A refreshing change
I had a refreshing meeting with a client last week, when my client talked about how she wanted to encourage the leadership team in her organisation to start taking more risks. Not in the dangerous sense such as taking up cycling in central London, or investing their departmental budgets with the local bookies. She was discussing how to foster a more innovative culture within the organisation. This particular organisation isn’t funded on a purely commercial model and as such, is under a great deal of pressure, both regulatory and morally, to justify how it invests its money. As you can imagine, this doesn’t necessarily lend itself to creating an innovative, risk taking culture.
When looking to become more innovative as an organisation, its vital to understand that innovation necessitates some risk taking. You can’t get away from this, as the very nature of doing something new means its hard to predict how its going to turn out. Its a big deal to ask your organisation to invest a significant budget into commissioning a new product or service when you don’t have hard and fast facts about how its going to be received by the intended customer base. However, it’s a lot less scary and indeed sensible, to take a small educated risk, rather than a giant leap in the dark. Here is my advice on how to take the right kind of risks.
Use a technique that repurposes the language of risk into something more positive and turns a risk into a hypothesis that can be tested and learned from. Take for example Lean Start Up http://theleanstartup.com/principles and Google Sprint http://www.gv.com/sprint/. Rather than invest significant budget into creating that all singing and all dancing product, these techniques encourage you to work out what the smallest thing is that you can deliver to provide customer insight and feedback. While a few brave leaders might be willing to gamble a 6 month investment in a vision for a product that is based largely on matter of opinion; many more will be much more comfortable to take a risk with a week’s worth of budget that will provide valuable customer insight and data that can be used to inform strategy and therefore, budgets going forwards. In turn, the organisation becomes more comfortable with taking risks within the structure of selecting a hypothesis to test, collecting the data and then using fact based decision making to deliver a strategy.
How does your typical Project Management Office view risk?
In the context of traditional Project Management Offices, the language of risk normally comes with a lot of negative connotations, those which are typically addressed by ensuring that RAID (Risk, Actions, Issues and Decision) Logs are up to date. Project Management Offices tend to be very concerned with documenting how risks will be mitigated and managed, monitoring when risks need to be escalated to senior management and creating governance systems of gates and approvals that manage those risks. While its very sensible to protect your delivery from the risks that could knock it off course, it would also be good to use some of that PMO effort and energy to support the good kind of risks.
Project Management Offices usually operate within a governance structure that requires detailed business cases, which are often based on shaky or assumptive data and information. Typically, these business cases require large chunks of a budget to be allocated for the year ahead. As a result, project sponsors and stakeholders, will sometimes manipulate the data, or simply be overly optimistic in their projections, in order to get their business case signed off and their project initiated. In more risk averse cultures, the project won’t get put forward at all and never sees the light of day, leaving the business exposed to a risk that could ultimately be avoided.
Using the PMO to drive risks and innovation
From my experience the solution is to facilitate a sensible risk taking culture, by putting in place a governance structure that supports the concept of testing hypothesis; such as a Lean Project Management Office (Lean PMO). In this instance, the Lean Project Management Office should support management decision making by implementing a business case model to support governance, that can demonstrate the delivery of value. The decision making “gates” in this process will be used to demonstrate that a product based hypothesis has been tested, together with the results and a summary. The decision on whether or not continued investment should go ahead will be dependent upon whether or not the results of the test or experiment, show that progress is aligned to the organisational strategy.
The Lean PMO
At the beginning it’s difficult for organisations to take risks. It’s a challenge, not least in changing ingrained behaviours; though taking risks is critical to any businesses growth. Of course risk comes with dangers, but executed and planned properly, using the right methods and empowering your team with the right training, can bring successes. The traditional PMO needs to evolve into a Lean PMO https://magicmilestones.com/lean-pmo/
Its a lot easier for us all to take risks if some one is there to provide some structure and boundaries to stop us from making really big mistakes. Is your organisation the kind that encourages you to take risks or do they deter you from it?
By Ann McPherson