PREFACE

Goal management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them.

—Paul Hawken, environmentalist

In 2002, I wrote Managing Projects for Value as part of a Management Concepts series of books about project management. The theme of that book, that “projects are an instrument of strategy,” is no less valid today than it was then, even though the science and practice of project management have changed—most would say advanced—in the ten years since. But one thing that has remained nearly constant is an emphasis on value attainment. In this book, we recognize and emphasize that project value and business value—more specifically business value-add—are very different but closely linked, making projects essential because they have the potential to make a business even more valuable by making possible the accomplishment of strategic objectives. Maximizing project value is about optimizing the trade-off between project value and business value, which are constantly in tension between the project manager and the project sponsor.

With the mainstreaming of agile methods over that decade, project value has become even more interwoven with business value because customers and users are encouraged to influence the value proposition during the course of the project. Thus, in my practice I’ve been called on many times to describe the difference between project value and business value, the tensions between them, and the means to affect their outcomes. To that end, I offer this book on maximizing project value to the community of project sponsors (speaking for the business stakeholders), project managers, and other stakeholders in business projects.

Chapter 1 begins with definitions of values, both as beliefs and as sense of worth, followed by definitions of business value and project value. Chapter 2 then develops the flow of the value stream from goals through strategy and to projects.

Chapter 3 covers building the business case, the business side of the project charter. In this chapter we describe business case development for agile methods and so-called wicked projects. If you are going to use other people’s money, you are going to need a business case, even if you’re just making an oral presentation.

Chapter 4 describes how teamwork can be used to maximize project value. Teams implement the value system that informs every business, whether in the public, private, or nonprofit sector.

Chapter 5 describes the judgment and decision-making processes with regard to projects, focusing on the cognitive biases we hold that color projects’ value proposition. What’s valuable to one customer may be value-less to another, not because of functionality but rather because of the bias each customer brings to the evaluation.

Chapter 6 is a new discussion of the project balance sheet, a concept introduced in Managing Projects for Value. Here we see the value drama played out in the form of potential gaps between the project manager’s and sponsor’s priorities, orientation to the project time frame and balance sheet, and risk attitudes.

Chapter 7 addresses project requirements. In many respects, requirements carry on the message first described in the business case narrative, but requirements are much more detailed, specifying sequence, priority, and urgency. All of these affect the value proposition.

Chapter 8 is a discussion of earned value. Some would say that earned value has had its day, and to some extent the traditional earned value system is inappropriate for many projects. Nonetheless, the message of earned value—getting your money’s worth—is timeless. To that end, we present three primary metrics for measuring earned value that apply to both traditional and agile projects.

Chapter 9 is the follow-on to project value: business value attainment in the postproject period. We find that there is much the project manager can do during the course of project performance and after completion to make value attainment more certain. In this chapter we focus on transitioning the project, change management, and risks to value attainment.

Chapter 10 is all about money—primarily how to value money and the destructive effects of time and risk on the value of money.

Chapter 11 covers value maximization from the perspective of a portfolio manager. The portfolio manager uses different tools from those customarily employed by project managers. We take a look at four of these tools.

Chapter 12 is about game theory. One game theory technique, iterated elimination, is applicable to trade studies, and studies leading to trade-offs are something every project manager faces.

In the epilogue, we summarize and wrap up the key points made throughout the book.

I hope you’ll like reading this book as much as I enjoyed putting it together.

—John C. Goodpasture
Orlando, Florida
July, 2012