People, Planet, Profits & Projects

Photo credit: Randy Pench/The Sacramento Bee via AP

If you are familiar with the weather in California, you know that it’s been ‘variable’ to say the least.  Over the past five years, the entire state – 100% - was under drought conditions.  Then between October 2016 and February 2017, the state saw almost double the seasonal average for precipitation, causing massive evacuations due to overflowing dams and mudslides.  We can attribute this to historical alternation between dry and wet weather.  But the cycles are more intense than ever, and scientists do attribute both the increased dry and wet ‘peaks’ to climate change.

In addition to the cycles, the generally warmer temperatures are helping to melt the Sierra Nevada’s snowpack significantly (some predictions say 90%) – releasing much larger amounts of water than usual.

An amplifying aspect to the droughts and flooding is the fact that more and more people are moving into areas which are into the path of the potential floods, and are placing an increased demand on the water supply during droughts.

Although this post will focus on California in the United States, consider that the increased threat of climate change related flooding is global – affecting people in Asia living around the Himalayas, Europeans who reside near the Alps, and South American neighbors of the Andes.

So the question is: how can projects save the day?

Let’s start with the problem statement: Since there are increased ‘peaks and valleys' with respect to flooding and drought, what can be done to capture the excess water and store it for those times when the drought cycle starts?

Reservoirs are not the solution.  Given the number of dammed rivers, that just will not work.

Could aquifers be the solution?  According to an excellent article in the November, 2017 issue of Scientific American, maybe they could – but it will depend on some pretty impressive projects.

In fact, aquifers have ten times the capacity of the 1,400 reservoirs in the state.  Also, if you compare the cost of building a reservoir with storing water underground in an aquifer, the cost of adapting an aquifer is 80% less expensive.

We can think of this idea as undoing what was done over the past decades with the construction of massive dams, reservoirs, aqueducts, canals, levees, and pumps, which the article says, “changed the plumbing of the entire state and caused countless unintended consequences”.   A series of projects that are proposed in the article seek to “return, somewhat, to nature’s way”.  How would this work?  Let land flood, but in a controlled manner.   Some of the projects that were undertaken in the past did not have a very long-term view with respect to their objectives.  In fact, the article says, “Successful projects start with correcting long-term misunderstandings about basic hydrology”. 

Consider the real meaning of an aquifer. An aquifer, the lakes, streams, rivers – all of the surface water above it - are actually the same water.  So when surface water looks replenished based on recent resupply (such as the October-February period mentioned above), the aquifer is still heavily depleted from decades of pumping by farmers and municipalities.

Some solution proposals

Three ways to store surplus water are proposed in the article: Recharge Basins, Underground Water Banks, and Controlled Levee Breaks

We’ll provide one example of a project, the Oneto-Denier restoration site in the Cosumnes River Preserve.  A short project description: 750 feet of a levee (one that was built over a century by farmers to protect their farmland from flooding) was removed to help the Cosumnes River fill this part of the floodplain when waters run high. 

In winter 2016, the project got its first test.  Hydrogeologists from UC Davis set up instruments to determine what happened as a result.  It turns out that the flooding had recharged groundwater three times more than typical from normal rain and irrigation, in turn replenishing more than 2,000 acre-feet of water, and it also appears that native fish are benefiting from this type of floodplain habitat.

Read about this project directly from the UC Davis site here.

Since not many of our readers are hydrologists, we’ll stick with the main point: whatever you believe to be true about climate change, there is a need for projects, project management, and project managers, to deal with climate-related effects, and it serves us well as a discipline, and you as a career aspirant, to be familiar with the changes that are taking place and the opportunities for projects to serve as solutions, whether it’s in responding to (for example) flooding and droughts, or to work on projects that address the causes of human-induced climate change or pollution.  And remember – this is just one of the ‘lines’ of the triple bottom line.  We will continue to post about not only ecological but also economic and social aspects as well, keeping true to the theme: People, Planet, Profits, and Projects.

In Part 1 of this post, I raised the issue of, and said that we would come back around to the divergence we see between the 70% failure rate (based on “project success” – looking at the steady-state outcome) and the 25% failure rate (based on “project management success”).  You may want to go back and review Part 1 for orientation.

