Every organization does it, but often with ambivalence: the performance measurement process has become a mechanical exercise dutifully executed to satisfy corporate requirements.
Most organizations have forgotten the original intent of connecting outcomes and benefits to a strategic business plan and setting employee objectives accordingly. By not focusing staff effort and motivation toward achieving common goals, an organization can expect the same uninspired outputs and tired outcomes that don’t support strategic objectives.
Wasn’t it Einstein who said that doing the same thing over and over again and expecting different results was a form of insanity? Revitalizing your organization’s performance measurement process requires a dramatic shift in approach.
Enter the benefits management approach. Stephen Jenner defines it as “the identification, quantification, analysis, planning, tracking, realization and optimization of benefits.” Benefits management helps to ensure that organizations are driven by their objectives and that they get a real return on investment from the projects and programs they undertake. Jenner also states that “benefits management seeks to optimize rather than maximize benefits realization. The difference is that while maximization seeks the most benefits irrespective of constraints, optimization is about doing the best that can be achieved within constraints and potential other uses of the funds available.”
Instead of the classic “on time,” “on budget,” and “on scope” concepts, “benefits mapping,” “business sponsor,” and “portfolio view” become the new vocabulary. Achieving benefits is the focus rather than successful completion of the project. Implementing benefits management also means changing attitudes toward performance measurement so that no one suffers through the routine exercise passively, but in a more engaged and productive manner.
Begin with the end in mind
You need to know where you want to end up to have a good plan of how you’re going to get there. Your plan has to be concrete and aligned with your organization’s strategic or business plans. Benefits management is a broader, more holistic approach to setting project or program performance expectations. With its many tools and techniques, it elevates performance management to a whole new level of organizational excellence.
A robust benefits map is one technique that denotes not just outputs and outcomes but also identifies clear, expected benefits to provide a better sense of the value of your project or program. Benefits maps can take many forms – the tried-and-true Logic Model, or the Treasury Board of Canada Secretariat’s Outcomes Management approach that integrates risk with performance and provides a clear, graphical picture of the complex interrelationships, just to mention two.
Progress toward organizational objectives and the degree to which benefits are realized can only be determined if they’re measurable. The benefits map is fundamental to identifying key performance indicators (KPIs) for each benefit. This helps set clear and achievable targets for key benefits; ones that will stretch the organization to a higher performance level (not too high so that your KPIs are unattainable but not too low so that your organization settles for mediocrity instead of excellence).
It also identifies risks, roadblocks, and negative outcomes. It requires that action plans be identified for when the performance level for each KPI varies from the target outside the predetermined level of tolerance. Consider how you will manage underperforming benefits and outcomes. Will they derail you? Or will you be prepared to step in with another approach?
In a benefits management process, a project is championed by a business sponsor. Unlike the project manager (who reports to the sponsor), the business sponsor is responsible for seeing the project from beginning to end…and beyond. Yes, there is a “beyond.”
With benefits management, once a project is completed, measurement doesn’t stop. Benefits have to be “harvested” or proactively sought out and then managed effectively. John Thorp defines “activist accountability,” the ownership of benefits and outcomes, as the first condition of successful benefits management. While the project is being implemented, the project manager focuses on outputs and milestones, but the business sponsor must ensure that benefits are being monitored and realized along the way. The business sponsor consults with stakeholders early and often throughout the project to include them in the ongoing management of benefits.
Another element is the portfolio view. The siloed, project-by-project approach is a thing of the past. Or should be. Having an inclusive, big-picture view of all projects, programs, and processes is crucial, as it avoids overlap and “double counting,” where the same benefits are claimed by more than one initiative.
How are you doing?
How will you know that you are achieving your benefits? With a benefits map in hand, the project team can review pre-established measures to help determine whether the expected benefits are being realized. You might want to look at other organizations and international standards to identify benchmarks and incorporate them into your plans as achievable targets.
It’s important to remember that, unlike the project manager, the business sponsor has a role post-implementation, as benefits usually accumulate long after the project has ended. The business sponsor will also identify the unexpected: the emerging, unplanned-for benefits that can arise and add value to the final project or program.
How did you do?
Once a project is completed, the business sponsor reviews the results. Although it can be done in-house, engaging a neutral third-party usually works best.
The final piece of this benefits-based approach is identifying lessons learned. Too often, organizations go through the motions of asking project participants to identify what went well and what didn’t… but then never follow-up with action, or bother applying the learning to the next project or program. Thus, these organizations tend to repeat the same mistakes. A more effective approach is to have a central repository of lessons learned and to oblige new projects to incorporate lessons learned from previous projects in the project planning before receiving a green light to go forward.
New performance paradigm
Benefits management is a new approach that builds on the techniques of logic modelling and performance measurement. It has been successfully implemented in many public sector organizations in the world – the most prominent examples coming from the U.K. and Norway.
It is gaining a foothold in Canada. There are many lessons to be drawn from the existing literature and resources available. Although many case studies come from Europe, the approach is aligned with the Treasury Board of Canada Secretariat’s methods and guides.
Benefits management augments and extends the capabilities of traditional approaches by introducing an additional focus on value and benefits achieved. Most importantly, however, it helps create high-performing organizations, turning a formerly tiresome exercise into a meaningful process that re-energizes and engages staff, and achieves real results.