CHAPTER 12
Applying Complexity Thinking to Ambiguous Business Problems, Opportunities, and Solutions
| Project Profile | |||
|---|---|---|---|
| Complexity Dimensions | Independent | Moderately Complex | Highly Complex |
| Clarity of Problem, Opportunity, and Solution |
|
|
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“Successful problem solving requires finding the right solution to the right problem. We fail more often because we solve the wrong problem than because we get the wrong solution to the right problem.”
—RUSSELL ACKOFF, SYSTEMS SCIENTIST
Complexity arises when managing a project with unclear business objectives and an ambiguous business problem or solution. Solutions that involve a widespread collection of systems functioning together also raise complexity issues. We offer techniques to help manage the complexities brought about by ambiguity, which requires an environment of adaptability, innovation, and creativity.
WHAT MAKES AMBIGUOUS PROJECTS COMPLEX?
Projects that involve an unclear business problem, an ambiguous business opportunity, or an undefined solution are essentially in a discovery or research and development mode. The problem or solution has not yet come into view with enough clarity to launch an implementation project.
AMBIGUOUS BUSINESS PROBLEM OR OPPORTUNITY
Complex projects often involve considerable uncertainty and ambiguity. When the business problem or opportunity is unclear, it is difficult to identify stakeholders, define business benefits, determine interdependencies, and establish project boundaries. Indeed, some would say that you cannot undertake a project if you cannot identify its business objectives.
AMBIGUOUS BUSINESS SOLUTION
Likewise, when the solution is ambiguous, it is impossible to assess the feasibility of the concept or to estimate costs. In this situation, we don’t know where the solution lies on a continuum between proven, well-understood technology to groundbreaking innovation. As a result, all options must remain on the table until the team members are certain that they understand both the business problem or opportunity and the recommended solution sufficiently to move into an implementation phase. Solution uncertainty usually means that the project is charting new territory and will likely use new, unproven technologies.
CASE STUDY: AMBIGUOUS BUSINESS PROBLEM
IT Legacy Replacement
Consider the situation that many large companies are facing today: Their existing legacy systems are old, outmoded, and fragile. In the case of one large financial institution, the core system for processing financial transactions (using 1960s batch-processing technology) could be run only on weekends. When problems occurred and the system crashed, the processing had to be started over from the beginning and the system would not be updated with current information at the start of the work week. Clearly, the legacy system needed to be replaced. Additionally, plans were underway to relocate the operations center halfway across the country.
The objective was clear: Develop a new IT operating system and hire, train, and set in motion a newly formed team at the same time. However, the business requirements were unclear, having been buried in the legacy system for many years. The business units were experiencing difficulties defining and reaching agreement on requirements for several reasons: (1) politically, there was a lack of consensus among management, (2) users were unable to define requirements because of a lack of knowledge of how the current processes and systems worked, and (3) there was no clear vision about how the business should operate in the future.
The solution: Create a small “skunk works” team led by a mid-level operations manager who understood how the current system worked (with all its flaws and workarounds) and had a vision of the organization’s future business needs. This business visionary was paired with a lead technologist who had an IT team of nearly 100 professionals to design and develop the system. This team was empowered to make all decisions and was supported by senior management. The operations center opened with key people who had been transferred from their original locations, an entire new operations staff, and a brand new IT application system and data center. When the expected problems associated with implementing a major new IT application arose, they were resolved and the operations center was running smoothly within a few months.
HOW TO LEAD AMBIGUOUS PROJECTS
Ambiguity and uncertainty are the hallmarks of complex projects. We present recommendations for leading projects when the business problem or opportunity is ambiguous and when the nature of the business solution is ambiguous.
AMBIGUOUS BUSINESS PROBLEM OR OPPORTUNITY
In an uncertain project environment characterized by ambiguous business problems or opportunities, we suggest that the project leader:
Focus initial efforts on determining a clear business objective- Embrace professional business analysis.
Focus Initial Efforts on Determining a Clear Business Objective
Without clear business objectives, a project does not yet exist. Before commencing work, conduct interviews with the project sponsor and key stakeholders to determine their business objectives, expectations, and constraints. Any obvious inconsistencies in the expectations of key stakeholders must be resolved before actual project work begins. A good place to start is by securing approval to form a small expert team to study the business problem or opportunity and determine the best project approach.
