The Project Success Model V1.7
The Project Success Model V1.7
by
Henrico Dolfing
www.henricodolfing.com
Version 1.7
Copyright © 2019 Henrico Dolfing. All rights reserved.
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The Project Success Model ™
Content
1. Introduction 4
5. Closing Thoughts 22
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The Project Success Model ™
1. Introduction
Alice: Would you tell me, please, which way I ought to go from here?
The Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don't much care where.
The Cheshire Cat: Then it doesn't much matter which way you go.
― Lewis Carroll, Alice in Wonderland
Project success and project failure are NOT absolutes. It may not be possible to be a
little bit pregnant, but you can be a little bit successful.
Every project has multiple success criteria related to business results, product/service
results, and project delivery results (cost, schedule, scope, and quality).
Some criteria are absolute, meaning they must be completed on or before the original
planned date, and some are relative, meaning they must be completed by a date
acceptable to the client.
Project success is determined by how many of your success criteria are satisfied, and
how well.
Whether or not a project is successful depends on who you ask. The very happy project
manager that implemented the SAP project as scoped on time and below budget (I
know, this will NEVER happen), the end users who absolutely hate the complexity and
slowness of the new system, and the COO that has seen IT costs double whilst none of
the expected savings materialized may all have very different opinions on the success
of the project.
Project success also depends on when you ask. Twelve months after the go-live, the
users will have a better grasp of the system and initial performance problems will have
been solved. And slowly but steadily, the expected savings will often start to
materialize as well.
So in order to determine the success or failure of your project, you should define all
the criteria relevant to your project, define how you will measure them, and define
when you will measure them.
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The Project Success Model ™
“If you do not know how to ask the right question, you discover nothing.”
— W. Edwards Deming
Simply put, project success occurs when outcomes add value to the business. This
implies that the value of a project is defined by subtracting all of the (in)direct costs
from all of the (in)direct benefits the project delivers.
More specifically, there are three core components that work together to facilitate
project success:
1) Project delivery success: Will the project delivery be successful? Essentially, this
assesses the classic triangle of scope, time, and budget. These are your costs.
2) Product or service success: This refers to when the product or service is deemed
successful (e.g., the system is used by all users in scope, up-time is 99.99 percent,
customer satisfaction has increased by 25 percent, and operational costs have
decreased by 15 percent). These are your benefits.
3) Business success: This has to do with whether the product or service brings value to
the overall organization, and how it contributes financially and/or strategically to the
business’s success. This is your value.
Overall, a successful project depends on the combination of these criteria. Some argue
that product/service success is the same as business success, or argue that
product/service success automatically means business success. This is not true.
> Imagine a new investment product for a bank that has a high margin but also
carries a significant risk for the bank, not just the customer. The product was wildly
successful and many clients bought it. Many more than expected, which made the
risk profile for the bank too high.
> Now imagine that this one product is still very successful and is creating revenue
and happy customers but it goes against everything that is defined in the new
strategy of the company, and this is blocking the company from moving in a different
direction.
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> Or that this very successful product with many happy clients, instead of helping the
company to get additional clients, is actually cannibalizing their existing clients.
> Or that this very successful new service in the direct business of the company is
competing with services offered through partners of the business, and these
partners are so pissed that they jump ship and it results in a huge net loss.
All the above are true stories that illustrate how product success can be completely
different from business success.
For smaller companies with only one product, or a very small product/service portfolio,
you might argue they are similar and very tightly correlated.
But for larger companies with bigger portfolios, I’m of the opinion that product success
and business success are fundamentally different. This is reflected in the three
separate levels I recommend to define project success.
While this may sound simple and straightforward, the challenges arise in clearly
defining and measuring these three levels of success at the beginning of the project,
then periodically reviewing and measuring them.
That is where the Project Success Model ™ c omes into the picture.
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The Project Success Model ™
"All models are wrong, but some are useful." ― George Box, statistician
The Project Success Model ™ is a so called conceptual model. Where a mental model
captures ideas in a problem domain, a conceptual model represents 'concepts' and
relationships between them.
A conceptual model in the field of computer science is also known as a domain model.
Conceptual modeling should not be confused with other modeling disciplines such as
data modelling, logical modelling and physical modelling.
The aim of a conceptual model is to express the meaning of terms and concepts used
by domain experts to discuss the problem, and to find the correct relationships
between different concepts.
The conceptual model attempts to clarify the meaning of various, usually ambiguous
terms, and ensure that problems with different interpretations of the terms and
concepts will not occur.
