Selling project management to senior executives
what’s the hook?
Worldwide, project management tools and techniques continue to gain acceptance in many industry sectors. Increasingly, companies espouse project management as a core competency. On one hand, we are noting a growing interest in elements of project management in virtually every segment of every industry. However, over 30% of projects end up being cancelled in midstream and over half of projects run as high as 190% over budget and 220% over the original time estimate (KPMG, 1997; Standish Group, 1995). Although lost opportunity costs can be difficult to measure, KPMG‘s (1997) survey of over 1,400 senior organizations found the lack of top management commitment to be a key factor in failed projects. Despite the pervasive high failure rate of projects and advocacy of project management by practitioners, the serious, long-term investment in project management remains a tough sell. The difficulty in selling project management internally can be compounded by stiff competition between firms (i.e., consultants, product sales representatives) jockeying for senior executives’ time to espouse on the wonders of their project management methodologies over others.
Over the last 10 years, the topic of selling project management has generated a significant amount of interest both within PMI® as evidenced by papers presented at PMI® conferences (see for example Block, 1991, 1992) and by PMI's recent sponsoring of a research project on the topic. The authors of this paper are conducting this research for PMI® and this paper represents the findings from Phase I. The paper presents practical insights gained from interviews aimed at identifying best practices necessary to build senior management awareness of the value and benefits of project management to their core business. The research team interviewed experienced practitioners familiar with selling and purchasing project management. A grounded theory approach was used to identify trends or themes related to successful and unsuccessful sales strategies. Particular attention was paid to the similarities and differences in how the sample groups understood project management and its benefits.
By exploring situations where project management has been successfully or unsuccessfully introduced into organizations, we begin to:
• Identify the compelling arguments of how project management benefits the organizations
• Articulate the practical and political approaches for gaining access to executives.
The paper begins with some background to the research and is followed by a brief introduction to the Phase I methodology, preliminary findings and recommendations for practitioners.
We set out to explore the project management, marketing and organizational literature to provide a framework for understanding the issues around selling project management. The following is a brief summary of some of the important issues we used to frame Phase I of this research initiative.
Disconnect Between “Selling” and “Project Management”
The terms “selling” and “project management” seem disconnected in the eyes and minds of most project managers. According to the Webster's dictionary selling means to “promote the sale, acceptance or adoption of” (1984, pp. 628). A quick review of the project management practitioner literature shows that project managers do promote and advocate elements of project management in the course of their work. Project managers generally promote project management by describing the features of tools and techniques and their inherent project benefits related to the priority triangle of time, cost and scope. Less frequently do project manager sales strategies tie project management outcomes to corporate level outcomes and strategies.
What Senior Executives Are Looking For
Generally, senior executives look for information to help them make sound business decisions as well as position themselves favorably in terms of their personal and professional growth. For example, they look for ways to measure and increase the return on their organization's investments and reduce expenditures (Dinsmore, 1996; McElroy, 1996). These outcomes are tied to corporate strategy not individual project outcomes.
How Do Sellers and Buyers Interact?
Sellers and buyers act either tactically (short term, quick win) or strategically (long term, slow win). The first level of selling refers to tactical approaches that advocate a strong product focus. The second level refers to strategic selling where one works with the customer to find the right solutions to business problems. The third level refers to competitive selling whereby one develops broader business relationships that help customers achieve their business objectives (Gardner, Bistritz & Klompmaker, 1996). Over the past 30 years there has been a noticeable shift in the three levels of sales proficiency toward the second and third stage. Senior executives have less time for tactical approaches and are seeking business relationships (Gardner, Bistritz & Klompmaker, 1996). Developing a relationship as a trusted advisor improves the likelihood of a successful sale.
