A Project Manager’s True Purpose: Output, Benefits or Both?

This post is the second of two that reinforce the importance of benefits to projects. The current post provides a perspective on why benefits are important to sustainability and reinforces why project management (PM) should focus on benefits and output. This is part of a series to help raise awareness around sustainable change delivery.

“Put first things first … Begin with the end in mind.” — Stephen Covey

Imagine that you are the project manager for the iPhone.  One of your engineers suggests a new technology for a 40-hour battery that is equal or less expensive to produce than the current battery. Before the new version can be produced, three months and $30 million more must be spent. As the project would be out of scope, more expensive and would delay the release, what would you do?

There is a debate around whether project managers should focus on benefits at all.  There are arguments that the output focus of some project management approaches follow production theory, whereas a focus on benefits is based on a strategic alignment and takes on a more sustainable asset lifecycle perspective. I tend to lean towards the latter… This discussion is changing, however, as the new draft of the PMI PMBOK includes benefits, which hopefully this post will provide support to.

A similar discussion is taking place about the difference between PM success and project success. With PM success, the project may have been managed flawlessly, as based on the best appropriate practices, and delivered on time within the budget and scope. However, if the output is shelved, never to be used and left to gather dust, the organization realizes no benefits from the investment; this is PM success, not project success.  Take the instance of a heart surgeon and a heart replacement “project.”  The patient (sponsor) is advised of the risks, benefits, costs and value by the surgeon.  The surgery takes place on time, on budget and the patient wakes up alive and leaves the hospital healthy.  However, there is a complication a few days after leaving the hospital and dies.  Some would argue the project management was a success… the project wasn’t.  An example, courtesy of Prosci, is provided below:

“Have you just built a beautiful ship,

or

have you done what is needed to get people on board?” (PROSCI, 2010)

Though Exhibit 1 is a little overly simplistic, it does help to demonstrate the purpose of this post: Project success is about realizing the benefits identified in the business case.

The Output Perspective

The output perspective tends to focus almost exclusively on project output, including that of time, cost, scope and the project team, with a nominal focus on the organization and its operations.

In terms of the project, benefits management and realization are entirely the purview of the business and sponsor.

The diagram below highlights a complete separation of the project/project team/project management from the business benefits realization arena.

This model follows the production management theory as highlighted below from an insightful presentation by Greg Usher, ‘Rethinking Project Management Theory,’ presented at the second International Project Management Association (IPMA) Research Conference 2014 in Tianjin, China.  For a more detailed review of the challenges with the triple constraint and output focused project management please consider reviewing the following post… Flaws with the Iron Triangle.

One of the arguments against project managers being involved in anything to do with benefits management is that benefits are outside of their control and are realized far after the project has completed and been disbanded.  This is often differentiated from the disciplines of project management and change management.

However, with the increased transition from operations to change delivery (project) focus, some estimate that 30%–40+% of the world’s gross domestic product (GDP) is invested in change and increased complexity as outlined in Exhibit 6. A more sustainable and organizational perspective is required; therefore, the benefits perspective is an excellent catalyst.

The Benefits Perspective

In certain project management camps and disciplines, there is uncertainty around how much attention, if any, the project manager should invest on the business side of change. The business and sponsor are both accountable for benefits realization. Though there are engagements where benefits management may not be directly within the realm of the project managers remit, the evolving nature of projects (and, dare we say, the professionalism of project management) requires an awareness and involvement in benefits management.

There are numerous examples where project manager is responsible in providing advice and guidance to achieve the greatest efficiency and effectiveness out of the project investment. For example, there are situations where sponsors are not fully aware of their accountabilities around change, such as the business case and benefits realization (the GAPPS Project Sponsor Standard is an excellent guide), and where organizations are unsure of how to enable and deal with change.

How does the project manager incorporate benefits management into the project?  There are numerous ways, but one straight forward approach is to employ the P5 Standard (outlined below) and  facilitate a P5 impact analysis around the various risks (threats and opportunities) and incorporate the high impact areas into a Sustainability Management Plan (SMP) and use the organizational Sustainability Management System (SMS) to mitigate / enhance the risks.

