REPLY Separate Professional Conference (SD6309)

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Posted by  "Alan McLucas" <a.mclucas at adfa.edu.au>

Colm suggested: "I can't help thinking that the
SD community just doesn't have enough good - i.e. properly documented, with
RoI etc - examples of SD in use in business ... "

I suggest that is probably true, unfortunately.  One reason for this can be
found in the fundamental nature of SD interventions.  A company that goes
through business process re-engineering or a balanced scorecard
organisational change intervention or implements six sigma can establish the
before and after states, and is able to calculate ROI.  

SD interventions are directed at finding out whether there is a problem and,
if there is a problem how it has arisen. Investigating a problem situation
and making corrections are usually iterative - SD interventions involve
action research.  The point is that we can rarely say:  " ... intervention
started here and ended there ..." - " ... it cost $x and returned $y ...",
such is the nature of dealing with complex problems.

However, I would argue that SD interventions can have enormous value, which
unfortunately is not easy to calculate using metrics like ROI.  Anecdotally,
we have recently helped a Government client work through a group model
building SD intervention focusing on HRM strategies.  We know exactly how
much it cost the client.  Would ROI be calculated on the basis of
improvements made over the next 5 (?) years, and on the basis of the
(unmeasurable) learning that has occurred - I don't know!  Learning only
translates into returns when successful strategy implementation is
demonstrated, even if the strategies are somewhat different to those
identified during the SD workshops (but still based on what has been learned
about the dynamic mechanisms that operate in the problem space).  I would
argue that implementation of the most appropriate strategies might return
savings of 10 - 50 times what the organisation paid for the SD intervention.
That would be a fantastic ROI in anybody's terms.

However, it is most unlikely that strategy implementation will follow any
prescriptive process.  Strategies will be adapted on the basis of a much
better understanding of the problem.  So, can I use a metric like ROI to
measure our success in this instance?  I cannot see how.  What price do we
put on the learning that has taken place?  Even if we could review this
particular intervention, say in 2 year's time, I sincerely doubt that we
will be able to establish an unequivocal link between strategies implemented
and the workshops conducted during the SD intervention and the consequent
value returned.  Herein lies a challenge.
Regards,

Dr Alan McLucas
School of Information Technology and Electrical Engineering,
UNSW at ADFA,
Australian Defence Force Academy,
Northcott Drive,
CAMBPELL  ACT 2600
AUSTRALIA
Posted by  "Alan McLucas" <a.mclucas at adfa.edu.au>
posting date  Fri, 2 Mar 2007 08:38:59 +1000