The fact is, the "business of business is to increase shareholder wealth." This sentiment paraphrases the thinking of many executives going back all the way to Adam Smith in the 18^th century. In his well-known book, The Wealth of Nations, published in 1776, business leader Smith wrote: "Every individual endeavors to employ his capital so that its produce may be of greatest value. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own security, his own gain." By all current measures, Mr. Smith was very self-centered and not community oriented. Nevertheless, it is as true today as it was more than two centuries ago that many businesses put financial performance at the top of the value chain.

Insofar as projects return more in financial resources than they absorb, we could then conclude that those projects are valuable to the business. It only remains to set up the mechanisms to make effective financial measures. We will take up financial measures in later chapters when we discuss capital budgeting and cost management. We will examine the concepts of sorting projects on the basis of their risk-adjusted returns calculated as either their net present value or their economic value add. Coupling scope with financial returns leads us to the concept of earned value. Earned value is indispensable for evaluating the true value of a project to the business.

Over time, several models have evolved to describe other sources of business value that are effective tools for project managers. Project managers are often called on to contribute to the selection of projects, to interpret the voice of the customer when setting scope, to evaluate the discretionary investments in upgrades and enhancements throughout the life cycle, and to assist with the rollout and deployment of the project deliverables to the end users and customers. Familiarity with the sources of value to executives, suppliers, users, and customers only enhances the value of project management per se. These value models convey understanding of the hot buttons of those constituents.