Project Management Institute

Managing Turbulence in Project Environments

Learning from Nature and Ecosystems

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ROBERTO CIMINO
Eni S.p.A.

Managing complexity and turbulence is a key issue project managers have to face in their everyday activity: dealing with change and external shocks is becoming the rule. Ecosystems are self-organizing systems, made of communities connected in networks of mass, energy, and information exchanges; thinking of a project as a complex network of agents—such as stakeholders, teams, providers, and customers—illustrates the analogy between ecosystems and social, organized systems such as projects or programs. Ecosystem dynamics studies the complex relationships among the system's entities with particular reference to the ability of the ecosystems to withstand external shocks—such as increasing level of pollutants or climate change—while maintaining their functionality. This peculiar feature is usually referred to as system resilience. Resilience is enhanced by a number of factors including ecosystem variety, existence of redundant mechanisms of control, and a low level of connectedness among ecosystem entities. Ways of building resilience in projects, programs, and portfolios include establishing redundancies within project teams, cultivating responsible and ethical team leadership, building modular project architectures, and channeling signals across portfolio components to the highest decisional level.

Keywords: complexity, resilience, system dynamics

INTRODUCTION

In today's turbulent global environment, change is taking place at an increasing speed: global forces—like technological change, an ageing population, and international flows of trade and finance—are exerting relentless pressure on social systems, producing an impact estimated to be 3,000 times higher than at the times of the Industrial Revolution (Dobbs, Manyika, & Woetzel, 2015).

If environmental challenges are added to the picture, the global pressure on planet Earth is often described as a global “squeeze,” borne out by an increasing world population, climate change, and loss of biodiversity (Rockstrom, 2010).

Disturbances and shocks can be expected to come from all scales—local, regional, and global—and crisis is becoming the new pandemic norm for all systems, which are under pressure, both from “below” (subsystems at lower scales) and from “above” (super systems at upper scales). Building up system resilience—that is, its capacity to absorb external shocks while maintaining functionality and benefits—is therefore, becoming vital for all who have the responsibility to manage complex systems such as projects, programs, and portfolios.

Useful lessons can be learned from ecosystem dynamics, a relatively new domain of research which has emerged in the last decades (Gunderson & Holling, 2002), aimed at studying the complex relationships among the system's entities, with particular reference to the ability of the ecosystems to withstand external shocks at the lower (for example, increasing level of pollutants) and upper scales (for example, climate change), while maintaining their functionality.

ECOSYSTEMS: FEATURES AND DYNAMICS

An ecosystem is commonly defined as a biological community of interacting organisms, linked together through nutrient cycles and energy flows, suggesting that the key features defining natural systems involve communities, networks of relationships, flows of energy, and materials, as well as complex feedback loops of self-regulation.

The study of ecosystems dynamics can also be applied to social, organized systems—such as projects, programs, and portfolios—since the latter are characterized by networks of relationships and complex feedback loops, with information exchanged between the nodes.

One of the major features of ecosystem dynamics is the existence of alternate stable regimes. Under given circumstances, an ecosystem can abruptly shift form one state of equilibrium to another as a function of external disturbances (for example, an increasing level of pollutants), making it very difficult to restore the starting equilibrium conditions.

Examples (Rocha, Biggs, & Peterson, 2014) include the shifting equilibrium of shallow lakes between a state of clear and turbid waters (eutrophication), dry/wet savannas, and coral reef degradation.

The “turning point” in the system between a state of equilibrium (“regime”) and another is called “threshold” and can be thought of as the value of the controlling variable (pollutants, for instance, in the case of shallow lakes) which should not be crossed in order not to move the ecosystem from a desired state to an undesirable one.

The property of the system preventing its shift from one regime to the other is called resilience, which can be defined as the capacity of a system to withstand to disturbance, while maintaining its functionality (in case of an ecosystem, the benefits it gives to communities) and its regulating feedbacks (Walker & Salt, 2004).

As can be seen in Exhibit 1, the state of equilibrium of a system (regime 1) can be represented by a ball sitting in a valley (“cup-and-ball” diagram, left part of the exhibit) and the alternate state of equilibrium (regime 2) as a nearby valley separated by a “hill:” the height of the “hill” with respect to the first valley (regime 1) is a measure of the system resilience.

As long as an external shock is not strong enough, the ball will be moved towards the hill top, but due to the “gravity” (its regulating feedback loops), it will return to its original state, preventing the shift of the system.

The higher the system resilience, the higher the stability of its equilibrium or—in other words—its ability to absorb shocks and still retain its features.

It should also be mentioned that once the system has been brought to its regime 2, to get back to its previous state the “hill” top has to be crossed in the opposite direction, often difficult or, in some cases, even impossible.

