An oldie but a goody! As we wind through summer vacations, staff members out of the office and competing priorities, we’re re-sharing a great blog post from last summer on how to manage the manager.
Project priorities are frequently decided by emotionally charged managers who scream, politic, and subvert in order to push their agenda forward.
This kind of “Management by Screaming the Loudest” demoralizes the workforce and buries the RIGHT projects that can better satisfy customers, lower costs, and transform your business.
Here are our favorite ways to end the shrieking in your organization and replace it with a process that will allow your best ideas to come to fruition.
Step 1) Set up a Business Value Assessment (BVA) Scorecard
Performing a business value assessment (BVA) sounds like a daunting task (designed to sell management consulting engagements).
In practice it is simply a way to assign a business value score to every project so you can compare the risks and rewards of dissimilar projects. Projects with a higher score have a higher strategic value to risk profile than projects with a lower BVA. This allows you quantitative input to prioritizing that is kryptonite to the squeaky wheels disguised as managers that typically scream their projects to the front of the queue.
The key to an effective Business Value Assessment (BVA) is:
- Build the criteria
- Assign weight to each criteria
- Set available options for each criteria and how many points it is worth
- Test against past projects to validate
Organizations that religiously apply this technique become energized, focused, and more efficient (and a lot more quiet).
#1) Figure out the criteria that goes into your BVA
The business value assessment needs to be independent of the project type and should represent the types of risks and rewards every project can be based on. The criteria will become part of a scorecard that can quickly be filled out and quantified for any project. The empirical value can then be compared with the values of other projects, regardless of project type, so that better priorities can be set.
You will need to facilitate the criteria with representatives of all major departments for the best results. At this point try to settle on the top 10 criteria and make sure they are mutually exclusive.
As an example, let’s assume your company has determined the following top seven criteria for assessing a project:
- Financial Impacts (cost reduction or revenue net present value)
- Customer Impact (how customers are impacted positively or negatively)
- Supply Chain Impact (how the supply chain will be affected)
- Regulatory Impact (regulatory consequences)
- Magnitude Impact (the overall scope of the effort)
- Dependency Impact (the impact on operations or other projects)
- Occurrence Impact (how often does the problem or opportunity occur)
The list passes the test of being independent of project type and the criteria have no overlap. You are ready for the next step . . .
#2) Determine the highest value and relative weight of each criteria in your BVA:
The next task at hand is to determine a scale value for your assessment. The overall value (0-5, 0-10, 0-100) will relate back to how many answers users will have when assessing a criteria. So if you have a lot of answer possibilities for each criteria, you will need a larger scale value.
The next part is a bit more subjective to your organization. You will want to set the weight of each criteria to the whole (from 1% to 99%). The sum of all the weightings much equal 100% for the scorecard to function.
Lets take a look at our example again. The company decided they would have five possible questions per criteria so they settled on a scale value of 0-5. They then set-up to rank and weigh the criteria in the following way:
- Financial Impacts (20% Weight)
- Customer Impact (20% Weight)
- Supply Chain Impact (10% Weight)
- Regulatory Impact (20% Weight)
- Magnitude Impact (20% Weight)
- Dependency Impact (5% Weight)
- Occurrence Impact (5% Weight)
Which adds up to a total of 100% of the assessment so we are ready to move on to setting up the actual assessment values for each criteria.
#3) Set Available Values for Each Criteria
We know our scale value, criteria, and the weighting for our BVA. Now we just need to give users various options for each criteria and determine how many points (from zero to your scale value) correspond with each answer.
Let’s look at our example again, focusing on regulatory impact. The company decided upon the following acceptable answers (and how much each answer would contribute to the score for that criteria
- 0 – No Impact Known
- 1 – Low Impact
- 2 – Local Media Exposure / Civil Legal Action
- 3 – Legislative Impact
- 4 – Regional Media Exposure / Criminal Investigation
- 5 – National Media Exposure / Criminal Penalties
People scoring their projects must pick only one answer and the value of the answer is then multiplied by the weight (in this case 20%) so you have a maximum of 5 points X 20% = 1 BVA for this one question alone. You can continue to sum the contributions of all the answers to achieve an overall BVA of 0 (minimum) to 5 (maximum for our example).
Note: It is a great idea to capture justification notes with each selection so as you audit, review, and eventually prioritize projects you can better understand (or challenge) why certain scores were selected for certain projects.
Now that you understand the value of scorecards to set the BVA of a project you can use this technique to score other qualitative measures (like post project assessments and incoming ideas). Here is a screen shot of a Business Value Assessment (BVA) built into the WorkOtter resource, project, and portfolio management solution. You can see how the system sets up BVA for you and tracks all scores in the database. Good luck with your scorecards and use the comments below to share your criteria and lessons learned!