Need for Alignment of Values
Frost (1999) suggests a value continuum for aligning buyers and sellers that builds on the Gardner, Bistritz, and Klompmaker (1996) model. It portrays value on a continuum, with foundation values of efficiency (e.g., return on investment, cost reductions, revenue generation, increased market share) and effectiveness (e.g., organizational effectiveness, customer satisfaction) at one-end and innovation values (market expansion, advantage creation) at the other. Frost's model portrays the promise-centric values critical to managers and relates them to how they are sold. For example, tactical selling involves both the vendor and customer being focused on the features of project management in short term, quick fix relationships. Conversely, strategic selling takes on a consultant/customer approach whereby the potential exists for the strategic selling of solutions to business problems. Finally, competitive selling involves a business-to-business partnership that is more encompassing in terms of its focus on both organizations. Sellers generally craft their messages based on their experiences; successful messages reflect the buyer's needs as the buyer understands them.
Selling and Triggers
Successful selling strategies include an approach to trigger a need in the buyer, a prepared response that situates the product as the best solution and evidence supporting the argument (Don, 2000). Sometimes the need is triggered by events or circumstances external to the sales effort (e.g., a crisis) but these type of triggers are not as useful in the sales process as the seller has little or no control over their timing or occurrence. Successful salespeople attempt to develop trigger strategies for their products that are more within their control by exploring the needs of the buyer and framing the product to address those needs.
This review made us speculate that the difficulty in “selling” project management may be caused by a misalignment between buyers and sellers (executives, project managers and consultants) around project management values and how they seek to buy and sell. If senior executives often receive mixed messages with respect to the benefits of project management, there may be a disconnect between the values used to sell and those used to buy project management. Based on this review, we set out to confirm this and gain some concrete insights into the magnitude and nature of the problem by exploring the following two questions.
1. How do “sellers” and “buyers” understand project management's functions and value?
2. How is project management sold in organizations?
We interviewed a total of 23 participants. Initially, participants from the Project Management Advisory Council (PMAC)—(companies that advise the Project Management Specialization at the University of Calgary) served as lead contacts. From this beginning we used a snowball technique to identify further interviewees. Interviewees fit into one of three categories:
Senior Managers (Executives, CEOs, CIOs or Vice Presidents) representing the influential group of individuals making decisions to purchase or not purchase project management (n=9).
Project Managers/Practitioners (Project Management Office Managers, Project Managers or Directors of Project Management) championing/selling Project Management largely in the context of their organizations) (n=6).
External Project Management Consultants/Experts whose experiences included both successful and unsuccessful attempts to sell project management to organizations (n= 8).
Participants were asked between 30–35 semi-structured, pretested qualitative questions. The questions focused on the similarities and differences in how these three sample groups understood project management, project management benefits, and the best way to present these. We use a Grounded theory approach whereby findings are “inductively derived from the study of the phenomenon it represents…it does not begin with a theory and then proves it but begins with an area of study to allow what is relevant to that area to emerge” (Strauss & Corbin, 1990, pp. 23). The analysis focused on identifying trends or themes related to successful implementation strategies.
Participants represent a diverse set of organizations. 14 (61%) were between 36–46 years, and 9 (39%) were between 46–55 years. Participants had practiced project management in such industries as oil and gas, information technology, telecommunications, consulting, healthcare, transportation and new product development. 15 (65%) of those interviewed had between 11–20 years of project management experience and 8 (35%) had under 10 years of experience. At the time of this research, two participants had their Project Management Professional (PMP) certification and two were working towards it. In general, the participants represented an experienced and educated group.
For the purposes of this paper, we present a summary of the findings under two categories related to the questions we set out to answer. First we explore the participant's understandings of project management and any gaps that may exist and then we look at the process of selling project management.
Exhibit 1. Common Decision Process for Buying Project Management
Are We Talking About the Same Thing?
Understandings of Project Management
All the participants initially described project management as per the Guide to the Project Management Body of Knowledge definitions. “A project is a temporary endeavor undertaken to create a unique product or service” (PMBOK® Guide, 1996, pp. 167). “Project management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project” (pp. 167). They did not describe it as a philosophy and none of the practitioners referred to specific methodologies. In general, the basic understanding of project management appeared to be held in common.
Once past the initial definition stage, a more varied understanding of project management came to light. Some viewed it as a tool or technique and others viewed it as a lifestyle, something that was ingrained in them and they believe in it. Some described it as “part of their makeup.” It was described in religious terms on more than a few occasions and interviewees indicated that they had “found the religion of project management” and described themselves as “converts.” Most of the executives provided less passionate or detailed depictions. They tended to describe it as a tactical toolbox for getting things done.
