The Measure of a Successful Project — a Businessman’s View

  Continuing on this week’s theme of Project Management Maturity, here is a piece provided by Larry Bull, PMI Manager, OPM3® Products and Services:

What is the measure of a successful project?  In days of old, the standard answer to this question was usually “on scope, on time and on budget” or some derivation of the tried and true “triple constraints” of good project management.  However, such performance often was met with a response from stakeholders that pointed to a less than acceptable level of project performance; in some cases, even project failure.

In this businessman’s view, the true measure of project success is in its ability to deliver the business value that the organization expected from it in support of its strategy.

We are seeing more and more in the literature of the day that projects are failing because of a “severe lack of alignment between projects and corporate strategy.” ⁽¹⁾  Further, that there is “a lack of business aligned metrics for project management” and a “lack of benefits management process aligning strategic value decision making with project value.” ⁽²⁾  Let’s take a quick look at these statements and see if there is a better way to look at the measure of successful projects.

The above statements suggest that a successful project is composed of two highly related elements of measurement that must be integrated and tied directly to the organization’s strategy for business success.  However, before moving on to quickly describe this businessman’s approach, it must first be recognized that an organization must have a strategy, what does it want to be when it grows up, and have taken the time to translate that strategy into a portfolio of the work or projects needed to achieve the business results it expects and needs to succeed.  This is another topic for future discussion, but must be acknowledged here to understand the following approach for measuring project success.

There are two aspects of a project that combine to determine its total success; the investment phase and the outcome or fulfillment phase.  The true measure of a project is its ability to deliver or fulfill the strategic value of the investment that the organization made in it.  From this relationship, it must follow that the integrated measurement and management of this relationship is what produces the true measure of a successful project.  This relationship is graphically represented in the following figure.

A Project’s Business-Management Lifecycle
As depicted above, the standard measures of project success (i.e. the “triple constraints”) focus on the investment portion of a project’s total life cycle, but give little attention to the strategic business value or fulfillment aspect of a project.  Although the measures of investment are crucial, they become most meaningful to the business when evaluated in relationship to their impact on the strategic value the project was authorized to deliver for the organization. 
Every project is authorized to produce a product or outcome that the organization believes is necessary to further its strategic objective(s).  In authorizing a project, the organization must identify those business measures that best represent the value it expects from the respective investment.  This expectation needs to become part of the respective project’s charter and scope so that a business-management relationship between the attributes of investment and the expectations of fulfillment can be effectively built into the project, communicated to the entire project team and made part of the execution, monitor and control aspect of the investment portion of the total project lifecycle. 

Only when a business-management relationship has been created can a true measure of project success be achieved.  By evaluating changes in project investment in relation to their impact on fulfillment, the organization sets up a value-based decision making dynamic between its strategy and the portfolio of projects it manages to deliver the value needed to fulfill its vision and growth.  This dynamic is graphically represented in the following figure, which demonstrates the organizational interaction necessary to ensure the achievement of strategic business success.

A Value-Based Decision Process
What is the measure of a successful project?  In this businessman’s view, it is the value a project delivers for the organization; its ability to fulfill the business expectations of the organization.  Only by recognizing and integrating a project’s measures of investment and fulfillment in a business-management lifecycle will an organization be able to measure and achieve strategic project success.

References:
(1)  Stanleigh, M. (2006, March/April). Ivey Business Journal. London: University of Western Ontario Ivey Business School, 70(4
(2)  KPMG. (2005). Global Program Management Survey: A UK Perspective. London: KPMG International.