Abstract
Rapid globalization is making unprecedented and sweeping changes to the way businesses are conducted, including project management practices, during the last decade. While the conventional wisdom of time, cost and resources to achieve a quality performance, through five processes and nine knowledge areas under the traditional project management domain, is encountering enormous challenges that transcend the fundamentals of project management principles. In today’s context, the success and failure of a project can longer be measured and directed upon project manager competency per se, but the entire environment in which an organization operates from a total perspective. In this paper, the author recounts his own empirical experiences in over two decades as a project management practitioner in an attempt to redefine project success with a new dimension of “House of Enterprise Project Management Capability Framework (EPMCF). This encompasses three critical success factors:
- The Project Manager Capability Model (PMCM)
- Project Management Capability Systems (PMCS)
- Organizational Project Management Capability Model (OPMCM).
The main body of PMCM comprises Project Manager Competency, Project Manager Performance, PM Training and Career Development; PMCS concerns the PM Processes, PM Methodologies and PM Knowledge System, whereas OPMCM embodies Cross-functional Support Systems, Management Support Systems, and Organizational Maturity Models. The EPMCF, a contemporary project management approach, goal is to benchmark the current state of project management practices and drive changes out of enterprise value chain in order to work towards project management excellence, hence organizational success in this highly competitive business environment.
Background
Two months into his new career as project engineer with Honeywell Singapore, during the mid 1980s supporting the oil and gas industry, the Author was tasked by his divisional manager to tender for a project involving plant shutdown maintenance and revamping at the Petrochemical Complex of Singapore, the largest petrochemical complex in South-east Asia. He spent extra hours, including weekends, vetting the 400 sheets of technical specifications, scope requirements, engineering drawings, and commercial terms and conditions. Three weeks later, he drafted a technical compliance list, project schedule, proposed designed drawings and payment term; he also calculated the hardware and material costs, estimated engineering expenses, based on the hour rates of Japanese engineers, as called for in the tender documents, in addition to the hour rates for local engineers and technicians. He determined the selling price including the gross margin, and gave the price summary to the sales manager for bid submission. After a few rounds of technical clarifications and commercial negotiations, during which he led the sessions and talked with the owner, the company was finally awarded the project. His divisional manager told him to lead the project since he knew everything related to it. He accepted it as a learning experience, notwithstanding that the project involved a total of 11 Japanese engineers and 40 local engineering staff to be managed, it was the company and also a new experience for him to supervise Japanese engineers more senior in age, (30-50 years old) than he, as a young man in his late 20’s. He based the plant shutdown duration to be 30 days time, failing which a heavy penalty would be imposed, and calculated backward the time to be taken for each activity to be completed. He displayed the bar chart at the site office. He mobilized transportation and test equipment, including setting up the site office, and made sure the engineers from the Japan office would be arriving just-in-time (JIT) for the project. He was the first to reach the site every morning, to ensure all jobs were approved prior to work beginning, and the last to leave at night after reporting the daily work progress to the owner and when no one else was on site. In spite of some frustrations during the course of project, all the committed work scopes were finally accomplished to the satisfaction of owner in 20 days and the plant was ready for start-up, 10 days ahead of schedule, which was translated into a hefty 10 day cost savings for the company, as well as the owner.
In retrospect, the Author marvels how he had accomplished, during those days, starting from ground zero without knowing the PMBOK, WBS, CPM, EVM, Backward and Forward Pass, CPI and SPI, etc and in the absence of a formal training in project management and cross-cultural lesson prior to taking the role of project manager. All he did was based on his intuition and common sense, plus site experience that led to the resounding success of the project. Nonetheless, giving him another chance to replicate a similar project outcome, he manifests that would be a miracle in today’s context because the world has changed dramatically, the learning cycle has shortened considerably, projects issues are more complex, project stakeholders are more diverse, business are more adverse, people are more discerning, and because the entire circumstances have shifted to a new paradigm in the past 20 years ago. Presently, project management concepts are ubiquitous in disparate business segments and many organizations believe that to practice project management is to set up a project management function and run it on “auto-pilot”. Unfortunately they fall short in putting project management in a proper perspective, primarily due to limited understanding of project management practices taking place in this dynamic business environment.
During the course of the Author’s PM consulting practice, questions always emerge from business owners and HR managers on how to measure project managers and make project management more effective for their organization. In order to share his experience to a wider audience, through this paper , he hopes to bring a message to organizations to observe project management from a macro aspect instead of targeting project managers per se. Conversely, project managers should also be vigilant on their limitations and barriers within organizations so as to turn the situation around. The “House of Enterprise Project Management Capability Framework” may be embraced to benchmark the current project management practices aiming towards project management excellence for organizations today.
