do or die?
illustration by Eric Mueller
All organizations must pursue
continuous improvement to
compete, but they won't get
very far without executive support.
although better, faster, cheaper is a common corporate directive, every company must decide on its own path for continuous improvement. Establishing a corporate commitment, adopting a strategic direction and developing measurement tools are steps along the way. Harold Kerzner, Ph.D., and Karen McIsaac discuss how project management maturity provides a powerful competitive weapon.
How much maturity does a company really need?
Dr. Kerzner: The amount of maturity a company needs is customer-driven. Whenever a contractor allows its customer to become more mature than it is, very unfavorable results can occur. For example, the customer may tell the contractor how the work should be done, do the work itself or seek out a more mature contractor during competitive bidding.
Therefore, companies that rely heavily upon external customers for their revenue stream, such as project-driven companies, must never allow their customers to achieve a greater degree of maturity than theirs.
Ms. McIsaac: To know how much maturity it needs, a company must conduct an honest examination of what's going on in its project world: Is it doing the right projects in the right sequence and for the right reasons? What is it supporting: tactical, strategic goals or random initiatives? Once a project is completed, where is the accountability for the projected metrics and benefits that justified the initiative? Who is asking the questions about project results? Is the company tracking where it may get off-center on projects? Does it know the root cause of project failures and is it addressing them with measurements to ensure there are actual improvements versus rhetoric?
Harold Kerzner, Ph.D., is senior executive director at International Institute for Learning Inc. and a professor of systems management at Baldwin-Wallace College, Berea, Ohio, USA. He is the author of In Search of Excellence in Project Management (John Wiley & Sons, 1998) and Using the Project Management Maturity Model (John Wiley & Sons, 2005).
Karen McIsaac, PMP, is president and consulting director of Project Managers Inc., Charlotte, N.C., USA, which specializes in implementing major change initiatives.
Which industries are making the greatest strides toward maturity?
Dr. Kerzner: First of all, it is questionable if maturity can ever be accurately defined or measured, because saying that you are mature in project management might imply that there is no further room for improvement. But if I were asked which industries appear to be more mature than others, I would begin with the auto suppliers. As companies such as General Motors become more mature, tremendous pressure is exerted upon the supplier base to improve in project management, and organizational maturity is appearing as a requirement in a request for proposal. In fact, maturity levels in project management have now become competitive weapons during competitive bidding.
Ms. McIsaac: In general, Fortune 500 organizations tend to recognize the capital investment in projects and have begun to understand the value of a disciplined approach to managing these investments. Our major experience is with the financial services industry, which has made significant progress toward achieving maturity. The largest companies have fostered organizational changes that support program and project management and formal governance processes as well as subscribe to required training programs, standard methodologies and Project Management Professional (PMP®) certification programs.
What can companies just starting out on the process learn from those who are leading the pack?
Dr. Kerzner: First, strategic planning for project management maturity is essential. Without guidance from some sort of strategic planning model, achieving maturity could take decades. Second, there must be a corporate commitment for maturity to occur, and the executives must see value in achieving a defined level of maturity in a reasonable time frame. Third, there must exist a dedicated organization that drives the maturity process, and this normally becomes the responsibility of the project management office (PMO).
Ms. McIsaac: One of the most important lessons is to treat maturity improvement as one would a multiphased project, with milestones, deliverables, measurements and appropriate funding. Organizations must examine and measure each phase or level for a deliberate period of time before venturing into the next one to determine what improvements have been achieved and which ones are expected to be achieved.
Should every company be pursuing maturity?
Dr. Kerzner: Given the fact that many executives today view their company as a stream of projects, the project management approach permeates the entire organization, mandating that maturity is necessary. So, only those companies that want to stay in business and remain competitive should pursue maturity. The alternative is rather unpleasant.
Ms. McIsaac: Not pursuing maturity is like stopping growth—you will not be in business for very long. The funding, the metrics, the recognition of its importance has to come from senior leadership—being a lone zealot does not make it happen. Companies that have not recognized the value in financial terms may not support continued commitment to these process improvements. Generally these organizations may not be tracking the overall financial impacts of projects not meeting objectives.
How can a company track its progress or success? Is measurement necessary?
Dr. Kerzner: The definition of maturity is very subjective. I have seen companies with very simple project management methodologies that were used so effectively that the company achieved better results than those companies that had been using complex methodologies for a longer period of time. In my mind, maturity is measured by how effectively the organization uses the tools and techniques that are available, and that there is continuous improvement to those tools and techniques. The best definition of maturity might be a continuous compression of schedules and improvements in estimating, customer satisfaction and follow-on work. It also could include having customers that have such faith in the ability of your project management systems to deliver that they treat you as a partner rather than as just a contractor, perhaps through sole-source procurement. It may be possible to measure some of the activities that lead to maturity, but to state that maturity is measurable implies that it has an end point. And in my mind, maturity is a never-ending quest to improve.
Ms. McIsaac: It's essential to have measurements. I'm fanatical about this. If you ask organizations what their project failures have cost them, they can't tell you. My recommendation would be to establish baselines around the most important criteria that are expected to be impacted by the commitment to improvement. With baselines, measurement criteria can be established and reported on a defined frequency to the stakeholders. The key is to start with something. If maturity—i.e., progress and improvements—cannot be measured, why do it at all?
It may be possible to measure some of the activities that lead to maturity, but to state that maturity is measurable implies that it has an end point. And in my mind, maturity is a never-ending quest to improve.
