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The Value Case in Dimension Four®

Hi All

#pm_ngt integrates D4 to P2 & PMBoK because on there own none of these three sets of thinking is the answer to the pursuit of benefits.

Within D4 there is a philosophy, procedure and tools set that supports Value Case development and delivery.

By the Business

Philosophy includes a mind-set that the real change managers are the business managers who live with the results and have responsibility to the investor who is accountable for the targets they delegate. The philosophy can be summarised as “By the business, for the business”. It is a reversal of the trend since IT started that outsources delivery of change and leaves the implementation of change orphaned.

REs

D4 ensures targets are set in terms that are visual imagery of a ‘future state of business as usual’.
The fsbau is described as actions and behaviours of the organisation’s staff. These fsbau targets are expressed as binary, dated, assigned & contextualised observations EG “On 1st July the Customer Services Director visits & sees all the members of the support staff engaged with members of the public at the service delivery centre. The conversations held answer the enquirer’s question on the spot.” We call these targets Recognition Events (REs).

Value Drivers

To be of value the activity and behaviours of staff (and equipment) in the fsbau must be aligned to the ‘levers of value’ relevant to the organisation. So we first of all ask the investor, FD, CFO, Financial Controller, Board etc “What drives value for the organisation?” – Answers may be “Easy access to parkland and healthcare” or “Phone answered with a real smile within 3 rings” or “Product despatched within 3hrs of order”, “Development of new drugs”, “Partnership with a like-minded supplier” etc. We call these Value Drivers(VD)

Cross Checking

Each RE is matched to each VD & vice versa to ensure that all REs have purpose and all VDs have supporting action. Sharing the links means that we can all say out loud what the linkage is.

Value Flashpoints

We then make crude best & worst & factored estimate of what value results from the RE’s affect on the VDs over what time-frames. These are dated events in a value stream. We call them Value Flashpoints. Each VF is one or more events that as a minimum include when value would first be truly recorded in the organisation’s results and if relevant how value will evolve over time. Again with dated, testable contextualised tests. Eg “March accounts record cash received from disposal of old premises”, or “July receipts include cash from sales to the public of between $1 and $1,000, September sees and 5 fold increase and January accounts show a steady revenue stream of $10,000 per product line”.

REs strenuously avoid numeric targets – binary only, VFs may be expressed as numeric results but it is delivery of the RE’s behaviours that is ‘success’ and leads to virtuous results. The VF’s numbers are hugely speculative and we are being honest about that – but see below.

New Value = New Behaviours

Note RE & VFs are “of the business” not a project or ‘program’ (NB MSP is 90% smoke & mirrors its 10% of value is what PRINCE2 miss-scoped because of an IT heritage – I’ll post a ‘reasons why together P2 & MSP are 90% overlapping and only 40% of what we really need’ sometime soonish).

REs & VFs are results that requires the business to have cemented behaviours. If there is any IT or plant & premises creation or amendment in here it’s often a small percentage and is over before any benefit can start to flow – The focus on benefits means much focus after what PRINCE calls a project.

Real Risk Management

Having linked VFs to REs, typically in a many-to-many network we apportion the degradation in the value streams from non-delivery of an REs (and enhancement from early delivery etc) – to determine the impact to baseline from threats (and opportunities) in terms that the FD/ CFO/ FC understand for funding of threat management activities (again by the business for the business).

The Value Case is thus a business risk network that values each RE in terms of the aggregate apportioned affect on VFs. The resulting transparency gives Investor’s the means to manage (make decisions) from a position of understanding.

There is More to Discuss

Not mentioned above is that an RE’s dated observation is 1) not open to debate by those without power but is communicated early enough for them to cope with the Shock/ Anger/ Resistance curve, 2) only meaningful if within the Investors power to make happen (and includes a duty to care for those affected), 3) Circulated for comment amoungst those with power but then frozen and from that point achievement within constraints is non-negotiable. 4) NO constraint –except legality/ morality etc – is placed on HOW the result is achieved. Solutions are expected to be replaced as they prove unequal to the delivery challenge. “Successfully deliver the customer’s required result” not “Follow the supplier’s process steps into obvious failure for the investor”

There isn’t much need of a ‘template’ in here but there are a few – RE table, VF table, Linkage table, VD list and if useful VC itself.

~~O~~

Logical Model Ltd provide consulting, support and training in the suite of #pm_ngt procedures, tools and techniques. We recommend Senior Leadership awarness sessions and Technical Team Leader briefings to accompany the focussed training & mentoring for the Project Leadership communitee.

Achieving value requires all three communities to share a view of  how to interact across the dialogue from Boardroom-2-Boilerroom™ and from the Investment’s start-2-finish. All must know the framework that structures roles, duties and decision making, and understand the tools & techniques relevant to their role’s communication needs as either provider or direction & decision maker or manager of change and operations or deliverer of results – project or bau.

Contact us for discussion of your specific needs

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