The only point of doing a project is to facilitate a change that will create value. The source of value may be intangible such as reduced risk, for example through preventative maintenance, enhanced prestige or in the case of regulatory requirements, the simple ability to keep trading; others are focused on generating a positive financial return, most projects generate a combination of financial and intangible values.
This expected value is generated through the realisation of benefits, but who is responsible for installing the ‘change’ into the organisation and making effective use of the project’s deliverables? In other words, when does a project start and end?
There seems to be an attempt by many senior managers to make their project managers responsible for all aspects of a project from understanding the business need through to realising the benefits years after the project has finished. While this can seem a very effective way of passing the buck, blaming someone else for another’s failure, it is hardly fair or reasonable and is highly detrimental to the organisation.
PMI’s standards and the new ISO21500 all have the view a project starts when it is officially started and it finishes when it has delivered all of the required deliverables. This raises a number of sensible considerations.
Starting a project
Only the managers of an organisation are in a position to determine its strategic direction and then identify and prioritise the needs that require meeting to implement the strategy. After a need is defined, a project can be initiated to deliver the required outputs. This does not mean the business managers need to have a fully defined specification but they must know how much they know about what’s required:
- If the requirements are clearly understood, a project can be initiated with defined time and cost parameters and limited contingencies.
- If the requirements need to be defined or clarified, the project needs to be established with success criteria understood, adequate time and cost contingencies in place and a ‘gateway’ process defined to ascertain the ongoing viability of the project as the requirements are progressively firmed up. If the project continues to offer a valuable contribution to the organisation it should continue. If its value drops below an acceptable level it should be terminated at the appropriate gateway review.
Finishing a project
While the project manager needs to be fully aware of the value proposition for the project, and take the value proposition into account when making decisions within the project, the project manager can only be responsible for delivering the required outputs optimised to the needs of the organisation. The rest of the value chain is dependent on the organisation’s line managers making effective use of the outputs to change the way the business actually works and instigate positive changes to realise the benefits that create value to the organisation.
Project delivery capability
The overall value chain requires a connected view from the innovation of ideas, to the development of an effective strategy, through portfolio management, project and program delivery, onto the realisation of sustained benefits for the organisations stakeholders.
To re-state the challenge from an investment perspective, there is no point in the organisation investing its resources in undertaking a project if the outcome is a reduction in value, but all too often this is exactly what happens.
Unfortunately, while the domains of project, program and portfolio management are fairly well defined, the concept of an overarching project delivery capability is lost between governance, strategic planning, portfolio management, project sponsorship and ‘benefits realisation’ which may, or may not be included in portfolio management. All of these facets of management contribute to the overall capability, but the concept of a ‘Director of Organisational Change’ who has executive level authority for the whole value stream is rare.
We have developed a number of whitepapers that strongly advocate that it is the organisation’s management that are responsible for creating value from their investment in a project; and the project manager’s role is to facilitate the efficient delivery of the project’s products, services or results needed by the organisation to enable the changes that will generate the value. The projects and programs function within an overarching project delivery capability framework. To understand the scope of a complete ‘Project Delivery Capability’ (PDC) framework see:
So who is responsible for creating value form projects? My belief is it is an executive management responsibility; the responsibility of project and program managers is to do the bit in the middle well, but there is absolutely no point in delivering outputs from a project efficiently if they are never used either because the wrong project was selected or because the organisational change aspects were ignored!
The overarching responsibility, which includes providing effective support to the project teams, sits much higher up the organisational structure.