Tuesday, August 23, 2016

Addressable opportunity

Value increases when the satisfaction of the customer’s need augments and the expenditure of resources diminishes. —Robert Tassinari

Tassinari's quote may be a little stuffy, but the idea is simple:
  • Value -- as seen by the business -- is the difference between the satisfaction of customer need, on the one hand, and the cost to meet that satisfaction, on the other hand. 
Presumably, the business has a way of monetizing the customer's satisfaction so that the "difference" is calculable.

Fair enough

In many prior posts I've asserted these propositions:
  • That there is a distinction between project value and business value, and 
  • That the interests of the customer/user, the sponsor/stakeholder, and the project manager must be balanced in some way, even though they compete for attention -- and resources -- as value is developed.
Me, me, me:
Each of these three interest groups has their own needs and wants, each has their own sense of urgency and importance, and each has an idea of the investment he wants to make and the risk he is willing to accept.

Nothing new there, but it helps to write it down. Hopefully, there's a sense of compromise and not polarization. Of course, unlike government, polarized businesses go out of business, and thus the issue is resolved in a manner of speaking.

The planning challenge

The planning challenge for project sponsors is to fashion a practical and rewarding opportunity for a practical project from the myriad of permutations and combinations of needs and wants, colored by urgency and importance, affordability, and risk.

Addressable opportunity 
In the event that there are more needs and wants than one project or one business or agency can address as an opportunity, the planning challenge becomes fashioning an addressable opportunity. And by that, I mean that part of a larger scope or landscape that is carved out for a project.

Carving it up may be a matter of skills and capabilities; it may be a matter of budget. It may be a matter of spreading stuff around so that no one PMO has the whole basket.

To state the obvious: to make the best of opportunities requires goal setting and strategic development in the context of mission and vision.

Mission provides the compelling call for action. Vision provides the epic narrative and points the way ahead. Goals set the stage; goals are the end-state to be achieved; goals motivate business strategy and in turn, project strategy.

This post was taken from Chapter 2 of my book: Maximizing Project Value. You can get it on any e-book site.

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