How does the project manager incorporate benefits management into the project? There are numerous ways, but one straightforward approach is to employ the P5 Standard (outlined below) and facilitate a P5 impact analysis around the various risks, including threats and opportunities. Project Managers can incorporate the high impact areas into a Sustainability Management Plan (SMP) and use the organizational Sustainability Management System (SMS) to mitigate the threats and enhance the benefits associated with the risks.

A few helpful texts are listed below, along with those listed in the References:

Bradley, G. (2010). Fundamentals of Benefits Realisation. The Stationery Office.

Jenner, S.  & APMG-International (2014). Managing Benefits: Optimizing the Return from Investments, 2nd Edition. The Stationery Office.

OGC – The Office of Government Commerce. (2006). Business Benefits through Programme and Project Management. The Stationery Office.

The upside to the organization with project management is to incorporate benefits management to realize the significant improvements. Though the following graphic was initially intended for sustainability reporting, it also highlights potential improvements in focusing on benefits.

The Next Step… The Sustainability Perspective

The next evolution of the diagram is outlined below.  The organization and project manager must take into account the sustainability perspective as well.

Conclusion

There are obvious situations where an output focus may make sense, particularly with less complex project engagements. However, the project manager and project team should always ensure that they understand and consider the big picture strategically. In addition, project managers should provide advice, guidance and support where applicable to aid the organization in maximizing sustainable long-term asset benefits.

Series Objectives

This series is all about raising awareness of sustainable change delivery and the integral elements, disciplines and competencies associated with it.  In the graphic below, each of these elements is identified in terms of their integration in empowering for sustainability.  These elements form the basis of the GPM® Global’s P5™ Standard for Sustainability in Project Management, the GPM® Global Training Programs, and the GPM® Global Portfolio, Program, & Project Sustainability Model (PSM3™) for organizational assessment.

References

APM. (2011). Delivering Benefits from Investments in Change: Winning Hearts and Minds.

APM. (2011). Delivering Benefits from Investments in Change: Creating Organisational Capability.

APM (2012). Delivering Benefits from Investments in Change: An Essential Part of Everyday Business.

APM (2012). Delivering Benefits from Investments in Change: Beyond ‘Business as Usual’ to ‘Value as Usual’.

Barton, D. (2011). Capitalism for the Long Term. Retrieved October 9, 2015, from https://hbr.org/2011/03/capitalism-for-the-long-term

Barton, D., & Wiseman, M. (2014). Focusing Capital on the Long Term. Retrieved October 9, 2015, from https://hbr.org/2014/01/focusing-capital-on-the-long-term/ar/1

Barton, D., & Wiseman, M. (2015). Book Excerpt: Perspectives on the long term. Retrieved October 9, 2015, from http://www.mckinsey.com/insights/leading_in_the_21st_century/perspectives_on_the_long_term

Bradley, G.a (2010). Benefit Realisation Management, Second ed. MPG BooksGroup, UK, Farnham.

Bradley, G. (2010). Fundamentals of Benefits Realisation. The Stationery Office.

Davies H.D. & Davies A.J. (2011). Value Management – Translating Aspirations into Performance. Gower.

Caccamese, A. (2012). Beyond the Iron Triangle – Year Zero. PMI

Carboni, J., Gonzalez, M., & Hodgkinson, J. (2013) The GPM reference guide to sustainability in Project Management. Fort Wayne: GPM Global.

Carboni, Joel (2014). The GPM P5™ Standard for Sustainability In Project Management. 1st ed. Fort Wayne: GPM Global.

Conner Partners (2004). The Leader’s Challenge: Installation or Realization.

Covey, Stephen R. (2009-12-02). The 7 Habits of Highly Effective People. RosettaBooks.

Ernst & Young, & Boston College Centre. (2014). Value of sustainability reporting – A study by EY and Boston College Center for Corporate Citizenship. EYGM Limited, 1–32.

GAPPS (2015). A Guiding Framework for Project Sponsors. Global Alliance for Project Performance Standards.

GPM. (2012). PRISM PRojects Integrating Sustainable Methods. Green Project Management Association.

