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November 23, 2005

The Value Management of Change

Planned change most often performs the task of recovering, reallocating or reconfiguring assets such that they become currently viable resources.

Benefits from changes come in many flavors, as few as there are different stakeholders and as many as there are occasions of use.

A single change might affect different parties in different ways because those parties have different dependencies, maturities and positions from which they operate. Consequently, the change affects them differently.

Thus, the potential "scope" of a change reflects multiple points of view that can variously describe the same change. Successful changes are often described through a set of "cascading" points of view that show how different levels of execution (managerial, operational, technical, etc.) coordinate.

IMeanwhile, innovations, renovations, reengineerings, repairs... all are possible perceptions of both the intended and the actual objectives of a change.

What's interesting is that not only can a single change be characterized by these different perceptions, but also that the lifecycle of a change includes several phases that may each be characterized, by those same perceptual terms, differently from the others .

In the change lifecycle, a modification to an existing structure or state of affairs can be seen to have these general phases:
- conception
- selection
- development
- implementation
- utilization

Each phase creates conditions that stage the next, but there also may be significant conditional requirements and constraints that are different for one phase than for another. These can include things like information tools, methodology maturity, funding sources, standards, and approval process.

The various factors appear differently, blend differently and influence differently -- by timing, place and stakeholder -- and by phase.

This indicates that any given phase may be driven by certain preconceptions regarding what kind of difference that it achieves will be significant -- or in other words, what value is delivered. The value of one phase can be very different from the value of another.

For example, management can take into consideration the need or opportunity to renovate (upgrade) methodology used in the selection phase. The reason for renovation is ostensibly to realign the procedure to the current requirements of the organization when the requirements have evolved beyond the incumbent (legacy) procedure. While the legacy procedure might deliver an acceptable decision towards the next phase, it might fail to support learning, partnerships, or economies of practice that better promote the organization's overall productivity and agility. Exaggerating to dramatize the point, the old way might be built for a perfect choice in one thing, while a renovation might be calibrated to produce a good enough choice in ten things.

But along these lines, we can see potential unpredictability or lack of coordination that makes each phase a constraint on the overall target value "delivered" from the "chain" of the modification's lifecycle -- but we also see that the value from each phase can influence the environment of overall operations.

This means that the ultimate change-deliverable may or may not be adopted and assessed as a high-value output. The impact of the deliverable includes an outcome that should be measurable, but the impact of the production of the deliverable is more fundamental to the economics of the organization's performance.

We have an intuitive recognition of this fact. We all know what the phrase "at any cost" really means, and it is about sacrificing our enabling infrastructure designated for sustained production, in order to drive an urgent singular outcome. We know what an "environmental impact statement" means when large-scale projects must alter the environment in order to arrive at their destination state. And "economic impact statements" typically identify projected alterations of cost/benefit relationships in many ways other than by the terms of the target change state.

The issue that is raised is the relationship of the change process to the value management practices in the organization. This relationship stands in comparison to the cost-efficiency practices associated with execution.

- Cost management addresses the consumption of allocated assets in meeting requirements...
- but value management addresses the opportunity cost of pursuing advantage by exploiting resources.

Posted by Malcolm Ryder at November 23, 2005 8:02 PM

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