To help explain this major divergence in statistics, we need to revert to the very definition of a project.  Here’s what Dr. Kerzner is saying about this in his talks on “Project Management 2.0 and 3.0”.  I thank Dr. Kerzner for permission to use these images which remain his intellectual property.

Do you catch that rather non-subtle mention of sustainability?  Remember: we’re not talking in particular about saving snails or reducing our carbon footprint.  Of course, those things are part of the concept of the “triple bottom line”, made up of social, economic, and yes, ecological outcomes, but they aren’t the only part.  What Dr. Kerzner is so wisely pointing out is that a project should be concerned with ‘the beyond’ – the sustained view of the project, that is, the way in which its outcome (hopefully) starts to realize business value – in a sustained way.

How can we do this?  Don’t we have to change our view of the lifecycle of a project, expanding it to look past the end, even past what we normally consider the outcome, handover, and even past what we have come to call “Benefits Realization”?  The short and only answer, is: yes.  Yes with a capital Y.

In the figure below you can see that Dr. Kerzner has mapped out timeline that adds an important new element, “VA” – Value Analysis, paired with Benefits Realization, and calls that portion of the Investment Lifecycle “Value Determination”.  Note the name of the figure: Investment Lifecycle.  We know from the PMBOK® Guide that prior to the Project Charter, senior management of an organization “owns” the project decisions, the choice to invest at all, and in fact, is using tools like ROI, IRR, NPV, and Payback Period to determine whether or not a project is even worth the investment.  So I think it’s actually easier for project managers who have been practicing for a while to “get” these green chevrons (IG and PA in the figure).  The tougher part is to switch to a mindset in which the later green chevrons (BR and VA) are considered in project decision making.  If you want to test yourself on this, check my recent blog post “Paved With Good Intentions” – there’s a scenario in that post that challenges your PM thinking in this very area of Value Determination.

Dr. Kerzner takes this idea much further, providing even tools and techniques to help perform Value Analysis.  I provide an example below in which he proposes a scoring system to assess the project based on its deliverables (which is where most of us as PMs are trained to STOP) and also its business value.  It’s no accident that the business value (with thanks to Vilfredo Pareto) is 70% compared to the 30% for deliverables.  In our Project Management World, we see that 30% as The Whole Pizza, when, as Dr. Kerzner is coaching us, it’s just a slice.  A big slice, granted, and a slice without which there’s really no Pizza at all, but still – just a slice. 

Also, notice the symmetry here.  The very same measurements we use and acknowledge, and happy integrate without question, into the PMBOK® Guide, namely Benefit/Cost Ratio, ROI, Payback Period, are used again after the project is handed over.  In effect, we are seeing if our predictions about the project – those that we made during the selection process – are coming true.  We cannot validate this at the ribbon-cutting ceremony, we have to wait, and this is problematic for the mindset of the PM (and I know you, because I am one, and I have the same propensities) - you are saying, "OK, on to the next project, let me have at it!".  It's also a problem from a pragmatic perspective, since we have to wait, perhaps years, to know if a project is providing (harvesting) this business value.

The 70% failure rate that Dr. Kerzner is quoting uses this long-term view.  That’s the difference!  The 25% failure rate shown in the Standish studies – well, that’s using the ‘scope, time, cost’ view, with failure being considered if two of the three are not delivered. 

How do you look at your projects?  Are you focusing only on the deliverables, or are you considering what your project delivers in the steady state?  Importantly, how are you making decisions in your project?  Are you focused on the Triple Constraint, or the Triple Bottom Line?   What Dr. Kerzner is telling you (adjusted to reflect the narrative that I use) is that your focus needs to be not only on project management success, but also on project success.  And that means you should be making those decisions with harvesting value from your project in mind.

Happy Harvesting!

This is Part 1 of a 2-part blog post, which was inspired by a presentation from Dr. Harold Kerzner.  The content shown here is used with kind permission from Dr. Kerzner and remains his copyright and that of IIL.

