what matters most, capability or maturity?
Founder and Senior Consultant, Human Systems International
In the world of organizational project management (OPM) there is a wealth of different models that purport to measure process maturity—Organizational Project Management Maturity Model (OPM3®) – Third Edition, P3M3, P3O, and so on, and so on. Most of these are derived either directly or indirectly from the family of capability maturity models developed at the Software Engineering Institute of Carnegie Mellon University. However, the use of the terms capability and maturity in connection with such models in everyday language is potentially ambiguous, and an emphasis on maturity rather than capability can lead organizations astray. Research supports the contention that there are three sets of capabilities that are essential for the effective delivery of strategy: organizational, “owner's,” and project. Efforts to improve strategy execution should be focused on improving selected elements of these in a logical and structural way.
The Role of Organizational Project Management in Delivering Strategy
Speaking at the PMO Symposium in Miami in November 2014, Michael Porter, widely recognized as one of the world's most influential researchers and writers on the topic of organizational strategy, painted an impressive thumbnail sketch of what strategy is and, perhaps more importantly, what it isn't. He portrayed strategy as a series of deliberate choices made by an organization as to which customers it would serve and how it would do so and, equally important, which ones it would NOT serve and how it would NOT do so.
Seen in this light, strategy is something that involves the whole organization in implementing these choices: finding ever-improved ways of serving the chosen customers in the chosen way, so as to create a unique value proposition that is supported by every one of the organization's component functions and divisions.
It follows that strategy will be delivered through activities that are designed to improve or change the organization through such means as programs to transform business processes, functions, or divisions, or to enter new markets or exit from others, or projects to develop new products or services, or to erect new facilities or introduce new ways of working. In other words, strategy will be delivered through a portfolio or portfolios of programs and projects. And the totality of the arrangements that organizations make for the management of these portfolios of programs and projects can be referred to as organizational project management—“a strategy execution framework,” as defined in OPM3® (Project Management Institute, 2013).
Differences Between Capability and Maturity
The term organizational project management has come into widespread usage to a large extent because of Organizational Project Management Maturity Model (OPM3®), first published by the Project Management Institute (PMI) in 2003. It was not the first such maturity model to be concerned with OPM. A presentation at the PMI® Global Congress 2001—North America identified 27 different models that had been reviewed by the team creating OPM3® (Cooke-Davies, Schlichter, & Bredillet, 2001).
The majority of these had been developed either directly or indirectly from concepts first introduced by the Software Engineering Institute (SEI) of Carnegie Mellon University's capability maturity model (CMM) for software. Integral to the model is the concept that organizations advance through a series of five stages to maturity: initial level, repeatable level, defined level, managed level, and optimising level. “These five maturity levels define an ordinal scale for measuring the maturity of an organization's software process and for evaluating its software process capability. The levels also help an organization prioritize its improvement efforts.” (Paulk et al., 1996). The “prize” for advancing through these stages is an increasing “software process capability”, which results in improved software productivity.
The SEI's model uses the two words “capability” and “maturity” in its name, and it is worth examining each of them in a little more detail.
The term maturity is a familiar one in everyday conversation. People are said to be mature either as a polite alternative to old or to imply a level of wisdom about their conduct. Maturity is a source of value in certain cheeses and in good wine. Insurance policies “mature” and pay out dividends to their fortunate holders, and plans are said to “mature” when they are fully thought through. In each of these cases, the term implies a positive value judgment. Maturity, it would seem, is a good thing.
In addition to this everyday use of the term, however, there is a specific and technical use of the term when it is applied to engineering or business processes. The concept behind this technical use is derived from statistical process control. It is possible to measure the performance of a process quantitatively by defining some aspect (say, the quantity of items undergoing the process in any given time period) and plotting a graph of its value at specific intervals of time. The resulting graph can be described in terms of both the average value achieved and the variability between the high and low values returned. If the process is designed to accomplish a specific value for this aspect, then the variability can be defined in terms of what are known as its upper and lower control limits (usually expressed in terms of the standard deviation from the average value). These three values (average, upper control limit, and lower control limit) give a precise definition of the performance of the process.
W. Edwards Deming, one of the “gurus” of the quality movement, illustrated this with reference to golf lessons in the following diagram (Deming, 1986).
As the process is defined and understood, measured, controlled, and refined, its performance improves. In other words, as the process “matures,” its performance improves.
