Project Success Means Realizing Business Value

When projects “succeed” by delivering defined scope on time and within budget, and their products and services fail to deliver expected benefits, has the project succeeded?

Project success boils down to meeting expectations, particularly the expectation to achieve the business objectives that justified the project’s initiation. Let’s explore how a focus on business value contributes to project success.

Note: We will use the term “business” when discussing objectives and benefits. If you are in a non-business organization, replace “business” with “organizational.”

Benefits Awareness

In healthy organizations, projects are initiated to deliver new or changed products and services that benefit the organization and its members.

As a project manager, it is best practice to make sure you and your team are aware of business benefit targets so that you avoid the all too common trap of focusing solely on schedules, budgets, features, and technical objectives rather than the reason for the project from a business perspective.

With benefits awareness, it is more likely that as objectives, requirements, and designs are defined the alignment between project and business objectives will be maintained.

Project Success

The Kirkpatrick success model says that training success is based on the degree to which participants apply what they have learned and that the results make a positive difference.

Trainers and courses are evaluated based on how well participants receive them. The most important results – whether what was learned was applied and whether it made a positive difference – are hard to measure, and they are not known until well after the course is over and the trainer has gone home. Very often they are not measured at all.

It is like that with projects as well. The project ends, and its success is measured based on whether target dates were hit within budget constraints and whether quality criteria have been met.

Of course, these are important success criteria. But when they are met at the expense of features and functions that enable the organization to improve, they contribute to failure.

Examples

Commonly cited examples of projects that have succeeded in meeting technical expectations but failed to achieve business value are product-to-market projects such as “New Coke,” SONY Betamax, and Crystal Pepsi projects.

For example, in 1985, Coca-Cola decided to improve its product. The project included all aspects of bringing a product to market, from fabrication to marketing. It was delivered on time and within budget. Months later, New Coke was so strongly rejected by consumers that the company was forced to revert to the original. Analysis tells us that poor market research and underestimation of customer loyalty to existing products were the root causes.

While they are less dramatic, there are examples in the realm of technology-centered process improvement projects. In one case an organization applied Agile development to change a department’s business process. They delivered a change that optimized it but disrupted the overall business process that the department was part of. In this case, the root cause was a failure to step back to assess and strategically address the overall business system before diving into the Agile project. The lesson learned is to use Agile development wisely and embed projects in the context of enterprise architecture and strategic planning.

In another case, a website was developed on time, within budget, and without technical flaws. When it was delivered and used it was difficult to navigate, and did not deliver the expected value. Here the cause was a technical focus with a strong drive to get the project done on time coupled with a lack of engagement with the user community. An Agile approach would have been beneficial.

Similar examples exist in construction and infrastructure projects.

Causes

How can failures like this be avoided? We start by identifying causes and then doing what is necessary and practical to eliminate them. Experience tells us that common causes are

• Not recognizing that business value is the most important objective
• Not defining business goals and success criteria
• Failure to engage end users in market analysis and product design. End users may be product consumers or application system users.
• Taking a tactical focus without a strategic context
• Applying the wrong approach. For example, an Agile approach when a hybrid or Waterfall approach is more appropriate, a highly structured approach when agility is needed, an off-the-shelf package when a custom product is needed, or a custom solution when an off-the-shelf one will suffice
• Letting the desire to be on time and within budget excessively drive projects. The Sydney Australia Opera House project was budgeted at $7 million and estimated to be completed in 4 years, it took AU $102 million and 14 years to complete. But in the end, it was a great success.
• Overlooking the need to include organizational change management in project plans
• Underestimating the speed of technological change – applying technologies that will soon be replaced by far better options

Learn from Experience

The way forward is to eliminate these causes. Begin by raising the consciousness of all stakeholders, particularly the executives and sponsors who lead the effort to ensure that projects pay off. With the recognition of the ultimate project objective and the causes of failure to achieve them

• clearly state and remind everyone about business objectives and set metrics to use to measure performance
• include failure to meet business objectives in risk management
• ensure that each project is evaluated in light of an overall strategy and enterprise architecture to avoid sub-optimizing the system when optimizing a part of it
• engage end users and potential consumers to validate the perceptions of designers and marketing professionals while working through resistance to new ideas
• manage organizational and technological change
• get better at scope definition, estimating, and scheduling while being flexible enough to adapt to changes in scope that are discovered as the project proceeds.

The Bottomline

In summary, spend quality time and effort at the start of each project to make sure that projects are initiated to add value by delivering new and changed products and services that benefit the organization and its members.

While technical and traditional project objectives like time, cost, and scope are important, success means meeting expected business benefit expectations.