Explain to me this…

1. We commission projects to realize the benefits (if we deliver the project but don’t realize the benefits, where’s the value in that?)
2. But we treat benefits as some afterthought or hoped for after-effect, rather than the project’s raison d’etre
3. When we do measure benefits we make it incredibly hard, labour-intensive and (usually) value destroying!

How did we get to this situation? Benefits realization management is not a mainstream discipline or process, but it should be.

Why is effective benefits management such a rare sight? There are many reasons and pressures to keep benefits management off the agenda – “not mature enough, it makes executives too accountable, too many things change for it to be meaningful”, and so on.

But there is one underlying, invisible reason that undermines benefits management — operational management thinking.

Operational management manages costs to budgets. Each year a month-by-month budget is approved, and each departmental manager works to ‘make budget’. Overspending requires a ‘Please explain’ as does under-performing on the revenue side. But the majority of managers know they have to manage cost as a primary control measure. They therefore bring this thinking into the project world.

Look at your project/program/portfolio reporting and I guarantee that the majority of the reporting is cost centric. Costs to date, costs to budget, costs to complete, committed costs, etc. All of these are important, but…

Project delivery management should be managed to value. Each project’s cost-to-deliver, needs to be managed in relation to the value available. The project manager needs to manage the productivity of the project delivery team and the quality of the outputs so as to deliver, enable and support the realization of the full business value for the least practical cost.

“Delivering on budget” is never the goal – “Delivering the business value” is the real goal; and you can’t deliver value by just controlling costs.

Yes, yes, yes, cost control is important as it impacts the net value realized. Every dollar/pound/euro spent over and above the least possible cost reduces the net value of the project and business results. Cost management, in the project delivery context, is a value management process.

Value management requires the full and timely delivery of the maximum available benefits and their financial value for the least practical cost. Every aspect of the project must be visibly aligned to and driven by value management.

To achieve this we don’t need complex benefits measurement processes, the project is the primary benefits realization process — but most project delivery approaches currently miss this as the project activities are not directly connected to the realization of the business benefits. It is believed and hoped that “The benefits will be realized after the end of the project”, but this is neither necessarily true nor a reason for not focusing on benefits from the day they are identified.

As a result of mis-focused thinking we have institutionalize three project delivery approaches that individually and cumulatively destroy the very reason we do projects – ie the realization of the business benefits.

1. We manage projects to cost – and hope the value will follow. It doesn’t, as we’ve seen in practice for many years.
2. We separate projects from benefits realization so that we need to create a separate stream of activities (and overheads) to track and measure benefits.
3. We treat benefits realization as a measurement or accounting exercise rather than as a change delivery process. To realize the benefits we need to take action, not just measure something!

What happens when we change these three approaches to focus on true benefits realization? The number, nature and value of benefits realized go up exponentially!

• Benefits increase at the business case stage as more benefits are identified. Usually the value of the benefits goes up by at least 50% and often over 100%.
• The value of the benefits realized during the project increase as many benefits are realized during the course of the project (and we don’t just mean some ‘quick wins’ here).
• And they increase at and after the project’s delivery as every aspect of both the project and business’s changes have been focused on realizing the maximum available value.

When benefits management is put mainstream, a doubling in the value of benefits realized is common. This results in a doubling of the return on investment.

In these tight economic times, a doubling of the return on capital invested in projects needs be a priority for everyone. It is a great opportunity for you. And it is not difficult – it is really quite simple when you understand the true nature of benefits and value management and how it can be simple.

A beneficial opportunity – for you

In February 2012 I am commencing an eight-week online course for a select few individuals. This course is not for everyone. This course is only for those who want to consistently increase the returns on their projects – not just marginally but massively; for those who want worldwide leadership in this critical area.

To apply go to http://totallyoptimizedprojects.com/pages/Opportunity-to-make-an-impact and we’ll make contact with you to discuss your application and desires. As I said, this course is limited to those that qualify.

Apply now and we’ll organize an hour-long strategy session to discuss your needs. What have you got to lose?

I look forward to hearing from you.

Project Governance has been neglected yet a governance team can destroy more value in five minutes than a project team can destroy in five weeks.

