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Value management is a team based activity that, depending on when it is implemented on projects, may involve key members of the project supply chain. It is therefore interventionist, disruptive and interruptive to good practice and procedure in delivering projects.
Based on the above statement and your experience of the value management training course, critically appraise VM as a structured method of project intervention. Discuss the advantages and disadvantages of implementing it on projects, including if you agree or disagree with it being an interventionist strategy, and suggest methods by which it may be improved.
This essay critically appraises value management as a structured method of project intervention; it then explores the advantages and disadvantages of this method and the extent to which it represents an interventionist strategy. The essay concludes by recommending ways in which value management may be improved.
Value management is defined by Kelly and Male (1996) as ‘a proactive, creative, problem-solving or problem seeking service which maximises the functional value of a project by managing its development from concept to use through structured, team-oriented exercises which make explicit, and appraise subsequent decisions, by reference to the value requirements of the client’. The British and European Standard on Value Management also sees value management as ‘a style of management, particularly dedicated to mobilise people, develop skills and promote synergies and innovation, with the aim of maximising the overall performance of an organisation.’
Value management can be applied at any stage during a project and is often done on a ad hoc basis, which has contributed to the criticism that it is interventionist and disruptive. Each base of the project has the opportunity for value management, but it is best to do value management at the beginning or early in a project because this maximizes the potential for value for money.
Value management asks ‘why’ projects or processes are being undertaken, and provides a framework for identifying better value from projects.
The following diagram outlines the main strategies in the value management process:
In the preliminary phase, the project manager meets with the client and value management facilitator in order to discuss whether value management is appropriate for the project. This is followed by the strategic diagnosis stage, where all of the key stakeholders are brought together to look at the objectives of the project and what information is required. They will also decide who should form the workshop members and what the workshop should deal with, including a timetable. If a project is already being undertaken, then the need for stakeholders to come together and reassess the situation may potentially be viewed as disruptive.
The workshop phase is one of the most important, and involves discussion and decision making about how to carry out the project, looking at all the different options and ideas between the various stakeholders. This is followed by the de-briefing and feedback stage, when members of the project team complete all of the matters arising from the workshop, to be included in the final plan. The final stage is the creation of the report, which involves the workshop facilitator presenting the report to the main stakeholders outlining how the project should be run. If this is different to the way an existing project is already being run, then it may appear disruptive. It is therefore important to maintain good communication.
As mentioned above, one of the most critical stages in the process is the workshop, where most of the benefits associated with value management are rooted. ‘Team dynamics and client education are critical elements of a successful value management intervention. A team needs to cover the stakeholder community and supply chain. This means that it needs the right skills mix/balancing end users, design, procurement, construction, and management… someone independent of the project, accepting this means extra cost and time in briefing his team.’ (Crossley, 2002)
It is important that the value management process looks at the entire project, not just individual parts, and that all of the people involved agree with it. It is essential that the best people are selected for workshops. This means that the people with the right information, knowledge and experience attend the workshop. If someone cannot make it, or it isn’t appropriate to ask them, then a ‘champion’ member should be asked to speak for them. This means all stakeholders are represented. A stakeholder is someone with an interest in the result of the project, for example the person investing the money or an engineer.
The following diagram outlines the stages of the process, which will underpin the critical success factors for a successful value management study. These critical success factors include the stakeholders, who must have a positive attitude towards the project and its direction. Also, the information used in decision making must be of a high quality and available at the workshop. One of the most important success factors is whether the objectives of the project are clearly defined. All of the relevant stakeholders must be present at the workshop, and ideally an independent facilitator should be used so there is no bias in decision making. The introduction of the facilitator may initially be seen as disruptive, if the project is already underway, as they will be involved with the process up to that point. The following diagram explains the workshop process.
The information stage requires that everyone should have the same level of knowledge about the project, and the information generated by the strategic diagnosis meeting. Once this is established, the workshop enters the functional analysis stage, which is designated to ensure that everyone understands the information they have, and how each of the bits of the project fit together, and where everyone fits in.
The next stage is speculation, where group members come up with group ideas and debate them, before entering the development stage. This develops the best ideas and looks at their risks and impact on the whole project. The best ideas are then taken into the decision phase and built into the overall, practical and achievable, combination. Once these have been finalised, the workshop enters the implementation stage where responsibilities are allocated and finishing dates and resources for each element of the project are finalised.
So far the essay has outlined the basis of value management and potential areas which may be criticised as interventionist and disruptive. It will now critically explore why value management is a useful tool, and the factors affecting its successful implementation.
As method of structured intervention, ‘value management is distinct from any other management approach in that it simultaneously includes attributes which are not found together in any other system. It is the only system that brings together within a single framework: management style; positive human dynamics; consideration of external and internal environment; effective methods and tools.’ (The British and European Standard on Value Management, 2000)
Although it is accused of representing an interventionist mechanism, value management may be used to identify and solve problems through the creative skills of a team, usually in a workshop situation as outlined above. The length of this workshop will depend upon the nature of the project, the degree of complexity and its scope and size. The value management process uses a structured method to come to a group decision about how a project should be completed at the best value. ‘Best value is the best possible compromise that can be achieved between all the competitive objectives of the various stakeholders to the project.’ (Hammersley, 2002) This helps stakeholders to challenge the existing methods being used on the project, and to come up with better alternatives, thereby making sure that the best project options, and the most efficient are selected.
