Have rationalizing costs and similar terms slowly crept into your project management vocabulary? Have you started thinking about conducting a gap analysis to determine where your organization is compared to where it should be?
If so, you're starting to think like an executive—and that should help you secure the much-needed buy-in from the higher-ups to move forward with your projects.
Executives are increasingly scrutinizing all of the projects in their portfolios, and expectations for project managers are high. When making a pitch, you won't win over executives by addressing every last project detail. Many organizations have been stung by crippling project failure rates, so building a clear business case should be a top priority.
“Executives are growing apprehensive about undertaking new ventures without the certainty that they will be fruitful,” says Seweryn Spalek, PhD, chief project officer for Helion S.A., a publishing group in Gliwice, Poland.
While organizations have much to lose, many also have little to spend.
“At a time of increased pressure on budgets, executives in most companies are faced with having to prioritize projects presented to them,” says Christo-foros Simiriotis, director of the global banking practice for Huron Consulting Group, Dubai, United Arab Emirates. “If an executive is looking at three projects, and only one is accompanied by a clear and solid business case, that's the one he or she is going to consider.”
JUST GIVE ME THE HARD NUMBERS
While the minutiae involved with projects are of great interest to project managers, senior management has something far different on their minds.
“Executives are busy people. They don't want to be bogged down in detail,” says Martin Webster, systems support manager for the Leicestershire County Council, a governmental agency in Glenfield, England.
Instead, most executives want to get straight to the bottom line: What return will they receive from their investment?
“Project managers ultimately have to understand the value of their project to their organization and be able to articulate that back in the terms their executives understand,” says Sinikka Waugh, PMP, president and CEO of Your Clear Next Step, a project management consultancy in Indianola, Iowa, USA.
In your business case, demonstrate the value of an initiative in terms of profit, savings or percentage points of customer satisfaction, market share, etc., she says. For example, if you're pitching a project that will streamline a process for your organization by saving 800 hours a year, call that out in your business case. If a project will improve customer satisfaction by responding to an issue end users have raised, the project manager should quantify the improved customer satisfaction as well as the reduced processing time for complaints about the issue.
TIP Develop a relationship with an executive's administrative assistant to find out more about his or her daily routine, suggests Sinikka Waugh, PMP, Your Clear Next Step, Indianola, Iowa, USA. Does she block out an hour for lunch? Does he take short walks in the afternoon?
“Invite the executive to lunch. Walk around the office campus with him or her. Invite him or her to a team event,” she says. “You have to make yourself available to executives without monopolizing their time.”
When an in-person meeting isn't possible, speak with others who have worked with him or her, Ms. Waugh adds.
Know what benefits will result each time a milestone is met.
“You have to be able to say to executives, ‘If we do this piece of the project, here are the savings,” Ms. Waugh says. “Make sure you understand the ROI as a whole so you understand which piece ties to which value. Then as scope changes over the course of the project, you can protect the portions that will return the most value to the business.”
Make sure the business case focuses on where the ROI comes from, how the project will deliver it and what your plan is for measuring it.
Of course, not all project value is easily illustrated by hard numbers.
“Some projects might deliver improvements in the well-being of employees or enhanced relationships with the community or government,” Mr. Simiriotis says. “Those returns aren't numeric or as easily quantifiable but should still be included in the business case.”
Say a company is the first in its industry to implement a new technology by completing a project: “In terms of credibility and trust, that eventually will carry good weight with shareholders,” he says. “That's very important for the business case.”
THE DO'S AND DON'TS OF BUILDING A BUSINESS CASE
DO be prepared. When presenting the business case for a potential project, you must feel confident in your assessments. “As soon as you start struggling to answer an executive's question, you start losing credibility,” says Martin Webster, Leicestershire County Council, Leicester, England.
DON'T be afraid to ask for help. if you're pitching a project that will have significant involvement with human resources (HR), for example, enlist coworkers in that department to explain their key concepts and concerns. “The HR colleagues will appreciate that, and it will increase your credibility with executives,” Mr. Webster says.
DO get to the bottom line first, only going into the project specifics if requested, says Sinikka Waugh, PMP, Your Clear Next Steps, Indianola, Iowa, USA.
DON'T pitch the project in isolation. if Project A will put Project B at risk by taking away resources, include that information in the business case, Ms. Waugh says.
DO offer alternatives. “A business case for a project should say, ‘This is the problem, and this is how we can solve it with different options,’” Mr. Webster says.
