Project Management Institute

Accelerate enterprise IT and business alignment--it's in the game

Abstract

The successful implementation of a project management initiative will align both the program management office and IT operations team with the needs of the business. In many instances, the success of these initiatives lies not in selecting products and redefining processes but in achieving buy-in from all stakeholders, both at the top and bottom of the organizational structure.

Successful global organizations such as Hewlett Packard, IBM, and DHL are using simulation gaming to convince stakeholders of the value of these best practice processes in order to achieve the cultural change often required for successful implementation.

With Forrester Research (2005, p. 8) suggesting that 50% of organizations will include some form of simulation in their education offerings by 2008, this paper considers the value they can add and how simulation gaming is being used to achieve real alignment.

Current Disconnects

Research confirms that project delivery has matured in recent years. Despite this research, numerous examples of spectacular high-profile project failures suggest further progress is still required:

  • The UK National Health Service IT Project was initially estimated to cost £6 billion, but is now estimated to cost £30 billion (Wearden, 2004).
  • The U.S. Federal Budget for fiscal 2006 includes 1,087 IT projects, totaling $65 billion. Of this project total, the Office of Management and Budget identified 342 projects, representing 23% ($15 billion) that are on the management watch list, pointing out concerns over risk, cost, or performance (Strauss, 2006).

Why is this still happening? Despite the increasing numbers of certified practitioners in project management and Prince2™, the proliferation of project management tools, and the recognition of the need to address the people component, why do failures continue to occur on such scales and in relatively high volumes?

Is it possible that attempts to improve competency levels for individuals are actually creating silos of expertise? Is there a requirement to raise awareness levels and to provide a common language for stakeholders across the entire organization? If formal qualification provides individuals with the tools and techniques necessary to identify the direction of a project management initiative, how are organizations communicating this vision to the stakeholders?

Project management initiatives will deliver real alignment when all stakeholders understand the need for process and product change and appreciate the business value.

According to Stang (2006), the people component must be addressed as well as the process and the products in major project management initiatives. Combining people, process and products is the real challenge. Stang suggested that when pursuing a PPM Initiative, prospects must make an investment in internal process change and external process automation. External automation ofprocesses is possible through the use of tools but only after processes have been reviewed and implemented (Ibid.).

The implementation of processes is the real challenge, as it requires buy-in from stakeholders. In many instances it is this disconnect between the people component from the defined processes and products that provides the pain.

Could this disconnect between process and product, with the people component at its core, be the key to taking project delivery to the next level? If so, how is simulation gaming contributing and how is it adding value?

Connecting People, Process, and Products

Many organizations address the process and product component using a small band of internal experts or external consultants. While both of these options can produce effective process automation in theory, the real challenge exists when everyone is required to follow them and embrace the implementation.

At this rollout stage, we move from a technical or operational challenge to a soft-skills challenge. People are naturally resistant to change, and while there are many methods to trigger change, there should be no doubt that it is critical to the success of any initiative.

People are naturally resistant and fearful of change. Strebel (1998) said that major change initiatives often fail due to one common reason—executives and employees often see change differently. “For senior managers, change means opportunity—both for themselves and for the business. But for many employees, change is seen as disruptive and intrusive” (Ibid. p. 139).

The integration of people with process and products should be addressed as a communications campaign to capture hearts and minds rather than as a technical challenge. All too often, initiatives are forced upon employees as a done deal. Processes are re-engineered, tools selected, and the initiative announced. The success then depends on a number of factors. Perhaps the initiative director has the charisma and oratory skills of a John F. Kennedy to inspire belief in the initiative. Perhaps employees fear the status quo more than the unknown that comes with change. Or perhaps the initiative director will simply order the change in behavior to achieve success. Or perhaps not!

Jack Welch (2003) wrote that the most effective leaders at GE:

have what we call “the four Es of GE leadership”: very high energy levels, the ability to energize others around common goals, the edge to make tough yes-and-no-decisions, and finally, the ability to consistently execute and deliver on their promises. (p. 58)

It is the ability to energize employees that is making simulation gaming so compelling.

