What Defines Success?

Project management has never been the kind of discipline that had a simple-to-define, simple-to-achieve definition of success. The success of the project manager has to be linked to the success of the project, but that can’t be a direct and inflexible tie.

                                                 

Here’s what I mean: If a project manager oversees a succession of projects that all fail, then there has to be some question about whether that PM is doing a good job. On the other hand, if we take a single failed project in isolation, we cannot assume the project manager failed because the project failed. We have all led initiatives that failed through no fault of our own—and where it could easily be argued the outcome would have been far worse if we hadn’t been involved.

There is also the issue of defining what constitutes success or failure. Ultimately, a project has to achieve the goals for which it was approved—delivering business benefits through the completion of features and functionality within a set timeframe and for an established budget. However, that’s not a black-and-white calculation of success or failure; a project that misses the deadline by a day and a project that misses the deadline by a month are not automatically the same.

Add into that the intangible results that come from a project—the growth of individual team members and the team itself to be better positioned to perform on the next project. That kind of success doesn’t replace the need to deliver tangible outcomes, but it is an element of the “success or failure” discussion.

The new world of project success

These factors have long been debated within an industry context, as well as at every organization that undertakes project management and assesses PM performance. There’s never going to be a single equation for determining success or failure, and the best we can hope for is a clear set of criteria that project managers are expected to perform to, combined with a consistent assessment of that performance.

  1. Immediate or short-term improvement: Typically this occurs on the cost management side of the ledger when a process improvement, automation, system enhancement or similar is implemented. The improved effectiveness and/or efficiency can show results in a short period of time, and those results can be tangibly measured in time, financial or similar terms.
  2. Long-term improvement: This is the kind of benefit that can still tangibly be measured, but generally over a longer period of time. In some cases, that time gap between project delivery and business benefit may also make it harder to associate the specific benefit with the specific deliverable. For example, the launch of a brand new product can theoretically allow the revenue two years later to be associated with that product, but if additional versions were released in the interim, it will be difficult to associate specific revenue or market share with a specific release of the product. However, the overall benefit can still be measured in objective terms—revenue, market share, margin, etc.
  3. Intangible improvement: This benefit is still significant and important to the organization but cannot necessarily be measured in absolute terms. Take greater employee and customer satisfaction, for example—they both help improve organizational performance, and a project may be directly tied to such an improvement (a project to improve customer support may deliver an immediate bump in customer satisfaction for example), but that improvement does not directly translate into tangible top- or bottom-line benefits.
At the risk of sounding somewhat cynical, I don’t see organizations being able to accurately measure a project manager’s performance any more accurately in the next few years than they have in the past. However, the reasons for that inability are changing. As the role of the project manager moves away from simply a project-focused role and more toward a business-focused role, so project success must be more closely tied to business success. For most organizations, that connection is still little understood—especially for those initiatives that do not have an immediate and direct connection to results.

However, things are now changing. As project management evolves to become a more business-focused discipline, the determination of whether a PM was successful in managing a particular project must also change. Some of the traditional variables still apply, but some are now very different—and even harder to measure.

If we make the reasonable assumption that the primary function of a project manager is to maximize the chances of the project he or she is managing being successful, then the first definition of PM success must remain aligned with the definition of project success. These days, that is becoming far less about “on time, on scope and on budget” and much more about enabling business outcomes.

In other words, a project may be late, it may spend more money than planned and it might drop a few features in the product or service—but if the organization still achieves the revenue, market share, cost reduction or whatever other benefit it expects to achieve, then the project is a success. The problem for project managers is that in many circumstances, those business benefits won’t be determined until months (or even years) after the project finishes, so how do we use those factors to measure success or failure?

I believe the solution is something that organizations need to improve in order to better understand their business as a whole; the ability to better determine project management performance is simply a fortunate byproduct. To understand that solution, we need to look at how benefits are achieved from project outputs. Broadly speaking, there are three categories of output (project deliverable) to outcome (business benefit) translation:

Organizations need to better understand how this translation occurs, especially for the second and third categories. The owner of a project’s outputs—the product owner, operational department head or similar—needs to understand their business function well enough to be able to accurately map the output of a project to the business benefits that will be accrued, and to recognize whether that benefit will be tangible or intangible. Greater understanding of this mapping will allow for more accurate benefit projections to be made during the project business case phase, better reassessment during project execution, and better alignment of the outputs of the project with the ability to achieve those results.

This last part is where the determination of project success comes in. The owner of the project outputs must work closely with the project manager to ensure that the final product or service that is handed off on project completion has the best possible chance of enabling business success—and the ability of the project manager to deliver that required output is the measure of the PM’s success. Inevitably, that defined output will be different at the end of the project than it was at the beginning.

In the modern business environment, the opportunities to deliver results and the organizational priorities are continuously evolving—and that will translate into project changes. That comes back to the idea of delivering an output optimized to deliver business results, not arbitrarily aligned with the project constraints.

If the output owner is unable to provide the project manager with a clear explanation of what the “perfect” output looks like during project execution, the PM cannot reasonably be held accountable for the success of the project based on the ability to deliver benefits because the PM is effectively operating blind. If the output owner does provide a clear definition of that perceived perfection, then the PM can be held accountable for how far removed from that perfection the ultimate deliverable is. From that point forward, the output owner has full accountability for delivering results (but that’s a different article).

To reach this definition of perceived output perfection, the PM and output owner must work incredibly closely—the output owner providing requirements and the project manager describing what is possible. The agreed-to solution must be supported by both of those individuals, and as a result the success of the two roles is inextricably linked together (the PM cannot succeed without the output owner, and vice versa).

That’s exactly how it should be if the organization is going to benefit. The PM still has other traditional measures of success (team and individual development, personal growth, etc.), but the hub of performance is the ability to deliver a project output that optimizes the ability of the owner of that output to achieve business results.

Conclusions

If organizations are to accurately and consistently measure project management performance, they must first do a better job of understanding the cause and effect of their project commitments with their business outcomes. That’s something they must achieve to better understand their ability to influence return on investment—and ensure they are investing in the right projects.

It’s also something project managers should want their employers to do because it will help demonstrate the value project management brings to organizations. Those of us in the project management profession inherently understand that value is delivered, but it needs to be objectively measured for the sake of individual and collective PM success.

Source: www.projectmanagement.com

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