Introduction
Overview
Project management (PM) is a mission-critical process. Projects are performed to implement new or changed products, address customer requirements, make operational improvements and comply with internal and external standards and regulations. If projects are not being performed as effectively as they can, the organization suffers. Project management adds value. It enables the right projects to be done in the right way.
In many organizations, significant change in the way projects are managed is necessary to overcome chronic problems and obtain significant results. The problems including late delivery, cost overruns, chaotic implementation of new products and processes, over burdened resources, etc. directly impact the organization’s bottom line.
The complex organizational change required to resolve these issues must be well planned and executed. It is a program that may impact every aspect of the organization from executive compensation and corporate policy to the way individual performers plan their work.
This paper addresses strategic issues for successful project management improvement. A systems approach, organizational readiness for change, business objectives, the role and functions of key stakeholders and organizations, obtaining buy-in, managing change, education and ongoing support are elements of the improvement program.
Results
In order to successfully improve PM, it is necessary to get executive level support.Executives want results.PM improvement results can be quite dramatic—according to Gerry Kendall, a Theory of Constraints expert, the Israeli Air Force reduced aircraft changeover project duration from three months to two weeks without investing in any new facilities. They achieved 100% compliance with scheduled due dates, and significant cost savings across a number of different types of projects within several months.Lucent claimed to triple their development capacity.For a variety of success stories, visit www.speedtomarket.com and www.goldratt.com.
Degree of Change
The degree of organizational change required to achieve results depends on how dysfunctional current practices are, how much the organization desires change and is ready for change. Change to organization structure, roles, responsibilities, compensation, policies and procedures may all be required to achieve desired results. The change may go deep into the organization’s process and may have a wide impact across the organization.
As an example, when Los Alamos National Labs sought to improve project performance they established a project management methodology and a project management office with the responsibility for managing projects. The new approach changed the role and authority levels of the functional groups that had been running the projects and the point of primary contact with project clients. The change resulted in resistance from the functional managers who questioned their new roles and the implication on their careers (Pitagorsky, 1998, 7–16).
As change agents the people who lead PM Implementation must identify change possibilities and chart a course that implements a PM process that provides the maximum possible performance improvement while minimally disrupting the existing organization. Sometimes, this means a multi-phased approach that creates change incrementally.Victories, even small ones in a well-planned sequence, will sustain support from executive sponsors, middle managers, PM practitioners, clients and project performers. Often the initial victories can be quite dramatic.
In other settings, more far-reaching change is called for. The organization’s culture, particularly its adaptability, must be considered when planning any change.
Business Process Change
PM Implementation is a business process change program to improve performance, achieve cost savings, improve service levels, improve the quality of project results, and the relationships among project stakeholders. It has companywide, bottom-line implications.
The underlying principles of organizational and individual change are:
1. Acknowledge that there are problems or opportunities for improvement
2. Recognize cause(s)
3. Realize that something can be done about it
4. Do what is necessary to change the situation.
Improvement is not a one-time effort. These steps represent a spiral toward perfection.Whether perfection is ever reached is immaterial.Reaching for it in a systematic way will result in continuous improvement. It is always possible to improve a system.
PM improvement is complex, fraught with risk of failure, associated with automation, new procedures, role, responsibility, authority, organization and cultural changes. Taking an approach that is driven from the top and focuses on root causes can minimize complexity and help to guarantee success.
Systems Oriented/Holistic Approach
If PM improvement can be isolated to specific projects, the effort can be focused and results can be relatively quick.However, if projects are interrelated either because they share resources or other critical elements, a more organizationwide approach is necessary.
For improvement to succeed, a systems oriented (holistic) approach is necessary. A holistic approach is one that recognizes the interactions between all the elements in a complex system.The system of managing projects includes all of the people, processes, policies, machines, facilities, roles, and relationships that are involved in, influence or are affected by project management.Any change to any part of the system may have affects elsewhere. Problems in the system can be traced to identifiable causes. Causes can be addressed by making changes to the system’s components.
