What are we doing? And why are we doing it? These are the first two critical questions that must be asked at the start of every project. However, they often go unanswered!
The nominal “what” is often provided. Implement a new system. Launch a new program. Build a road or bridge. However, the “why” is frequently unclear or poorly defined.
Understanding the “why” should prompt a cascading series of questions. Is this really needed? Is this the best use of our organization’s treasure? Is the “what” the best solution? Is there a better, faster, or cheaper option?
The answers to these probing questions must be internalized before writing a line of code or putting a shovel in the ground. The cost of delay—the time to answer these questions—will be insignificant compared to the cost of future rework or failure.
Framing the project makes all the difference. Starting with the solution limits exploration of better possible alternatives. Focusing on clarifying and solving the problem, validating its importance, and considering alternatives leads to better outcomes.
Transportation agencies in the Washington, D.C. region were enamored with light rail in the early 2000s. The 2.4-mile H Street streetcar was the planned first installment of a revitalized network in the District of Columbia. In Suburban Maryland, the Purple Line was designed to connect communities in a transit-beltway.
Today, the 10-year-old H Street line is scheduled for decommissioning. The yet-to-be-opened Purple Line is years behind schedule and billions over budget. Both projects considered and ultimately rejected dedicated bus lanes. Dedicated bus lanes are now favored because they cost a fraction of the cost of rail. In comparison, nearby Arlington County abandoned its streetcar plans in 2014 in favor of buses, citing concerns over cost and effectiveness.
Satisfying the Triple Constraint—scope, schedule, and cost—is the standard measure of project success. However, these are tactical measures. Fulfilling business intent should be the primary focus. Although this may seem obvious, historical data from the Project Management Institute (PMI) indicates that one-third of projects fail to meet their business objectives. Establishing clear, measurable, and business-aligned objectives is the starting point. Defining project success criteria upfront and measuring and tracking performance increases success scores sevenfold.
A Federal agency avoided spending potentially millions of dollars on an IT performance measurement system. The CIO wanted to implement a system to support internal invoicing for IT services. The technology team went through multiple iterations, manually creating the reporting and pressing the CIO to define how the data would be used. He could not provide the “why,” and the project was not undertaken.
It Starts with the Portfolio
Contents
Portfolio management serves as the linking pin between an enterprise’s mission and strategy and its programs and projects. Organizational leaders are responsible for articulating the strategy and are accountable for ensuring alignment. Portfolio managers define the processes, create the tools, and facilitate the outcomes.
The portfolio charter establishes governance and oversight practices, outlining how projects are prioritized, selected, governed, monitored, and benefits are realized. Objectives and Key Results (OKRs) are a common tool for translating strategy into quantifiable and measurable outcomes. Financial measures such as net present value, return on investment, or cost-benefit ratio are standard tools where benefits can be monetized. Weighted selection factors and weighted shortest job first (WSJF) are helpful when benefits are more difficult to quantify.
Organizational strategy is often conveyed through high-level, aspirational statements—better, faster, cheaper. Strategies typically aim to become more efficient or productive, increase revenue, expand into new markets or products, or transform the organization. Without measurable expected outcomes, these statements are just platitudes. Adding quantifiable expectations provides necessary rigor. A strategic goal to improve operational efficiency is compelling. OKRs define the next level of detail. How is efficiency measured? What are the targeted gains? Do the projects meet this hurdle rate?
The business case funds the project. It establishes the initial agreement between the sponsor and the portfolio. It describes how the project aligns with the strategic objectives, defines the hard and soft benefits, provides high-level specifications, and discloses risks that could impact the benefits realization.
The Project Charter Defines the Project
The charter authorizes the project to proceed. It grants the project manager the legitimacy and power to use the organization’s resources—people, equipment, and money—to execute the project. The charter builds on the high-level information documented in the business case.
The project charter should refine and reaffirm the problem statement, expected business outcomes, approach, and exit criteria. Clearly articulating the expected outcomes and exit criteria will help ensure the completed project fulfills the business intent.
The project owners are responsible for defining the expectations and exit criteria and should be accountable to the enterprise for its ultimate success. Creating consensus on the definition of success can be a challenging task. However, avoiding this forcing function can lead to scope creep, unmet expectations, or project failure.
Expected Outcomes
Expected outcomes establish the intended consequences of delivering or implementing the project. They should be described in business terms, tied to the organization’s strategy, and be measurable. The outcomes further elaborate on the benefits described in the business case.
Objectives and Key Results (OKRs) are a portfolio tool that can also be used at the project level. They can align and clarify expectations at the beginning of the effort. And, throughout the lifecycle, they can be used to evaluate and validate the project’s ongoing value and worth.
A project to replace a legacy accounting system was initiated without clear or quantified expected outcomes. Ultimately, it delivered underwhelming benefits, and the costs were several times higher than desired. Since no formal expectations were established at the outset, it was impossible to adjust proactively.
Conversely, a new office building project was put on hold during the COVID-19 pandemic. When the project was restarted several years later, the building was redesigned as an apartment building. Shifting economics, along with clear performance measures, facilitated that change in direction.
Exit Criteria
Exit or acceptance criteria are the predefined conditions or thresholds that determine when a project or project phase has met its performance objectives. They serve as a final checklist for completion. These items establish the overall quality standards and expectations. They can also be defined and agreed on for major project deliverables.
The acceptance criteria should be objective, specific, and measurable to both establish expectations for the team and avoid disagreements when deliverables are submitted for approval, or at the end of the phase or project. Deliverable, phase, and project acceptance plans can be developed and refined as the project progresses.
© 2025, Alan Zucker; Project Management Essentials, LLC
See related articles:
- The Project Charter Lays the Foundation
- Economics 101 for Project Managers
- Project Portfolio Management & The Theory of Constraints
- Project Portfolio Management: Simplify the Selection Process
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