Consistently Doing the Right Projects and Doing Them Right – What Metrics
Do You Need?
T. J. Cooke-Davies
Human Systems International Limited, United Kingdom.
University of Technology, Sydney
University College, London
Abstract
Few topics are more central to the art and science of managing projects than “project success”. It would seem
to be self-evident that every person involved in the management of a project will be striving to make it
successful. In the world of the twenty-first century “success”, like its close relative “winning”, seems to be
an unquestioned “good”. So surely there can be nothing too difficult about measuring project success?
Unfortunately, behind this rather obvious-sounding question, there lies a seething mass of complex
assumptions and inter-related concepts that have led one author almost despairingly to ask, “Measuring
success – can it really be done, and if carried out, what purpose does it serve?” Difficulties abound for many
reasons: the different viewpoints, interests and expectations of groups of stakeholders involved in any given
project; the subjective nature of perceptions of “success”; the tendency of perceptions to evolve over
extended periods of time; the difficulty of assessing complex phenomena using simple metrics – the list is a
lengthy one. On closer examination, project “success” turns out to be a rather slippery subject!
And yet the need remains. Every project is undertaken to accomplish some purpose, and it is both natural and
right to seek to assess the extent to which that purpose has been achieved. Equally, if the art and science of
project management is to advance, then practices that lead to success are to be encouraged over those that
lead to failure. Indeed, these two aspects of the need to understand project success each lead to a different
aspect of the topic that will be covered more fully in this paper. Success criteria are the measures against
which the success or failure of a project will be judged, and success factors are those inputs to the
management system that lead directly to the success of the project. Each is important, but the two should not
be confused.
Projects in organizations come in all shapes and sizes, and yet the performance of each of them must be
monitored, and decisions must be taken both inside and outside of the project in the light of changing
circumstances. New research among thirty leading organizations in Europe, USA and Australia suggests that
there is much dissatisfaction with the metrics they use to monitor the health of projects at corporate, portfolio
and project levels. Organizations taking part are drawn from varied industries and markets, including
Aerospace and Defence, Pharmaceutical R&D, Financial Services, Automobiles, Government, Electronics,
Information Systems, Retail, Energy and Transport.
The presentation will review both the “State of Knowledge” about success criteria and success factors, and
the “State of the Art” in terms of hierarchies of metrics in order to answer such questions as, “What metrics
does an organization need?”, and, “How can it know which are the right projects, and whether they are being
done right?”
Introduction:
Corporate strategy is implemented through projects, so if organizations want to improve the execution of
their strategy, they need to improve the success of their projects. To do this, they need to improve their
corporate project management capability, of which metrics are an essential component. This paper will
provide a research-based answer to the question, “What are the characteristics of a suite of project
management metrics that is capable of supporting an organization’s efforts to improve project success?” But
before answering that question, there is some ground to be cleared in preparation by reviewing first the
connection between corporate strategy and project success, and then by examining the role that project
management metrics currently play and some commonly-encountered problems.
Strategy, projects and project success.
In today’s turbulent times, it seems as if every organization holds on to some form of “strategic intent” as a
compass to guide it through the rough waters. This may be a collective intention arrived at through a
deliberate process of analysis and dialogue that is then formally written down in an “or ganizational strategy”
document or it may represent the emergent characteristics of the combined actions of the whole organization
expressed as a purpose or a series of goals. But just as an individual person seems to need a meaning in
order to make sense of his or her life (Frankl, 1959) , so an organization seems to need a strategic intent in
order to survive in a turbulent business environment. (de Geus, 1997)
The strategic intent, of course, varies from organization to organization, but it will always encompass two
kinds of goals: improvement of the current products or services and the processes and technologies for
delivering them; and innovation and introduction of new products or services, processes or technologies.
(Anbari, 2003). Regardless of industry or market sector, each of these two kinds of goals requires projects to
be established, executed and completed so, in a very real sense, projects can be considered as an integral part
of “strategy in action”, and the successful implementation of every strategy can be said to depend to a greater
or lesser extent on the successful completion of projects.