DON'T assume executives understand project management speak. “We in the IT project management field use acronyms all the time,” Mr. Webster says. “But most executives haven't got a clue what we're talking about. Keep it simple and spell things out.”
WHAT'S IN IT FOR THE ORGANIZATION?
As passionate as you are about your project—or even as much as an executive wants his or her pet project launched—it ultimately comes down to organizational alignment.
“It's not about my particular project,” Ms. Waugh says. “It's about making the business more successful. In the end, executives will be more supportive and appreciative of us as project managers if we are first thinking about the organization.”
Projects not aligned with strategic objectives are doomed from the start, according to Mr. Webster. “With projects that don't do so well, there is a common tie: There hasn't been a clear organizational mission,” he says.
Take, for example, an organization that has cost reduction as its strategic objective. A project manager, realizing that customer support processes take too long and customer satisfaction is being negatively affected, pitches a project to alleviate the issue. The project will result in happier customers but has nothing to do with cutting costs. It may not be the right time to pitch this particular project, as it's not likely to receive prioritization from executives, Ms. Waugh says.
HIGH STAKES
Executive opinions aren't the only ones to consider when pitching projects. Building the business case must also include distinguishing how the project will meet diverse stakeholder expectations and goals.
Careful stakeholder analysis must be conducted for all possible stakeholders—primary decision-makers, influencers and those impacted by the project, says Sinikka Waugh, PMP, Your Clear Next Step, indianola, iowa, USA.
Think about all the departments in the organization that will be affected—financial, human resources, technology, marketing or public relations—and consider what each needs from the project being pitched.
“I've recently encountered some pretty painful examples where the project manager neglected to think about all the stakeholders in the project,” Ms. Waugh says. “They thought of who on the executive level would approve or buy into the project. But they didn't think about the end users of the new software application, or the customer service folks who would have to support the new application.”
If an organization doesn't have clearly stated objectives, its project professionals can demonstrate leadership skills by being proactive.
“Ask the executive where the company expects to go in the next couple of years,” Mr. Simiriotis says. “Project managers should strive to understand the vision, goals and objectives to ensure that the project objectives are in line with the business owners' own targets.”
There can even be hidden benefits that work toward organizational goals. If, for example, a business unit manager wants to implement a project to cut costs and improve efficiency, the project manager should prompt him or her with questions to determine if there are by-products of the process that are equally important, such as worker productivity, quality control or inventory optimization.
TAILOR YOUR MESSAGE
Even when an organization has multiple goals, there's a good chance that some are higher priority than others.
“Of the measures of project success— time, cost and scope—you can bet your bottom dollar that any given executive will focus more on one than the others,” Mr. Webster says. “You have to balance those areas and focus your message.”
For example, he realized a particular executive would immediately flip to the financial section of project reports. “It didn't really matter what I said up to that point—he was only interested in the bottom line,” Mr. Webster says.
Just as critical as knowing what interests executives is realizing what they resist. “An executive may have been burned by something in particular or might have a pet peeve,” Ms. Waugh says. For instance, someone might have had negative past experiences with vendors. When pitching a project to this executive, the project manager should highlight the plan for vendor management.
“If the project involves a vendor situation, you should put that up front: ‘Here is how we will be proactive, and here are the risks,’” she says. “Or, if we're doing everything internally, that can work in our favor.”
DEVELOPING A BUSINESS SENSE
For project managers immersed in the world of processes, schedules and budgets, it's not always an easy departure into the land of ROI and strategic vision. There are plenty of ways to enhance business knowledge, though.
“Seminars, one-on-one coaching and workshops are invaluable tools to disseminate best practices and terminology,” Dr. Spalek suggests.
In addition, an increasing number of organizations find value in embedding project managers within the business group rather than a vertical segment such as IT.
Executives are growing apprehensive about undertaking new ventures without the certainty that they will be fruitful.
—Seweryn Spalek, PhD, Helion S.A., Gliwice, Poland
“It's a way to keep a very open and continuous path from the project manager to the business side,” Mr. Simiriotis says. “It gives project managers unique insight into how the business side thinks and acts, as well as its expectations.”
Even if the executive suite at your organization isn't mandating that its project managers build the business case for their projects, take the initiative and present your supervisors with one.
“The reality is, if a project we're working on isn't in the best interest of the organization, we should put our pencils down and focus on something that is,” Ms. Waugh says. PM