PMBOK 7th edition introduces "Value-based delivery" as a key concept. This places a significant importance on the broad application of ideas, routines and principles for creating value in a dynamic, complex and ever-changing project ecosystem. Needless to say, to work towards "value delivery" the project manager and team needs to have the project value mindset. This mindset describes the attitude of a project manager, which maximizes the value of a project, by making value-focused project decisions and by seeking and exploiting opportunities beyond the baseline that will lead to increased project value.
Two questions here
1. The common argument around value delivery is who and how one measures the value of the project.
2. One of the theories of project success has been to define project success as adherence to triple constraints. This, in my opinion, is also a mindset, a "theory of constraints-based" mindset. How do you navigate both these mindsets to ensure the "real" value of the project is derived?
I would like to know your experiences. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
there is a big problem here (not because of you, in general. Something I debate a lot when I was part of the team that created benefit realization standard). The key, the thing that organizations must focus is Solution. That´s the key. Solutions gives value, not projects neither products. Solution is equal to "the thing" to be created (product/service/result) plus "the way" to create it (call it project/program, etc). But that´s not new. This is from the begining of the times. This is to undestand systemic theory and quality theory. Just organizations that put focus on that are successful.
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1 reply by Dr. Deepa Bhide
Jun 30, 2024 1:43 AM
Dr. Deepa Bhide
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Thanks, Sergio, for your response, and I agree with you. Solution (tangible, measurable, objective, needed to solve the business problem, etc.) is the key, and the value is then a byproduct. Working towards this defined "solution" should be the way forward.
Not sure I'd use "theory of constraints" in that manner as it might be confused with Goldratt's ToC :-)
However, the point you make is valid and is illustrated by the response I'd provided in a separate discussion when Witold had asked about examples of tough recommendations made by PMs. When I recommended my leadership team to cancel the project I was leading because I believed it would not deliver expected benefits, some of the pushback was from those who were purely looking at the triple constraint performance and felt all was well. I had to pull their heads out of the sand to recognize that investing in a project is a means to an end and if that end won't be achieved, the PM (and their leaders') responsibility is to stop throwing good money after bad.
With regards to your first point, a good approach to benefits management is to ensure that the what & how of the value proposition for a specific project is identified before it is initiated as part of the business case.
Kiron
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1 reply by Dr. Deepa Bhide
Jun 30, 2024 1:49 AM
Dr. Deepa Bhide
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Kiron, thank you for that suggestion. I agree :) and hope it's not confusing.
It's interesting to know how you had to recommend cancellation of the project. That seems to be not only practical but ethical too, relating to responsibility and honesty. I see quite a few times that for whatever reason the project is intiated and then the delayed for a significant time. At times the SOW is not signed for a long period. By this time, the need for the project is non-existent. Or the impact that the project would have yielded is softer. The bottom line is that the "value" is not to be realized. At such times, it's important to make a timely decision to shelve or cancel the project and re-initiate it at an appropriate time. PMs, more often than not, get into the TOC mindset and start getting transactional about how to make the balance work, forgetting about the end "value".
I agree that theory of constraints has a specific meaning and not the one I think you mean.
To your point however, identifying the main qualities that reflect the value of the project, and how to measure those within your constraints is essentially the meaning of Systems Thinking.
Applied in a formal way, I would try to develop the relationships between variables to define how each variable affects the other in a predictable, measurable, and repeatable way. Done less formally, I describe the process of understanding the interrelationships of desired outputs and constraints as "calibrating my mental model."
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1 reply by Dr. Deepa Bhide
Jun 30, 2024 2:08 AM
Dr. Deepa Bhide
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Thanks Keith for your response and I agree with you on the "calibrating the mental model". I think I am still stuck up on the "what's the definition of value" part. I guess its a function of systems thinking.
Saving Changes...
Tim ArmstrongTechnical Engineering Manager | | Principal Consultant| Toray CMA | | Eos Astraeus LLC |Steilacoom, WA, United States
I would like to know if you are trying to combine a process's ToC (Throughput / Inventory / Expense) with the Iron Triangle (Scope / Schedule / Cost). They do have some overlap that I can explain from experience with manufacturing processes and manufacturing projects, but I want to know your purpose.
For question 1, there is a simple, straightforward way of measuring value. Ensure the value is objective and delivers hard impact. If the value is a soft impact, it becomes difficult to measure. Also, stakeholder assessment and (push-pull) communication via SOW or Charter are transmitted and received via stakeholder signoff. Ensuring benefit realization is key.
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2 replies by Dr. Deepa Bhide and Vishakha Rai
Jun 30, 2024 12:13 AM
Vishakha Rai
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True
Jun 30, 2024 1:41 AM
Dr. Deepa Bhide
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Tim, thank you for your response. I am relating to the iron triangle of scope, schedule and cost (a generally agreed upon triple constraints).
You bring up a good point on "soft impact" of the value and I think, most of the times it is that. I have seen projects where the SOW push and pull is stretched way beyond the expected life of the project itself, and there is no benefit realization as the project need does not exist. Project teams, even in such cases, go ahead with a forceful "value" realization exercise when they ideally should have shelved the project idea.
I would like to know if you are trying to combine a process's ToC (Throughput / Inventory / Expense) with the Iron Triangle (Scope / Schedule / Cost). They do have some overlap that I can explain from experience with manufacturing processes and manufacturing projects, but I want to know your purpose.
