Achieving business results with Strategic Project Leadership®
Professor of Supply Chain and Project Management
Rutgers Business School, The State University of New Jersey
Strategic Project Leadership® (SPL) is a new and integrated approach to project management and was built on the foundations of traditional project management. It combines the strategic, business-related aspects of projects, the operational needs of getting the job done, while adapting to the context and changes in the environment and the leadership sides of inspiring and leading the project team. The main objective of SPL is to focus projects on business results by creating value, competitive advantage, and winning in the marketplace. This research-based, industry-proven approach recognizes that most projects today are uncertain, complex, non-linear, and changing; they are highly impacted by the dynamics in the environment and “one size does not fit all.” More importantly, it addresses the fact that meeting the “triple constraints” of time, budget, and performance goals is insufficient to guarantee business success. This paper describes the motivation for building the SPL approach and outlines its major concepts, planning elements, and implementation principles.
One of the most critical elements in the competitiveness and growth of organizations is project management. Clearly, no organization can survive today without projects. Projects are the drivers of innovation and change; they turn ideas and strategies into new products and services, and they can make organizations better, stronger, and more competitive. Furthermore, in an increasingly dynamic and competitive world, the investment and effort in projects continue to grow.
However, in spite of their importance, most projects today are still showing poor performance. Most projects don't meet their time and budget goals and many do not deliver their expected business returns. Paradoxically, many organizations are still not seeing project management as a strategic competitive competence, and many CEOs are ignoring this activity in their organizations, seeing it as a simple, operational job (instead, many have focused recently on Six Sigma). The unusual combination of weakness, importance, and neglect, provides a unique business opportunity to make a difference and benefit from helping organizations turn their project management into a powerful competitive weapon.
In this paper, we describe the status of conventional project management and the opportunity for change. We will show how the new concept of Strategic Project Leadership®, which was developed during years of research, teaching, and consulting, could help organizations and managers to make this difference. We will start by analyzing the reasons for the weakness in the profession, present our research process and findings, and provide the framework for turning projects into powerful competitive assets. We conclude by describing a set of principles on how to implement SPL, in addition to the existing project management organizational practices.
Why is Project Management Weak?
Today, many organizations use a well-established approach and a set of universal techniques to manage their projects; yet, they often find out that the traditional approach to project management is insufficient in dealing with today's dynamic business requirements. In fact, the truth is that even if you do everything by the book and precisely follow all the formal guidelines of project management, your project may still fail! The questions are: Why? What is missing?
There are several reasons why the classic approach is insufficient. First, the conventional approach to project management is based on a predictable, fixed, relatively simple, and certain model. Furthermore, it is often decoupled from the dynamic changes in markets, technology, or business environments. The reality is that most projects today are unpredictable, changing, and involve a great deal of uncertainty and complexity. Second, the current guidelines treat all projects as the same, and use a “one size fits all” approach. In reality, however, there are significant differences among projects and “one size cannot not fit all.” To succeed in a project, you must recognize the differences that exist among projects and adapt your style to the specific project characteristics. Finally, although almost all project launches are motivated by a business need or opportunity, the current project management approach is not designed to deal formally with business needs, focusing instead on operational efficiency and on meeting a project's time, budget, and requirement objectives (commonly called “the triple constraint”). However, achieving the triple constraint is insufficient and is only one aspect in a project's success. On one hand, research shows that even if projects meet their time and budget goals, they may still end up with disappointing business results (Shenhar and Dvir, 2007); on the other hand, often even late and costly projects become tremendous business successes. A well-known example is Microsoft's Windows development project, which was delayed numerous times and its costs extensively exceeded the estimates, yet it became Microsoft's most successful source of income.
The Science and Art of Project Management
The traditional tools of project management provide a universal formal part of the profession—the “mechanics” or the “science.” They are practiced around the world and promoted by professional associations—the most prominent being Project Management Institute (PMI)—and by dozens of consulting groups offering training and applications based on the classic concepts. The science part includes well-known and important techniques, such as WBS, PERT, Gantt, CPM, and Earned Value, to name a few.
