People, Planet, Profits & Projects

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!

We have blogged before about Sustainable and Responsible Investment.  We’ve discussed the Dow Jones Sustainability Index and its ilk.  Since then (about 6 years ago), it’s getting increased attention now – look at the increase in SRI, especially in the most recent years:

So what is SRI?

According to The Forum for Sustainable and Responsible Investment, SRI is:
Sustainable, responsible and impact investing (SRI) is an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact. Examples of ESG criteria can be found here.

Wall Street investors (at least some of them) and NGOs are working together to consider sustainability, conservation, and social responsibility into great-performing financial products bankers sell every day.  Examples of these are “Green bonds”, sustainable commodities, ecosystem services, carbon credits attempting to attract mainstream capital to invest in and shore-up (excuse the pun) large-scale efforts related to sustainability.

What drew my attention to this, as we watch Harvey, Irma, Jose, Katia, Lee, and Maria form and storm in the Atlantic, is the apparent increase in threat to island nations.

Case in point – the devastation in the Caribbean from Hurricane Irma, and at the time of this writing, what looks to be the ominous arrival of Maria in the same area.

Turns out, there is a very interesting story at the intersection of SRI and the threat of sea-level rise and a greater number and intensity of severe weather.

And it’s centered on Seychelles, an archipelago nation in the Indian Ocean (and part of the African Union) which is made up of not 10, not 30, not 100, but 115 islands. 

99 percent of its territory is ocean, and more than half of its GDP depends on fishing – in particular, tuna, and on ocean-based tourism.  Seychelles is an example of what some people are calling a Large Ocean Developing State (LODS).  By some estimates, there are 58 LODS on Earth, and 65 million people call them home – and the populations of these nations are increasing, even as they find themselves facing the first impacts of rising sea levels and bigger, badder storms.

As climate concerns and other environmental anxieties mount, Wall Street and NGOs are working together to hammer the complexities of conservation into the kind of mature, repeatable financial products bankers sell every day. Green bonds, sustainable commodities, ecosystem services, carbon credits — some sectors of the conservation market are nearly ready to attract mainstream capital to bankroll large-scale restoration and conservation.

The story at this intersection was called Debt for Nature Swaps Let Impact Investors Finance Climate Resilience.  It’s a short and to-the-point article, and I suggest you have a look for more detail.

Mostly, though, it’s the story of a deal.  It’s a deal that will launch lots of meaningful projects, in the Seychelles, and that’s why you’re reading this story on projectmanagement.com.

Here’s a very short (and probably clumsy, but close enough) version of the deal courtesy of another excellent article which came up in my research on this topic - this one from The Economist, called Debt Relief For Dolphins.

It’s a debt restructuring in which The Nature Conservancy (TNC), an American NGO, ‘consumes’ $21.6m of debt owed by the Seychelles to the Paris Club of international creditors, and in exchange, the island nation promised to protect 30% of its waters by 2020—half of this area will be off-limits to fishing and will create a giant (400,000 square kilometer) reserve, one of the largest of its kind in the world.

The idea: Seychelles has a longer time to pay back their debt at a lower interest rate over a longer period, and TNC triggers funding for conservation projects that the island would otherwise be hesitant to take on. Examples of the projects:

• training fishermen to use more sea-friendly techniques
• conducting research on fish populations
• gearing up to monitor the new reserve

Here’s what TNC has to say about the deal:

“I think it’s a good example of what we’re trying to do in NatureVest,” says Rob Weary, the Conservancy’s senior director of product development, of the Seychelles debt-for-nature swap. “We’ve created [something akin to an in-house bank] in the Conservancy, using all the tools that an investment entity would, but instead of using it [solely] for profit, we’re using it to fund conservation.”

Although it involves "only" $22M, this could be considered a pretty small deal.  But it’s a template for application by other NGOs and other nations which stand to gain from such an exchange.

“Although we are small, we can make a real difference,” President James Michael of Seychelles said about the debt restructuring. “A difference that brings the best outcomes for Seychelles. And a difference that offers examples in terms of sustainable development, in terms of innovation, and in terms of options for all small island states.”

No, that's not a typo.

Hidden Figures was a 2016 film which conveys the true story of a team of female African-American mathematicians who played a vital role at NASA during the early years of the U.S. space program, with little recognition, until well after the fact.  This blog post is not about those particular women, but it is about a woman (with a similar surname) who also has been working in planetary science, and from whom, I think we can draw some PM lessons learned.

