Conveying VALUE: A Proposed Framework to Inform Decisions
There you are. After months of preparation, you finally have the opportunity to pitch your big idea to a senior executive, an idea you believe is the organization’s next big thing. You rehearsed, memorized your script, and your PowerPoint is flawless. However, before you utter a word, the executive asks you two pointed questions, why should she sponsor your idea and what value will it bring to the organization?
How do you respond? How do you know if something has value? What makes any product, project, system, or process worth the time, effort, and resources to produce, implement and maintain? The application of the word “VALUE” as a framework may help to illustrate essential factors associated with determining and conveying a project’s value.
V- Variety within volatility. Verified and validated
An outcome or output is worthwhile if it benefits a variety of stakeholders, such as the organization, its investors, and consumers, despite the volatility of change. This notion is especially true in organizations where there is a high rate of turnover in senior leadership positions. With each new leadership transition, organizations storm, norm and conform to meet the leader’s expectations. Regardless of the volatility of change, the outcome or output should contribute to the organization’s success, as well as assist the various leaders who will govern it.[1]
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A value-added project, and its corresponding results, should be something you can objectively verify and validate. With a variety of stakeholders, each with their own interests, subjective outcomes are open to interpretation, which leads to confusion. Organizations should have systematic ways to verify processes and validate outcomes. Verification and validation are quality management terms. Verification evaluates, “whether or not a product, service, or result complies with a regulation, requirement, specification, or imposed condition.” Where previously the project team (those who plan and execute) verifies processes, conversely, only customer stakeholders (the recipients or those affected) can validate products. Customer stakeholders are the only ones who can definitively determine if the product, or outcome, meets their needs based on their specifications.[2]
A – Addresses a need. Adaptable in ambiguous environments
A project is value-added if it is adaptable in ambiguous environments. The words volatility and ambiguous may seem similar but are different. Volatility references rapid change associated with unpredictable environments. Ambiguous refers to an unclear path related to future decisions involving multiple courses of action. A value-added project is one that can accommodate several options with minor adjustments. Project managers who introduce rigid projects may quickly find their initiatives obsolete if they fail to account for the decision maker’s course corrections. Therefore, project managers should consider the conditions that could warrant adjustments, and then determine how they might manage the execution of those adjustments. They do this by first accepting the fact change is inevitable. Second, they visualize how the adjustment might manifest in the future. Third, they attempt to forecast the adaptations required to operate within the new environment. In other words, they ask the “what if” questions. The more project managers ask the “what if” questions the more prepared they are to implement planned adjustments when indicators present themselves.
L – Legally, morally, and ethically sound. Longevity
Value-added projects adhere to legal, moral, and ethical standards, which is all about trust. The more an organization adheres to, and reinforces its legal, moral, and ethical standards, the more they increase trust with its internal and external stakeholders. At the consumer level, customers are more likely to go to X hospital, or request X service from a local business, if they believe the service provider is reliable and trustworthy. This is key. Are we not all reading those Google and Amazon reviews before we commit and click the order button? There is a growing trend of consumers and companies incorporating heavily weighted ethical sourcing and procurement criteria into their acquisition decision-making cycles. Organizations, who deviate from their standards, or, their industry’s code of conduct, degrade trust, potentially damaging their reputation and stakeholder relationships. Sustained erosion of trust and confidence can have significant negative consequences for any organization. Therefore, organizations would be wise to maintain their vigilance by maintaining their legal, moral, and ethical standards.[3]
When considering the value of initiating a new project, one should contemplate longevity, relative to the industry and organization. While short-term gains are adequate, long-term strategic effects are better. Some projects, depending on scope, can be expensive and time-consuming. Therefore, organizations should consider the project’s long-term relevance before deciding to expend resources. Before production, manufactures may consider how a product will provide consumer value across generations. Project managers may contribute to projects knowing, they may not see the project’s completion. Managers attempt to establish quality systems and processes with the expectation of those systems and processes remaining in effect long after their tenure. This long-game thinking is the difference between an infinite and finite mindset. However, one word of caution, do not allow long-term thinking to cause rigidity in planning. Remain cognizant to external environmental factors, which may warrant change or adjustments, while pursuing long-term effects.[4]
U – Unique. Understandable. Uncertainty
In addition to being useful, projects should be unique. Organizations, by definition, initiate projects to create uniqueness. According to the Project Management Body of Knowledge, a project is “a temporary endeavor undertaken to create a unique project service or result.” Companies produce products, and provide services, with the promise of providing something distinctively different from their competitors. This is the difference between quality (meeting the function) and grade (what distinguishes one product from another). When considering whether to change a system or process, the change should offer a unique and distinct improvement over the current system. Otherwise, an organization is executing changes for the sake of change, which is never popular.[5]
Value-added projects should be understandable. They are not overly complex or complicated. They are simplified to the point where the majority, if not all, stakeholders can easily understand them, enabling a shared understanding of purpose and effort. Initiating and implementing unnecessarily complicated and complex projects and processes can perpetuate confusion throughout an organization, which could unintentionally produce counter-productive results.