Value of Project Management
To project managers the value of project management related to being more efficient and effective in their roles, which helped them with their track records and career paths. The measures of most interest to them related to being “on time, on budget and on spec.” As such, they focused on tactical strategies in selling project management (features, attributes) because they tended to be “heads down, in the trenches” and these were the values of importance to them. To many in this category, the value of project management was so obvious it almost didn't bear explaining.
The value of project management to established consultants in material terms rested in increasing revenue and establishing their presence on accounts. They preferred to focus on strategic level outcomes and to sell project management at that level however they were willing to focus on whatever benefits the client wanted to buy. Smaller consultants tended to sell project management benefits relative to their individual skills and expertise.
The value of project management to executives related to being more efficient and effective in their business capacities and ultimately in how it helped them with their careers. They wanted to buy services that were aligned to their strategic business and personal goals. They were far more interested in buying tools or techniques that impacted strategic outcomes than those aimed at improving operations.
In all the interviews conducted, only those at one projectized firm consistently described project management as providing strategic benefits; all others interviewed described it as a corporate tactic. The rationale given was that business priorities lay elsewhere. Consultants confirmed these views based on experience with the same clients.
Clearly a disconnect exists between perspectives about the value of PM and what it should accomplish for organizations. Project managers craft their sales message based on their experience; however, from the literature we know that successful sales messages must reflect the buyer's needs as the buyer understands them. Project management must be positioned as a solution to executives’ central business concerns and backed by evidence, rather than as a religion or a thing you're just supposed to do.
How is Project Management Usually Sold?
To answer this question, we asked each participant to tell us the story of a time when they were involved in the “purchase” or “sale” of project management within an organization. Synthesizing these stories results in the needs based decision-making process depicted in Exhibit 1.
From the stories of project management the interviewees indicated that the triggers to buy project management were related to a combination of internal and external factors as reactions to specific needs.
• Internally, the decision to buy project management was primarily related to an extremely troubled or failing/failed project or the advent of mega/complex projects.
• Externally, the decision to buy project management was primarily related to competition and market share issues.
The impact of these internal and external contexts left the companies feeling that they were in “crisis” situations.
Not one interviewee mentioned that project management was successfully sold proactively, as a strategic investment. Block's work presented to PMI® in 1991 and 1992 confirms the difficulty of proactively selling project management. In organizations not rife with crises, the executives seemed disinterested in spending money on project management due to the perception that it was overhead and expensive. This explains some of the frustrations and challenges internal project managers faced in their efforts to sell project management proactively.
Specifically, crisis situations forced executives to consider the merits of project management in terms of the business problem. Recognition that the firm needed to improve the project management processes was usually based on the “insurance policy” value of project management in reducing risk and buying them certainty or its contribution to their personal success. Senior management's willingness to pay (WTP) for project management is associated with their perception of the pay-off—total revenue must exceed total cost. They tend to avoid buying project management because the tangible benefits seem disconnected to the individual's WTP, especially on a larger project that takes a long time. Conversely, willingness to accept (WTA) the loss of PM as an option/strategy in the future becomes much more of a compensation issue on a grander scale. In either case, the risk decision may rest on only one variable (typically cost), which acts to underestimate value of project management.
