Most projects start from where they are and the problem they want to solve. This is the wrong starting point. You need to start by knowing where you’re going.

The new Science’s Value Equation redirects the project’s focus from cost to value, from pain-management to gain optimisation, from delivering the project to delivering the desired business outcomes. This redirection of focus is not only desirable but necessary if you’re to realize and maximise the value available from your investments.

You should check your project has all of the following dimensions.

Most projects seem to think they start with a problem. This leads them to think that step two is to identify the solution. And this is where too many projects go off the rails, at the very beginning.

You may start off with a problem, an opportunity, a challenge, an obligation or an idea. But the first value-adding step is to define your end states, your ‘desired business outcomes’.

1    You start with the end defined — clear, agreed, specific, measurable ‘desired business outcomes’.

Where do you want to end up? How will you know when you have been successful? By defining your ‘desired business outcomes’ you define where you’re going and can then focus your whole project or program on getting there. Everything aligns to the outcomes.

2    Now you can identify and quantify (where possible) the resultant benefits.

Identification of your benefits defines the potential available value. You can then ascertain if your project is worthwhile. (NB in our definition of ‘value’ we include non-financial value, such as protecting competitiveness.)

3    Then accurately define the current state so that you know from where you are starting.

You may know that the current state is a mess, but it is the ‘mess’ from where you have to start to change. Importantly you need to know exactly how the current state works, with all of its quirks, variances and special events as this is the reality you are planning to change. Too many projects skimp or skip this step.

4    Now you can identify what changes are required to get there (the outcomes defined future state) from here (the current state) and realize the benefits and value.

You need to define the major change activities required without any consideration of ‘how’ they are going to be done or by whom. You therefore start with a view of the total change workload. If the workload is too much you can change your outcomes accordingly (and not suddenly find out late in the project that you’ve got a ‘tiger by the tail’ that you cannot deliver).

5    Then you map your outcomes’ inter-dependencies so as to understand their interrelationships and where (and when) the value will be delivered.

Once the outcomes have been identified they can be sequenced into an “Outcomes Roadmap” — a simple diagram that shows the interdependencies and relationships of the outcomes (and their benefits).



This simple roadmap diagram quickly

• identifies how and to which other outcomes each outcome is connected
• identifies any outlying outcomes that may or may not be worthwhile and should be questioned (eg in the illustration above, outcome 6)
• and allows you (when the Outcomes Roadmap is aligned to a delivery timeframe) to sequence and time the delivery of each outcome’s associated benefits  — this manages unrealistic benefits timing expectations (“I want it now”) by showing the dependencies involved.

6    Next you define which business outcomes or sub-outcomes the project(s) will deliver (and their associated benefits).

You now define your project outcomes from your business outcomes and delivery activities.  Your project outcomes are, therefore, a subset of your business outcomes. (Conventionally, the business outcomes are never defined but are assumed or hoped for).

Once you have agreed the project’s outcomes you can decide which change activities need to be actioned by the project and which remain to be actioned by the business to realize the desired business outcomes and benefits. This allows you to divide the identified change workload between project(s) and the business. This simple approach ensures all of the required change activities to deliver the agreed outcomes, benefits and value are identified and planned to be actioned from the outset.

7    Now you have a change project ready for implementation that can be estimated, scheduled and managed using traditional project management techniques.

At this point as you start project delivery, using the new Science approach, you have …

• clear, measurable defined desired business outcomes/end states — your business measures of success. You’ve started with the end defined — this is critical.
• a comprehensive list of change activities required to get there from here (the known current state). This defines, at a high level, the overall workload — can you do it?
• divided these change activities into those to be delivered by one or more project(s) and those to be delivered by the business — so that they will cumulatively deliver in full the agreed business outcomes/end states. No surprises and no gaps for value to fall through.

Many projects do not attain any of these three states ever.

8    You can also optimise your project’s costs with minimal impact on the benefits.

VDM’s new Science’s Value Equation enables objective value optimisation …

1. Each benefit and its value is linked to an outcome, so now you can compute the benefit value of each outcome — ie you know where the value is.
2. The project’s activities are now linked to the delivery of each business outcome so that the costs of delivering each outcome (and its benefits) can be computed — ie you know where the costs are.
3. The interdependency of all of the outcomes is now known (the “Outcomes Roadmap”). This map shows where each outcome is dependent on others so that if one outcome is altered or deleted the impacts on the remaining outcomes and their benefits can immediately be tracked and measured — ie you know your inter-dependency constraints.
4. This enables you to optimise your project by identifying the 60% of the costs that deliver 90% of the outcomes/benefits/value (the 60-90 rule). The eliminated aspects of the project can then be deferred or deleted.

