create that strategy which will propel the company to fortune but I’m going to ask you to hold your horses. The Titanic might be sinking and we’ve got to plug the massive great big hole before messing around with the deckchairs or plotting a new course. To begin this journey, I’m going to introduce you to the strategy cycle.
The components of the diagram are :-
1) Have a purpose, a moral imperative.
2) Observe the landscape you’re operating in and the climatic patterns that impact it (in terms of business we call these economic patterns). These patterns are useful for anticipation of change.
3) Orient your organisation around the landscape using basic principles (known as doctrine).
4) Decide where you’re going to attack the market, gameplay the landscape to your favour and act. This is collectively known as leadership.
5) It’s a cycle — every time you or anyone else acts it can change your purpose, the landscape, where you need to act etc.
I’m going to assume you don’t have a map of your business landscape. You might have things like business process maps, systems maps, mind maps and a host of other things called maps but none of these are actually maps. The odds are, you’ve never seen a map of business and you’re blind to the environment. But that’s ok, almost everyone else is in the same boat.
When it comes to using the strategy cycle then in these early stages we’re going to skip climatic patterns, anticipation, gameplay, leadership and all that good stuff. Instead, we’re going to focus on doctrine and how to stop the organisation from actively harming itself. We’re going to plug the Titanic!
How? Well, we’re just going to loop around adding doctrine.
There are forty patterns (i.e. principles) that make up doctrine. These are all universally useful to any organisation but not all principles are made the same i.e. some are more important than others. Hence, I’ve provided a phased implementation of doctrine and we’re going to start with a few principles in phase I (marked in blue). These principles are challenge assumption, know your users and know your user needs.
But how to introduce challenge into the organisation? Doesn’t challenge already exist? Why challenge?
Ok, for most organisations you have endless lists of committees — global architecture group, business strategy forum, policy committees etc. They are generally full of well meaning people but there’s usually not a lot of actual challenging going on and communication is nearly always suboptimal. If the organisation is of any size it’ll have lots of waste, failed efforts, bias and duplication but no-one can really tell you how bad the problem is. When most executives stumble on this, they often want to take stock.
Taking stock of a large estate (whether IT or otherwise) is usually a pretty daunting task and the problem we’re trying to solve is not “what we have” but “don’t do silly things in the future”. Hence we really don’t need to know how much waste we have, we just want less of it. This is why we’re going to iterate around the cycle adding doctrine. No big bang approach, just lots of small steps.
To start, we’re going to introduce a group which will become a future bedrock of strategy in the organisation. That group is Spend Control.
The beach-head of Challenge
The purpose of spend control is simply to challenge what we’re doing. It’s important to remember that it doesn’t control the budgets. Those budgets belong to other departments or business units. Spend control simply says that if we’re going to spend more than £25K on something then that has to be presented to us and exposed to a bit of challenge.
To begin with, spend control should simply ask — who are the users, what are their needs and by what metric will we measure those needs? You can even reinforce this by going around leaving posters of “What is the User Need?” or sticking it on the back of your phone as per Liam Maxwell (former UK Gov CTO)
Who are the users, what are their needs and by what metric will we measure those needs — surely everyone does this? You’d be surprised. Last time I counted, less than 20% of organisation could clearly identify their users and far less could describe their users needs. You might be lucky and be in one of those exceptional organisations but chance are, you’re not.
So, how does spend control work? Well, a project owner turns up at spend control with a project that they’ve got budget to spend £100K on. Spend control asks who are the users, what are their needs and how we will measure this? The response can often be “I don’t have a clue, it’s only a £100K”.
Well, spend control’s job is to ask the project owner to find out. But remember, the project owner is also the budget holder and so they can simply ignore spend control on the grounds that “It’s a waste of my time”. You’d be amazed at how many people try to get exceptions to spend control because they believe that they are too important to be challenged on basic questions.
Let us assume the project owner decides to ignore spend control and does the work anyway. They might be successful but the problem for the project owner is when the project fails. It’s a problem because there is paper trail that they refused to answer the most basic of questions. This is the other side of challenge — you need to ask the questions and audit what happened.
What is also happening in the background is that spend control is building up a picture of things we might be doing (the projects coming into spend control), the users we serve, their needs and how we measure success. It’s also building up a picture of which project owners listen, accept the challenge, succeed in projects and understand their users. This is all good stuff.
At some point, maybe six months or a year into the process, then spend control needs to have a showdown with one of those failing project owners. You’ll need to emphasise that people can’t keep on just doing stuff without understanding the users, their needs and some basic metrics to measure against. This showdown is rarely comfortable but you need to push for no exceptions to the idea of being challenged. Once you’re there, the beach-head of challenge has been established then we can start to ramp things up.
At this stage, we going to extend spend control to ask more questions. We’re going to go beyond just simply users and their needs but start to look at what is needed to build a project. I’ve highlighted the extended set of phase I doctrine that we’re going after in blue.
