Project Management Institute

What makes earned value and other advanced PM techniques so hard to successfully implement?

Introduction

Information Technology projects have a long history of poor performance. Various reports document the abysmal project accomplishment history for this industry. Some organizations have endeavored to deploy traditional advanced project management methods (i.e., earned value) with varied degrees of success. Others have heard the siren song of newer techniques, like Critical Chain Project Management. Accompanied by a chorus of incredible promises, which include vastly accelerated delivery and “on time” guarantees, these too are attempted and produce similarly checkered results. And then there are those organizations that continue to search for that ultimate project management tool which will remedy all their project management woes with little or no investment.

Why do these efforts to implement increasingly advanced project management techniques fail to be effective? What makes advanced project management techniques so difficult to implement? Why is it so hard to get the benefits?

Over the past several years, the EDS Program/Project Management Consulting group has examined a broad range of projects and programs, both internal as well as those orchestrated by non-EDS organizations. Each of these situations has its own unique mix of people, leadership styles, methodologies, and project management techniques. Despite this variety, barriers to effective inculcation of advanced project management techniques can be overcome through appropriate application of behavioral change strategies.

Training Alone Is Not Enough

Traditional models for corporate education see people development as simply a transactional event. Person “A” requires access to knowledge and skills regarding subject “X.” Send Person “A” to training event “Z”—case closed—Next! This “sheep dip” approach to people development, whether we're discussing inculcation of advanced PM techniques or IT application languages, is of limited effectiveness because it fails to address the totality of environmental factors that contribute to personal effectiveness in application of specialized knowledge and skills (which ultimately leads to institutionalization of those practices). It is also presumed that only the “new” advanced technique information must be conveyed.

Realizing the benefit of advanced PM techniques requires recognition that the major hurdle to be overcome is not the complexity of the subject matter—many of these techniques aren't that difficult to understand and master. Nor is the hurdle totally related to enabling tools—there are a number of enabling tools to bring economy to the process of applying these techniques and there are some considerations in this area. The primary hurdle to be overcome is the dynamics of change as it relates to human behavior.

The Challenge of Change

Let's face it—no one likes change. Even the most “leading-edge” people will rail against a change as innocent as having to take a highway detour (accompanied by the usual traffic delays) to accommodate seasonal road maintenance activity.

Typical human response to change should come as no surprise. After all, the “change targets” (i.e., those persons on the receiving end of change) are being forced to move from a state of existence that is known, predictable, stable, secure, productive … to a state which is unknown, unpredictable, uncertain, less productive, insecure ….

Considering that change is a “constant companion” in life, it should also come of no surprise that the human response to any change event follows a predictable response pattern. Upon initial confrontation with an impending change the first response is denial. As the change event continues to unfold, resistance and/or resignation characterize the next response pattern. These responses are typically occurring at the lowest point in the “change curve.” Depending upon the change event's characteristics, change targets do run the risk of becoming trapped in a loop at this point in the change curve.

Eventually resistance/resignation give way to exploration in which the change targets begin to personally examine the change event's significance to them and how to best function in the new paradigm. The final response to the change event is renewal in which the new, resultant change state now becomes the status quo.

These human responses to change events have significant implications for organizations that want to implement advanced PM techniques. The time spent floundering through the pain of the change curve can be reduced by deliberate actions crafted from consideration of eight change leadership strategies.

Strategy 1—Leadership

While there are some change events through which people may be forced (like the necessity of leaving a comfortable seat when your office building is on fire), most change events benefit more from “leading people” through change. Effective change leadership behaviors exhibit themselves in a variety of ways like:

•   Understanding the current change environment, culture, capacity for change, etc., and packaging the change event into palatable, impact packages (few people are capable of eating an elephant in one bite)

•   Enabling the change event through appropriate support (financial investment, personal presence, communication, etc.)

•   Holding people accountable for results characteristic of changed behaviors (typically during the “Exploration” phase of the change curve)

•   Leaders exhibiting similar changed behaviors in the conduct of their work.

