Project Initiative + Business Management = Project Value
Projects provide value when they accomplish business objectives. If project managers want to be successful, they need to understand business goals and practices so they can translate business value into project value.
Traditional project management used to focus on the process of managing a project to successful completion. No more. We’re seeing a shift from a narrow, strong, technical focus of project management to a broader, more business-driven focus. The business reason for initiating a project is now paramount. Project managers need to deliver business objectives, not just complete a project.
The most recent research indicates that high-performing Project Management Offices (PMOs) are seeing an unmistakable trend. These more mature PMOs have an impact, not only on projects and programs, but on overall organizational success. (State of the PMO 2016, pg. 3). Project managers in all PMOs, not just those in high-performing companies, must concentrate on three areas where a business-focused leader must shift from the traditional thinking:
- Communicating to drive results;
- Managing for business impact; and
- Demonstrating project value to the C-suite
Project Communication that Drives Business Results
Project managers who want to be successfu must stop thinking of themselves as “just a project manager.” Nothing could be more limiting for a role in which the PM serves as a consultant, a trusted advisor, and a change agent. Internalizing this message will affect how project managers communicate, to whom, and how often. Communication style will change with theaudience and its impact can’t be understated.
In a business role, the project manager is constantly reinforcing the strategic reasons for the project and identifying the business impact of any changes. We need to ask a lot of questions to understand the business purpose of the project. That's where we begin to answer the question, What is the business value of the project?
Traditionally, project managers talk about cost, schedule, scope, and quality. We still need to talk in those terms. However, in shifting to a business mindset, we also want to communicate about the project in both project terms and in business terms:
- Cost translates to …. Financial Impact
- Schedule translates to …. Time to Market
- Scope translates to … Parameters for Success
- Quality translates to … Service Integrity
Project managers may need to make the tough calls, sometimes be “intelligently disobedient,” and deliver bad news immediately. In a consultative way, they may even need to recommend killing a project.
Managing for Business Impact
In developing a business focus for projects, organizations must consider a wide range of issues and follow a process that enables the right projects to be chosen to support the company’s strategy. Upper management needs to support project management and encourage cross-functional interface with projects. Portfolio management must be in place and proactively managed. Project selection and prioritization are critical factors of success. If an organization doesn’t create a process to link projects to strategies, projects will surface across the organization in an uncontrolled manner resulting in confusion and a higher project failure rate. A project manager is expected to make ask questions on why the project was chosen, and then make decisions not to just get the project done, but rather to insure the desired business impact of the project will ultimately be realized.
Demonstrating Project Value to the C-Suite
Bottom line … it all comes back to VALUE. The business case should help to outline the expected project value. It should include:
- Identified and quantified benefits
- Identified risks to achieving benefits and associated risk management plan
- Estimated cost to deliver benefits
- Anticipated timeframe for delivery of benefits
It’s important to remember that the project value may not align with the project completion dates. Full project value may not be realized until “X” happens or is realized. Some projects are not viewed as a success upon their completion.
If you want your projects to show value, recognize that you-- and by that I mean everyone involved with projects, not just the executive sponsor or senior program manager --need to become more business savvy. Embrace the business perspective. Approach your projects by strategically linking them to strategy, getting clarity on reason why project was chosen, and by doing a business case and shifting to business terminology. The final step to get Project + Business to = Value is to drive the business results and demonstrate the value to your executives.
Is this how your organization is running projects? Have you departed from traditional thinking to a more business-focused approach? Share your thoughts on this equation with me by email or in the comments.