Enterprise Project Management Capability Framework (EPMCF)
The EPMCF can be deployed at organizations that involve ICT, engineering, construction, banking and healthcare, etc, to usher in a common platform to achieve project management excellence as shown in Exhibit 1 below. A house must first be built upon a solid foundation, from which the bricks are laid around all four walls prior to putting a rooftop onto it. Drawing on this analogy, the House of Enterprise Project Management Capability Framework (EPMCF) encompasses three major components with the Enterprise Project Management Capability Framework as the house’s foundation; the three critical success factors of Project Manager Capability Model (PMCM), Project Management Capability Systems (PMCS) and Organizational Project Management Capability Model (OPMCM) as house body; and the Project Management Excellence as the Roof Top. The following sections will dissect the three critical success factors of house body of EPMCF.
Exhibit 1. House of Enterprise Project Management Capability Framework
Project Manager Capability Model (PMCM) –The Master Bedroom
The project manager capability model helps to evaluate project manager competency prior to drawing up an improvement plan for them. These days as many project fiascos are conveniently pointing at the competency of project managers in question, the prevalent doubts aroused include how to measure up project managers? Assess their competency or performance, and which one comes first? What differences are between competency and performance? These burning issues are always bogging the business owners and HR managers in the absence of a holistic solution. The PMCM is sub-divided into the project manager competency, project manager performance and project manager training & career development.
Project Manager Competency
The “Project Manager Competency Development (PMCD) Framework” narrated by Project Management Institute (PMI®) which states “Competencies have a direct effect on performance. Competence is a term which is widely used but which has come to mean difference things to different people. It is generally accepted, however, as encompassing knowledge, skills, attitudes and behaviours that are causally related to superior job performance”(p. 1-3). The PMCD also cited the performance-based approach to competence, which assumes that competence can be inferred from demonstrated performance at pre-defined acceptance standards in the workplace as the basis for Competency Standards Movement, similar to that of the United Kingdom’s National Vocation Qualifications and the Australian National Competency Standards Framework. Another view on project manager competency that “performance-based competency standards describes what people can be expressed to do in their working roles, as well as the knowledge and understanding of their occupation that is needed to underpin these roles at a specific level of competence. It is concerned with demonstration of the ability to do something at a standard considered acceptable in the workplace, and performance criteria/assessment criteria specify the type of performance in the workplace that would constitute adequate evidence of competence”(Crawford, 2002, p. 3 ). Project manager competency can also be explicated as “the competency is essentially a combination of knowledge, skills and attitudes that an individual possess. Knowledge is the familiarity, awareness or comprehension acquired by study or experience. Skills is the ability to apply knowledge whereas Attitude is a state of mind or feeling”(Cleland, 2002, p. 259) and also “Determination of the desired competencies of project manager is highly influenced by organizational needs, strategies and culture”(Rad, 2002, p. 44)
The Author reckons that project manager competency should be represented by a hybrid of knowledge, skills and attributes, or KSA, based on his heuristic experiences and observations in managing people across the boundaries on projects. Knowledge means an expert knowledge consisting of domain or technical knowledge, such as engineering, ICT, construction, accountancy, and healthcare, etc.; whereas PM knowledge is gained through hardcore work experience and self-improvement. The domain or technical knowledge enables project managers to effectively communicate with all stakeholders within the vertical industry, although it may be less critical with the rise of PM knowledge through progressive career developments. Expert knowledge forms the competency baseline for project managers and can be quantified through various stages of examination, under which the project mangers are certified via formal education. On the other hand, project manager skill-sets are the managerial skills such as interpersonal skills, negotiation and communications skills, language ability, and computer literacy skills, etc. that enable project managers to perform better jobs. Skills are taught to improve project managers’ work efficiency by practicing them regularly. For instance, a project manager can be more skilful in project scheduling after completing the MS Project course such that he or she could plan for the next project more efficiently. Whereas project manager attributes are derived from their attitude, behaviour, intuitiveness, leadership, ethical conduct, perseverance, and cultural quotient, etc., the kind of project manager’s intangible assets to drive their effectiveness. Attributes are innate and can not be trained or replicated easily; therefore, project manager leadership is a style, but not a skill set, as often mistaken by many professionals. There are anecdotes showing that a competent project manager would respond to different situations more decisively than his or her peers, even they have undergone the same kind of leadership training. Project manager leadership style can be modelled after the Leadership Grid developed by Robert Blake with four quadrants of team management, task management, middle-of-the road management, country-club management and impoverished management (Schermerhorn,1997, p 317). Project managers must also be acquainted with other functional operations within the company in the purview of human resources, marketing, production, engineering, supply chain, accounting, and services of the entire continuum in the company. Moreover, competency does not equate to the long service duration in the company, as a result of time relevance, that the useful life cycle of knowledge and skill-sets possessed today can be overtaken tomorrow with the proliferation of Internet and relentless information flows leveraging on the advanced technologies, and the rate at which new knowledge areas and new skill sets created every day are simply immeasurable. Therefore, a project manager who has worked for 15 years may have to prove himself or herself more competent than a project manager who has worked 10 years in the same company involving a similar job scope. As quoted by Dr.Kerzner ,“In the twenty-first century, companies will replace job description with competency models” (Kerzner, 2001, p 1045-1047). As such, the project manager experience used to be a competitive edge, but now is seen as a learning process. In contrary, PM competency is recognized as a benchmarking tool to qualify project managers as value creators and maximize stakeholder values while PM competency renewal is to describe a project manager’s initiative to keep on kaizen to the next level of competency, as good as the self-actualization needs described by Abraham Maslow.