A conceptual model provides a key artifact of business understanding and clarity. The
concepts of the conceptual model can be mapped into actual implementations that
will be different for each organization and project.
The Project Success Model ™ contains five steps, each one feeding into those that
follow.
The moment the definition of one of these steps changes, it is highly likely that it will
have a direct impact on the others.
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The Project Success Model ™
The diagram below offers a visual path of these steps and how they interrelate.
Although it is often easiest to start by defining the desired business outcome, there are
no restrictions as to where to begin. What is most important is that you go through
multiple iterations—to refine your definition of project success until it is stable, clear,
and feasible on all three levels. Following this overview, let’s take a deeper look at
each step.
“Of all the things I’ve done, the most vital is coordinating the talents of those
who work for us and pointing them toward a certain goal.” ― Walt Disney
Business success results from defining how a new product or service will create value
for the organization, measured in both financial and strategic terms.
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> New markets (e.g., reaching a new location or rolling out a new product)
“We fail more often because we solve the wrong problem than because
we get the wrong solution to the right problem.” ― Russell L. Ackoff
When you have defined a desired business outcome, you have created a new problem
to solve. But before you can solve a problem, you need to know exactly what the
problem is, and you should put a good amount of thinking and resources into
understanding it. And because today’s problems are so complex, you know they can’t
be solved by being broken down into specific components.
“Managers are not confronted with problems that are independent of each other,
but with dynamic situations that consist of complex systems of changing problems
that interact with each other. I call such situations messes. Problems are abstractions
extracted from messes by analysis; they are to messes as atoms are to tables and
chairs.”
“Given one hour to save the world, I would spend fifty-five minutes defining the
problem and five minutes finding the solution.” ― Albert Einstein
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Management demands action, not talk and collaborative analysis. The kind of meetings
that involve debate and discussion are especially seen as “just talk.” This is
understandable considering the number of meaningless meetings most people
experience, but I believe debate and discussion are necessary to create a shared
understanding of a problem. While I would not use the same time split as Einstein (in
the quote above), that is only because the problems I work on do not involve saving
the world.
This brings us to a critical juncture: What happens if you don’t understand the
problem? The “solutions” that are generated will create new problems and without
any guarantee that they will even touch upon the existing issue they are meant to
solve. Alternatively, the better you understand the nuances of a problem, the more
likely you are to understand its root cause and, from this, to create countermeasures
to prevent the problem from recurring. Understanding the problem is the first step
toward any kind of problem-solving. The next step is to define how success will be
measured. After all, it is imperative to know—at the outset—whether your solution
will actually solve the problem.
“A project is complete when it starts working for you, rather than you working for it.”
― Scott Allen
Project failure starts when we can’t tell what “done” looks like in any meaningful way.
Without some agreement on our vision of “done,” we’ll never recognize it when it
arrives, except when we’ve run out of time or money or both. We’ve all seen the
project failure numbers before. We’ve all been told how bad things are. We’ve all
heard that large numbers of projects fail because of poor planning or poor project
management. Whether this is true or not, how can we increase the probability of our
own project’s success?
First, we must recognize that without a clear and concise description of done, the only
measures of progress are the passage of time, consumption of resources, and
production of technical features. These measures of progress fail to describe what
business capabilities our project needs to produce or what mission we are trying to
accomplish. Capabilities drive requirements. Therefore, without first identifying the
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In short, capabilities encapsulate what a business is doing right now and what needs to
be done in order to meet its current and future strategy.
A capability is a crucial element of the organization and as such is clearly different from
other capabilities. A capability might be applied throughout the organization and can
be applied in different ways to bring about different outcomes.
Well-defined capabilities seldom change. The capabilities provide a much more stable
view of organizations than do projects, processes, applications, or even strategies.
Capabilities only change when there is a significant shift in the underlying business
model or mission, which might occur through a business transformation initiative or in
conjunction with a new merger or acquisition.
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Examples of capabilities
> Managing risks: A bank manages risks by KYC, AML, and other processes.
> Managing credit risk: A bank's global credit department manages its credit risks.
> Analyzing client credit ratings: A team of analysts in a bank's global credit
department analyzes its clients' credit ratings.
> Qualifying sales leads: A sales operation team qualifies sales leads before they
enter a sales pipeline.
With capabilities as our starting point, we’re now going to look at project delivery
success as they apply to any project.
