MEASURING

INTANGIBLES
(AND WHY THAT
MATTERS)
Project HEADWAY Webinar Series

MARK MULLALY, PH.D., PMP

mark.mullaly@interthink.ca
@markmullaly

18 05 2023
Webinar Objectives

Understand The Important Role Of Intangible Measures In Evaluating Success

Identify The Challenges And Difficulties In Using Intangible Measures

Develop A Strategy For Successfully Measuring Intangible Outcomes

Measuring Intangibles (And Why That Matters) 18 MAY 2023 3

Webinar Process – Things to Know

This Is A Zoom Webinar Presentation

• PowerPoint
• Computer-based audio stream

Problems or Help?
• Contact Heather using the Q&A box

Questions?
• Submit a question in the Q&A box
• Questions will be answered during the Q&A session
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This Presentation Will Be Recorded for Future Reference

PDUs

Measuring Intangibles (And Why That Matters) 18 MAY 2023 4

Agenda

• Introduction
• Defining Our Terms
• Intangibles Matter
• Pursuing Intangibles
• Successfully Managing Intangibles
• Question & Answer Session

Measuring Intangibles (And Why That Matters) 18 MAY 2023 5

DEFINING OUR TERMS

Intangible

Measuring Intangibles (And Why That Matters) 18 MAY 2023 6

Defining ‘Intangible'

'Intangible' Means:
• Not tangible; impalpable

• Something intangible, such as:

• An asset (such as goodwill) that is not corporeal
• An abstract quality or attribute

Source: merriam-webster.com
• Definition taken on 15 May 2023

Measuring Intangibles (And Why That Matters) 18 MAY 2023 7

Defining ‘Tangible'

'Tangible' Means:
• Capable of being perceived especially by the sense of touch; palpable

• Substantially real; material

• Capable of being precisely identified or realized by the mind

• Capable of being appraised at an actual or approximate value

Source: merriam-webster.com
• Definition taken on 15 May 2023

Measuring Intangibles (And Why That Matters) 18 MAY 2023 8

What Does The PMBOK Have To Say?

Surprisingly Little
• The term “intangible” appears in the PMBOK Guide exactly twice

In Two Different Contexts

• Nature of the project
• Some projects are perceived as intangible (e.g. software or the design of a drug)
• Context of value
• Exploring the net quantifiable benefit of a business endeavor
• Recognizing that this may be tangible, or intangible, or both

Measuring Intangibles (And Why That Matters) 18 MAY 2023 9

What This Means In A Project Context

We Are Exploring Impacts That Are Less Directly Measurable And Observable
• Success
• Value
• Benefits

There Is A Recognition That These Are Important

• They are harder to precisely define
• They are more difficult to specifically measure
• The are less visible and directly observable

The Challenge Is How To Productively Address And Evaluate Their Impact

Measuring Intangibles (And Why That Matters) 18 MAY 2023 10

INTANGIBLES MATTER

Measuring Intangibles (And Why That Matters) 18 MAY 2023 11

Thinking About What Matters

When We Define A Project, We Think About And Define Success

• It is a critical part of the project planning process

What Gets Articulated As Success Has Different Perspectives

• Success in delivering the project
• How we know the project was delivered well and accomplished what it was supposed to do
• Successful realization of value as a result of doing the project
• Whether or not the project was worthwhile doing in the first place

Each Of These Dimensions Can Be Further Broken Down And Differentiated

• Evaluating the concrete results of what was done
• Assessing the experience of delivering those results

Measuring Intangibles (And Why That Matters) 18 MAY 2023 12

Actually Assessing Success

How Do We Evaluate Whether A Project Was Successfully Managed?

• What are the questions that we can ask to evaluate this?

There Are The Default Perspectives

• Was it delivered on time, on schedule, on budget and to quality?
• Now ask yourself: why are these the default perspectives?

There Are Other Dimensions That Matter, And Matter A Lot To Project Customers
• I felt supported
• I had confidence in the person/team managing the project
• I was continually aware of progress and problems
• I felt taken care of and valued

Measuring Intangibles (And Why That Matters) 18 MAY 2023 13

Defining Tangible Benefits

Tangible Benefits Are Those That We Can Directly Measure

• It is possible to evaluate and objectively assess them

Verify Often, That’s Because There Is A Cost That Can Be Inferred

• It is the basis of using business cases as a decision making tool
• Only those benefits that can be associated with a dollar value have an impact

There Is Some Other Dimension Of Impact That Still Can Be Quantified

• Increases in productivity
• Reductions in defects or failures
• Accelerations in time to deliver

Measuring Intangibles (And Why That Matters) 18 MAY 2023 14

Defining Intangible Benefits

Intangible Benefits Are Those That You Can’t Directly Measure

• You can experience and observe them
• You cannot put a ruler beside them and objectively evaluate them

This Doesn’t Downplay Their Importance, But It Complicates Evaluating The Result
• Intangible benefits are very often subjectively perceived
• As we know, subjective perceptions are open to individual interpretations

