Value proposition design for projects
One of my favorite books, “Value Proposition Design” written by Osterwald, Pigneur, Bernada and Smith shows how to design and test value propositions in an iterative search for what customers really, really want. The basis for the right value proposition is a Canvas (see illustration based on Strategyzer), which shows on the one hand side the customer´s perspective of jobs and requirements together with the pains a customer is facing as well as the gains he is expecting from a collaboration (e.g. in a project). On the other side, certain products and services together with gain creators and pain reliefers could be offered that fit the customer needs. The match is the right value proposition. It can be combined with the Business Model Canvas and thus define the strategic approach of a (product and service) provider.
The value proposition design can be generally used to invent and improve value proposition. It can also be used for projects to match the needs of customers with what is being offered through a project. On the right side of the Canvas you note the set of customer characteristics that you assume, observe, and verify. The left side highlights the benefits (value proposition) that you offer to the customer. Both need to fit. Neither more (“over engineering”), nor less (“underperforming”), just right to the level of expectations.
For a project the section “jobs & requirements” describes what the customer is trying to get done through the project, expressed in their own words. It requires an intensive dialogue with the customer, based on assumptions, observations and verifications. The “pains” describe what the customer perceives as bad outcomes, risks, and obstacles in relation to the project. The “gains” highlights which outcomes or benefits the customer wants to achieve through the project. That could be formulated in form of short, medium and long-term outcomes or benefits. On the left side the project is outlined in terms of “products and deliverables”, i.e. a list of what the customer gets through the project. The “pain relievers” demonstrate how the project alleviates the customer´s pains, and the “gain creators” describe how the products and deliverables create customer gains.
The Value Proposition Canvas is a great tool for analyzing the customer needs and aligning the project set-up with those needs. It may be used in the preparation, definition or design phase of a project and helps avoiding unnecessary risks, conflicts, delays or cost overruns in projects. However, it requires a culture of open communication, humble inquiry / consulting.