Risk in a Collaborative Culture

 Why risk matters  Risk and Conscious Competence  Mitigating risk

why risk matters

what is risk?

what drives risk?

Project Management Change Management how does risk change during a project?

what happens if we ignore risks? I’m beginning to think it wasn’t such a good idea to turn off those unit tests

what happens if we incorrectly define risks?

at what levels should we assess risk?

how is risk management different from change management?

risk and the conscious competence learning model

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell

applied to profiling and mitigating risk

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell become aware

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell learn high churn~ afraid to make decisions~ uncertainty “agile”

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell bureaucracy complexity optimize. mentor. perfect. “lean”

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell out of touch ~ process is king develop a blind spot

decision making

what do we do? when do we do it? when do we decide?

Business Value Benefits Value Calculation Costs calculation typical financial calculation

Business Value Guess Value Calculation Estimate calculation however….

we need some help !

Purpose Considerations Costs and Benefits Business Value Model

where do we start?

Market Differentiating High Low Mission Critical Low High Differentiate Parity Partner? Who cares? Purpose Based Alignment Model

Market Differentiating High Low Mission Critical Low High Innovate, Create Do we take this on? Minimize or Eliminate Achieve and Maintain Parity, Mimic, Simplify Purpose Based Alignment Model

example financial documentation system

Market Differentiating High Low Mission Critical Low High What goes here? Anything here? Most are usually here. Purpose Based Alignment Model

350 differentiators

simplified the rest focused on differentiators

results: better product cut time by 50% 60% cost reduction

Market Differentiating High Low Mission Critical Low High Differentiate Parity Partner? Who cares? Strategy?

Sustainable Competitive advantage strategy = sustainable competitive advantage

the “billboard” test…

You Think My Products Are Good? You Should See My Chart of Accounts!

“To be the low cost airline.” - Southwest Airlines

“Will this help us be the low cost airline?” - Southwest Airlines

remember, parity is mission critical

and purpose is not priority

differentiating changes over time

Leadership Influence innovate!

Purpose Business Value Model

other considerations ?

time to market

risks

Collaboration Model flexibility

Collaboration Model dependencies

team size and experience market uncertainty domain knowledge team capacity technical uncertainty

Purpose Considerations Business Value Model

costs and benefits ?

Purpose Considerations Costs and Benefits Business Value Model

group chunks high – medium - low

“build” a chunk …

objectives / projects / ideas Value Model prioritized chunks build highest value chunks adjust VM if inputs changed discuss value and value to date Enough value to go to market? ~ Yes? Deploy ~ No? Continue? ~ No? Stop. ~ Yes? using the value model

applied to risk

becoming aware: profiling risk

There are many models... most work well. How about:  Delivery risks  Business case risks  Collateral damage

delivery risks Standish Group Study, reported by CEO Jim Johnson, CIO.com, ‘How to Spot a Failing Project’

Always or Often Used: 20% Never or Rarely Used: 64% Standish Group Study, reported by CEO Jim Johnson, XP2002 Sometimes 16% Rarely 19% Never 45% Often 13% Always 7% business case risks

collateral damage

example: express products

Re-factor existing enterprise software products for the SMB market. The goal: make these products consumable by the SMB market.

what are the delivery risks? Low The development work is complete. Depending on the requirements, some functionality might be disabled.

what are the business case risks? Business Case Risk: High – IBM Sales teams for these products might not be experienced in reaching customers in this market – Required new sales channels (telesales, business partners etc) – Required new support structures (IBM L1/L2/L3 and support methods were accustomed to enterprise customers) – Marketing material needed targeting at this market

collateral damage risks? could be high are there existing enterprise customers that will want to migrate to the SMB versions?

Leading Agile Collaboration Model Collaboration Process we collaborate to increase awareness

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell collaborate to become aware

example: updated transaction engine

WHOSE input is important to create an accurate, project-level profile of the risk? development sales product manager testing support

different risk perspectives for: delivery business case collateral damage

how does knowing this mitigate risks?

how do we now reduce uncertainty to further mitigate risks?