While the preceding items don't represent an exhaustive list, appropriate response by an organization's leaders can be a determining factor in whether you succeed in implementing advanced PM techniques. The authors have all observed would-be practitioners of advanced PM techniques who refused to frustrate themselves because their leaders' behaviors sent the clear message, “These practices are not valued ….” Without leadership support, don't bother putting out to sea with the change effort—that's one ship that shouldn't leave the port. As a result, don't expect to implement advanced PM techniques via a cost-free, extra-curricular grassroots effort. Anyone who believes that change can be accomplished without senior leadership buy-in, and their use of it, is either naïve or foolish.

Strategy 2—Communication

Throughout the duration of the change event, appropriate messages must be sent to affected stakeholders outlining what's changing, why it's occurring, and “what's in it for them.” In the authors' experience of coaching organizations through PM maturity initiatives, many of the barriers to implementing advanced PM techniques can be “softened” through a concerted communication program, particularly when one of those barriers is the perception, “Oh, these new techniques are just going to add more overhead without bringing me additional value ….”

The purpose to a communications plan for implementing advanced PM techniques is to manage expectations. These communications should provide a clear focus of the desired state that you're attempting to reach and illuminate the path to that state.

Of critical concern, however, is communicating, and clearly demonstrating, how this new initiative represents a “real” change which will make the job easier for those most impacted by it/required to use these techniques. The authors have seen many “improvement” initiatives that were nothing more than a pseudonym for changes that benefit/are wanted by someone else, not those who must make it happen. As a result, the people in the trenches saw no benefits for them. They could not see, nor appreciate, the benefits the completed change would bring them. They could only see it as a different way to do something they felt they were already doing just fine. WIIFM (What's In It For Me) can be a powerful change ally and motivation tool.

Strategy 3—Relationship Management

Some change events may have consequence to peripheral, affected stakeholders. These relationships may require articulation of the change being made, the immediate effects they may experience during the process, and how they ultimately benefit from these changes. In the authors' experience of assisting organizations with implementation of advanced PM techniques like earned value analysis, PERT, Monte Carlo simulation of risk, etc., managing affected stakeholders expectations is very important, particularly if the stakeholder(s) perceive the change may impose cost to them.

Like those who are directly impacted by the change (discussed above), this group must also see a personal and direct benefit relative to the occurring changes. It is very likely that this will be different from what is being offered to “others.”

One of the most overlooked stakeholders/”partners” within this category is the customer. Rarely is the customer considered, yet they are the reason for implementing the change … the goal is to deliver their project/product better than what would have been accomplished without this change. Failure to consider this is to leave a wonderful opportunity on the table. As an example, during the deployment of advanced project management training to various accounts, the authors' had the customer's invited to the same training event. Benefits that many would not have been initially seeking included:

•   Strong team relationship between the “customer” and the “contractor”

•   A clear appreciation that both parties share an identical goal … on time delivery of high quality results.

•   Risk is not a “four letter word” and it can be discussed with the customer.

•   An understanding of the “metrics” each is responsible to achieve:

•   Customer—best value for the dollar

•   Contract—delivery of all planned contract revenue.

One's first reaction to these points might be, “Doesn't everyone already know and understand this?” Our experience is very different. Everyone knows them … not everyone really “appreciates” them. The implementation of earned value on an IT project (which is typically time and materials) is a good example. Why would anyone want to implement a process that could shorten a T&M contract, which would have the effect of lessening the planned/forecasted value? This seems to be counterintuitive to internal (contractor) goals; but this is sometimes resolved by the customer's environment. Often, it is not considered advantageous by the customer not to spend all the funds. The two can work together by completing the project early, and then delivering additional customer value (another small project). In this manner, all the revenue is delivered and the customer achieves their best value objective.

Strategy 4—Business/Technology

The strategy of Business/Technology asks of the change plan, “What related changes are necessary in the conduct of our business processes to provide an appropriate environment for the desired state?” The answers to these questions have a direct effect on whether or not your efforts to implement advanced PM techniques will be successful. In the authors' experience, more than one judgment effort has failed because little consideration was given to either the selection of appropriate enabling tools and/or the integration of these techniques into the organization's workflows.

