Project Management Fundamentals - What Makes a Project Successful - The Diamond Approach to Successful Growth and Innovation

What Makes a Project Successful

Success: Multiple Dimensions, Multiple Viewpoints

We see project success as a multidimensional, strategic concept. Every project needs more than one dimension for assessing success, and those dimensions vary in importance and significance, depending on the project.

Measuring organizational effectiveness on different dimensions is not new. It has evolved in recent years at the corporate level, as companies have realized that assessment based on traditional financial and accounting measures is not enough. Kaplan and Norton developed the corporate Balanced Scorecard concept to address these issues. It includes four major dimensions: financial measures, customer-related measures, internal measures, and innovation and learning measures. Typically, organizations choose fifteen to twenty submeasures that reflect their specific needs and environments. Other studies have suggested adding yet another dimension, for a total of five: financial, market related, process quality, people development, and preparing for the future.

But how does all this apply to projects and their success? Clearly, any collection of measures should address more than one need and should represent the concerns of more than one stakeholder group. But above all, success measures must reflect the strategic intent of the company and its business objectives, for three reasons. First, if a project does not serve the organization, why do it at all? Second, it should encompass success at different times: what may
seem well done in the short run may end later in disappointment, and short-term setbacks may turn into long-term rewards. Project success should therefore be observed with different time frames in mind. Finally, success measures should reflect the interests of various stakeholders who will be affected by the project’s outcome.


The Five Main Dimensions of Project Success
Based on research study, they suggest that a comprehensive assessment of project success in the short and the long term can be defined by five basic groups of measures:
 Project efficiency
 Impact on the customer
 Impact on the team
 Business and direct success
 Preparation for the future

Other dimensions may also be relevant, but these groups represent a wide spectrum of project situations and cover a great majority of cases and time horizons. Each dimension includes several possible submeasures, as listed in figure 2-1.

Figure 2-1: Specific success measures


The first dimension, project efficiency (or meeting planned goals), represents a short-term measure: whether the project has been completed according to plan. Was it finished on time? Was its spending within the budget? As we mentioned, meeting resource constraints probably indicates a wellmanaged, efficient project, but it may not guarantee that the project will ultimately succeed and will benefit the organization in the long term. However, with increased
competition and shorter product life cycles, time to market may be a critical competitive component that cannot be ignored.

The second dimension, impact on the customer, represents the major stakeholder whose perception is critical to the assessment of project success. This dimension should clearly state how the project’s result improved the customer’s life or business and how it addressed the customer’s needs. For example, if the customer is a service provider, success in this dimension might be defined as follows: “The product will enable the customer to cut in half the response
time to its own customers, and reduce errors by 60 percent.”

The third dimension, impact on the team, reflects how the project affects the team and its members. Good project leaders energize and inspire their team members and make the project a memorable, exciting experience. Other projects may be remembered as demanding and exhausting experiences. This dimension assesses the cumulative impact: team satisfaction, morale, the overall loyalty of the team to the organization, and the retention of team members after the project is completed. But this dimension also assesses the indirect investment the organization has made in team members. It measures the extent of team learning and team growth and of team members’ newly acquired skills and new professional and managerial capabilities.

The fourth dimension, business and direct success, reflects the direct and immediate impact the project has on the parent organization. In the business context, it should assess sales levels, income, and profits, as well as cash flow and other financial measures. In short, this dimension should relate to the project’s commercial success and answer one simple question: did it help build the bottom line?
In many cases, this dimension is represented by a typical business plan that outlines future expected sales, growth, and profits from the resulting product. In other cases, this dimension may involve an investment benefit analysis plan, which ties the investment to expected returns. However, this dimension might also include business-related measures for internal projects not aimed at new products for external markets, such as reengineering projects for restructuring business work flows. In such cases, this dimension often includes measures of costs saved, improved production time, cycle time, yield, and quality of process.
This dimension may also apply to nonprofit organizations. For example, when a charity foundation initiates a project to improve its services, shorten its processes, and serve more customers more cost-effectively, assessing the success of such an improvement project should include measures designed to reveal the direct impact of the project on benefits to the public.

The final dimension, preparation for the future, addresses the long range benefits of the project. It reflects how well the project helps the organization prepare its infrastructure for the future and how it creates new opportunities. Future infrastructure may include new organizational processes and additional technological and organizational competencies. Typical measures might include creating a new market, creating a new product line, or developing a
new technology.

Key Points and Action Items
 Project success cannot be judged by the triple constraint alone. Time, budget, and performance are short-term dimensions that do not reflect longer -term success. Project success is a multidimensional, strategic concept that should consider both the short- and long-term success of the project and its product. It should focus on business success as well as the efficiency with which the project is run, and it should consider different stakeholders’ points of view.
 Five dimensions are typically sufficient to plan and assess project success: efficiency, impact on the customer, impact on the team, business and direct success, and preparation for the future. Each of these dimensions is then reflected in detailed measures for each project. Additional dimensions may be needed in specific cases.
 Different projects have different success measures. These measures depend on the point of view, the time frame, the project uncertainty, and other variables. The relative importance of success dimensions depends on the time of the observation and the type of the project.
 Success dimensions are determined as part of the project plan and should drive project execution. They should be defined together with possible failure criteria for “what can go wrong.” It is the responsibility of the project manager and team to make sure that a project is executed so that it meets all the success dimensions.
 Success dimensions may also change during the project’s life cycle, as new information is gathered and as the environment changes.
 Executives should implement a system in which all projects, as a first step, define the relevant success dimensions in the project plan. Project reviews should include progress reviews along all success dimensions and, if needed, approve changes in success measures.
 Your organization’s culture should reward project managers and teams for more than meeting time and budget goals. Give greater responsibility to project managers, and make sure that they are rewarded when the product performs well in the market and when customers are really happy with the outcome.


For more Information:
Project Management Resources
Enterprise Programme Management, Achieve PMP Exam Success PMBOK® Guide, Global Project Management Handbook, Program Management, Portfolio Management

Project Management Fundamentals - What Makes a Project Successful - The Diamond Approach to Successful Growth and Innovation