I met up with Nathan Kunkel to talk about business outcomes, business value and benefits, which will be the topics of IT People Denmark’s upcoming workshop, “The Power of Defining Business Outcomes”, where Nathan is the facilitator. Here’s what came out of our talk.
Let’s jump right in! Tell us about Business Outcomes.
Business outcomes are the driving force behind successful projects. They establish the measures of success in straightforward, measurable language, something that is often missing in business cases and at the time of starting a project.
But surely projects know what they are doing before beginning, don’t they?
You would think so, and let me be clear: there are organizations and individuals who are very good at delivering successful projects. That said, there is overwhelming research that shows ‘the success’ of projects is seen to be in the 30%-40% range, but that poor result is not a reflection of problems with project management – project managers and project teams generally deliver what they are told to deliver. The challenge is the mindset that, ‘if we build it, it will work.’ What gets lost is the focus on the business value to be achieved.
What do you mean by that?
The challenges most organizations have is in not defining a project in business terms.
A project is part of a business initiative to improve and bring value to the business – to make things better, to improve processes, to provide and implement new tools that create more business value, regardless of whether it is a streamlining initiative or one that expands the business portfolio or changes the business model. When a project is defined in technical terms and not business outcomes, important components to successful implementation are disconnected from project delivery, things like benefit realization, and change activities on the business or user side.
So defining business outcomes as the starting point puts focus on the business?
Exactly! It puts focus on the business and aligns the different stakeholders on precisely what the deliverables are. It puts focus on the value to be gained, instead of the orthodox approach that measures projects in terms of cost, timeline, and specification.
Think of it this way: you can build a new reporting system, but if the organization is not prepared to implement it, time and value are lost, and I’m talking about real value – money is lost, change is slowed down, old systems and habits are still in use, resistance can be high. A business outcome frames the delivery in business terms. “We have a new reporting system, and all relevant staff in regional offices are trained and delivering the newly formatted reports as scheduled.” You can measure the success with a simple yes or no question: Do we, or don’t we?
But isn’t cost, timeline and specification important?
They are indeed, but in most cases those are measures of project efficiency, not project success.
Let me put it like this: what is it that we remember about past projects? What is most important? Do we look back and say, “Hey, remember that project that delivered on time and on budget? THAT was great!” No, no, no. What we look for is to look back and say, “That project really jumpstarted our data analysis capabilities, and gave us the means to make more fully informed business decisions.”
So how do business outcomes tie it all together?
The key to successful projects and business initiatives is to spend time on the front end, before a project start. A typcial business initiative will produce 8-20 business outcome statements, each framed in business terms, and each measurable by a yes or no question. You then position these in a sequential timeline that shows what needs to be delivered first to allow for future deliveries.
Once your business outcomes are defined, it enables you to identify all the changes needed to deliver that outcome: not just activities related to a technical delivery, but all the change activities needed from all angles, such as training, HR involvement, documentation needs, organization changes, purchases, decomissioning, and so on. All change activities are wrapped into the delivery of a business outcome, bringing change and project onto the same page.
And benefits? What about the value to the business?
Good question! So, in the same way that change activities are identified for delivery of a business outcome, we look at each business outcome and identify what benefits are associated with it. We don’t wait to take the value, but instead look to take the value from the moment it is available, the moment a business outcome is delivered.
In short, Activities delivery Outcomes that enable Benefits. It’s that simple. And please excuse my promoting this, but the TOP Value Equation is designed to link these together through repeatable processes that guide an organization to define and identify these components quickly, and at a cost that is far less than bringing in a team of management consultants.
So the purpose of the workshop is to focus on defining business outcomes?
It is – it all starts with defining the value you want to achieve: the desired business outcomes. I will quickly get participants to experience hands-on how to define business outcomes, and demonstrate how benefits are identified for each outcome. Time permitting, we will take a talk on both change activities and the importance of monitoring and managing the delivery of value.
Sounds great, Nathan. We look forward to the workshop!
The workshop takes place the 31st of January 2017. Read more about the workshop here. It will be possible to attend a networking-lunch after the workshop.
‘Defining Your Desired Business Outcomes’ is the first module and cornerstone of the TOP Value Equation, a value delivery chain management tool that shifts project focus from ‘on time, on budget, to specification’ to delivering what the business wants: desired business outcomes.
The workshop owner, Nathan Kunkel, is associated with Totally Optimized Projects, Teknologisk Institut, and Help@Head. He is a certified instructor in the TOP Value Equation, and has had long engagements in The Maersk Group and the United Nations, covering a wide range of responsibilities within IT and Finance.