Disturbances and shocks can arrive on the system either from systems at higher scales—for example, regional phenomena induced by climate change such as droughts or heat waves—or from systems at lower scales, as is the case for the budworm attacking trees in boreal spruce and fir forests (Holling, 1988) which causes deforestation cycles every 40-130 years.

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Exhibit 1: Loss of resilience due to external shocks (adapted from Rocha et al., 2014).

If we think of regime 1 as a desired state (clear waters, in case of an ecosystem, or a project well within its golden triangle), and regime 2 as an undesired state (turbid waters or a project spiraling out of control), it can be clearly understood that building and preserving the resilience of the system amounts to increasing its stability towards disturbances and shocks as well as preventing its shift to an undesired state, from which it can be very difficult to get out.

A first factor in increasing system resilience (Walker & Salt, 2004) is variety: the higher the number of species in an ecosystem, the higher the regulating loops and the higher the ability to withstand shocks; since a disturbance or shock might disrupt some of the loops, but the ability of the system to function preserving its feature can be guaranteed by redundant loops.

Variety is directly related to redundancy, which is the opposite of efficiency: as long as there are different loops and actors working for the same purpose, albeit in different ways, we have redundant mechanisms, but at the expense of efficiency, which implies that a given task is carried out by fewer specialized actors.

Resilience is, therefore, related to redundancy, and this comes at a cost. Conversely, systems characterized by a high degree of specialization might be very efficient in carrying out assigned tasks, but are also more vulnerable to shocks (less resilient).

A second factor to increase resilience is related to system connectedness: the more interconnected the system components, the faster and the deeper shocks can propagate throughout the system, and the higher the likelihood of its disruption (i.e., shift to an alternate undesired regime).

Resilience can also be implemented by increasing the modular architecture of the system: modular parts are less connected by definition to the rest of the system, and shocks can be better managed since their propagation is hindered by the system architecture itself.

A third factor is referred to as tightness of feedbacks within the system and across scales below and above the system, or in other words, how fast a change in a part of a system influences other parts and how quick there is a response. This feature is of particular importance for social systems and refers to the ability of quick detection of, and response to, signals of approaching thresholds.

Nurturing local communities and cultures is key, especially in cases where system disturbances come from lower scales. The know-how of people operating in local environments, often built over years and decades of experience, can be of help to early detection and response (Gunderson & Holling, 2002).

APPLYING RESILIENCE THINKING TO PROJECTS: CASE HISTORIES AND LESSONS LEARNT

Turning to the world of projects, programs, and portfolios, perhaps the best known case of a catastrophic outcome from a loss of resilience is offered by the accident of the Challenger space shuttle, which took place on January 28, 1986, 73 seconds after its launch.

The two commissions (Rogers and House Committee commissions) set up after the accident found out that the root cause had to be related to the lack of resilience to low temperatures of an O-ring, sealing a joint in one of the Solid Rocket Boosters. The O-ring material had been designed to work at temperatures higher than 53° F, while on the cold morning of January 28, temperatures had dropped to 31° F, unchartered waters as far as the ability of the O-ring to maintain its functionality was concerned.

What is even more interesting is another conclusion of the Rogers commission, which found that the potential problem with resilience of the O-ring had been raised by O-ring manufacturer engineers and discussed with NASA management on the eve of the launch, but the seriousness of the problem was not properly acknowledged at the level where the discussion took place. In addition, due to the complex NASA decisional organization, this issue was not brought to the upper decisional level of the organization—shielding in this way, to the top decision maker on how such a small piece of equipment might lead to catastrophe.

The above reported example, clearly shows how resilience was eroded at least at two levels: on the physical features of the O-ring materials (very small scale, compared to the overall program system), as well as within the program system itself, since the information feedback from the small (O-ring) to the upper scale (top decision makers) was broken, due to failure in the information processing system (Mahler & Casamayou, 2009).

How can resilience-thinking principles be applied to projects, programs, and portfolios to increase a system's ability to absorb shocks and avoid catastrophic failures?

First, variety should be encouraged and redundant mechanisms implemented whenever possible.

Typical project environments usually display complex networks of actors, both within the enterprise—as the project core team, functional units carrying out specific tasks, and as the company's stakeholders—and in the outer environment, as contractors, providers, authorities, and clients.

The most obvious place where variety can be implemented is the project team, which can be seen as the engine of all problem-solving activities throughout the project's life.

It is well known (Heffernan, 2015) that the best teams have more gender and cultural diversity, as well as a better social capital (trust and care for each other). Similar people tend to confirm mental patterns (group thinking) when tackling problems, preventing a full-fledged creative approach.

An additional source of diversity can come from the smart use of stakeholders—integrating, for example, contractors or providers into the problem-solving activity at the early stages of work packages which can broaden the perspectives on issues by bringing diverse skills and experiences on board.

