How to measure anything in project management

How to Measure Anything in Project Management is a thought-provoking new book, co-authored by Douglas Hubbard, Alexander Budzier and Andreas Leed. APM Podcast had the chance to catch up with Hubbard and Leed to find out exactly how possible it is to measure everything about a project.

Hubbard is a management consultant and President of Hubbard Decision Research, and Leed is Head of Data Science at Oxford Global Projects and PhD Fellow at Aarhus University. They joined the podcast to share their research on where the project profession is going wrong when it comes to measuring success and give their recommendations on how projects can be made more successful.

“The one very consistent finding we had was that projects that spend more time in front-end development tend to perform better,” said Leed. “Secondly, projects that apply more quantitative and evidence-based methods also tend to perform better in adhering to their estimates, compared to projects that use more qualitative and subjective estimating techniques.”

Here is some more food for thought…

1. Everything about a project can be measured

“Every project that anybody has ever proposed had some expected consequence that is necessarily observable, otherwise it wouldn't be something that anybody cared about,” said Hubbard. “It’s really hard to measure a project that’s supposed to improve collaboration, innovation, the environment, customer satisfaction, social welfare or children's education. In each of those cases, there are expected observable outcomes, but you might be highly uncertain about them. That’s a different issue, but you can identify the observations first – then the rest is a little bit of maths to reduce your uncertainty.”

2. Measurement is about reducing uncertainty

“All measurements are meant to reduce uncertainty [so you can] make better bets. You’re making better decisions – that's what all of this is about. Project management is all about making decisions before and during a project, sometimes even after a project. So, you can think of project decisions during the project as sort of intervention decisions,” Hubbard explained.

3. What not to measure

“If you’re not going to do anything with the measurements during a project – that is, you can't think of anything you might do differently at all if [those measurements were] surprisingly high or surprisingly low – then that has an information value of zero,” said Hubbard.

4. Project management culture

“The culture in project management is that we typically measure the things we’ve measured before or that other projects measure. This is how we’ve done project management and how we’ve thought about quantifying risk in some way, but they typically don’t really distinguish between the methods that are proven to actually give you better results, versus the ones that, at worst, add uncertainty,” said Leed.

5. Fewer projects, bigger wins

“The first big project management decision is approval, and modelling it quantitatively is what’s needed, because when we start looking at that problem by itself, we find out that most decision-makers probably would not have accepted most of their projects. When you look at the data, there’s a way to quantify risk aversion as well, and when you look at all the research on what executives say about how risk tolerant they are, then compare that to the actual risk of the big projects, they wouldn’t have accepted almost any of them,” Hubbard said.

6. Spend more time on early selection

“Fewer projects, bigger wins, is one approach, and also spending more time on that early selection. If somebody says, ‘This project is a good deal because we make more than our cost of money’, that’s not nearly good enough if your return is just a little higher than your discount rates. If those returns are modest over your cost of money, your discount rates, that’s not nearly good enough,” said Hubbard.

7. Spend more time on up-front planning

“Spend more time in up-front planning and look for better options. Keep exploring. There's this classic measurement problem – it’s an operations research problem: how long should I generate solutions before I pick the best one and build on that one? Because there’s a chance the next solution you generate is going to be better than any of the previous ones,” said Hubbard.

“On the other hand, you could keep deferring the project, which has benefits itself presumably. That’s something that isn’t typically looked at, and you could spend more time on it at the front end. It appears that people converge too quickly on a preferred solution. They should think of many more solutions and generate many more decision models and options to be used during the project,” urged Hubbard.

8. The most important project is how to do projects

“The single biggest project that the world is facing right now is how to do projects… and this is the key message in the entire book. There’s a lot of ways to run projects and a lot of ways to measure projects, and we’re just not spending enough time figuring out which ways work better,” said Hubbard.

Listen to APM Podcast’s episode ‘How to Measure Anything in Project Management’ on Spotify, Apple Podcasts or YouTube.

How to Measure Anything in Project Management is published by Wiley

 

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