Unfortunately, at this point in the argument, it all becomes rather more problematical! Behind the discussion
of project success lies a seething mass of complex assumptions and inter-related concepts that have led one
author almost despairingly to ask, “Measuring success – can it really be done, and if carried out, what
purpose does it serve?” (De Wit, 1988). Difficulties abound for many reasons: the different viewpoints,
interests and expectations of groups of stakeholders involved in any given project; the subjective nature of
perceptions of “success”; the tendency of perceptions to evolve over extended periods of time; the difficulty
of assessing complex phenomena using simple metrics – the list is a lengthy one. On closer examination,
project “success” turns out to be a rather slippery subject!
And just as an exact definition of what constitutes project “success” eludes us, so the results achieved by
projects continue to disappoint those associated with their sponsorship, execution or implementation (Morris
and Hough, 1987; O'Connor and Reinsborough, 1992; KPMG, 1997; Cooke-Davies, 2001).
It has been argued elsewhere that one way through the maze of discussions about project success is to
consider the answers to three separate questions: “What factors lead to project management success?” “What
factors lead to a successful project?”, and “What factors lead to consistently successful projects?” (CookeDavies, 2002 p185). But the focus of that article is success factors, those inputs to the management system
that lead directly to the success of the project. These should not be confused with success criteria, which are
the measures against which the success or failure of a project will be judged. Since this paper proposes
answers to a question about “metrics” (the science of measuring), the focus will be rather more on success
criteria than on success factors, but it is necessary to spell out the distinctive characteristics of the criteria
that are normally used to assess the success of projects at each of the three levels.
Level 1. Project management success – was the project done right?
This is the measure of success that has dominated the practitioner-oriented literature on project management.
In the folklore of the project manager it is about managing time, cost and quality. In reality, project
objectives are rarely this simple. There will often be a business case to be born in mind or a gross profit to
be made; there may be health, safety and environmental objectives to be accomplished; if the project is a
technical one, or a “platform” new product development, there could be scientific or technical goals to reach.
Nevertheless, the principle is simple: once the objectives of a project have been clearly defined and the
constraints spelled out, then the project manager and her or his team can use their best endeavours to deliver
the project so that it meets the objectives within the constraints. If anything changes, which is likely given
the inherent uncertainty that is involved in any new endeavour, then techniques such as project risk
management and project change control can be called into play as appropriate. As a guided missile seeks its
target, adjusting its trajectory as appropriate along the way, so the project team seeks to achieve the project
objectives. Is this then an appropriate level at which to measure the success of a project? There are three
different kinds of arguments that suggest that it is.
Firstly, modern project management has developed from a base of managing relatively “discrete” projects,
each with its own organization, and each established to accomplish specific purposes (Morris, 1994). The
kind of success criteria that are broadly used as measures of “project management success” have not only
been those most commonly applied in the history of project management (Project Management Institute,
2000), but they also allow the project team as a coherent organizational unit to be accountable for its own
performance and the practice of aligning accountability with authority is one of the well-attested principles
of good management practice.
Secondly, the underlying concept behind measuring success at this level is based on the well-understood
principles of first-order cybernetics (Schwaninger, 1997) in much the same way that a thermostat or a guided
missile operate. This is clearly appropriate for projects in which both the goals and the methods of achieving
them are relatively clear at the outset (Turner and Cochrane, 1993). Thirdly, the capture of data about the
extent to which projects within the same enterprise are successful in terms of project management success
enables the enterprise to compare and contrast the practices that are generally associated with successful
projects with those associated with unsuccessful ones. This in turn provides the enterprise with valuable
information about which project management practices are in need of improvement within project teams.
These are convincing arguments that support the case for continuing to measure project management success
for many projects in many organizations. It is far from being the whole story, however, and for the second
level of success it is necessary to turn to the second of De Wit’s levels – what he calls “project success”
(1988).
Level 2. Project success – was the right project done?
