Introduction
The Department of Agriculture of Western Australia (DAWA) assists the State of Western Australia's agriculture, food and fiber industries to be sustainable and profitable, with a clear focus on export-led growth. Its key objective is to work in partnership with industries and communities to increase the value of sustainable agriculture, food and fiber exports from Western Australia to A$8 billion within 10 years. The value of the State's agricultural exports in 1999–2000 was A$3740 million, which represents 15.7% of the State's total exports and 16.7% of national agricultural exports. DAWA's ability to improve the well being of the agricultural and rural sector is ultimately limited by its ability to attract the necessary funding from government and other sources. Increasingly, these organizations are demanding a real return on their investment. If DAWA was to continue attracting that investment, then it must be able to:
• Identify how the greatest benefit can be achieved
• Articulate exactly what that benefit will be
• Demonstrate a professional and logical approach to its achievement
• Prove that the benefit was achieved and that we were instrumental in that achievement.
Consultants appointed by DAWA in 1998 identified the Logical Framework Method (LFM) as the most appropriate methodology for the monitoring and evaluation of projects within that Program. In 2001 DAWA endorsed the development and implementation of an agency-wide LFM facility.
The author was engaged as a consultant to run several one-day interactive workshops for DAWA that presented the LFM and required participants, working in small groups, to apply LFM to one of their projects. These small groups presented their LFM to the workshop participants for discussion and critical analysis. This paper will:
1. Outline LFM
2. Describe some important benefits and problems of using LFM.
Logical Framework Method (LFM)
Projects are formed to accomplish objectives. The setting of project objectives is important because little can be done until clear, unambiguous objectives have been set for the project (Turner, 1999). Projects have a hierarchy of linked objectives. These can be identified and structured by use of the Logical Framework Method (LFM). The PMBOK® Guide (PMI, 2000) makes brief mention of the Logical Framework as a project selection method as part of the scope initiation process. USAID (U.S. Agency for International Development) developed LFM in 1970 to improve project management of international development projects and accountability to Congress.
LFM typically uses a 4x4 Matrix, setting out four aspects: Objectives, Key Performance Indicators, Means of Verification, and External Risks—see Exhibit 1.
Project Objectives
• Project Goal—Projects should be derived from strategic goals—“all projects should be supportive of the performing organization's strategic goals” (PMI, 2000). The project goal is the highest ultimate objective toward which the project is expected to contribute. The project goal is the broad overall strategic orientation to which the project will contribute and should be consistent with the strategic plans of the organization. It provides the strategic rationale behind the project and describes the long-term impact of the project, e.g., increased shareholder value. Many distinct projects can have the same goal. It is desirable that only one goal is stated or the project will risk being unfocused.
• Project Purpose—The purpose is the primary reason for undertaking the project. This is the critical objective, because it involves consideration of the project's degree of influence. The purpose is the intended near term outcome—effect or impact—as a result of utilizing the project's outputs and is often described in terms of a beneficial change. Consequently, it is frequently a soft objective, i.e., cannot be felt or touched. The project purpose provides the means toward the project goal and determines the required project outputs. The successful achievement of the project's purpose can be measured in terms of how well the project's product satisfies users' needs. A project should ideally have only one purpose, otherwise efforts become diffused and one purpose is easier for determining the project outputs.
• Project Outputs—This is the project deliverable—the immediate measurable, tangible, verifiable outcome, result or item that must be produced to complete a project (PMI, 2000).
• Project Inputs—These are the resource inputs (e.g., human, materials, equipment) and clusters of key project activities required to deliver each output (i.e., top-level of WBS). The activities explain how the project will be done and provide the basis for project management tools such as the work breakdown structure, responsibility chart, schedule and budget.
Exhibit 1. Logical Framework Method
The four-level hierarchy of objectives has:
• Two levels outside the project (goal and purpose), which answer the question “are we doing the right project?”
• Two levels within the project (outputs and inputs), which answer the question “are we doing the project right?”
