New Strategic Project

Management
by Dr. Abdulmalek Hazbar
Part two: Mastering the Four Critical
Strategic Questions
Chapter 7: Question #2—How Do
We Measure Success?
Develop Success Measures and Verifications
FIGURE 7.1: Success Measures Describe What Each Objective
Means
 Develop Success Measures and Verifications

❑ Success Measures describe the conditions expected

to exist when Objectives are achieved.
– Clarifying these conditions early strengthens your design
and reduces later disagreement over whether project
Objectives have been met.
– At the same time that you set measures, identify the data
sources needed to verify the status of each measure.
❑Buy attention and Be selective when choosing these
important guides, it will guide you to monitor project
dashboard.
❑ The term Success Measures also
goes by other names such as:
❑ Metrics,
❑ Key Performance Indicators (KPIs),
❑ Key Results Areas (KRAs)
 Measure What Matters Most
❑ Setting clear Success Measures at the project start does
two things:
1. It strengthens the project design.
2. It reduces after-the-fact doubts and finger-pointing as to whether a
project reached its intended Objectives.
❑ Each Objective you construct has a Success Measure by
combining an indicator and its target.
❑The indicator describes the expected type of behavior, action,
or event.
❑The target makes the indicators more specific by adding the
required numerical value to be achieved and/or a date by when
it is to be achieved.
❑ One common form of measures
❑ Is to “Achieve X by Y date”
❑ Or “Increase X from ___ to ___ by Y date”:
❑ For example, Achieve roll-out of new
product by September 1,
❑ Or Increase customer satisfaction by 20
percent within 3 months.”
The best Measures are to meet these criteria:
1. Valid
– They accurately reflect the meaning of each Objective.
2. Targeted
– They include numerical quality, quantity, and time
targets that are pinned down.
3. Verifiable
– They can be verified by nonsubjective evidence or
data.
4. Independent
– There are separate measures at each level in the
hierarchy.
 Types of Indicators
1. Hard Indicators; 2. Soft Indicators.
❑ Hard Indicators; is a quantifiable Indicator
❑ The following list provides examples of hard indicators:
1. Reduce errors by 20 percent in six months
2. Enhance quality by 10 percent by Q2
3. Increase net profits by 15 percent this year
4. Stabilize performance within one standard deviation by Y
date
5. Improve funding by 30 percent within six months of project
start date
6. Increase total # of served clients by 15 percent by the end of
the year
7. Relocate 50 percent of materials to X location from Y
location in one month
8. Reach milestone X by Y date with Z resources
 Hard Indicators
❑ These examples show a future expected completion date. You
can often break these down into interim targets for ongoing
progress monitoring (e.g., 20 percent by end of January, 30
percent by end of February, etc.).
❑ These examples show a future expected completion date.
❑ You can often break these down into interim targets for ongoing
progress monitoring
❑ (e.g., 20 percent by end of January, 30 percent by end of February, etc.)..
❑ when there is little data to justify any specific number
❑ state a range (“between X and Y”).
❑ For example, increase website traffic by 10 percent minimum; 15 percent
desired; and 20 percent stretch target by June 30.
❑ As you proceed, remember that what is easy to measure is not always
important, and what is important is not always easy to measure.
 Soft Indicators

❑ Soft indicators are those that are intangible or

subject to personal judgment.
❑Some examples include:
1. Improve employee morale by 20 percent by end of
September
2. In the fall, new students to be given more help than
last year
3. Improve the taste of the gravy next month
4. Reduce employee dissatisfaction with the leadership
within three months.
5. Strengthen relationships among the crew.
 Targeting Your Indicators

❑ Targeting is Adding numerical values for each indicator.

❑ Begin with the basic indicator, and then
elaborate by describing as appropriate:
1. Quantity—How many? How much?
2. Quality—How good? What standards of performance?
3. Time—By when? For how long?
4. Customer—Who are the clients/users/beneficiaries?
5. Cost—What resources are required?
 Targeting Your Indicators

❑ Set numeric targets at a level that is sufficient to

achieve the impact required at the next-higher level.
❑Selecting appropriate targets can draw from:
❑past experience,
❑data analysis,
❑or negotiated agreement to establish what is realistic,
achievable, and warranted.
❑When all else fails, make a reasonable guess.
❑ Make sure you have valid indicators that cover each
key word in the statement of the Objective.
❑How many Measures does each Objective need?
❑ No rule,

❑ May be a single Measure will be sometimes suffice.

❑ Multiple Measures are usually necessary to pin down all;
but the simplest Objectives.
❑ Choose the minimum number that enables you to monitor
the progress toward each Objective with sufficient accuracy.
❑ The easiest measures to monitor are at the Input and
Outcomes level, which covers tasks, schedule, costs, and
progress made
❑ However, those that are the most
important.
❑Those ascending towards Outcomes, Purpose,
and Goal—are progressively more difficult.
❑ Purpose- and Goal-level Measures
should be jointly developed and agreed
upon by key stakeholders.
❑Outcome measures are the project
team’s responsibility to set.
 Other Variations and Combinations
❑ The list below illustrates possible variations on the two major
types described in previous slides.
❑ Single-point events: Complete ISO certification; Achieve breakeven
point.
❑ Time period targets: Achieve X results between Jan. 1 and March 31
❑ Range of results: Achieve minimum level of X, a target of 1.5X, and
stretch target of 2.5X.
❑ Performance targets: Reduce errors in code to less than X.
❑ Minimum acceptable: Reduce customer churn by at least 15 percent.
❑ Maximum acceptable: Customer complaints not more than 2 percent.
❑ Current Indicators: Hotel occupancy rate.
❑ Leading Indicators: Future hotel room reservations
❑ Lagging Indicators: Three-month trailing average
❑ Proxy or substitute Indicators: Count relative plant population by pollen
count
❑ Compound Measures: Airline revenue per passenger seat-mile
❑ Make vague indicators clear by adding targets, as shown in
Figure 7.2.