This level of project success is perhaps the one that is of most interest to the “owner” or “sponsor” of the
project. It is about “value for money” in its broadest sense. The assumption is that the project will be
successful only if it is successfully operated, and delivers the benefits that were envisaged by the people and
organizations (i.e. the stakeholders) that agreed to undertake the project in the first place. An analysis of six
recent project management “bodies of knowledge” identified sixty core elements that are central to the way a
project manager thinks about his or her work (Cooke-Davies, 2001). When these are clustered into eleven
topic areas, and related to each other through a “systemigram”, it becomes clear that “anticipated benefits”
become the touchstone not only for formal “stage gate” reviews of projects, but also for the continuous
“informal assessment” of the likely success of projects carried out by owners, sponsors or senior
management, and influencing decisions about priorities and resource allocation.
Comparison of the eleven topic areas with previously published research about project success reveals a
silence about “benefits,” perhaps because little has been written about benefits management or benefits
realization until recently, and perhaps because the subject of “benefits” has been subsumed in the general
discussion about “project purpose” or “project goals.” Nevertheless, there are three reasons why this is an
appropriate level at which to measure the success of a project separately from the first level that was
discussed, project management success.
The strategic
environment for
projects.
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Corporate
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Processes and decisions
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int o programmes and
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t he pr oduct s.
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Figure 1: The involvement of both project management and operations management in the
achievement of “project success”
Firstly, as Figure 1 shows, benefits are not delivered or realized by the project manager and project team,
they require the actions of operations management. This calls for a close co-operation between the project
team on the one hand and the “sponsor,” “customer” and/or “user(s)” on the other. Thus the discussion of
project success involves dialogue with a wider cross-section of the organization than is appropriate or
necessary for proje ct management success. Secondly, delivering project success is necessarily more difficult
than delivering project management success, because it inevitably involves “second order control” (both
goals and methods liable to change) and thus brings into play an additional set of corporate processes to
those that are involved in delivering project management success. And thirdly, the extent of project success
is unlikely to become clear during the life of the project itself, whether success is measured quantitatively in
terms of financial benefits or qualitatively in some less tangible form. For these three reasons, project
success is itself a viable level at which to establish success criteria.
It is not being suggested here that project success is somehow a “better” level at which to establish success
criteria. Both project success and project management success are important to any project. If a project
achieves project success without project management success, there is the inevitable conclusion that even
greater benefits could have been realized. On the other hand, if project management success is achieved
without project success, then the owner or sponsor has failed to obtain the benefits that the project was
designed to provide. And that brings us to the third level of success.
Level 3. Consistent project success – Were the right projects done right, time after time?
As the focus moves from project management success, through project success to consistent project success,
a completely new set of criteria come into play, as adjudged by different groups of stakeholders. Projects are
the means by which all organizations accomplish business change, as well as the means by which some
organizations deliver profits to their shareholders. The consistency with which projects accomplish both
project success and project management success is thus a matter of interest to every organization that is
competing in markets for scarce resources, such as customers or finance.
At this level, a discussion of the criteria by which consistent project success is achieved is one that embraces
the whole organization, and that will inevitably be influenced by its chosen market and strategic intent. For
operations-driven organizations (such as financial services companies, or mass manufacturers) consistent
project success in such areas as effective overall IT expenditure and new product development can lead to
competitive advantage. For project-based organizations (such as engineering contractors, defense suppliers
or turnkey IT systems providers), consistent project success can lead to profitable expansion. In either case,
as the proportion of total work that is carried out in the form of projects increases, so consistent project
success assumes an increasing strategic significance.
In recent years there has been a growing interest in project portfolio management for new product
development (e.g. Cooper et al., 2001) , specifically for R&D (e.g. Matheson and Matheson, 1998) or
generally for project spend in organizations (e.g. Artto et al., 2001). But many organizations, particularly in
traditional project-based industries, do not adopt a portfolio approach. For such organizations, as for all
others, the effective and efficient use of scarce resources (particularly, but not only, people and money)
remain of paramount importance. Thomas and Jugdev (2002) in their award-winning article on project
management maturity models emphasize that long-range competitive advantage is enjoyed by those
organizations that make the best use of their strategic assets (i.e. resources) which adds further weight to the
claim that productivity of key resources is an important criterion at this third level.