The goal and purpose are strategic objectives whilst the outputs and inputs are operational objectives. Prior to formulating the project objectives, it is useful to produce a short statement to document the problem or opportunity that the purpose is intended to address. The goal, purpose and outputs are often written using strong future completed-action verbs, e.g., constructed, implemented, developed.
Hierarchy of Project Objectives—Logic
The objectives are typically formulated top-down from goal through to inputs. The hierarchy displays a series of cause-and-effect linkages between one level of objective and the next. A “How-Why” logic of the four project objectives is applied as follows: start with the “project goal” and ask, “How is this to be achieved?” the answer should be “project purpose”; then ask, “How is the purpose to be achieved?” the answer should be “project output,” and so on. Finally, working backward from the inputs can check the logic by asking “Why?” So the hierarchy displays a series of causal linkages between one level of objective and the next higher level and toward a path to the ultimate highest objective. Importantly, the stronger the cause and effect linkages between the project objectives, the better the project design. This ensures that the project contributes to the strategic plans of the organization.
Youker (1998) provides a simple example that shows that all projects have a hierarchy of objectives:
Stonemasons are working on a cathedral. The first one, when asked what he is doing, said “hitting stones with a hammer.” The second, “making square stones.” The third, “building a wall.” The fourth, “building a cathedral.” The fifth, “giving praise to the greater glory of God.” Each is giving an objective for the same project, but at a different level of the hierarchy of objectives. These five objectives can be verified by applying the Why-How logic.
LFM—Example
An example of the LFM matrix is shown in Exhibit 2.
Project Objectives—Responsibilities
Goal and Purpose—Responsibilities
Senior management within the project-initiating organization (sometimes referred to as the sponsor, client or owner) is ultimately responsible for ensuring the link between organizational plans and the goal and purpose of selected projects, and the creative processes in identifying possible ideas for a project (Munns & Bjeirmi, 1996). However, the project manager must be aware of the project owner's strategic plans to understand the underlying reasons why the project is being undertaken. Project managers must understand the business environment and view their project as part of the company's struggle for competitive advantage, revenues, and profit (Shenhar et al., 1997).
Furthermore, project managers need to be both wary and courageous in asking questions regarding relevance and rationale (Briner et al., 1996). When there is conflict between some project objectives and the owner's strategic requirements, the function of the project manager is to make any effort in order to find possibilities of balance and compromise (Albonetti, 1990). Ultimately, however, this situation may be beyond the control of the project manager and the decision of resolving this conflict resides with the project owner. However, the project team should review early in the project the appropriateness of the linkage between the outputs, purpose and goal as part of the scope management process, and be constantly aware of the project's goal and purpose throughout the project.
Exhibit 2. LFM Example
Outputs and Inputs—Responsibilities
The outputs and inputs represent the implementation of the project. The delivery of the output is the responsibility of the project manager and project team. For example, a project output may be a training program and the purpose may be that the staff will do a process differently as a result of this output. However, accomplishment of this purpose is the responsibility of senior management who must turn outputs into impact. So, from a project management perspective, “projects end when they are delivered to the customer. That is the point at which project management ends. They do not consider the wider criteria which will affect the project once in use” (Munns & Bjeirmi, 1996). However Willoughby (1994) warns “the PM might expect (or fear) to be blamed if the required Purpose does not result from even the most careful and proper management of the Inputs and the provision of the Outputs!”
Key Performance Indicators
KPIs measure results and answer the question “How do I know whether or not what has been planned is actually happening or has happened?” Project objectives require indicators that allow for measurements to recognize and verify their accomplishment, based on the approach that “if you measure it, you can manage it.” KPIs focus on results rather than activity and provide an objective basis for monitoring and evaluation. KPIs permit accountability or communicating the value of the project to others. A project objective may have more than one KPI but should be a minimum number that measures what is relevant and important. KPI force reconsideration of the narrative statements describing the project objectives. Where possible, KPIs should be expressed in terms of quantity (how much), quality (what kind of) and time (by when). The critical project objectives requiring KPIs are the purpose and outputs. The purpose is the primary focus of the project, so KPIs are critical. The purpose often has an intangible impact, such as change in behavior in the users of the project output, so that setting KPIs can be difficult. KPIs for the output are typically measured in terms of cost, time and quality of the deliverables. Examples of KPIs are given in Exhibit 2.