This decision for tool selection is often accomplished as a different and separate process from that of the change plan. Processes are established based on the “theory” associated with the advanced PM technique. These new directives, however, are not necessarily consistent with the inherent workflow assumed in the design of the selected commercial, off-the-shelf tool.

Decision-makers are also awe inspired by the reporting capability and the seemingly endless array of graphics that can be produced. As a result, they seem to loose sight of two critical facts:

1. All these wonderful reports require the input and maintenance of data to produce them, and

2. The goal of the organization is successful projects that improve the financial viability of the company, not the continual input and maintenance of project management data.

This last point might seem minor, however, the experience of these authors has found it repeatedly ignored and one of the crucial factors to success. The two key areas from which advanced PM techniques want data is the fiscal and time tracking systems, and these can both create a high overhead demand if automated ties and processes with legacy systems are not established. This must be automated … you want the project team analyzing and thinking about what the data is trying to tell them, not keypunching it into the system. The collection of time and cost data, by cost account, and verifying its correctness, however, is a killer, particularly if time tracking is not part of the current culture. By contrast, schedule status has always been, and well remain, fairly easy to collect … the team will readily share when something has been accomplished … progress is always good news.

Strategy 5—Team Structure

The strategy of Team Structure raises the following questions:

•   How must the organization structure change to provide an environment for the desired state?

•   What are the current roles (and related responsibilities) that must change?

•   What new roles are required?

•   What roles will be retired?

Implementing advanced PM techniques may require roles that were not previously a part of the organization. In its quest for PM excellence, many EDS solution Centres have added advanced PM specialists' roles, which are leveraged across one or more centers. These individuals not only provide specialized skills for these advanced techniques, but also coach and mentor their peers in these respective disciplines.

There might also be changes in the responsibility levels of existing roles. The authors have found that many organizations limit or restrict certain information from project managers. This is particularly true in the area of salaries, yet they hold them responsible for meeting project cost objectives! Senior leadership will entrust them with multimillion-dollar projects whose failure would be the ruin of the company, but will not provide visibility into one of the larger cost components they must track and manage.

There is also the question of all the stakeholders. As mentioned earlier, the customer is part of the team in many ways. They certainly share the goal of success. In many cases, they can contribute to the management of key risks. As such, they need to be integrated into the overall team structure, not just as a group to which to deliver reports, but also as individuals that can contribute to project success.

Strategy 6—Education/Training

The strategies of Business/Technology and Team Structure are all intended to create an environment in which the change can flourish and be effective. Once the questions in these two major areas that shape the organization's policies, standards, processes, and supporting procedures are answered, then—and only then—is it time to identify appropriate education and training activities. Failure to do otherwise is to conduct training as an end in itself without regard for how these advanced PM techniques are to fit in the scheme of how the organization does business.

That's not to say that all training must be tied exclusively to furthering a change initiative. One context in which training as an end in itself is appropriate is for the purpose of building awareness, as was characteristic of much of the early corporate education conducted by EDS with respect to PM techniques; however, the most effective training in the use of PM techniques occurs when it's tied to the exercise of a respective organization's business model.

In the design of education/training programs, consideration must be given to factors like:

•   Recognition of different learning styles

•   The power of organizational learning mentoring and peer interactions, knowledge management constructs, etc.

•   The benefit of experiential learning activities.

All these were considered when we developed our “EVRM Course,” which integrated earned value training with risk management. It combined classroom training, various exercises and a simulation that mirrored their new work environment.

A big issue here, however, is the overall “value” to which training is assigned. It is often viewed as an area where money can be “saved.” The significant surge in web-based training is a good example of it … training that can be delivered at any time with no need to schedule around work activities, provide a learning environment or instructor, etc.

This is not the time, however, to think solely about “saving money.” The goal here is a culture change. It is about investment in the future. Presuming that previously delivered training is sufficient for this new implementation is inappropriate, even if it included information on the soon to be implemented advanced PM techniques. In most cases, past training was theory based, with limited (if any) tie to the organization's new business model or the practical application of this material. The training to be delivered should now simulate and reuse as many of the new business model's processes, forms, procedures, etc., as possible. This helps to support the change and forms the foundation of new experiences.

