Strategy execution via Benefit Mapping

How is a strong relationship formed between organisational goals and projects to be implemented?

Initiative list

When a project portfolio assessment is conducted to take Project Portfolio Management to the next level, we usually find a list of ongoing projects and initiatives linked to various strategic themes.

Award to?

What is immediately noticeable is that while the projects and initiatives may have an owner, the strategic themes are not specific. Usually, the owner is named as "the MT" or "the Executive Board". As a result, there is insufficient direction on the strategic themes, and hence insufficient direction on the desired outcomes of the projects and initiatives. The organisation lapses into initiating well-intentioned projects and initiatives, only to assign - or talk them up - to one of the strategic themes. This will result in the organisation spending money and deploying capacity, without knowing to what extent the project or initiative contributes to the strategic objectives.

The result will be that one only notices afterwards that the organisation has unintentionally taken a wrong turn somewhere and is going to end up far from the intended result. Too late, because costs have already been incurred and capacity has already been deployed. The project could have been stopped earlier or never started in the first place.

This is largely preventable. This will now be discussed in more detail, because an organisation can only spend money and use capacity once. So the organisation wants to do this in the best possible way ('doing the right things'). That is why organisations are looking for a different angle.

Distract from!

The power of using Benefit Mapping lies in the fact that organisations do not assign projects to capabilities and benefits to be realised, but derive them from them and visualise this as well. Derive from rather than assign to.

Capabilities, incidentally, are a collective term for processes, systems, knowledge, but also for attitude and behaviour, for example. Benefits (including the associated KPIs) can, simply put, also be seen as a further detailing and derivation of the organisational objectives.

Two completely different approaches: bottom-up versus top-down. Of course, the trend is to do a lot bottom-up, but there are really big advantages to be gained by doing the creation of an initiative list largely top-down. To a large extent and not for 100%, because often binding agreements have already been made with customers and suppliers; so they also appear on the list of projects and initiatives. This set-up also creates much more peace of mind for the Project Portfolio Office, because the initiative list is known in advance in outline form.

From right.......to left

Determining derived benefits (including relevant KPIs) as a derivative of the objectives and subsequently capabilities to be developed (programmes/ epics) and initiatives/projects to be implemented is done by a number of ('stepped') workshops with stakeholders, with the desired end result being consensus and support. By recording this schematically, we make cause-and-effect relationships visible.

One can test whether the outcome 'makes sense' by reading from right to left:

If we want to achieve our objectives, we will have to realise the derived benefits (including KPIs), for which we will have to realise a number of capabilities (processes, systems and knowledge) by initiating a number of projects and initiatives.

But also from left to right:

When we execute these projects and initiatives, we build certain capabilities through programmes / epics, enabling the organisation to realise the relevant benefits (including KPIs), which enable us to achieve our objectives.

The rule of thumb is that when the story rings like a bell both left to right and vice versa, the organisation is very close to the final version. A benefit map gives a very pure and strong relationship between the list of projects and initiatives and the organisational objectives to be achieved -a much stronger relationship than when projects and initiatives are directly assigned to the organisational objectives. In this way, the =available budget and capacity are used in the best possible way. Problem solved!

Correlation

In the schematic overview above, the arrows (connections) can be used to quantify the extent to which a project or initiative contributes to building a certain capability. That contribution is of course important to assess the added value with regard to the realisation of the organisational objectives and which is therefore a preferred one).

Benefit map as shadow list

Putting aside existing projects and initiative lists and starting from scratch with a benefit map exercise is a big step. In any case, when an organisation decides to do this, it is important that it finds a natural moment for this, e.g. a revised strategy or new multi-year plan, to significantly increase the chances of acceptance. Beyond that, setting up a benefit map is an interesting step to carry out and then putting it alongside the existing projects and initiatives list. Spot the differences! The outcome offers the opportunity to take a look at the current set-up and tighten it up where necessary: does the organisation, in assigning initiatives to the objectives, arrive at the right initiatives?

Benefit mapping as part of a continuous process

Benefit mapping is part of the benefit management process, which is preferably a continuous process in the organisation. Benefit mapping starts with benefit identification, after which a schedule is drawn up showing the build-up of value (benefits). Value is then realised and evaluated. By the way, the holy grail in this is that an owner is linked to each defined benefit (ownership!).

The benefits of benefit mapping

When new ideas are suggested from within the organisation, a quick glance at the projects and initiatives list, derived from the benefit map, is often enough to indicate that such an idea has already come into view through this exercise and is already on the list.

By linking an owner to each benefit, they will remain responsible for the delivered results even after the capabilities are realised in the line.

A projects and initiatives list as a result of a Benefit Mapping exercise is less concerned with annual plans, but looks directly at what needs to be done to realise the objectives, beyond the annual boundary. This can be plotted over time in a Roadmap, which also provides insight into when benefits can be realised (through benefit tacking).

If an organisation does stick to annual plans, the capabilities could, for example, be realised in a number of iterations (e.g. market share builds up over the next three years from x%, to y% to eventually z%). Hoshin Kanri, a structured working method that supports an organisation in realising its long-term mission and vision, for example, does work with annual plans.

Within Improven's assignments, we challenge our project portfolio managers to make Benefit Mapping an integral part of the assignment.