Value-added projects survive and thrive in the midst of uncertainty. Uncertainty, in this case, refers to risk, in terms of threats and opportunities. Organizations should consider the fact that risk is highest during the initiation phase and decreases over time as organizations implement strategies to manage risk. An organization’s ability to survive and thrive in uncertainty starts with a well thought out risk management plan, which outlines how the organization will address risk. Next, organizations identify the risk events, which can affect the project. Once organizations identify risks, they determine the probability and impact of each risk event, followed by an overall assessment quantifying an organization’s confidence level of achieving its objectives. Based on this information, organizations develop response plans to address the identified risks, and implement those planned responses based on predetermined triggers and conditions. Once implemented, organizations monitor risks to assess whether their responses had the desired effect, or, if additional adjustments are required.[6]
E – Economical and beneficial. Effective and efficient. Evaluated and measured
Value-added projects are economically beneficial. When determining the business need and value, organizations use such techniques as cost-benefit analysis and benefit-cost analysis to help them decide whether the effort is worth the investment. Benefit-cost analysis is a ratio analysis, which compares the expected costs against the expected benefits. Cost-benefit analysis helps organizations determine the best approach to achieve desired results. When organizations implement product-based projects, they may base their decisions on return on investment and rate of return. When implementing new systems and processes, organizations may make decisions based on expected cost savings.[7]
Value-added projects are effective and efficient in achieving their objectives, which means; an organization can evaluate and measure the results. Projects are effective if they achieve the desired outcome. Organizations are efficient if they can accomplish their desired outcome in the least amount of time, using the least amount of resources.
Determining effectiveness and efficiency implies evaluating and measuring results, which starts with properly defining objectives. An excellent way to define objectives is to use the SMART method. Objectives should be specific, measurable, attainable, relevant, and related to time. Once you determine objectives, you can now evaluate and measure results against a standard. A method of conducting such measurements and evaluations is to use measures of performance and measures of effectiveness. Measures of performance answer the question, “Did we do what we set out to do?” Measures of effectiveness answer the question, “Did we achieve desired results?” It is possible to execute a plan perfectly and still not achieved desired effects, which is why constant monitoring, feedback, and refinement is critical throughout the process. While conducting measures of performance and effectiveness, one can use such tools as, earned value management, controlled charts, and sampling to assist with analysis in determining the level of effectiveness and efficiency of a project.[8]
In summary, simply having what you believe is the next big thing is not enough if no one values it. Therefore, how you communicate value matters, as it may decide whether a project receives sponsorship and resources. The next time you face an implementation decision or provided an opportunity to explain why an organization should invest in your idea, this VALUE framework can help inform your decision, and assist you in articulating an intelligible response. Incorporating the VALUE framework early in the analysis and planning process can help determine if a concept is worth pursuing, before pitching your big idea to a senior executive.