Project delivery success has to do with defining the criteria by which a project can
deliver as intended. Essentially, this addresses the classic triangle of scope, time, and
budget. Project delivery success is limited to the duration of the project to the extent
that success can be measured as soon as the project is officially completed (with
intermediary measures being taken along the way as part of project control processes).
Considering we have already defined scope (in the previous section on capabilities), we
are left to define time and budget.
Time
Let’s start with time. What criteria drive this parameter? New regulations? Other big
projects planned for next year? To be clear, time is not about planning. Planning is
carried out later by the project team. This process involves defining a time window
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The Project Success Model ™
that will enable a successful project to be delivered. But first, we must think about the
costs associated with delays and artificial deadlines.
Costs of delays
Artificial deadlines
Examples of deadlines
Real deadlines
Artificial deadlines
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Budget
Your project budget should always be expressed in terms of expected project value.
As stated before, project success occurs when outcomes add value to the business.
This implies that the value of a project is defined by subtracting all of the (in)direct
costs from all of the (in)direct benefits the project delivers.
Using this logic, when your expected project value is USD 3M and your company wants
a return on investment (ROI) on each invested dollar of 50%, your project budget is
USD 2M. In other words, project budget = project value / 1.5.
If the estimated value of your project goes down, your project budget goes down. It is
that simple.
Many people confuse real project budget with the authorized project budget. The
authorized project budget is the total amount of authorized financial resources
allocated for the particular purpose(s) of the sponsored project for a specific period of
time. It is usually based on a mixture of project cost estimations, department budgets,
free cash flow, and other factors.
But as soon as your costs go over the authorized project budget (which is highly likely
for technology projects), or the estimated benefits are not as big as planned (highly
likely as well) you should ask yourself what the real budget of your project is and if you
are willing to spend it or not.
How do you know whether you’re looking at the right factors when it comes to
determining the real budget?
Whether or not your company can spend this money is a financing and risk question,
not a budget question. You could even secure a loan to do certain projects. This
increases risk and reduces ROI (because of paid interest) but can be a valid option.
Whether or not this budget is enough to realize the project is a cost estimation and risk
question, not a budget question. You should never confuse your cost estimations with
your budget. Budget is what you can spend, while cost estimation is what you think
you will spend. Ideally, the latter is less than the former.
And whether or not your organization is willing to spend their money on this project is
a prioritization question, not a budget question.
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Always express your project budget in terms of expected value delivered and you’ll
have a better idea of the real budget of any project.
"It is change, continuing change, inevitable change, that is the dominant factor in
society today. No sensible decision can be made any longer without taking into
account not only the world as it is, but the world as it will be." ― Isaac Asimov
Product or service success involves defining the criteria by which the product or service
that is delivered is deemed successful.
The problem that you need to solve critically determines which solution is needed. In
turn, the solution that is needed determines what capabilities are required to achieve
the desired outcome. Aligned with this, the efforts that are required to build these
capabilities have a significant impact on your project delivery success, which will
correspondingly have a big impact on the cost side of things. The success of the
product or service determines the direct benefits, just as it impacts the indirect
benefits and business value.
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From To Description
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Objectives and key results (OKRs) were first articulated by the Intel Corporation, and
are now widely used among the biggest technology companies in the world today,
including Google and Zynga.
OKRs were originally meant to set strategy and goals over a specified amount of time
for an organization and teams. At the end of a work period, your OKRs provide a
reference to evaluate how well you did in executing your objectives.
The same concept can be used to define project success. Identifying your project
strategy and goals, and laying it out in a digestible way with OKRs can help your project
team and stakeholders to see how they are contributing to the big picture, and
whether and how they can align with other teams.
There are one or more objectives at the heart of any project, which are also known as
the desired business outcomes. The act of setting an objective involves listing what you
hope to accomplish. Not only does this provide clarity in the planning phase, it can be
used at a later time to assess whether you have reached, or have a clear path to
reaching, that objective. Choosing the right objectives is one of the hardest things to
do for any project and, quite frankly, it requires a great deal of thinking and courage to
do it well.
Assuming that your objectives are well thought out, the key results can be introduced
into your OKRs. In more detail, key results are numerically based expressions of
success or progress toward an objective. All key results must be quantifiable and
measurable.
The important element here is measuring success. It’s not good enough to make broad
statements about improvement (which are subjectively evaluated). The bottom line is
that we need to know how well we are succeeding. Accordingly, qualitative goals
(which are more felt than measured) tend to underrepresent our capabilities, because
the solution tends to serve the lowest common denominator.
