Strategic Thinking: success secrets of big business projects

Here is a book that doesn’t push another new methodology to confuse and confound chief executives with conflicting philosophies. The reader will instead find a rolling up of many existing processes, of well established, straightforward methodologies presented in a very simple package.

Dr Stevens has combined in one book what readers might have to search for in many different texts. Most readers will no doubt admit that this must be the first time in which seemingly unrelated group problem-solving methodologies have been pulled together and fully integrated into one highly effective approach that can assist organisations in driving towards high levels of individual and project team achievement.

Dr Stevens draws not only on his vast experience in running group problem-solving workshops for numerous organisations worldwide over the last two decades but also on his insight as a corporate psychologist to clearly identify where the most powerful resource lies in the success of enterprises. This he calls strategic thinking. He also reveals the secrets of certain aspects of tactical thinking. These include the ways in which the facilitator manipulates group dynamics and structures techniques within the methodologies to ensure their success.

The book constantly reminds us that strategic thinking is not just something that lies in the domain of senior executives. Strategic thinking is all about unleashing the power of any stakeholder in the development of a particular project, product or service. This includes representation from the shop-floor through to top level executives and ultimately to end users.

The book is also about change. For that reason anyone who is association with bringing about change to organizations, whether they are public or private sector organisations or whether they are big or small business, will benefit from the insights uncovered. Anyone who is affected by change in organisations will need to read this book too, to understand their part in the processes used. And academics and students who wish to appreciate the ‘nuances behind the scenes’ that drive the methodologies to make them work will gain great value from this book.

The case studies not only draw from Australian and United Kingdom experience but also include major projects, private and public, drawn from the Asia-Pacific area.

I commend this book to those who are looking to consolidate existing knowledge or apply new knowledge to a workable, profitable and effectively time-managed approach to achieve business prosperity and success.

Dato’Ir. Hj. Omarb. Ibrahim B.E. (Malaya), M. Sc (Southampton), FIEM,

FIHT, P. Eng.

Director General of Public Works, Malaysia

Acknowledgments

I wish to dedicate this book to Ted Smithies and Cliff Barker, from the Olympics 2000 City of Sydney Their clear articulation and documentation of the New South Wales government’s Total Asset Management Manual (Department of Public Works and Services) assisted me immensely in much of the work I have done in value management, risk management and partnering around the world.

Henry Chelvanaygam assisted tremendously in the raising of awareness of senior personnel, both in the private and public sectors in Malaysia, to the advantages to be gained from the group problem-solving methodologies. To Henry, my thanks.

Also, my appreciation goes to Caroline Shindlair, who has worked relentlessly on pulling together all the information from the original text. She had the unenviable task of sifting through hundreds of pages of the original manuscript to help create this finished ebook product.

Finally, my thanks to Robyn Harris, my assistant, who had the arduous task of compiling and typing the original manuscript, between and during our frequent overseas trips, and for helping me to bring the group problem-solving methodologies to clients worldwide

Preface

Over the years there have been three fundamental realisations with regard to problem solving in organisations.

Realisation One

For many years group problem solving has been recognised as having many advantages over individual problem solving when working within organisational contexts. Group problem solving and specific approaches for carrying it out can be traced back at least to the time of the ancient Greeks. Through different cultures and different periods in human history we can see evidence for its support. For example, in the jury system some highly complex issues are evaluated by a group of twelve people and decisions, or the verdicts, are suspended until all the evidence is produced.

The multilateral approach to group decision making has many advantages over the obvious alternative. Many different concepts can be thought of simultaneously with a richness of content occurring in a rapid period of time that could never be achieved by individuals over comparable time spans. Many differing perspectives on a problem can expedite the quality of decision making of a group.

Despite the apparent evidence of superiority of group problem solving there are many examples of individual perspectives prevailing in organisational settings, to the detriment of the organisation. This can range from the unilateral decision making of a chief executive who is remote from the needs of an organisation to that of a single external consultant who gives incorrect advice to an organisation. Some consultants presume that with their limited involvement in an organisation-and with their academic, experiential or intellectual resources-they can produce higher quality decision making than a structured group problem-solving situation that involves the aggregated wisdom of the ‘experts from within’.

