PMI and small- to medium-sized companies

a happy encounter

Sara Baroni, President, Oxigenio Management Consulting

Abstract

In Italy, small- and medium-sized companies generate 71% of the total added value, which is far higher than the 57% in the rest of Europe and the 49% in the United States. The other factor, which mainly characterizes small companies (those employing up to 50 people), is the ability to develop a sort of “latent innovation”; this is a process entirely built around the entrepreneur and his or her strong ability to generate “new worlds.”

In May 2010, the PMI Northern Italy Chapter (PMI-NIC) and Oxigenio decided to launch a research project involving a dozen entrepreneurs operating in Brescia, one of the country's most competitive industrial districts, and with what goal in mind? The goal was to generate value through a better capacity to transform a “conceived” idea into an “implemented” one. With what means was this goal to be accomplished? The goal was accomplished by adopting a project-oriented approach customized for these kinds of companies and therefore very flexible and adaptable to their specific needs. What was the result? The result was a set of integrated visual tools validated through the execution of two pilot projects that allowed characterization of the role of the project manager in an effective and innovative way.

Origin of the Initiative

During the last four years of this story, which started in 1996, the PMI-NIC has grown from about 500 members in 2007 to more than 1100 today. This has created not only an expansion but also a diversification of the companies represented, with the presence of many members coming from small- and medium-sized companies. Thanks to these companies, there has been an increasing demand to adapt PMI's best practices, which are usually applied to big businesses, to this specific sector. The question is: how can A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fourth Edition (PMI, 2008), be deployed in those companies in which the number of employees is actually lower than the number of processes, not to mention the over 70 inputs and outputs and almost 150 tools and techniques? Another question to be asked relates to the profile of the project manager, because this role is not present in small organizations and its importance is difficult to understand.

In consideration of this, and the fact that in Italy small- and medium-sized companies generate 71% of the total added value (a record in the most industrialized countries), in May 2010 the PMI-NIC decided to launch an initiative based on the following three major assumptions:

  • First, the entrepreneurs need to be contacted in person in order to work together on common objectives, limited time, and the possibility for their companies to benefit from the experience;
  • Second, an industrial area characterized by small companies (with up to 50 employees) must be selected. In Italy, the area around Brescia is certainly a good example of this (in Italy as well as worldwide); and
  • Third, consulting firms familiar with this context need to collaborate. PMI-NIC has started cooperating with Oxigenio, founded by Sara Baroni who has been a member of PMI-NIC for many years.

The Path We Followed

T o better understand the path we followed, it is useful to refer to another research project undertaken by the PMI-NIC, which started in 2008 with the goal of studying the project as a “complex adaptive system” and analyzing the various aspects of the complexity theory (auto-organization, systemic vision, etc.). As an outcome of this initiative, a book was published, entitled “Il Project Management Emergente” (The Emerging Project Management) in which various topics are addressed, including the so-called “ethnographic approach” applied to the stakeholder analysis (Varanini, 2009, pp 11–17).

An additional contribution comes from another book dedicated to the Brescia industrial area, which contains many experiences of entrepreneurs who live there (De Martini, 2001, pp11–17). It enabled us to organize our work, clarifying from the beginning, the fundamental assumptions of what to do and, above all, what not to do:

  • First, we must realize that every small business is a world built on and around the entrepreneur. This world must be respected because it is the expression of a culture and an absolute original capacity of innovation;
  • Second, we must avoid the use of predefined models, thinking that the best way is to adapt, or even worse, to simplify models applied to bigger and more complex organizations. It is not correct to consider a small business organization less complex than a big one; and
  • Third, and finally, we must respect the main principle of an “ethnographic approach,” which is an observation of a reality without trying to influence it in any way. We paid the most attention to this during the implementation of the two pilot projects in which we acted only as facilitators and left the project teams to proceed according to their own logic and language.

Our initiative started with an event held in April 2010 and attended by 50 entrepreneurs and 40 professionals interested in the topic. The initiative was presented and then followed by the organization of some roundtable discussions, moderated by practitioners from the PMI-NIC and Oxigenio. We collected a number of suggestions about how small businesses can interpret the project concept and which areas are the most interesting areas for entrepreneurs.

After the event, we received a dozen requests to take part in the next phase of the design for and experiment on a project reference model based on three assumptions:

  • A project life cycle should not only concentrate on delivery, but also extend to both the generation and sharing of ideas and to the post-delivery review of the benefits obtained;
  • The use of visual tools, which are simple, intuitive, and very effective for knowledge transfer and integration is preferred; and
  • The selection of essential information to manage a project, leaving room for enhancement of documents, techniques, and support tools.

Two pilot projects were started between July and October 2010. The first project involved product innovation at a company producing hydraulic door closers and automatic hinges. The second project involved process innovation at an insurance agency with the intent to adopt a completely paperless management system for documents.

The initial reference model was significantly reviewed and enriched through two meetings between the entrepreneurs, their collaborators, and the PMI-NIC and Oxigenio observers/facilitators. This was made possible because of the active collaboration of the representatives of the small businesses who experienced this collective event as something really new and stimulating. In particular, both entrepreneurs recognized the effectiveness of the approach followed, above all in the idea-sharing and team buy-in phases, which for them have always been the most difficult.

