An Attempt to Define Value

Jim, in his comment on Intuition is Not Enough for Knowing About the Project Portfolio, said:

I am having trouble with the definition of the word “value” in this context. Do you mean showing progress, as in earned value, or value to the customer, such as in ROI or payback period? Value has become a loaded word. Please define your terms.

To me, value is some visible form of progress. I prefer working product. I can live with a demo. I can live with a prototype. In some very small number of organizations, I can briefly live with a document. A document ceases to be visible progress after a very small period of time, such as a few days, maybe a week. Demos and prototypes also lose their value over time, if they do not become working product.

Managers can’t make good decisions about the portfolio if they can’t see visible progress, so they can tell if the money they’ve spent is worth the time they’ve invested.

If I really knew how to calculate ROI (and not make it be a number I can just make work), I would use ROI. But that’s a bigger rant for another time.

4 Replies to “An Attempt to Define Value”

  1. Remember that value, like beauty, is in the eye of the beholder, but in the case of value the beholder needs to be the customer. ROI and numbers work well for the financial set, but most customers are buying a service or a program to reach an end that may not be apparent. Help them get what they want and they will appreciate the value.

  2. I’m not sure that I totally agree with Chet Frame. If the result we are trying to achieve may not be apparent, how will we ever know if we have achieved. I believe that benefits, or value, just like cost, must be highly visible. It should be evident to all whether these have been attained. If you had substituted “quality” for value, I might have tended to agree more, but not completely.

  3. I’m on Chet’s side. Value is an assessment made by a person at a point in time saying, “My concerns are better taken care of then they were before I received (whatever). It’s important to note the temporality of the assessment. A report at one might be assessed as of value by the client while later the report is just waste. Further, standards shift through time. A team listening carefully to a client may be surprised to find out their happy client is no longer happy only due to the client discovering that s/he could be getting something more than the team has been providing.

    Portfolio managers need to stay close to the client of the projects to see that the intended value is being assessed.

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