For employees to accept change they must believe the initiative is of value. Most important, the value to the business must be understood and the impact on the organization must be appreciated. This is difficult to achieve in a traditional chalk-and-talk education event.

Many organizations are using simulation gaming as part of a wider campaign to clearly demonstrate the value of their initiatives and energize employees. They provide a platform upon which employees can apply the processes, tools, and techniques to gain an appreciation of the potential business benefit. These events also provide a practical appreciation of the role of the individual and how their behavior may have to change.

Addressing the People Component

Simulation gaming drives adoption of project management best practice through a number of deliverables:

  • By showing the business value that can be realized
  • By providing an overview of the path from chaos to maturity
  • By effectively engaging employees early in the initiative
  • By providing a practical application of the processes and products
  • By showing how communication and behavior can greatly affect the success of an initiative.

Business Value

The ability to display real business performance improvement is a key deliverable of simulation gaming. As participants implement project management processes, they can see the impact to the fictional business they are supporting. This provides reassurance of the main objective of the project management initiative, which must ultimately be to drive business performance.

This ability to show business value as an initiative matures should reflect the quick wins that are required at the enterprise level to generate momentum for the initiative. Many initiatives at the enterprise level are “activities- centered” rather than “results-driven” (Schaffer & Thomson, 1998, p. 189). Often, results-driven improvement programs are more effective, as they focus on specific, measurable, operational improvements. The simulations seek to replicate this approach by running through a number of rounds and demonstrating how business performance improves at each stage of maturity.

This can often be described as targeting the “low-hanging fruit,” which suggests the program will target obvious changes to deliver results and provide the initiative with some momentum. By proving the dollar benefit quickly in the initiative, value can be realized and buy-in achieved.

Mapping the Maturity Path

Many simulation games are played over a number of rounds, typically three to five. They are designed to progress from a state of chaos, where performance is sub-optimized, to a state of excellence, where processes are mature, communication is effective, and business performance is optimized. In essence, they move the participants from a state of chaos to a level-5 maturity nirvana!

To effectively reinforce this performance improvement, maturity assessments are often included in the more advanced simulation games. If maturity assessments are used in the real world in conjunction with the project management initiative, it is possible to demonstrate the phased nature of the initiative, confirming which processes will de adopted at which stages. For example, time, cost, and quality management may be addressed initially, followed by other processes. Furthermore, as the simulations are played through over a number of rounds, it is possible to illustrate the value that can be realized through the introduction of each of the process groups. It is possible to show the value of improved initiation and planning with regards to the increased ability to execute and monitor and control projects.

It can be exceptionally difficult to communicate the path each initiative will follow. It is equally challenging to provide a vision of where the initiative is designed to take the organization. Simulation games are designed to clearly demonstrate the vision, path, and steps required to achieve the objective.

By providing a vision of the future and the maturity path to be followed, participants are provided with an appreciation of the impact on their role. A fear of the unknown can create suspicion, and by showing how roles, communication, and behavior changes with maturity, participants are reassured.

Engaging Employees

If simulation games are used early in the initiative, participants are provided a high-level overview of the initiative, from which it can often be possible to gather feedback on possible improvements. The value of employee engagement can be significant, as the people in the organization are often the ones with the ideas for improvements, as they deal with this pain on a daily basis.

By using simulations to engage stakeholders early in the initiative, a number of benefits can be realized. Reassurance is provided of the aims and potential business value that can be realized. This early reassurance is exceptionally important, as it reduces suspicion of the initiative, which can in turn create fear. The events should also attempt to gather feedback from participants, maximizing the knowledge and experience that exists in the workforce, and also providing a positive experience for employees who are reassured that they have a voice.

Demonstrating the Processes and Products

Simulation games provide a practical appreciation of processes and products. By modeling real-life organizations and representing the business, program management office [PMO] and operations, it is possible to recreate the different pressures that exist at the enterprise level. It is on this platform that it is possible to apply project management tools and techniques to address these enterprise-level issues and to drive business performance improvement. The more realistic the scenario and pressures, the greater the learning experience for the participants.

