There’s a scene I’ve watched play out umpteen times over the past three decades. The setting is the boardroom, and the starring role is played by a question that I’ve seen posed by some of the most astute non-execs I’ve had the pleasure of knowing. Usually it is directed to the member of the c-suite who is designated as the executive sponsor of the current over-running, over-spending, slippage-laden transformation programme. Four simple words:
“Are you in control?”
It’s such a simple question, but answering it is laced with all sorts of difficulties. A long answer to a short question can often seem evasive, but a short answer can seem superficial. I’ve seen this question handled in a range of ways, so I’ll give you the good, the bad and the ugly answers – in reverse order.
The ugly
NED: “Are you in control?”
Sponsor: “In what sense do you mean ‘control’?”
NED: “Hmmm, if we’re having to explain the concept of ‘control’ to the executive sponsor of the programme, we’re in a lot of trouble.”
The bad
NED: “Are you in control?”
Sponsor: “Yes.”
NED: “Then how is it that we reached the point where a programme that was forecast to take 2 years and cost £42M is now in year 5, unfinished and has already spent £439M?” *
[*The spend to completion actually topped out at £530M]
The good
NED: “Are you in control?”
Sponsor: “If you had asked me that question 3 months ago, I would have answered ‘no’. Consequently, we’ve taken a number of steps to assert control. These include a very different approach to planning and execution, a new approach to risk and issue management that converts reactive into proactive, and greater precision in governance that has enabled far better situational awareness, genuine decision-making and direction-setting from the top.”
The sponsor then went on to set out what the board should expect to see over the next six months: Progress, milestones, key indicators of the health of the programme. It set the scene beautifully for the next board meeting where the exec was able to recap on those points and then proceed to update the board on each point in turn: “We told you ‘x’ would happen. It was delivered on date ‘y’. Our risk exposure has been managed down from a cumulative risk score of ‘a’ to a residual risk score of ‘b’. ‘c’ percentage of our delivery at task level occurred on or ahead of time in the last reporting period. 22 instances of potential slippage were detected and intercepted in real time and before the critical path was impacted.”
It was genuinely impressive; demonstrable, fact-based control.
We always advise executive sponsors to challenge themselves with the ‘control’ question constantly. Here are four good questions to assess control:
1.
Do you know what the programme’s burn rate is? (You should, because that tells you the cost of a day’s slippage.)
2.
When do you become aware of slippage? At the time it happens? The immediate aftermath? At the next programme milestone? (If it’s at the milestone, it’s an expensive fait accompli.)
3.
Do you know the overall risk exposure of the programme. Do you know its trajectory? Do you know the cumulative costs associated with the risks? (If the answer is ‘no’, that’s a blank cheque situation.)
4.
Do you know the cycle time – the average duration from issue identification to resolution? (It’s one of the most reliable indicators of the extent to which the programme is on the front foot, i.e. executing to the plan, versus the back foot – spinning its wheels.)
So, are you in control?