To perform assessment on project managers, the first step companies should do is profile the current project manager competency covering PM knowledge, skills and attributes for gap analysis, which will then formulate the training needs prior to project manager performance measurement. Project manager competency assessment may be conducted in conjunction with an external qualified PM consultant to ensure a fair assessment on PM competency.
Project Manager Performance
Comparatively, assessing project manager performance is more contentious than any other functional managers in the company due predominantly to the lack of proper yardstick to benchmark project manager performance. Unlike other functional managers, such as the sales managers whose performance is tied to sales targets achieved and difficult market conditions which are often cited when sales targets could not be reached, project managers are always held accountable for failed projects, even the projects might have started from the wrong footing or due to other organizational constraints. As such, companies should abandon the “one-size-fits-all’ approach, while evaluating project manager performance, but should embrace a distinctive assessment system under which a set of multi-facet parameters as Key Performance Indicators (KPIs) to benchmark project manager performance. In the event the PM assessor is not PM trained, an external qualified PM consultant may help to moderate project managers jointly. A 360- degree appraisal can be useful for qualitative and quantitative measurements on project manager performance.
The key difference between project manager competency and project manager performance is that the former is the project manager’s personal asset, whereas the later is an outcome of situation whereby personal asset is applied as one of the inputs. Other inputs to the outcome may include the organizational behavior, customer relationship and environment etc, and under no circumstances that project managers can achieve the same project outcome despite working under a similar set of project variables.
Project Manager Training & Career Development
PM training and career development are the impetuses for tomorrow’s business success in project-driven organizations in order to escalate project manager competency and project manager performance. Since trainings and certifications are inadequate nowadays to make project managers competent, companies must first identify PM training needs after assessing PM competency and mapping out a long-term career development program for project managers. With equal opportunity, a career development plan for project managers should be put in place to raise the glass ceiling of project managers to the level of vice president for project driven organizations.
Project Management Capability Systems (PMCS) – The Hall
The PMCS comprises Project Management Processes, Project Management Methodologies and Project Management Knowledge Systems supported by IT infrastructures that help expedite project information flows within the organizational value chain.
Project Management Processes
The project management processes embody PM process definition, PM process implementation and PM processes audit for process improvement under a well-defined PM process manual, including flow charts meeting the business objectives and also as an ISO manual. The PM processes must cut across the spectrum of five processes of initiating, planning, executing, controlling and closing with each process covering the WBS and the associated activities from start to end. The PM processes must be implemented once the PM process definition has been completed, followed by a process audit to optimize it periodically for process improvement. An externally qualified PM consultant may help to facilitate PM process definition, implementation and audit to realize a tangible ROI. The concept of PM processes should be instilled and permeated throughout the organization, from front-end to back-end, such that every value chain member could appreciate their roles and responsibilities while supporting project activities.
Project Management Methodologies
The PM methodologies include PM tools and PM templates, regardless of software or hardcopy that can help to improve workplace efficiency, such as the most basic planning tool of Microsoft® Project software, which is widely embraced in various industries. There are also more specific web-based collaborative PM tools that can support realtime project information ranging from resources planning, earned value and financial management, content and communications management, risks and scenarios analysis, etc. which can be accessed by project stakeholders virtually everywhere in the world. In some mega projects, where constructability is a prime concern, the use of 4D simulation tools, with time dimension, will help visualize construction problems in advance of project implementation, so as to save time, cost, and resources while managing project risks. PM templates for project costing, meeting minutes, design sign-off, and change notice are the effective documents for verification purpose, in the event of contractual disputes.
