What's wrong with this picture? (Part 2)

To continue my blog about what's gone wrong with EVM in the Department of Defense and its largest contractor, consider this sentence from a recent Defense Contract Management Agency (DCMA) report:

In its simplest form, EVM is the discipline of managing programs successfully by planning and controlling authorized work to achieve cost, schedule, and performance objectives.

I realize that this is a goverment report but this is very typical writing style for the EVM industry -- not very "sticky" and it really isn't describing the simplest form of EVM. Following the example of Dan and Chip Heath, about whom I've written previously, allow me to write a stickier message...

In its simplest form, EVM boosts project performance by clearly defining intended outcomes, and measuring their completion. EVM is also used to measure and improve schedule performance and cost performance.

Notice that I mention intended outcomes first (that's scope), schedule performance second, and cost performance third. News articles often talk about compliance first, then they talk about cost performance, schedule performance, and perhaps some vague notion about "technical performance," "scope performance," or simply "performance" last. Whenever I have a chance to write or speak about EVM, I explain that this is exactly backwards in priority. In my opinion, this is the correct order of priority:

Priority #1: Achieving the intended project scope (as defined by discrete intended outcomes) should always be the top priority of a knowledge workforce, and it is the top DAILY priority. Without it, schedule performance and cost performance are meaningless. Put another way, if you don't measure completion of intended outcomes, it is likely that your project team doesn't fully UNDERSTAND intended outcomes (i.e., project scope). Therefore, all three elements of the triple constraint (scope, schedule, and cost) will suffer significantly, and so will compliance. This priority applies to EVERY project, including agile/iterative projects because discrete outcomes in Agile are defined by user stories. Attending to this priority is always a leading indicator of success -- for every project.

Priority #2: After mastering the art of scope performance, the project team can master the art of schedule performance. This is definitely a second priority, because if your team isn't focused on the completing intended outcomes, there is no hope of performing on schedule. Schedule performance is typically more important than cost performance, because late projects are rarely on budget. Another reason that it is second priority is that attending to schedule performance is a real-time indicator of success. Unlike Priority #1, this second priority does not apply to all projects.

Priority #3: After mastering the art of scope and schedule performance, it is time to master cost performance. Measuring cost performance is clearly a lagging indicator of success (sometimes lagging by many weeks). It should receive attention, but not as much attention as leading and real-time indicators, listed above. This priority typically applies to large projects, but not all projects.

Priority #4: The last reason to implement EVM is customer compliance. Taxpayers are lucky that Lockheed the DoD absolutely insists on using EVM to boost cost, schedule and scope performance, but all parties of this news story (DoD, Lockheed, news reporters) have the real priorities exactly reversed. When Lockheed fails to understand and apply 19 out of 32 EVM compliance criteria, it makes headlines in the Business Press. But when your project team doesn't understand its intended outcomes -- because you aren't measuring their completion -- then project performance suffers in silence!

Let's put it another way: Is the root problem at Lockheed that their managers don't understand 19 out of 32 criteria, or is the root problem that tens of thousands of Lockheed employees don't truly understand their intended outcomes?

The DoD is threatening to withhold Lockheed's profit until they comply with all 32 criteria, but as a taxpayer, I'm more interested in knowing that Lockheed's workforce has a VERY clear understanding of its multi-billion-dollar intended outcomes. Clarity of focus (especially in knowledge work) doesn't make headlines, but it is the foundation of success.

/Garry