Here, in Part 1, I will give the background of the topic of Benefits Realization Management and the solid connection between that and the element of triple-bottom-line, long-term thinking.

In Part 2, I will extend this concept as Dr. Kerzner did in his presentation (regarding Project Management 3.0) to the idea of ‘project value’, presenting some specific thinking in the area of decision making and scoring of projects based not only on their immediate deliverables but how they deliver value on a sustained basis, and will consider "harvesting" of project value.

Let’s start with some statistics from Dr. Kerzner:

• More than 70% of the companies fail to achieve the desired benefits in full or in part from their investments.
• Even if the benefits are achieved in part, they are most often less than fully realized or expected.

This is striking, and in stark contrast to what we read in the latest CHAOS reports from the Standish organization, which indicate that – although many are ‘challenged’ in delivering on time, scope, or budget, only 25% or so of projects “fail”. 

So what’s going on here?  What’s the reason for this massive divergence?  Which is true?  Are 70% of projects failing, or are 25% failing?  Well, of course, it all depends on when you look and how you define success.  This one distinction is the main point of our recent book, “Driving Project, Program, and Portfolio Success”.  In it we talk about redefining success.  We use examples, such as the Sydney Opera House to illustrate that projects which may fail at “Project Management Success” may yield great benefits later.  Conversely, projects like “New Coke” may be managed with great “Project Management Success” but never deliver any positive value. 

In other words, we were (without knowing it) writing about Dr. Kerzner’s Project Management 3.0 when we wrote that book (and in ongoing blog posts since then).

Let’s continue with the concept of Benefits Realization Management as defined by Dr. Kerzner.  The ‘one-two punch’ that I noted in his presentation is that (1) the value that projects deliver is not always immediately available as a metric, and (2) many of the metrics for monitoring value are made up of intangibles.  This fits very nicely with the challenge I posted last month having to do with a project decision as to which type of pavement material to use on a segment of highway.  You may want to take that challenge again, or for the first time, after reading these two blog posts.

With regards to the intangible benefits, Dr. Kerzner has a very good list for reference:

Note that the list does include sustainability.  And remember – sustainability is not only about reducing pollution or saving a species.  Sustainability in its most productive sense includes economic, social, and ecological, so that would include the Employee Morale, Image/Reputation, and even the Culture, Collaboration, and Quality of Life elements above.  We can see that there is great alignment between what Dr. Kerzner discusses and what we’ve been talking about for a while, here on this blog, in the Driving Sustainable Success book, and going all the way back to our original work on the topic, Cleland Award-winning Green Project Management.

However, let's return to Benefits Realization Management (BRM).  Here’s how Dr. Kerzner describes it:

"The ultimate goal of benefits realization management (BRM) is not merely to achieve the benefits, but to sustain them over the long term"

That’s a good basis for this topic.  Let that “soak” a while.  In Part 2, I’ll continue this thread to encompass Dr. Kerzner’s view of Business Value and its importance in a true assessment of project success, which will come back around to help us solve this divergence we see between the 70% failure rate and the 25% failure rate I point out above.  Stay tuned to People, Planet, Projects, and Profits for Part 2!  

Translation: (something like)" "A trash picker does more ... than a Minster of the Environment"

Today, just a short post about one of those true intersections of project management – in this case software development – and sustainability – in this case, recycling via “waste-picking”, and a new “App” that serves the millions (did you know there are millions?) of Catedores – or their equivalent – worldwide.

The app, called Cataki, is featured in a short story under the heading “Rubbish in Brazil”, in the most current version of The Economist.

Paraphrasing from the article:

The developers of Cataki, a smartphone app, hope to change what is seen as an unwanted, but very needed profession in Brazil – and many other countries as well. Since July it has been matching people who have rubbish with catadores operating in their neighbourhoods. Catadores cart off unwanted non-recyclables like sofas and televisions as well. On the Cataki map their carroças show up Uber-style as purple icons. Thiago Mundano, a street artist who is the brain behind Cataki, insists it is more like Tinder (a dating app) - because it takes no cut from the catadores). On future versions, people will post photos of their rubbish, and catadores will accept or reject it by swiping right or left. Photos of catadores will make it still more Tinder-like, Mr Mundano hopes.