Poorly understood, poorly supported and poorly executed it is not surprising that more projects fail due to poor project governance than poor project management.

Yet while we invest millions in project management we invest next to nothing in project governance.

Even getting people to agree what ‘project governance’ is, is a challenge.

Governance support materials are sparse and usually superficial. Not helped by executives insisting they only want “the questions I need to ask,” not understanding they need much more to be effective.

So, after 20 plus years in project governance roles and over 12 years teaching, coaching and supporting executives in governance, we are providing a world-first solution that will revolutionize project governance knowledge.

THE TOP™ PROJECT GOVERNANCE KNOWLEDGE CENTER

You can find out more here.

This is both a comprehensive resource center for executives in project governance roles and a support base for those accountable for project governance performance in their organizations.

The Project Governance Knowledge Center provides the direction, information and support required to move project governance from being a potential liability to being a key driver of success.

Whether you want to confirm your understanding of project governance, build you personal competency in a governance role or develop your organization’s governance capability – this Knowledge Center will equip and support you. It is designed by executives for executives.

For example, it provides

• Charters, checklists and cheat-sheets (Tools and templates)
• Answers to frequently asked questions (FAQs)
• Short videos on how to deal with specific topics – such as “What to do if your project goes red” (Education Programs)
• Short guides on how to assess business cases, govern risk and more than 20 other topics (Guides)
• Practical frameworks that explain why projects fail, plus others that change how projects are viewed, approached and delivered (Frameworks)
• Articles on project governance – topic specific (eg How to champion your project) and some story based (eg Death by 1000 cuts) (Topics)
• Lessons to be learned – such as The Tale of Two Projects – that shows how easy it is to in good faith oversee a failure and what good project governance (and project delivery) looks like. (Topics)
• Easy-to-read books on important topics such as getting the best out of consultants – Consultants.CON (Topics).

Executives know all they need to know — at least they think they need to convey the impression that they know all they need to know. And, to get to an executive position you need to have some sort of track record and experience.

But, when it comes to projects and project governance this model falls down. Being a Sponsor or Steering Committee/Project Board member is not like any line management role. It is partially hands off and partially hands on. It has full accountability (for the delivery of the business outcomes, benefits and value) but not full control (of all of the elements involved in their delivery). It is part way between being an overseeing board member and an involved manager.

Project governance is a complex role that is certainly not intuitive. Even ex-project managers do not understand the governance role well as it is a very different way of thinking to being a project manager. (Just as being a board member is a different role to being a line executive.)

Yet, educating executives on their project governance role and how to perform it effectively is rarely done. Why?

Executives are reluctant to put their hand up for help, as they believe they should know enough, everyone else seems to be coping with the role and they appear to be muddling through no worse than anyone else.

Project, program and portfolio managers are reluctant to say to tell executives that they need to be trained in the role. So nothing happens.

But things do happen. Projects continue to fail (on one or more dimensions) while being ‘governed’ by otherwise competent executives. When the causes of project failure are analysed, inadequate project governance is always in the top 3 reasons for failure (above inadequate project management).

So, by burying our heads in the sand, we continue to allow poor project governance to destroy projects week in and week out.

I often point out to governance teams that they can destroy a project’s value and intent in 5 minutes; whereas it can take a project team 5 months to achieve the same result!

However, we have found over the past 13 years that when you do teach executives about project governance, their confidence in the role increases, their performance improves and poor projects are called out by their governance teams.

But when educating executives you are not dealing with a blank canvass. Each executive will know something about project governance and, therefore, there is a danger that the training is seen to be teaching them things they already know. Hence the need for the 40-40-20 rule. This rule says:

• We know you know 40% of what you need to know about project governance.
• We know you think you know another 40% about project governance that may or may not be correct – this knowledge needs to be confirmed or corrected.
• We know you don’t know 20% of what you need to know about project governance but none of us know what that 20% is.
• Therefore, as we go through this training, you’ll hear things you already know; you’ll hear things that confirm or correct what you think you know; and you’ll be given some new insights into important dimensions of project governance.

This frames the education as building on their existing knowledge, that there is up to 60% of potential new or correcting knowledge, and allows them to hear the elements they already know without dismissing the whole training as teaching them what they already knew.

