What is Value Management?

Value management is something that project managers should be aware of. In fact, the Association for Project Management in the UK has a specific interest group dedicated to value management. It’s a structured approach to defining what value means to a business and that’s essential to make sure that projects are aligned to strategy. A value management framework should give you the ability to define what your company needs, any problems and opportunities and then take these and review what the right solution should be.

Sounds difficult? The main problem with value management is that it’s subjective. And that applies whether you are dealing with what the company values as a whole (like “we value environmental credentials”) or at a project level (such as “As your sponsor I value quality over budget on this project”). Different people will have a different view of what is important. At corporate level you would expect there to be some kind of agreement and strategic take on what the company values – that’s essential as it can help prioritise projects (criteria around value should be part of the project selection process). But at project level when you are dealing with a number of different stakeholders it can be difficult to get agreement about what’s important.

Getting consensus

Value management centres on making sure that everyone has a clear view of the project objectives and how these will be achieved. That makes sure that you get ‘value’ however you have defined that. Getting consensus can be difficult but it’s really important to ensure that the project team doesn’t get pulled in different directions. You will struggle to deliver the project successfully if you constantly have to deal with change requests or stakeholders who want different things from the project and who change the priorities.

Consensus workshops can be useful during the early stages of the project. Make sure that you record the outcome and document agreements made. It is always possible to change what you initially considered to be the main project objectives, but again this should be done with the consensus of all the key stakeholders and not by one person alone.

Principles of value management

Given that you can deliver more effectively if you have consensus and know what your stakeholders want, it’s important to bear value management in mind when you are delivering the project, not just at the beginning. I often call this approach customer-centric project management as it means focusing on what is important for your project customers (your stakeholders). We can formalize the principles of value management as: 

• Awareness of what ‘value’ means for the project by establishing an ongoing way to monitor and control what we mean by value. This could be as simple as having regular conversations with stakeholders about whether the project is meeting their objectives and whether you are targeting project work on areas that they consider important. Bear in mind that what they think of as important on this project will change as the project progresses so a one-off conversation will not be enough.
• Focusing on project objectives and using those to drive solutions, not the other way around (in other words, always bear the objectives in mind when coming up with solutions and don’t let technology drive the ‘answer’).
• Focusing on the purpose of the deliverables i.e. the ‘what’ not the ‘how’ while balancing that with good project management methods and governance.