The desirable characteristics of project objectives include:
• Specific & Accurate—KPI must reflect what we are trying to measure in an accurate way; e.g., amount of cement delivered to site is not a good indicator of number of houses constructed.
• Measurable—KPIs must be measurable in either quantitative or qualitative terms. Quantifiable KPIs are desirable because they can be precise, aggregated and allow for statistical analysis. However, intangible project objectives may required qualitative KPIs.
• Practical—The KPI must be attainable at reasonable cost in a timely manner using appropriate collection methods.
• Agreed—KPIs should be derived in negotiation with the key stakeholders.
Means of Verification (MV)
Projects require constant feedback to track progress toward objectives. The MV describes the sources of information for KPIs that will show what has been achieved for each level of objectives. The MV may require a budget and actions. For example, if a survey is required to verify the achievement of a KPI, this may require additional activities (within Inputs) and a budget. A MV must be available, cost effective and timely. See Exhibit 2 for examples.
External Risks
External risks referred are factors not directly under the relevant manager's control that may impede or prevent his or her ability to advance from one level of the hierarchy to the next. So risks listed on any one row are those that may impede achievement of the objective above, given that the objective on the first row has been achieved. They are the important “killer risks” (i.e., high consequence and high/medium probability) that may prevent achievement of an objective. They are in addition to the risks managed within the project risk management process, e.g., availability of skills and resources. See Exhibit 2 for examples.
LFM—The DAWA Experience
As mentioned previously, several one-day LFM workshops were conducted at DAWA during 2001. At the end of each workshop, the participants were required to complete an evaluation question-naire requesting their thoughts of the benefits and problems of using the LFM. The following key points are next.
Hierarchy of Project Objectives
Benefits of identifying a hierarchy of objectives include:
• Clear understanding and statement of the project objectives. It avoids the problem of producing vague statements for the project objectives. It also prevents flaws in logic such as combining different levels of objectives. On several occasions, the workshop teams significantly rewrote their project objectives because of the insights provided by articulating the hierarchy of objectives.
• Structures logical thought and judgment of the appropriateness of the stated project objectives, which is particularly useful for the many research projects undertaken by DAWA. It also helps prevent omission by oversight. It encourages thought not only about the project objectives but, importantly, linkages between them.
• LFM is a good communication tool for all stakeholders and clarifies “why I am doing these tasks.”
• LFM allowed the clear and appropriate allocation of responsibilities for the achievement of the various levels of project objectives.
Some problems in formulating the hierarchy of project objectives were:
• In stating the project goal, attempting to clarify links to broad strategic organizational goals, which may be pitched at a very high level, while retaining a realistic link to the project.
• Clarifying and gaining consensus of the objectives.
• Oversimplification of objectives.
• Assuming an unlikely causal relationship among the various project objectives.
• The purpose is erroneously a reformulation or summary of the project outputs, rather than the causal results of the project outputs.
KPI and MVs
Benefits of using LFM to identify KPIs and MVs include:
• Forces a focus on developing relevant and achievable KPIs
• KPIs encourage thinking of what can be done
• Sets KPIs that are agreed by management.
Problems of using LFM to identify KPIs include:
• Difficult to formulate accurate and valid KPIs, e.g., what is a reasonable target for adoption of the project output?
• KPIs nebulous at Goal level
• Identifying KPIs that can be measured with affordable MVs.
External Risks
Benefits of using LFM to identify external risks include:
• Provides framework to identify and manage external risks
• Problems of using LFM to identify external risks
• Excludes consideration of key internal risks, which can be more critical than external risks.
Summary
The articulation of project objectives is one of the most critical processes of project management. LFM is an excellent tool and process for assisting in the formulation of project objectives, the means for measuring achievement of these objectives and the identification of key external risk that may impede the successful achievement of these objectives. It must be emphasized that the creation of the LFM is not simply a “box-filling” exercise. The process of completing the LFM is the critical issue and must involve all key stakeholders.