Project management methods require that each project has a clearly defined business case. However, evaluating and prioritizing projects requires more than just looking at the business case. It is important to consider how the project relates to a larger purpose. Leaders can use purpose evaluation to determine if the project is aligned with their strategic goals. It's also an important driver of team engagement and motivation for the entire organization. It is essential that companies learn to clearly articulate the purpose of a project. It is easy to find out the purpose of a project by asking why. Each layer of why will bring you closer to the project's purpose. You should not begin a project if you don't find something that motivates people to do it.
A jury of four architects selected the Jrn Utzons' proposal to win an international design competition in January 1957. The jury praised the Danish architects' proposal for large-scale performance spaces as the most innovative and creative of the 230 submitted proposals from more than 30 countries. The business case for the project was very strong and it was approved. It was estimated that the project would cost $8 million, and take four years to complete.
The initial deadline proved to be too short. It was impossible for engineers to begin phase 1 as planned in early 1959 due to a lack of details and definitions in Utzon's proposal. Construction costs were significantly higher due to the complexity of Utzon's design. The deadlines for the project were missed and the budget continued to rise. It seemed that the amount of work left on the project was increasing rather than decreasing.
The project was delayed by a decade, took 14 years to complete, and cost more than its budget by 1,300%. The majority of the $95 Million cost overrun was paid by the state lottery, which diverted money from other public spending.
Shouldn't the project be halted or scaled back from a project management standpoint after all of the delays and overruns in budget? It was a total disaster from a business perspective.
This project is actually the Sydney Opera House. It is a symbol for Australia and Australia and one of the most well-known architectural works in the world. It is not enough to meet the deadline, budget, and business case.
This is not just the case with the Sydney Opera House. The UK's Millennium Dome and the Channel Tunnel are two other examples of projects that have had completely flawed business cases but still achieved benefits that were unimaginable to those who created them. All of these projects have been extremely successful over time.
While the business case can be a useful starting point when evaluating and prioritizing project proposals, it is not sufficient. It is also important to understand the relationship between the project and a larger purpose. It is rare that organizations spend enough time explaining the why of their projects. Many don't even know how. However, it is easy to do and essential to selecting the best projects.
The Business Case is Not Enough
Project management methods require that each project has a clearly defined business case. It is essential to have a clear understanding of the project. This can be achieved through research, thinking, and analysis. When we build a business case, even the most basic details like cost and scheduling estimates, are affected by the biases of those who are formulating them. It is against human nature to present a failing business case. If someone is determined to get a project done well enough they will find a way for it to be completed. They will also present their numbers in the best possible light.
In a study on project success that I carried out while working with PricewaterhouseCoopers, we reviewed 10,640 projects from 200 companies in 30 countries and across various industries. Only 2.5% of companies completed 100% of their projects successfully, and many business cases were based on incorrect assumptions and overly optimistic.
High Performance and Engagement Driven by Purpose
Understanding the purpose of projects is crucial, even if you don't want to look at just the business case. It can help leaders determine whether the project is worth their time. Every proposal that has a business case is not viable can be implemented. Understanding the purpose of a project helps us to see how it aligns with our strategic goals. Purpose is perhaps even more important to project success. It motivates and engages team members as well as the entire organization and helps them support the project.
Many projects have long-term, technical or deliverable-focused goals. These include a new platform rollout, expansion program, new company values, reorganization or digital transformation project. Some use financial goals, such as a 10% return-on-investment (ROI). These complex and unrealistic targets can cause a lack of passion in the project's team.
Instead, incorporate purpose into your project foundation. A purpose that is clear and compelling reflects the value people place on the project's work and its true reason for existence. It awakens people's intrinsic motivations and reveals the deeper meaning of the project beyond making money.
According to the EY Beacon Institute and Deloitte, purpose-driven companies perform 2.5 times better than other companies at driving innovation, transformation, and change. On average, 30% more revenue is generated by innovations that were launched within the past year. As an executive, I have seen this trend in action: Projects with higher purpose are more likely to succeed than those that don't inspire. The vast majority of people have incredible strengths. Leaders who are truly great know that their heart is the most powerful tool to tap into them, not ROI or deliverables. They can accomplish extraordinary things if the project they are working on is connected to their inner purpose, passions, and values. However, a lack of conviction or purpose in a project can spread quickly from one member of the team to the next.
Few organizations are able to clearly articulate a project's purpose and its relationship with the organization's strategy.
Keep asking why
To find the purpose of a project, you can simply ask "Why are we doing this project?" Leaders usually need to ask this question between four and seven times in order to understand the true essence of the matter.
A project to implement a new system of HR management is one example. Most project managers will tell you that the project is to implement a new HR system. The deliverable is what the project produces, not why it is being produced.
Instead, ask why. It may be that we are implementing a new HR program to provide better service to our employees. You might ask, "Why do we want better services for our employees?" Perhaps to address the key issue of low employee engagement. If so, it will result in a higher level of business performance.
This series of deep and more in-depth questions has led you to realize that your project's purpose isn't to create a new HR system, but to make your employees happy and improve your overall performance.
It's amazing what a difference it makes. You now have a project that aligns with the organization's strategy and will motivate your project team members. After you have identified the purpose, it is time to ask two additional questions. When and how much will the project increase motivation? In six months, for example, Now you will have a compelling purpose for your project. It should be specific, measurable and clear with a deadline. This will allow you to engage stakeholders and team members more effectively and make it more successful.
You should not begin a project if you don't reach something meaningful after the exercise.
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Let's take one last look at Sydney Opera House. Three years prior to the selection of Utzons' design, New South Wales Premier Joseph Cahill launched the project in 1954. He had a remarkable purpose: To help create a better, more educated community. The Queen Elizabeth II officially opened the opera house on October 20, 1973. It has since been visited by nearly 11 million people annually. According to Deloitte the Sydney Opera House is worth $4.6 billion for Australia. Although developing a business plan is difficult and necessary, what makes a project truly compelling and motivates people to do their best work is the higher purpose.
This article was adapted from HBR Project Management Handbook.
