Efficiency

In a previous post I presented the five project success factors as proposed by Shenhar and Dvir in their book ‘Reinventing Project Management’. To recap, the dimensions are:

  1. Project efficiency
  2. Impact on the customer
  3. Impact on the team
  4. Business and direct success
  5. Preparation for the future

Today I want to explain project efficiency, the first dimension, in more detail.

Project efficiency is about meeting planned goals for the project given the resource constraints. Efficiency represents an internal focus on how we execute the project.

Our project goals are things like:

  • Schedule – we want to meet schedule, to stay within the time constraint.
  • Budget – we want to meet budget, to stay within the cost constraint.
  • Yield – we want to maximize the return on the expended resources (e.g., earned value).
  • Other – we want to meet any other goals that make sense for the project. E.g., in construction or manufacturing safety is an important (usually obligatory) measure.

As we can see, quality or scope is not included here. Quality is about delivering something that works and scope is about delivering something that is useful. If its not working, it isn’t useful, so quality is a subset of scope.

Scope is not related to efficiency dimension, it is related primarily to the impact on customers and the business and direct success dimensions. Obviously, we shall have to sweat scope, just not so much under the efficiency umbrella.

Efficiency will always be important and how we measure this must be related to the characteristics of the individual project. This means it will be difficult to produce a standard list of universally relevant efficiency measures fit for any and all projects.

Still, it is important to provide concrete measures that can be evaluated during project execution wherever possible and after the project is over. We can certainly come up with a framework for thinking wisely about efficiency measures so we pick the most useful.

And we don’t have to start from zero. Bjarte Bogsnes in his book ‘Implementing Beyond Budgeting’ presents a clear and straightforward approach to defining performance measures that fit the efficiency dimension to a T.

Bogsnes lays it out as a checklist to use as test for each proposed measure, which I have adapted into a list of 7 questions to fit the context of a project:

  1. Does it measure progress towards the project’s (strategic) objectives?
  2. Does it measure real performance (i.e., is it an internal relative measure of inputs to outputs or an external relative measure like a benchmark)?
  3. Is it a lead or a lag indicator (i.e., lead indicators measure inputs or what creates results while lag indicators measure outputs or results)?
  4. Does it address areas where we want change or improvement or is it for monitoring only (either is valid, but we need both)?
  5. Is it meaningful at the level where it will be used (i.e., to the people/for the context)?
  6. Does it have a baseline (i.e., do we have historical data or experience to measure against)?
  7. Can it be measured easily (i.e., can we get the data with a reasonable level of effort and in a sensible timeframe)?

Working through the seven questions above will help weed out unsuitable measures and create a meaningful scorecard that will assist in measuring progress as well as capture information for posterity to serve as a database to inform future projects.

dot The basic elements of the efficiency dimension of project success