Creating Value Out of Change

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Change has become a constant in our fast-moving world, but very few organizations are leaders of change.

How can project and program management help? One of the key factors of success is value creation--understanding the context, reasons and impact of a change and defining how to create value out of it.

Both strategic managers and project managers have traditionally tried to keep change to a minimum because it affects their plans. This won't work anymore!

Complex situations, where multiple stakeholders compete with each other and try to influence the outcome on a continual basis, create ongoing change. This requires constant adjustment of the plan through a series of integrated, mutually reinforcing decisions that form a coherent whole.

But how can we keep direction if we are continually adjusting? Program management may be the answer.

First, key stakeholders must be identified. Then, based on their needs and expectations, measurable and agreed benefits that will achieve the stated strategic objectives are defined. This is called the "value proposal."

To construct the value proposal, the program management board and other key stakeholders must first make sense of the impact of the change and agree on the program's expected benefits.

Typically, workshops and individual interviews will enable the program board to build agreement on stakeholders' needs and expectations and classify them into critical success factors (CSFs) and subsets of CSFs.

The sum of the CSFs constitutes the value proposal and will give direction to the change. Projects are then defined and initiated to produce deliverables that will enable the realization of these CSFs.

Because the CSFs are fairly high level, they will not change drastically when new needs appear through external or internal influences. But the relative importance of the CSFs may need to be adjusted.

CSFs will directly influence the projects that are part of the program, sometimes requiring the early closing of a project and the initiation of a new one.

The key to value creation is to understand that:

•    Without direction, time and resources will be wasted on distinct, unconnected projects and activities.

•    The change program direction must be based on key stakeholders needs and expectations, and clearly defined through agreed CSFs.

•    Strategic direction can evolve and be adjusted on an ongoing basis, but always for explicit reasons that will generate added value.

I will address two other factors for success--transition and value realization--in upcoming posts.
Posted by Michel Thiry on: September 17, 2009 01:49 PM | Permalink

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