For example, if project overruns and quality short-falls are caused by initiating multiple projects that far exceed the capabilities of the available resources, no new and improved scheduling tool and technique is going to substantially change things. Here, change to motivation and portfolio management would be needed to address what may seem like a project performance problem.
Readiness for Change
In order for an organization to successfully improve it must be ready for change. Readiness is the degree to which the organization acknowledges the need for change and commits to do what ever is necessary to improve.
Readiness is measured by how executives remove barriers and provide resources and how management and supervision follow through with the tactical changes required of them and the people who report to them.
Risk and Resistance
As in any program, risk management is a critical part of planning. Among the risks in PM improvement programs are disruption to the environment as project performers learn new tools and techniques, choice of inappropriate tools and process definitions, insufficient staff for managing and facilitating the change process, underestimated schedule and budget, insufficient support from senior management and other stakeholders, longer learning curves than expected, etc.While there are many potential risks, the probability of success is most closely related to resistance to change and how it is addressed.
Whenever there is process change, there is impact on the way people work and the way they relate to one another. Resistance is not inevitable, but we must assess its likelihood, the form(s) it might take and its potential impact. Then we can develop appropriate responses.
Managing Resistance
Managing resistance begins with a “selling” process. Improvement initiatives must include education, training and motivation for all stakeholders.Motivation strikes at the roots of resistance.
Each class of stakeholder is motivated differently. For example, executive sponsors are motivated by significant financial improvement, gains in market share, increased stability within the organization, etc. Performers are motivated by how much the change will make their lives more rational. Clients want better results, faster, cheaper, and more predictably. Functional managers want to be able to perform their functions effectively, perhaps, protect their turf, etc. Project managers want to be able to commit to rational project objectives, avoid conflict, serve their clients and sponsors and have clear understandings about the roles and responsibilities of all project stakeholders. Hopefully, all stakeholders share the motivation of increasing the organization’s capacity to perform.
Where resistance exists, permit it to surface, use it to test the correctness of the program, and address it firmly and candidly. Sufficient authority to break through unreasonable resistance is necessary.
Maturity
Process maturity is intrinsically linked to PM implementation. Maturity Models provide both a path and criteria for assessing where an organization is. All of the maturity models support the need for a planned approach—an implementation program— over time frames that may be from several months to two years.
One PM Maturity model (Kerzner, 2000) identifies five levels of maturity
1. Common Language
2. Common Processes
3. Singular Methodology—including portfolio management
4. Benchmarking
5. Continuous Improvement.
The levels overlap. Benchmarking including establishing measurement baselines and processes can begin at the onset of the improvement process.
The maturity model can be used as part of the selling of PM, as a basis for program planning and as a means for understanding the complexity and duration of PM improvement. A gap analysis, comparing where the organization is today and where it would like to be regarding project performance is effective to establish goals and motivations for change.
Maturity implies that the organization exhibits specific characteristics. Richard Bauhaus (Knutson, 2001, 304–5) identifies seven critical characteristics in:
1. Consistent processes
2. Everyone knows and follows the PM process
3. Clearly defined roles and responsibilities
4. Common principles, language and expectations
5. Portfolio management
6. Project’s linked to business strategy
7. Continuous change, including education, improvement projects, measurement, etc.
The Prerequisites for Improvement
Motivation to Change
The two primary motivators are pleasure acquisition and pain avoidance. Pleasure acquisition replaces pain avoidance when the organization begins to continuously improve to gain benefits rather than fix problems.Until then, an organization’s readiness for change is linked to the degree of pain the organization and its inhabitants feel.
In one high-tech manufacturing firm, loss of market share in a highly competitive industry and turn-over of critical employees were the principle pains that brought the firm to PM improvement. The market share issue was linked to long and unpredictable product development cycle times. The turnover issue was linked to chronic overtime, among other causes, linked to project management.