‘Value management is a flexible, team-based activity, planned and directed by an independent value management facilitator and driven by consensus. The workshops are short duration (usually 6 hours to 2 days) intense and highly structured.’ (Hammersley, 2002)
Whilst value management has a number of advantages, there are also some drawbacks to using this technique. One of the key weaknesses of the method is its interventionist nature, which can cause tensions and rivalry between stakeholders in the project party. It is important to create a climate which is open and trusting during the workshop sessions, and all stakeholders need to feel comfortable with the process.
‘Excessive conflict can break the relationship among the participants, hence, moderate conflict levels may be most appropriate for stimulating creative decisions and improving performance and final outcome.’ (Leung, 2002)
Tensions will be especially apparent if the facilitator is not independent of the project, leading to a situation of bias.
In some situations, a drawback of the process occurs where a suitable ‘champion’ cannot be found to represent a stakeholder during the workshop process. This will lead to obvious tensions where the stakeholder is concerned and can jeopardise these areas of the project.
Another disadvantage of the implantation of value management process is that if value management is used continuously, at various stages throughout the project, irrespective of need, then it can become a ritualised process. This damages the impact of the process, and can damage relations between project members. Equally, this form of ritual behaviour can be seen as excessively interventionist and unnecessary.
If value management is implemented late in the project, rather than at the beginning, this can cause higher degrees of friction between stakeholders, especially if the projects’ credibility is drawn into question. This leads on to the final potential drawback, a situation may occur where the process inadvertently excludes an important stakeholder, and neglects to take their views into account. This will inevitably cause conflict.
There are many benefits associated with the successful implementation of value management, and one of the most important, is its ability to formalise the business planning and management processes. It is generally accepted that in order to gain the maximum benefit from the process, it should be implemented as early as possible, preferably before the project takes place. In this way it is able to identify the key strategic and political issues, and to bring them into the open.
The whole process places a large emphasis on team working. Whilst this may be viewed as potentially interventionist, it is interventionist in a positive way, bringing stakeholders together and ensuring that everyone recognises their place within the overall plan. Equally, providing stakeholders with the means to provide structured input can prove to be empowering, and improve staff morale. A result of this is, rather than being disruptive, it builds positive business and interpersonal relationships, with a focus on effective team building, and the brainstorming of good ideas. In addition, the overall aim is to focus on value, and this can only be positive.
The process also encourages efficiency, and separates individual stakeholders’ needs from their wants, so that only those demands which benefit the project as a whole are met. This links well to the identification of critical success factors, as mentioned earlier, and the identification of potential areas of risk.
Whilst value management has been shown to have both advantages and disadvantages though it’s potentially interventionist approach, there are a number of areas where VM may be enhanced in order to satisfy the maximum number of stakeholders, and reduce the perception that it is disruptive.
One of the most important areas of consideration is to ensure that ‘managers support any value management program, as its benefits may not be seen straight away.’ (The Federal Construction Council of the National Academy of Sciences, Department of Energy, 1997) This can be an area where the process falls down. Equally, if the process becomes ‘ritualised’, then it will inevitably be seen as interventionist and disruptive.
Managers need to be careful under which circumstances value management is implemented, and where it is deemed appropriate for use, ensuring that all stakeholders are aware of its specific goals and objectives and focus on the clients requirements. An area which is often neglected in value management is the need for proper feedback; this can reduce the need for further ‘disruptive intervention’ at a later stage in the project. As long as accurate and reliable information is used, and appropriate feedback utilised throughout the project, there is no reason why stakeholders should feel that the process is ‘interruptive to good practice.’
In conclusion, this essay has critically appraised value management as a structured method of intervention; it has shown that whilst there is a potential for it to be viewed as disruptive and interventionist there are many benefits as well as disadvantages associated with the process. On balance, the advantages appear to outweigh the drawbacks, and it is up to management to implement the system successfully, so that it does not appear to be disruptive and interruptive.
British and European Standard on Value Management (2000), Value Management BS EN 12973
Counting the Cost of Costing, http://www.contractjournal.com/home/Default.asp?type=2&liArticleID=27105&liSectionID=11 [Accessed 11th March 2005]
Crossley, A.D. (2002), Value Management as a Successful Project Intervention Strategy, White Paper www.servq.com
Department of Energy, Office of Field Management, Office of Project and Fixed Asset Management (1997), Value Management: Good Practice Guide GPG-FM-O11
Hammersley, H. (2002), Value Management in Construction, Association of Local Authority Business Consultants, Hammersley Value Management Ltd, Coventry
Kelly, J. and Male, S. (1996), The Value Management Benchmark: A Good Practice Framework for Clients and Practitioners
Leung, M.Y. and Liu, A.M.M (2002), Analysis of Value and Project Goal Specificity in Value Management
School of Civil Engineering, University of Leeds, Value Management Group http://www.leeds.ac.uk/civil/ceri/conman/value/summary.html [Accessed 11th March 2005]
The Institute of Value Management, http://www.ivm.org.uk/aboutivm_publications_vm_localgovt.htm [Accessed 11th March 2005]