Real leadership is like a value pot that draws people to continuously deposit their bits of value, knowing that they will not be disappointed should they decide to use the contents of the pot.
Projects are inherently value-driving initiatives. The value delivered by the project has multiple contexts and can take many forms. Value can be the uniqueness of a product or service, or the earning potential to be generated by the project’s output, benefits to the users, and society at large. Not only is defining value and the beneficiaries of value important, but it is also important to have clarity or at least some understanding of how the value created by a project’s output will be measured. Hence, a whole gamut of variables needs to be considered to understand a project’s value proposition.
That raises the question: how do we capture all these variables in a simple manner so that the project team can use them easily without requiring some sort of intensive training? Moreover, it should be useful for projects of all sizes and types delivered in any industry or business segment. That means it should be something generic that has a wider potential of usefulness regardless of the type or context of project.
As they say, a picture speaks a thousand words, so perhaps a diagrammatic presentation could be useful. Rather than reinventing the wheel in this regard, it is worthwhile to use what is already available and refine it for the project management context. With that in mind, the “business model canvas” and “opportunity canvas” concepts seem to be very useful anchors to draw upon to build something similar in a project management context. We call it a “project value board.”
For clarity, we define a project value board (PVB) as a succinct graphical representation of variables that drive the creation and measurement of value in a project’s output. A PVB should provide a bird’s eye view of all variables in a simple and easy-to-use manner for the project team’s use.
Now the question is, what should a PVB look like? What variables should it include? Fortunately, “business model canvas” and “opportunity canvas” provide various potential variables that could help form the make-up of a PVB. Therefore, drawing upon the two canvases, we propose a construction of PVB and explain the variables that have the potential to make up a robust PVB. Not to mention, the proposed construction is preliminary in nature and by no means a final version of PVB. But hopefully, it will provide some food for thought for further exploration of the PVB concept in totality.
Proposed make-up of Project value board
A business model canvas succinctly shows how a business creates value, what would be the value proposition and value beneficiaries, while also looking at cost structure and revenue stream. An opportunity canvas holistically provides an understanding of the opportunity while showing the problem that led to the opportunity and business challenges etc. To construct PVB, we borrow a number of items from these two canvases that could potentially help in understanding project value more effectively. We will discuss these variables as follows:
- Project value proposition
A project’s value proposition is the total value delivered by the project to all relevant stakeholders. These can be clients (s) of the project; customers or users who will consume or use the project’s output; suppliers; and other actors or stakeholders who will become part of the process to perpetuate the existence of the project’s output. The project team can adopt the questions from the business model canvas and opportunity canvas to assess and determine the project value proposition. The indicative questions are:
- What value will the project’s output deliver to the client, customer, or user?
- Which one of the customers’ or users’ problems is being solved by the project’s output?
- What customer needs will the project’s output satisfy?
Drawing upon the info in the business model canvas, the project’s value proposition could be delivered through new or innovative design, new or innovative process, reduced costs, reduced risks, improved quality, improved performance in the client organization, improved product/service performance, enhanced usability of product/service created by the project.
It is important to recognize that value is what is considered important. As such, it will vary based on client needs and various other factors. So, the project team should be ready to start with a fuzzy assessment of value and work through PVB to build a solid understanding of the value proposition.
- Key project activities
Project team members need to identify and define activities that are regarded as critical or important to the client organization. For PVB, we will use some additional thinking to also identify project activities that will help create the value proposition. Drawing upon the business model canvas, some of the indictive questions the project team could ask:
- What are the activities (e.g., design, prototype development, requirements understanding, risk mitigation) that will help create and deliver the value proposition of the project?
- What key activities does the project’s value proposition require? Is it customer relationship management? Sales? Marketing? Research and development? Production? Operations?
- Key project resources
Key project resources are the inputs and assets that the project will use to create the value proposition. Drawing upon the conceptualization of business model canvas, these could be physical (e.g., facilities), intellectual (patents, copyrights, data), human (e.g., project staff), technological, and financial.
In addition to the above-mentioned resources, the professionalism and tacit knowledge of project teams should also be considered, as often these are the defining factors that either help or hinder value creation.
- Main challenges
As part of PVB development, the project team needs to take into account the potential challenges that they will face in creating value. Generally, in project management, teams identify risks and analyze their impacts. But, PVB is focused on value, so here the focus should be on considering and identifying challenges that could derail the creation of a value proposition.
Further drawing upon the opportunity canvas, the development of PVB should also include consideration of challenges that affect successful operations of a client or successful use of the project’s output by end users or customers. It will help understand the impacts if identified challenges are not resolved by the project’s output, ultimately contributing to the achievement of the project’s value proposition.
- Business benefits and metrics
Drawing upon the opportunity canvas, the project team should also consider the benefits delivered by the project’s value proposition to the client. These could include items from cost-benefit analysis done in project management, such as cost reduction, cost avoidance, resource optimization, enhancement of quality, etc.
Furthermore, the metrics that will be used to measure the realization of benefits. These could be increases in profits or revenues for the client. It could be customer satisfaction or perception of usefulness from a customer or end-user perspective. So, identifying the appropriate metrics will help in linking the actions and results of developing PVB.
- User/Customer benefits
The analysis and identification of customer or end-user benefits is another element of PVB. The project team should consider what the customer problems are that they are trying to solve to understand the benefits that the customers will realize. Is it about a new product or service that is designed to solve some nagging customer problem? Is it the addition of some features that will help improve the customer experience? Or is it about cost reduction and delivering intrinsic joy to the customer?
Customer benefits must be identified and integrated into the overall value proposition description while creating PVB, depending on the customer problem(s).
Projects are in the value creation business. Hence, understanding the value proposition is the key that unlocks realizing the benefits of establishing projects. However, in hindsight, there is a lack of a simplified mechanism to consider various factors that help in understanding the project’s value proposition.
With that in mind, drawing upon the “business model canvas” and the “opportunity canvas,” this article presents a concept of a project value board. The aim is to bring together factors in a simple diagram that enables people to quickly see and understand the link among various factors for delivering project value. Given the simplicity of the PVB structure, it is expected that the concept will help project teams of all sizes across all industries, from simple to complex projects and projects that are delivered in any business environment
Note: This article was previously published on: www.academiasolution.com