Strategic Project Management - Away from PBO By Default Shadow

1. Strategic Project Management - Away from PBO By Default Shadow P D Rwelamila PhD, PrCPM Professor of Project Management & Procurement Systems Graduate School of Business Leadership University of South Africa (UNISA) South Africa 2008

2. What to Cover • Context – PM for Contemporary Organizations • Context – Forewords (4#) • Context – Executives/Foot soldiers • What is a PBO & Challenges in Practice? • Visiting the Project Coal-face • Linkage Between Projects & Strategy – Prac tical dilemmas • Project Management Maturity – How mature is your organization? • Internal Re-engineering - Strategic PM in action

3. 7 Primary Forces of Change Facing Contemporary Organisations • Compression of product life cycle • Global competition • Knowledge explosion • Corporate downsizing • Increased customer/client focus • Rapid development of non industrialised countries & closed economies • Small projects represent big problems

4. PRIMARY FORCES FACING CONTEMPORARY ORGANISATIONS • Compression of the product/service life cycle: • computer aided design (CAD) & manufacturing (CAM), have forced radical changes in the product life cycle & clients are more demanding for improved services. • Global competition: • transformation from national or regional economies to one global economy during the 1970s, has brought pressures on quality improvement and cost containment

5. PRIMARY FORCES (Contd.) • Knowledge explosion • the growth in new knowledge has increased the complexity of projects because projects encompass the latest advances & services are also more technologically complex. • it is hard to find a new product that does not contain at least one microchip • the need to integrate divergent technologies (through PM)

6. PRIMARY FORCES (Contd.) • Corporate downsizing • after years of stressing growth and ‘big is better’, organisations have begun to face the harsh reality that big is also costly • downsizing (or rightsizing if you are still employed) and sticking to core competencies have become necessary for survival of firms. Middle management is a mere skeleton of the past - PM is replacingmiddle management • it is rare today to find any major project performed totally in-house - outsourcing, where the PMs have to manage their own people but also their counterparts in different organisations

7. PRIMARY FORCES (Contd.) • Increased Customer focus • the majority of customers no longer simply settle for generic products/or services. They want customized products/services that cater for their needs • the customized environment requires a much closer working relationship between provider & receiver • PM is critical both to development of customized products and services and to sustaining lucrative relationships with customers

8. PRIMARY FORCES (Contd.) • Rapid development of Developing Countries & Closed Economies • the collapse of the Soviet Union, Apartheid, etc., and the gradual opening of Asian communist countries, SADC and other African countries have created an explosion in pent-up demand for consumer goods & infrastructure development • there is scramble to introduce new products and services to these new markets & many firms are using PMtechniques to establish distribution channels & foreign bases of operations

9. PRIMARY FORCES (Contd.) • Small projects represent big problems • the velocity of change required to remain competitive or simply keep up has created an organisational climate in which hundreds of projects are implemented concurrently - the climate has created a multi-project environment and a plethora of new problems.

10. THE FORCES ARE REAL! • PM is ideally suited for a business environment requiring accountability, flexibility, innovation, speed, and continuous improvement.

11. THE IMPACT OF THE 7 FORCES • it is no longer possible to to use traditional management methods to solve problems (individuals solving problems!!) - the need to use teams to solve problems (combined skill?) • organisational response to the forces cannot take the form of an instantaneous transformation from the old to the new

12. Forewords (1) “We found that too many leaders and managers, particularly at the upper and senior levels, were inclined to view project management as a special case management – a minor departure from the proper or expected ways of managing the organizations. Too often, these managers failed to appreciate the strategic role that projects can play in the management of their organizations. Up until the last few years, many managers tended to tolerate rather than fully accept project as the way to enhance organizational effectiveness. This caused PMs, functional managers, and project professionals to see themselves in ambiguous roles in supporting project initiatives.”:Cleland & Ireland (2007)

13. Forewords (2) “Aligning the organization’s portfolio of projects to maximize their contributions to strategic objectives takes a highly coordinated effort. It requires more than the old "grenade over the wall"approach, in which the planning staff identifies and characterizes the project and then tosses it to an uninformed and uninvolvedproject managementgroupthat is supposed to complete the project. - everyone must be engaged with the project before charging ahead.” - Dinsmore & Rocha (2012)

14. Forewords (3) “PM is no longer about the sequence of steps required to complete the project in time. It is about systematically incorporating the voice of the customer/or client (my emphasis), creating a disciplined way of prioritizing effort and resolving trade-offs, working concurrently on all aspects projects in multifunctional teams, and much more. ……….- in this case 80% of the costs are determined before they take over.” :Jones (2003): Lean Enterprise Research Centre, Cardiff Business School, UK

15. Forewords (4) “There are huge opportunities for eliminating wasted time and effort in almost every project . In manufacturing, Toyota estimate that only 5% of activities actually add value, 35% are necessary but do not add value, whilst the remaining 60% is pure waste – ‘muda’ in Japanese! By halving the effort in designing a new car, they show this ‘muda’ can be reduced by good project management. Every PM…has not only to manage their own project but seek ways of eliminating the ‘muda’ in their systems so they can do more for less, and more quickly next time!” :Jones (2003): Lean Enterprise Research Centre, Cardiff Business School, UK

