Dining in a Michelin star restaurant is a memorable experience. The chef showcases his fine culinary expertise with creative use of quality ingredients and immaculate presentation. On top of that, the attentive service and the ambiance deliver an extraordinary evening. That fabulous experience becomes a frame of reference for comparing future dining at other Michelin star restaurants.
It is advantageous for businesses to have a frame of reference in decision-making. The frame of reference offers a reflection point for acknowledging the status quo and assessing what is needed to accomplish the set goals. The insight is crucial to successful execution.
In order to garner useful insight from the frame of reference, one needs to use a disciplined approach to establish what to incorporate and how to manage it. Let’s use an energy company which seeks to build a better reporting dashboard to illustrate the points.
- Desired outcomes. Identifying the desired outcomes might be the most straightforward task. By listing the specific outcomes, the energy company defines the enhanced value it seeks. In this case, the desired outcomes include a tool that allows users build a customized dashboard quickly without involving IT and provides the flexibility in accessing the information remotely and securely.
- Commonalities with status quo. This might seem trivial and less important when dealing with a transformational change. But noting the commonalities establishes the baseline. Current best practices might still be relevant and worthwhile to maintain. Identify the deficiencies as well. The energy company wants to maintain the reporting frequency but would like to be more efficient with the compilation of the results and the delivery of the report. It is helpful to define the desired magnitude of improvement also.
- Elements of innovation. There are many ways to improve the status quo. Some might be easier to develop and implement than unconventional solutions. The key is to determine the parameters that constitute success. For the desired outcome of “building a customized dashboard quickly without involving IT,” the need is for a low-code solution or something equivalent. Determine what the implications are for the stakeholders.
- Stakeholders’ alignment. Stakeholders include employees, business partners and customers. Engage the key stakeholders in establishing the frame of reference. What is a top priority for one group might be the least important for another. Getting their input formalizes a common ground for gauging success. For the energy company, the dashboard is used by employees only. Input from the main user groups helps to stake the boundary, which is useful for scope management. Otherwise, a lot of time could be wasted on unnecessary debates down the road.
- The evolving business environment inevitably triggers changes to the business needs. Without assigning someone to take ownership of the frame of reference, the lack of tracking leads to scope creep and confusion. Further, the changes could get lost, making it difficult for the business to monitor progress and achievements. The energy company assigns the ownership of the frame of reference to the sponsor of the initiative, who in turn holds the project leader accountable for the actual tracking.
Specificity is key in developing a useful frame of reference. A sound frame of reference not only serves as a checklist for validating action, but also provides a guide for gauging the effort needed to deliver the desired results. The business makes better decisions.