In another firm the failure of a mission critical ERP implementation project and continuous conflict between the IT group and its internal clients that ultimately became evident to external clients were the painful symptoms that surfaced the need for PM improvement.
Typical problems that bring organizations to PM improvement are:
• Loss of market share to competitors who get higher quality products to market faster at lower cost
• Dissatisfied internal and external customers
• Dissatisfied employees due to chronic overtime and the perception that they are working for people who knowingly insist upon irrational project objectives
• Operational inefficiency and disruption due to poorly managed business change projects.
These business problems affect profitability, the firm’s share price and its survival. Each of them can be traced to project initiation, planning and execution short falls.
Acknowledgment
Does the presence of pain guarantee that the underlying issues will be addressed? Certainly not. Some organizations, like some people, can be in denial forever. Even recognition of chronic and terminal problems can be met with denial.
In order to be ready for change, the pain must be acknowledged.
Acknowledgment means that people must communicate problems openly.There must be candor, or straight talk, so that problems can be surfaced and explored in a healthy, systematic way, regardless of whose turf gets stepped into or whose defenses are breached.
There is a strong tendency to hide problems. People and organizations are often defensive. Blaming is common. Few are willing to open their personal and group performance to the kind of scrutiny required to identify the root causes of the problems that plague the organization.
To be ready for PM improvement the organization must buyinto the need for a compassionately ruthless exploration of its problems and their causes. The exploration can be facilitated by outside consultants, but the organization’s stakeholders—executives, managers, supervisors and performers—must perform it. Blaming and denial must be replaced by dispassionate analysis moderated by wisdom and compassion.
Formal processes to evaluate organizational performance and identify the causes of defects and inefficiencies are built into the continuous improvement systems common to TQM, Six Sigma, Theory of Constraints and various maturity models. Performance reviews, Gap Analysis and benchmarking are among the techniques used to formally acknowledge the need for change.
Hope
Acknowledgment without the hope that change is possible is not enough. There has to be the recognition that it is possible to do something about it.We are often faced with responses like “That’s all very logical and even practical, but it won’t work here.”
Such responses are self-fulfilling prophecies that, if allowed to persist, will kill any chance of successful improvement. If people believe that they can’t change the way things are, they will not try. By not trying they will prove that they were right—“See, we told you. It won’t work here.”
This negative thinking is very subtle and runs deep in both human nature and organizational dynamics. For example take the simple statement “That’s ideal.” It sounds quite positive. But, it is often hiding thoughts like “Yeah, it’s ideal but who can implement it in our shop?” Ideals are often seen as unreachable.
Open dialogue is important.We want people to be critical, to push back. When they say, “That can’t work here,” the change agents ask,“Why do you think it won’t work?”“How could we make it work?”“What would work?”Change agents engage the members of the organization in the exploration of their environment, beliefs, goals, and resistance.Through exploration the organization begins to see that it may very well be possible to improve.
Cause Identification
As the organization explores its condition and the possibility of improvement, problem causes must be identified. There is a flow here. As people begin to answer the hard questions about why they don’t think change is possible, why they do things the way they do, even when they know they are “wrong,” the change agents facilitate cause analysis.
The removal of cause, clearly, eliminates the effects. Cause analysis can be done using any number of techniques, for example Ishikawa (Cause and Effect) Diagrams (PMBOK® Guide 2000), The Five Whys (Senge, 1994, 108), Conflict Diagramming (Scheinkopf, 2000). Cause analysis identifies causes, examines them in layers of causation and assesses if and how they can be addressed.
Cut Through
The change agent must be tenacious.Don’t take “We can’t do anything about that.” for an answer. Cause analysis is intertwined with changing attitudes about what can and can’t be done. Cut through the lethargy and self-fulfilling prophesies that inhibit change. With the right motivation and the right sponsorship, there is little that can’t be changed.
Once there is acknowledgment of the pain associated with dysfunctional PM, recognition of the possibility for improvement and understanding of the cause(s), then we can begin to implement improvement.
