We measure the progress towards a specific delivery defined in a work package and identified by a milestone. The delivery is the goal and the progress measured is the progress towards that goal.
Inevitably there are controls, checks, inspections, tests, validation and verification which guarantee that the right work has been done, to specification, without unacceptable problems, in the right place and in the right quantity: useful, usable and used.
Milestones often release some value that can be recognized and paid for by a customer. The work effort is not always directly related to the value. First of all there is the risk to take into account. Design, preparation and foundations are work packages that may not take a long time, but they can reduce the risks significantly.
Secondly and quite simply, the customer’s perception of value does not always align with the work effort or cost. Information is one example. It may be cheap to give and valuable to receive a piece of information, or vice versa. It’s worth checking frequently what gives the value to the customer – i.e. via prioritizing – in order to adjust the effort proportionately, if realistic and appropriate.
With some work packages a control, a check or a test does not mean very much. Either the work has been 100% completed or not, but there are no intermediate milestones. The work must be accepted at the end, when you can say that it is 100% complete: 0/100
This seems unfair on the party executing the work. After all they have accomplished work that has only gets recognized and paid for right at the end. They may demand 20% down payment at the beginning and the balance at the end: 20/80. Similarly on internal work packages, you may choose to account for 20% of work accomplishment at the start.
If you decide instead to count 50% of the work accomplishment at the beginning and 50% at the end of a work package, it looks and sounds over generous, but it feels right when you are working well. There is an incentive to start the work, and you are over-estimating the earned value of the work for the first part of the job (and remembering to value its importance). In the second half of the task you are underestimating the work that’s been done from halfway until completion, when you earn the remaining 50%: 50/50.
The notion of level of effort is for those work packages where it would be more difficult to assess value, because the value depends upon something else (i.e. Quality management and testing). Also, when your progress is evaluated according to the hours worked, this is a kind of level of effort. You make the assumption that value depends upon the quantity, volume, weight, interfaces connected, functions tested, documents processed; meters of pipe implemented, instruments calibrated or some other measure that you are managing.
Always focus on the goals, and determine how success will be measured. If my document is a business proposal to a customer, then perhaps the management summary and cost breakdown are worth 80% of the whole value. Therefore that’s maybe where I invest my effort. If producing a slide presentation of a business investment, then better spend time on the benefits and the graphics; if it’s a design document, then the clarity of the drawings and the supporting statistics; if a requirments specification, then the exhaustivity and the ability to obtain agreement; if a publicity poster, then the slogan; if a document to be translated, then the quality of the sample and the final edit, and so on.
Three stories about value:
* A motorist takes the car, with a knocking sound, to be repaired at a garage. The garage mechanic listens a moment, and then smacks the engine with a hammer and the knocking stops. “That will be 100 Euros.” “100 Euros for hitting my car with a hammer?” “Actually, it’s 1 Euro for hitting the engine and 99 for knowing where to hit”. This is actually more effective than saying, “It’s worth much more than 100 to you sir”. The motorist is paying for competency and reliability.
* It was said that Picasso always knew his worth and how to get the recognition his art deserved. Certainly, his conviction was a factor in influencing the market. The story goes that once in a restaurant, when asked to pay the bill, he offered instead to draw a sketch on a napkin. (Real artists don’t carry money.) The restaurant owner is delighted and asks him to sign the sketch. Picasso’s answer: “I’m buying a meal, not the restaurant.” (Or why not a chain of restaurants?) J.M.W. Turner would add a blob of red paint to a small boat in the middle of a painting and blast the competition out of the sea. But many other artists fail to sell work that only becomes commercially successful when they have passed away.
* Michael Faraday was a philosopher, chemist and physicist who pioneered many discoveries and inventions, including an electromagnetic motor. When asked by the Prime Minister, William Gladstone, of “Of what possible use can this be”, Faraday’s reply is a model of exemplary stakeholder management. “One day, Sir, you will be able to tax it.” Incidentally, it is said that Albert Einstein used to keep photos of three scientists in his office: Isaac Newton, James Clerk Maxwell and Michael Faraday.
Therefore, when asked about a change to engineering product, a business-minded person might say, “If we could make this change would you pay for it?” “A shop assistant might say, “Would you tell your friends about it?” In the simplest of words, “What’s the value?”