Despite the fact that companies invest heavily in both strategy and projects which are aiming to strategy realization, the vast majority of projects (50 to 75 percent) fall short of expectations in delivering benefits. This is attributed to the lack of linking strategy to projects. Projects success should be evaluated against strategic goals and real benefits realization apart from traditional metrics, such as the iron triangle.
This gap can be closed through Benefits Realization Management (BRM), also known as value management and benefits management, which can help, among other things such as increased ROI, to shift focus from projects’ outputs (standalone deliverables) to projects’ outcomes (results, realized benefits). Although an astonishing 93% of companies declare that they have a BRM in place only 17% of them report applying it consistently.
There are three key aspects to real BRM implementation:
- Use of BRM to define, manage, and track project progress against new KPIs explicitly tied to strategic outcomes and value creation. There is no need for heavy bureaucracy since 1-3 BRM KPIs, monitored once every two to four weeks, are enough.
- Active engagement and shared responsibility among C-suite executives (strategy owners), business owners (projects owners) and project managers (managing projects to deliver strategic outcomes) within an open dialogue environment.
- Setting the right conditions for success and, more specifically:
- encouraging and enhancing required behaviors (such as focusing on strategic outcomes, issues raising and quick deciding),
- having the right project managers in place (skills, personal development and managerial support) and,
- securing senior-level sponsorship (avoidance of overloading sponsors, providing sufficient and to-the-point information and personal development).
Since proceeding step by step, instead of making fundamental changes, is a key success factor towards a mature BRM companies can use a pilot-test approach that:
- minimizes nuisance and effort,
- maximizes results and,
- can lead to BRM embracement.
Quick BRM wins:
- Use of BRM to select the 20% of the projects that deliver 80% of the value (80/20 rule) can cement quick wins and serve as a proof of concept that builds momentum for BRM in the C-suite.
- Appointment of skillful project managers from very early in the beginning of these projects and keeping them involved as long as needed till the strategic outcomes are realized.
- Regardless of what project management and BRM tools and methodologies are used the “right” behaviors have to be articulated and encouraged through emphasizing and rewarding raising of issues early, quick deciding and frequent realignment against strategy.
- Establishing of strategy importance, especially in project management, so that attention to strategic outcomes, rather than project results, is used as the driver for day-to-day project management.
Medium to long term actions:
- Standardization of the focus shift from project outputs to strategic outcomes through procedures that provide clear distinction between them two (i.e. differentiated KPIs) and commitment to sustaining outcomes after project closure.
- Linking C-suite, business owners and project managers’ incentives to outcomes apart from outputs through specific KPIs such as improved customer satisfaction, faster time to market or better financial performance.
- Strengthening of decision-making capabilities, open communication, strategy and project management skills across C-suite executives, business owners, and project managers by on-the-job training and apprenticeship and not just one-off training programs.
improving BRM capabilities step by step =
being better-positioned to execute strategy + winning in a tough business environment