A recent interview in Scientific American by Jen Schwartz, caught my attention.  This isn’t normally where a project manager would go for information about our discipline of PM, but that doesn’t mean it is not a good source of inspiration and information.  Indeed – it’s a very good source.

The interview is with Christiana Figueres, a career diplomat from Costa Rica.  Recently she orchestrated (you could read that as “project managed”) the 2015 Paris climate agreement, in her role as UN Framework Convention on Climate Change.

Now I realize that some people and organizations have politicized climate change, and even Ms. Figureres herself, but again, I want to point out that I am drawing not from a political journal but one dedicated to credible, reviewed, consensus-based science.

As I often do in this blog, I like to go to the mission statement of an organization to orient myself around the source.  In this case it helps point out how this is a valid source of information.

 Here is Scientific American’s mission statement:

SCIENTIFIC AMERICAN is the world’s leading source and authority for science and technology information for science-interested citizens, delivering understandable, credible and provocative content to an audience of more than 5 million people worldwide. The magazine is independently ranked among the Top 10 US consumer media for “Most Credible” and “Most Objective.”

Founded in 1845 on the commitment to bring first-hand developments in modern

science to our audience, SCIENTIFIC AMERICAN is the oldest continuously

published magazine in the United States. SA boasts over 140 Nobel laureate

authors in our 165 years -- the most of any consumer magazine.

The magazine prides itself on being credible and objective.  And with 165 years of experience, besides making me feel young again, that’s a pretty solid basis.

So – back to Ms. Figueres. After a failed COP15 Climate Conference in Copenhagen in 2010, she spent the next six years rebuilding the global climate change negotiating process based on fairness, transparency and collaboration.  Check the PMBOK® Guide – 5^th Edition, 6^th Edition… any edition, and corroborate that with the PMI Code of Ethics and Professional Conduct – and its values of honesty, responsibility, respect and fairness - and you’ll see that connection.

I’d like to spend a moment highlighting a few extracts from the interview that I’d assert apply to the intersection of PM and sustainability.

I’d like to start with this one from the preamble:

“Figureres achieved unprecedented cooperation not by flexing her authority (the position carries very little)…. Trained as an anthropologist, she bet that humans are motivated to work toward a common goal if given a structure of trust and hopefulness. In the face of high stakes and daunting complexity, she created an even bigger mess, imbued it with optimism, then navigated through it.”

There is a lot to unpack there, starting with what should seem like a familiar refrain for PMs: influencing and motivating without authority.  Next, the bit about creating a mess seems to evoke the concept of Tuckman’s model of Forming, Storming, Norming, and Performing.  She wisely understands the innovation and creation that occurs during “a mess”, so (excuse the kitchen analogy here) while she was “stirring the pot”, she was also making sure that all of the chefs knew the recipe and got along with each other.  Sounds like deliciousness will ensue.  And it did.

In the interview itself, she talks a little about what I read as Agile methodology:

“Looking back, I’ve always had a willingness to be vigilant to where the opportunity is.  You don’t have to progress in a straight line; you can be creative.  Perhaps it’s like a sailing strategy, taking left and right, left and right.  Or sometimes it’s stepping back one foot so you can then step three feet forward.”

And later:

“To all those who suggested that ‘this is too complex, let’s delay six months’, I put my foot down and said, “We are not even considering it”.  You must allow for the process itself to be muddy because that is the space in which innovation occurs, ingenuity sprouts up and surprising alliances come forward.  You want to be not only tolerant but even encouraging of messiness – but with a hard deadline and a clear destination.

Next, and perhaps without knowing it, Ms. Figueres provides expert judgment on Identify Stakeholders and Manage Stakeholder Engagement with this gem:

“From my anthropology background, I drew a conviction that this had to be an inclusive process, not just federal governments.  So we opened it up to the private sector, the spiritual community, and scientists…. There is sort of a self-organizing force that occurs, and better decisions are made when they are informed by as many different perspectives as possible…. Then we allowed for everybody to use the tools they have to apply the science to their particular country, sector, or issue.”

Although this interview was taken from a Scientific American article on the science of gender issues, using Ms. Figueres a platform to discuss “female energy” and to hold her up as an example, I hope you’ll agree that there’s a great deal of value in what she’s said (even in the snippets I’ve included).  And if nothing else, I encourage you to expand your sources of knowledge when it comes to developing yourself and your team – trusted sources that are outside of the usual, but will still boost your capabilities.