The results produced in terms of project life cycle and support tools results are listed in the following paragraph.

The Results

In small- and medium-sized businesses, the objectives are often reached without considering activity planning as the best way to reach them. In these businesses, which are more complex from a relational viewpoint than from a technical one, there is an element we could not neglect in our model. This element is the passion of the entrepreneur, who knows how to bring his or her ideas so forcefully in order to overcome dispersion of energies due to a minimally structured approach (Baroni, 2008).

Enthusiasm and passion are the elements we noticed when working with the team of entrepreneurs and in the two experiments aimed at defining a reference model for project management. This is why this model had to put the entrepreneur in the centre of the project, providing logic and tools able to guarantee the propagation of the flow of energy from him to his collaborators.

As the result of our work, we proposed a set of logics and simple tools to be used with these two primary objectives:

  • to guarantee a high level of enthusiasm during the whole project, from its origin to the evaluation of the expected benefits; and
  • to involve people in all phases in order to overcome the limits of these typically minimally organized companies.

Our “extended” project life cycle (Exhibit 1) starts with the idea generation phase, through to the post-delivery phase when the benefits attained and the relative lessons learned can be evaluated and capitalized. Six support tools are linked to this “funnel-like” model. Each tool is integrated in a framework we represent through the cells of a beehive in order to express the industriousness and concreteness of these organizations.

The “Funnel-like” Project Life Cycle

Exhibit 1 – The “Funnel-like” Project Life Cycle

In the first phase, the ideas are generated by the entrepreneur or his or her collaborators through a comparison aimed at stimulating creativity. Everyone knows that innovation means, above all, a different and better way of carrying out activities and delivering products. The entrepreneur suggests the key themes, leaving enough time for ideas to emerge on “IWall,” a space managed by the entrepreneur and reserved for the most promising ideas.

This is followed by a phase of idea sharing, for which the team has created “IMap,” a mental map that contains, at the first level, the key questions to be answered. This visible tool has proved to be extremely efficient during the pilot projects because it has helped transform a “conceived” idea into a “feasible” one according to those taking part in this phase.

Once again, visual tools, in particular sticky notes, characterize the organizational phase of the project, starting with a “deliverable-oriented” work breakdown structure (WBS). This tool, called “IDo,” was recognized as essential for the effectiveness of the communication and team buy-in.

This tool is followed by the “IPlan” tool, which is a simple template used to highlight the timing and sequence of the activities, the responsibility matrix, and the cost estimates with possible contingencies.

During the realization phase, the “ICheck” tool, a simple cockpit in which the state of progress is shown, is used—not only time, cost, and quality are considered, but also human resources, communication, and risks and opportunities.

The post-delivery phase is seen as a fundamental moment to check the benefits obtained. The entrepreneur and his or her collaborators shared the use of the “ILearn” tool, in which a mental map is used again to represent the key questions of a debriefing path.

What about the project manager's profile? This, of course, was a much discussed topic because project managers are different from one another, depending on the industrial contexts. One common element we noticed is that the real problem is, above all “culture.” All the people involved must be oriented to the project approach rather than being able to identify just one single person responsible for the project. In addition, we must point out that some entrepreneurs indicate that this role can pass from one person to another—this is caused by the necessity to guarantee maximum competence and the credibility of those in charge of a specific phase during the project execution (e.g., when passing from the design to the industrialization process).

The Next Steps

The eight months dedicated to developing this research and experimental project enabled us to identify a set of assumptions for the next steps. Following is the main path for our future developments:

  • We started a challenging journey that will continue in 2011, both to widen the basis of comparison with other geographical and industrial areas and to consolidate the best practices used so far with new experiments in the field. In this context, we will certainly seize the opportunity to use the PMI network by collaborating with chapters in other countries;
  • We need new developments aimed at enhancing the model, not only from the quantitative viewpoint, but also by adding new tools or best practices. What counts is to provide every small business with the flexibility necessary to improving the model independently. The aim of our initiative must be a qualitative enrichment of the reference model. This can be done by creating and experimenting with new ways to spread and consolidate the project management culture among small- and medium-sized companies; and
  • Last, but not least, we must view these companies as a world full of opportunities for consultancy firms and service providers and so on. Such organizations must accept different logic in order to start a propitious relationship for both sides; they must cultivate the “ethnographic” approach by recognizing that the expected ignorance of small business entrepreneurs is instead a heritage of various forms of knowledge and an original and modern way of interpreting and producing innovation.

Baroni, S. (2008). Quando l’imprenditore non si diverte più (When the entrepreneur is not fun anymore). Milan, Italy: McGraw-Hill.

De Martini,0 B., Lambri, M., Redolfi, M., Tosini, G., & Varanini, F. (2001) L’innovazione latente (The latent innovation). Milan, Italy: Il Sole 24 ore.

Project Management Institute (PMI). (2008). A guide to project management body of knowledge (PMBOK® Guide)—Fourth Edition, Newtown Square, PA: Author.

Varanini, F., & Ginevri, w. (2009, November). Il project management emergente (The emerging project management). Milan, Italy: Guerini Editore.

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.

© 2011, Sara Baroni and Walter Ginevri
Originally published as a part of 2011 PMI Global Congress EMEA Proceedings – Dublin, Ireland

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