Creating Value Through Projects: From Outputs to Outcomes

Whether you're leading a business initiative or managing personal projects like moving to a new home, organizing an event, or planning a wedding, achieving the desired value is key to feeling successful and fulfilled. Understanding the difference between output, outcome, and impact is critical in any project.

This blog post delves into the project management value chain, showing how projects have become essential tools for organizations to navigate a fast-changing world—and how this applies to our personal lives, too. As the world around us evolves, we're all required to adapt, and with every change comes the need for project management. Learning the basics isn't just for professionals; it's for anyone looking to manage life's transitions effectively.

The focus of this post is simple yet powerful: how projects create value by moving beyond outputs to achieve meaningful outcomes.

Before diving into this topic, we need to define the term "project" first. If you are confident about "Project," you can skip the section and the related video.

What is Project Management?

Project management has evolved over the last 50 years, but the concept is ancient, with projects like the Pyramids showcasing early examples.

Projects and operations are interconnected, with projects creating unique outcomes and operations focusing on repetitive tasks that sustain a business. While both are vital, they require different approaches. Projects are temporary and handle uncertainty while operations are ongoing. Not every initiative needs project management, but more significant, resource-intensive efforts do.

Project management requires specialized skills. Organizations benefit from clear policies distinguishing projects from operations, enabling better adaptation to changing business conditions.

For further details, you can watch the video:

*Click on the visual above to watch the video and dive deeper into the topic!*

Next, let’s discuss “Output” and “Outcome” and their relation to “Value”.

Project Management Value Chain

Output and outcome are critical terms in project management, and there is a shift in focus from project "output" to "outcome." "Output" refers to a project's immediate deliverables or results, and "Outcome" relates to the short- or medium-term effects these outputs have on the organization's performance. On the other hand, executives are mostly concerned with the broader "impact" — the long-term effects of project outcomes on organizational performance.

The alignment between a project's outputs, outcomes, and impact is crucial. A project can be well-managed but might not align with the company's strategic needs. That means success at the project level doesn't always ensure the desired business impact. Effective communication between the project manager, sponsor, and top Management is key to understanding and achieving the expected value from the project.

For further details, you can watch the video:

Any initiative follows a typical cycle. Let’s talk over this life cycle next:

Change Management and the Project Life Cycle

A typical lifecycle of an initiative begins when an opportunity or threat is recognized, and then it requires an analysis to understand its background, value, risks, and resource needs. Those two phases are followed by a decision phase, where Management evaluates the initiative and either accepts, rejects, or postpones it. When approved, the initiative is delegated to a sponsor.

Individuals with management authority oversee the early phases of a project, identifying opportunities or risks and making critical go/no-go decisions. In nearly all initiatives, stakeholders—and sometimes the entire organization—must be prepared for the upcoming change. This stage is known as the "get-ready" phase, and the project sponsor manages it. Once preparations are complete, the sponsor appoints a project manager, marking the project's official start. The project manager then develops and executes the project plan.

As the project is technically completed, the related initiative moves the organization from its current state to a new one. Although the project is technically completed and the output is delivered, the full value of the initiative is realized after the organization adapts to the change, marking the true impact of the project.

For further details, you can watch the video:

Every initiative has its specific circumstances. Culture, values, and power dynamics within any group—whether an organization, friend circle, family, or non-profit community—profoundly shape how projects are managed. Successful project management styles should align with the unique characteristics of each community. The next section will explore organizational structures from a business perspective. You may skip this part if you are mainly focused on non-business projects.

Organizational Structures and their impacts

Broadly, organizations tend to fall into three categories: functional, matrix, and project-based.

Functional organizations: Project management roles are not clearly defined. Projects are managed by higher-level strategic and tactical managers, with little direct involvement from operational staff. This approach often works in small companies or startups with limited projects.

Weak matrix organizations: As companies grow and the number of projects increases, functional managers delegate project coordination to trusted experts, creating a "weak matrix" structure. Those trusted experts do not function as project managers but as coordinators. They have no authority, and they rely on Management to make decisions.

Balanced matrix organizations: As coordinators take on more responsibility, the structure evolves into a project management role. This organizational structure is then called a "balanced matrix." In this structure, project managers handle both their functional and project roles and often face workload challenges.

Strong matrix organizations: To address these challenges, companies may create a Project Management Office (PMO), establishing a dedicated team of project managers with higher authority, marking the shift to a "strong matrix" structure.

Project-based organizations: Most of the work is executed through projects in such organizations. Teams are typically formed for the project, bringing together employees from different areas of expertise to work collaboratively. The team is disbanded once a project is completed, and resources are reallocated to new projects. In the construction industry, most of the organizations are project-based.

For further details, you can watch the video:

Projects and Defining Success

Success is typically defined as achieving a desired outcome. Still, in projects, it's often evaluated by the scope, time, and budget triangle, often called the "Iron" or "Golden" triangle. Today's fast-changing world requires a strategic approach beyond the "iron triangle" and focusing on the project's broader business benefits. Understanding the value a project brings to an organization is key to achieving true success.

*One of the most popular projects in the world. Is it a successful project?*

For further details, you can watch the video:

You can not manage a change without understanding the “Stakeholder” concept. The next part focuses on “Stakeholder Management”.

Stakeholder Management

Stakeholders are individuals, groups, or organizations who may impact a project, impacted by or perceive an impact from the project. These include sponsors, customers, users, suppliers, and regulatory authorities. Identifying critical stakeholders early on is essential for project success.

Effective stakeholder management largely depends on the project manager’s experience and communication skills. Not all stakeholders require equal attention, so it’s essential to prioritize them based on their influence, interest, and attitudes toward the project. Understanding their perspectives is crucial for resolving conflicts and ensuring engagement, particularly with challenging stakeholders.

For further details, you can watch the video:

While modern business trends, including agile frameworks, promote empowered teams and shared responsibility, effective leadership is still essential to drive change. The following section highlights the role of the project manager as the key leader in this process.

The Project Manager

Although there is almost a standard definition of the project manager role, her role varies based on the organization’s structure—functional, matrix, or project-based. In functional structures, project managers have limited financial control, while in matrix and project-based structures, they have more authority and are accountable for the project’s budget, schedule, and outcomes.

The organizational culture and the specific project requirements influence the role of the project manager. For example, a project manager in construction has different responsibilities than one in software development. As the organization’s structure shifts from functional to project-based, the project manager’s leadership skills and decision-making authority increase.

PMI compares project managers to orchestra conductors, emphasizing their role in coordinating diverse experts (like musicians) to achieve project harmony. While project managers may not be experts in each technical area, they are responsible for guiding the team, ensuring collaboration, and driving the project toward its goals, similar to how a conductor leads an orchestra without playing an instrument.

For further details, you can watch the video:

Summary

The true measure of success lies in understanding and managing the project value chain—from outputs to outcomes and, ultimately, lasting impact. Differentiating these concepts and focusing on outcomes and impact is essential for any initiative. Whether leading a complex business initiatives or navigating a personal milestone, this approach empowers you to create the expected value for the stakeholders. Mastering these principles not only ensures successful project completion but also brings a deeper sense of achievement and fulfillment in tackling both professional and personal challenges

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