Where Value Is Really Created in Projects And Why Most Organizations Get It Wrong

Every industry is suddenly talking about value. PMI’s brand-new PMBOK® Guide places value at the center of modern project management. It’s a necessary shift - but still incomplete.

Because here’s the truth:

Most organizations don’t actually know where value is created.

They try to “deliver value” in execution… when real value is shaped months (or years) earlier.

This gap between where value is created and where leaders think it is created - explains why so many projects struggle, stall, or fail before they truly begin.

1. PMI Is Right - Value Matters.

But It Doesn’t Explain Where It Comes From.

PMI’s latest edition emphasizes:

• value creation 

• value delivery 

• value sustainment 

• strategic alignment 

• iterative planning

All important.

But PMI does not clearly describe the moment value is actually formed.

It does not explicitly say:

Value is created before execution - in decisions, not deliverables.

This is where methodologies like “opportunity framing” and the “stage gate process” become essential.

2. The IPA Model: Value Is Created in the Front-End (FEL)

Independent Project Analysis (IPA) has studied more than 20,000 capital projects over 35 years. Their findings are unambiguous:

Up to 80% of a project’s total value is determined during the Front-End Loading (FEL) stages.

Sources: IPA Institute - FEL Index & Project Performance https://www.ipaglobal.com 

Prof. Bent Flyvbjerg book - “How big things get done".

IPA breaks FEL into three stages:

• Assess (FEL-1): Business case clarity, opportunity shaping

• Concept (FEL-2): Options development and selection

• Develop (FEL-3): Scope definition before execution

Projects with strong FEL outperform others dramatically:

• Cost outcomes are 20–25% more predictable 

• Schedule performance improves by 15–20% 

• Failure rates decrease by more than half

These numbers show that value creation happens during FEL - not execution.

And yet…

Most organizations spend only 1–10% of project time here.

3. Value Creation vs. Value Maintenance

(And Why Leaders Confuse Them)

Value Creation = Early Stage Decisions

This includes:

• “Framing” the opportunity

• Defining the problem correctly

• Identifying value drivers

• Defining success criteria

• Aligning stakeholders

• Testing assumptions

• Identifying and mapping risks

• Exploring multiple solutions

• Selecting the optimal concept

• Setting strategic direction

• Determining economic feasibility

This is where direction, scope, and strategy are decided.

Wrong here → wrong everywhere.

This is what IPA calls FEL value.

Value Maintenance = Execution & Operations

Once the right concept is selected:

• planning

• execution

• monitoring

• control

• commissioning

• operations

• optimization

These activities protect value - they do not create new value.

Execution can only deliver the value designed earlier.

4. Why Organizations Get It Wrong

Executives love momentum. They love progress. They love action.

So they accelerate:

• planning

• resourcing

• scheduling

• architecture design

• contracting

• procurement

• construction

• software development

And they skip over the slower, more thoughtful work:

• understanding the real problem

• validating assumptions

• aligning sponsors and key decision - makers

• defining scope boundaries

• exploring options

• clarifying success

• aligning stakeholders

This leads to the most common industry failure pattern:

Jumping to execution before creating value.

Prof. Bent Flyvbjerg captured this perfectly:

“Over 90% of megaprojects go over budget or over schedule - or both.” Source: Oxford University – Megaprojects and Risk

5. How the “Stage Gate Process” Reveals Value Creation

The “stage gate process” (also called the Decision Gate Process) separates the lifecycle into phases with strict decision points between them.

It makes value creation visible:

Gates 1-2-3 = Value Creation (“Think Slow”)

Here we: ✔ frame the opportunity ✔ identify and compare options ✔ test assumptions ✔ model uncertainty ✔ define success ✔ choose the path ✔ build alignment ✔ create confidence

Gates 4-5 = Value Maintenance (“Act Fast”)

Here we: ✔ execute ✔ deliver ✔ control risk ✔ assure performance ✔ sustain outcomes

The brilliance of the “stage gate process” is its simplicity:

Slow down early. Speed up later.

6. Agile or Waterfall - The Truth Is the Same

Some believe that value creation is only for Waterfall projects.

Not true.

In Agile

Value creation is in:

• problem definition

• user value mapping

• sprint goal alignment

• stakeholder clarity

Agile only succeeds when the problem is framed correctly.

In Waterfall

Value creation is in:

• concept select

• business case

• FEL 1–3

• pre-feed definition

In Hybrid

Value creation is front-loaded, value delivery is iterative.

Regardless of method:

You can only deliver well if you decide well.

7. The Real Reason Projects Fail

Most organizations do not have a problem with execution.

They have a problem with:

❌ poor “framing” ❌ unclear value ❌ premature decision-making ❌ weak options analysis ❌ stakeholder misalignment ❌ fear of slowing down ❌ unclear scope boundaries ❌ undefined success criteria

They rush into activity and activity feels like progress.

But progress without clarity is just motion. And motion without value is waste.

8. Final Thought - Value Is Not Delivered, It Is Designed

The PMBOK is moving in the right direction. But IPA’s research makes one thing crystal clear:

Value is created in early-stage decisions not execution.

If you want predictable outcomes: 

•  invest in “framing workshops”

• discipline the front end work

• use the “stage gate process”

• make decisions that create value 

• align before you act

Because:

Value is not an outcome of execution. Value is an outcome of clarity.

Frame it well. Decide well. Then deliver with confidence.

9. Want to Learn This Approach?

Join My Course: Mastering the Decision Gate Process**

For project executives, PMs, engineers, and decision-makers who want to:

✔ reduce project failure ✔ improve front-end loading ✔ make better strategic decisions ✔ use framing workshops ✔ implement the “stage gate process” with confidence ✔ create value early and maintain it through delivery

The course includes:

• video lessons • real project case studies (oil & gas, mining, infrastructure) • tools & templates • a full Decision Gate roadmap • examples using your PATH framework • guidance on running opportunity framing workshops • access to a private discussion group

If your organization struggles with unclear scope, rework, late surprises, or rushed execution - this course was built for you.