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Benefits Management and the ‘Tipping Point’?

I’ve been working on an article with Richard Breese, John Thorp and Carlos Serra, examining the spread and take up of benefits management. Richard (as the lead author) has examined the diffusion of benefits management through the lens of ‘translation’ – an interesting perspective and one that will hopefully be available to a wider readership very soon. In the meantime, I was reflecting on Richard’s insights in the latest draft over the weekend, and this in turn led me to re-read Malcolm Gladwell’s ‘The Tipping Point’. Applying Gladwell’s analysis, the wider adoption of benefits management is dependent on:

  1. ‘The Law of the Few’ i.e. key individuals including:
  • ‘Maven’ – who connect people with information. For example, those who post their reviews on Amazon, Trip Advisor etc;
  • ‘Connectors’ – who connect people with people; and
  • ‘Salesmen’ – who persuade the wider audience to adopt the new idea.
  1. ‘The Stickiness Factor’ i.e. there is a simple way to package/re-package information to make the change stick. This often requires that the original concept be adapted/’translated’ into something that can be more widely used and so extend adoption beyond the ‘innovators’ to the ‘early adopters’, and in turn to the majority.
  1. ‘The Power of Context’ i.e. the conditions/circumstances in which the change occurs and steps that can be taken to facilitate the adoption of new ideas.

All of which got me thinking – what are the main barriers to the take up of benefits management? Is it a case that we need more ‘Maven’, ‘Connectors’ and ‘Salesmen’? Or does the message need to be made more ‘sticky’ by ‘translating’ it into a form that the project, program and change management community can more readily apply? Or is the need to focus on the wider business/organisational context within which change initiatives are designed and delivered?

 

The Big Short by Michael Lewis. 

The story of the financial crisis – and how too many actually profited from it.  I particularly liked the following, What are the odds that people will make smart decisions about money if they don’t need to make smart decisions – if they can get rich making dumb decisions?”   A useful parallel there to those who make investment decisions in our companies and government departments.  They may not always get rich, but if there are no ‘consequences’ then we should hardly be surprised with the outcome.  As those who have heard me speak know I actually think ‘accountability’ is over-rated as a solution (transparency is what is really required) – but nevertheless it would be nice to think that there is some correlation between performance and reward. 

 

Benefits Management – part of the solution or part of the problem?

The case for benefits management is usually premised on the belief that adopting defined practices will improve the realisation of benefits from an organisation’s projects and programmes.  But despite much of this guidance having been around for over a decade, the evidence as to whether it works is at best mixed. I noted in ‘Managing Benefits’ (TSO, 2012) that, “Research evidence indicates that many organizations worldwide still struggle to implement benefits management effectively.”  Thus from this perspective, the problem is one of implementation. Yet there is evidence that adopting formalised processes for their own sake may be part of the problem rather than the solution.  For example, John Whitty refers to the paradox that modern project management grows in popularity whilst at the same time appearing not to work[1].  Whitty argues that we assume modern project management is adopted to deliver projects on time/to budget, but actually it may be, “a tool used for surviving in the corporate environment”.

Beyond the PPM environment, researchers have come to similar conclusions – for example:

·       In relation to management information, Feldman & March[2] found that, “organizations systematically gather more information than they use, yet continue to ask for more….[and] much of the information that is used to justify a decision is collected and interpreted after the decision has been made, or sunbstantively made”.  The explanation – “The gathering of information provides a ritualistic assurance that appropriate attitudes to decision making exist.  Within such a scenario of performance, information is not simply a basis for action.  It is a representation of social virtue.  Command of information and information sources enhances perceived competence and inspires confidence.”; and

·       Regarding the role of accounting, Burchill, Clubb, Hopwood, & Hughes[3].  argued that accounting systems can serve as organizational “rationalisation machines” – seeking to legitimize and justify actions that already have been decided upon; and once implemented, the accounting system becomes, “an organizational and social phenomenon”. 

The use of management disciplines in serving socio-political purposes may also help explain the continued struggle of benefits managmeent to achieve the promised impact. For example, in an article exploring information technology evaluation practices in African firms, Rennie Naidoo and Walter Palk[4] found that firms that had adopted formal stringent processes did not appear to perform significantly better than those with less formal, or even any formal process at all! They consider that one explantion is that, “a benefits management approach may be serving specifically as a political device or yet another procedural obligation for a funding requirement or for a general project evaluation.”  

This reinforces the view that beyond adopting benefits management as a set of processes or practices, organisations should focus on actively managing benefits to optimise the retun on their investments in change – and specifically by: alignging benefits with strategy and the organisation’s performance management regime; and most fundamentally of all – start with the end in mind – begin by identifying the required benefits and then design the project or programme to deliver these benefits, rather than using benefits to justify a pre-defined solution. 

  



[1] http://www.youtube.com/watch?v=vYbztMrxmP8

[2] Feldman S.F. & March, J.G. (1981) Information in Organizations as Signal and Symbol, Administrative Science Quarterly, 26 (1981): 171-186.

[3] Burchill, S., Clubb, C., Hopwood, A. & Hughes. J. (1980) The Roles of Accounting in Organizations and Society, Accounting. Organizations and Society, Vol 5, No 1. pp 5-27. 

[4] Naidoo, R & Palk, W. Exploring formal information technology evaluation practices in African firms (2011) African Journal of Business Management Vol 5(29) pp. 11696-11704.