This is the concept that seems to lie behind the proliferation of maturity models that are now a part of the landscape of models that are offered as means of improving OPM. Most of them take as a basis some process-based standard, such as A Guide to the Project Management Body of Knowledge (PMBOK® Guide) and its fundamental building blocks (such as Knowledge Areas), and provide a description of the characteristics of that building block at each of the different “stages” of maturity: typically described, standardized, measured, controlled, and continually improved. Such a model has been described by Bill Ibbs and Young Hoon Kwak (Ibbs & Kwak, 2000).
Both SEI's CMM and PMI's OPM3®, however, introduce another concept, capability, and that is what we consider next.
Like maturity, capability is a term that is regularly used in everyday conversation. The concept of being capable of performing certain tasks or activities has even been used as an accolade: “Capability Brown” was how the eighteenth century English landscape architect Lancelot Brown was referred to both during his own lifetime and ever since. Also like maturity, capability seems to be a good thing. An entry in Wikipedia describes Mr. Brown as “the last of the great English eighteenth-century artists to be accorded his due” and “England's greatest gardener” (Capability Brown, n.d.).
Perhaps because of the wide range of possible applications in the world of business and management is capable of great ambiguity. Two illustrate, consider how the word capability is used in two different models: SEI's Capability Maturity Model Integration (CMMI) and PMI's OPM3®.
SEI does not use the term capability on its own. Rather, it defines capability level as the “achievement of process improvement within an individual process area … A capability level is defined by appropriate specific and generic goals for a process area” (CMMI Product Team, 2010). In other words, starting from what you are trying to accomplish with a specific process, the SEI capability level, gives you an indication of how well you are able to do it. Capability level becomes a kind of adjective that modifies your description of a particular process, and to understand what the process is designed to accomplish, it is necessary also to understand its goals.
In contrast with CMMI, OPM3® uses capability as a noun rather than an adjective in the following way: “A capability is a specific competency that must exist in an organization to execute project management processes and deliver project management services and products. Capabilities are incremental steps leading up to one or more Best Practices” (Project Management Institute, 2013).
As if that is not confusing enough, if the discussion is elevated from the narrow topic of maturity models into the broader field of strategy and organizational management, the term capability is generally used at a much higher level to refer to an essential ability possessed by an organization that it must possess if it is to accomplish its objectives, as a visit to any online dictionary will confirm. In an excellent review of this literature as it relates to the delivery of strategy through OPM, specifically through portfolio management in times of uncertainty, Yvan Petit and Brian Hobbs (2010) demonstrate the usefulness of this broader concept.
For the purposes of this paper, capability will be used in this broader sense as the ability to perform or achieve certain actions or outcomes: in this specific instance, those that are essential to deliver an organization's strategy.
Capability or Maturity?
In the light of this working definition, it can be seen that the rather simplistic approach of many maturity models overlooks the precise manner in which increasing process maturity leads to improved organizational capability to deliver strategy. Indeed, it can be argued that they have the cart before the horse: It isn't improved maturity that leads to capability; rather, improved capability can be characterized as improved maturity.
SEI's models acknowledge this in that they use the term capability level to describe the state of a process, and thus the performance that can be expected from it. Maturity level, on the other hand, is used to describe the state of an organization in terms of the sum of its capabilities. This has the benefit of logic on its side: First describe what you can and can't do, and then refer to the sum of what you can and can't do in some overall quick reference.
The difficulty with the definitions from both CMMI and OPM3® is that their focus on business processes and the extent to which they are performed, measured, controlled, or continually improved tend to omit two critically important factors: the practices that are embedded into a process, and the knowledge, skills, aptitudes, and motivation of the individuals who are involved in the process.
Benchmarking studies have demonstrated “the ability to perform or achieve certain actions or outcomes” is substantially higher if the process is designed to make use of superior practices. Perhaps one of the most dramatic demonstrations comes from Ford Motor company, whose “managers knew that 500 employees processing accounts payable were far too many. But they couldn't believe Mazda's claim that it did the job better with fewer than 10 people. When they overcame their disbelief, Ford benchmarkers found their own accounts payable staff spending most of their time trying to match often-conflicting data in a mass of paper—purchase orders, invoices, and receipts” (Main, 1992).
Similarly, since programs and projects are essentially dealing with the unknown future, processes are likely to perform better if they are in the hands of capable, knowledgeable, motivated experts than in the hands of automata who are simply following the written rules of the process. After all, people can improve processes more readily than processes can improve people!
