Benefits Realization: Demonstrating Initiatives’ Value

Debbie Crawford just taught a refreshed version of our Benefits Realization class. The topic is one that bedevils PMOs, largely because it takes a while to figure out that it’s not a closing phase task. In other words, it has to be planned, executed, monitored, controlled, and delivered…just like any other initiative deliverable. Below is an overview of the class:

Benefits are not just another dimension of portfolio management, but are the basic rationale for any investment of funds.  As such, benefits should drive those investment or change decisions from initiation through implementation and beyond. It is the methodology needed by any organization intent on effectively demonstrating that desired benefits are achieved in practice.

This course, built on a wealth of real world experience and lessons learned, will engage the participants in achieving:

  1. Increased organizational ability to forecast benefits which are complete, realizable, and represent real value for the money. In other words, we are investing in the right things and getting them done.
  2. Realize forecasted benefits in practice by ensuring the required enabling, business, and behavioral change takes place; ensuring that the performance of the benefit matches the business case promise.
  3. Realize benefits as early as possible and sustain that realization for as long as possible.
  4. Capture and leverage emergent or unplanned benefits (and minimize any dis-benefits) to optimize the benefits realized and the value for money is achieved.
  5. The organization’s ability to demonstrate the above – not just as part of the framework of accountability but also so that we learn what works as a basis for continuous improvement.

We say we want faster horses

While I’m on a Henry Ford roll, here’s one about the dangers of simply taking orders from one’s customers.

If I had asked people what they wanted, they would have said faster horses.

We now mock Ford for “any color he wants, as long as it’s black“; but passively listening to the customer is no good either. Long ago Ford understood the pitfalls of just asking “what would you like?”

This quote came to mind as I reviewed the predictions in the Pew Research report on Killer Apps in the Gigabit Age. Full disclosure, I don’t buy such specific predictions. I’m with William Schrader’s take on page 2:

Gigabit bandwidth is one of the few real ‘build it and they will come’ moments for new killer apps. The fact that no one had imagined the other killer apps prior to seeing them grow rapidly implies that no one can imagine these new ones—including me.

Many of the guesses are entertaining and may well be true. In the end, what struck me was how derivative nearly every prediction was. Most involved augmentation of current functionality: a variant on the “faster horse” desire. Some, like one librarian, were hoping for features that already exist: e.g., seeing recipes in a heads-up display.

Paging KitchMe and Google Glass.

PM Standards are not Holy Writ

Andrew Meyer at Inquiries into Alignment provides a useful corrective to the faith that we project management types put in our industry standards and frameworks (post here).   He hits on a lot of topics that are only alluded to in our project management “bibles”:

[P]rojects often pull people from different departments together to work on a project. While that is what the project requires to be successful, what does that mean for the people pulled from the different departments? Is the project of primary importance to them or is what’s happening in their department of primary importance?

Now, I believe Andrew that has set up a bit of a straw man here.  I’m not sure that it is the responsibility of the PMBOK Guide or PRINCE2 to elaborate some of these topics fully (I’ll leave Agile aside for the moment).  At least in the case of the PMBOK Guide, it is only a guide to the project management body of knowledge.  While a guide should reference the need to ensure business alignment, only so much content “meat” can be expected from such a guide.

My take is that firms should not count on generic standards to cover some of these topics —  one’s firm-specific methodology should elaborate the questions Andrew suggests (and more):

What is the business environment your company is working in?
How is that environment changing?
What is happening inside the business?
What is the state of the project?
Where does it need to go?
What needs to happen to get it there?  

A good upgrade “why to” list

Regular Crossderry readers know I’m partial to ERP upgrade tips and advice (here, here, here, and here).  This list by Beth Stackpole stood out as one of the more practical and insightful “Why to upgrade” lists around.  In particular, point four is often overlooked.

  1. Upgrade an ERP system that’s more than five years old.
  2. Upgrade when ERP system integration is difficult.
  3. Upgrade when an ERP system is missing the “modern” features and functions required to efficiently run the business.
  4. Upgrade when employees, partners and consultants aren’t using the system — or aren’t available to fix it.
  5. Upgrade when it’s obviously time, whether the hard upgrade ROI is clear or not.

As they say… read the whole post.

Changing from a “work” to “deliverable” mindset

Glen Alleman has been a roll at Herding Cats, provoking some excellent back-and-forth in recent posts and comment threads.  His post (here) on Deliverables Based Planning (which is a service mark of his firm, I believe) prompted some knowing nods on my part.  As Glen notes in a comment:

You cannot believe…or maybe you can…how uncomfortable this makes people. They want to plan tasks! They want to track tasks! They want to be in control! (Deliverables are just a detail to be de-scoped when necessary).

We have passed through this vale of tears ourselves.  Since I’m on vacation and feeling particularly lazy, I’ll simply cut-and-paste from my own comment (with a few edits for clarity):

[T[he mindset change from simply planning “work” and “effort” to focusing on well-defined deliverables has been tough.  However, once we got through driving that change, we found few problems making most SAP project deliverables “tangible or verifiable.”