RECIPE FOR PROJECT SUCCESS: THE CHAOS TEN
The Standish Group International, Inc. 2001
#4: Clear Business Objectives
Clear business objectives—a clear understanding of where the business is today and what the organization wants in the future to achieve strategic goals—is essential to project success. Business objectives may include customer satisfaction, increased revenue, or decreased cost.1
- Be certain that everyone involved is on the same page in terms of the project’s business objectives.
- Make sure stakeholders can recite the “elevator pitch,” a concise and comprehensible explanation of the business objectives delivered in 10 seconds or less.
- Consider the big picture and how the project fits into the organization’s overall strategy.
- Promote speed and understand how clarity of business objectives can increase speed.
- Have a yardstick for measuring progress on the project.
- Make return on investment a clear business objective.
- Collaborate with team members to ensure a clear and concise message on business objectives.
- Build the foundation for a peer review process.
- Avoid having too many cooks; too many stakeholders can spoil the project.
- Do your homework through basic and fundamental research and test the clarity and reliability of the business objectives.
Embrace Professional Business Analysis
Professional business analysis is an emerging discipline (see www.theiiba.org). Organizations that acquire and master business analysis competencies and elevate business analysts to a leadership role will be equipped to react to and even preempt changes in the marketplace, flowing value through the enterprise to the customer and thereby achieving a competitive advantage.
The business analyst plays a significant role in helping the executive team translate business strategies into business initiatives. The business analyst guides an array of enterprise analysis activities leading up to project definition and funding. Organizations will use some or all of these techniques, depending on the maturity of their portfolio management and business analysis practices. It is important to note that while these activities seem to be performed in sequence, many occur concurrently and some may be omitted altogether.
The analysis techniques that are designed to bring the business problem, opportunity, and recommended solution into view include the following:2
- Creating and maintaining the business architecture to bring engineering principles to bear when managing organizational changes
- Conducting feasibility analyses to determine the optimal solution approach to a business opportunity or problem, delaying design decisions until the last responsible moment
- Developing a decision package of information for proposed new projects for the portfolio management team, including scoping and defining new business opportunities, preparing the business case, and conducting the initial risk assessment
- Preparing and presenting the new project proposal to the project sponsor for disposition
- Managing the projected business benefits throughout the project and measuring the business benefits of the deployed solution.
Embrace practices that use business models and visualization techniques that can help clarify the current and target states of the business. Spend ample time researching and studying the business problem or opportunity; conducting competitive, technological, and benchmark studies; defining dependencies and interrelationships; and identifying potential options for meeting the business need or solving the business problem.
AMBIGUOUS BUSINESS SOLUTION
We offer the following recommendations to enable the project leader and team to make progress despite an uncertain solution approach:
- Form a special “innovation team”
- Use edge-of-chaos management to bring the solution into view
- Become an expert at facilitating teams to make innovative decisions
- Conduct a feasibility study to identify and analyze solution options
- Conduct value-chain analysis for cross-functional enterprise solutions
- Conduct root-cause analysis to ensure the solution will solve the business problem
- Become adept at using tools and techniques that foster creativity and innovation
- Lead your team into “the zone.”
CASE STUDY: AMBIGUOUS SOLUTION
Retail Business Intelligence Project
For an example of a project involving an ambiguous solution, we look to the retail industry. Many retailers store information on what their customers purchase and use loyalty cards to identify each customer. A major supermarket chain decided to use the shopping history held on a central database to identify special offers that would be of particular interest to a customer when he or she arrived at the checkout and presented a loyalty card.
In this case, the system held a record of all the items the customer had purchased during the last six months; the supermarket had approximately nine million customers every day, each purchasing an average of about 30 items. Although the project seemed attractive from a commercial viewpoint, it would have involved searching a four-terabyte centralized database, analyzing the results, and delivering the information remotely—almost instantaneously to all stores concurrently. Given the existing system architecture, this was impossible. While a change to the system architecture (e.g., distributing the database to stores or caching data locally) might have made the system viable, the cost of doing so would have far outweighed the business benefit.3
Clearly, both the business team and the IT team had leapt to the solution without conducting due diligence to fully understand the business problem and determine the most feasible and innovative solution.
Form a Special Innovation Team
As we learned in Chapter 11, innovation comes most readily when special teams are established, removed from the day-to-day operations of the business, fully funded, fully supported from the top, and time-boxed. When the solution is elusive and the project is critical, adopt practices learned from organizations that have successfully established special innovation teams—and then get out of the way! Assign a project manager who has exceptional technical skills, has a highly flexible style, and is comfortable working with uncertainty.
