Book Review: Maximizing Project Value: A Project Manager’s Guide
By: John C. Goodpasture, 2013. Management Concepts Press, Inc. Tysons Corner, VA. 277 pages. Review by: Gerald Mulenburg, PMP National Aeronautics and Space Administration (Retired)
From its title, this book’s obvious goal is to guide project managers in maximizing project value. Author John Goodpasture says, “Value is the worth we place upon something for which we are willing to give up something else” (p. 7). But, as he describes, it is much broader than that, and he goes beyond the project into the program, portfolio and the enterprise itself, showing and supporting why and how project value is so closely tied to these. “Business value is the net improvement in the business. Projects are valuable because they are the means to extract value from opportunity” (p. 21); and therefore, “…projects are an instrument of strategy” (p. xiii). This supports the author’s intent to reach a broad audience: “I offer this book on maximizing project value to the community of project sponsors, …project managers, and other stakeholders in business projects” (p. xiv).
The breadth of this approach doesn’t water down the book’s focus on project value, but makes its content much richer and meaningful across the project management spectrum by tying project value to the larger value desired for the enterprise. In his words, “…we do projects to enhance the fortunes of our enterprise or advance the mission of our benefactors” (p. 275). If this definition were used to determine project success, it seems many more projects would be deemed successful, and the author provides plenty of beef to show us how to accomplish this goal.
To begin his argument, he says, “Projects are not valuable in and of themselves; they acquire value as an instrument of strategy to exploit opportunity” (p. 16). To clarify, he says, “Project value is the worth of a project’s throughput, or the difference in business value measured before and after a project. Maximizing project value is really about optimizing and managing the tension between the project manager’s mission to manage for project value and the project sponsor’s charge to enhance business value” (p. 1). The basic elements, he says, include a willing agreement between parties who have the capability to meet the demands prescribed. In projects, materials and resources are transformed into an end product whose value will exceed the cost of these inputs, and projects must be measured by their value added to the business, not the cost of these materials and resources.
Using a balanced-scorecard type of framework for measuring value, Goodpasture connects business and project goals together in a visible and productive way. “Maximizing project value is about optimizing the trade-off between project value and business value, which are constantly in tension between the project manager and project sponsor” (p. xiii). This approach prevents sub-optimizing the project to achieve its limited goals at the expense of the enterprise’s goals: “…we must manage the tension between the demands of earning project value and the requirement…for the enterprise to profit” (p. 275). The joint scorecard framework for monitoring achievement of both enterprise and project goals is called a balance sheet: “We diagram this tension using…the project balance sheet [that] illustrates the inevitable gap between the business case…and the project charter [using] estimates about the uncertain future. That gap is risk” (p. 275). To reduce or eliminate that risk, he proposes that planning provides the general direction for the project with key processes providing orderly delivery.
His conclusion is that, “…there’s no project…that does not benefit from the planning that supports a business case” (p.275). He paraphrases the quote attributed to Gen. Dwight D. Eisenhower, “‘It’s not the plan but the planning’ that really holds value” (p. 275). He also emphasizes the importance of teams: “The most important point we make in this book is that teams are among the highest order of the social structure because they so intimately intertwine personal and collective commitment to a common success” (p. 276).
Both the theory and practice of using a value scorecard as the project balance sheet comes with references and graphical depictions of how the process works. “Best value,” he says, “is a dynamic trade between feature, function, and performance on the one hand with available resources on the other” (p.14). Allowing for differences between different types of projects (for-profit, non-profits, government, etc.), he defines the appropriate values or utilities to be used with each type. Earned value is discussed as a means to identify where a project is on its trajectory toward completion and to show the link between project earned value and business earned value. There is little doubt that this book provides as much guidance/value for program and portfolio managers as it does for project managers, plus it offers an understanding desperately needed by executive and senior management about what projects are, what they do and the enterprise value that they provide.
Although a fairly small paperback, this book is an excellent primer of project management ranging across essential topics that provide the reader with grounding in what project value is, why it is important, where it derives from and how to most effectively achieve it. A tall order, but done well in fact, figure and example.
Released: November 8, 2013, 10:22 am
| Updated: February 19, 2014, 12:35 pm