Consideration of who receives the training is also important. Senior leadership often focuses on delivering training to those designated to be project managers, thinking that this is the group primarily “doing” project management, and therefore, the ones requiring the advanced skills. The reality is that all stakeholders should be familiar with these techniques to the extent necessary for their role. Certainly the PMs require the training, as it influences how the project is planned, metrics collected, etc. Training for senior leadership and team members is equally important. Senior leadership needs to understand what the reports are telling them, the factors that influence various metrics, and to actually use them in their decision-making processes. Failure to do so can result in this information being misused, as well as reinforcing/demonstrating to the Project Manager that the change to these new advanced project management techniques is “not important” (because they do not try to learn it).

Senior leadership must also understand that there are many factors that can influence the metrics they receive and the variances they will experience, not all of which are under the PM's immediate and direct control. This understanding comes from taking the same training as the PM, and should demonstrate to them that this information should not be used as a bludgeon. If they beat up the PM over variances, the variances can be made to go away, but it does not necessarily mean the projects are running better!

Team members also need training, as they must understand the overall impact of these changes. They might now be required to submit time cards, document task estimates, etc. Knowing how these interact and the value it brings to them, the team members, reinforces the importance. Finally, the customer's understanding and ability to interpret the advanced technique reports correctly must also be considered. If they, like senior management, cannot see value in them, they will not use it.

What should the training look like? Traditional PM training is organized around knowledge areas or a simplified serial process. It tends to focus on theory more so than practical experience. The realities of project management are that it is not really a serial process. It is cyclical within itself. An early decision in the overall process gets challenged/overcome later resulting in a return to the earlier processes so that adjustments can be made, and then these adjustments must be rolled through the entire process. Theory is nice, but if the trainees have already had the basic course, plus experience, what they want (and need) is practical knowledge that helps them appreciate how this information is applied, not more classroom theory.

This is not to say that basic knowledge should not be “revisited.” In fact, this is the most fertile ground to revisit. We found that a careful review of these “basic” project management areas contained the majority of the knowledge needed to be successful with such advanced techniques as earned value!

Why is this true and what makes it so hard to “teach” advanced PM? Most training starts out with the advanced topic and presumes that the attendees have thoroughly internalized the basics. In reality, they have internalized and implemented what they needed for their current environment, and since it did not involve advanced PM, some of the “fine points” within the basic areas that support the advanced techniques have been ignored/forgotten. The end result is the big lift in learning advanced PM is not in the new techniques but reviewing and showing where the basic knowledge provides crucial support. In our application of this within EDS, we have repeatedly seen the same impact each time … the trainee is immediately energized with the feeling that this is within their power to master. After all, the review is focusing on reminding them of subtleties they learned once before, leaving a very small amount of new material to master. We do this by reviewing the basics, intermixing a series of interrelated practical exercises that directly relate to their business, and cap it off with a one-day simulation, allowing them to experience the interplay between the different areas one more time, and to learn to interpret the results they receive.

What basic areas are reviewed? When we say, “go back to the basics,” we really mean it. The work breakdown structure (WBS) is the first area visited. Some practicing PMs have come to actually ignore this, thinking they can jump to the schedule (they're the same, right?!). They do not appreciate its role in insuring the complete capture of scope, organizing a project's data rollup and responsibility assignments, integrating system life-cycle requirements, planning various intermediate work products, and then building a project schedule. Organizational Breakdown Structure (OBS) is next (guess what … it's not the organization chart!), why it is important, its role with cost accounts, the assignment of cost account managers, where work packages fit and establishment of their individual entrance/exit criteria. Basis of Estimates (BOEs) is included, and it is here that a greater understanding of scope is obtained, as well as assumption analysis and its relationship to “risk.” Finally, the value of “baselining” and its relationship with scope and schedule is “re-learned.”

