Pitching Value

September 29, 2009 by
Filed under: Project management, Quality 

For almost all of the projects that I have seen, the most difficult challenge for the project manager is to be able to clearly express what the expected value for the project will be for the sponsor. Without this, though, all that you are proposing is to spend some someone’s money in a given time period.

There is the old discussion around the ‘iron triangle’ of project management, the relationship between scope, schedule and cost that many would argue is critical to balance for project success. More and more people lately are including quality as a distinct fourth element (I’ve been pushing this for years), but even this is not enough. Often, a project can be well managed and come in under budget and time, with the expected scope and quality, and still be disappointing: it has to deliver value.

Important projects are ones geared to actually address a pain that the client is experiencing, and a well-structured project sets expectations about how much that pain is being alleviated. These expectations should be in a form that we can actually confirm whether or not we achieved our pain reduction, or how close we got. While most projects are akin to going to a doctor with an ailment and his suggesting to “try this, I think it might solve your problem”, well-structured projects would get a suggestion more like “take this, and we can expect to measure this much reduction of pain at this point in time.”

I don’t know about you, but I would tend to have more confidence in the second scenario, particularly if the expected results have been met in past projects.

The initial emphasis, then, shouldn’t be in the definition of scope, but in the definition of expected gains to be had for the work to be done. How much better/faster/leaner/more competitive am I going to be? What is my return on this project investment? Once we have established reasonable expectations about this, and recognize that the benefits of moving ahead with the project outweigh the costs of doing so. Details of how you will do so can come only after this is established.

Pitching value appears to be a hard thing to do for most project managers, as there has traditionally been little emphasis on the practice, or for mature or large-scale projects, that established need has been formulated elsewhere. Generally, project focus is all about delivering scope within some combination of cost and time constraints.

Additionally, in technology projects, there is a long history of working with a ‘fuzzy front-end’, vague and imprecise requirements that generate tons of discovery (and often problems) downstream, and if anything, this tendency is becoming more mainstream, not less.

Because of all of this, if you have the ability to set expectations about the value to be delivered, you can differentiate yourself from the crowd. It is relatively easy to take a definition of scope and come up with a schedule and cost estimate (though few recognize that this is simply an estimate), it is another thing entirely to be able to identify how the world will be a better place.

Often, the client only knows that it hurts, and they are coming to you to stop the pain. They rarely have quantified this pain, so you task becomes more complicated. You will need to estimate the current magnitudes of pain, and estimate how much you can improve the situation to build a strong argument. After you have started the project, though, you will then need to establish a measurement approach and a baseline on which to compare success, and set reasonable expectations as to when that value will be achieved. Often, that final measurement can only be done after you have delivered, but you should be able to see trends heading in the right direction well before then.

With this perspective, focus is not on completion of tasks or spending of money, but delivery of value. Unlike the money or time discussions where each party wants something different, discussion of delivered value can bring us together to a set of common goals to achieve. We are all better off. – JB

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