This is patently untrue.

Realisation Two

The second area of realisation that is significant is that of project driven rather than organisational driven problem solving. Over recent years, the introduction of group problem-solving methodologies, such as total quality management, has placed emphasis on separating project areas from within an organisation, whether they are concerned with a particular service or product (existing or to be developed) and making them the centre of structured team activity. Emphasis on the project versus organisation-wide problems enables a more focused, meaningful and measurable approach to problem solving.

Realisation Three

The third and final realisation of importance is that there are many different sorts of group problem-solving methodologies, and many of them have been practised for fifty years or more. These include participatory strategic planning; value management; value engineering; risk management; partnering; post-completion review and even total quality management. Unfortunately many of these group problem-solving methodologies are treated in isolation rather than being linked together to optimise the way in which a business or project can function. However, in pockets of big business all around the world the various group problem-solving methodologies are currently being used vigorously, if not to their highest potential.

The worst of consulting is seen where clients are drip-fed and their unhealthiest is sustained.

This book attempts to do two things. First it suggests that group problem-solving methodologies, used by big business to increase profitability and to ensure effectiveness of decision making in product or project development, can be successfully used in small businesses for the same reasons.

Second, the book attempts to demonstrate that these methodologies form a continuum in the life of a project or product. Whether organisations are big or small, they should look first at identifying which projects their organisation needs to embark on over a prescribed period of time (participatory strategic planning). Then they can apply the appropriate group problem-solving methodologies, starting with value management and ending with post-completion review, to ensure the successful operation of the organisation through the effective exploitation of these group problem-solving methodologies at the right time, on the right project with the right team of participants.

The conscious act of selecting the right group problem-solving methodology at the right time, while benignly exploiting the group dynamics associated with the group problem-solving methodology, is called ‘strategic thinking’. Strategic thinking is all about getting the best out of an organisation by getting the best out of the projects and products that make up that organisation, and by getting the best out of the people who comprise those projects.

In this book each of the methodologies has a chapter dedicated to it to explain the details of the associated techniques and processes. Each of the methodologies is also illustrated with ample references in actual case studies. To demonstrate, the robustness of these types of group problem-solving, their success in different cultural contexts is demonstrated by case studies from different countries. Two of the methodologies are looked at from the point of view of their application to a small company situation. This is done as a ‘hypothetical’ situation.

Private sector case studies can be difficult to publish due to the fact that tremendous competitive advantage can be gained from applying the methodologies and the advantage would be lost if they were revealed in this book. However, the methodologies are presented in such a simple way that readers will be able to apply them easily to their own businesses.

The reader will notice throughout this book that there is no specific theme or similarity in the types of clients who have been referred to, either directly as case studies or indirectly when describing the processes and techniques associated with the methodologies. With strategic thinking, once the group problem-solving methodologies of value management, value engineering, risk management and partnering have been mastered, there should be no constraints on the types of industries to which the facilitator (the person who drives the group problem-solving process) can apply the techniques.

The facilitator must be interested in the processes involved in liberating the human mind and fully exploiting its potential within the context of groups of other minds, focusing on common problems at hand. The participants in the group provide whatever expertise is required in the context of the industry that is being covered. The facilitators should remain distant from the content and should pour all their energy into the benign exploitation of the group dynamics that make that problem-solving experience so very rich and rewarding.

Indeed, the facilitator who claims to be an expert in the mining industry or in the education industry or any other industry is suggesting a level of knowledge of a specific industry that is superior to that of the combined internal resources of the client organisation. The potential client should beware of such claims.

There is much to be said for those facilitators who mix disciplines and industry types. They receive different levels and different types of stimulation each time they intervene in a client organisation. Over a period of years a good facilitator, like a successful bee, will have dipped into many rich experiences and have helped ‘cross-pollinate’ many client organisations through receiving different levels and different types of stimulation from each of these interventions. Hopefully, as time passes, they will pass on their enthusiasm, their adaptations of techniques and methodologies, to make the group problem-solving processes even more valuable.