FIGURE 7.2 Make Measures Clear by Adding Targets

 Determine How to Verify
❑ The third LogFrame column, Means of Verification,
identifies the source of data or other means to
efficiently monitor and verify the status of each
Measure.
❑ Here are some examples:
❑ Direct observation
❑ Instrument reading or test results
❑ Decision meetings (budget approval)
❑ Financial reports
❑ Net promoter scores
❑ Industry financial comparisons
❑ Employee/Management meetings
❑ Industry surveys
❑ Additional verification methods include:
the results of any measurement or analytical tools used, such
as mathematics, statistics, and computer software.
❑ Do not rely only on reports and other system-generated
information to keep your finger on the project pulse. Reach
beyond databases, computers, and formal status reports, and
tap into the informal network.
❑ Sometimes an informal conversation yields better insights
than the most recent reports.
❑ Measurement has a cost in time, energy, and resources. So,
first:
❑ look to already existing and easy-to-use methods, and then
supplement these as needed.
❑ Sometimes ideal information is too impractical, too complex, or too
expensive.
❑ Make sure the cost of identifying and monitoring does not exceed
the value of the information.
❑ The Verification column forces you to consider
and concisely summarize how status information
will be generated, tracked, analyzed, reported,
and utilized:
❑ Who needs what information and why?
❑ What specific measures provide what is needed?
❑ How timely and accurate must the information be?
❑ What format should it be in?
❑ What’s the best way to get and share it?
 Measures Help You Choose Among Alternative Approaches

❑ In Chapter 3, we introduced an Objectives Tree for customer

service improvement.
❑ Recall we were comparing three different paths and the team
chose to eliminate one option, leaving two third-level Objectives
to evaluate further (resolve issues faster, and speed up customer
learning) We pick up the story at this point.
❑ We can expand these two remaining third-level Objectives down
another level, as shown in Figure 7.3.
FIGURE 7.3 Objectives Tree for Improving Customer Service
❑ This offers a better picture of how each of the two
remaining third-level Objectives could be achieved.
❑ You may decide one or both are necessary to achieve
our second-level Objective of improved customer
satisfaction and choose to build a project around them.
❑ We have a choice to either include both of our third-
level Objectives in a single LogFrame or to divide it
into two Log-Frames
❑ one project for each third-level Objective. To keep the logic
intact, if we divide it, each third-level Objective
becomes an Assumption in the other’s LogFrame.
❑ For this example, we will choose to leave it all as
one project and copy the Objectives to the left
column of a LogFrame, shown in Figure 7.4.
❑ Then we populate the remaining cells by
addressing the other Critical Strategic Questions.
❑ The resulting summary document paints a clear
picture of the project strategy on a single page.
 Special Types of Indicators
❑ Two types of indicators can be particularly useful, if
you know how to use them correctly: leading and proxy.
❑ Leading Indicators play an important predictive role.
❑ Have you identified leading indicators? Can you obtain early
evidence that the business case is or will be fulfilled?
❑ Learn to spot trouble before it strikes, and decide how to
prevent it!
❑ Action leads; results follow.
❑ Those learning-by-doing or agile efforts that involve frequent
adjustments benefit highly from leading indicators and ongoing
modification in order to redirect the strategy as needed during
the project journey.
 Special Types of Indicators
❑ Proxy Indicators (substitute) that closely correlates
with the item of interest.
❑ While proxies are never as accurate, they are often the
best you can do.
❑ What proxies might you use for hard-to-measure
dimensions of your project?
❑ How will you know that people are engaged and
committed?
❑ How about team effectiveness? Relations with:
– sponsors?
– Stakeholder support?
 Apply Step #2
❑ To move forward, you need to build on your
established objectives.
1. Review the Objectives you completed in Applying
Step #1. Make sure you have clear statements and
valid If-Then logic connecting Goal, Purpose, and
Outcomes.
2. Beginning with Purpose, develop clear Measures
using Quality, Quantity, and Time (QQT) as
appropriate (and perhaps include customer and cost).
Describe each Measure with complete sentences,
phrases, or bullet points. As you set Measures, choose
the most cost-effective Means of Verification.
3. Make sure each Measure includes indicators
and targets.
4. Set them aside for a few days, then take a fresh
look. Invite input from others. Continue to
improve your Measures, and do not prematurely
freeze them.
5. In addition, identify a few indicators that
concern the performance of your project team
and management process. These process gears
need to turn easily and mesh smoothly to
maintain high performance.