Projects are an investment. Their purpose may be to implement application software or implement process improvements or to reorganize one or more functions, etc. But in the end, the expectation is that the organization will be better off for having made the investment. That’s precisely the point of any business investment.
If you wanted to evaluate how well a business was doing, you’d probably want to see their Profit and Loss Statements (P&L) as well as their Balance Sheet. Any business that didn’t operate with these, is not going to be taken seriously. I don’t think we’d accept someone telling us, “Oh, we’re doing fine.” We’d insist on the financials. They would tell us how well the business was doing.
Why not do the same thing for our projects world? Why not create a Projects Enterprise that can be managed like a real enterprise?
What financial statements do is much more than give us a method of accounting. They make people accountable over multiple transactions. You may have accountability at the single project level, but do you have it across all projects and across time? Can you demonstrably show that your project management enterprise is, in fact, delivering greater and greater value?
I’d like to propose two Project Enterprise Statements:
The Current, Predicted, and Realized Statement (CPR)
The Balance Sheet
Every project should change the value charge for some stakeholder account. For example, a project may intend to change profit or revenue, both shareholder accounts. Or it may change safety, or employee compensation, or stress, all employee accounts. Each value that is expected to be changed can be seen as an account, just like in business. Every CPR Statement would contain a list of accounts that need to be changed and a list that should remain stable. For each account to be changed, we would provide the following:
Current: The current value, however measured or evaluated.
Projected: The value we are aiming to achieve.
Realized: The value actually captured or achieved.
A CPR would cover before, during, and after the project. It would be a tool for implementing total project memory. No project should start without it. No project is truly complete until we know what has been achieved.
Next week we’ll explore the Balance Sheet.
End of Part I
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