This practical, contextualized experience provides a considerably more powerful learning dynamic than can be realized through traditional chalk-and-talk education.

Changing Behavior

In order to apply these processes and products to the model, the participants must actually change how they are communicating with other groups. They must engage in reviews to determine what information is required by other participants to allow them to do their job more effectively. This results in significant changes in the quality and content of information the participants communicate with each other and whom they communicate with. They must also change how they are performing their roles in the simulation in order to drive performance.

These changes in behavior can then be mapped to the changes necessary back in their day-to-day roles in order to support the initiative. Many employees have been performing in the same manner for years without giving any thought to how they can best communicate with others.

What is Simulation Gaming?

Simulation games can be described as a combination of the following components;

  • Experiential learning
  • Facilitation theory
  • Simulation
  • Game play

Experiential Learning

Experiential Learning is often described using David Kolb’s 4 stage learning process (Kolb, 1984). The process consists of a stage cycle as follows:

  1. Concrete Experience
  2. Reflective Observation
  3. Abstract Conceptualization
  4. Active Experimentation

The theory can be equally applied to life-long learning or one-day education events. Simulations played over a number of rounds provide a platform for this iterative improvement by completing the stages of the cycle a number of times.

  1. Concrete experience. This stage often lasts approximately 30 minutes and gives the participants the opportunity to “run” their business and experience performance. Most notably, early performance will be sub-optimized and participants will have a concrete experience of pain, both within their roles and of the business.
  2. Reflective observation. On completion of the first stage, it is then possible to review performance, both using group discussion and using the simulation to track performance. Balanced scorecard and/or maturity assessments can be included and add particular value if these tools are also used in the real world. This stage is vital to reflect the poor performance in early rounds and to reinforce the performance improvement in later rounds. This theory suggests that without reflection we would continue to repeat our mistakes.
  3. Abstract conceptualization. This stage is often used to introduce connections to theoretical best practices and to consider, under the facilitator’s guidance, how best practice tools and techniques could be considered to overcome the issues currently impacting performance. The connection between tools and techniques that are currently used back in the real world (or tools and techniques soon to be introduced in the real world) can be introduced. This stage must be facilitative rather than directive in nature, as it is imperative that participants do not feel forced into decisions. The facilitator acts more as a consultant, offering ideas and leaving the participants to make the final decisions.
  4. Active experimentation. This stage is perhaps not entirely applicable to experiential learning education, as it is best described as a planning period for participants. They must have the opportunity and freedom to consider how best to apply the theoretical tools and techniques introduced in the previous stage.

It is typical for participants to complete this cycle three to five times. If completed successfully, it will give participants an appreciation of the need for continuous improvement as part of the culture of an organization. It can also be linked to the Plan-Do-Check-Act cycle.

Facilitation Theory

Facilitation theory was suggested by Carl Rogers and others (Dunn, 2000) and is based on the premise that learning will occur with the educator acting as a facilitator and encouraging learners to consider new ideas without fear of external factors. The facilitator must also make tangible connections between issues in the real world and the experiences in the simulation. They must also ensure that project management theory is understood, and must connect this theory to the processes, tools, and techniques applied in the simulation.

Simulations

Simulations can be defined as a highly interactive event that will allow the learner to model or role-play in a scenario. The key advantage is providing a platform that allows skills or behaviors to be practiced and implemented in a risk-free environment. The more realistic the simulation, the greater the learning experience.

Game Play

Game play can be defined as a structured activity used for both enjoyment and education. Key components include goals, rules, and interactivity. Game play generally helps develop practical skills.

While game play is an accurate reflection of the dynamic, suggesting engagement and enjoyment, there is always an element of suspicion regarding the “tree hugging” component and fear of an irrelevant, contrived event with no real outcomes. The value of many of these simulation games can be assessed through the view that successful global organizations are using this form of education and communication to drive performance.

How do Simulation Games work?