Project management is also an art. The reasons why projects succeed or fail today can be attributed to the unwritten rules of the profession—the art part. The ratio in project management is perhaps, 20% science and 80% art. The art part includes many of the “weak spots,” as mentioned above, such as dealing with change, adapting to a specific context, and the lack of business focus during project execution (see Exhibit 1). It is time to turn some of the critical elements in the “art part” into science. If we could teach project management teams how to deal with change, adaptation, complexity, and business focus in a formal and structured way, project and organizational success would see a tremendous improvement.
Over the last two decades, our research team's work has focused on the non-traditional aspects of project management. We have studied over 600 projects around the world and have looked for the reasons why projects succeed or fail. We have developed numerous frameworks and principles that could help organizations and managers formalize some of the art parts and turn them into science, and we have tested these frameworks on dozens of organizations, with great levels of success and acceptance. We have also developed tools to apply these principles in real organizations. Based on this experience, here we present an integrated strategic approach to project management called Strategic Project Leadership® (SPL). The following sections describe this approach and its principles.
What is Strategic Project Leadership®?
Strategic Project Leadership® (SPL) is an integrated approach to project management, which was built on the foundations of traditional project management and adds several new formal components to the conventional approach—“turning some of the art into science.” The main objective of Strategic Project Leadership® is to focus projects on business results by creating value, competitive advantage, and winning in the marketplace. SPL combines the strategic, business-related aspects of projects, the operational needs of getting the job done, and the leadership aspects of inspiring and leading the project team.
Strategic Project Leadership® is based on a simple but powerful principle: Instead of seeing project managers as responsible for “getting the job done,” (i.e., completing the project on time and budget and meeting requirements), SPL sees project managers as leaders, or better said, “mini CEOs.” They should become responsible, not only for getting the job done, but also for achieving the expected business results, and inspiring and motivating the project team. They are also expected to adapt their style to the right context and manage the project in a dynamic and flexible way.
SPL is adding two new levels to traditional project management: dynamic adaptation and strategic leadership. The Strategic Project Leadership® framework encompasses all approaches (see Exhibit 2), and the three levels of SPL are summarized in Exhibit 3, which includes the major ideas, techniques, and focus.
The Dynamic Adaptation studies were supported in part by grants from the Department of Defense in Israel and NASA. They are described in dozens of research articles, and their principles and frameworks are summarized in works by Shenhar and Dvir (2007).
First, we suggest that organizations adopt a multi-dimensional framework for planning and assessing project success, instead of the traditional “triple constraint.” Such a framework will become part of the initial plan; it will first set the expectations in advance and later be used as a benchmark project execution to monitor if the project is still going to achieve these expectations. The framework for project success should include at least five dimensions (Shenhar et. al., 2001; Shenhar and Dvir, 2007)):
- Impact on the Customer
- Impact on the Team
- Business Results
- Preparing for the Future
Second, managers and executives of projects must learn to expect change and even embrace it. They must accept the reality that all their projects will undergo changes and should treat these changes as the norm, rather than the exception. Planning should be viewed as an on-going process, as new information is obtained. Re-planning should become common, not exceptional, and teams should adopt a flexible style for decision making and use a “rolling wave of planning” (Shenhar and Dvir, 2007), or an “agile project management style,” in which not everything can be planned in advance. Changes and adjustments should be added later, as more information is collected and the project moves on. Teams should also see this approach as an opportunity to adjust and redirect the project toward maximizing the end results and achieving higher revenues.
Finally, organizations should accept the reality that “one size does not fit all projects” (Shenhar, 2001), and learn to use a framework that will help them distinguish between different project types and adapt a project management style for each project. Project managers should learn to adapt to different levels of market, technology, and environmental uncertainties; different levels of complexity; or different constraints and limitations and they must also adjust the project to the unique business environment and industry. The Diamond Model (Shenhar and Dvir, 1996; Shenhar and Dvir, 2007) offers a framework for analyzing a project's specific context and selecting the right style; it includes the following four dimensions, and each dimension is divided into four different project types:
- Novelty – How new is the product to your market and users?
