Isn’t a “disbenefit” really just a cost?

In a comment, Craig Brown at Better Projects asked me if disbenefits weren’t simply costs.   That was my first take as well, and disbenefits do indeed have costs (additional resources or forgone revenue).  After further thought, the “disbenefits” concept should be clearly differentiated from the concept of costs, which after all come along with every project.

Disbenefit is a British usage, meaning “disadvantage: something that makes a situation disadvantageous or unfavorable.”  In the project context, we Yanks might call these disadvantages side effects or externalities generated by the deliverables of the project or program.

Let’s go back to the poor Dodge Caliber to flesh out an example.  Some auto companies use fleet sales to move slow-moving or undesirable inventory.  Even if these fleet sales are low or negative profit — when taking into account fixed costs of the tooling — microeconomics 101 says that profit is maximized/losses minimized when one produces and prices to the point where Marginal Revenue = Marginal Cost.   However, such a static analysis doesn’t account for the disbenefits generated, per the outline below:

  1. Due to poor reviews and dealer sales, Chrysler management sells unwanted Dodge Caliber inventory to rental car companies to minimize losses.
  2. Renters of these unwanted Dodge Calibers are dissatisfied with the Caliber and form negative opinions of the Dodge and Chrysler brands.
  3. Therefore, these renters are less likely to purchase any Dodge or Chrysler car (lowering sales and profits across multiple marques).

I’ll play around with a couple of spreadsheet scenarios illustrating how to quantify this disbenefit.

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.

Increased Customer Satisfaction: Demonstrating the Value of PM

SAP PM-specific success stories: 2004-2006

Showing customer value: more comments on the first results of the PMI Value of PM study, earlier posts (here , here, and here).

SAP customer satisfaction scores have shown strong improvement over the last few years, but project management satisfaction is rising faster than the overall SAP Consulting customer satisfaction. While we have surveys that demonstrate this result, an even more tangible measure of this satisfaction is the huge increase in project management success stories.

The field loves success stories, because they highlight the role of SAP Project Management in ensuring customer success during implementation projects.  Customers go “on the record” to make powerful statements about exactly how SAP Project Management supported their projects and programs.  For examples in a number of industries, click here for a list of SAP Project Management success stories (or search here using the search string “SAP Project Management” success stories).

Door-to-door sales…the last frontier (the 19th century’s, that is)

Not sure how many folks saw Stefan Stern’s FT article Desperate Sales Measures.  Sometimes I think BCG throws stuff up against the wall — they do have some brilliant folks — but as a colleague said “how did they let this out the door?”

I did some door-to-door back in the day, and the article is certainly spot on about best practices (in fairness, the BCG pdf is here). It does have a certain plausibility when you read it, but it is more of a business history article.  I felt like I was reading a copied archival text, perhaps some 100-year-old Fuller Brush management training manual. Or maybe my old encyclopedia salesman’s guide…

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