Formula for Failure

A large department store retailer was launching a major initiative to revamp its stores’ technology infrastructure and streamline operations.  At the project’s kick-off meeting, the chief information officer stood up, walked over to a chalkboard and wrote:


He turned to the assembled team from store operations, finance, logistics and technology plus the software vendors and consulting partners and asked who knew what this formula meant.  After a few moments of uncomfortable silence, he explained the formula: an old process (OP) plus a new technology (NT) equals an expensive old process (EOP).  The team’s job, he said, was to avoid this formula for failure. The team’s job was not to automate what the company was already doing but to reinvent the way the company did business.  It needed new processes supported by new technology to drive efficiency and to better serve the customer.

This simple idea set the tone for the project. It became a touchstone for the team.  It was a constant reminder of their mission.  It gave each team member permission to ask “why do we do it this way” and “how can we do better?” It allowed them to challenge the phrase “that’s the way we have always done it” which abounds in so many projects and is the ultimate innovation killer.

For most project teams, asking why and looking for ways to improve is important but it does not guarantee that they will avoid the Formula for Failure.  There are many factors that can drive a project team to turn an old process into an expensive old process, and it’s common to experience more than one at a time.  Here are 10 of the most common reasons.  Perhaps, you will recognize a few:

  1. New Team, New Focus.  After a project has been funded, ownership of that project typically shifts from the business person or team that has the need and created a business case to a delivery function or team. This could be the information technology department or a project management office (PMO).  The previous owner typically stays involved as a project sponsor or subject matter expert while they continue to do their day job.  The team running the project may not understand why this project was funded to begin with or simply assume that delivering a technical solution will deliver business results.  They don’t realize that they need to change the old process.
  2. The Next Big Thing Takes Priority.  Once the business owner goes back to their day job, there is a mountain of work that needs to be done.  Inevitably that mountain includes the next big problems to solve.  The next big thing requires the business owner’s attention and begins to consume more of it over time.  Meanwhile, less time is spent monitoring and working with the project team working on their last initiative.  Eventually, the business owner isn’t close enough to the project to understand how the project has evolved (see next points four and five).
  3. Your Special Sauce is Just Thousand Island Dressing. In the 1970s, McDonald’s did a masterful job marketing the Big Mac with its “special sauce” which was basically thousand island salad dressing.  Too often, retailers think that the processes that their staff does in their stores is their special sauce.  The process to write a schedule is not a competitive advantage, but freeing up the manager to spend more time on the floor might be.  Project teams need to be careful not to embrace an old process as their stores’ special sauce when, in fact, it is just thousand island dressing. Making this mistake results in unnecessary customization to the new technology and an expensive old process.
  4. When Before Why. Once a technology implementation starts, the focus shifts to managing timelines and budget, which are always tight.  As the project runs into problems, timelines and budgets do not change.  Instead, scope gets cut, and as the scope gets cut, higher-level goals – the big reasons why the project was approved – get forgotten about as all attention shifts to keeping the mechanics of the project – when the project will be complete – on track.  Thus, allowing OP to work its way back into the project.
  5. Phabulous, Phantom Phase 2.  This idea is similar to “When Before Why”, but unlike the previous topic where the why is forgotten, the project team recognizes that it cannot deliver the entire benefit given the timeline and budget, and begins to shift scope to “Phase 2.”  Soon, Phase 2 begins to look pretty fabulous.  Of course, Phase 2 is a phantom.  It is neither budgeted nor planned, and its business case was already used to fund the initial project.  For most retailers, Phase 2 is like the Easter Bunny or a Santa Claus without the bump in revenue or traffic.
  6. A Rebel with a Cause. It takes courage for an individual or team to challenge the status quo, especially in a large organization.  A lone voice calling for change is a rebel at best,cancer at worst, but most likely, gets drowned out in the masses.  However, if that voice has authority, it becomes an agent for change.  Authority comes from leadership.  In the story that opened this chapter, the project team was able to affect change because the CIO not only challenged them think big but the retailers’ entire executive team provided them with the authority to implement change.
  7. Use it or lose it. Shifting focus from corporate to the field, the timing of training programs is as important as the content of the training program. If associates are trained on a new process, but then cannot use it immediately or frequently the training will be forgotten.  Associates will slip back to using the old process.
  8. Lost in Translation.  Telling associates how to do a new process is only part of the battle of gaining adoption.  Managers and associates also need to understand why the new process is being implemented.  How does this benefit their store, the company, their brand or their lives? Without an understanding of why, the new process will get lost in translation and stores are likely to fall back into their old ways of doing things.
  9. I am Smarter than You. Closely linked to getting lost in translation is the idea that the stores – and the field – know better than corporate.  New processes are ignored or modified because the field believes it is smarter than corporate.
  10. You Can’t Keep Score Without a Scorecard. The project is winding down.  New technology is in the stores.  Stores have been trained, and associates are using the new processes…but are they?  How do you know?

Avoiding these pitfalls is hard.  It is easy to find yourself with an expensive old process is challenging.  But, the benefits can be great.  Just consider the corollary to OP + NT is NP + NT (New Process plus New Technology).  So, what does NP + NT equal?  True innovation? Sustainable business transformation? Increased profitability? Competitive advantage? Improved customer loyalty? Ultimately, NP + NT = ROI.

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