A recent post focused on a instance where a programme planned to spend £189m and ended up spending almost £1.3bn – a 6.7x overspend, where 85% of the actual cost was a ‘slow-moving surprise.’ There was a lot of speculation on LinkedIn about what caused the spiralling cost, but one particularly perceptive contributor posed a gem of a question: Given that the company (Asda) was PE-backed (by TDR Capital), and that PE is notoriously shrewd when it comes to managing its investment decisions, why was the slow-moving surprise even allowed to play out?
Unsurprisingly, I have a view. Dysfunctional programmes do seem to be prone to developing a collective case of ERM; Escape Room Mentality. Imagine that you are in an escape room where there are three levers in the centre of the room. They are marked Cost, Time and Outcome. The inmates of the escape room keep moving these three levers in a variety of sequences, believing that only these levers can spring the door open.
That’s what often happens in dysfunctional programmes, and there are three problems. The first is that the inmates keep moving the levers, even when demonstrably, the door is not opening. They still persist in just moving these levers, multiple times in the expectation of a different outcome. The second is that whilst attention is on those three levers, the inmates are not looking elsewhere within the room for other levers that might actually spring the door open. And the third problem is that the inmates shouldn’t actually be touching those three levers at all, because moving them is likely to do more harm than good.
Take the cost lever. Most organisations react to slippage by throwing more money at a programme, just as Asda did, but it doesn’t solve the problem, it camouflages and feeds it. It sets up the programme to shrug its shoulders, utter the time-honoured phrase “we are where we are” and soldier on, burning yet more cash on the same proven dysfunctional approach without ever being forced to confront and deal with the root cause(s) that have created the situation.
Ditto the time lever. There are ways to manage slippage, but simply accepting a later delivery as a fait accompli is not one of them. And then there’s the outcome lever. How many times has a programme pulled the ‘minimum viable product’ rip-chord, fatally undermining the outcome whilst simultaneously missing opportunities to optimise the business case?
So if I’ve convinced you not to touch those levers just yet, what are the other levers in the room? There are literally dozens available to a struggling programme, but here are three for openers:
1.
Reduce the programme’s headcount. Yes, I know it sounds counter-intuitive, but it works. It’s a practical application of something called the Ringelmann Effect (article to follow) and we’ve seen it applied many times to turbocharge the productivity of a programme. And the beauty of it is that it also reduces the programme’s running costs.
2.
Use RCF (Reference Class Forecasting) qualitatively. Essentially it’s a technique for analysing what has caused specific activities within previous programmes to overrun, so that the team can devise counter-measures. It was used with great success for the Commonwealth Games 2022, a programme that should have been a disaster; only four and a half years to prepare instead of the usual seven, the wettest winter on record in Birmingham, the supply chain disruptions of Brexit, and a once-in-a-century pandemic. And yet the programme completed far enough in advance of the target date to be able to hold two test events prior to the real thing.
3.
Sort out the planning. Slip into the back of the room at a programme meeting, and what you’ll probably see is a lot of well-intentioned people trying to improvise a way forward, compensating for the lack of an executable plan. The problem is that humans cannot plan and execute at the same time: For the proof, just look at the To Err Is Human study in the US (1999). Planning and execution have to be separated, or the programme will just continue to be one long improvisation. And planning is not that difficult: It can be done cleanly in 20 days.
These are just three potential levers: There are plenty of others. And the real beauty of these levers? Even if the programme wasn’t in trouble, why would you not pull them anyway? Unlike the cost, time and quality levers, they cannot harm the programme. They can only help it.