PM Articles > Kent McDonald > The DVD's of Business Ownership

The DVD's of Business Ownership

An organization I worked at wanted to improve the project results we delivered. While we revised our project management techniques and training, we realized that another critical factor is the people that initiate projects and serve as the primary stakeholder of the project, referred to as business owners. We decided that these people—who do not work on projects as their entire job, but were key members of the project teams on which they participated—needed to learn more about the role of business owner and its responsibilities.

What is a Business Owner?

Business owners typically should be the individual who will "own" the product of the project once the project is complete, but it is not their only job. For example if the project is to create or revise a process or to implement a new piece of business software, the business owner is the leader of the organization that is responsible for that process or use of the system on an ongoing basis. By virtue of this, they are the person who has the most vested interest in seeing the project completed, and need the responsibility and authority to make the appropriate decisions for the project.

While it is important that there be one and only one ultimate business owner, the project should also have an appropriate number of stakeholders and subject matter expertise at various levels and representing all the necessary domains. This ensures all of the necessary viewpoints are accounted for in the project.

Even though there shouldn't be such a thing as a Business Owner title, the role is so critical that the organization I described above did not allow a project to proceed without a specifically identified business owner. This requirement sometimes resulted in naming someone for the sake of keeping the project going. These projects invariably ran into one difficulty or another, usually related to unclear definition of the project, an unclear idea of the value provided by the project, or poor decision-making. So we established a mnemonic to help business owners remember their key responsibilities on a project and help prevent those kinds of issues:

  • Definition
  • Value
  • Decisions

Definition

The first important responsibility of the business owner is to clearly define the product scope of the project. In other words, what problem is this project intended to solve? This should produce a clear understanding of what the project is trying to accomplish. All project team members can use this understanding to help them to make day-to-day decisions about their work on the project.

In addition to initially defining the project scope, the business owner should also advocate that scope to stakeholders and other impacted parties outside of the project team. Finally, they should determine when revisions to that scope are needed, based on changes to the project environment.

Value

It is the business owner's responsibility to explain why the organization should undertake the project based on the value it delivers. Unfortunately, value, like obscenity, is in the eye of the beholder; you know it when you see it. My friend Chris Matts provides a good definition for the business value delivered by a project:

A project delivers business value if it increases or protects revenue or reduces cost in alignment with the strategy of the organization.

Increasing revenue and reducing cost are pretty familiar concepts, although most projects focus on protecting revenue. You can think of protecting revenue as doing things that prevent customers from moving to a competitor or reducing risk. The complicating factor with these projects are that revenue protection is not always represented by actual revenue or costs, but rather an impact to the bottom line that might occur should the project not be completed.

The last portion of this definition—"in alignment with the strategy of the organization"—should be pretty clear cut. A project may appear to have a fantastic business case that will bring the organization additional revenue or reduce its cost. But if it is not aligned with the organization's overall strategy, it can quickly become an expensive boondoggle that detracts resources away from more important activities.

A second aspect of value is ensuring that all the deliverables of the project directly relate to the intended value delivered by the project, and do not result in gold plating. Some organizations refer to this idea as delivering the minimum necessary functionality. Teams are often tempted to add unnecessary functionality since they are "working on that process anyway." It's the business owner's responsibility to help the team resist that temptation; so that the cost of the project does not outweigh the benefits provided, and thus reduce the overall value of the project.

Decision Making

The third responsibility of the business owner, and perhaps the most important, is decision making. This includes making decisions about what the project is about and what value it is intended to deliver. It also means making decisions about what features are and are not included in the project as well as the priority in which those features are delivered.

Decision-making seems simple on the surface, yet people often have difficulty doing it effectively. I have found that a straightforward, disciplined approach to decision making improves my own effectiveness:

  • Identify the decision you need to make.
  • Understand when the decision has to be made.
  • Determine the information that would be most helpful for making that decision.
  • Use the intervening time (until the decision needs to be made) to gather the necessary information. Avoid the temptation to make the decision until that time comes or unless you have all the necessary information.

This approach helps you to make sure you are making timely, informed decisions.

Although I have stressed the key responsibility of the business owner as the primary decision maker, this does not mean that all decisions have to be made by the business owner, especially considering that is not their only responsibility. Decisions should be made by the member of the team in the best position to make that particular decision, usually based on subject matter expertise. The business owner's decision-making responsibilities come into play on those critical decisions that have a considerable impact on the project, or when team members and stakeholders hold different positions on an issue.

Business owners have other responsibilities as well, but we found that they all trace back to definition, value, or decision-making. We structured our training around these three concepts, based on the premise that these were the key factors that led to business owner effectiveness. Because the people filling this role did not do all of their work via projects, these concepts were much more important than the various project management processes which are the domain of project managers.

Related Links
The Agile concept of Project Value Models can help your teams recognize value when they see it, and make sure it really does align with business goals. Identifying high-value projects is easier if strategic project selection criteria have been identified and published. If you're not sure how to spot the business goals, check out this burning question from our Business Analyst Fast Track for suggestions.



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