- Derivative, Platform, New-to-the-Market, New-to-the-World/Breakthrough
- Technology – How much new technology is used?
- Low-Tech, Medium-Tech, High-Tech, Super High-Tech
- Complexity – How complex is the product or the project organization?
- Material/Component, Assembly/Subsystem, System, Array/System of Systems
- Pace – How critical is your time frame?
- Regular, Fast/Competitive, Time-Critical, Blitz
A unique Project Diamond describes each project context, and the specific project diamond determines what the appropriate style is for this particular project. The Project Diamond can also help analyze project difficulties and put a troubled project back on track. As an example, we cite the recent problems in Boeing's development of its 787 Dreamliner program. The program suffered extensive delays, because the company did not expect the difficulties it encountered with the new technology of composite materials and the complexity of its wide network of suppliers to which it delegated an unprecedented amount of design and development work. The Diamond Analysis used for this program showed that the program was managed as a Medium-Tech System project, whereas the required approach should have been a High-Tech, Array (see Exhibit 4).
The Strategic Leadership part came out of our strategic management studies, which were supported by grants from National Science Foundation (NSF), Project Management Institute (PMI), and NASA. They are summarized in several articles and in a PMI research monogram (Shenhar, Dvir, Milosevic, &, Thamhain, 2007). This level includes two new formal steps in the planning and execution of projects—strategy and spirit.
Project Strategy – Adding The Missing Link
Typically, project execution starts after a project plan has been created (PMI, 2008). The plan normally includes the project scope, deliveries, milestones, resources, and activities for execution. Most projects are initiated as part of the company's business strategy and they need to support this strategy; yet, the traditional books and training are not guiding teams on how to do it. As we've found, in order to translate the company strategy into what needs to be done on the project to support this strategy, we need to add a formal project strategy document between the top-level business strategy and the project plan, in other words: adding the missing link. But what exactly is project strategy and what does it involve?
In today's environment, any project outcome—a product, process, or service—is likely to face competition. Thus, for each product, process, or service one should ask, how will it stand out? How will it succeed in the face of competition, and what will be its competitive advantage? Project management, therefore, cannot just be about meeting time and budget goals; rather, it should be about creating competitive advantage and value. A good project strategy document will define how to create the best competitive advantage for winning in the market place; the project strategy is the project's unique way of making sure this happens. This way should involve the project's approach, direction, and a path that are planned in order to win over the competition (Mintzberg et. al, 1998).
We define project strategy as: the project perspective, position, and guidelines on what to do and how to do it, to achieve the highest competitive advantage and the best value from the project outcome (Shenhar et. al., 2005; Shenhar & Patanakul, 2010). A typical project strategy document will include the following components:
- Business Background
- Business Objective
- Strategic Concept
- Product Definition
- Competitive Advantage/Value
- Success/Failure Criteria
- Project Definition
- Strategic Focus
Project Spirit – Inspiring the Project Team
The second component that strategic project leaders must address formally is project spirit. Great leaders know how to define and nurture a vision that energizes and brings out the best in people. Visionary leaders are often transforming and inspiring their people to achieve outstanding results and overcome enormous difficulties. But great leaders must not only exist at the national level; they can be found everywhere and in particular, in projects. Project managers should train themselves to become inspiring leaders and see this as a regular part of their job. By building a formal project spirit, project managers should be able to translate company and business visions into great and exciting products and build a project environment that is based on energy, excitement, and enthusiasm, which will lead to successfully achieving the project's goal and creating the competitive advantage and value. We define the project spirit as: “The collective attitudes, emotions, and behavioral norms that are focused on the project's expected outcome and achievements” (Aronson, Shenhar, & Reilly, 2010).