The first thing spend control should ask people for is a map. This is a fairly simple exercise — you start with the users, their needs and then work out the components involved in making that happen. You do this through a chain of needs i.e. this needs that which needs that etc. The tricky bit with a map is you need to also put down how evolved the components are. There’s an entire book on this, so I won’t repeat that here but to give you some comfort, all maps are imperfect. In fact, they have to be in order to be useful. So don’t worry about making the perfect map, that’s not the point.
By way of example, I have provided a very simple map for a tea shop.
The map is far from a perfect map of a tea shop, however the goal is not perfection but to allow challenge. Hence, we can note that there are lots of components missing from this map from furniture to a method of taking payment. By sharing any map with others we can often find basic things that have been missed. We can also challenge in terms of what we’re doing i.e. why are we custom building kettles?
These maps are in fact maps of capital (with flows and stocks). So we can add metrics to the map. Each line is a bidirectional exchange of capital i.e. the user gets a physical flow (the cup of tea) in return for a financial flow (money to pay for the cup of tea). The capital itself can be physical, financial, social, risk, information — all sorts of things. Yes, we can also build P&Ls and cashflows from this.
We’re now asking who are the users, what are their needs, how will we measure this, what components are involved, where is the money going and challenging across the lot. As we get more maps, we can even discover duplication between maps i.e. we’re building the same thing twice. The worst duplication I’ve found in Government is 118 times. The worst I’ve found in the private sector is a finance company that has managed to rebuild the same thing over 1,000 times. Do remember, it’s not because people are daft but because of suboptimal communication. People just don’t realise they are doing this.
Let us repeat those steps just to be clear.
Step 1 — Focus on the user needs which means you also need to identify the users.
Step 2 — Know the details i.e. what is involved in building the thing. This allows others to challenge, find missing components and create a common image which can be communicated with others.
Step 3 — Reduce duplication. When we have several maps then we usually start finding duplication rather rapidly. In general, I hold a view based upon experience that over 90% of the P&L of most organisations is waste. It’s a far bigger problem than people realise and I’m genuinely surprised by organisations that have any sort of handle on this problem.
Step 4 — Reduce bias. I can’t tell you the number of times I’ve come across organisations custom building that which is a commodity because this is incredibly common. I’ve had people looking to invest in robotics (with lovely business cases provided to show an ROI for the capital investment within 12 months) to improve the efficiency of some workflow for a problem that only occurs because they’re custom building something which is a commodity. In this case, the item was custom built racks, the problem was standard servers didn’t fit into their custom built racks requiring people to remove cases, drill holes and add new plates. The “proposed solution” was to replace people with robots in order to remove a bottleneck in the workflow. The actual solution was to stop making custom built racks and start using standard racks. This sort of stuff is so common, that as far as I can tell it is the norm in large organisations.
Hence, use the maps to challenge and question — why are we custom building this thing?
At this point, you want to give the changes another six months or a year to bake into the organisation. Spend control should be challenging across a much broader spectrum of things from the user needs, to the components involved, to duplication, to bias and where we’re spending money.
Whilst the process of making a map is fairly quick — a few hours or so — it is also something that spend control can help others with. But expect resistance. Everyone likes to talk about the importance of challenge but no-one actually likes to be challenged. There will be lots of demands for exceptions and why this or that project is too complex to go through the process and a host of other excuses.
Don’t get disheartened. In some cases, spend control will be able to really help others by showing them that what they’re building is also being built by others. This will enable people to focus their efforts on stuff that matters, to get rid of the common (the boring) or even identify opportunities across multiple maps for building common services. You will find that spend control has its champions.
But there will always be those who think they’re too important. Just remember to record the advice given, those project which ignored the advice and what the end result of the project was. Build that evidence base. I’m afraid you’ll probably need a few more confrontations with failed projects before it becomes accepted that challenge is not a bad idea.
What is also happening behind the scenes is you’re also now building a view of the landscape that you’re competing in. All those maps are connected, part of a wider landscape and you’re starting to get a view of this and your estate.
Finishing Phase I
At this stage, whilst things should be getting better, you’re still going to have oodles of failed projects. You need to have built that evidence base and trust before you really embark on this part of the journey which is all about completing phase I (highlighted in blue).
To begin with, we going to have to start breaking down projects. Just because we have a map, doesn’t stop people trying to build the entire map in some Death Star like project outsourced to their friendly SI. You’ll need to introduce ideas like FIRE (Fast, Inexpensive, Restrained and Elegant — see Lt Col Dan Ward) and constraints. What we need to do is break things up.
Step 5 — break into small contracts.
You will get howls of resistance to this is because it makes the landscape more complex. Project owners will complain that they’ve got multiple contracts to manage now along with the interfaces between them. Please note those interfaces already existed and no amount of pretending they don’t by trying to hide it in a big contract is going to make them go away. Breaking into small contracts is vitally important because it means we can now apply appropriate methods.
