We’ve met Arthur previously.  He’s the Product Owner for an effort to replace the Commission System for a mid-sized insurance company in the middle of America.

The insurance company Arthur works for has grown through acquisition. Until recently, one of its practices was to let each company keep its own identity when dealing with anyone outside the walls of headquarters. This included the relationships with independent agents and the resulting commission structures. As a result, Arthur had to deal with a slew of different very unique commission rules…down to the individual agent level and the resulting hodgepodge of commissions “systems” required to administer these different commission plans. Now that the organization has finished its acquisition binge, it realizes that some commonality needs to be introduced in many areas, including commissions.

Arthur has been charged with making the commissions area more efficient. His first instinct was to find a new commissions system that would allow him to administer all the various commissions plans in one place, yet still maintain all the unique commission structures. He sat down with a couple of more experienced members of his staff, and they started scouring the Internet for possible products.  A quick search revealed that there were a several options out there. (Which should have been obvious considering the seven different software applications they had inherited from the companies they had purchased, only one of which was custom built.)

It was at this point that they reached out to IT for some help figuring out what to do next.  Arthur was a little hesitant to do that at first because he was concerned that IT would want to build something in house.  He was pleasantly surprised when he started working with Heather, a Business Analyst on the team, who suggested that instead of immediately going out and looking for specific products that they step back and think about what need they were trying to satisfy (Heather’s exact words).

Define-SuccessHeather and Arthur sat down to talk about the current situation and what Arthur hoped to accomplish.  Heather would ask a fairly open ended question, listen to what Arthur had to say, and then paraphrase back what she thought she heard.  While Arthur was talking, she’d also write notes and sketches up on the white board in the conference room where they were talking.

At one point, Heather asked Arthur, “So how will we know when we’ve been successful?”

Arthur looked at her puzzled, “What do you mean?”

Heather took a quick glance at the white board, “Well, you’ve said that the current commissions process is a pain.  You have a bunch of unique rules that apply on an individual agent-by-agent basis.  You have multiple, different systems that you have to account for.  There are no consistent commission rules that use different pieces of information, and you have a lot of people who would like to have reporting for different regions, branches, districts, offices, etc. but there is no consistent hierarchy of how those things are organized. You’ve said you’d like to have the following.”

She pointed to a list she had gradually been writing on the white board as Arthur talked:

  • Accept inputs from multiple policy systems to determine commissions
  • Create unique commission rules based on free form attributes and specific values of those attributes
  • Create unique commission rules for each individual agent
  • Support multiple hierarchies: some sales channels are organized based on product, others are based on geography, some are based on both product and hierarchy
  • Allow for adjustments to occur in the calculated commission rules
  • Allow for manual determination of commission payments
  • Support multiple commission rules unique to the individual, unique to the policy

“You’ve listed capabilities you would like to have in a solution, but I’m curious to know how we know when we’ve been successful.”

Arthur pondered for a minute, unsure about what he was about to say because he thought it was fairly obvious, but he wasn’t too anxious to look stupid. “I’d say it was when we have something that can do those things.  That is, what you IT folks call ‘scope’ isn’t it?”

“In a way, but that list is actually a bit too restrictive.” Said Heather,  “I’d rather have some measurable way to know that we’ve been successful, but not have that defined by what we do.  What if, for example, we figure out a simpler way to solve your problems?  I’m more interested in defining success as some measure that we can keep our eyes on and use that to determine how we are doing.”

Arthur looked back at the list. Still confused, and a little abashed that he had just looked immensely stupid.

“I’m not quite following you.  Could you give me an example?” he finally said.

“Sure,” said Heather looking back at the white board to another part of the notes. “You said that it currently takes you a week to run a full commission cycle, and that’s when everything goes relatively smoothly.  That seems like quite a bit of time considering you are paying commissions every other week.”

“Yeah….” said Arthur reflecting on the last commission cycle and the late nights he had spent manually adjusting checks because one of the commission systems he inherited decided to give up its existence halfway through its calculations.  He had just that morning responded to the final “where is my check” email. He shuddered.

“So,” said Heather, “what would be a better cycle time?”

“Instantly, “ said Arthur with a weak smile, “But I suppose that is too much to hope for.  I suppose if we think about the timing of when we get the various pieces of information we use to calculate commissions, the best we could do is 2 days.

“Ok, “ said Heather, then let’s start with this as a definition of success.  An objective if you will” And she wrote up Reduce the time it takes to produce commission payments from 1 week to 2 days on the white board.

“Oh, I get it, “ said Arthur, who didn’t.

But they continued the conversation and identified two additional objectives, so that the three they would use to define success were:

  • Reduce the time it takes to produce commission payments from 1 week to 2 days
  • Reduce time required to setup a new commission plan from 6 weeks to 1 week (needed every time a new product is created)
  • Reduce time required to setup a new agent from 1 day to 1 hour

“So by defining success this way, “ said Heather referring to the three objectives written on the white board, “we have more options open to us that we can use to determine how to address it. Having more options is a good thing, because it helps us to avoid going down a path that leads to a more complicated, and costly solution than we actually need.