For question 1, there is a simple, straightforward way of measuring value. Ensure the value is objective and delivers hard impact. If the value is a soft impact, it becomes difficult to measure. Also, stakeholder assessment and (push-pull) communication via SOW or Charter are transmitted and received via stakeholder signoff. Ensuring benefit realization is key.
I would like to know if you are trying to combine a process's ToC (Throughput / Inventory / Expense) with the Iron Triangle (Scope / Schedule / Cost). They do have some overlap that I can explain from experience with manufacturing processes and manufacturing projects, but I want to know your purpose.
For question 1, there is a simple, straightforward way of measuring value. Ensure the value is objective and delivers hard impact. If the value is a soft impact, it becomes difficult to measure. Also, stakeholder assessment and (push-pull) communication via SOW or Charter are transmitted and received via stakeholder signoff. Ensuring benefit realization is key.
Tim, thank you for your response. I am relating to the iron triangle of scope, schedule and cost (a generally agreed upon triple constraints).
You bring up a good point on "soft impact" of the value and I think, most of the times it is that. I have seen projects where the SOW push and pull is stretched way beyond the expected life of the project itself, and there is no benefit realization as the project need does not exist. Project teams, even in such cases, go ahead with a forceful "value" realization exercise when they ideally should have shelved the project idea. Saving Changes...
there is a big problem here (not because of you, in general. Something I debate a lot when I was part of the team that created benefit realization standard). The key, the thing that organizations must focus is Solution. That´s the key. Solutions gives value, not projects neither products. Solution is equal to "the thing" to be created (product/service/result) plus "the way" to create it (call it project/program, etc). But that´s not new. This is from the begining of the times. This is to undestand systemic theory and quality theory. Just organizations that put focus on that are successful.
Thanks, Sergio, for your response, and I agree with you. Solution (tangible, measurable, objective, needed to solve the business problem, etc.) is the key, and the value is then a byproduct. Working towards this defined "solution" should be the way forward. Saving Changes...
Not sure I'd use "theory of constraints" in that manner as it might be confused with Goldratt's ToC :-)
However, the point you make is valid and is illustrated by the response I'd provided in a separate discussion when Witold had asked about examples of tough recommendations made by PMs. When I recommended my leadership team to cancel the project I was leading because I believed it would not deliver expected benefits, some of the pushback was from those who were purely looking at the triple constraint performance and felt all was well. I had to pull their heads out of the sand to recognize that investing in a project is a means to an end and if that end won't be achieved, the PM (and their leaders') responsibility is to stop throwing good money after bad.
With regards to your first point, a good approach to benefits management is to ensure that the what & how of the value proposition for a specific project is identified before it is initiated as part of the business case.
Kiron
Kiron, thank you for that suggestion. I agree :) and hope it's not confusing.
It's interesting to know how you had to recommend cancellation of the project. That seems to be not only practical but ethical too, relating to responsibility and honesty. I see quite a few times that for whatever reason the project is intiated and then the delayed for a significant time. At times the SOW is not signed for a long period. By this time, the need for the project is non-existent. Or the impact that the project would have yielded is softer. The bottom line is that the "value" is not to be realized. At such times, it's important to make a timely decision to shelve or cancel the project and re-initiate it at an appropriate time. PMs, more often than not, get into the TOC mindset and start getting transactional about how to make the balance work, forgetting about the end "value".
I agree that theory of constraints has a specific meaning and not the one I think you mean.
To your point however, identifying the main qualities that reflect the value of the project, and how to measure those within your constraints is essentially the meaning of Systems Thinking.
Applied in a formal way, I would try to develop the relationships between variables to define how each variable affects the other in a predictable, measurable, and repeatable way. Done less formally, I describe the process of understanding the interrelationships of desired outputs and constraints as "calibrating my mental model."
Thanks Keith for your response and I agree with you on the "calibrating the mental model". I think I am still stuck up on the "what's the definition of value" part. I guess its a function of systems thinking. Saving Changes...
Deepa,
I look at the triple constraints as essentially the business equivalent of Newton's laws of motion. There is only so much work that can be performed with a given amount of energy so how that energy is applied are the trade-offs in planning and execution.
The definition of value itself is the most important qualities of the intended outcome. In engineering, those are sometimes called the "illities" like profitability, sustainability, produceability, etc. When applying systems thinking pick perhaps 4 of the most important characteristics of your end state. Then whether it is a product or business outcome, you can compare your solution options based on whether they make each of those characteristics better or worse.
That's fundamentally how genetic algorithms work. Some thing, whether that is a molecule or a business organization can be modeled as a set of characteristics. Changing each gene will make the solution better or worse based on your desired qualities. If the change is better, than keep it and if not discard it. The algorithms then try to find the best fit through a process of optimizing the genomes to produce the solution with the highest total score based on your qualities representing value.
Keith
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1 reply by Dr. Deepa Bhide
Jul 03, 2024 11:26 AM
Dr. Deepa Bhide
...
Keith, I so agree with you and thank you for explaining the concept. I relate this somewhere similar to healthcare domain (since I am a physician!) and also a project manager. In healthcare, while control or cure of the disease can be the ultimate "solution" of the project (patient care continuum as a project), the ultimate value to be determined is quality of life, psychological alignment etc. That's the ultimate value of the project.