Use Edge-of-Chaos Management to Bring the Solution into View
In some circumstances, when a project seems to be operating on the edge of chaos, the team is still brainstorming, creating, studying, examining ideas, and evaluating dependencies to select the most valuable, most elegant, and least complex solution. Encourage lots of experimentation and prototyping to bring the solution into focus early in the project. In rare cases, project teams design and develop more than one solution in order to determine which approach to pursue. Use small-scale prototypes to test concepts and new technologies. Adopt the practices of three to five design cycles and late design freeze. When this “tiger team” approach is used, the outcome can be more innovative and creative than ever imagined. If your team seems to be operating on the edge of chaos, it might be just the right place to be!
Become an Expert at Facilitating Teams to Make Innovative Decisions
Decision-making in the context of complex and ambiguous projects is wrought with pitfalls. Because we are attempting to clarify ambiguities, we are reluctant to make any decisions until the business situation is unambiguous and our solution approach is defined. However, decisions are necessary to make forward progress. We are also reluctant to make decisions until the results and ramifications of our decisions are well understood. However, in complex projects, that is virtually impossible.
Various approaches to decision-making are appropriate at different times throughout complex projects. Again, the situational project leader determines the appropriate decision-making approach depending on the situation. These decision-making approaches include:4
- Decisions are made independently, by the project manager or a small group, mostly through intuition. This approach is most appropriate early in the project when little information has been discovered but forward progress is critical.
- Decisions are made collaboratively, with a team of experts striving to arrive at the most innovative, creative decision. This approach is most appropriate for identifying potential solution approaches to the business need and for identifying new products for the marketplace. When creativity and innovation are the goal, this decision-making approach requires the project manager to foster edge-of-chaos behaviors to remove all current patterns and biases, striving for truly out-of-the-box thinking. The project manager must allow enough time to let ideas simmer and the solution emerge.
- Decisions are made using decision analysis techniques, i.e., based on the results of analysis as opposed to intuition, preference, or creativity. This highly scientific approach to decision-making involves the logical analysis of a correctly structured problem.
Decision analysis techniques are appropriate when it is important to remove all biases and prejudices from the decision. Decision analysis is applied during the enterprise analysis and architecture effort preceding project launch and subsequently as needed throughout the project. The decision analysis process typically involves four phases:
- Decision framing, or structuring the problem Modeling the alternatives
- Quantitative analysis
- Implementation, monitoring, and review of the decisions.
Conduct a Feasibility Study to Identify and Analyze Solution Options
Once a team of experts has participated in a creative brainstorming session to identify innovative solution options, the project manager should guide the team through an analysis of each option to determine which has the highest value and is most feasible.
The team analyzes the economic, technical, operational, cultural, safety, and legal feasibility of each solution option until it is clear which option(s) has a higher probability of success. The team then develops initial solution designs and prototypes to demonstrate its ability to manage solution dependencies and interrelationships. The team also conducts rigorous risk assessments and risk response planning for each option, focusing on identifying and managing interdependencies to external projects, groups, organizations, and application systems.
During the feasibility analysis, the team attempts to answer such questions as:
- Is this effort unprecedented? Have we, or anyone else, faced it before?
- Is the technology that is likely to be needed advanced (i.e., not commercially available) or even nonexistent?
- Do we understand the scientific phenomena involved (if any)?
- Is the problem within our business competence to solve? To understand?
- Is the problem/solution environment clear?
Conduct Value-Chain Analysis for Cross-Functional Enterprise Solutions
Value-chain analysis is an effective technique for assessing the feasibility of enterprise-wide solutions. Value-chain analysis attempts to describe the cross-functional processes within the organization and assesses the value that each activity within the process contributes to the organization’s product or services. The goal is to ensure that the solution will be able to perform particular activities and to manage the interrelationships between the activities, resulting in a competitive advantage. The linkages can be flows of information, goods, and services as well as systems and processes.5
Conduct Root-Cause Analysis to Ensure the Solution Will Solve the Business Problem
Good solutions are designed to solve specific problems. Conduct thorough root-cause analysis to ensure that you have determined the underlying business problem. Cause mapping is a structured approach to problem-solving that is based on facts, data, and evidence. The goal is to remove biases and opinions from the process. Cause mapping creates a visual map that focuses on the entire system, i.e., any combination of the parts that function together as a whole. It can be used to solve all types of problems—errors, defects, failures, losses, outages, and incidents—in all types of industries.
