27 January Drive Change to Increase Value | Stephen Wise January 27, 2021 By SuperUser Account Leadership, Project Management Ideas, Strategy Change, Project, Future-State, Business-Value 0 Why you need a Project Guide in One Simple Picture. Projects Drive Change. Moving from Current State to Future state is the selection of priority projects designed to increase business value. Related Articles What value are you creating with your IoT? | Stephen Wise The increasing capability to digitize the physical world presents enormous dollar opportunities. IoT and its technology provides the ability to sense the world or take an action or both. For example, manufacturing applications include operations optimization, predictive maintenance, inventory optimization, and health and safety. McKinsey has suggested that the economic impact of IoT in factories will be valued at 1.2 to 7.7 trillion US dollars in 2025. Most companies can explore the following over arching models: Transform business process; Enable new business models; or Combine with other advanced technologies like AI and blockchain. Developing a business model to reduce your costs or enhance the customer experience is the first transformation step. Here are my top 5 tips for developing your IoT business strategy. Ensure the business case has clarity for how the company will capture value from the IoT solution internally or from customers. Executive sponsorship of the IoT portfolio of activities requires business led cross-functional support from all areas of the enterprise; IT enables IoT for the enterprise, not the other way around. Involve manufacturing and the frontline in up-front planning as monetizing IoT benefits depends on business process change and change to customer experience. For example, most implementations will require/suggest for things to be done differently as part of the future state – buy-in from those impacted is critical. Engage partners and internal resources to augment the new skill sets that will be required to maintain and use functionality. Networking and connectivity, Data science, and security will all be learning curves. Manage all your IoT initiatives as a portfolio to initiate/cancel, prioritize, and balance projects according to revenue, cost, resource availability, and risks. The pervasive embedding of IoT hardware is a given. IoT is reshaping the way enterprises manage processes. Albeit, the usefulness and timing for when it is helpful that your fridge knows it will soon be out of milk is not clear. Nevertheless, the great value to be gleaned in Health, Transportation, Retail, Manufacturing, and so on is logical. Monetizing the power of sensor-enabled data and knowing how to deploy is a disruptive change that should be on everyone’s business radar. Stephen Wise www.IntegrationProfessionals.com Dramatically Improve Traction M&A: Top Ten Drivers | Stephen Wise | Integration Professionals I believe that under-estimation of the importance of the post-merger integration planning is the single greatest factor leading to this high failure-rate phenomenon. The preventative action is development of a robust post-merger integration plan that aligns stakeholders’ activities with the deal thesis. Objectives, Measures, and Benefits A critical first step to creating this plan is for leaders to communicate a deal thesis with clear success criteria. The objectives, measures, and benefits must be detailed and well defined. For example, if they are not tangible or they are vague, it is highly likely they will lose gravitas as they timeline moves forward. As a starting point, to creating a robust deal thesis, here are the top ten drivers of M&A acquisitions[1]. I believe that under-estimation of the importance of the post-merger integration planning is the single greatest factor leading to this high failure-rate phenomenon. The preventative action is development of a robust post-merger integration plan that aligns stakeholders’ activities with the deal thesis. Top-Ten Drivers of M&A acquisitions 1.Industry Synergy Achieve economies of scale by buying customer / supplier, or competitor. Acquisition of a competitor is horizontal, and acquisition of a customer or supplier is vertical. 2.Strategic Planning Accomplish strategic goals more quickly and more successfully such as entering new markets or acquiring technology or people assets. 3.Differential efficiency Realize a return on investment by buying a company with less efficient processes and making them more efficient. 4.Inefficient Management Realize a return by buying a company with inefficient managers and replacing them. 5.Market Power Increase market share and ability to increase price/profit. 6.Financial Synergy Lower cost of capital by smoothing cash flow and increasing debt capacity. 7.Under valuation Take advantage of a price that is low in comparison to past stock prices and/or estimated future prices, or in relation to the cost the buyer would incurs if it built the company from scratch. 8.Corporate Governance Assert control at the board of directors’ level in an underperforming company with dispersed stakeholder ownership. 9.Tax Efficiency Obtain a more favorable tax status. 10.Managerialism Increase the pay and/or power of managers. STEPHEN D WISE INTEGRATION PROFESSIONALS DRAMATICALLY IMPROVE TRACTION [1] Lajoux, Alexandra Reed (2019). The art of M & A : a merger, acquisition, and buyout guide. New York: McGraw-Hill Education. Delivering Business Transformation Strategy | Stephen Wise Michael Porter’s books on Competitive Strategy and Competitive Advantage led me to embrace Project Management. That is, I have frequently said, a company that invests in Project Management is making an investment in their competitive advantage. Less frustration delivering value, less disruption to teams, improved engagement, etc. Porter’s Five Forces and the SWOT analysis are now inadequate as concrete underpinnings for strategy design. Strategy is still important, but the amount of change driven by disruption, innovation, and transformation means that the interpretation and implementation of Strategy – which occurs during the delivery – requires a high-touch feedback loop. An increased importance in the strategy delivery does not mean that strategy design is less important – it means that executives must give equal personal priority and attention to designing the right strategy as to delivering. Here are three key tips for executives to stay engaged in the delivery phase of business transformation strategy. Governance – Decision Making – Planning & Re-planning. Governance – Build a governance structure that reinforces the accountability and responsibilities for the vision. Ensure the team is adequality resourced in terms of experience and availability. Review and address risks and interdependencies at the beginning and periodically and through the realization of accumulated benefits. Insist on a complete set of regularly reported metrics and milestones. Decision Making - Move quickly to re-prioritize and remove roadblocks that are uncovered despite a lack of complete information or analysis. Accept changes to time and budget milestones based on new information from the working team. Planning & Re-planning – The less time you have available – the more important it is to have a robust plan. Don’t forgo detailed planning, but in today’s business environment planning and re-planning must be rapid and agile. Documenting tasks, task owner, and interdependencies are as important as schedule and budget. Issues impeding success should be discussed regularly and recommendations to tweak the plan fed up to the executive team in order to ensure alignment and ongoing support. Delivering strategy is like going on an expedition through a deep jungle. Every so often you will get to a hilltop and be able to asses how things went so far and what new landscape is coming in to view. An executive that spends time and money crafting the strategy needs to protect her investment by staying available and engaged for those hilltop moments. Stephen Wise Integration Professionals Dramatically Improve Traction How to be a great leader | Stephen Wise | Integration Colin Powell, the retired US Four-Star General says to remain calm and be kind. He also has a rule - to have a demanding vision. Vision, he says, is our destination. Have a Vision of the future Vision, what is it? Where do I find it? Vision is not “Establishing vaccination guidelines and agreements, activating a network of furloughed retail workers, and implementing a military supply-chain technology for transportation and storage.” That is the strategy. Vision is not “Vaccinating all the citizens against COVID by September 2021”. That is a goal, that will be driven by the Strategy. Vision is higher than that. Vision is not something that exists today. It is something that is imagined that could be created in the future. Developing a compelling vision is done by looking into yourself. What are your beliefs? What do you believe is possible? Figuring out who you are, why you are here, and what is most valuable to you. Cultivating vision is a process. It does not emerge during an off-site, or from reading leadership philosophies, or watching an inspiring movie. To be visionary you need to set aside significant time to percolate these questions. Provide Clarity of desired results Bruce Lee may have said, “The successful warrior is the average person, with laser-like focus.” Results require change. Without change there is no result. Motivating anyone to change is expecting them to work towards the unseen and unknown. At every level of challenge this is a fundamental issue that needs an answer every day. Giving your team the answer they need is not difficult, your job is to provide clarity. You need to communicate to your team the information they need to risk working on the unseen and unknown. Explain to your team what is most important. Work with them so they understand why the choices made are the best choices. When the team is aligned on what is most important they will have clarity on the desired results. Demonstrate effective Decision making Nelson Mandela said that “Action without vision is only passing time. Vision without action is merely daydreaming. But vision with action can change the world.” Standing on the shoulders of giants, I say the sum of the actions will not be productive without a robust decision-making process. The problem with change is that, only after starting, on the way to achieving results, does the solution emerge. The detail is previously unknown on what is required, how it will come together, and what is needed. Leaders who make the mistake of communicating their vision from on high, hiring the best team, and delegating all responsibility for results will be in for a surprise. Leaders need to reserve time to develop vision and they need to be effective at engaging others to deliver lofty goals. However, do not let go of the steering wheel and don’t look away from the dashboard. You need to ensure that everyone is aware of and reliant on a process for obtaining your decisions on how the strategy and goals are to being met. You need to ensure that you are aware of and broadly communicating key decisions to all stakeholders. If you miss this – you will more than likely not recognise the final product. Questions for you to ponder. What would be an example of a Vision that is supported by the vaccination goal and strategy mentioned above? How have great leaders from demonstrated these three skills of Vision, Clarity, and Decision-making? (e.g., George Washington, Martin Luther King Jr., Captain Kirk) STEPHEN D WISE INTEGRATION PROFESSIONALS DRAMATICALLY IMPROVE TRACTION How to Improve Sales Revenue in Your Company | Stephen Wise A typical business goal is to execute the sales strategy and increase revenue by X% over the period. The sales process is an ongoing operational activity and is usually not suited to being treated like a formal project. However, the sales process needs to be managed and there are similarities between managing a sales process and managing a project. A sales process needs: Management of key milestones and timing Identification and assignment