Why Projects Succeed - Articulating the Value of Project Management

February 29, 2012 | Author: PM Hut | Filed under: Lessons Learned, Project Management Best Practices

Why Projects Succeed - Articulating the Value of Project Management
By Roger Kastner

This article is part of a series, the previous article can be found here.

“A foolish consistency is the hobgoblin of little minds.” - Ralph Waldo Emerson

A number of years ago on a Friday afternoon, a Product Manager asked me if I wanted to get coffee and discuss a current issue on our project. I had a status report due in 30 minutes and asked if we could go later. At first the Product Manager hesitated and then he quoted something from the movie Office Space, asking if my eight managers would hound me about a late “TPS report.” Then he thought another moment and dropped the above Emerson quotation on me.

“What?! It’s due at 3pm every Friday!” I pleaded. He responded, “What’s going to happen if it gets turned in late, or not at all? You already keep our sponsors informed. That status report only repeats what you’ve been saying. It’s a waste of time.” Did he have a valid point?

Many of the tactical things Project Managers do might seem like a waste of time to stakeholders if we cannot connect them to value-add activities. And if these things do not seem to add value, then we need to understand and articulate why they are “required.” Because someone must get value out of them, right?

My Previous Reason “Why”

Early in my career as a Project Manager, I thought the value of project management lay in the inherent effectiveness and efficiencies gained by managing work efforts as projects. From my perspective, the discipline of project management was the keys to the efficiency kingdom.

For many years, I understood the “why” of Project Management to be simply “because” the outcomes are much greater and more efficient when managed via teams than by summing up individual efforts. Other tangible examples include:

  • Gantt charts are effective ways of visualizing work efforts and resource conflicts;

  • Risk and issue logs are efficient ways of articulating what might or what is currently knocking the project off course;

  • Communication plans set expectations for communicating.

And so this version of my “why Project Management” worked for a while.

However, as I worked on bigger projects, I discovered that even in “successful” projects (with success measured as on-time and on-budget), the end product sometimes failed to meet the expectations, the stakeholders were dissatisfied, and the investment of dollars ultimately did not generate the expected return.

Since those experiences didn’t quite feel like a success, I began to question the foundation of my old “why” theory.

My New Reason “Why”

Even though projects that are delivered on-time and on-budget may make a PM’s bonus bigger, that act of delivering the product of a project does not necessarily generate expected value for the enterprise in and of itself. I’ve worked on a few products that were on-time and on-budget, but because they failed to gain the commercial success anticipated by the product managers, those projects sure do not feel like successes, i.e., no one would feel comfortable wearing the project celebration t-shirt anymore. So how can project management drive value? It’s based in the tried and true concept of Return on Investment (ROI).

The “How” is accomplished by accurate Commitment Management, i.e., setting, managing, and delivering expectations on the “I” or “Investment,” so that value-generating “R” or “Return” are realized. “How” is also accomplished by adopting lessons-learned from past successful projects and products to guide the PM towards success.

Step #1: Commitment Management

Projects are investments. Organizations invest money and resources into a project with an expectation that the resulting end-product produces a return greater than the original investment, a calculation known as ROI. As project management discipline is applied to better manage the investment and safeguard the expectations upon which the investment was originally funded, it is more likely that the product’s expected benefits will be realized.

A Business Owner or Product Manager calculates ROI based on expected costs of development and support and the time line from when a product “hits the market” until its end-of-life, when it ceases to provide value. Often that ROI is calculated prior to when a project team or project manager is assigned, so the first thing a Project Manager should do is validate the accuracy of the expectations, also known as “re-setting” the expectations.

Once the project expectations have been set (or reset) and cost and time baselines have been approved, the project manager must then manage stakeholder expectations to ensure the end-product will still be able to achieve that projected ROI.

A good Project Manager utilizes all the tactics in the PM toolkit to help set and manage expectations (e.g., Charters, Work Breakdown Structures, Gantt charts, Risk and Issue Logs, Status Reports, etc.) but the successful Project Manager will be able to articulate why those tactics help support and align to the product strategy and attainment of the ROI. The successful Project Manager knows why these tools are important and is capable of demonstrating how the Gantt Chart and the Risk and Issue Log help to drive the delivery of the project to meet “go to market” stakeholder expectations and support the expected ROI.

Step 2: Adopting Lessons Learned

A successful project is not only one that meets stated commitments, it’s also one that generates value for the sponsoring organization. While there are many reasons why projects succeed, when analyzing how projects successfully deliver on value generation, there are a few key project success factors that go to the top of the list:

  • Customer Involvement is key to determining what problems need to be solved and whether they are being addressed satisfactorily by the solution.

  • Clear Business Objectives inform the project’s direction and guide all project decisions to ensure alignment with end-product and value generation expectations.

  • Executive Sponsorship means active leadership involvement to ensure project alignment with organizational goals. This sends a signal to all stakeholders about the importance of the work and the amount of executive support behind the project.

  • Stakeholder Management ensures all interests and expectations of the project are identified and managed adroitly, all stakeholders are aware of current status, and the stakeholders are actively and appropriately engaged in the project.

Balancing Strategy and Tactics

By connecting the dots between tactics and strategy and creating a balance between the two, the successful Project Manager provides true leadership to team members, stakeholders and the executive sponsors. That balance is required for any project or campaign, as illustrated by one of my favorite quotations:

“Strategy without tactics is the longest road to victory. Tactics without strategy is the noise before defeat.” - Sun Tzu

Or as I like to paraphrase…

“Tactics without Strategy: a lot of running around. Strategy without Tactics: a lot of sitting around.”

OK, I’m not as poetic, poignant, or published as Sun Tzu, but you get my point. The successful Project Manager provides this balance for their teams and projects and ultimately ensures effective commitment management and value generation.

Summary

Driving “value” is only part of the battle for Project Management. Being able to articulate that value is crucial for successful Project Managers. Whether it’s motivating team members to participate in project activities, or getting stakeholders to pay attention to your project requests, describing the value of project management so that it is understood by stakeholders is a key to project success.

What do you think? How do you articulate the value of project management? Share your thoughts by leaving a comment below.

Reprinted with permission from Slalom Consulting - © 2011 Slalom Consulting

Roger Kastner is a Business Architect with Slalom Consulting who is passionate about raising the caliber of project leadership within organizations to maximize the value of projects. You can read more articles from the series on “Why Projects Succeed” here.

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2 people have left comments

Great article and very true.

For so many years, PMO’s have been considered low value due to the benefits not being artuculated in a language the Business understands.

i.e. release of platform xyz in a status report or milestone chart. Not very exciting to the Business.

However, new product launched in Europe will excite the Business as that equates to a vision and strategy they understand.

Thanks

Simon

simon wrote on February 29, 2012 - 10:00 am | Visit Link

[...] This article is part of a series, the previous article can be found here. [...]

Why Projects Succeed - Proactive Risk Management - PM Hut wrote on March 15, 2012 - 1:55 pm | Visit Link

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