December 08 National Newsletter   Most Noise or Most Need? Peter C. Ross   Peter C. Ross is a Consultant with William Thyme & Prophet Pty Limited.

 

Traditionally the noisier projects tend to win out

 

Experience in law firms tells us that we’re often dealing with noisy people. The source of that noise is not always the same, however it is common that the noise generates action and often capital expenditure. My question is simple. Is that appropriate?

My counter proposal is at least semi-scientific method of deciding where one's limited capital expenditure funds should be directed, and / or a method of acid testing those noisier requests.

 

What seems to be the problem?

Inherently, someone under pressure to perform will look for a scapegoat or an excuse for their lack of performance which is beyond their control. That is, their lack of performance is “not their fault”. Often, particularly in legal firms it seems, that translates into “noise” about a report or system that doesn’t exist, doesn’t work or “is not the way I run my practice”. I don’t have the information or the tools etc and “I can’t do my job”.

Often, this issue is escalated as a priority development request, either for a new report (which is often never used), a new system or some other form of customisation.

The problem, as such, is that the development so sanctioned, may not be the most appropriate use of funds at this time. Rarely, if ever, do such noise generated projects make it through a formal evaluation. This is because of the noise, the bustle and “urgency” of the solution required.

The reality is that there are limited funds and limited resources for changes in your firm, be they reports, systems, logos, marketing campaigns, whatever, and it does seem appropriate to be a bit more scientific about how these things get the go ahead.

 

OK, so it’s a problem, what now?

Logic dictates that there should be a process for the evaluation of projects, and a determination of their relative priority for funds, as against all the other competing priorities. Even if this can’t be done as easily and effectively as we might like, there should at least be some “hurdle” criteria for the proposal to get over before it gets a green light, and I’m pretty sure one of those hurdles shouldn’t be “the decibel level and length of time whinging from the proposer of the project”.

Now I’m dead against paper forms as a rule, so lets assume that this “form” I’m about to describe is an email or workflow form and then I’ll be ok. In reality paper is a good start for now.

 

 

Essentially what we’re trying to achieve is three things:-

1. Evaluate the seriousness of the proposal and ensure that the proposer knows what they are actually asking for,
2. Having them commit to writing a description of the change / solution, which in many cases will cause enough of a delay you won’t ever need to do it, or at worst means you have something by which to limit the scope, and
3. Gain some understanding of strategic and operational benefits to offset against the costs of the proposed changes.

I know it’s not rocket science, but it really does surprise me how often these types of measures are not taken into account. So here’s the sort of thing I’m thinking is a good starting point:-

a. Strategic alignment of Project to stated firm direction.
b. Alignment with short term KPI’s and goals

c. Project estimated external cost.
d. Likelihood of other firm areas obtaining direct benefit from this development.
e. Project estimated internal resource diversion (man days).
f. Projects suffering from this diversion and the effect thereon.
g. Time delay till benefits flow.
h. Annual direct benefit quantum.
i. Payback period (the time taken for the benefits to pay for the investment).  At the moment I’m in favour of between 3 and 6 months as a maximum. Any longer and the reality is there’s no payback or there are other projects that should have priority. Remember there is no such thing as material long-term competitive advantage.

 

Now some of the points here make further assumptions that the firm, in its planning, has in fact identified its strategic focus, hurdle rates and other KPI’s, but I suspect that for most firms this is a reasonable assumption.

Change management

 

If this is a big change from where your firm is at today then there’s a change management task to be delivered as a matter of urgency before you can head down this path. If you don’t, the whinging will get louder and there’ll be fighting in the streets.

Rightly or wrongly (I think wrongly), the loud and raucous approach has been (silently) signed off as appropriate and acceptable for a long time. If you plan to change it, you need to get a solid agreement up front that the assessment approach is superior and supported at all senior levels within the firm.

It makes sense at your next planning meeting or conference to bring up the issue of a capital projects hurdle methodology and present the guidelines you think are appropriate. As always, go in hard with some pretty stiff guidelines so when the inevitable relaxation is required to get agreement, you end up about where you wanted to be. Get it signed off in writing and make sure the key players are in the loop (and you have their physical signatures on the plan).

One extra point here, and it’s never popular but its necessary. The judges decision is final and there is NO right to appeal. If you don’t include this in your focus, you’re just inviting lobbying, grandstanding and even more noise generation, and frankly you have wasted a lot of time and achieved very little.

You’ve made the change, now stick to your guns

 

OK, so you’ve made the change. As with all such sensible but difficult practice management changes, you now need to stick to your guns and ensure that you are not only following the new path, but seen to be following it as well.

Make a bit of a song and dance about the plan.  Publish the guidelines and the background of how they were agreed (and who was involved). Talk about how there will be an assessment group who will meet monthly to consider project requests and assess them against the guidelines, and provide detailed feedback to the respondents.

Make sure the assessment group includes some noisy, sensible, and influential members, but do keep it to a small size and with an odd number of members for obvious reasons.

 

Naturally it’s important to talk in terms of a range of possible outcomes from the assessment;-

1. No, it’s not happening, doesn’t meet enough key criteria
2. We need more information to assess the project

a. benefits
b. effort
c. budget
d. applicability etc.
 

3. Yes it should be happening, but it’s unlikely in the next NN months because of other higher priority projects etc.
4. Yes it’s happening and has been scheduled for NN months away, behind project X, Y & Z which are already approved and at least equal if not a higher priority.

 

Experience shows that the majority of “loud” silo projects are detrimental to the firms strategic direction. Executives need to train themselves to put on their “noise cancelling headphones” and ensure all resource consuming projects pass the strategic alignment and other relevant tests before being given the green light.

 

Won’t it be nice to get to next year's planning knowing that you’ve done what needed to be done, not just what someone yelled about. Now it’s up to you.

 

Good luck.