Triggered by these “crisis situations” executives began an information search. Externally, they reached out to specific project management consultants on the basis of prior relationships or referrals; e.g., those that were “top of mind” for specific services or skills. Rarely did the executives seek out new relationships with consultants or establish stronger ties with internal advocates of project management. There seemed to be three reasons internal sources of information were not cultivated. First, executives tended to view consultants with a different degree of credibility than their own project managers. In many cases the organizational crisis was in response to poor performance on organizational projects. Project managers were usually the ones blamed or fingered when projects were in trouble and senior managers failed to appreciate the element of shared responsibility (Jugdev & Hartman, 1998). This tended to reduce the credibility of project management proponents within the organization at the very time when executives might be ready to listen. Second, another challenge that internal project proponents faced in selling to their executives related to position power and language. Typically project management proponents were not at a similar level in the hierarchy and so did not have access to resources, influence, coalition and sometimes more importantly did not share a common language with the executives. When the project managers focused on project minutiae, executives further disconnected in terms of both receiving the message and listening. Understandably, project management is experiential and good project managers tend to become better project managers on the basis of their previous successes and failures. Frequently, participants stated that “you need years of experience and scars on your back, and have had a few things go wrong to be a real project manager.” However, most executives had not necessarily achieved their senior positions by spending time in the project management profession so the granularity that project managers used to sell it to them did not always work.
Finally, executives often got very mixed messages from their internal resources, messages often in direct conflict with those being offered by the consultants. Generally, senior executives got responses to queries about the state of project management in the organization that range as follows:
• We do project management and we do it well so we don't need help. This reaction reflects a resistance to change and exemplifies denial in terms of project management improvements.
• We don't need project management. We have managed to do projects “the old way for years” and do not need to change our practices or learn new ways. This reaction indicates an immature level of project management, and significant resistance to change.
• We need help with project management. Thank goodness we are receiving help and our concerns are finally being heard. This level indicates a moderate level of project management maturity and awareness that improvements are possible.
Executives receiving the first two types of responses are likely to be either confused or angry in a situation where they have recognized the organizational problems around project management. Executives receiving the third type of response are not likely to turn to this group for advice. Thus internal proponents of project management are severely handicapped by the tendency of executives to be triggered to explore project management only in crisis situations. Clearly, this group needs to develop better ways of gaining access and triggering interest in project management more conducive to proactive implementation.
Once the need was recognized and heightened awareness on project management achieved (learning), it usually led to acceptance of project management as a potential solution. Then, executives took action by either buying project management externally from consultants or growing it internally by training their staff, hiring project managers and augmenting this strategy with some consulting services. These two choices differ in that buying project management services reflects an organizational culture that views project management as a commodity. On the other hand, those companies that grow it internally support it as a core competency. These companies indicated that it took years to grow project management internally and that the progress was incremental.
In the cases where the need for project management continued to be denied at this stage, the practitioners believed that there would be no change. In these organizations, project management was simply something anyone could do when the need arises. These project managers were often promoted up the technical ranks and awarded the title “project manager” although they often did not have the experience or training to fill the role effectively. One interviewee used the term “accidental project manager” to describe these individuals.
Our findings suggest that a disconnect exists between what the sellers promotes and what the buyers want to hear in the project management realm. A naiveté appears around the belief that project management should be valued for its own sake. Thus, senior executives fail to see project management's value connection with the goals of the organization. In addition, the “sale” of project management at present appears to be the response to internal crisis or changes in the environment instead of occurring as a proactive business decision. Those interested in being more effective at selling project management will benefit from learning and applying the basics of marketing strategies, listening to their target audience and ensuring that they align the sale of project management to match the executive's degree of receptiveness on the value continuum.
Selling project management to senior executives requires project managers learn different skills and overcome a discomfort with acting in a “sales” capacity. Project managers’ experience with project management means that they best understand it's the value and benefits within their company. They appreciate its value and benefits when it is used effectively on projects and they appreciate its need when projects do not go well. Project managers are excellent ambassadors to promote project management in business terms to executives. They can develop skills in putting forth the arguments of how project management benefits organizations by applying best practices and heightening senior management awareness of the value and benefits of project management.
As with any project, the attempt to “sell” project management at the executive level benefits from careful planning and preparation. The results of this phase of the study provide some insights into the process necessary to “sell” project management and some of the arguments that others have found to be successful.
Our preliminary research findings suggest that the difficulty in selling project management at the executive level often results from gaps in the marketing relationships. For example, project managers sell features and attributes when executives want to hear about results and benefits. At times project managers and smaller consultants are guilty of selling before the need has been identified let alone agreed to by executives (Goldratt, 1998). These disconnects could be viewed as misalignments between values and expectations. Those involved in selling project management to executives can benefit from understanding some basics of marketing and communication skills (e.g., improving their listening skills in terms to learn how to frame the problem executives want answered). This will enable them to make the right connections about what executives are receptive to hearing in business terms. We suggest using a three-point approach of triggers, responses and proof to explain project management benefits.