Project Management Knowledge System
Project Management Knowledge System, isn’t a PMIS that performs number crunching the the IT department; instead it is built upon an enterprise-wide culture by which every project team member contributes towards knowledge management by identifying, defining, creating, documenting, depositing, sharing, retrieving, and disseminating what they know and learnt from inside and outside the company explicitly and tacitly. As indicated by Nonaka “explicit knowledge can be expressed in formal and systematic language and shared in the forms of data, scientific formulas, specifications, manuals and such. It can be processed, transmitted and stored relatively easily. In contrast, tacit knowledge is highly personal and hard to formalize. Subjective insights, intuitions and hunches fall into this category of knowledge. Tacit knowledge is deeply rooted in action, procedures, routines, commitment, ideals, values and emotions”(Nonaka, 2001, p. 15).
The PM knowledge systems are nurtured through relentless communications with project stakeholders to create a learning organization. Tacit knowledge, such as project lessons learnt, dispute resolutions, and customer feedbacks, etc. should be captured electronically to be referenced for future project improvement. PM knowledge systems can be realized by an IT platform to codify tacit knowledge into explicit knowledge in the repository and to be assessed and shared among project stakeholders and enterprise-wide. According to the Global MAKE 2004 (Most Admired Knowledge Enterprise) study conducted by Telecos, in association with The KNOW Network, that the top 20 global organizations have transformed enterprise knowledge into shareholder value by creating and sharing knowledge.
Organizational Project Management Capability Model (OPMCM) – The Kitchen
PMI believes that project success requires project manager competence, as well as organizational project management maturity and capability-organizational performance, cannot be ignored. In other words, having a project manager who possesses the “right” competencies cannot ensure project success, as there are too many organizational maturity factors and other contingencies that influence the outcome of project as well. In fact, it is possible to have a “competent” project manager working within an “immature” organization, which could result in unsuccessful project, or vice versa (PMI, 2002, p 1-3). The OPMCM underscores the importance of the key elements of Cross-Functional Support System (CFSS), Management Support System (MSS) and Organizational Maturity Model (OMM).
Cross-Functional Support System
The cross-functional activities enable project managers to phase in during the project inception to gain a better understanding on project scope, project schedule, and resource allocation prior to project execution. It also helps to cultivate a sharing culture and mitigating potential risks prior to project execution. In project-driven organizations, cross-functional support systems should involve all functional departments, otherwise it would be a futile attempt, albeit these departments might have their own prerogatives such as:
- If a project manager was not informed of design changes before production,
- A purchaser failed to track delivery on project supplied items,
- A project accountant generated out-dated project cost report,
- Engineering failed to provide resources to support project activities etc.
All these organizational deficiencies or organizational inertial will not only lead to project rework, but also cause cost overrun and project managers to bear the blunt, consequently, due to project delay. The Cross-functional support system should form the backbone of PM processes, which help project managers make informed decisions. Furthermore, project managers should also be empowered to assess the performance of other functional departments on their support rendered to project activities.
Management Support System
The most critical aspect in every project management deliverables is the managerial vision and management buy-in of project management, with upper management acting as a project sponsor. they could influence project outcome tremendously. In the event of project issues that go beyond the autonomy of project managers, the moral support from upper management will pave the way to motive the entire project team instead of providing mere lip services.
Organization Maturity Model
The Organization Maturity Model described here is an extension of Project Management Maturity Model (OPM3®), charted by PMI, in 1998 to guide companies towards project management excellence with a broader dimension. According to PMI, OPM3 is designed to provide a way for organizations to understand organizational project management and to measure their maturity against a comprehensive and broad-based set of organizational project management best practices. OPM3 also helps organizations wishing to increase their organizational project management to plan for improvement through three processes of knowledge, assessment and improvement (PMI, 2003). There are other similar OPM3 modles developed in recent years. Among them are two prominent models, the Project Management Maturity Model (PMMM), comprised of five levels of maturity represented by common language, common processes, singular methodology, benchmarking, and continuous improvement.(Kerzner, 2001, p 1063), and the Project Management Maturity Model (PMM) covering five levels of maturity of initial, repeatable, defined, managed, and optimizing (Dinsmore, 1999, p 171-174).
Conclusions
In light of the unceasing globalization, augmented with emerging technologies that are revolutionising the orthodox business models, project driven organisations should take stock of their organisational design and reshape it in tandem with the changing environment so as to entrench in a competitive economy. The proposed Enterprise Project Management Capability Framework (EPMCF), a strategic business approach can help companies forge a greater organisational success by rolling out the following initiatives while managing complexity, diversity and adversity on projects in the global arena.
- Assessing the current state of project management practices and formulate a change strategy or organisation to gear up project management excellence and achieving an organisational success.
- Promoting project manager competency and performance through qualitative and quantitative assessments prior to mapping a training and career development plan for project managers.
- Enhancing project management capability system by optimising project management processes, improving project management methodologies and deploying a project management knowledge system.
- Cultivating an organisational culture to support project activities by nurturing a cross-functional support system, upper management buy-in, as well as embracing the maturity model to continuously kaizen project management practices