Investment Logic Mapping: A Blueprint for Change
Investment Logic Mapping: A Blueprint for Change
Connecting the divide between activities, outcomes, benefits and organizational objectives.
Happy Tuesday, Transformation Friends. Another week, another opportunity to go Beyond the Status Quo.
Last time, we discussed a fundamental principle of managing large transformation initiatives called “start with the end in mind.” This principle stresses the need to start with a clear understanding of the initiative’s end goals, the changes necessary to achieve these goals, and the tangible value these changes create.
In that post, I briefly described a helpful tool called the Investment Logic Map (ILM), also known as a Benefits Map. It’s a tool that can help communicate the rationale behind our work, particularly in large transformation initiatives. It is designed to provide a clear, visual representation of the logic connecting activities to their expected outcomes and benefits to the greater objectives of an organization.
In today’s post, we’ll look deeper at the ILM and the particular configuration that I like to use. It divides things into two sides: the “Problem” and the “Solution.” It then places the “Benefits” as the central link between these two.
Grab your morning coffee, and let’s get started.
Core Concepts
I’ll start by sharing a visual of my preferred style and configuration for the ILM:
Essentially, there are three core components: the Problem side, the Solution side, and the central role of Benefits.
The Problem Side: This aspect focuses on identifying and articulating why we’re investing in the first place. It involves outlining the broader organization’s strategic objectives alongside other drivers, including the underlying reasons or motivations for these objectives. This side of the ILM ensures that the work and the change we create are grounded by and support the organization’s goals.
The Solution Side: In contrast, the solution side details how we plan to help the organization achieve its strategic objectives. Starting from the specific activities undertaken and their tangible outputs. These are linked to new capabilities that lead to the desired outcomes. This side of the ILM helps us see how our actual work will drive the initiative’s goals.
The Central Role of Benefits: Bridging the two sides are the benefits: the measurable positive changes or advantages that the initiatives aim to deliver. The benefits are central to the ILM framework as they link the “why we’re doing this” with the “how we’re going to do this.” This central focus on benefits ensures that the initiative is not just a series of activities (i.e. activity-centred using the vocabulary from the last post) but benefits-led.
You’ll notice that many of the elements don’t necessarily map one-to-one. For example, you may have an activity that produces multiple outputs, an output that drives more than one capability, or more than one capability tied to an outcome. This is expected and helps to visualize complexity and relative importance. For example, a capability linked to three objectives may create a more significant risk than one tied to only a single outcome.
Another overarching feature of ILMs is that the level of detail can be tailored to specific audiences. For example, a programme office might hold a highly detailed version of the ILM, perhaps even showing a delineation between programme tranches, which would help describe the landing points at the end of each tranche. In comparison, a version presented to a senior investment board may only show the capabilities and the highest level outcomes on the solution side, sparing the finer details around implementation.
Let’s look at each component in more detail. I’ve also provided additional examples and resources at the end of today’s post.
Understanding the Problem Side
The problem side consists of two key elements: Strategic Objectives and Drivers. These are elements that are not owned or controlled by the change initiative. However, they create the purpose (the why) for it.
Strategic Objectives: These are the high-level goals of the investing organization, not to be confused with the initiative’s goals. The strategic objectives provide a clear direction for why the organization is investing in the initiative, setting the stage for what ultimately needs to be accomplished. As such, we are not creating anything new or novel in this part of the map; we’re simply stating these objectives to visualize them alongside the other elements.
Drivers: Drivers are the underlying reasons or influencers of the strategic objectives. These could be linked to recent events and may include broader government policies or priorities in the public sector context. Again, the initiative is not creating anything new here; it’s simply stating what these are.
Understanding the Solution Side
The practical strategies and actions to address the identified challenges are detailed on the solution side. It comprises four integral elements: Activities, Outputs, Capabilities/Enablers, and Outcomes/Business Changes.
Activities: These are the specific tasks or actions that will be undertaken. At the highest level, these could be projects, for example, or projects may be broken down into more minor work breakdown elements. PRINCE2 formally defines an activity as,
A process, function, or task that occurs over time, has recognizable results and is managed. It is usually defined as part of a process or plan.
The key is ensuring these activities are directly linked to the outputs.
Outputs: Simply put, Managing Successful Programmes (MSP) defines an output as,
Output: The tangible or intangible deliverable of an activity.
Outputs are crucial as they are what is “handed over” when an activity is completed. Together, outputs create capabilities or enablers.
Capabilities/Enablers: These are the resources or conditions necessary to achieve the desired outcomes. Again, from MSP, they are,
Capability: The completed set of outputs required to deliver an outcome… it is a service, function, or operation that enables the organization to exploit opportunities
They can include new technology, funding, skilled personnel, supportive policies, or processes. New capabilities and enablers are what generate change: the outcomes.