Trigger: Understand what the triggers to buy are for executives. Currently, the strongest triggers for the need for project management at the executive level appear to be an external crisis or negative project activity. Buying occurs at a reflexive or involuntary level associated with current problems and no real learning takes place. This situation relegates project management to a reactive fast fix grounded in delivery of flavor-of-the-month tactics and bandaid solutions to deep project wounds. In this case, either a positive or negative association develops through pairing previous experiences with the promotional pitch. This cycle perpetuates itself on the underlying belief that project management will help control and diffuse external trigger events. From a sales perspective this means that sales will always be reactive. However, until we determine how best to sell project management at the strategic level where executives respond on the basis of listening to their internal needs (reducing costs and increasing revenue), project management proponents need to be ready to respond to these external triggers.
To increase the potential for proactive sales, project managers can initiate the trigger by focusing on questions like: What are the top five things the executive is trying to do for the company? What are their priorities? What keeps them up at night? Listen for cues and insights into these areas. For example, the executive may be focuses on increasing revenue and decreasing costs. Once these are understood, project management can be fit into the appropriate context and sold proactively.
Response: Sellers need to move away from selling project management by focusing on specific features (e.g., tools and methods) and learn to reframe the information in terms of benefits or values relative to the executive's priorities. One way of doing this is by drawing analogies about the impact project failures have on the business strategy and discussing lessons learned. The goal being to stimulate deep learning as opposed to associations made out of fear of past mistakes.
Proof: It helps to provide anecdotal information or proof of the value proposition in the context that executives will relate to; e.g., restate the value of project management in terms of efficiency terms that support the business objective and link to the strategy. A tight correlation between business goals and project management is required (alignment).
Additional pointers from practitioners who market and sell services include the following:
• People buy from people they have developed good relationships with and people they trust. The goal of most marketing and sales staff is to become “trusted advisors.”
• Listen to executives and relate project management to their agendas and priorities
• Build strong relationships (if you don't click, you don't win)
• Understand the politics of the environment
• Don't waste time selling features, make the connection between project management and value (Jugdev & Thomas, 2000).
Project management is a tough sell in a competitive environment characterized by a lack of boundaries and innovative partnering strategies. Credibility and trust are important advantages to have and contribute to successful services selling. The insights from the practitioners provided in this paper can enhance project management proponents’ competitive edge by aligning their selling values to those of the senior executives in the buying mode.
Phase I is an exploratory phase subject to the limitations of the smaller sample sizes of a distinct population parameter. The results should be interpreted within this framework, and thus, the conclusions generalize specifically to this population. The initial phase enabled the development of a more narrow and in-depth approach for Phase II of the research. Phase II entails a web based survey or Delphi study aimed at generalizing and elaborating, challenging and in some respects validating the findings of the first phase. The aim will be to provide concrete descriptions of important triggers, responses and evidence to be used to support the introduction of PM in organizations. Individuals or organizations interested in participating in the second phase are invited to contact us.
The authors of this study would like to acknowledge the Project Management Institute for visionary directions toward this research initiative. In particular, we are indebted to Dr. Lew Gedansky for his leadership and support. The authors would also like to acknowledge the generous financial support provided by the following organizations:
• University of Calgary, Calgary, Alberta
• IBM Canada Ltd., Calgary, Alberta
• Project Management Institute—Southern Alberta Chapter, Calgary, Alberta
• Computers in Information Processing Society—Calgary, Alberta Chapter
The authors would like to acknowledge the valuable insights contributed by the study participants. Further details on this research project or for a copy of the detailed paper that was presented at the Project Management Institute Research Conference June 2000 can be requested by contacting Kam Jugdev at email@example.com
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Proceedings of the Project Management Institute Annual Seminars & Symposium
September 7–16, 2000 • Houston, Texas, USA
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