Delivery Effectiveness

We can explore the importance of numbers in business cases with the help of David Byrne and Talking Heads:

Facts are simple and facts are straight
Facts are lazy and facts are late
Facts all come with points of view
Facts don't do what I want them to
Facts just twist the truth around
-- Cross-eyed And Painless

I think the parallels between music and project management are interesting. For example, I have always been struck by Byrne’s lyrics. Whether doing financial analysis in my corporate roles or guiding projects as a consultant, I have found the manipulation of information has always provided an opportunity to make data tell the right story. Mark Twain had great insight on this as well, stating, “Get your facts first, and then you can distort them as much as you please.”

I have seen skilled practitioners take Twain’s words to heart. Sometimes this is done on purpose (e.g., in the creation of a business case to justify a new venture) and in some cases the manipulation is simply a lack of understanding or the selection of the wrong facts. Selecting the wrong data is one of the biggest problems. When we use facts (metrics), especially those founded on complex math (complexity tends to lend credibility), we feel more comfortable with quantitative measures as opposed to qualitative ones. But often, the measures we choose are not representative at all.

Numbers are just that: numbers! They are the facts. However, the way we use them may be flawed. In a less musical vein, Jack Brennan, chairman and CEO for the Vanguard Group stated, “A fundamental rule about assessing IT value is that spreadsheets don’t tell the whole story.”

I think it can be this simple: It is incumbent upon those that originate an idea for an initiative to prove its business worth. Business managers should not leave the development of detail financial cases to the project manager. PMs may be project management experts with little understanding of the business. They may be technical gurus and not ‘business-people’ expert in the line of business. They may be hired guns commonly referred to as consultants. Every company has a different process, organization, and cost accounting way to view and assess the value of a project. That is not likely to change, nor should it. Attempting to find one method across the multitude of businesses in every industry is tantamount to the search for the Holy Grail. It is important for the business decision makers to trust their processes, people, and tools. Each organization has a process. That process must be vetted, reviewed, and matured. If we do not improve the resources we use to make decisions and instead rely on “just the numbers,” we will fail. Vanguard’s Brennan has argued the old aphorism that project “spending decisions on numbers alone can be penny-wise and pound-foolish.”

While working for R.R. Donnelley in the mid-90’s, I had the opportunity to support two CFOs. The finance organization was not pleased with the level of rigor going into the capital appropriation process. To remedy the situation, one of the senior staff in Finance revamped the business case review and approval process. Donnelley created a formal process for framing a business case. The process covered outlining the concept, developing multiple solutions (each with pro’s and con’s), developing project structures for each alternative and roughing out execution planning. With this set of data points in hand, decision makers were primed to make more well-informed choices about the allocation of discrete resources.

All conceptual projects would pass through the first two gates, while only realistic alternatives would go through the last two steps. The process specified deliverables to be created and delivered in each stage. These included a high-level roadmap for each alternative, definitions of roles and responsibilities for the key players, a risk assessment outlining known challenges that each alternative may encounter as well as contingency plans for avoiding or reacting to risks. While the Donnelley approach as a formally orchestrated process is complex and time consuming, the concept is a key take away for any project manager (or financial manager). The process need not be formal or even contain these specific phases. Instead, it is essential that project business cases (i.e., a document suite that includes more than financial calculations) are reviewed, assessed, and committed to in a staged fashion. It is also crucial that all involved understand that there is more to the business case than just numbers.

By putting this planning process in place, the Office of the Controller was able to begin a culling process for initiatives. The proposed initiatives that passed the early stages of Decision Framing and Solution Alternative were moved forward for more detailed development and review. However, work was saved by not completing the detailed analyses for conceptual initiatives which fell short after the second stage.

While this formal definition and culling process was not without its challengers – the process required additional work to be done by the business sponsors in formulating their concepts and this was met with some dissatisfaction – it did enable Finance to better understand the true business case behind initiatives. As a first step in the redesign of the financial appropriations process, Donnelley scored a win by implementing pre-project planning.