Project Management Institute

Enterprise project management around the world

Japan seen from within

Up&DowntheOrganization

by Paul C. Dinsmore, PMP, Contributing Editor

IS ENTERPRISE PROJECT MANAGEMENT catching on around the world? Judging from my e-mails, interest abounds. Aside from a steady communications stream from the United States, messages have trickled in from China, Japan, Norway, South Africa, Canada, Brazil, and Mexico.

The blooming interest is spawned by the expanding enterprisewide view of projects, as executives and managers look for effective ways to survive—and to stay ahead of the competition. Abroad, as in North America, companies strive to conquer the management of multiple projects of various natures across the organization, encompassing not only basic project practice but also the corporate support required to optimize the process.

A few years ago, Japanese industry surged ahead in the quality movement. Will history repeat itself with EPM?

In January of this year, I accepted an invitation from Mr. Ichizo Aoki, the events program manager for the Japan Project Management Forum (JPMF), to give the keynote talk at the JPMF convention slated for 20 June 2000. I had met Mr. Aoki in Chicago at the 1997 PMI® Seminars & Symposium through Mr. Hiroshi Tanaka, chief operating officer of the JPMF and general manager of project services division of JGC Corp. “Hiro,” as he is known to his PMI friends, had been instrumental in suggesting the theme of “Enterprise Project Management” for the JPMF convention.

As Hiro introduced me to a few dignitaries prior to the keynote speech at the Tokyo venue, “Dinsmore-san” was all I could understand, but I knew he was referring to me respectfully and affectionately. Seven hundred convention delegates listened intently as I spoke of enterprise project management, with special emphasis on the view of modern organizations as “portfolios of projects.” The rest of the day also was dedicated to the theme, with presentations of case studies by Japanese speakers.

What I Expect from Japanese Project Management

On the day following the convention, I conducted a workshop for 40 participants, along with Hiro and Mr. Yoshiaki Shibao, author of Enterprise Project Management, a book published in Japanese. A theme slated for me to present was “What I Expect from Japanese Project Management.” I had updated myself through the 1999 Japan country report from the Global Project Management Forum (GPMF), and Hiro kindly drafted a presentation that included the fact that JPMF, through its parent organization ENAA (Engineering Advancement Association of Japan), is the second oldest alliance with PMI, dating from 1979. JPMF also was a founding member of GPMF, the international movement aimed at fostering global cooperation and interchange on project management themes.

Here are the principal project-related challenges facing Japanese corporations, as summarized from that 1999 GPMF report:

img Accelerating speed of market changes calling for new approaches

img Sticking to past success stories means lagging behind in global competition

img White-collar productivity is under fire (reportedly Japan's largest corporate vulnerability)

img Steady state operations no longer produce stable profitability, whereas a portfolio of projects does.

Also drawn from the 1999 report are the following perceptions showing the wide variation of maturity levels for project management practice in Japan:

img Engineering and construction—mature, over 40 years solid practice

img General construction—working to overcome stagnant industry

img IT/information services—rapidly expanding interest in project management

img Manufacturing—rebuilding project management practices

img Government—growing awareness of project management on public projects.

Exhibit 1.Yoshiaki Shibao's chart compares project management maturity in Japan and Europe

Exhibit 1.Yoshiaki Shibao's chart compares project management maturity in Japan and Europe.

An Insider's View

Mr. Shibao, who is manager of Artemis International Inc.'s consulting group in Japan, was kind enough to share some of his views on present-day “Japan Incorporated.” A summary of his perceptions follows:

Enterprise project management is gradually expanding in Japanese industries; advanced companies will tend to apply this new concept to improve competitiveness. Japanese industries struggle to keep pace with the changing business environment. A gap between the Japanese management system and the external environment is a cause for friction and places limitations on organizations’ productivity.

Many organizations are sustained due only to employees’ sacrificial contributions represented by enormous voluntary overtime work with no pay I have found many companies distressed by employees’ mental anguish, which is caused by high stress and the strain of hard work. This situation is critical, especially in the manufacturing industry which is exposed to hard worldwide competition.

Excluding sectors such as engineering and construction, Japanese industries that are generally unfamiliar with project-oriented (horizontal) management currently execute projects using rigid hierarchical (vertical) organizational structures. They slice projects into pieces as necessary and control each piece within the respective functional group.

