What is the goal of your company? What should it be? How do you know if projects are contributing to the goal? In this blog, I address these questions and more.
This is the first blog in a series I’m writing called Uncommon Sense: Practical Advice to Creating Value, targeted to those with a stake in creating value in companies. Most of the concepts apply to all industries and types of companies. I hope you enjoy reading it and find some insight in doing so. Please reply, share on social media, or email me at email@example.com to keep the conversation going.
Begin with the End in Mind
Think about a project with which you were associated, either as a leader, manager, or team member. For example, it could be a process improvement, customer experience, or software implementation project. How do you know if it was successful?
Before moving on, let me ask, is your company for-profit? If so, what is the goal of your company? As Eli Goldratt wrote in his book titled The Goal, I suggest that the goal of a for-profit company should be to make a profit today and in the future. There are other “necessary conditions” that should be considered as well, which I’ll write about in the second blog. However, at the end of the day, if a company doesn’t make a profit now and in the future, then it is not sustainable.
In that context, think about that project again, and ask yourself if it was successful? Did it help you achieve the goal of making a profit today and in the future?
In most cases, I think people candidly would answer no or maybe. Put it this way, if you were compensated on how much the project contributed to the goal – as opposed to a salary, bonus, or professional services fees – and you had to make a compelling case to get paid, then would you get paid? Should you get paid? Well, when you put it that way …
To borrow from The 7 Habits of Highly Effective People, when considering projects, begin with the end in mind. Ultimately, the objective of projects should be to contribute to the goal of a company.
I define projects as sets of tasks that companies don’t do regularly. Since companies don’t do them regularly, the risk of them not contributing to the goal is high. Yet, companies invest significant human capital and financial capital in projects. For example, for a software implementation project, it is common for a mid-sized company to invest several hundred thousand to several million dollars in software fees and professional services fees. And, that same company may invest thousands of hours of employees’ time on the same project.
Yet, it is also common that many – if not most – team members on projects are unclear as to what the objective of the project is and how it is intended to be achieved. It reminds me of the saying, “if you don’t know where you are going, then any road will do.” In far too many cases, projects are completed without achieving the objective, because the objective and how it was intended to be achieved were not articulated, communicated, or understood by all the team members at the beginning.
The leaders in a company should be responsible for ensuring the objective of a project is articulated, communicated, and understood by the team and any relevant stakeholders (I define leaders as the decision-makers and those accountable for the success of companies as well as the underlying lines of business and departments). This responsibility should be an extension of their overall responsibilities, which I suggest should include the following:
- Articulate the goal of the company (i.e., “why” does the company exist)
- Facilitate the development of the strategies (i.e., “what” things should be done) and the tactics (i.e., “how” will those things get done)
- Understand the managerial skills required to deliver against the strategies and tactics
- Ensure the company has the managers with the necessary knowledge, skills, and experience
- Allocate appropriate financial capital and human capital
- Hold managers accountable while providing the necessary coaching and support
Projects should be a means to an end, namely contributing to the goal of the company. Leaders should ensure that managers understand the goal, the strategies, and the tactics. Only then can we reasonably expect managers to be able to identify, plan, and execute projects that contribute to the goal.
Unless managers understand what the goal, the strategies, and the tactics are and how they fit together, then they are likely to go down a path that does not help achieve them. Even the best executed of projects will be unsuccessful if managers cannot clearly and succinctly articulate the expected value of projects and how they support the goal, the strategies, and the tactics. At best, under such circumstances, a projects may disrupt operations, take focus away from serving customers, or break even financially. At worst, they may degrade employee morale, threaten the loss of customers, and erode profitability.
While it should not necessarily be the responsibility of leaders to identify and define projects, it should be their responsibility to approve them and the resources required to support them. Leaders should use this mechanism to check that projects support the goal, the strategies, and the tactics. They cannot and should not know all the project details. That is the responsibility of managers and project team members. However, they should understand and know the answers to several critical questions prior to approving and funding projects:
- How does the project align with the goal, the strategies, and the tactics?
- What is the expected investment?
- What is the expected value?
- How will the expected value be realized?
- What are the opportunity costs (i.e., potential value of projects not undertaken)?
Many projects are unsuccessful in that they do not contribute to the goal of making a profit today and in the future. To minimize this risk, leaders should begin with the end in mind. They should ensure their managers – and their managers’ team members – understand the goal, the strategies, and the tactics of the company as well as the underlying lines of business and departments they support. Only then can we reasonably expect managers and their team members to identify, plan, and execute projects that contribute to the goal.