Process and methodology

The methodologies of value engineering, value management, risk management, partnering and other group problem-solving approaches indicated in this book are all very simple. It is the prowess of the facilitator in the utilisation of the methodologies that is the real key to the successful application of methodologies to real business needs.

It is the process behind the group problem solving and the effectiveness of the facilitator, in the appropriate selection of the methodologies and techniques at the right time in the life of the project that ultimately spells project profitability. The ‘eclectic’ approach to the adaptation and utilisation of the methodologies is the secret of success in the process of strategic thinking.

About the author

Dr Stevens formulated the notion of strategic thinking in the early 1980s. He has been involved in more than 500 strategic thinking sessions world-wide for major government organisations, multinational organisations and small businesses. He has worked on projects ranging in complexity from the manufacture of toilet-paper rolls and paper tissues through to the refitting of nuclear reactors to submarines.

From a cost savings point of view, Dr Stevens has assisted such clients as the Federal Airport Corporation with the identification of some $70 to $80 million savings for an international airport, through to the identification of nearly £80 million of savings on railway rolling stock for the Crossrail project in London for British Rail and London Underground. Aggregated savings for his clients are in the hundreds of millions to billions of dollars.

Dr Stevens is an organisational and corporate psychologist who believes that ‘through the harnessing of the human mind in group problem solving we are able to exploit the greatest resource available to us in the development of a project or service’. He is now advocating that the formal group problem-solving methodologies, refined by him over the years and practised worldwide, could be taken from large government and private sector organisations and applied to small business to dramatically increase profitability; reduce risk; ensure that mistakes are not repeated and that successes are; and to remediate interventions and programs that might have gone wrong, like total quality management.

He also advocates that most group problem-solving processes can be undertaken in short one to two day bursts in highly structured retreat workshop situations.

Dr Stevens has undergraduate, masters and doctorate degrees in psychology and has worked in senior management positions over the years for multinational organisations. His personal motto is Dives Ab Cognitate, ‘wealth from thought’.

CHAPTER 1 - Introduction: project versus organisational focus

Key points

The business world has been flooded by intervention techniques in the last fifty years.

External consultants, presenting themselves as unilateral decision makers rather than using a participatory approach, have characterised these interventions.

Some of these interventions have sought to shape organisations in the same way as behaviour modification seeks to shape individuals. Unfortunately, it is spontaneous recovery that accounts for most successes in individual therapy-and probably does so too in organisational interventions.

Organisations should be broken down into specific projects which provide measurable, meaningful focus points for the application of intervention techniques.

Key terminology

- management by objectives

- commitment from the top

- drip-feed consulting

- correlation and causal effects

BRIEF HISTORY OF ORGANISATIONAL INTERVENTION

In over fifty years since the end of World War II, a litany of intervention techniques has been aimed primarily at organisations, to influence those organisations ostensibly for their own good. These interventions have come and gone under many different names, the most generic of which was ‘Organisation Development’ or ‘OD’ as it was known at the time. But there were many others too, such as ‘management by objectives’ (MBO), management matrices, and so on.

Figure 1.1 reminds us of some of the ‘popular interventions of the time’, with an indication of how long each particular style of intervention remained popular. It is quite apparent that the 1980s heralded a massive number of organisational approaches.

Figure 1.1 This graph shows, on a qualitative influence index, the impact of the various popular management techniques.

(Source:Adapted from Australia Graduate School of Management material)

Most of these interventions were characterised by the hard sell approach of external consultants, keen to gain commitment from the top executives of the organisation. Typically cynicism would creep in within twelve months of the inception of a particular organisation intervention.

The cynicism came mostly from middle management down, either because the promised deliverables did not manifest themselves or because the commonsense results emanating from the interventions would have been apparent to any astute observer and could have been effected by possibly simpler and certainly cheaper internal processes and resources.

The Chief Executive Officers in many instances kept their disappointment, disbelief or sheer anger hidden to avoid ‘loss of face’. This of course is in line with the tendency of some Chief Executive Officers to use consultants as weapons in a political game, as the more the consultants cost the more credibility they bring in support of the Chief Executive Officer’s initial agenda-that is, if the gamble works. If it doesn’t, the high cost must somehow be ‘lost’.