Having established that simulation games provide a platform for participants to experience the pain of immature project delivery and to realize the benefits as they apply processes, tools, and techniques, we will now consider how this theory is implemented.

Simulations are typically delivered over one day and played over three to five rounds. Group sizes range from 8 to 16 participants with a facilitator. The performance matures as follows.

Round 1. This round is typically referred to as the chaos round. Participants are provided sufficient information to perform their roles effectively but do not have a full appreciation of the exact information required by other stakeholders. This round will see business stakeholders ignored by the PMO, not receiving updates on progress, or confirmation of changes to budget or scope. The PMO ends up releasing resources, both personnel and budget, to project managers ad hoc, without appreciation of prioritization of projects or ROI. Project managers lack discipline, clarity, the ability to track and control projects, and make decisions at all costs to get their projects completed on time. The operations team will be under pressure to install these new products developed by the program office. They are engaged late in the cycle and projects are handed over with little information, often leading to spectacular failure.

Round 1 Review. The review of performance confirms these key issues:

  • Poor communication

  • Projects late, over budget, not matching expectation
  • Wasted resources, both financial and personnel
  • Projects poorly monitored and controlled
  • Poor ROI
  • Projects incompatible

The solution that participants are encouraged to apply includes:

  • Improved communication with all stakeholders
  • Expanded project initiation and planning
  • The application of tools, including WBS, activity definition, sequencing and duration estimation, directly allocating resource to tasks, and accurate calculation of costs. These steps result in project plans for each project prior to the next round. This in turn allows project managers to complete a planning document that will include a Gantt chart, providing managers the ability to monitor and control resources and take effective corrective action if required.

Round 2 will typically see a marked improvement in project delivery. Simple projects are successfully launched, milestones will have been defined, and accurate predictions will be possible. As a result, when projects deviate from plan, they can be easily tracked and effective corrective action can be taken to restore the project to plan. Communication among all areas will demonstrate a marked improvement with participants receiving the accurate and timely information they require in order to maximize performance.

Rounds 3 and beyond will build on the improvements realized in round 2. Projects with increasing complexity are considered, and as more tools and techniques are applied, the participants are increasingly capable of dealing with the advanced concepts.

Conclusion

Simulation gaming is currently used to drive change in organizations through the ability to replicate enterprise-level issues and demonstrate how best practice can deliver a solution. Simulations have typically been of the format used to train airline pilots and astronauts, but increasingly they are being used to replicate organizations in the classroom.

As 21st-century education evolves in line with technology, simulation gaming will be used more extensively to address the critical component in every organization—people.

References

Dunn, L. (2000). Theories of learning. Retrieved June 7, 2007 from http://www.brookes.ac.uk/services/ocsd/2_learntch/theories.html

Kolb, D. (1984). Experiential Learning: Experience as the source of learning and development. Upper Saddle River, NJ: Prentice Hall, Inc.

Schaffer, R. H., & Thomson, H. A. (1998). Successful change programs begin with results. Harvard Business Review on Change. Cambridge, MA: Harvard Business School Press.

Schooley, C., Moore, C & Fossner, L. (2005, March 29) Simulations: An emerging technology for building employee skills. Available at http://www.forrester.com/Research/Document/Excerpt/0,7211,36603,00.html

Stang, D. B. (2006, December 13). Invest in IT processes and process automation for PPM. Available at http://www.gartner.com

Strauss, H. (2006, November 4). Why IT projects fail in government. Available at http://www.gartner.com/DisplayDocument?id=498327

Strebel, P. (1998). Why do employees resist change? In Harvard Business Review on Change Cambridge, MA:Harvard Business School Press.

Wearden, G. (2004, October 12). NHS IT project costs soar. Retrieved June 7, 2007 from http://news.zdnet.co.uk/itmanagement/0,1000000308,39169940,00.htm

Welch, J. (2003). Straight from the gut. New York: Business Plus.

© 2007, Jason McClay
Originally published as a part of 2007 PMI Global Congress Proceedings – Atlanta, Georgia

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