Outcomes/Business Changes: Finally, outcomes are the changes or impacts due to the project. MSP describes outcomes as,
Outcome: The result of change, normally affecting real-world behaviour and/or circumstance. Outcomes are desired when a change is conceived. They are achieved as a result of the activities undertaken to effect the change.
In the ILM example provided earlier, a key observation is the concept of nested outcomes, where smaller, incremental outcomes contribute to larger, overarching ones. This aspect becomes particularly significant in extensive transformations that span a long time and encompass substantial change. While our endgame might be realizing a few significant benefits, it's essential to recognize and communicate the more minor yet meaningful changes that occur along the way. Understanding how these incremental changes pave the way for the larger ones and how we can extract intermediate value from these changes is crucial.
Central Role of Benefits
At the centre of the ILM are the benefits which serve as the link between the problem and solution sides of the framework. MSP defines a benefit as,
Benefit: The measurable improvement resulting from an outcome perceived as an advantage by the investing organization(s) and which contributes towards one or more organizational objectives.
There’s much to unpack with benefits; we won’t get into most of it today. But here are a few key concepts.
MEASURABLE - benefits by definition are measurable, making them different from outcomes, which are observable.
Benefits should have several measures, both lagging and leading, that allow us to track progress. For example, a benefit might be a 20% improvement in the efficiency of Service X with metrics like the proportion of applications whose processing time is over 2 days, the number of manual interventions required, the time it takes staff to conduct an initial assessment, etc.
Benefits come in two main categories: financial and non-financial.
Placing benefits at the centre of the map is on purpose. It forces us to
place a tangible value on the change we’re creating (the link between the outcomes and the benefits); and
link that value to the organization’s greater purpose (the link between the benefits and the strategic objectives).
In the ILM I showed above, I also like to break benefits down into two parts:
End/Ultimate Benefits: These are the long-term, significant impacts that the initiative aims to achieve. They are directly linked with the strategic objectives.
Intermediate Benefits: These are optional. They represent the short-term gains or achievements that lead to the ultimate benefits. They are more like milestones along the way and can be nested like outcomes. These benefits help us to maintain momentum and provide evidence of progress, which is critical in long transformations when the ultimate benefits may be a long way off.
I believe it's essential to keep the End Benefits distinct, visually and conceptually. These benefits are directly linked to the fundamental justification for the investment, so it's important for them to stand out. Whereas, the intermediate benefits tell us about the incremental value we can deliver along the way.
One last thing about benefits. It’s also critical to outline and understand the dis-benefits, which are defined as [MSP]:
Dis-benefit: The measurable decline resulting from an outcome perceived as negative by the investing organization(s) and which detracts from one or more organizational objectives.
Some of our outcomes may unintentionally produce undesired effects. For a short anecdote on where this went terribly wrong for Colonial Britain, look at The Cobra Effect.
Integrating the Elements: Line of Sight
In Investment Logic Mapping (ILM), once the elements are defined and, crucially, the connections between them are established, the framework's true power is in creating “Line of Sight”.
When explaining this, I get people to imagine each item on the ILM as a node in a network that can be lit. Imagine pressing on an item and having the nodes connected to it illuminated, the nodes connected to those, and so on. For instance, if we focus on a specific activity, we can illuminate a clear path showing how this activity's outputs contribute to developing certain capabilities, which lead to particular outcomes, eventually culminating in the realization of defined benefits that align with our strategic objectives.
Conversely, this Line of Sight can also be navigated from the opposite direction. By starting with a particular benefit, we can trace backward to understand all the underlying outcomes, capabilities, outputs, and activities that contribute to achieving this benefit.
We can do this with any part of the ILM. This bidirectional 'Line of Sight' enhances transparency and accountability and provides an assertive communication and strategic planning tool. As I mentioned earlier, from a detailed master, it’s very easy to make audience- and purpose-specific products, especially if you have a digital version of the ILM where it’s easy to play with colours, contrast, and opacity.
Wrap up
ILM forces us to create a clear line of sight between the why and the how. This structured approach is valuable for understanding, managing, and communicating large-scale change initiatives. It emphasizes aligning activities with strategic objectives and ensuring that every step contributes meaningfully to the desired outcomes and benefits.
Let’s reflect on these questions:
Problem-Solution Side Alignment: How can we more effectively align our everyday work with the objectives of our organizations?
Benefit Realization: How can we ensure that the benefits of our initiatives are measurable and meaningfully contribute to these strategic objectives?
Complexity in Transformation: Considering the interconnected nature of activities, outputs, and outcomes in the ILM, how can we better manage and navigate the complexities inherent in large-scale public sector transformations?
Until next time, stay curious and I’ll see you Beyond the Status Quo.
Resources and Examples
Treasury of New Zealand’s guidance for ILM:
Australia’s Queensland State Government’s ILM Guide
Australia’s Victoria State Government’s ILM Guide
Example with different elements:
