‘I almost became an accountant’ said our consulting partner. ‘What I liked about it was the standards as well as the numbers’ she added. This means that when you read an organization’s financial statements you are not left guessing – the information and how it is presented must meet a defined standard – something that external auditors may be required to verify. So, if something is defined as a ‘fixed asset’ or classified as ‘revenue’ there is a standard being followed.
This contrasts with how projects and initiatives are analyzed or reported upon within organizations. That is, in spite of the fact that a portfolio of projects represents an investment of millions of dollars of the organization’s money and may be aimed at delivering on strategies that are expected to generate a multitude of that figure in terms of forecasted revenues, savings and so on.
Inaccurate or misleading financial reports can have serious consequences – legal and otherwise. Think Enron or World Com where executives went to jail, fines of millions were imposed and billions were written of share values. But, what happens when the reporting on projects is inaccurate or misleading?
Rightly, you may be thinking that patchy, inaccurate or even misleading project information is a long way from ‘cooking the books’. Certainly, the scale of the Enron and World Com scandals dwarfs the implications of misreporting on even a 10 or 100 million project. However, this is no way takes from the case for a more robust means of reporting to the C-suite on strategic initiatives and critical projects.
Inaccurate, incomplete or even misleading project information and reporting could result in more projects failing or at least failing to meet expectations. Moreover, it can jeopardize business performance by impeding the execution of the strategies that projects were meant to bring to life. That is impotent because: Whether a strategy is succeeding or struggling depends on the success of the key projects and initiatives in its project portfolio.
While there are many factors that determine the success or failure of any project, clearer and more consistent information and reporting on projects could:
These benefits don’t just apply to a single project, but across the overall project portfolio which could have 50 or more ‘live’ projects that would represent a total investment of $75 million1.
So, how to profile or account for a critical project or initiative? In particular, how to do it for a senior executive audience, where the focus is more strategic than tactical and where staying high is essential?
Our analysis points to 9 key pieces of information as being required to profile a critical project or initiative for senior executives, as follows:
The 8 pieces of information you need in profiling a critical project for senior executives are: are shown in diagram form below.
These are not just 8 pieces of information, but 9 powerful talking points to engage senior executive sponsors and stakeholders. The result is no ordinary project conversation, but rather a strategic conversation.
These are HBR topics – terms that would likely feature strongly in the latest business strategy book. Moreover, these are sticky topics, or at least they should be. The have the power to engage and energize senior executives and busy stakeholders.
Q: Which one of these 9 factors (for your project) requires a conversation?
In times gone by it may have been that these topics were reserved for the C suite. Afterall, it is their job to devise the strategy and the project team’s job to faithfully execute on it. But such a top-down traditional view is challenged by the requirements for greater speed and agility, as well as collaboration and innovation.
The success of complex ambitious projects requires that project teams keep one eye on business needs / strategy and the other on the activities and steps of the project plan or Gantt Chart. This is key to leading, rather than just managing projects. It is also central to success.
In profiling a project or initiative there are the obvious elements such as project timeline and budget, as well as the fundamental factors such as business need and project confidence.
There are also factors that are commonly overlooked – for example the level of project complexity (labelled ‘Business Unusual’) or misunderstood (such as Business Impact).
Some are matters of objective fact (e.g. budget), others are surprisingly subjective and will reveal a variety of perspectives (e.g. project confidence).
Some provide quantitative data (e.g. project headcount) while others provide qualitative data (e.g. market reality, or strategic ambition).
Combined they provide an insightful profile of a critical project or initiative. However, when you go looking for the 8 pieces of information, don’t be surprised if you find that 2 or 3 of them are missing or unclear. The question is: How many of the 8 factors are clear for your project / initiative?
What underlying business need does the project address?
What fundamental market reality shapes the project?
The focus on what we call ‘market reality’ is important because it challenges leaders to look not just from the inside out but from the outside in. Organizations can become so wrapped up in their own internal workings and internal challenges, that they can lose sight of what is happening with customers and competitors.
A project sets its compass by business needs and market reality. Re-calibrating continually to reflect changes.
Confidence & Ambition
Of all the metrics on a project these can be the most revealing! Indeed, if the CEO could only as 2 questions these would be them. Project teams have a powerful 6th sense about these factors. They predict success. But can be as much about mindset as reality. Let’s explore ambition and confidence in turn:
How ambitious is the initiative?*
*Please rate on a scale of 1-10, where 1 is not ambitious at all and 10 is ‘moonshot’ level of ambition).
What is the level of confidence in the success of the project (today)*? To probe further:
*Please rate on scale from 1-10, where 1 = Not Confident at All and 10 is Absolutely Confident.
The next two factors relate to ‘the numbers’ or the financial ‘stakes’ of the project. It’s what your CFO wants to know:
What is the expected payback or return on investment for the project?
The first is Business Impact and the second is Budget or Investment.
What quantifiable impact is the project likely to have on the business? (Please describe in scenarios with #s) Specifically:
For example, while it may be an IT or HR project, it is the impact on the business that matters – what impact is it expected to have on the performance of the business (e.g. will it generate savings or efficiencies, improve customer service, reduce business risk, etc.). Being able to distinguish project activities and outputs from business outcomes and impact is important. A key question is: Is there a business case, how robust is it?
What is the approx. total budget for the project?
Urgency & Timeline
What is the level of urgency around the initiative? Probing further:
To what extent is the project ‘business as usual’ or ‘business unusual’? For example:
We use ‘Business Unusual’ as a proxy for project complexity. It also a measure of how strategic a project truly is. For example, is it about shaping the future of the organization or just short to medium term performance? It is an important question, although it rarely gets asked2
Note there is a scale used here, as projects are rarely 100% ‘business as usual’ or 100% ‘business unusual’ but are to be found on all points in between.