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How to Measure Success of Strategic Projects

Strategic Projects

In project management circles there is often disagreement about how to measure success of projects. Traditionally a project’s value is measured according to the triple constraints of time, cost and quality, also referred to as the Iron Triangle.

These three dimensions form the cornerstone of most projects. Not only do we need to understand the trade-off between time, cost and quality when we plan the project, it’s also hard to imagine that a project can be successful if it’s delivered late, if it’s significantly over budget or if it fails to deliver the quality that the customer wanted.

Strategic Projects

But there is more to successful project delivery than the triple constraints – not least when we consider strategic projects. Strategic projects distinguish themselves by being initiated by top management and by being linked to the organisation’s strategic objectives. They have a business case and they have strategic benefits that they must deliver.

Contrast that to a tactical project, initiated by a local team in response to problem or an opportunity they have encountered. Whereas the tactical project is focused on short-term deliverables, the strategic project is likely to be concerned with long-term benefits.

The triple constraints are great for measuring short-term success but they don’t tell us anything about the longer-term benefit of a change. We need a way to measure strategic success related to the business case.

ProjectsBenefits Delivered

We have to understand if the change is valued by the customers after it’s been handed over, if the product or service we have delivered is easy to maintain and operate, and if it’s making economic sense over a longer period. Too many projects measure success only at the point where the product or service is delivered – and not what happens afterwards.

I was fascinated by Dr. Knut Fredrik Samset’s view on how to measure strategic success, when I came across his report some years ago. Samset is a Professor of Project Management at the Norwegian University of Science and Technology.

He says that a good marker of success is the delivery of benefits in a strategic context. He argues that the triple constraints of time, cost and quality are tactical success criteria, whereas factors such as sustainability, relevance, impact and effect are strategic success criteria. In his report ‘Making Essential Choices with Scant Information’, he writes:

“Judged in a broader perspective, a successful project is one that also significantly contributes to the fulfilment of its agreed objectives. Moreover, it should have only minor negative unintended effects, its objectives should be consistent with needs and priorities in society, and it should be viable in the sense that the intended long-term benefits resulting from the project are achieved. . . In essence, five requirements or success factors are fulfilled: efficiency, effectiveness, relevance, impact and sustainability. These are tough requirements that go far beyond the issues usually covered by many planners and decision-makers…

What is termed efficiency represents only the immediate indications of a project’s success in delivering its outputs. Clearly, there are many examples of projects that score highly on efficiency, but subsequently prove to be disastrous in terms of their effect and utility. There are also numerous projects which fail to pass the efficiency test but still prove to be tremendously successful both in the short and the long-term.”

 

According to Samset, strategic success is essentially a question of getting the business case right, something, which many project managers would say is outside of their scope. Their job is to deliver a product or a service within time, cost and quality constraints, and not to ensure that the project’s concept makes good economic sense or that it’s contributing to the organisation’s strategic objectives. But if we want to see fewer projects fail we have to give more consideration to the strategic value of projects and their long-term impact.Strategy Execution

Although the project manager cannot take sole responsibility for a project’s business case, they do have a role to play and can – together with the project’s executive – ensure that the project is successful both in the short and long-term. The project manager’s role is to deliver value to the company and client – not just to complete the project on time and on budget.

Strategic Success Criteria

As we engage with our clients in understanding what will ultimately make the project a success, we essentially have to consider the three tactical dimensions of time, cost and quality (this is what Samset refers to as ‘efficiency’), as well as the following strategic dimensions:

  • The effect of the project on strategic objectives such as efficiency gains, market share, cost savings etc.
  • The relevance of the project to its users, i.e. what is the response from the users? Do they accept and embrace the new service or deliverable?
  • The impact and sustainability of the project, i.e. is the product easily maintainable, has it been produced using sustainable methods and resources and can its waste be recycled?

 

Measurable Benefits

When agreeing these tactical and strategic measures we have to make them as SMART as possible, i.e. Specific, Measurable, Achievable, Relevant and Time bound. It’s uninteresting to state that the effect of a project should be an increase in market share without also noting what the desired share of the market should be, by when and how that compares to today’s market share.

I work with many organisations who are not able to evaluate the success of their projects – including some very strategic ones – because they don’t agree a set of measurable criteria up front and because different parts of the organisation have a different view of what success looks like. What a missed opportunity for evaluating their projects and improving the way they work.

Regarding the time horizon that we’re measuring to, it’s equally important that we agree a measure, which is acceptable to all stakeholders. The success of a project may look very different if we measure the effect of it after 10 years as opposed to 3 years.

Everything may look nice and smooth the moment the project team finishes the work and hands it over, but how does it look several years after? Surely that question has to be taken into account. The project’s success criteria should be evaluated over the life span of the project and adjusted if there is a change in corporate strategy or market conditions, such as legislation and customer demand.

Strategy ProjectsIt makes little sense to maintain that a project should increase the firm’s market share from 12 to 14% if the market share happens to have dropped to 10% by the time the project is ready to launch.

Evaluating Users

I like how Samset highlights the need for a project to be relevant to its users. If a product is being developed to specification, but the users for some reason don’t like it, it will not be seen as a success. Many project managers are ill equipped to deal with the emotional response from users who don’t like a product or a service delivered to them.

If that happens it’s insufficient for the project team to simply refer back to the requirements and state that they delivered what they were asked to deliver. If the users don’t like what they see the project manager will have to acknowledge it.

Evaluating the user’s response becomes easier if we have the courage and insight to ask the users how they feel about the product while it’s under development. We have to be brave enough to ask them if they would be comfortable using the product and to listen to their feedback.

The best way to make a product relevant and usable is by focusing on the user experience. We can do that by prototyping the solution and by working closely with the end users throughout the project. We have to be able to illustrate to the users what they will get long before the product has been fully developed.

So as you see measuring success of a strategic project requires so much more than simply talking about time, cost and quality.

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About Susanne Madsen

Susanne Madsen
Susanne Madsen is an internationally recognised project leadership coach, trainer and consultant. She is the author of The Project Management Coaching Workbook and The Power of Project Leadership (Jan 2015). Prior to setting up her own business, she worked for 17 years in the corporate sector leading large change programmes of up to $30 million for organisations such as Standard Bank, Citigroup and JPMorgan Chase. She is a fully qualified Corporate and Executive coach and a member of the Association for Project Management (APM). Susanne specialises in helping managers improve their leadership skills so that they can gain control of their projects and fast-track their career. She does this through a combination of training, coaching, mentoring and consulting.

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