Business Objectives
The foundation for any program or project is its business objectives. These are the driving forces that have motivated the project’s sponsors to fund and support the project.
Avoid the all to common error of promoting objectives that are not directly related to business objectives. Executives must commit and continuously support PM improvement. What motivates them?
There are a wide range of business objectives for a PM improvement program, depending on the organization and its current conditions. For example:
• Increase the return on investment
• Get to market faster with new/enhanced products
• Implement operational improvements
• Ensure that projects are aligned with strategic plans
• Minimize the cost of ongoing operations
• Retain critical employees and vendors
• Thrill (or at least satisfy) customers
• Satisfy regulators.
Quantify business objectives to provide targets and measure success. As business objectives are met, effective organizations raise the bar to promote continuous improvement.
To meet business objectives, PM improvement objectives may include:
• Increase on time, within budget projects
• Reduce project duration
• Reduce project cost
• Effectively manage expectations—estimate more accurately
• Reduce defects and inefficiencies in products or processes
• Reduce chronic overtime and unnecessary stress on project staff
• Improve relations between all stakeholders.
As with business objectives each program objective must be measurable and the bar can be raised (or lowered) as the program progresses.
Use measurable objectives to manage improvement and motivate all stakeholders. Don’t get lost in the numbers. The objectives and related measures should reflect the complexity of the organization, be flexible and ultimately be related to strategic business issues.
Projects comprise the program. Project objectives may be to implement a PM methodology and tools, implement a portfolio management process, provide training and a career path system, etc. Each of these projects helps achieve higher-order objectives. Each must be coordinated in the context of the PM improvement program.
Key Stakeholders
The principal stakeholders in PM Improvement projects are sponsor(s), champion(s), and change agents.
Sponsors
Sponsors are executives who have been convinced that PM Improvement is a mission critical, strategic issue. The sponsor authorizes change agents to plan and execute the program and motivates all others to actively participate. The probability of success increases as the level and involvement of the sponsor increases.
Champions
Champions bring knowledge to the organization and convince executives and others that Project Management is a mission critical issue. The champion identifies the pains and gets them to be acknowledged by the sponsor and other members of the organization. The champion can be from anywhere in the organization, at any level. Generally, the champion finds the sponsor.
Champions must have the courage to candidly raise sensitive issues, be respected for their ability to manage projects and be excellent communicators.
Change Agents
Change agents facilitate improvement. They are the managers, coordinators and participants in the improvement program. The number of change agents is designed to grow as the program takes hold and the improvement process progresses. Ultimately, everyone in the Project Management process can be a change agent because they take part in process review and continuous improvement. It is critical that the change agents have a clear charter and sufficient authority and budget.
The principal change agents are responsible for articulating the project management processes to be implemented or improved. They are facilitators. They may author or select processes, select external consultants, training products, etc. They are responsible for managing the entire program.
The principal change agents are often PM process experts. Others may perceive them as academic theorists. PM improvement is not theory. Unless the PM process is perceived as being practical for the target users (project managers, project leaders, functional managers, clients and performers), it will be rejected.
External consultants can be of value, as long as they are managed and not looked upon as saviors. A process that is imposed on an organization, either by internal or external experts is likely to fail. The external consultants should act as subject matter experts, providers of generic PM processes, coaches, trainers, advisors and sounding boards.An effective management consultant will work with internal stakeholders who have the primary responsibility for the change.
PM Office Role and Functions
The Project Management Office (PMO) is an organization that administrates and supports project management in the organization and may be a functional home for project managers. The PMO is often the principle change agent group. If a PMO does not already exist, one should be created.
Once a PMO is active, it must be able to play two roles, (1) an operational group that is coaching, reporting, managing data, facilitating reviews, auditing, managing process descriptions and changes, etc. and (2) the managers and key performers in the improvement program.Alternatively, a PM Improvement program office can manage the improvement process, and ultimately turn its role over to the PMO.