There is more to this project than software.  It includes events in which graffiti artists (see below) and healthcare professionals and the ‘mechanically inclined’ gather to inspect and paint, and add rear-view mirrors to the carts (carroças), as well as to attend to the needs of the pickers themselves.

It’s new, but it may catch on worldwide.  After all, according to a report by the World Bank, 1% of city dwellers in developing countries work as waste-pickers. Mr Cazuza, a veteran, thinks Cataki is useful mainly to “newbies who don’t know where to start”. An electronic calling card may win them more respect.

To learn more about the project and how it was rolled out (very creatively, and I applaud the way they did this handoff from project outcome to steady-state use), watch this video which is narrated in Portuguese but is subtitled in English.

So…What do you think of this trashy project?

The title of this blog post will be explained at the end of the post.

It’s a different sort of a post – one which asks YOU a question and looks for your feedback.  I’m really interested to know what you think.

I’m going to give you a scenario and it’s intentionally highly-simplified, because I don’t want you to labor (or argue) over the technical details of the construction project it represents – take the general information that is given at face value.  I would like you to rather think this through as a decision-making exercise, in which I’d like you to challenge your own thought process and to expand your “consideration” of inputs and context.

Let’s say you are the project manager of a major road-resurfacing project.  Let’s say it’s a 50-mile section of an interstate highway in the northeastern US – prone to heavy traffic (including trucks) and some temperature extremes (freezing, snow, heat, humidity).  Further, we’ll say that this is a Federal highway, so the stakeholders are the US Government which is sponsoring the project, and of course the (taxpayer) drivers who are driving on this surface.

Your project team is deliberating over the choice of paving material.  They can choose Material “S”, the standard paving material, or Material “LT”, a new paving material made from recycled tires and construction waste, which is more expensive, but has some characteristics which are very attractive.  Its cost, 3 times the standard, will mean that you must go to a senior executive for an increased budget.

Here are the details of these two materials:

As you can see, the LT material, while costing 3 times as much as Standard (Material “S”) will provide better traction for drivers (better “grip” of the road, especially during wet conditions).  It also provides better fuel efficiency.  For example, vehicles that would get 20 MPG (miles per gallon) would actually get 30 MPG on a stretch of highway paved with LT.  Also, because Material LT is flexible and resilient, it will require much less in terms of repair – fewer potholes, cracks, and other imperfections appearing over time.  There is an intangible here – it’s not just cost of repairs; fewer repairs also means less inconvenience for drivers.  You’ll have less frequent lane closures, and reduced risk of accidents involving construction crews.

So here are your questions:

The big one: should you go for the LT?

The subtending questions:

• What drives your decision?
• What did you consider?
• What was your “planning horizon”? 
  • Are you thinking about handing off the project to the highway department and moving on to the next project, or are you thinking through to the ‘benefits realization’ portion of the highway?

Make your decision now, but also… please read on to have a little more ‘advice’.

Let’s look at the same information presented a little differently, and now I can reveal that LT stands for Long-Term (as in Long-Term thinking):

Framed this way, what are your thoughts?

Does this change your considerations?

Note that the benefits are economic (accelerated breakeaven point for the maintenance department, lower fuel costs for your drivers), ecological (reduced carbon emissions) and social (you are keeping your stakeholders alive).  This is the point.  By extending your planning horizon to beyond the handover to the highway department, extending it to “operation”, I assert that you are improving the quality of your project decision making.

So now, back to the title.  The expression “The road to hell is paved with good intentions” is meant to be (among other things), an admonishment that a good intention is meaningless unless followed through. 

So I think the “follow through” in this case is the consideration of the product of the project.  In this case the product of the project is – literally – paving.  Your projects will have other ‘follow-through’ items.  Are you considering the long term? Step back and think about what happens to the product – the outcome – of your project.  You may be paving the way for big improvements for your stakeholders.

What do you think?  No, really, what do you think?  I’m very interested to hear your feedback about the scenario and even more so about what went through your mind as you drove through this decision.

Thanks!