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For example, if I create a goal to “launch a new training program for the sales team” I
might do that for one sales team member. If I set a key result to “train fifty sales team
members” and only train ten, I’ve still exceeded my original goal ten times over.
“If it does not have a number, it is not a key result.” ― Marissa Mayer
Activity-based results measure the completion of tasks and activities, or the delivery of
project milestones and deliverables.
Activity-based results usually start with verbs such as “launch,” “create,” “develop,”
“deliver,” “build,” “make,” “implement,” “define,” “release,” “test,” “prepare,” and
“plan.”
The critical questions to ask yourself are: Do you want to measure efforts or results?
Are your OKRs focused on your objective or on the means to get there? As mentioned
before, when used correctly, OKRs define success criteria for a project and whether or
not it has achieved success. But to do that, OKRs cannot be based on activities. There
are three main reasons for this:
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results or add value to the organization. The project is just a hypothesis so you
cannot attach your OKRs to a non-validated bet.
The reality is that nobody works on projects as a hobby. Behind every project is the
desire to improve upon one or more metrics. So, instead of tracking the delivery of a
project, we should measure the indicators that motivated it in the first place.
> Improving average weekly visits (per active user) from X to Y
> Improving engagement rates (e.g., users complete full profile) from X to Y
Increasing/reducing the metric M from X to Y, where X is the baseline (where we
begin) and Y is the target (what we want to achieve).
Using the “from X to Y” model is preferred to writing a change in percentages, because
it conveys more information. To see why, compare the two options below:
Option 1 can be confusing, since it’s hard to tell how ambitious the target is. Are we
talking about increasing the number of new users from 500 to 600, or from 4000 to
4800?
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The Project Success Model ™
When project teams start to work with value-based OKRs, it is common for them to get
stuck listing activities as key results. To convert those activities into value, think about
the consequences of succeeding in this task. What are the desired outcomes?
Examples of OKRs
Objectives like “don’t release any new bugs” make terrible OKRs. A guaranteed way to
achieve that objective is to stop releasing software. But despite “no new bugs” making
an awful OKR, it’s still an important measure of business health. It’s worth keeping an
eye on.
There are plenty of metrics like bugs released (a proxy for code quality) which are
important to watch but don’t fit well in OKRs. Rather than trying to wedge them into a
container where they don’t belong, consider adding a second tool to your toolkit—key
performance indicators (KPIs).
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If OKRs give your teams direction, KPIs make sure nothing is going off the rails.
Practically any metric—site uptime, conversion rates, user retention—can be used as a
KPI. KPIs are a metric that’s important to watch, but not something you’re trying to
change right now.
Keeping track of relevant KPIs will help you uncover problems as they emerge. If you
decide a KPI is out of line enough to justify investing in a fix, then it simply becomes
part of an OKR. The passive KPI “Conversion rate—5%” becomes the active objective
“Double conversion rate by September.”
Use KPIs to keep an eye on things. Use OKRs when you want to make a change.
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5. Closing Thoughts
“Good business leaders create a vision, articulate the vision, passionately own the
vision, and relentlessly drive it to completion.” — Jack Welch
The Project Success Model ™ contains five steps, each one feeding into those that
follow.
The moment the definition of one of these steps changes, it is highly likely that it will
have a direct impact on the others.
As you learn what you should be measuring and what truly matters for your project
and business success, it becomes easier to define measurable results.
Would you like me to help you and your team understand and define project success?
Contact me here to book an onsite workshop.
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The Project Success Model ™
Blog
With my blog “Doing the right projects and doing projects right” I want to provide you
with relevant, helpful content in all areas of project, program, and portfolio
management that you can use to further your organizational and professional growth.
How-to guides
I have written a vast number of articles in the format of how-to guides. They outline a
step-by-step process which you can follow to solve a problem or task related to
project, program, and portfolio management. You will find an overview of these guides
here.
I research technology project failures and then write case studies about them because
it is a great way of learning from others' mistakes. This page here is an ever-growing
collection of case studies I have written.
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Troubled projects are never pretty. Often there isn’t time for guessing, just acting. I
have helped companies to save projects from the brink of failure. By combining my
deep technical knowledge with a proven process, I quickly address major problems and
bottlenecks, putting the project back on track.
I spend my spare time in the Swiss mountains enjoying alpine marathons, climbing,
downhill mountain biking, river rafting and leisurely hikes with my wife and toddler
son.
LinkedIn: http://ch.linkedin.com/in/henricodolfing
Email: [email protected]
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