The Impact Of Intangible Benefits Tends To Relate To Qualities Rather Than Direct Effects
• Attainment of strategic advantage
• Coherence or usability of design
• Customer experience

Measuring Intangibles (And Why That Matters) 18 MAY 2023 15

Where Each Of Them Fit

We Need To Consider And Assess Both Tangible And Intangible Benefits

• They both have a place in assessing outcomes
• Meaningful insights can be gained from both perspectives

Tangible Measures Give Us Objective Reassurances Of Results

• We attained the concrete outcomes that mattered
• We understand the financial impacts that were realized

Intangible Measures Give Us Subjective Evaluation Of Outcomes

• We delivered the experiences that make a difference
• We inspired and influenced the perceptions that were meaningful

Measuring Intangibles (And Why That Matters) 18 MAY 2023 16

PURSUING
INTANGIBLES

Measuring Intangibles (And Why That Matters) 18 MAY 2023 17

There Is An Obsession With Measurement

“What gets measured gets managed.”

• One of the most frequently uttered statements in a business context
• There is a dimension of truth to it, but there is also some misguidance that results
• More broadly, what gets prioritized and focused on gets managed

We Often Default To The Easy And The Safe

• This tends to be what we can attach a number to

What Is Easily Measurable Is Not Necessarily Important

• To a certain extent, this echoes attribute substitution
• Substituting a complex and difficult question with a comparatively simpler one
• In essence, we go with what we know we can measure
• Not necessarily the measures that are most relevant

Measuring Intangibles (And Why That Matters) 18 MAY 2023 18

There Is A Strong Desire For Quantification

There Is An Expectation That Benefits Should Be Quantifiable

There Is A Perceived Reassurance Behind Quantification

• That the benefits are real

• That thought and care has gone in to defining them

• The ability to reliable and confidently deliver on success

That Is Not To Say That Quantification Is A Bad Thing; It Is Not

• Where it is possible to measure something that is meaningful, we should do so

• Not all that is meaningful and important will lend itself to quantification

Measuring Intangibles (And Why That Matters) 18 MAY 2023 19

Financial Impacts Are How We Keep Score

The Bottom Line Is The Bottom Line

• For many, it is how organizations are assessed and evaluated

• This is particularly true in the private sector

Productivity Or Efficient Doesn’t Matter For Its Own Sake

• That is then turned into financial impacts in terms of costs and returns

• Often with the immediate expectation of reduction of budgets

This Is Why Business Cases Get So Emphasized In Decision Making

• They evaluate options only in financial terms

Measuring Intangibles (And Why That Matters) 18 MAY 2023 20

Addressing Intangible Benefits Is Often Resisted

The Role Of Non-Quantifiable Information Has Evolved In Awareness And Importance

• It is seen as being important and needing to be addressed
• How this is appropriately addressed continues to be challenging for many

If The Decision Making Tool Is A Business Case, The Impact Of Intangibles Is Exactly Zero
• Business cases are decisions presented in financial form
• Intangible impacts that can’t be quantified is not included in the estimates
• They have no impact on the analysis or its results whatsoever

The Consequence Is That Non-Quantifiable Information Gets Treated As Rhetoric

• The interesting consequence is that it has too much influence on the decision, or not
enough

Measuring Intangibles (And Why That Matters) 18 MAY 2023 21

SUCCESSFULLY
MEASURING
INTANGIBLES

Measuring Intangibles (And Why That Matters) 18 MAY 2023 22

Understand Where And How Intangibles Fit

The Common Perception Is That Outcomes Are Judged By Measurability

• The degree to which they can be quantified or not

• Because intangibles don’t lend themselves to quantification, we discount them

A Different Perspective Is Their Strategic Importance

• The more strategic an outcome, the more intangible it often is

• Many of the most measurable benefits are operational

• We think about costs, productivity, savings, efficiency, quality improvement – the “what”
• Many of the least measurable benefits are strategic
• We think about differentiation, reputation, confidence, experience, brand – the “why”

Measuring Intangibles (And Why That Matters) 18 MAY 2023 23

Understanding What Matters

There Are Strategies To Address The Measurement Of Intangibles

• They aren’t exhaustive

• They are not necessarily direct measures

• There can be levels of subjectivity

• There is no one right way to do this

There Is A Dimension Of Creativity That Goes Into Measuring Intangibles Well

• This may create perceptions that measures are fabricated or not relevant

• They are in fact well-accepted strategies

• They are essential to actually demonstrating what matters, and doing it well

Measuring Intangibles (And Why That Matters) 18 MAY 2023 24

Evaluating Subjective Experience

An Essential Means Of Measuring Intangibles Is Assessing Subjective Experience

• This is more popularly called “customer satisfaction”

You Are Asking People What They Think About An Experience

• Using surveys, questionnaires, polls, or physical response buttons

This Is Inherently Subjective

• This doesn’t mean it is not important; it is often vital
• It is still open to interpretation (in answering questions, and analyzing results)
• The results are representative; they should not be considered accurate measures
• Even where results are “statistically valid”, that is an indication of probability, not
accuracy

