Don’t Overlook the Unintended Consequences of Your Projects

Do you consider all the implications of your projects? As business analysts, we are often most comfortable thinking about what happens if we’re “on spec.”  After all, specifying a future state of affairs is a big part of what we do.

Given that, do we think enough about what happens if our projects fail, succeed, or succeed beyond our wildness dreams?

Here’s a story that got me thinking a lot about unintended consequences.

Groupon is a social media site that offers coupons to users. Most of the deals are half-price or less and amount to a free meal or half-price meal or free bottle of wine. One business owner bravely shared his Groupon story (the representation of his business model alone is interesting). His Groupon deal left him in negative cashflow and they had to float payroll from their personal savings.

Let’s look at why this happened.

  • Groupon takes 100% of the revenue from coupons purchased under $10.
  • Companies offering a Groupon coupon are encouraged to discount their prices by 50%.
  • Over $10, Groupon still takes 50% of the coupon value.

If you do the match, a Groupon $6 coupon for $13 yields the business $0. (That is, unless you happen to pay more than $13 when using the coupon.)

Talk about the unintended consequences of success.

  • This company sold 1000 coupons which meant potentially 1000 new customers. Big success.
  • He then had to feed them each a *free* $13 lunch. Big cost. 
  • The business owner wasn’t naive. But, he had made a false assumption that most customers would purchase more than $13. So, he’d be doling out $15-20 of food for $2-7 instead of $13 for $0. Big difference.

What seems straight-forward is often full of options, many unintended.

Help Your Stakeholders Avoid This Mistake

Haven’t we all been in meetings where someone says “well, I can only hope we have that problem.” Then we all snicker and say yes, we hope so. Since we probably won’t let’s not worry about it. I know on some projects I’ve felt a bit sheepish about bringing up such success “issues”. As if talking too much about potential success would somehow nix it.

On a recent project we had this discussion and decided to plan for success. We put in a contigency plan for some potentially overworked sales people. We didn’t want our marketing strategy to actually decrease overall sales.

In this case success on a project could have meant failure against the big picture. We didn’t end up needing our plan. But it’s there. And now it’s still there if we happen to need it for a similar success in the future.

But is contingency planning really enough? Should we also be looking at the ROI on wild success? What are those extra salaries and the opportunity cost. What is the cost of too much success? And does our project still have a positive ROI? And, if not, is there a lever we can put in place to cap or control our success, keeping it profitable and positive for our business?

Of course, the levers of business are tricky. No one can pretend to make accurate predictions. We can state our assumptions, list our constraints, mitigate our risks, lay out our well-thought out requirements, but we never know if we’re going to come way ahead or way behind plan. And the costs and benefits are different at each level of relative success or failure.

I know from growing a business that few things are truly predictable. And those that do become predictable only do so after long periods of time. By the time something is predictable, I’m about ready to change it. In a growing business dealing with lots of change, predictions of benefits or cost are shady at best. Dealing with ambiguity is certainly a necessary skill.

Looking forward, I just want to encourage you to think of the unintended consequences of your next project.

  • What might happen if you succeed?
  • What might happen if you fail?
  • Is your business heading for a Groupon experience?

Just in case this post spins you into a state of analysis paralysis, don’t forget to consider the costs of doing nothing. Oftentimes there is an unrecognized cost to standing still that trumps success or failure.

Figure Out Consequences by Mapping the Business Process

The best way I know to find the right questions to ask is to look at the big picture of your processes and run through multiple scenarios.

In Business Process Analysis, we’ll walk through a step-by-step process for mapping and documenting a business process. You’ll also have the option to receive individual instructor feedback on your model and 8 PDs or CDUs towards your IIBA certification or re-certification, and/or 8 PDUs or Contact Hours towards PMI certification or re-certification.

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