You can now significantly reduce your level of project investment without significantly reducing the business value achieved. This is a simple way of maximizing each project’s net value while reducing the overall level of investment expenditure. A truly ‘value-focused’ approach.

9    Now you’re ready to finalize your change project’s value proposition.

For many (most?) projects the business case is seen as a financially oriented document required get the project approved and funded. Once it works (ie gets the funding approved) it is on with the project to deliver the solution or whatever. On many projects it is difficult to link the business case and the project plan as these documents may have been developed by different teams, be focused on different outputs (‘benefits’ versus ‘solutions’) and use different language.

The new Science puts the business case and its value proposition centre stage. The business case no longer exists to justify the project; the project exists to deliver the business case! The whole raison d’etre of the project is to enable and support the delivery of the desired business outcomes, benefits and value — ie the value proposition. This may sound obvious but is not the norm.

The business case now defines what is to be delivered (the value) and what is required to deliver it — the change activities, required resources and funding.

10    Change (and project) execution

The project is now defined in terms of the changes required to achieve the agreed (project) outcomes from the current state. This renders the project a ‘change project’ as it is planning, scheduling and managing the execution of the ‘change activities’ that each move you forward to achieve your value proposition. Some of these change activities can be technical (eg systems development) but now these technical changes are only one of many different parallel ‘change streams’.

As a result of this change-oriented approach, ‘change activities’ (rather than the ‘solution’) are now the core focus of project activity. As you make these changes you can deliver business improvements and benefits progressively throughout the project’s duration (instead of everything happening at or after the end of the project). This progressive implementation of changes approach …

• renders even a long-term project ‘agile’ in that it is able to continuously deliver value to the organization
• builds confidence in the viability and worthiness of the project — “it delivers”
• sustains the momentum and morale of those on the project — “we’re successful”
• ensures that if, for any reason, the project has to be cancelled some value will have been realized (which may allow capitalization for accounting purposes)
• reduces the net cost of the project as early benefits can be delivering real financial value along the way.

Using this progressive benefits delivery approach we have often delivered over 20% of the total potential value even before the project has been completed!

11    Now you can measure your extraordinary results

You can now measure your projects in terms of

1. project and then business outcomes achieved
2. benefits delivered
3. value realized
4. and delivery efficiency (time/budget — still important but secondary).

Your primary measures of success are the achievement of the business outcomes, benefits and value (the ‘gain’) for the minimal ‘pain’ and cost.

This Value Delivery Management approach and the Value Equation™ enables you to manage both the value and the cost elements of your project. The accountants’ desire for financial control is now extended to both sides of the ledger. The project fraternity can still manage to time and cost, but now the business can manage to preserve, protect and deliver the business value.

The conventional contrast

This is not how conventional project management approaches traditionally start and progress.

They start with a problem so that they can plan the delivery of the solution. The new Science is not focused on the delivery of the solution per se; but on delivering the business outcomes. Only when the solution contributes to the known, agreed business outcomes is it relevant.

Because the ‘solution’ is often technical (new system, new technology, new equipment, etc) it can become the central focus of a conventional project and consequentially makes the project a ‘technical’ project — in effect if not in name. The whole project then aligns to the technical timeframe, lifecycle and implementation approach, and the project goes forward (downward?) from there.

The new Science’s central focus is change — what we need to change to get from the current to the new end states. Every project is a change project. Change and change management are now the primary drivers of the project. Any technical stream is subordinated to contributing to the change program.  The change plans are now no longer constrained by any technical lifecycle and can instead deliver improvements and benefits progressively through implementing change continuously throughout the project.

Many of the project management tools, such as project planning and scheduling, can still be used but now with different emphases and focus. The conventional project management tools are now used to plan and schedule change activities to deliver business value. This is a different way of thinking.

This ‘starting with the end defined’ approach to projects fundamentally changes their course, nature and results – delivering exponential increases in business results for less cost and in less time. It’s time to change perspectives.

More information on our VDM approach is contained in our book Value Delivery Management – The new Project Delivery Science