Elements of Performance-Based Project Management

Project success is elusive in all business and technical domains, including software development, construction, new drug development, any project involving multiple participants, irregular funding, and emerging requirements.

To increase the probability of project success we must start with principles and apply practices that are implemented by processes. Without these principles the practices and processes have no home.

These principles are based on the following steps:

Identify the technical and operational capabilities we need for success of the project, mission, or business case.

These need to be measured in units of effectiveness and performance.

• Effectiveness is operational measures of success that are closely related to the achievements of the mission or operational objectives evaluated in the operational environment, under a specific set of conditions. These measures are stated in units meaningful to the buyer, focus on the capabilities independent of any technical implementation, and a traceable to Mission Success.
• Performance measures characterize physical or functional attributes relating to the system operation, measured or estimated under specific conditions. These measures are attributes that assure the system can perform the mission and are an assessment of the system showing it can meet the design requirements at satisfy the Measures of Effectiveness.

Construct the sequence these capabilities will be delivered in to maximize business value, minimize risk, and maximize opportunities along the way to make improvements.

• This sequence needs to be detailed enough to determine dependencies but not so detailed to inhibit easy changes as we discover new requirements needed to fulfill the capabilities.
• The chart below shows an actual sequence of capabilities for a health insurance provider network ERP system. As each capability is delivered, it can be incrementally put work in the business.

With the sequence of work in place, we can now look for risks and opportunities for improvement.

Risk is created by uncertainty. Uncertainty comes in two flavors:

• Reducible uncertainty – these risks can be reduced by spending money, changing or plans, or creating alternatives. Formally these uncertainties that create the risk are epistemic. This is risk related to the lack of knowledge about the situation. We can pay for more knowledge. ?
• Irreducible uncertainty – these risks cannot be reduced with more knowledge. They are dependent on chance. No increase in information can reduce the risk.

With sequenced capabilities, risk handling plans, and opportunity plans we can now be able determine the cost and schedule of the work needed to deliver the capabilities. This work starts with packages of work holding the budget for the work and describing the period of performance. ?This result shows us the cost needed to produce each capability. This cost can be compared to the beneficial outcomes from the capability to confirm the business case or mission strategy.

For each chunk of work in the plan to implement the needed capabilities, we need a method to measure progress to our plan.

These measures must be based on tangible evidence of physical percent complete. This is done through three basic approaches:

• 0/100 – we’re done, or we’re not done. Nothing in between.
• 50/50 – we’ll get 50% for starting and 50% when we’re done.
• Quantifiable backup data – a series of milestones each with some tangible evidence of completion, representing some pre-defined percent complete.

Each of these assessments of progress to plan is based on pre-defined units of measures. This avoids the opinion of progress we often see on projects stuck at 80% to 90% complete.

Conclusion

We need to know what DONE looks like, how we’re going to arrive at DONE on-time, on-budget, with the planned capabilities, what resources, funding, and work sequences we need, what risk handling and opportunity management can be performed, and how we’re going to measure tangible physical percent complete along the way.