It seems to me to be inarguable that improved business maturity is the result of improving capability, and not the other way round. Improved capability is the driver, and increased maturity the result.
Improved capability to deliver strategy is what will deliver strategy better; improved maturity is a side benefit. Capability is first, maturity second. And as a wise man wrote more than 70 years ago, “You can't get second things by putting them first; you can get second things only by putting first things first” (Lewis, 1985).
Essential Capabilities for the Delivery of Strategy
If the essential focus for delivering strategy better is capabilities, rather than maturity, what are the essential capabilities?
A good place to start is by looking at what has been written about “success factors”: those factors that if in place lead to success, and if absent, lead to failure. This is a field that has been widely researched over several decades since Baker, Murphy, and Fisher investigated the topic in the 1970s (Baker, Murphy, Fisher, Cleland, & King, 1988). More recently there have been a number of “meta-studies” that summarize the results of a large number of primary research studies (see, for example, Fortune & White, 2006).
Since the publication of my own PhD thesis, and a subsequent, widely cited summary paper (Cooke-Davies, 2002), I have been arguing that there are three groups of essential capabilities and not one if OPM is to be the reliable means of delivering strategy. They are distinct groups for three reasons:
1. They are owned and carried out by distinct groups of people within an organization;
2. They involve different kinds of processes and practices, and require different competencies from the people who own them and carry them out; and
3. Their success is measured using different criteria.
This view has recently received strong support from Peter Morris, among others, although he talks about it slightly differently. He argues that capabilities can “be thought of in terms of three levels: a technical core; a strategic wrap, shaping and shielding the technical core; and an institutional level of action aimed at creating, as far as one is able to do, an environment within which the project, and other projects and programs, will prosper and flourish” (Morris & Geraldi, 2011).
This is not the same as the commonplace distinction between portfolio management, program management, and project management. The sets of capabilities being proposed here relate to different groups of people in the organization, not to different types of work. Senior management in the organization, for example, makes rules and sets the tone for all three kinds of project-related work: portfolios, programs, and projects. Similarly, individual senior executives may find themselves involved in different ways with all three: as CEO of a business unit they may be responsible for a portfolio of programs and projects; as a senior executive, they may be the executive sponsor of a strategic initiative or a major program; as an executive with functional expertise, they may be a member of the steering committee for a particular project. The better their “owner's” capabilities, the better they will fulfill each of these different responsibilities.
Since the focus is on OPM rather than on project management, it is appropriate to start at the highest level: that of the organization as a whole. As such, these capabilities should be understood and developed at the senior level of the organization. Responsibility should ideally lie with a C-level executive, such as a chief project officer, although in practice it will often fall to the head of the top-level project management office (PMO) (an enterprise PMO, strategic PMO, or the like).
This is the role that provides the “voice of strategy delivery” in the discussions and decisions that are taken in pursuit of the organization, whether these are “top down,” “bottom up,” or “middle outwards.” There is considerable evidence that the presence of such a voice has a significant impact on the effective delivery of strategy. Indeed, the PMI's Thought Leadership Series 2013 provided evidence to support this from a variety of viewpoints (Boston Consulting Group & Project Management Institute, 2013).
Managing portfolios of programs and projects
The work of delivering a strategy is usually delivered through one or more portfolios of projects and programs (Morris & Jamieson, 2004), and so it is important to have the capability to identify the right work to be done and to ensure that resources are used in the most effective possible way. This sounds much easier than it is in reality. Powerful executives who are used to exercising their own hard-earned autonomy over investment decisions for which they are accountable do not naturally give up that privilege to the collective view of their colleagues, and yet that is what they have to do if a true portfolio management capability is to be created and developed.
Managing the organizational talent
In a series of three research studies, PMI's Thought Leadership Series 2014 made a compelling case for the overwhelming need for organizations to develop the capability to attract, recruit, develop, and retain the right pool of talent that is necessary to lead and manage its portfolio of programs and projects (Project Management Institute, 2014). This capability depends on an effective partnership between business leaders, the HR department, and the OPM department, which is not always simple to create.
Standardizing and improving OPM processes across the organization
There is ample evidence that organizations benefit greatly from the existence of standardized processes and frameworks across the organization, so that different departments and functions can work together efficiently, and to facilitate both cross-functional teams and transferability of key program and project personnel (Project Management Institute, 2014a).
As the world becomes more complex (Cooke-Davies et al., 2011), the organizational capabilities need to become both more flexible (Loch, DeMeyer, & Pich, 2006) and more robust (Weick, Sutcliffe, & Obstfeld, 2005).