To help you meet the need to educate executives or, if you are an executive to educate you directly, we are launching a world first Project Governance Knowledge Center next week. The first and only one of its type in the world.

Stay tuned.

The project is finalizing the business case.

It has no clear definition of the desired business outcomes.

It has no process definition of its requirements – just a list of functions and features.

The solution was selected on the basis of others in the industry are using it so it must be okay.

The configuration selected prevents progressive delivery, delaying the benefits to post implementation.

The benefits that have been identified are mostly spurious and only intended to get the business case past the board.

Even at this stage it is quite clear that the cost to deliver will double before the project is delivered.

Attempts to improve the situation fall on deaf ears.

The project team point to the reputable consulting firm involved as proof that all must be okay. The consulting firm can see years of fees ahead and they are not going to ‘rock the boat’.

The governance team are merely focused on getting the business case approved, “Then we’ll look at the issues.” But they won’t.

Instead, after approval all will be fine for a while during the start up of the development phase. The cash burn rate will increase as the number of project staff increase, but that’s expected.

Later, after a few months, a few scope changes will start appearing.

Expectations will be progressively managed down.

Then real issues and delays will arise.

The governance team will panic and totally focus on cost containment and achieving ‘something’ for the monies invested.

The focus of the project team will be on cutting scope to meet some revised ‘latest’ schedule.

Eventually ‘something’ will be delivered, installed and implemented. Workarounds will be created to cope with the shortfalls of the system.

Some if not all of the systems to be replaced will be found to need to be retained.

No one will be looking for any benefits.

This is the common view of three independent consultants from three different firms with knowledge of the client and their project. 

So, When should this disaster in waiting be called out? Respond on the Blog.

Featured publication

Understanding Project Governance
Only $9.95 | Buy Now 

Business project governance is still more ‘not understood’ than misunderstood yet it is critical to project success.

In this succinct Guide 26 areas of project governance are discussed to emphasize its importance and describe what happens when it is not done effectively.

An essential introduction to anyone looking at or being appointed to a project governance role. Basically, a comprehensive primer on project governance.

Who should read:

• Project Sponsors/Owners/Executives – to understand the scope and nature of their role
• Steering Committee/Board/Governance team members – to understand the scope and nature of their role
• PPMOs – to understand how project governance roles and how they need to be established and support
• Project Investment Committees – to understand what to expect from governance teams
• Project Practitioners – to understand the true roles of governance teams
• Auditors – to understand the true roles of governance teams.

More information

Every now and then we get a “Aha!’ moment when we get an insight. When we see something differently for the first time. I remember when in the first few months of my journey to improve the performance of projects I realized that the actual value generated from projects was almost entirely determined by the business – only they didn’t know it, they didn’t know how to do it and no one was helping them.

Einstein had an insight on a balcony in Vienna when we realized that he wasn’t seeing the clock tower across the city but that the clock tower was sending light to him.

Insights are good and valuable but in and of themselves are not innovation. Innovation is insight put into action.

Einstein’s insight led him to explore the speed of light leading to the development of the theory of relativity.

My own initial insight, that the business controlled the value from projects, led to the development of a business-driven approach to projects – TOP™. But is TOP innovative or just an insight?

Think of project delivery as a jigsaw. Currently the “picture” has been drawn by project specialists, and the pieces that exist (and many are missing) are cut from the technical and project management disciplines’ perspectives. For example, technical architecture “pieces” have been developed to plug gaps left by deficient or missing business direction and requirements specification processes; scope management “pieces” have been designed to protect the project manager. And the whole “picture” is coloured by cost control.

What we conventionally see with attempts to improve project performance is either a nip here and a tuck there to improve individual projects steps, or (and sometimes worse) a whole new set of additional activities added to project delivery. (I’m thinking in particular of value management systems that seem to increase workload rather than increase realized benefits.)

TOP’s innovation has been to reorientate project delivery from cost to value management, from project to business centricity, from delivering outputs and capabilities to delivering business outcomes and benefits.

Therefore, when TOP brings a value-focused, business-driven approach to projects it is not only changing the colour of the picture (from cost to value) but also changing the “picture” to be business outcome focused, and changing how the pieces are cut and organized as well. We are, in fact, redefining the whole project delivery jigsaw.

