Risk Management - Preventing Reversion: How to Cause the Change
Finding the Right WOW Measure
It can be hard to find the right metric of performance to capture the sudden change.
Obstacle: Many of the common KPIs in businesses are ‘lag measures’; they are questionable in their causality i.e. quarterly profit return. A quarterly metric will not show the sudden change in performance.
Your measures scope needs to be narrow enough, and twitchy enough, that they will show any shift in performance when you implement the changes.
The performance metric used for the Wow Measure needs to be seen to change suddenly. The measure must update frequently i.e. hourly or daily. Daily is better than weekly.
It can be necessary to be quite creative when searching for responsive Wow Measures.
Some Wow Measures companies have used include: Time spent on cross training, number of jobs ready to be invoiced but not yet invoiced, visibility of jobs and job progress.
Threat of Reversal of Fortune
The ‘threat of reversal of fortune’ is used to lock in the gains of a change project and prevent the solution (and thus the benefits) from being undone when negative effects occur.
To create this dynamic, there is a need to get evidence of an important beneficial change of a performance metric, e.g. a Wow Measure.
You will need to baseline the metric to isolate out the noise of other projects and events, such that it is clear to the stakeholder that the change in the Wow Measure was caused by the project change that occurred.
Scenario
IT Solutions uses the metric of due dates met for delivery and milestones as their key performance indicator (KPI).
Within weeks of implementing the change, the missed due dates have halved.
Employees of IT Solutions start a debate about whether the change had any effect, and complain about some negative effects of the change.
Ned, the business owner, has evidence of the good fortune (positive outcomes) created by the change but he stalls the discussion for another three weeks. He knows if the number of missed due dates can be halved again, then this evidence of success will become even more powerful.
Six weeks after the change, Ned calls a meeting with his employees. He says, “Look we’ve caused the missed due dates to go from 100 a week, to 50 a week, to 25 a week. If we stop using the new process, our new way of doing things, our missed due dates are going to go back to 100 almost immediately. That would be bad. Do you want that?”
The employees of course say, “No, we don’t want that!” And, thus, the threat of reversal of fortune operates to prevent employees or stakeholders from undoing the change and IT Solutions retains the benefits of the solution.
(Names have been altered to protect identities)