ISO. (2014). ISO 55000:2014 – Asset management: Overview, principles and terminology. Retrieved October 9, 2015, from http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=55088

ISO. (2014). ISO 55001:2014 – Asset management: Management systems — Requirements. Retrieved October 9, 2015, from http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=55089

ISO. (2014). ISO 55002:2014 – Asset management: Management systems — Guidelines for the application of ISO 55001. Retrieved October 9, 2015, from http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=55090

Jenner, S. (2011). Realising Benefits from Government ICT Investment – A Fool’s Errand? Academic Publishing.

Jenner, S.  & APMG-International (2014). Managing Benefits: Optimizing the Return from Investments, 2nd Edition. The Stationery Office.

Kern, M. (2014). Outcomes vs Capabilities. Retrieved October 8, 2015, from https://www.linkedin.com/pulse/20140919090447-86002769-outcomes-vs-capabilities?trk=hb_ntf_MEGAPHONE_ARTICLE_POST&trk=hb_ntf_MEGAPHONE_ARTICLE_POST

Mills-Scofield, D. (2012). It’s Not Just Semantics: Managing Outcomes Vs. Outputs. Harvard Business Review.

OGC – The Office of Government Commerce. (2006). Business Benefits through Programme and Project Management. The Stationery Office.

OGC – The Office of Government Commerce (2009). Managing Successful Projects with PRINCE2™ 2009. The Stationary Office.  http://www.amazon.com/gp/product/0113310595?keywords=prince2&qid=1444246966&ref_=sr_1_1&sr=8-1

OGC – The Office of Government Commerce (2012). Management of Portfolios. The Stationary Office. http://www.amazon.com/Management-Portfolios-Book-Best-Practice/dp/0113312946/ref=sr_1_1?s=books&ie=UTF8&qid=1442811531&sr=1-1&keywords=Management+of+Portfolios

PROSCI (2010). Viking Ship Tutorial – Which sounds more like your projects?.

Remenyi, D., Bannister, F. & Money, A. (2007). The Effective Measurement and Management of ICT Costs and Benefits, 3rd edition. Elsevier.

Rowe, W. G., & Nejad, M. H. (2009). Strategic Leadership: Short-Term Stability and Long-Term Viability. Ivey Business Journal, (September / October). Retrieved from http://iveybusinessjournal.com/publication/strategic-leadership-short-term-stability-and-long-term-viability/

Schroeder, C. M. (2014). Let’s Fix It: The Rest of the World Is Rising With or Without the West. Retrieved October 8, 2015, from https://www.linkedin.com/pulse/20141016120343-18642888-let-s-fix-it-the-rest-of-the-world-is-rising-with-or-without-the-west

Serra, C.E.M. & Kune, M. (2014). Benefits Realisation Management and its influence on project success and on the execution of business strategies. International Journal of Project Management, 33 (2015) 53–66.

Simms, J. (2011). Solving the Benefits Puzzle. Totally Optimized Projects.

Stephenson, H. Lance. (2015). TCM Framework, Second Edition. Retrieved October 9, 2015, from http://www.aacei.org/resources/tcm/

Thiry, M. (2002). Combining value and project management into an effective programme management model. International Journal of Project Management. 20, 221–227

Thorp, J. and Fujitsu Consulting’s Center for Strategic Leadership (2003). The Information Paradox – Realizing the Business Benefits of Information Technology. McGraw-Hill, Canada.

Usher, G. (2014). Paper – Rethinking Project Management theory: A case for a paradigm shift in the foundational theory of client-side construction project management.

Usher, G. (2015). Presentation – Rethinking Project Management theory: A case for a paradigm shift in the foundational theory of client-side construction project management.

Vermeulen, F. (2015). 5 Strategy Questions Every Leader Should Make Time For. Retrieved October 8, 2015, from https://hbr.org/2015/09/5-strategy-questions-every-leader-should-make-time-for

Ward, J. & Daniel, E. (2012). Benefits Management – How to Increase the Business Value from Your IT Projects. Wiley.

Wessel, M. (2014). The Most Innovative Companies Have Long-Term Leadership. Retrieved October 8, 2015, from https://hbr.org/2014/12/the-most-innovative-companies-have-long-term-leadership