The catchcall has always been, from the external consultants’ point of view, to get commitment from the top executives to the process. Obviously the whole intent of this was to ensure that all subordinate levels from the top down were coerced into the process and the external consultant offering the ‘miracle package’ would be assured of at least twelve months’ continuous consulting.

I like to typify this style of ongoing external consultancy as ‘drip-feed’. The main objective, again from the external consulting point of view, was to gain a link of dependency from the organisational client through to the consulting organisation, manifested as a retainer or tight contract that ensured a lucrative cash flow for the external consultant.

WINNING THE BATTLES AND THEN THE WAR

Out of this plethora of interventions, some of which were borrowed straight from popular psychology at the time, arose a pragmatic management intervention school based on ‘behaviour modification’-straight from the psychology text books.

In psychology, the behaviour modification school took the complex organisation of human traits, behaviours, attitudes and all other aspects of ‘the individual human organisation’ and broke it down into component parts. Those parts of the individual human organisation that were considered maladaptive or incorrect in social terms were specifically changed to more appropriate behaviours. Moving this idea from an individual scope to an organisation scope, the management practice borrowed from behaviour modification was to identify, in precise terms, the organisational target that was expected from an individual within the organisation. Once this target or set of objectives was identified, the ‘therapists’ (let’s call them ‘consultants’) tried to ‘shape’ behaviour by taking chunks of behaviour and reinforcing those components that were most aligned to the end objective. From this approach evolved management by objectives or MBO as it was known.

Reverting back to the field of psychology and looking again at the individual level, this behaviourist approach of the psychologists could be contra-distinguished from the classic ‘psychoanalysis approach’. This alternative approach viewed the human being as an ‘organisational package’. Many steps were said to be taken, over a long period of time, to change the inner psyche, which would ultimately result in manifested behaviours that were the ‘ideal’ ones. The psychoanalytical approach implied that there was some sickness in the ‘inner psyche’ and that this ‘wrong attitude’ could be healed or fixed. If we use the psychoanalysis approach as an analogy for the interventionist approach towards business organisations, this would equate with the tremendously difficult and questionable practice of trying to change an organisational ‘culture’. In the organisational context, ‘culture’ would be analogous to the individual’s ‘inner psyche’.

These two schools of psychological thought were more or less polarised and competitive.

The psychoanalytical approach, derived essentially from Freud, was seen as a traditional approach, whereas the behaviourist approach was perceived to be a more modern approach based on the work of modern American psychologists.

Psychoanalysis does not have a history of high success rates in terms of patient or client interventions by therapists. This is well documented in the relevant texts. In those instances when it has been apparently successful, it has been more likely a case of spontaneous recovery by the client with perhaps too much credit being given to the psychotherapist. The psychotherapist, like the consultant, was always there to claim success in a program that might have had at best a correlation effect rather than a causal one.

Let us dwell for a minute on this concept. Causal effect is one in which there is a direct relationship between event ‘A’ occurring with a consequent event ‘B’ then occurring. For example, there is an undisputed causal effect between dropping a brick on your bare foot and experiencing pain. Correlation effects are much less precise. Whenever event ‘A’ occurs, event ‘B’ seems also to occur and it appears ‘B’ is a consequence of ‘A’. However, there might not be direct evidence to suggest this. For example, if every time you drop a brick on your bare foot you swear and then in frustration kick a dog, the dog might well think that each time you swear that causes you to kick the dog-yet there is no direct or ‘causal relationship’.

F

igure 1.2 Psychoanalytic approaches versus behaviourist approach

Taking this psychoanalysis analogy to organisational intervention one step further and looking at the difference between causal and correlation effects, readers might remember occasions when they have been recipients of ‘cultural changes’ in an organisation, and their sceptical response to consultants claiming to have changed the ‘culture’ of the organisation. Could it have been spontaneous recovery? Could there have been correlational relationships, for example, rather than the causal relationships as might be implied by organisational consultants.