In any case, there must be resources to perform both operational and improvement activities.Having the same staff perform both of these simultaneously is difficult and may ultimately damage the improvement program.
The Steering Committee
As in any project or program, there is need for a high-level group of key stakeholders—executives and/or senior managers—whose areas will be impacted by the change and who will be called upon to sustain the project, make critical decisions, and cut through politics. Where projects are performed for internal clients, presence of senior client managers on the steering committee is very desirable.
Working Groups
Working groups are teams made up of project managers and project leaders that may critically review process definitions offered by the change agents, take part in developing aspects of he new process, etc.Working groups are a way of promoting buyin by the target users.
Implementation
There is no single way to implement PM improvement in an organization. Each organization is unique and, given the complexity of the change process, it is necessary to adapt to the organization’s current conditions. There are generic models based on business process redesign projects that can be used as a foundation for planning the improvement program (Harrington, 1991).
Principal Deliverables
To reach the goal of bottom-line improvement, the principal deliverables of a PM improvement program are:
• Project management process definition, including a Project Life Cycle model
• Standards and procedures, including forms, checklists and document outlines for all PM processes—Initiating, Planning, Executing, Controlling and Closing
• A portfolio management process
• Creation of a PMO
• A glossary of PM terminology—tailored to the organization and its types of projects
• Prototypical task lists for typical projects
• Prototypical role and responsibility assignments for organization units, with variations by type of project
• A tool set for use by project personnel and the Project Office
• Career development plans for project leaders and managers at all levels
• A training curriculum (with required participation) including executive orientation, basic PM training for all project participants within the organization (performers, functional managers and staff, internal clients, etc.) as well as some regularly used vendor staff members, more advanced training for project leaders and project managers
• A plan for the ongoing support of Project Managers
• A plan for compliance monitoring
• A plan for ongoing improvement of the PM process that includes review requirements, measurement, regular evaluation of review and measurement results, process improvement techniques and responsibilities.
Critical Success Factors
Implementing project management is a program made up of a series of projects and ongoing support activities. The most critical factors in the PM Implementation program are:
1. Sustained executive level sponsorship, based on strategic business objectives.
2. Patience. Time frames range from several months to two years, depending on the degree of readiness, resource availability, degree of resistance, among other factors.
3. A well-planned improvement process consisting of a strategic, program-wide plan and individual plans for each project within the program. Use professional project management.
4. Clearly differentiated, but carefully coordinated, PM and performance (e.g., design methodology) improvement programs. Project management provides the means for clearly identifying performance problems, coordinating improvement initiatives across projects and providing the ability to measure the results of performance improvement.
5. Adequate resources with an appropriate level of authority to get things done.
6. Flexibility.Any complex program undertaken with the idea that things must rigidly adhere to some preestablished plan is bound to fail.
7. Participation and buy-in by the people who will be most effected by the changes—project managers, performers, and functional managers. Create a team of respected PM’s and FM’s to review and approve processes and to spread the word.Avoid imposing the new process on people. Have the authority to do so as a last resort.
8. Buy-in by clients and sales people. The new process will affect them and they can have a significant impact on the program’s success. Few clients and sales people will unilaterally postpone their projects or give up on pressuring for arbitrary budgets and deadlines. Policy and compensation changes may be required to address these issues.
9. Ongoing support and improvement including education, coaching, facilitation, compliance monitoring, measurement, process review and process improvement. Establishing a PMO to provide this support is critical.
10. Results, objectively demonstrated through measurement against a baseline.
Underlying these is the need for clear, candid and continuing communication throughout the entire organization coupled with a holistic approach.
Conclusion
Project management improvement is a complex, often high-risk program that promises significant bottom-line results, often at the cost of cultural change.Managed properly it can take the organization to a significantly higher level of performance.Managed poorly, at best, it may provide some small short-lived benefits.
Once the organization is ready, making the change is relatively simple (not necessarily easy, though).Until it is ready, significant change is virtually impossible. Getting the organization ready through motivation and education is the critical challenge.