16. Upstream Upstream Downstream Downstream Strategic Project Management Executive Management Interface between Project Link and Clients (internally and externally) and the focus to continuously ensuring appropriate and optimised solutions [Strategic emphasis; Core team & organisation; PMIS; Developing a PM; Becoming a learning organisation; Inter-organisational relations] ProjectLink in the midst of the Upstream and Downstream of Project Management Development Tactical Project Management The Project Manager and his/her Team’s Interface with stakeholders applying Project Management Best Practices Technical + Social Cultural Project PM The Project Manager and his/her Team’s Integration and Optimisation of the Required Project Resources (Technical) + Management (Social-cultural Issues)

17. Do You Know Who You Are? • AProject Based Organization (PBO) • : Characteristics (1) • management by projects must be an organisational strategy; • adoption of temporary organisations for the performance of complex processes; • manage a portfolio of different project types; • have specific permanent organisations to provide integrative functions;

18. Do You Know Who You Are? • AProject Based Organization (PBO) • : Characteristics (2) • apply a ‘new management paradigm’ (lean management, total quality management (TQM), business process re-engineering and learning organisation); • have an explicit project management culture; and • perceive itself to be project oriented.

19. Default Project Based Organizations • Project unlinked to coherent strategies • Upper managers are unaware of the total number & scope of projects being undertaken • Lip service to learning from projects (audits & close-out reports out of the equation) • Window dressing project management information systems • The core-team is very weak and chaotic PROJECT BASED ORGS. BY DEFAULT AS A NORM

20. Project Management A Cinderella Field? • 8 out of 10 project managers are accidental or have inadequate PM knowledge base • Most organizations are fundamentally project based - but are PBO by default – characterized by archaic & fragmented systems • Project management training is characterized by curricula falling short a significant number of project management fundamentals PROJECT MANAGEMENT POSTURING SEEMS TO DOMINATE

21. Accidental Project Managers – custodians • Individuals are appointed as PMs because they have qualifications in the same field as the project’s core business • Player and referee roles – a conflict recipe • Perpetual competence challenges • Understanding the social coalition dynamics (Overflowing IQ or Overflowing EQ or Balance IQ/EQ?) THE GROWING SYNDROME WITH ENTRENCHED DYNAMICS

22. Project Management -Context & Concepts • From a Linear Model to a Complex 3-Dimensional Maze –environment • Features of a Project

23. A Project - Part of a Complex System(3-Dimensional Maze) • Inputs & outputs • Sector/Industry environment • Country/Economy environment • Global environment • the need to understand the dynamics of environments

24. Cost Project stakeholders H&S +Env. Quality Utility Schedule Project & PBO forces Inputs Output(s) Sector/Industry forces Country/Economy forces Global Forces A 3-Dimensional maze –environment H&S – Health and Safety; Env. - Environment

25. Features of a Project • Primary features: • a project anatomy (life cycle) (a beginning and end, with a number of distinct phases in between) – linear model? • a budget with an associated cash-flow • activities that are essentially unique and non-repetitive • use of resources, which may be from different departments & need co-ordinating • a single point of responsibility (i.e. the project manager) • team roles & relationships that are subject to change & need to be developed, defined & established

26. Accumulative Effort Total Project Life Cycle Time Plan Accomplish Phase 3 IMPLEMENTATION Execute (E) Set up: • organisation • communications • Motivate team • Detail technical requirements • Establish: • work packages • detailed schedule • information control • systems • Procure goods and services • Execute work packages • Direct/monitor/forecast/ control: • scope, quality, time, cost • Resolve problems Phase 1 CONCEPT Conceive (C) • Gather data • Identify need • Establish • goals, objectives • basic economics, feasibility • stakeholders • risk level • potential team • Guesstimate resources • Identify alternatives • Present proposal • Obtain approval for next phase Phase 4 TERMINATION Finish (F) • Finalize product(s) • Review and accept • Transfer product responsibility • Evaluate project • Document results • Release / direct resources • Reassign project team Project Life-Cycle [generic] (developed from Rwelamila (2001) , the PMBOK series. Volume 1, Wideman and Fellow, 1991, p111-2) Operation/ Use Phase 2 DEVELOPMENT Develop (D) • Appoint key team members • Conduct studies • Develop scope baseline: • end product (s) • equality standards • resources • activities • Establish: • master plan • WBS • policies and procedures • Assess risks • Confirm justification] • Present project brief • Obtain approval to proceed Phase 6 TRANSFER Finish (H) • Quality of Facility/ service • Evaluation process Phase 5 OWN & OPERATE Finish (G) • Project operate commercially • Project produces cash flow to pay lender’s debts interest and principal repayment. • Cost (operation & maintenance, etc) • Training?