‘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 important 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?