The first step in creating spirit is articulating an appropriate and exciting product vision. Visions can often be summarized by a short motto or slogan, which will be derived from the strategy and articulate the state of affairs after the project is completed. Well-defined product visions will excite the team, create meaning, and unleash the energy in people but they will also excite upper management and eventually influence the customer. All and all, the following four elements can help build a successful project spirit:
- Vision – Building inspiration, excitement, and motivation
- Values – Directing and guiding the right behavior
- Symbols - Distinguishing the project's uniqueness
- Social Activity – Taking care of the fun and creating the team bond
Summary - Implementing Strategic Project Leadership®
Implementing SPL requires a new integrated approach concept, new framework for planning, and a collection of implementing principles as summarized below.
The Integrated Approach Concept – The Four Aspects
Strategic Project leadership® involves moving out of the current “get the job done” approach. Although operational excellence is important, it must be accompanied by additional conceptual understanding. We suggest that project managers and teams learn to integrate four aspects during their work (Exhibit 5):
- Operational Excellence – Meeting the project's efficiency goals of time and budget
- Dynamic Adaptation – Adjusting the project to changes and context
- Strategic Focus – Focusing the project on business results and competitive advantage/value
- Inspired Leadership – Inspiration and motivating the project's team.
The Planning Framework – The Five Hierarchical Plans
To guide the project's planning, SPL defines a hierarchy of five parts of a strategic project plan: strategy, spirit, organization, processes, and tools (Exhibit 6). A project plan is designed to support the company's business strategy, but is unique to the project's specific business goals. Some of these plans will clearly include traditional components such as scope, WBS, CPM, and so forth, but they would be parts of a larger framework of planning that starts with strategy, and continues with the rest of the plans:
- Strategy – Building a unique project strategy to support the company's strategy and creating competitive advantage
- Spirit – Creating a unique vision and a normative behavior environment that focus on the creation of competitive advantage
- Organization – Adopting the organization to the unique goals and strategy of the project
- Processes – Building the project's traditional and strategic processes of planning and monitoring
- Tools – Using traditional tools together with new tools and documents that support the business-focused strategy
The Twelve Principles for Implementation
The following twelve principles summarize the rules that will help organizations and project managers implement the SPL approach and follow it throughout the project execution. Although we did not discuss all principles in detail in this paper, this list provides a complete picture of what SPL implementation requires:
- Focus project management on business results; turn project managers into leaders, and make them responsible for the business results
- Select your project (and program) portfolio based on different types of business objectives
- Define a strategic charter for your project; obtain top management support upfront and throughout the project
- Define why, (for) what, and how you are going to do the project
- Set the expectations in advance, including the business results; define multiple success dimensions for different stakeholders
- Define your project strategy, including the planned competitive advantage/value and strategic focus
- Define your project's vision, and create the right spirit that will excite the team and support the creation of competitive advantage
- Define your project organization and processes, and build a plan for project execution and monitoring, to ensure operational excellence, strategic focus, and inspiring leadership
- Expect change; build hierarchical and dynamic plans; be ready to revise your plans as you move forward; obtain more information and remove uncertainty
- Identify your project uniqueness and adapt your project management style based on the “Diamond” dimensions and other project characteristics
- Conduct strategic project reviews, in which you reexamine the needs, the strategy, and the expectations, in addition to reviewing execution status and progress
- Create an on-going learning organization within your project.
Moving toward a more strategic project management world is both timely and necessary. It is also possible. As we described, Strategic Project Leadership® provides an integrated approach to project management, with the clear goal of achieving business results by creating competitive advantage and value through the project. However, implementing SPL in organizations will require changing the current perspective on project management. The most effective way to do this is through the upper management of an organization; executives who adopt these realities earlier, will be tomorrow's winners. Nonetheless, the change will require cooperation between top management and project managers and teams, in which executives entrust project leaders with higher autonomy and more power. Project leaders (formerly managers) will then understand they can do more than just focus on meeting time and budget goals.
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© 2010 Aaron Shenhar
Originally published as part of Proceedings PMI Global Congress 2011 – Washington D.C.