The Impact of Organisational Capabilities on Project Success

The Impact of Organisational Capabilities on Project Success

A Formicio point of view

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The purpose is to share a point of view on the impact of organisational capabilities on project success

Delivering projects – particularly those aimed at implementing strategy – is a challenge for most organisations

What is often forgotten is that the purpose of strategy implementation projects is to change the trajectory of the organisation – and increasingly that of its partners

Successfully changing an organisation’s trajectory involves understanding the organisational capabilities that determine its current trajectory – and then deciding how their impact can be altered

Organisational capabilities are like muscles – the more they are used the stronger they get

© 2015 Copyright Formicio Limited

Our point of view is based upon insights and

experience that we have gained over time

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The aim is to inform and inspire

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The majority of projects fail to deliver their intended outcomes

According to John P Kotter, Professor Emeritus at the Harvard Business School, only about 5% of large-scale change projects are successful

Research by the Standish Group covering 175,000 projects in the USA with a combined budget of $250 billion, found that 53% overspent and 82% overran

Oxford University’s Said Business School analysed 1,500 global projects worth $245bn and concluded that IT projects are 20 times more likely to fail than large projects in other sectors, such as construction

The evidence spanning the last 25 years indicates that our ability to deliver successful projects has not improved – and is arguably getting worse


Traditional approaches to improving project success – that focus on the ‘mechanics’ of project management – are necessary but not sufficient

“The first sign of insanity is doing the same thing over and

over again and expecting different

results”Albert Einstein, 1879-1955

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All organisations are on a trajectory, a path that takes them from where they are now to a future state

The purpose of a strategy implementation project is to change the organisation’s trajectory – to one that takes them to a target future

Examples of such projects include:– establishing a new business unit– launching a new product– introducing a new channel to market– integrating an acquisition– implementing a new IT platform– reengineering core business processes– moving production to a lower-cost geography

In some cases, this also involves changing the trajectory of partner organisations – as is often the case in joint ventures


An organisation’s trajectory is

determined primarily by its organisational

capabilities

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Organisational capabilities are a major factor in determining an organisation’s trajectory

Some organisational capabilities ‘pull’ an organisation to a new future by changing its trajectory

Some organisational capabilities ‘anchor’ an organisation to its current trajectory


To change trajectory some new organisational capabilities may need to be introduced, others strengthened and some weakened

Organisational capabilities are like muscles – the more they are used the stronger they get

Organisational capabilities: ... comprise shared mental models;

practices; common language, mindsets and beliefs, and shared experiences

... are embedded in the organisation and not lost when key individuals leave

... determine how the organisation operates and behaves

... are different from the skills and competencies of individuals

© 2015 Copyright Formicio Limited 6

The stronger organisational capabilities become, the more they shape culture

and establish organisational habits

Ultimately, organisational capabilities define an organisation’s trajectory

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Organisational capabilities are often difficult to identify – until they are experienced

When a project comes up against capabilities in the organisation that are not aligned with its intended trajectory, the project will start to fail

This is either as a result of the embedded organisational capabilities not being identified or their impact underestimated

These organisational capabilities are often described as the organisation’s antibodies to change

Some organisational capabilities are easily recognisable – while others only become apparent when they are experienced


The first stage of assessing the impact of

organisational capabilities is to identify

them

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The strength of organisational capabilities – and their impact on an organisation’s trajectory – can be assessed


Organisational capabilities that ‘pull’ the organisation to its new trajectory

Organisational capabilities that ‘anchor’ the organisation to its existing trajectory

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Deg

ree

of Im

pact

Anchoring Organisational Capabilities

Difficulty in Changing

Illustrative

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Deg

ree

of Im

pact

Pulling Organisational Capabilities

Difficulty in Changing

BAC DE

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Illustrative

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Five questions to ask if the success of your project involves changing your – or your partners’ – organisational trajectory

1. To what extent does your project need to shift the trajectory of your organisation – and that of your partners?

2. Which organisational capabilities are needed to ‘pull’ your organisation to its intended trajectory?

3. How could these organisational capabilities be introduced or strengthened?

4. Which organisational capabilities currently in place have the potential of ‘anchoring’ the organisation to its current trajectory?

5. How could these ‘anchoring’ organisational capabilities be best weakened or eliminated?


“The important thing is not to stop questioning.

Curiosity has its own reason for existing”

Albert Einstein, 1879-1955

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The power that comes from having a shared point of view

Having a shared point of view is a powerful tool for collective leadership. It can bring clarity and balance. It can create a context where everything makes sense, people know exactly who they are, what is needed and why they are here. Effectiveness is maximal, yet effort is minimal. Everything flows as it should.

Developing a point of view takes time and effort, but the outcome will be worth it.

The Formicio Team


11© 2015 Copyright Formicio Limited

We work with people who want to improve their organisation’s future. We can help you:

Assess your Strategy by understanding your organisation’s current trajectory and the factors driving it.

Develop your New Strategy by defining an organisational trajectory that leads to an improved future.

Operationalise your Strategy by creating the conditions that enables the organisation to pull itself to its target future.

Through our collaborative consulting approach we help you find and implement solutions that work in your organisation

About Formicio

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For further information contact ...


David [email protected]

Peter [email protected]

Frank [email protected]

+44 (0)20 7917 2993www.formicio.com

mailto:[email protected]




http://www.Formicio.com/