Project Management

How To Express A Project Manager's ROI

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By Dave Wakeman

I spend a lot of time focusing on value and ROI. For a project manager, it's often a challenge to understand how to communicate your role in terms of value or ROI. But that doesn’t mean you shouldn’t try.

The fact is that without strong project management and project principles in place, most projects wouldn’t come close to realizing any ROI or creating value for their organizations.

So how can project managers begin thinking and expressing their success and impact in terms of value? Here are a few ways:

1. It isn’t about actions, it’s about outcomes.

It can be tough to think in terms of outcomes with all of the various requirements built into your project’s plan. Or with a sponsor sitting over your shoulder asking about every minute detail.

But your goal is to produce a project that creates value for your organization and client. You don’t do that with a list of activities you have completed. You do that with the outcomes those activities produce as a whole.

To begin to turn your thinking around, instead of stating the tasks you’ve completed, start stating your accomplishments like this:

“Based on our objective to create a new drilling platform that has the following functions, we have successfully created the framework for the platform and have integrated these three features into the framework. We are on schedule to finish the remaining features within our predicted timeframe.”

2. Ask questions based on intended impact.

Too many project managers find themselves in environments where their input isn’t desired, their thoughts aren’t respected, and they feel reluctant to ask questions.

That’s a terrible situation. And, if it’s a common experience, I’d advise you to put down this article and go find a new job, because you deserve better than that.

If you’re merely failing to ask good questions, you need to get over that right away. Questions empower you as a leader. 

The questions you ask should be directed toward the intended impact of the project on the stakeholders, the sponsor and the organization. So ask strong questions like:

  • “What will this project mean to the stakeholders?”
  • “Why is this project being prioritized right now?”
  • “What should we be on the lookout for as possible challenges to the project’s success?

These kinds of questions will empower you with two things: knowledge to make better decisions within your project and the context to explain and communicate those decisions to your team and key stakeholders.

3. Measure your work in a meaningful way.

In so many businesses, we hear about data and measurements.

What does much of it mean? Not really a lot, in too many instances.

To refocus your project management efforts and maximize your ability to talk in terms of the value of your projects and your leadership, you have to measure the outcomes in a meaningful way.

Here are some examples:

  • Because of these improvements in processes and decision-making, we saved 5 percent on costs and came in 3 percent earlier than expected.
  • By making the decision to fast-track this part of the project, we were able to free up these resources, and that enabled us to realize a 10-percent gain in productivity.

The key here is to make sure you focus on making things meaningful and measurable. Being fast or cheap is one thing, but being better, faster and cheaper is what counts. 

By the way, I write a weekly newsletter that focuses on strategy, value, and performance. If you enjoyed this piece, you will really enjoy the weekly newsletter. Make sure you never miss it! Sign up here or send me an email at dave@davewakeman.com! 

 

Posted by David Wakeman on: November 01, 2015 11:18 PM | Permalink

Comments (9)

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This is a fascinating topic. I have been impressed recently with the impact of "telling a story" or "painting a word picture" rather than just citing numbers to demonstrate ROI. This is a way in which we can help stakeholders to visualize ROI outcomes.

I have been studying the US presidential debates this year, not from a political point of view, but from the viewpoint of communication strategy to see what I can learn (This would make a great class in Business School by the way). It's been interesting to see some of the candidates talk more like an engineer with numbers and stats, but they don't really seem to resonate with the audience even though logic would indicate that they should. I've noticed that one of the candidates deals almost entirely with word pictures rather than stats ("a wall", "big beautiful gate", etc). But is this a case of too much story and not enough data? I'm asking myself what combination of stats and word pictures is most effective--what can I learn?

I know one thing. I have been in board rooms with very intelligent company vice-presidents, CFO's, board members, and the like; where even the eyes of the "numbers people" are glassing over as the Power Point with all the stats goes on and on. Then someone speaks up, paints a simple word picture, the energy level in the room goes up, the conversation becomes animated, and it is the story that carries the day. I'm sitting there saying to myself, "What just happened".

I'm beginning to develop a strategy for myself, where ROI is presented in a combination of story, word pictures, and the numbers. There has to be substance behind the story, but the story is what really speaks. I watched a video of Steve Jobs speaking last night and was impressed by his masterful combination of facts and story--it seemed very effective.

What do you think?

Great subject Dave and Great points Bruce. I like the words stats and story. It clicked my mind in some additional directions.

As Dave suggested, asking straight question which will ensure setting expectations with mutual agreement by all involved parties.

Communicating/Expressing the progress and results - either in form of Stats or Story.
If we really see risk taking ability of stakeholder and their communication language we can decide upon in which language we need to communicate.
Risk taking stakeholders are comfortable with stories if not backed completely by stats.
Some Stakeholder need stats for decisions which they make, telling them story does not work.

If we have Stakeholder analysis, we would get to know how to express ROI.



Well, my experience tells me that you cannot take "either" or "or" approach. I agree with Bruce on this. To deliver your message, the best strategy to adopt is a combination of raw numbers and juicy story. The story leads you to a direction gently without you even realizing most often, more so if it creates interest. However, it may sound hollow (to discerning audience) if it is not backed up by solid data.
This approach is good, but it requires hard work and research behind it.
And there starts the real FUN and HIGH of real Project Management!

Great subject. Thanks.

Thank you all for your comments.

It doesn't come through in this piece, but to consider the narrative around ROI as a story is pretty consistent with my worldview.

Another thing that Bruce brings up that is interesting is talking about the presidential debates in terms of story telling. I have done a great deal of political work and I have seen that the story aspect will completely overwhelm the numbers and that the most effective numbers illustrate the story.

To highlight Rajinder, asking questions should be a guide to people to get them to talk about what is important and that is where I have the most fun.

Thanks for reading and commenting.

Dave

Great
ROI - return on investment that what they want from anyone and as a PM to prove that I saved this much if I was not there it would have cost that much or delayed by that much , to saw what happen without PM expertise . In our organization we run a programme call I3 Idea and every project that you manage has to come up with saving idea - related to technical - either you modify scope or introduce innovation to save money to client .That is one of KPI of project as well.

Thank you for this post! Great topic! I like to think of PM communications pertaining to value similar to the advertising on a carton of almond milk. The activities, tasks completed and ROI are kind of like the nutrition and ingredients label while the accomplishments of those tasks are what's advertised on the front of the carton (50% more calcium than regular milk, 100% dairy and soy free).

Good subject and advice for newer PMs trying to develop or evolve!

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