Cross functional teams

This past month has been very reflective for me. I have met many of my old colleagues from previous consulting projects going way back to the mid 90s. What has been interesting has been the observation that the battles we were fighting then are the same now. I would have thought that basics like the need for cross functional project teams working on a prioritised set of investments that are each going to deliver competitive advantage into the future would be mainstream and yet I still am frequently having to coerce and influence organisations into adopting this philosophy.

It was, therefore, very refreshing to read the article in last week's economist on Pixar. For those of you who have attended one of our training courses you will know that we are big fans of Carlos Ghosn, CEO of Renault and Nissan. Carlos is a genius in leading large disparate organisations to deliver a common vision of being the most profitable car company in the world. He turned both organisations around in the mid to late 90s and has been running both organisations since mid this decade, achieving what other car alliances and mergers have never been able to achieve....shareholder value. The reason I mention this in relation to the Pixar article is that it describes how Pixar used the continuous improvement principles of Toyota to generate constant and never ending improvements to their animated films. This shows how looking at high performing industry's in an innovative way and adopting their best management practices can provide real competitive advantage. The other reason Carlos came to mind when reading the article was because it talks about how Pixar manages to integrate the various creative talents of its 1,200 strong workforce enabling them to work across portfolios and comment and improve works that they are not directly involved in. This is a movie production house's version of cross functional teams. Creative design teams aren't besotted with their own projects but can be called upon to critique and assist other projects that are running in parallel. A rare thing in this industry. So once again, cross functional communication, integration and a common vision creates enormous value for in this case Disney and its shareholders (sounds like a management philosophy I like to peddle).

Prioritisation the impossible dream.

A rather rueful thought has befallen me after a hectic week following up on UniPhi leads from our recently completed road show. One of the big new features in version 5 is the ability to build a tailored made prioritisation framework and then apply this framework to each project in the various portfolios. Working with clients on this concept has made me realise that this is probably the most valuable piece of consulting we provide. It seems so simple and obvious a thing to do when compiling these frameworks that I often wonder where the IP is in what we are selling and yet working with senior executives and selling the benefits of a firm prioritisation framework that is rigidly adhered to is extremely difficult.

The benefits of these frameworks are massive and in my opinion, it is better to prioritise incorrectly than not to prioritise at all. Many organisations that are failing to generate competitive advantage aren't failing due to a lack of ideas or a lack of activity but are failing because of too many ideas and too many activities. Prioritising investments and actually delivering on the top 10 - 20 is bound to be more beneficial than trying to do all 100 and not delivering any.

It is with interest that I correlate this type of thing to organisations that announce random headcount reductions that are neatly rounded to the closest thousand or hundred but can never articulate where the chop is going to be. They usually need to send out "razor gangs" to crawl each silo'd department and ask them what they can do to chop heads. Of course, if they had a prioritised portfolio of investments, a considerable number of heads could be saved by killing low priority projects that are probably no longer viable in the changed environment. This should be a very quick and easy exercise if the organisation has an enterprise portfolio and project management tool that will give them the current status of the prioritised list. Add the killing of these projects to the rationalisation or divestment of businesses that are no longer making money should bring about real savings in a challenging environment and ensure that projects that still will deliver competitive advantage remain. It's the investments you make in a downturn that will enable you to print money in the upturn (just ask the sage of Omaha).

Readers of this blog would be able to see previous articles on stage gate financing and the like to see how best to apply prioritisation frameworks but in a week where this product has come to the fore yet again, I thought it was time to remind myself as well as those who may stumble across our work...PLEASE PRIORITISE!

Demand side solutions in government

We've been working with the South Australian Government for 4 years now on developing capability maturity in business case creation and investment justification. One of the more interesting observations of this work is that most solutions identified to solve problems are supply side solutions (i.e. more capacity or more functionality). Rarely are ideas generated that look to influence demand for services.

This observation (which to some may be trivial and even obvious) was further compounded the other day when I was driving my two children to school. My kids go to school 15 minutes from our house (thankfully driving against traffic). Even though it is only 15 minutes it is still a draining trip through and across the mass of cars moving their way into the city. As I sat at the traffic lights looking at this mass of traffic all I could think of was what a waste of time. Then it occurred to me that a colleague at work battles this traffic even though it would be possible to work from home. So this wandering thought pattern led me one question; why do we always go for supply side solutions. I'm sure most of the people sitting in that traffic curse the government for not making the M5 tunnel four lanes each way and I'm equally sure the people on the north short going across the spit bridge curse the single lane bridge but surely part of the solution is reduce demand in peak hours traffic. Of course easier said than done but this difficulty is the reason why demand side solutions have so much potential; the solutions have to be innovative and innovations = value.

So, from now on, as a management consultancy that targets the real asset investment market, we'll be exploring demand side solutions and seeing of we can't find something a little bit different from the norm...watch this space.