Project Management Needs a CFO Mindset

Intro #

I’d like to make the case — hear me out! — that we should think about product and project management closer to the same way that we think about Finance within a company. In other words, I think it would serve a lot of companies well if they put as much effort and rigour into tracking the things that they are doing in a standard way that lets them report on them.

How Companies do Finance #

Every company of a certain size (and worth its salt) invests time, people and money in its financials. Not only does every large company have a CFO and a Finance team, these people are accredited professionals. What’s more, there are international standards for finance and accounting that are adopted by companies so that company financials are tracked in a standard and repeatable way.

Lastly, there is a source of truth for a company financials in the form of a general ledger (“GL”) software system. The system is encoded with the company’s chosen accounting standards and rules and governed by a strict set of permissions. It’s even audited to make sure everything is above board! There are other systems that feed data into and extract data from the GL (which are similarly governed by a strict set of audited rules.) The result is that the executive team knows it can trust the data from the GL. (And if they can’t, there are much bigger problems at the company.)

To summarize, companies of a certain size prioritize their financial management by having these qualities:

• There is a team of professionals dedicated to the function
• There are standards and rules in place for how to treat financials
• Financials are stored in a source of truth, with strict rules in place to make sure the data is accurate

Some companies do all this better than others of course. But they all do a form of those three things and no one questions it. And that’s because a company’s Financials are important.

All companies, even not-for-profits, need to understand how much money comes in and how much they spend (and on what). They use this data to form insights and help make decisions based on those insights. Without an accurate picture of a company’s financials, executives can’t make good decisions, and can’t even understand if they’re successful.

With that, let’s compare this to the state of Project and Product Management in many companies.

Project & Product Management #

I’m going to group Project and Product Management together here for the sake of simplicity. The trend in software development is to eschew the idea of projects (temporary endeavours) for products (ongoing things that continually grow and improve.) But both product and project management are both about deciding what to do, doing those things, and using data to understand how they are doing. To simplify things further, I’ll refer to both as P. Management.

Let’s make another assumption here, which is that understanding what a company is doing and whether the things they are doing are going well is important to making decisions. With that in mind, let’s compare how P. Management is organized in companies you might be familiar with as compared to Finance:

When you look at it this way, and you assume that the data about what teams are working on and how well those things are going are important, you can start to see the problems here. How can people in a company understand how well things are working and what actions to take if the data about those things are haphazard, out of date, and subjective?

Modern Software Product Management principles solve for this in a different way, by setting up Key Performance Indicators (“KPIs”) which are (ostensibly) objectively measured. If teams are delivering what they should be, the KPIs move in the right direction. In addition, modern Agile and DevOps principles go a long way to help software leaders understand bottlenecks in their code writing and delivery processes.

But the problem is when you step back from individual software teams. It’s great that Product Managers and Software Managers have numbers they can optimize. But what if a deliverable that needs the help of multiple teams to deliver needs to be done by a certain date? This is where I find objective measurement tends to take a back seat to “things are going great!” type updates that aren’t helpful in the long-term.

Example: Marketing Misses the Conference #

For instance, let’s say a company is shipping a big new feature that requires the effort of multiple software teams. This feature would likely need the Marketing team to create a campaign to promote it, and the Finance team to adjust their Financial reporting to measure the associated revenue.

Finance and Marketing block off their time in anticipation of when the feature is complete so that they can do their parts. But wait! Even though everyone said progress on that feature was going great, right before launch time, the Software team says it’s going to be delayed by six weeks. Now Marketing and Finance have to scramble to re-plan their work. What’s worse, Marketing avoided going to a big Marketing conference to make time for this work. And now it’s too late, because it’s sold out!

Now let’s imagine a scenario where there is a central source of truth, standards, and processes to track all the delivery work for these teams, and a reliable way to measure their progress and forecast their deliverables. In this world, stakeholders would have a much better idea much sooner that their deliverables were going to be off track. They would track and measure them in a standard way that gives them a reasonable prediction as to when they’ll be complete. The Software team can tell much earlier that they’re off track, and either do work to adjust, or go ahead and tell Marketing they can buy those tickets to the big Marketing conference because they know much earlier they won’t hit their dates.

Conclusion #

My example above describes this as a utopian world where everyone is always aligned and all reporting works perfectly without any effort. In reality, it’s never that simple. Even in Finance, the numbers can (despite best efforts) be wrong. But the state of Financial reporting is generally much more reliable, because companies invest time, money and people into making sure of it.

I don’t think Finance is a perfect model to apply to P. Management, but I think if companies placed the same investment and importance into Project and Product Management as they do Finance, they’d benefit greatly. And I suspect that companies that consistently deliver successfully do just that.