How value methodology can help project managers excel
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Have you ever looked at your project and asked yourself, “Why am I doing this?” or “How can I do this better?” Those are two big questions for any project manager. To get the right answers, you first must ask another question: What is the function I must perform?
Function-inspired change is at the heart of value methodology, which can enable project managers to better understand their client’s value objectives, meet schedules and stay within budgets. Value methodology also allows project teams to remain agile and to “take the chance out of change” by ensuring that every decision made throughout the project life cycle ties back to the basic functions the project must perform.
Value methodology was created by General Electric (GE) during World War II when the company was looking to improve performance and cost. A GE team started by identifying and classifying the functions of its products. When team members boiled functions down to active verbs and objects that could be measured, they were able to decide whether each function was essential or secondary. Defining functions like this allowed the team to understand products from new vantage points—and strategize in valuable ways. The company could apply costs to each function and decide if that cost was really worth the expense. Ultimately, a methodology emerged from GE’s work: value analysis.
Value analysis evolved as it was translated from products to projects and processes. Depending on its application, it now goes by different names: value engineering, value management, value planning and its umbrella moniker, value methodology. It differs from other management practices in three ways:
- It is based on the analysis of functions.
- It is performed by a multidisciplinary team in a workshop setting facilitated by a trained value specialist.
- It follows a step-by-step process: the value methodology job plan.
To understand the benefit of this methodology for your own projects, remember that activities differ from functions. For example, consider which would lead a project team to better brainstorming options: planning an activity like constructing a bridge or planning a function like spanning a river. Or consider planning an activity like processing invoices versus planning a function like allocating funds. Clearly, looking at the function opens up more possibilities.
Value methodology may be applied to products, projects and processes. One company convened a value engineering study to analyze its rechargeable electric toothbrush. It defined the value objectives and criteria for success as cost, effective plaque removal, perceived value, assembly speed, ease of use, reliability, ergonomics, safety, simplicity, regulatory compliance and mouth-friendliness. The value engineering team performed function analysis and then generated more than 500 ideas, of which 240 were judged to warrant further discussion. The team developed 31 significant proposals, including the design of an in-line charger, a redesigned cover, elimination of the need for welding during manufacturing, revised testing specifications and revised packaging. The company ended up saving more than US$13 million as a result of implemented proposals that improved production, changed materials and design, and made other improvements.