Project metrics: their role and some commonly encountered problems.
One practical implication of this discussion of three different levels of success criteria is that an organization
would do well to monitor its performance using a “suite” of project metrics that incorporates all three levels
of success, if it is serious about understanding and improving its success in the field of projects. As figure 2
shows, each of the different levels of success is of interest to different levels of the corporate hierarchy, and
each is visible after different amounts of time have elapsed relative to the project duration. No significant
studies have as yet been published about the nature and extent of project metrics that are in general use,
although Atkinson (1999) and Lim and Mohamed (1999) each argue that the need for multi-layered project
success criteria is intimately linked to the need for more comprehensive metrics. Unpublished research
within the Human Systems Network, however, supports this view and further indicates that few
organizations are happy with the metrics that they use. Two phases of this research will inform the
conclusions reached in this paper.
Metrics lie at the heart of management information systems, and it is no different for projects. Accepted
wisdom about measurement can be summed up in the phrase, “If you want it, measure it. If you can’t
measure it, forget it.” (Belasco and Stayer, 1993, p216). The clear implication is that the primary function of
information systems and metrics is to assist in control. The current fashion for “dashboards” makes this
explicit. “While driving a car, it makes good sense to pay close attention to what you are doing, looking at
the road ahead and checking who is on either side of you and who is visible in the rearview mirror. A good
driver will glance at the dashboard of the car as they proceed. This dashboard holds the essential information
needed to drive the car, the speedometer, the oil pressure gauge, the gas gauge, and a few others.” (Eckes,
2001, p21).
Level of Hierarchy
Required to give
Commitment.
Consistent Project Success.
(Were the right projects
done right, time after time?)
Project Success –
Was the right project done?
Project Management Success –
Was the project done right?
Time elapsed before measurement is
possible.
Figure 2: Measurement of project success. Organizational commitment and time elapsed.
The primary uses to which organizations put project management metrics are to establish a baseline for
control purposes and to predict future costs (Egberding and Cooke-Davies, 2001). The least often used
purposes are to assess corporate capability and to identify opportunities for improvement. These findings are
entirely consistent with Eckes’ analogy of metric s being used the way that a driver of a car uses the
dashboard.
When looking at metrics in a little more detail, it is clear that organizations keep many different types:
financials, time, quality, technical performance, resources used and available, project benefits, human factors
and composites (dashboards, traffic lights etc.) (Egberding and Cooke-Davies, 2002). Indeed, there is much
“good practic e” around where metrics are concerned, although only one organization (a U.S.A.-based
defense contractor) was able to lay claim to “best practice” in each of the four areas that will be described
below.
Alongside these pockets of good practice, however, there is also considerable dissatisfaction with the
metrics, especially from the financial community who tend to distrust the accuracy and objectivity of many
of metrics produced from within the project management function. Composite metrics (such as “traffic
light” indicators), while much liked by senior management, are also distrusted for their subjectivity and
openness to bias. Where metrics are kept of “benefits management” they evoke almost universal
dissatisfaction. There appears to me much room for improvement.
Both the good practices and the causes of dissatisfaction are drawn upon in the section of this paper that
describes the characteristics of a “best practice” suite of project management metrics, but before coming to
that there is one more fundamental observation to be made.
In an interesting paper delivered here in Australia, Thomas and Tjåder (2000) pointed out that “control” and
“learning” assume two very different paradigms. As we have already seen, control is a feature of mechanical
systems that are actively steered by an external “driver”. Learning, on the other hand is a feature of higher
organisms and is, moreover, an activity that is of necessity self-directed from within the organism. These
two paradigms coexist uneasily together, and all of the evidence available to me suggests that in the thinking
of management it is the “control” agenda that dominates. Organizations are even less satisfied with their
ability to transfer lessons learned from one project to others than they are with their suites of project
management metrics!