Become Adept at Tools and Techniques That Foster Creativity and Innovation
An array of techniques is available to open minds to new ideas and to foster creativity and innovation. We present just a few for your consideration:6
- Emotional intelligence. Hone your emotional self to effectively use emotion in your communications, problem-solving, and decision-making. Remember, people change behaviors because of their emotions—because they believe emotionally that doing so will be to their benefit.
- Pattern discovery. Use divergent thinking to discover new patterns that may lead to innovative ideas.
- Metaphors and storytelling. Use metaphors and imagery to add sensory and emotional richness to your understanding of a concept.
- Mind mapping. Create a visual representation of the components of an issue, with relationships and interdependencies depicted.
- Visualization. Use rich pictures, models, and simple diagrams to bring the project into view; visualization techniques ensure that all key stakeholders see the issue at hand the same way.
- Intuition. Trust your gut feelings, your instincts; intuition is one of the most powerful tools of the right brain, which can process vast amounts of information holistically and in record time.
- Experimentation. Intelligently choose experiments to conduct to remove uncertainty and ambiguity; as you learn, adapt appropriately.
- Divergent thinking. Explore options, connections, and relationships to discover novel approaches. As opposed to convergent thinking, which is directed toward a single, correct solution to a problem, divergent thinking demonstrates that there is no one best solution.
Lead Your Team “into the Zone”
Mike Aucoin proposes that we need to be patient, allowing our team members the time to get “into the zone.”7 The premise is this: When we become experienced and skilled at an activity, it becomes internalized. We enter a “zone” that is effortless and often unconscious, like driving a car, typing on a keyboard, or riding a bike. This state is familiar to athletes and musicians. For jazz musicians and improvisational comedians, this is the state where experimentation and spontaneity, and yes, innovation and creativity, come most easily and naturally. A project team can be most creative if its members are in the zone. How can project teams make it to the zone? Aucoin suggests these essential elements:
- Practice. A certain level of competence and skill must come naturally to be in the zone.
- Confidence. Creativity flourishes when the mind is active but relaxed, when it is not afraid to experiment. A person cannot be in the zone if he or she fears failure or is performing in an environment of mistrust.
- A sense of “professional play.” The individual should approach the task at hand with a sense of curiosity, experimentation, and optimism that is playful even while he or she is performing serious work that leads to breakthroughs.
When faced with significant ambiguity, and the business need or solution has not yet come into view, it is premature to launch an implementation project. Instead, form a small but mighty team of experts to conduct analysis and experimentation. Specifically:
- Recognize that it is imprudent, if not impossible, to move forward without a clear understanding of the business objective.
- Apply professional business analysis techniques to bring the business need and optimal solution into view.
- Use edge-of-chaos management to identify the most valuable solution; delay making decisions until the last responsible moment.
- Become an expert at leading teams to innovative decisions.
- Conduct a formal feasibility study to identify and analyze all potential solution options.
- For cross-functional or enterprise solutions, conduct value-chain analysis.
- Conduct root-cause analysis to ensure that the solution will solve the business problem.
In summary, employ both conventional and adaptive approaches for managing projects with ambiguous business problems, opportunities, or solutions (see Table 12-1).
TABLE 12-1. Approaches for Managing Projects with Ambiguous Business Problems, Opportunities, or Solutions
| Managing Ambiguous Projects | |
|---|---|
| Complexities | Management approaches |
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Adaptive
Conventional
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NOTES
1. Jim Johnson, My Life is Failure: 100 Things You Should Know to be a Successful Project Leader (West Yarmouth, MA: The Standish Group International, 2006), 6.
2. Kathleen B. Hass, The Business Analyst as Strategist (Vienna, VA: Management Concepts, Inc., 2008).
3. The Royal Academy of Engineering, “The Challenges of Complex IT Projects,” (April 2004). Online at http://www.raeng.org.uk/news/publications/list/reports/Complex_IT_Projects.pdf (accessed March 2008).
4. Lev Virine and Michael Trumper, Project Decisions: The Art and Science (Vienna, VA: Management Concepts, 2008), 7-8.
5. M.E. Porter, Competitive Advantage (New York: Free Press, 1985), 39-44.
6. B. Michael Aucoin, Right-Brain Project Management: A Complementary Approach (Vienna, VA: Management Concepts, 2007), 93-112.
7. Ibid., 264, 265.