Step 6 — apply appropriate methods.
You might not be aware of this or it might be a bit of a shock to discover, but there is no magic one size fits all method for project management anymore than there is for purchasing. I’ve been using maps to apply appropriate methods for 13 years and I’m still stunned to find people who do not know this. You’ll need to apply multiple methods at the same time for any large system. Hence you’ll tend to outsource those more industrialised components on the right whilst building in-house with agile techniques those uncharted and uncertain components on the left. You’ll also use different purchasing mechanisms across the map. The overwhelming majority of large scale failures that I see come from misapplication of techniques and almost all of them can be anticipated before the project has even started.
The typical failure is someone takes a project like the one above and outsources it all in one big contract. To mimic this, I’ve just marked all the “mini contracts” as outsource in the map below. If you look at the map, the components on the left hand side are in the uncharted space i.e. novel, new and changing. We can’t actually specify them because they constantly change. Hence sticking them in a contract with components on the right hand side that can be specified always ends up with excessive change control cost overruns. Invariably people argue that next time we need to specify it better but we have a word for those people — it’s called “wrong”. The solution is to use appropriate methods.
Step 7 — Learn about context i.e. what works where.
You will find this causes even more howls of resistance. The number of times I’ve had people shouting at me that Agile or Lean or Six Sigma works everywhere but the other techniques don’t is too many to count. They don’t work everywhere. They each have their own context.
By the way, making mistakes like applying inappropriate methods (as shown above) is how we learn patterns with maps i.e. we learn that there are appropriate methods. This is one of the big things about mapping — it’s not only for challenge and communication but also learning. You have a map, you apply some action to it, you then observe what happens and if you’re lucky, you’ll discover a new pattern.
This learning can be passed on from one project to another. Helping and advising project owners on how to manage their environment is where spend control can truly shine. Spend control will already be on the path to becoming the intelligence function that every organisation needs. But let us not get carried away with the future. At this stage you’ve completed all the doctrine in phase I and should be embedding that into the organisation through spend control. You’re challenging across multiple aspects from the user, user needs, components, how we treat them, where we spend money etc. All the time you’re learning about the environment and what methods work where, removing duplication and bias and hopefully becoming fitter and leaner.
You should be a couple of years into your journey. We’ve still several more phases of doctrine to go and we’re years away from creating adaptive cell based organisational structure that use multiple cultures to cope with evolution (see below) but we’re better than we were. We’re also a good 5–10 years away from being able to effectively anticipate change, to use maps to target the landscape and to learning how to manipulate the market in order to write strategy.
I know lots of people are fairly fervent that they need to build this “AI based blockchain digital ecosystem platform” thing but it really doesn’t matter. What matters is we’ve started our journey into understanding our environment and we’re learning. Later on, you’ll be able to run circles around those who haven’t despite their oodles of cash, engineers or advantage. It took 18 months (from 2008 to 2010) and less than £0.5M to take over the cloud with Ubuntu versus Red Hat and Microsoft. Maps are powerful weapons.
At the beginning, I did say hold your horses on organisational change and strategy because the honest truth is most people haven’t got a clue how to do this — it’s pretty much all random, blind luck, memes picked out of the air and gut feel. The reason why you felt panic is because you didn’t know what to do. The good news is, most executives don’t either.
Rather than blindly stumbling around, it’s better to have made our first steps as mapping is itself a journey. Don’t panic if your organisation has nothing that resembles spend control, that’s normal. This can also be to your personal advantage as you’re bound to run up a number of quick wins i.e. you’ll discover those £60M projects which can be built for £800k. Of course, you’ll get some serious push back in terms of politics.
If you persevere then you will eventually get to the point that you can play those more advanced games but start with these basics. Often people ask me what sort of targets should I set for mapping? As a rule of thumb in the private sector, by the time you complete the first phase of doctrine then you should probably set a stretch target of demonstrably reducing waste in the P&L to about 50% or below i.e. less than 50% of the P&L expense is waste. Obviously, some players are already far better than others. In Gov, there tends to be less waste because there are pre-existing mechanisms of challenge such as the MPA (major project authority), NAO (national audit office) and PAC (public accounts committee) but even in such spaces, it’s more than possible to save billions. It’s a rule of thumb because few will have any real idea of the scale of duplication, bias, misapplied techniques, irrelevant user needs or badly designed contracts. People will ask you how much can be saved? What evidence supports this? But no-one will be able to answer how much waste exists. You’ll have to discover the baseline as you go along.
When it comes to the original question of rebooting GDS, I can’t emphasise enough the importance of focusing and doubling down on spend control. For myself, next time I get involved in writing a “Better for Less” paper then I’ll make sure that I add maps. Front and centre.
Originally published at blog.gardeviance.org on October 30, 2018.