A discussion of paradigms (indeed of the underlying theories of how human beings work together to
accomplish jointly-held objectives) is not the focus of this paper, and merits a much fuller discussion
elsewhere. It is sufficient to remark at this point that the topic of control versus learning is incorporated into
the third of the four “best practice” characteristics (a culture that encourages effective decision-making) that
are described below.
So, having considered the link between project success and organizational strategy, and reviewed the role
that project management metrics play in project success, it is now possible to turn to the question that this
paper set out to answer, “What are the characteristics of a suite of project management metrics that is capable
of supporting an organization’s efforts to improve project success?”
Characteristics of “best practice” in project management metrics.
The characteristics are grouped together into four clusters. These do not represent four different sets of
actions to be taken, but rather four different aspects of a well-rounded set of organizational “vital signs” that
indicate the health of the project management efforts throughout the organization.
Cluster I: Explicit improvement targets for project success that relate to organizational objectives.
Arising from the primary and secondary research that informed our earlier discussion of the three levels of
project success, three separate characteristics can be identified in this cluster of characteristics.
1
Improvement targets are set for each of the three levels: project management success, project
success and consistent project success. These targets should be explicitly related to current
annual business goals so that the benefits of improvement are directly linked to organizational
strategy.
Table 1: Three levels of project success summarized.
2
Ownership is clearly established for each of the targets at each level, distinguishing clearly
between governance (sponsorship etc.) and management of the project. (Turner and Keegan,
1999).
3
Decision-making follows the principle of “subsidiarity”, with decisions be ing taken at the lowest
level at which the decision-maker is in possession of all sufficient and necessary information.
Aside from published assertions about the importance of “authority” and “empowerment”,
evidence for this is provided by proprietary quantitative evidence showing the correlation
between team empowerment and cycle times in pharmaceutical research and development and
by research into the maturity of project management in different industries (Cooke-Davies and
Arzymanow, 2002).
A detailed review of the literature on project success criteria and success factors allows the material for this
cluster of characteristics to be summarised in Table 1. The information has been derived from a detailed
analysis of 44 published items of research into project management success, most particularly the excellent
tabular summaries in Morris and Hough (1987), Belassi and Tukel (1996) and Crawford (2001, Appendices
C and D)
Cluster II: A comprehensive hierarchy of metrics that provides suitable information for the right
people to make the right decisions.
Aside from improvement targets for each of the three levels of project success, people at different
organizational levels and in different job functions each require different sets of metrics to inform their
decision-making. The second cluster of characteristics describes three different attributes of a well-formed
hierarchy of metrics.
4
Different organizational levels are concerned with different kinds of decisions, and so need
different levels of “roll-up” At a minimum, three levels can be distinguished, corresponding to
the three levels described in characteristics 1 to 3: the top level of the discrete business unit or
enterprise providing governance to the total portfolio of projects and programs within the
business unit; the level of project sponsor or governance team responsible for the business
benefits of a program or project; and the level of the project manager and project management
team.
5
The assessment of multiple projects is qualitatively different from the assessment of a single
project many times over, and so additional analysis is required in addition to the “roll-up”
described in #4. At the top level, the metrics should cover more ground than simply the sum of
the metrics from individual projects and programs within the portfolio. Metrics such as
productivity, attrition, and process maturity are also relevant at this level.
6
Different job functions are interested in different aspects of project success. In addition to
different hierarchical levels (see #4 above), a number of different job functions focus on
different aspects. All job functions are interested in project costs, but finance managers are
especially interested in resource utilization and financial benefits; project support offices are
interested in human factors metrics (e.g. competencies, external certification) and quality
metrics; business unit managers are interested in portfolio metrics; and technical functional
heads are interested in specific metrics indicating the technical performance of the product being
produced by the project. An effective suite of metrics provides each job function with those
metrics that allow them to do their job effectively.
Cluster III: A culture that encourages metrics to be used to improve the quality of decision-making
in the organization.