But probably the most effective way of building up resilience in project environments is by implementing redundancies. For example, work packages are often subcontracted to external providers—establishing a group of experts in the core team to follow up on the outsourced activities can help through continuous quality checks to prevent schedule slippage and deliverable defects.

A typical example is offered by those projects aimed at implementing facilities which require overlapping phases of basic engineering, detailed engineering, and procurement, where detailed engineering (and in some cases, also basic engineering) activities are outsourced.

Establishing a group of engineers within the core team is beneficial for checking the most critical parts of the work and helps in identifying (at an early stage) issues that can be solved through close interaction with the engineering services provider.

Again, redundancy comes at a cost: additional resources to be integrated in the core team increase project budget and a careful trade-off should be done. For instance, by identifying the critical expertise to be used to check a contractor's task, and keeping the approach as lean as possible.

A second way to enhance resilience in project, programs, and portfolios is to build modular project architectures as much as possible, devising project tasks with low mutual interdependence. When changes occur, only single project tasks are affected, rather than the whole project.

When modular architecture is not possible, it is advisable to try to group all the major interconnected tasks into single work package, assign a clear responsibility for it, and adopt an adaptive management strategy by proceeding step-by-step and by rearranging the plan as new information is made available (Ohemen, Thuesen, Parraguez, & Geraldi, 2015).

Finally, a resilient project environment is best implemented at the portfolio level by carefully managing tightness of feedbacks from below and above scales.

As we have seen from the Challenger accident, a lack of communication between “below scale” (engineers working on O-ring) and “above scale” (top decision makers) can lead to catastrophic failures.

Projects are the portfolio components best-suited to channel signals from all scales, provided that a culture of resilience-thinking is spread and adopted. As we have seen, project environments usually have access to a great number of stakeholders that are external to the enterprise and acting at all scales—from providers supplying components to regulating agencies, governmental, and supranational agencies—and are, therefore, the optimal locus from which signals of change from the environment can be detected.

Communication and change management throughout portfolio is, therefore, vital to guarantee a seamless flow of information from the “below scale” (projects) to the “above scale” (decision makers, see Exhibit 2).

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Exhibit 2: Continuous change monitoring and management across the portfolio.

CONCLUSIONS

Nature and ecosystems dynamics offer models to understand key variables to be implemented in order to enhance organized systems’ ability to respond to shocks and disturbances, which, as we have seen, are increasing in magnitude and frequency. System resilience is the keyword and should be implemented at all project, program, and portfolio layers (at a project/program, but also—and maybe especially—at the portfolio level.

Redundancies to be implemented in trade-off with efficiency, the addition of variety to project teams—both within teams and by resorting to skills and perspectives of external stakeholders, and finally, continuous monitoring, communication, and change management across the portfolio are three key knowledge areas a resilient project/program/portfolio manager should learn to master.

ABOUT THE AUTHOR

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Roberto Cimino has 30 years of experience in turbulent project environments, such as innovation and R&D projects. As a project manager and project director, he has managed several innovation projects form the phase of conception to the final technology transfer to the customer. His current responsibility is as the VP of Technology Planning and R&D Scenarios with eni.

CONNECT WITH ME!

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Dobbs, R., Manyika, J., & Woetzel, J. (2015, May). No ordinary disruption. The four global forces breaking all the trends. Public Affairs.

Gunderson, L. H., & Holling, C.S. (Eds.). (2002). Panarchy. Washington, D.C.: Island Press.

Heffernan, M. (2015, May). Willful blindness—How projects go wrong (but could get a lot better!). Keynote Session presented at PMI® Global Congress 2015—EMEA, 11–13 May, London UK.

Holling, C. S. (1988). Temperate forest insect outbreak, tropical deforestation and migratory birds. Memoirs Entomological Society of Canada, 146, 22–23.

Mahler J. G., & Casamayou, M. H. (2009). Organizational learning at NASA. The Challenger and Columbia accidents. Washington, D.C.: Georgetown University Press.

Ohemen, J., Thuesen, C., Parraguez, R. P., & Geraldi, J. (2015). Complexity management for projects, programmes, and portfolios: An engineering systems perspective. White paper. Newtown Square, PA: Project Management Institute.

Rocha, J. C., Biggs, R., & Peterson, G. (2014). Regime shifts: What they are and why do they matter? Regime Shift Database. Retrieved from www.regimeshifts.org

Rockstrom, J. (2010). Let the environment guide our development. TED Talks. Retrieved from http://www.ted.com/talks/johan_rockstrom_let_the_environment_guide_our_development.

Walker, B., & Salt, D. (2004). Resilience thinking: Sustaining people and ecosystems in a changing world. Washington, D.C.: Island Press.

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 or any listed author.

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© 2016, Roberto Cimino
Originally published as part of the 2016 PMI® Global Congress Proceedings – Barcelona, Spain

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