This approach is especially effective when looking at the solution itself — most ERP-type deliverables should reflect enabling the execution of customer business processes (and the outcomes and benefits that ensue). This definition has proven quite tangible (the execution of enabled processes themselves) and verifiable (tests of the increasingly complex models of the processes, e.g., unit, string, integrated, business simulation tests).  Decently contructed tests should confirm whether or not the realized solution conforms to requirements. Furthermore, one can track the outcomes from these deliverables and trace the benefits — realized vs. expected. 

Value of PM in Business Transformation

I forget to whom I should give the hat tip on this topic, but Here’s a study by Logica that highlights what makes change “Winners” successful (study here, may require registration).  As you can see, project management was a differentiator in business transformation, which of course I think is great.

My take is that being good at PM is necessary, but not sufficient, to be good at change.  That’s because being better at PM should mean that one is better at delivering initiatives of any type.  In other words, PM excellence should make change-heavy initiatives more successful — but that’s because PM helps when delivering all initiatives.

Remembered the source… hat tip to Michael Krigsman at IT Project Failures.

PM Quote of the Day — Theodore Levitt

Kodak sells film, but they don’t advertise film. They advertise memories

It has been a while since I used film in a camera.  But sure enough, Kodak still advertises memories  not JPGs.  So it should be for our projects and programs.  Too often we get caught up in describing the impact of our initiatives in the wrong order:

  • First, all the work that we and our team is doing.
  • Second, all the great things that we’re building.
  • Third, how many more resources we really need to build it right.
  • Fourth… fifth…
  • And finally, if we ever get around to it, we admit there may be some benefits to the project.

Of course, this approach will give audiences the wrong memories.  When pitching something, one wants to draw the audience in with an enticing vision of the final destination.  They don’t care so much about what it took to get there.

A more subtle problem is that focusing on work, technology, and obstacles makes one sounds self-centered  The message comes across as — look at all the work I’m doing, what I’m building, how I’m suffering — as if no one else is doing the same.

A project should be advertising dreams, not drudgery!

PM Quote of the Day — Baldassare Castiglione

Employ in everything a certain casualness which conceals art and creates the impression that what is done and said is accomplished without effort and without its being thought about.

I used to believe that sprezzatura — the “unstudied nonchalance” Castiglione describes in The Book of the Courtier — must be something one is born with.  A hint about the truth is in Castiglione’s own words: “which conceals art and creates the impression….”

My closest partner in a business school entrepreneurship project was an experienced and accomplished sales executive.  He appeared so fluid and at ease when selling an idea, advancing a position, or pitching a business plan.   But his apparently innate grace was actually quite studied.  For example, when prepping for a sales call, he dedicated hours, even days, to careful preparation.  I was a bit shocked at the effort he insisted on for all our project’s communications; I had always thought sales folks winged it most of the time. 

This approach came in handy when we delivered our new venture pitch.  It took us weeks to revise the story line, refine the presentation, and familiarize ourselves with every nook and cranny of the venue.  At showtime, our delivery was notably more polished and assured than our competitors. 

But the real benefit was when something unexpected came up on one slide: an “obvious” typo.  I knew the material so well that I didn’t freeze.  With a sense of ease and comfort, I simply talked to the slide’s point.  Well, with one twist…

We’re have a pilot customer lined up — insert Company Name here — and we’re going to start the implementation shortly… just as soon as we learn to spell obvious.

Executive Support: Demonstrating the Value of PM

Executive buy-in and support: more comments on the first results of the PMI Value of PM study, earlier posts (here , here, here, here, and here).

Value measures should first focus on the tangible (e.g., ROI, better margin) or making the intangible more tangible (e.g., tying customer satisfaction to revenue or reduced escalation costs).  In addition, I would also suggest that one should also look at how much value one’s executives attribute to project management.  Of course, the initiative has to have delivered results.  But many PMOs forget to ensure that senior leadership understands exactly how PM improvement translates to the firm’s bottom-line, top-line, brand value, etc.

One of the most powerful endorsements of SAP’s project management efforts came from the current CEO of SAP America, Greg Tomb.  During our global services leadership summit, each regional leader presents a short presentation on the “whats and whys” of his/her unit’s performance.  When Greg was discussing the excellent revenue, margin, and customer satisfaction results in the Americas, he explicitly credited project management as the foundation for all three.

“Public” and vocal executive references are some of the best intangible value proof points.  Not only was the recognition appreciated by the Americas PMO leadership, it also reinforced the global PMO message to the rest of the global leadership team: project management works.

Why DID we need the value of PM study?

Per a recent comment by Dr. Paul Gianmalvo (URL here, post and comment here), the results of the value of PM study do sound like they simply confirm the value of motherhood, apple pie, and clean living.  As Paul notes:

Yes, project management adds value. Of course it does!!! What alternatives are there?

I agree that the answer is obvious: competent project management is indispensable.  In fact, I believe that outstanding project management is a competitive advantage.  But that fact hasn’t always been obvious to the folks who approve project management: senior executives.  When pitching PMO and other project performance improvement initiatives, too many project management professionals launch into assertions of the value of PM.  I know… I’ve done it and see it again and again.

To me, the stunning results from the study are not that PM has value, but how poorly we still calculate and communicate the returns on our organizations’ investments.  Only 50 percent of PM organizations bother to calculate ROI?  Those must be some confident, complacent, or perhaps foolish PMOs.

When it comes time to show benefits from a PM improvement program’s outcomes, silence is death.

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