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell learn high churn~ afraid to make decisions~ uncertainty

using the business value model to reduce churn and uncertainty

Purpose Considerations Costs and Benefits Business Value Model

This models iterative decisions. It helps us identify the “last responsible moment” to make decisions.

example: customer retention

Potentially great way to improve customer retention. However, lots of costs and guessed- at benefits. How do we reduce uncertainty and make progress?

What project “chunks” make sense? Phase 2, measure the value of improving retention in each segment. Results? Focus the big project on the segments with high retention value. Phase 1, segment the market while delivering value. Four segments each with a unique buying trigger. How does this generate value? Advertising hits one Of the buying triggers. Results? Lower marketing costs with higher return at a fraction of the big project costs. Phase 3, no need to continue. Overall results? Increased retention where it made sense at a much lower project cost and risk.

reduce the tendency towards complexity and further reduce risks?

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell bureaucracy complexity optimize. mentor. perfect.

use purpose-based alignment model

Market Differentiating High Low Mission Critical Low High Innovate, Create Do we take this on? Minimize or Eliminate Achieve and Maintain Parity, Mimic, Simplify Purpose Based Alignment Model

example: business intelligence

our product: superior analytics engine our competitor: superior UI

What do we do about a new user interface? Differentiating for us? Analytics Engine Differentiating for our competitor? User Interface What is the purpose of our user interface project? PARITY! How does this help us reduce complexity? (we “go to school” on competitors UI and just try to keep pace).

our dynamic world

what happens if…

you accelerate the timeline?

the demand for the product shrinks?

you fold-in an acquisition?

part of the team is pulled away?

your triggers to reassess your risk profile and mitigation plans?

we want to avoid …

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence out of touch ~ process is king develop a blind spot

but how?

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence out of touch ~ process is king collaborate broadly to maintain awareness

Scenario In order to respond to a competitor, Product Management announces an early release. In order to meet the release date, Development shrinks the time allocated to the quality plan. Technical Sales now requires a SAR and a service engagement. The product releases but Support is not prepared for the required support levels. Support shifts some support tasks to Development. Development no longer has the resources to meet the next planned release date or content.

in other words... there are no isolated decisions!

What triggers should cause us to review and revise the risk profile and mitigation plan?

macro leadership and risk

Macro Leadership Cube Mitigate Delivery Risks Mitigate Business Case Risks

Shared Boundaries Mitigate Delivery Risks Mitigate Business Case Risks Mitigate Delivery Risks Mitigate Business Case Risks Mitigate Delivery Risks Mitigate Business Case Risks Interlock DevelopmentSalesSupport

example: network services to remote locations

what are the critical interlocks?

construction schedules network design decisions vendor schedules

focus on any changes …

Leading Agile Collaboration Model Collaboration Process through cross-functional collaboration

summary

profiling risk

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence From William Howell

collaborating to profile risk delivery risk ~ business case risks ~ collateral damage risks

bring the right people together from the entire enterprise in other words, the affected and affectors!

Market Differentiating High Low Mission Critical Low High Differentiate Parity Partner? Who cares? Purpose Based Alignment Model

Purpose Considerations Costs and Benefits Business Value Model

risk management cannot be siloed

Shared Boundaries Mitigate Delivery Risks Mitigate Business Case Risks Mitigate Delivery Risks Mitigate Business Case Risks Mitigate Delivery Risks Mitigate Business Case Risks Interlock DevelopmentSalesSupport

Collaborative Leadership and Risk Mitigation The collaborative leadership tools are designed to improve decision making. This includes decisions about risks. These tools are: The Purpose Alignment Model The Business Value Model

What Tool Do We Use For Decisions Today?

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence Business Value Model To Reduce Uncertainty

Competence Consciousness Low High Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence Purpose Alignment To Focus

what triggers will cause you to reassess your risk profile and mitigation plans?

Leading Agile Collaboration Model Collaboration Process collaborate!