This redefinition changes key aspects of project delivery – for example:

• Making scope management a key governance role, not a project manager role
• Embedding benefits realization management into the end-to-end project delivery process rather than as a separate stream of work
• Inverting business cases to be value rather than cost centric and to be the primary focal document of any project
• Approaching all projects as ‘change projects’ 
(its amazing how many project and change managers don’t understand this one)
• Moving portfolio management to be a subset of strategy and not a superset of projects. 
And so on.

Each of these changes may seem small, obvious or inconsequential. However each of them is an example of changes that, like rocks lobbed in a pool, send out eddies of impacts on all of the other aspects of project delivery.

For example, repositioning portfolio management as a subset of strategy

• Changes where it should report in the organization (to the head of the investment committee)
• Changes its measures of success
• Changes the required background and knowledge sets of the incumbents
• Changes the reporting they should focus on. And so on.

The one insight when put into practice leads to innovation vis-à-vis orthodox portfolio management.

The world didn’t stop when Einstein announced E=MC², instead some obsolete thinking was replaced and, more importantly, whole new opportunities were opened up in the realm of quantum physics.

Equally, the Totally Optimized Projects™ approach to projects won’t stop the world, but it does replace a lot of obsolete and destructive thinking and opens up whole new opportunities in the realm of successful project delivery and radically improved project and business performance.

Which realm do you want to operate in?

© Jed Simms, 2011

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The human body is both kind and cruel in that, for example, in the event of an emergency it will allow us to make a mad dash for safety (kind) and punish us later when our muscles seize up (cruel).

Our project delivery approaches are also kind and cruel. They will allow us to make a mad dash to completion (albeit at times over many months) and then punish us later when our operational options and flexibility seize up due to system and process constraints.

We long ago discovered that the opposite to project ‘success’ is rarely failure but ‘compromise’ — significant compromise not only in project delivery performance but also, and more importantly, in compromised future performance.

The delivery of the solution by the project is the start not the finish. It is the start of what you can do with that solution. Unfortunately with most of our performance measures focused on completing the mad dash to the end of the project, the longer-term business consequences are too often compromised.

• Scope is treated as a variable – to be adjusted to meet the budget or schedule
• Functions and features are defined that ignore their implications on the end-to-end processes
• Design decisions are made to meet technical standards at the expense of operational costs and productivity.

And so on.

While consistently reports of poor project performance are measured in terms of time and budget overruns, the most significant cost is the deficiencies, compromises and constraints that are delivered to the business.

Whereas over time the human body will relax the seized muscles and allow us to return to normal; project solution constraints only ‘relax’ with additional expenditure and effort, and some constraints being irreversible as they are built into the core of the solution.

It is, therefore, better to be cruel than kind — cruel in insisting on achieving the optimum business results so as to be kind in providing the operational options, flexibility and productivity desired.

We don’t do projects to deliver something on time and on budget; we commission projects to deliver the desired business outcomes, benefits and value. Let us not be ‘kind’ and compromise these outcomes; rather let us be cruel and insist on getting what we want.

© Jed Simms, Totally Optimized Projects Pty Ltd, 2011

Featured publication: How to define your desired business outcomes.
Outcomes are everything” – Get this step right and the rest of your project will fall into line with a clear direction and measure of success.

Only $49.95 (available for immediate download)

The (late) Steve Jobs said that if you believed something was ‘simple’ you obviously did not understand it. The challenge, he said, was to thoroughly understand the complexity so that you can then simplify it. His products are testaments to his success — highly sophisticated items of technology with one or two buttons only, for example. Apparently he and a small team spent their evenings for weeks and weeks simplifying the original iPod interface.

Yet in our time-pressured working environments, increasingly there is a desire for the simplistic.

A classic example of this is the approach of locking business case defined benefits into future operating budgets so as to ‘ensure their realization’. This is simplistic thinking – and illustrates the value-destroying properties of such simple thinking.