Three major characteristics dominate the typical Japanese management system:

img Projects tend to be managed from a technical standpoint rather than a business view. Project managers spend more time on technical issues and little time on business management.

img More attention is aimed at managing people as opposed to managing work. This provides a management perspective in which behavioral aspects become much stronger than scientific considerations.

img Customer satisfaction becomes the highest priority. This culture has penetrated many Japanese industries and is recognized as the basis of business.

This management style works when time flows slowly, and Japan has been able to introduce high-quality products into the market with competitive prices. However, the Japanese management system is not consistent with the current business environment, and we are faced with the need to change our business model.

Project Management Maturity Benchmarking. We have been implementing project management maturity benchmarking in many Japanese companies across several industries since 1996. Our benchmarking is carried out in four management layers: Strategy, Program, Project, and Task. Exhibit 1 shows the results of benchmarking in Japan.

European companies have had project management practices implemented for years. The Japanese experience is more recent, in many cases less than three years of project management practices. Although the overall maturity level is lower than European companies, this trend was expected from the beginning because project management had not fully taken root in the Japanese companies assessed. It was found that project management was very low in comparison with other management areas. In most cases, a concept of project management does not even exist, or the current system of project management does not work properly. Lack of a project management mechanism caused operational problems, and corporate productivity was adversely affected due to a missing link between corporate strategy and projects. Typical issues found with the projects surveyed are: (1) priorities are changed arbitrarily in respective departments; (2) projects, which should logically never exist, do exist; (3) same product is produced in different projects; and (4) resource control mechanism for multiple projects is subjective and illogical.

Reader Service Number 083

Resistance to Cultural Change. The goal of the change is to enable organizations to select projects properly in order to achieve corporate objectives linking to corporate strategy and to control projects to maximize a total throughput, responding to market pressure by shortening project lead time with lower cost and better quality. Most companies having traditional Japanese management systems need to change their cultures from vertical to horizontal. This demands not only a cultural change but also a transformation of the power structure in the enterprise. This is the most difficult part of the change, but it is fundamental. The direction of power has to be rotated 90 degrees from vertical to horizontal. The following are the major reasons why problems may occur during the change of systems based on our past experiences: (1) fear of change from current business processes, (2) reluctance to accept the denial of past success experience; (3) threat of losing current power in line managers, (4) weak management efforts due to reluctance to take responsibility of failure; and (5) weak management efforts due to lack of crisis consciousness.

FROM THE INFORMATION I collected on my trip, it would appear that Japan is behind some other parts of the world in terms of enterprise project management. The maturity curves Mr. Shibao shared regarding practice in Europe clearly demonstrate that point.

Yet, decades ago Japan also was perceived as behind the times on another fundamental topic—quality. In the 1950s, “Made in Japan” was more a symbol of being inexpensive than of quality. Foreign experts such as W. Edwards Deming introduced the Japanese to the modern view of quality. Shortly thereafter Japan developed its own approaches, beginning with quality circles, and subsequently became recognized as the leader in terms of global quality.

To make enterprise project management a reality in Japan, focus needs to be aimed at:

img Applying Japanese wisdom to this new facet of project management. As masters of consensus and participative management, the Japanese certainly have the capacity to introduce breakthrough concepts and practices in enterprise project management.

img Making the transition from single projects aimed at discrete objectives to a portfolio of projects focused on corporate goals.

img Promoting the perception that projects add value to corporations as ongoing concerns, and guarantee both the survival and growth of organizations.

If indeed history repeats itself in Japan in the evolution of enterprise project management as it did in the quality movement, the rest of the world may be surprised with some striking advances in a few short years. ■

Reader Service Number 032

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Paul C. Dinsmore, PMP, PMI Fellow, is the author of seven books, including Managing Organizations by Projects:Winning Through Enterprise Project Management [Amacom,1998].He is president of Dinsmore Associates, affiliated with Management Consultants International Group, with headquarters in Rio de Janeiro, Brazil. Reach him by e-mail at dinsmore@amcham.com.br. Send comments on this column to editorial@pmi.org.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

October 2000 PM Network

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