—Harold Kerzner, Ph.D.
What would prevent a company from achieving full maturity?
Dr. Kerzner: There are several factors, including executives who don't:
- See the value in project management or in project management maturity
- Recognize that project management maturity is now a competitive weapon
- Realize the importance of project management maturity to the customers and competitors
- Authorize the creation of a PMO to guide the maturity process
- Commit sufficient resources to achieving maturity.
Obviously, there is a common theme in these five factors: executives. Hence, executive education has been a priority of mine in recent years.
Ms. McIsaac: Senior leadership must offer continual support, with a focus on meeting clear, measurable objectives. There needs to be a commitment to improvements in project management within the organization and setting goals with the appropriate metrics, funding and the financial cost justification. One big stumbling block is ego. If you don't perceive a need for continual improvement in the practice of project management, you've limited the growth of your human capital and the organization's performance capability.
There are many maturity models on the market. What elements define the best ones?
Dr. Kerzner: There are two primary components that must be considered: simplicity and assessment capability. The prospect of developing a complex maturity model may very likely scare away senior management because they may not be able to determine time frames or resources needed to achieve maturity. With maturity models, complexity breeds avoidance. Assessment instruments are needed to show that progress is being made. While each of these models have a different approach, they all have the same ultimate objective: maturity. The decision of which one is best for a given company might be based on the time frame allotted, number of resources available, pressure by the customers, maturity level of the competitors and whether the company is project-driven or not.
Ms. McIsaac: Look to the model that can best support and demonstrate measurement criteria so the organization is able to recognize when it has met those criteria and the steps for migrating to the next level. Most maturity models are similar; they just have different labels on them. A company should exercise the same disciplined practices as they would in the choice of any vendor or product. They should clearly define their problem, their needs and expectations.
It's essential to have measurements. I'm fanatical about this. If you ask organizations what their project failures have cost them, they can't tell you.
—Karen McIsaac, PMP
What are the merits of maturity models that don't use levels, such as PMI's Organizational Project Management Maturity Model (OPM3)?
Dr. Kerzner: While I believe that maturity is a never-ending quest for excellence and continuous improvement, there must be some structure and decision points that indicate that this is happening.
Maturity is both quantitative and qualitative. Quantitatively, we can measure results to see that improvements are taking place. Qualitatively, maturity involves the culture of the company, the ability of the people to work together, the amount of conflict requiring involvement of executive management and relationships with clients.
The best enterprise project management (EPM) methodologies may not provide the required results if the behavior is not in place. To wait five years to discover that in place is unthinkable. Structure and measurement for mid-course corrections is essential.
Ms. McIsaac: The merit of using maturity models that do not use levels is that an organization can build its own model that represents its goals, behaviors and improvement measures. However, using a model with some defined levels can make it simpler for an organization to quickly begin adoption.
How can a company maintain momentum after reaching a plateau?
Dr. Kerzner: The answer to this question is simple: executive support. There must be a champion at the top of the company who visibly supports the quest for maturity and excellence. As an example, in 1998, an auto supplier developed an Intranet-based EPM system that was championed by an executive. Shortly after the system was launched, he was assigned to other duties. Three years later, the company realized that no continuous improvement had occurred to the system. The executive returned and within six months, the company had made major continuous improvement efforts to its systems. Now permanently assigned as the champion for maturity in project management, the executive encouraged ideas to come forth, established a PMO to lead the benchmarking activities and solicited customer feedback on the customer's view of the maturity of their systems.
Ms. McIsaac: Charter a continuous improvement group to continually evaluate the organization, looking at the quality of the project executions, trends in project management, training and support needs, and the tools and financials associated with each. It can be part of the PMO or not, but the group works in an oversight and support role, monitoring what new things are coming and how the company is performing against capitalized project initiatives.
How long does it typically take companies to reach maturity?
Dr. Kerzner: The single most important force for achieving higher levels of maturity (other than continuous executive support) is the early-on establishment of a PMO. It becomes the major driver for the maturity process. Without a PMO, it may take three to five years to reach certain initial levels of maturity. With early establishment of a PMO, however, and the right people assigned to it, it may take only two years.
The problem with deciding upon a time frame for maturity is that it's heavily reliant upon someone's definition of maturity, the speed with which tools are either purchased or developed, and the commitment to the right levels of project management education.
Maturity is not the development of tools or processes. Maturity is the effective use of these instruments and continuous improvement in use of these instruments using captured best practices.
Ms. McIsaac: The time and resources devoted to pursuing organizational project management maturity depend on an organization's priorities and commitment as well as its ability to absorb change. Considering these factors and the current maturity level within an organization, my recommendation and goal would be a four- to seven-year timeline.
Is it worth the investment in time and money?
Dr. Kerzner: You know the amount of money needed to achieve a certain level of maturity. But what is the cost or opportunity loss of not achieving it? Is it possible for the opportunity loss to be at least an order of magnitude greater than the cost of achieving maturity? You bet.
Ms. McIsaac: Yes, it's worth it, with clear measurements against a factual baseline that can attest to the worth of the investment. Many organizations are investing millions of dollars on program and project investments, but these funds and project benefits are at risk without organizational project management expertise and maturity. PM
PM NETWORK | FEBRUARY 2006 | WWW.PMI.ORG
FEBRUARY 2006 | PM NETWORK
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