Locking benefits into future budgets:

1. Reduces the value of benefits as managers seek to minimize their future exposure by defining only enough benefits to get their business cases approved (not a good start).
2. Is irrelevant to the many managers who do not expect to be in the same position by the time the benefits are being expected (not a behaviour changing solution).
3. Fails to recognize reality – that during the course of the project and beyond the financial value of benefits can legitimately change significantly due to factors outside the project and governance teams’ control – eg interest rate changes. Any increase or decrease in value is ignored by this simplistic approach.
4. Doesn’t even measure benefits realization only budget achievement. If other events have allowed the future budget to be met, the benefits from the project may not be realized at all as they are not needed (to make budget) or measured (as benefits).

And we could go on. But this example illustrates the dangers of simplistic thinking.

Simplified thinking, however, is quite different.

If you want to measure benefits realization you need to measure the inputs – the ‘stepping stones’ along the way to full benefits realization. You need to measure the progressive delivery of the:

• project outcomes,
• business outcomes,
• associated benefits
• and then their value,
• while tracking any changes to the value drivers.

This ‘input’ approach to benefits realization management and measurement is simple to set up, embeds benefits realization into projects, and actually increases the value of benefits realized. Their value is tracked and measured independently of any other events or financial changes so you know what the project has and has not delivered.

When people just ask, “Just tell me what to do,” they are looking for simplistic answers. They don’t want to ‘think’ – they just want to ‘do’. In these cases you can be assured that their outcomes will be simplistic, poor and compromised.

What people should ask for is “Tell me how to think about this. How should I approach it? How do I define what I’m trying to achieve?” When you then provide them with simplified but highly effective solutions, you’re on your way to a simplified and highly successful result.

© Totally Optimized Projects Pty Ltd, 2011

Featured publication: Solving the Benefits Puzzle



Solving the benefits puzzle is a story of how an organization, frustrated with its inability to track and measure benefits, moved towards adopting a benefits realization TOPology.

This short, entertaining book spells out the problems and the solution. It is intended as means of getting people to understand benefits delivery management when their level of interest is likely to be low. More information | Download sample pages

Only $29.95
Get your copy today

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There is a famous case in Australia where the Chairman of a large company rejected out-of-hand a takeover offer of $27 per share when those shares twelve months later were trading at under $10. This Chairman’s ‘protection’ of the company was hugely detrimental to his shareholders.

So it is with the project fraternity and project improvement opportunities. “Oh, THEY won’t adopt any of this” or “We (as an organization) are not mature enough (to improve).”

In one case the project manager dismissed the TOP approach to identifying and simplifying the business requirements as “Just too hard to do in this organization.” His project then went on to double its original cost and then fail due to, you’ve guessed it, inadequate business requirements! I’m sure his Sponsor was delighted to have been protected from a workable and lower cost solution.

There is a common but fallacious belief that ‘more mature’ (as they are seen) processes are more difficult and more work. In some cases this may be so; but with TOP we’ve designed it to remove many of the redundant steps and render other steps unnecessary. The overall workload goes down.

If you take an 18-step process and redesign it to be a 5-step process or reduce 375 processes down to 23 options – the design, configuration, testing, training and operating effort and associated project costs all go down. But most organizations are ‘protected’ from this level of improvement by project teams’ use of software as the definition of requirements.

If you take the opportunity to implement change progressively throughout the project, realizing benefits that are not systems dependent; the net cost of the project goes down while belief in the potential success and value of the project goes up. But most projects are ‘protected’ from this continuous realization bonus by the dogged use of the systems development lifecycle.

When the Board of a major bank complained yet again at the poor results obtained from projects; the Bank focused on filling the gaps in its current methodology rather than identifying the root causes of the problem. “We’re not mature enough for anything else” was the justification. That Board was ‘protected’ from improving its project results.

Because the project fraternity have often failed before to ‘change the business’ in relation to projects (often by trying to get them to use project management tools and techniques) they are reluctant to try again. “It doesn’t work; they just won’t change.”

This is where TOP is different. It is a strategy-based, business-driven approach. It assumes the project manager is going to do their job effectively. What it is asking the business is questions like,

“What exactly are we trying to do here?” and

“Is this a valid project?” and

“What business changes do we need to make?”

But then we also give them the processes, tools, techniques and templates to answer these questions.