Metrics are of value only to the extent that they encourage people to make high-quality decisions about
projects, so as to improve the specific aspects of project success for which they have responsibility and
authority. This cluster of characteristics is, in many ways, the most important, since it indicates the health of
the human heart of an organization.
7
Communications lies at the heart of complex organizational responses, and metrics play an
important role in shaping conversations. This is the primary means of reconciling the conflicting
agendas of control and learning. Decisions are made in conversation, and a well-crafted suite of
metrics promotes dialogue that both encourages the right decisions to improve success, and also
that results in the individuals involved in the dialogue learning something of benefit to the
organisation. It is important that metrics are valid and are used to indicate “what is”, rather than
to achieve specific outcomes desired by some parties at the expense of others.
8
Studies have shown that trust matters to project success (Construction Industry Institute, 1993)
and conversations triggered by metrics can either foster or hinder the creation of trust. Thus
metrics should be valued by and visible to all those who contribute to them.
9
The flow of metrics around an organization, coupled with different levels of confidence in the
metrics, means that decision-making can be opaque and project management’s input
undervalued. This can be especially true in two situations: financial data emanating from the
project management function that is at variance with financial data emanating from the financial
function, and estimates (particularly of either time or benefits) that are repeatedly shown to be
optimistic, and can thus continually be challenged.
10
If the control function of metrics is overemphasised at the expense of learning, and coupled with
a tendency to “micromanagement” on the part of governance bodies, there is likely to be a
tendency to distort the metrics that are provided upwards, and thus to fall foul of characteristic
#7 (valid data).
Cluster IV: An infrastructure of processes and systems that collects necessary and useful metrics as
efficiently as possible, and that is continually improved.
This fourth and final cluster of characteristics encompasses the processes and systems that are used as a basis
to provide the whole suite of metrics.
11
Metrics are only as reliable as the processes that produce them. Thus if the process is distrusted,
so will the metrics be. For example, “traffic light” reporting (red, amber, green status) is often
liked by senior management, because it allows the compact visual presentation of extensive
amounts of data in a way that is easily absorbed, but it is distrusted elsewhere because of the
variability of the judgements that influence the chosen colour. One area that is particularly
prone to this difficulty is project planning – both for resource utilization and for forecasts of the
date at which specific milestones will be achieved. The quality of time and resource forecasts is
highly dependent on the quality of the planning process, and the availability of accurate data
from past projects on which estimates can be based.
12
Multiple data flows lead to additional work reconciling information used as the basis of different
metrics. This can be either hindered or helped by ERP systems. The accuracy of project
financial data appears to be improved by the introduction of a well-planned ERP system, but
individual project teams will need both careful training and ongoing support if the data available
to projects for financial decisions is to match the rolled-up data being provided through financial
management.
13
“Best Practice” separates the capture of data (done once) from the production of reports (done as
automatically as possible). This calls for established disciplines, agreed definitions and wellthought-out IT/IS. Ideally, once a keystroke has been captured, it does not need to be re-entered
into any system, but can be stored centrally and the accessed in as many different ways as is
necessary for the production of the entire hierarchy of metrics, not only for projects, but for
operational functions such as payroll and departmental financial and productivity statements.
This raises, of course, questions over the audit and storage of input data.
14
Most organizations have considerable scope for reducing cost and effort in gathering and
reporting metrics. The search for greater efficiency, accuracy and immediacy forms a
continuous activity in the best run project-based businesses.
Concluding comments: the role of metrics in developing project management capability.
An assessment of the suite of project management metrics that an organization uses from the point of view of
the four clusters of characteristics described in this paper performs two functions at the same time. Firstly it
provides a window into the quality of the measurement system that is used by different people to inform the
decisions that they make about projects, and thus to point to areas that can be improved. Secondly, and
perhaps more importantly, these four clusters of characteristics highlight areas of strength and weakness in
an organization’s overall project management capability by indicating the extent to which vital signs can be
monitored and changes responded to.
For both of these reasons every organization that wishes to improve its execution of corporate strategy would
do well to devote some energy to assessing its suite of project management metrics.
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