of people to assist Encouragement of teamwork at client site and internally Risk identification and mitigation planning Tracking and reporting of selected metrics Feedback/improvement loop Management of key milestones and timing in the sales process I recommend every sales team to work with an expert project manager to develop a template of tasks and estimated timing which gets stored in a central library. At the earliest reasonable time, the template should be fired-up and customised to suit the opportunity. That is, tailor it to needs by modifying the tasks that need to be accomplished, the estimated durations, and dependencies. This plan, will guide all stakeholders to manage expectations and keep everyone on track for what needs to happen next. Identification and assignment of resources within the organization to assist with the presentation Once an opportunity has been identified, team members need to be called on for assistance in various parts of the proposal. It is important that the sales person ensure that everyone has time to take on the work, understands how to do the work, and understands when and how to report that the work is completed or that some sort of issue has caused work to slow down or stop. The sales person may not have the authority to prioritise everyone’s time and therefore it is important to keep the lines of communication open. Risk identification and mitigation planning Sales people are able to identify unique risks because they are the closest to understanding the client’s expressed needs. These insights are extremely relevant. Combined with their own experience dealing with other customers, sales people can see risks that no one else can. Positive risks, those that have upside potential lead to new items in the sales funnel. Negative risks, those that can push a deal off the rails should not be pushed under the carpet. The (negative) risks, should be identified and reviewed. Each risk has a likelihood/ probability of occurring and severity/impact on the sale should it occur. The sales person’s team and management should periodically develop and review tactics to reduce the probability and lesson the severity of impact, should it occur. Tracking and reporting of selected metrics back to the team and management Peter Drucker, has been paraphrased, “you can’t manage what you can’t measure”. The selection of appropriate measures and metrics is a cornerstone of sales management. Most sales people are keenly aware at all times of the status of their metrics and how much they are exceeded or failing short of their objectives. In addition to short-term results, frequently communicating a sales dashboard may be more beneficial then you thought. The benefit is to improve organizational alignment with the sales strategy. Having visibility to the sales dashboard could be the trigger to makes those changes Feedback/improvement loop Deals get won. Deals get lost. The salesperson will obtain lots of knowledge about the client or at least they should. Knowledge represents a significant asset for most businesses. Left unmanaged knowledge tends to quickly fade. When deals are lost, it is important to learn from the process. Are there changes that can be made to the sales process? A lessons learned process and central repository for the post-mortem will help the next sales rep and also help when it comes time to review the process for a complete over hall or investment in technology to automate parts of the process. Stephen D Wise Stephen Wise Integration Professionals Dramatically Improve Traction $1 B Annualized Cost Savings from United Technologies Merger | Stephen Wise United Technologies has proposed a merger and acquisition of Raytheon for a combined company valued at more than $100 billion. The architects of the deal have analyzed the strategic rationale. One of the quantified success metrics they announced is synergy of economies of scale leading eventually to $1 billion in annual cost savings. Unfortunately, deal track records are not so good. According to The Art of M&A (Reed, Lajoux, and Nesvold), 55% of all mergers fail to deliver on the financial promise announced when the merger was initiated. Why do 55% of all mergers fail to deliver? Most assume that ensuring the deal success is the domain of the advisors, accountants, lawyers, and bankers. However, once the deal closes, management is left to deliver on the expectations and promises. I am convinced that the single biggest factor of merger failures is the lack-of a CEO sponsored Integration Program lead by a Project Manager. Why is that? Most post-merger activities run behind schedule. I believe a root cause is managers are assigned many of the activities as “business-as-usual” (BAU) work. Managers already have a day job and reporting structure so management of the resourcing, risks, issues, and decision making that was present during the pre-close phase has largely evaporated. There is a high-level of uncertainty on any project and M&A is no different. It is critical that the leadership team responsible for crafting the deal remain involved. The teams responsible for progress and benefits delivery can get easily mired in firefighting and in-fighting. Sometimes this can be blamed on “culture-clash” but regardless of the label it is up to leadership to quickly identify and make key decisions for the team. How do I fix that? A Project Manager will assure there is a process to engage, manage and communicate to stakeholders the changes to the timeline, unresolved issues, new risks, and most important, ensure timely decision making. In the case of the new Raytheon Technologies, the advisors, accountants, lawyers, and bankers have put together an impressive transaction overview. You can check out the announcement package here. Hopefully, in coming days we will also see demonstration of a strong Project Manager working closely with the CEO to successfully deliver on the annualized benefits everyone is so excited about. Stephen Wise Integration Professionals Dramatically Improve Traction https://www.IntegrationProfessionals.com Comments are closed.