I don’t think “protecting my organization from improvement” is in anyone’s job description; but many seem to want to make it their personal accountability.

Who is protecting you from improving your project results?

© Jed Simms, 2011

Featured publication: The Promise



A short, sharp description of what the problems with project delivery are and how the multi-lens approach used by Totally Optimized Projects addresses these problems..

This is intended to enable busy executives to understand the problem, and that there is a proven solution. It also gives you a quick ‘reality check’ exercise to assess if you need to change. If you want more information there are more complete versions of The Promise available. This is the primer. More information

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Many years ago I saw a specification for a “sub-second response time nationwide” for a notification of staff absence to HO transaction. This was a transaction where a three-minute response time could have been tolerable.

The person specifying this performance level had no idea of the costs associated with meeting this request.

This event prompted me to develop a guide for executives that spelt out the cost implications of some of their unthought through demands.

In view of the desire for sliders, I have converted the quality performance dimensions into a set of sliders. There is no mutual exclusivity, they merely show the tradeoff between quality/performance and cost – the higher the quality standard, the higher the cost to supply and maintain. Simple.

These sliders are intended to give business management a mechanism to control their systems costs. As systems are invisible in their nature there is an unconscious belief that their quality options are free. If you want 24/7 availability, that comes with a cost. At least a discussion can be held as to the level of quality you’re willing to pay for.

For more information and detail on each option – see How to control your systems costs.

This brief Guide gives Project Sponsors, and their governance teams, information on 12 key system cost drivers so that they can specify their systems performance and cost criteria on business terms.

This Guide puts the business in control of its downstream systems costs. Buy now

A tool gaining popularity is Rob Thomsett’s sliders.

The idea is simple: there are six sliders/options that measure project success with a scale of 1 (low) to 5 (high). At the outset of the project the business is asked to rate the relative importance of each of the six options with the caveat being that any movement up on one option must be met by a corresponding movement down on another.

The six sliders cover

• Stakeholder satisfaction Do you want to be satisfied with the outcomes of the project?
• Deliver on time Do you want to receive the project to schedule?
• Deliver on budget Do you want to receive the project at the agreed cost?
• Deliver planned scope Do you want to receive all that you said you wanted?
• Meet quality requirements Do you want it to perform/work?
• Team satisfaction Will you feel warm and fuzzy if the project team are happy at the end?

Now remember, any movement towards “Yes” must be countered by a corresponding movement towards “No”.

This is surely the ultimate substitution for project performance!

“Mr/Ms Business, we are about to take your $x and in return we want you to commit to being happy with a poor quality result that you agreed to be dissatisfied with, but know in return that the project team had a great time.”

Interestingly, project practitioners welcome this model but complain that only dimension reflects the project team (team satisfaction). Within bounds, the business is not interested in ‘team satisfaction’. Did the team have a good time? Is not a business measure of success. (This is not to say that managing team morale and productivity is not important.)

This model seems to me to be evidence of how far away we are getting from what projects are all about — delivering business outcomes and their benefits.

The measure of success is “Did the project deliver the agreed (hopefully optimized) business outcomes so as to enable the full realization of the associated benefits?” There is no sliding away from this measure.

Certainly there will need to be compromises at times — but these should be trade-offs in relation to the value the project is to deliver.

A time overrun impacts when benefits will be realized – that’s the trade-off.

A cost overrun impacts the net value of the benefits – that’s the trade-off.

A quality or scope compromise will reduce the ability to realize the benefits in full – that’s the trade-off.

A stakeholder satisfaction compromise may again impact the level of benefits realized.

Insofar as these decisions are necessary they need to be made with quantified numbers that spell out the value impacts and alternative options. These six sliders are not alternatives, which is the fundamental problem with the model. Rather than compromise at the outset, let’s focus on delivering success and the realization of the business benefits.

Featured publication: Understanding Project Success (only $9.95)




The most common measures of project success – on time/on budget – are deficient. Indeed, many organization’s project measurement processes penalize attempts at success.

This Guide provides a thorough discussion of what is (and isn’t) ‘success’ across three dimensions – all of which have to be met for the project to be considered a total success. Yet, too often, only one is used. Agreement as to the true measures of project success can have a major impact on your future project results. More information

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