Governing Innovation with People-Centric Planning

Technology environments continue to get more complex, dynamic, and business critical. It seems everything about technology has changed in recent years—except the way it is funded.

In many ways, technology planning and funding are run the same way they have been for decades. These legacy, project-based approaches are inefficient and wasteful, and are fundamentally misaligned with modern technologies and realities.

It is for these reasons that teams need to take a new approach: people-centric planning. With this approach, teams are given persistent, long-term funding. Teams are organized around products and value streams, rather than in the siloed departments of the past.

There are three key principles that enable teams to successfully deploy people-centric planning: governing innovation, aligning technology with the business, and empowering teams. In this post, I’ll look at governing innovation.

The problem

Within some organizations, governance has acquired a negative connotation. People tend to view governance as an impediment, creating extra steps that slow down progress and make tasks more difficult. The reality is that most leaders have been forced to make hard tradeoffs in balancing demands for governance and innovation. This is very much the case in the context of technology planning. Having a top-level decision-maker review the funding for each scope change may serve to protect the business from some risks, but it also may slow the business to crawl.

In the past, teams pursuing a traditional project approach would typically have some form of documentation that details costs and the deliverables being received for a given expenditure. When you start funding people, how do you ensure you’re getting value for the money being spent?

Previously, technology teams were effectively only tracking IT metrics, reporting on whether they delivered on time and on budget. The reality is that these metrics didn’t align with business metrics, such as sales, revenues, or profit margin; or the second-level levers that drive these metrics. The analogy is like that of a factory. The assembly team can have gauged their success solely on the number of widgets delivered, but this metric may not have any bearing on the manufacturer’s business fortunes. Whether the factory delivered 5 or 5,000 widgets a day may be academic if none of the widgets produced meet required specifications or quality standards.

The people-centric planning approach

Given these realities, it is clear leaders need to take a different approach to governance in order to succeed with people-centric planning. Instead of focusing on work and granular requirements, leaders need to give people key metrics and offer them the autonomy to determine the best way to achieve those metrics. In support of this approach, it is vital to establish visibility into what people are doing and how it affects the business. Leaders need to be able to track value in real time, using one set of business metrics.

The continued interweaving of business and IT means teams need to move to tracking a single set of business metrics. These metrics can take different forms, but most critically they’ll provide a gauge in terms of value. All that ultimately matters is that business metrics are moving in the right direction and that the technology is perceived as contributing to that.

This approach creates directional alignment. For example, in a bank, a key business metric would be new account acquisition, which ties directly to assets under management and revenue. Technology initiatives can fuel improvements in this metric, but they may not necessarily have a direct impact or be the sole factor to affect this outcome. For example, a key technology initiative may be delivered successfully but the acquisition metric may still drop due to macro-economic factors. Leaders need to rely on their judgement and ensure metrics make sense conceptually.

Benefits

By employing people-centric planning, leaders and teams can realize these advantages:

• Establish improved visibility and insights, empowering people throughout the organization to make better decisions.
• Improve trust between teams.
• Minimize business risk.

Conclusion

A lot has changed. Why does technology funding look the same as ever? In today’s digitally transformed world, your organization can’t afford to rely on decades-old technology funding models. By employing people-centric planning approaches, your organization can eliminate the waste, inefficiency, and inflexibility of old-school approaches. 

To learn more, please visit our People-Centric Planning page.