Arthur nodded slowly looking at the three objectives.  He was starting to piece together what Heather was suggesting in his head, and he liked the idea of these simple statements being the guide to what they were trying to accomplish, but something…seemed to be missing. He couldn’t put his finger on quite what.

Heather, who seemed to be on a roll, had launched into describing the next step. “Okay,” she said erasing part of the whiteboard. “Let’s take a look at one of these objectives and talk about the things we can do to meet that objective.  The way I want to think about it is through what types of behaviors we need to change or encourage from the various people who can impact the objective.” Short pause. “Arthur, are you ok?”

She had noticed that while she was talking that Arthur had clasped the sides of his head and bent over double so that his forehead was resting on his knees.

“What oh… yeah, I’m fine.  It’s just that…. well that’s a good definition of success and all…. but I don’t think it’s complete.” He said slowly raising his head but keeping his hands firmly on his head.  Giving him the look of a very perplexed elephant with an exceedingly short trunk. After a second or two like that, he realized he probably looked like a perplexed elephant and put his hands down into his lap.

Heather, was a little confused.  She thought Arthur was getting it, and she thought that the three objectives that they had come up with were a good clear description of what they were trying to accomplish. She wasn’t sure what to think of the perplexed pachyderm imitation.  She also wasn’t sure how she arrived at pachyderm in the previous sentence. “Well…. what do you think is missing?”

“These are good objectives if you are focused solely on my department…” started Arthur, suddenly craving a bag of peanuts, “…but it seems like we should have something more general.”

“What do you mean,” said Heather thinking that Arthur was going to have a tremendously brilliant insight, or was going to utter something completely irrelevant, “by something more general?”

Arthur felt a tiny little smile come across his face because he thought he was about to offer a tremendously brilliant insight.  He pushed aside the nagging concern that he was, instead about to utter something completely irrelevant, “Well, is the purpose of this exercise,” he waved his hand a little bit dismissively at the white board, “to come up with meaningful business objectives to help us determine what we should do on the project?”

Heather began to feel a little hopeful that she was about see the bright flash of insight, “yes it is.”

Arthur was trying to work out things in his head a couple of seconds before saying them. “Well, these objectives are good for my department, but they really don’t speak to the value for the entire company. I mean my boss has really challenged me to make our processes more efficient, but also always talks about this need to drive sales. These objectives don’t say anything about that, and he seems to care a lot more about that than efficient processes.”

“Well,” said Heather catching an idea of where Arthur was heading and wanting to intercept him before he fell off the cliff, “one thing with establishing objectives is you want to focus on the specific things that the change is supposed to address.  In our discussion you never really mentioned anything about selling more.  This project could have some impact on costs by making your processes more efficient…” Heather trailed off hoping that was enough to talk Arthur off the cliff, though she wasn’t quite sure she followed what she had just said.

“Actually, commissions has a big impact on sales.  At least we think so.  That’s why we have all these unique rules. I think” Arthur said, the concentrated perplexity giving way to careful pondering.

Let’s leave Heather and Arthur there for a little bit.

Heather did a great job of finding more out about Arthur’s needs and driving to identify objectives that could be used to evaluate solutions rather than focusing on a list of features.  Even though Arthur had implicitly made a decision to buy a commissions package, Heather knew it was important to understand their measure of success and use that as a means of evaluating potential solutions.  Using these criteria allowed the team the opportunity to look at more options, some of which could end up being simpler, less expensive and perhaps even more elegant than what the team would have come up with by going against a list of scope items.

Even so, Heather was about to make a big mistake by assuming that efficient processes was all there was to the project. Luckily, Arthur had a nagging sense that something was missing and Heather had enough sense to listen to him and understand other measures of success – in reality other reasons for doing the project.

This sort of thing happens all the time, even to the most experienced business analysts.  It’s very easy to take things at face value and consider our work progressing nicely when we have clear objectives. It’s always a good idea to validate if that is really all there is and consider what broader organizational perspectives should be considered.

In the next post in this series, we’ll see how Arthur and Heather take steps to validate that they are working on the right objectives and use that information to guide their approach to the project.

About Kent McDonald

Kent J. McDonald is a B2T Training Senior Instructor and stives in uncovering better ways of delivering value by doing it and helping others do it. His more than 15 years of experience include work in business analysis, strategic planning, project management, and product development in a variety of industries including financial services, health insurance, performance marketing, human services, nonprofit, and automotive. He is a certified Scaled Agile Framework Program Consultant (SPC) and active in the business analysis and agile software development communities helping people share stories about what does and does not work. He shares those stories at beyondrequirements.com in addition to presenting at and helping organize several local and international conferences.

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