We may now take the positive aspects of the behaviourist approach one step further than, say, MBO. What we might find more productive is to take components within organisations and businesses and focus on those components in short bursts, shaping them so that they start to move towards defined objectives, rather than try and change a malaise in the whole organisation, or individual employees’ maladaptive behaviour. In other words, we should fight a series of battles on components and be successful in them. The winning of those battles will lead to success in the overall strategy to win the war. Similarly, if we focus on projects or products within an organisation and enjoy success at that level, we might ultimately experience overall organisational or cultural shift for the better, if in fact we actually need it when the components are working well (see figure 1.3).

In this book we will look briefly at the organisation at a strategic level. But most emphasis will be on breaking that organisation down into component parts-normally known as projects or possibly identified as products within a manufacturing organisation (or a service in a service industry)-and determining that overall success for a company is derived from success at the ‘component’ level.

For example, the success of manufacturing organisations is measured ultimately in terms of the success of the component products that are being manufactured, with the overriding marketing/administrative network ensuring the delivery of the products to the right number of buyers at the right price (marketing and administration also being ‘component’ parts).

Thus it is the success of the production and of course the selling of the manufactured products that is the foundation for the success of a manufacturing industry. The successful manufacture of the component parts represents activity at a project level. To assess the overall success of a manufacturing organisation without specific reference to the success of the component or project parts is simply too ‘loose’. Discussion on improving manufacturing companies (or for that matter, a service organisation or any business) at a general cultural level can only be meaningful in the context of component or project parts.

The overall perspective of this book is to concentrate on the success of projects, products or services within an organisation, and to highlight the principle that it is important to focus on the success of the battles rather than the overall strategy of the war.

The rationale of this book still includes an acceptance that there will be a strategic approach to the organisation. This is usually arrived at through effective strategic planning by the participants in that organisation, and not by external consultants. The planning process should be initiated from the top of the organisation, then run down through the formal organisational structure and be owned at subordinate or divisional levels. The planning then flows back up to the top of the organisation by way of information being fed from the lower levels, to perpetuate an interactive, iterative approach to planning and development of the organisation.

The overall strategic approach is looked at in Chapter 13.

Figure 1.3 Winning the battles and then the war. (a) The whole war shifts towards victory or success as individual battles are won. (b) The whole organization shifts towards organizational success as individual projects are successfully achieved or implemented.

CHAPTER 2 - Strategic thinking: A model for group problem solving

Key points

The Greeks’ concept of Ethos, Pathos and Logos could constitute a GPS methodology.

The participatory approach in group problem solving is represented by

participation (P) ownership(O) commitment (C) goals (G)

Exploitation of group dynamics in a benign sense is of great benefit in the effective running of projects.

One of the ways to harness these group dynamics is to ensure a system of rules in workshops.

The role of the facilitator as an external agency is very important in effective group problem solving.

Fast track consensus and fast tracking group problem solving have their benefits.

Key terminology

- participatory formula

- group dynamics

- stakeholder

- marathon, serial and episodic group problem solving

GROUP PROBLEM SOLVING

It was a long time ago that group problem solving (GPS) was recognised as an effective way of harnessing the greatest human asset-the mind-when embarking on a project or developing a new product or service. Over 2000 years ago the Greeks realised the advantages of selecting a group of experienced people to work on a problem who suspend individual judgment, listen to all points of view then, after some deliberation, make a final decision on the problem area. In many respects this simple and very ‘human’ approach has been addressed recently in a series of ‘participatory’ methodologies, both in public and private sectors. These will be explained briefly in the next chapter, and then in detail in succeeding chapters. The successful delivery of this range of methodologies and their timely and effective application in problem areas is referred to as ‘strategic thinking’

First the word ‘methodology’ must be defined in more detail with respect to GPS methodologies. ‘Methodology’ means a systematic approach with guidelines and steps to each approach to group problem solving. Each of the steps within each of the methodologies has its own set of techniques. Thus the methodology for value management as a group problem-solving approach will be different from the methodology of partnering as a group problem-solving