My first really big corporate project was a four-year project. Immediately after assigning it to me as the project manager, the leadership team asked: “So what date are you going to be delivering on?” I’m thinking, “What date? Like, four years from now, predict the actual date?” And then they said, “And how much exactly, is it going to cost?” Obviously, this was a few decades ago. At that time, our definition of success for a project was delivery on time, on budget, with the scope requested. This is the classic triple constraint, the age-old basis of project management and project success. In addition to the triple constraint, we got more thoughtful and added quality: quality of the product and quality of the project as well (quadruple constraint just doesn’t roll off the tongue like triple constraint, does it?) At this organization, we would spend weeks running financial numbers on all of our projects, making sure that they were going to give us a return on investment. There was a significant resource investment up-front to determine the business case for the projects, but they never revisited those numbers at the end of the project. Interestingly enough, we would consistently re-baseline every time our project was not going as we thought it was going to go. So we had no real good credibility in any of our data or our true project success.
Enter Agile project management and our criteria and conversations begin to look different, beyond the triple constraint. The new question is “did we deliver value?” I can deliver something that’s on-time, on-budget, with what you asked for, but is it helping our company grow? Is it helping our clients grow? Is it giving us something that allows our business to thrive and to succeed? To the users find value in everything we gave them or in just pieces of what we delivered?
That question of value needs to come into play and at the forefront of our discussions for project approval and project criteria. Mark Langley, President CEO of PMI, Project Management Institute, in Pulse of the Profession for 2018, talked about maturing value delivery capabilities as one of the key concepts and topics for this year. We need to be able to demonstrate that our projects are actually delivering on value.
In the Pulse of the Profession 2018, Langley states that “fewer than one in ten organizations report having very high maturity with their value delivery capabilities.” (2018). Further, when we look at underperformers versus champions, five percent of underperformers have high-value delivery maturity, whereas 87 percent of champions have high-value delivery maturity. This concept of value delivery is something that we’re going to see more and more, and I think it’s a good topic, not only for us as project managers to be aware of, but also as business owners. If you are running your own business, if you are in a strategic or leadership role, you need to be asking yourself, of the projects that you are taking on, and that you’re leading, and that you’re delivering, are they actually bringing back value? Success isn’t just on-time, on-budget. But what does that return look like in terms of value to the business and the customer?
5% of underperformers have high-value delivery maturity compared to 87% of champions
Agile has really brought to the forefront the concept of delivering the highest value functionality first. We prioritize our work of the project by what’s of most value.
There is a pie chart that floats around out there, periodically referenced and it talks about functionality that users actually use. (Interestingly, no one can quite confirm the source of this pie chart or the data – but it is compelling). The best way to think about this idea of functionality that is actually used (or valued) is to consider Microsoft Excel. If I asked you how much functionality within Excel you use, what percentage would you say? Most people respond with “maybe five percent, glorified calculator.” If I get really fancy, I might do some formulas or maybe I’ll do an array. But consider the capabilities that Excel actually has. Now step back and look at the bigger picture: not only is the value held in a small number of features and functionality, but there is all of this excess code and structure that needs to be maintained, refactored, and documented. So the question becomes “is there a point where additional features or functions will no longer provide a value that is worth continued investment in development?”
I recommend a four-step process to ensure the value of our projects, regardless of the project management approach that is implemented:
- Value Definition: Determine what value looks like for the particular project. The value should be defined in terms of the organization and the customer. This will be revisited as requirements are gathered, documented, and prioritized.
- Business Case: A business case assessment determines the “why” behind the project, including the financial justification for the initiative. I find that organizations with mature project management practices tend to be diligent about creating a business case before authorizing a project. Organizations with lower maturity, or intuitive project management, may not have a formal business case assessment. Formal or informal, a documented and anticipated return on investment should be conducted for every initiative where resources are being applied to an initiative.
- Periodic Kill Points / Checkpoints: During that project, identify set kill points. At each kill point, the project is evaluated to determine if it is still able to deliver the value that was anticipated in the business case. If not, pull the plug! I have been involved in projects where companies would just keep throwing money at projects that were destined for failure. There is a mistaken perspective that if a project gets cancelled, any investment up to that point is a lost investment. But it is better to cut the losses early, versus continuing to revive a project that ultimately cannot be saved. Those kill points / checkpoints / phase gates will enable decision-making: keep progressing, make modifications, and/or we’ve either delivered enough value or the project cannot deliver the value we anticipated.
- Business Case Reconciliation: It is crazy to me how many companies do not actually go back and do a business case reconciliation at the end of the project. Time is invested doing a business case in order to approve the project but then it is not validated or reconciled at the end. If you are not going to validate it after the fact, what is the point of doing the business case? There has to be some type of reconciliation to say, “Okay, did we or did we not get the value we anticipated? And if we didn’t, why? Where did we go wrong, and what can we improve?” We all know the definition of insanity: repeat the same action and expect a different outcome. So many organizations are insane as it relates to their project management. Not conducting a business case reconciliation is a prime example of project insanity. If we are not measuring that success, how do we know where we are at, and how do we know how to get better?
Projects are the lifeblood of today’s organizations. You cannot succeed in today’s market without changing, evolving, and disrupting. If you are putting dollars. resources, and hours into projects, you must identify the success criteria beyond the triple constraint and question the value that is being delivered. I believe we are going to see this pushing more and more to the forefront of the project landscape and is something that business owners, project managers, and organizational leaders need to be considering.
PMI’s Pulse of the Profession (Rep. No. 10th). (2018). Project Management Institute.
About Belinda Goodrich:
Globally recognized as a project management expert, Belinda Goodrich is the founder and CEO of PM Learning Solutions. PM Learning Solutions is focused on delivering world-class project management exam preparation programs and materials. Under The Goodrich Institute, Belinda serves as a consultant to a number of Fortune 500 companies with a focus on improving the project management processes and practices in order to drive business growth. After over 20 years of corporate project management and executive leadership experience, Belinda “retired” to serve the project management community. The first woman in the world to achieve five of the PMI credentials, Belinda now holds the following: PMP®, CAPM®, PMI-SP®, PMI-ACP®, PMI-RMP®, PgMP®. In addition, Belinda is a Certified Scrum Master. The author of multiple books and courseware on project management and PMI exam topics, Belinda is an in-demand facilitator, speaker, and consultant.