Even with this sampling, one should see that we have covered much of what is needed to understand and successfully implement earned value, yet it is found within what most consider “the basics.” What is left are only those components immediately associated with the technique itself, and this is not much! Issues such as the concept of “earning value,” the earning methods (0- 100, X/Y%, weighted milestone with percent complete, etc.), how to do the math and interpret the results is the only truly “new” material. Exercises associated with this material should also be made “practical” and delivered in such a way as to resemble the impending “new normalcy.”

Strategy 7—Measurement

Perhaps one of the greatest mistakes made with respect to any change initiative is failure to establish substantive measures through which the organization can substantiate realization of the desired state, both incrementally and “at end.” The change transition plan must institute a measurement program through which those determinations might be made. This is of particular importance when implementing advanced PM techniques. The organization's executive leadership (and the change initiative's sponsors) should expect (and rightly so) substantive measures demonstrating the effectiveness of these initiatives. In the authors' experience, these measurements should be referenced against an initial benchmark of the organization's project delivery success evidenced in project history prior to the implementation program.

A simple but universal truth is “you get what you measure,” or in other words, “metrics equals behavior.” If you want to make a change successful, carefully determine the metrics needed to make this happen, presuming of course all the various stakeholders are considered when these metrics are devised. (Yes, someone should to be measuring the senior leadership's behavior!) The right metrics will help make this happen, and if it includes both the “carrot and the stick,” chances of it being embraced is dramatically increased.

Strategy 8—Performance Management

It's entirely possible to pursue an implementation approach for advanced PM techniques that addresses the seven strategies discussed thus far and still fail to implement effectively IF consideration is not given to performance management. Performance management provides both the “carrot” and the “stick.”

While it's nice to believe that the “superiority” of the new way of “doing things” will motivate people to use these new techniques, that's usually only true for those people who represent the “early adopters” in the organization. For the remainder, expect to get the behavior for which you are willing to pay.

The strategy of Performance Management asks, “What will be done to discourage old behaviors and encourage desired behaviors”? Typically, incentives are used as change targets are descending down the change curve while moving through resistance. As the core of the organization moves into the Exploration phase, this is the appropriate time to apply the “stick” to recalcitrant members of the organization who are stuck at the bottom of the change curve. If performance management consequences don't characterize the design of the change package, it's unlikely behaviors will change.

Conclusion

While discussed in generalities, we have successfully employed these techniques on numerous accounts that became aware of the need to adopt advanced project management techniques. It is never as simple as buying a tool, or conducting some training. Much more must be considered, and a complete plan needs to consider, and integrate, all of the following areas:

•   Leadership

•   Communication

•   Relationship Management

•   Business/Technology

•   Team Structure

•   Education/Training

•   Measurement

•   Performance Management.

Obviously, approaching the change implementation as a project itself is important. The effort needs to be defined, planned, executed, and tracked with the same processes and tools as one would use for the products delivered to customers. And like any plan, addressing all of the project's scope is crucial if all its objectives are to be accomplished.

In all cases, implementing advanced PM topics was never as simple as “Send Person ‘A’ to class.” More than just training is involved, and some of it on casual examination might be considered a revisit to the past. But the key difference is that the training focuses on the practical application of the material and less on the theory. The value of these advanced PM techniques needs to be internalized and valued.

Finally the successful implementation of change is achievable, but it is more than just a change. A new culture is being developed and put into place, and this does not happen over night. It takes considerable time, and continual reinforcement of the appropriate behaviors. Senior leadership needs to be the leader of this change, ensuring their own behavior does not “back-slide” into the old ways. And they need to make sure that value is being delivered to all stakeholders involved in this change. Fancy colored reports are not necessarily the goal of the project team. They already know what is happening, so putting it into a new form is not a benefit. Helping them find issues that have escaped them, and/or identifying solutions/ways to improve the project is what they are pursuing.

References

Cohen, William A. 1990. The Art of the Leader. Englewood Cliffs, NJ: Prentice Hall.

EDS. 1996. Implementing Change Process Methodology.

Kotter, John. 1996. Leading Change. Boston: Harvard Business School Press.

Scholtes, Peter R. 1996. The Team Handbook. Madison, WI: Straus Printing Company.

Senge, P.M. 1990. The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday/Currency.

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.

Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA

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