Measuring Intangibles (And Why That Matters) 18 MAY 2023 25

Assessing Proxy Impacts

The Challenge With Intangibles Is That They Cannot Be Directly Measured

• Instead, it is possible to measure around the intangible

To An Extent, This Is A Form Of Attribute Substitution

• You are taking a difficult question, and replacing it with a simpler, easier one

This Can Be Done In A Number Of Ways

• Instead of design effectiveness, measuring how fast it takes to find something
• Instead of employer reputation, measuring how many applications you receive
• Instead of marketing reach, measuring number of inquiries or values of sales

In All Instances, You Are Not Measuring The Thing You Care About
• You are measuring around the thing and inferring that what you measure relates

Measuring Intangibles (And Why That Matters) 18 MAY 2023 26

Measuring The Next Best Alternative

Not Being Able To Measure An Intangible Raises An Alternative Question

• What would be the impact if it wasn’t there? What would it take to deliver value?

Measuring The Next Best Alternative Is A Different Assessment Of Substitution

• It measures the value of an intangible by the cost of the next best alternative
• That cost may have direct and indirect influences that factor into total impact

This Requires A Realistic Assessment Of Impacts And Consequences

• Removing a solution, and considering the alternatives required to replace it
• This can feel artificial, and some of the impacts can actually be quite large
• It is a common and accepted form of valuation of intangibles in business cases

Measuring Intangibles (And Why That Matters) 18 MAY 2023 27

Measuring The Effect

Rather Thank Looking At Negative Consequences, You Can Also Explore Positives
• What does an intangible asset let you do that you otherwise couldn’t?

Measuring The Effect Is About Evaluating The Follow-on Benefits That Are Created
• It is not measuring directly the intangible value
• It is once again measuring around the value, based on what it makes possible

There Are A Variety Of Ways That This Can Be Accomplished

• Rather than measuring reputation, the value of markets that otherwise wouldn’t be available
• Instead of intellectual property, the value of the contracts that IP makes possible
• Instead of customer satisfaction, the value of their repeat business with you

While Factors May Again Be Related, It’s Important To Recognize We Are Still Making Substitutions

Measuring Intangibles (And Why That Matters) 18 MAY 2023 28

Accepting That It’s Intangible And Moving On

The Simplest Way To Assess Intangibles Is To Simply Acknowledge Them

• Recognize that they are there
• Value them for their own sake
• Subjectively accept that they matter even if they can’t be measured

This Is Inherently The Most Subjective Approach

• That is not to say that it doesn’t have a place

You Are Essentially Having A Strategic Dialogue About What Matters And Why
• Accepting the intangible value is seen as important and making a difference
• Being unwilling to replace or let go of the intangible and what it represents

Measuring Intangibles (And Why That Matters) 18 MAY 2023 29

How To Get Close To Answers That Work

All Of The Strategies Of Measures Are Representations And Approximations

• That doesn’t mean they aren’t relevant, and don’t provide value

There Is An Essential Framework You Can Use To Guide What Approach To Use

Goal Question Measure

What Goals What Questions What Measures

Are We Trying Will Demonstrate Will Answer
To Achieve? Attainment Of The The Questions?
Goals?
Measuring Intangibles (And Why That Matters) 18 MAY 2023 30
IN CONCLUSION…

Measuring Intangibles (And Why That Matters) 18 MAY 2023 31

In Conclusion…

Intangibles Are By Their Nature Elusive

• They are impossible to measure directly, and can be hard to measure at all
• Because of that, there are many that don’t trust or accept the impact of intangibles
The Reality Is That Intangibles Are Essential
• Many of the strategic outcomes we most care about realizing are intangible
• That doesn’t make them not work pursuing
• What it does do is put our desire for confidence and certainty in doubt
There Are Strategies For Measuring Intangibles
• While they are often still subjective and open to interpretation, they are also widely accepted
• The right measurement approach depends on what matters most
• There can also be value in simply accepting that the intangible is, in fact, intangible
A Way To Guiding Effective Measurement Is Being Clear About What You Are Trying To Do
• Identifying the questions that you can ask to assess accomplishment
• Defining the measures that best help to answer the questions

Measuring Intangibles (And Why That Matters) 18 MAY 2023 32

Q&A

MEASURING INTANGIBLES
(AND WHY THAT MATTERS)

Measuring Intangibles (And Why That Matters) 18 MAY 2023 33

 In Conclusion…

Quick Review:
Process to Pose a Question

Questions?

Mark Mullaly, PhD, PMP Measuring Intangibles (And Why That Matters) 18 MAY 2023 34
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Measuring Intangibles (And Why That Matters) 18 MAY 2023 35

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Measuring Intangibles (And Why That Matters) 18 MAY 2023 36

Mark Your Calendars!

Project HEADWAY

Digging for Root Causes

Thursday, 15 June 2023

@ 3:00 PM EDT

Measuring Intangibles (And Why That Matters) 18 MAY 2023 37

THANK YOU

QUESTIONS FOR THE PRESENTER?

MARK MULLALY, PH.D., PMP

mark.mullaly@interthink.ca
@markmullaly