Creating the right climate and behaviours
Finally, since so much of the delivery of strategy depends on employees’ “hearts and minds” being aligned with essential elements of the strategy, organizations should develop change management capability, and the appropriate culture and behaviours that go with this (Cabrey & Haughey, 2014).
The second group of capabilities includes those that should be possessed by any senior executive or manager who is entrusted with the direction, oversight, or management of programs or projects that are important to the delivery of the chosen strategy. There are three of these:
Managing strategic initiatives
Most organizations will have a small number of truly significant initiatives or programs that consume not only substantial resources but also a disproportionate amount of management attention. Recent work by the Boston Consulting Group (Sirkin, Keenan, & Jackson, 2005) has been integrated with that of other organizations such as the Economist Intelligence Unit (Economist Intelligence Unit, 2013) into the capstone report of PMI's Thought Leadership Series 2013 (Boston Consulting Group & Project Management Institute, 2013).
The task is challenging, calling as it does for both “hard” capabilities, such as establishing targets, milestones, roadmaps, and other measures, with the “soft” skills of gaining commitment from all stakeholders.
Governing and directing programs and projects
More generally, it is at this “owner's” level that the skills of executive sponsorship are crucial (Crawford et al., 2008). Once again, this involves both the competence of individuals, as well as the frameworks and processes that are in place to provide effective governance for programs and projects.
Managing and realizing benefits
The last of the capabilities at the owner's level is the ability to specify, manage, and realize the benefits from programs and projects that are the reason they are included in the portfolio in the first place.
This third area is the one that needs the least explanation here at a conference for project management practitioners. It includes all the traditional capabilities that are so well known from standards such as the PMBOK® Guide:
- Initiating projects and programs;
- Planning projects and programs;
- Monitoring and controlling projects and programs;
- Executing projects and programs; and
- Closing and handing over projects and programs.
Integrating the Three Groups of Capabilities
These three groups of capabilities are mutually interdependent. For example, it will be difficult for the organization to develop effective portfolio management capabilities if project level capabilities are inadequate; portfolio management depends on the ability to specify and forecast project outcomes with a reasonable degree of accuracy. Similarly, it will be difficult to demonstrate effective project capabilities if the routines for managing talent do not provide sufficient project managers with the right level of capability to manage the programs and projects that are necessary to deliver the strategy.
Improving Organizational Capabilities
So, if these are the capabilities that are necessary to deliver strategy, what are we to do if we find them absent or deficient? There are a number of different points to bear in mind when planning any improvements:
1. Any substantial attempt to improve OPM is itself a strategic initiative and also a form of management innovation. The observations about strategic initiatives made previously are directly relevant, but additional food for thought is provided by a highly perceptive follow-up to the largest piece of project management research yet undertaken (Thomas, Cicmil, & George, 2012).
2. In deciding where to start with an improvement initiative, it is important to make the decision based on evidence of high quality, using, for example, the principles of evidence-based management (EBMgt) (Rousseau, 2012). Denise Rousseau, a leading advocate for EBMgt and a past president of the Academy of Management, was one of the keynote speakers at the PMI® Research and Education Conference 2012 in Limerick, Republic of Ireland.
The principles are easy to describe, although challenging to implement. At its core, evidence-based organizational project management (EBOPM) combines four fundamental features into everyday management practice and decision making:
- Use of best available scientific evidence from peer-reviewed sources
- Systematic gathering of organizational facts, indicators, and metrics to better act on the evidence
- Practitioner judgment assisted by procedures, practices, and frameworks that reduce bias, improve decision quality, and create more valid learning over time
- Ethical considerations, weighing the short- and long-term impacts of decisions on stakeholders and society
3. In deciding which capabilities to make the subject of an improvement programme, therefore, the scope of the initiative should be made, as far as possible, using the principles of EBMgt, and the initiative should be consciously implemented as a strategic initiative designed to make a management innovation.
In effect, that brings us full circle to where we started this paper, with a consideration of how to gather the facts, indicators, and metrics that best help us to scope the capabilities to be improved. If a model is used in order to provide an assessment that compares divisions within the organization, or that compares the organization as a whole with other organizations, then its best use is to focus the effort on the particular capabilities or groups of capabilities that will provide the greatest impact on the delivery of strategy.
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© 2015, T. J. Cooke-Davies
Originally published as a part of the 2015 PMI Global Congress Proceedings – London, UK