Project Management Institute

What if the CEOs find out?

the strategic positioning of project management

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UP & DOWN THE ORGANIZATION

Paul C. Dinsmore, PMP

The Strategic Positioning of Project Management

Just because project management is good for organizations doesn't mean they will accept the necessary changes gracefully. But timing is everything; and for “managing organizations by projects,” the time is at hand.

This stand-alone article is part of a series about MOBP—Managing Organizations By Projects (previous columns were published in March, June and September). The concept, also referred to in the literature as Modern Project Management, Management of Projects, Managing by Projects, and Corporate Project Management, reflects a global way of putting classic project management methodology into practice; it's the across-the-board application of project management techniques to company projects, large and small. MOBP means that the project mindset permeates the company in all areas—marketing, engineering, quality, strategic planning, human resources, organizational change, corporate management—and that people are conversant with and competent at using project management methods in their work. This column focuses on the strategic positioning of project management for organizations moving toward MOBP

There's a generation of us that have followed project management since it was “discovered” in the ’60s. We've watched classic project management mature from mainframe-based activity structuring and networking to a broad form for managing complex technical ventures. In the mid-'80s, we observed a resurgence in project management, when user-friendly software programs were launched for microcomputers and recognition was given to the human side of managing projects. Now, since the early ’90s, the idea of “the management of projects” looms large as an organizational approach to running business. Although the strategic positioning of project management, aimed at boosting the corporate bottom line, is a growing trend, the concept is still new to many companies.

Let's say the CEOs find out about this trend. A lot of them know, of course, but others haven't yet made the discovery. What will begin to happen if the news filters up the organization? Or if the trend is otherwise picked up from the literature? Does this mean smooth sailing for MOBP—Managing Organizations By Projects—right into the executive suite? It might seem that way on the surface, but there are indications to the contrary.

University of Arizona professor Frank Toney, PMP, a key articulator of the “Fortune 500 Project Management Benchmarking Forum,” documented a case in which a corporate project management group reduced cycle-time-to-market from 52 months to 18 months; a reduction of over 64 percent! (See “Good Results Yield … Resistance?” PM Network, Oct., 1996.) The VP in charge, rather than leaping for joy, took a let's-keep-it-quiet tack and stonewalled the $4 billion-incremental-revenue success story because of internal politics.

Why would anyone want to put up a wall around project management gains for the organization? It seems absurd from the outside. Yet it would be naïve to think that functional managers will embrace the victories of others with unrestrained glee. After all, drastic reduction in product cycle time by a new group implies that the old way and the “old guard” might have been wrong. And, politics, ambition, and “one-upness” have always been part of the corporate game. So, neighboring parties become defensive and manifest themselves either by overtly throwing rocks at successes or subtly stonewalling the effort. This stuff doesn't happen all the time, but when it does, it should be no big surprise since there's a lot of human nature in organizations—both of the good and not-so-good varieties.

What Is the Strategic Positioning of Project Management, Anyway? Strategically placing project management means mustering enough corporate clout so that the principles for managing projects are practiced throughout the organization. This calls for structuring the responsibility for projects at a level of influence that makes sure, one way or another, the message is spread about the company.

Let's assume, then, that the executive suite buys into MOBP and wants to make it happen in the company. How would senior executives go about organizing the effort? How would they ensure that the organization is pumping modern project management for all it's primed to be? Here are some of the possibilities:

  • Spreading Religion. Under high-level sponsorship, everybody gets trained and gets into the spirit of things. This involves efforts including creating the vision of modern project management, developing a mission statement with objectives and goals, involving people and preparing the organization, reviewing standards and procedures, examining project workload, implementing the support structure, expert support, and training.
  • Project Office I: Super Group. Here a central group acts as the “manager of the project managers,” and is responsible for results. The group ensures that all major projects are conducted successfully. The project office is a central power center for managing projects. The office not only handles policies and procedures, but takes online responsibility for success.
  • Project Office II: Support and Facilitation. This involves a strategically placed project management knowledge center charged with seeing that both word and practice are spread. In this posture, the project office takes on more of a facilitative role than a managerial one. The office in this situation is responsible for articulating the project management program throughout the company; the role is one of support and facilitation.
  • Collaborative Cousins. The project management effort joins forces with another facilitative group, such as the quality office or the change management group. Since these groups use techniques that are at least close cousins to project approaches, there is logic to pulling these movements together. The challenge, however, becomes, “Under the leadership of whom?”

So, Why Don't They Understand? When a great idea comes along at the wrong time, its impact is like a muffled thud. But when the time is right, that same idea might whisper itself to hurricane strength. Things happen when the time is right.

For example: do you remember the quality movement in the United States in the 1970s? Probably not, because there wasn't much of one; back then quality was more of a control thing. At the time, it was considered a big move to promote the Quality Control guy to a higher management position. Were there reasons for promoting quality in American industry at the time? You bet! The U.S. automobile industry was under siege from the Japanese, who were using such unseemly tactics as producing better quality vehicles at cheaper prices. The same was happening in appliances and electronics.

But the quality movement didn't start to take off in the United States until around 1984. Just as in other significant change situations, in the case of the quality movement, it took external market pressure, dissatisfaction within companies and credible solutions to the problems preached by experts like Juran, Deming and Crosby to set the wheels in motion.

So is the timing right for the blossoming of project management into a broader concept like MOBP? Harold Kerzner, professor at Baldwin-Wallace College, dates the era of Modern Project Management from 1993. Tom Peters, in his best-selling management books, has been expounding on the virtues of managing by projects since the early 1990s. Companies like IBM have been reinforcing existing project management approaches in recent years. Successful project-driven companies such as ABB and EDS continue to be cited as glowing examples in the literature.

What's So Good About Managing Organizations By Projects? Since the moon-shot programs of the ’60s, project management's claim to fame has always been its results-oriented and time-proven techniques that complete projects to performance and quality standards, within schedule and budget and to the satisfaction of the client. Since MOBP concepts propose to spread this word throughout the organization, there is even more reason for joy from the executive suite.

To instill management by projects within an organization calls for solid commitment by upper management. For instance, “Projects are the building blocks of our business” is one of NCR's Foundation Statements. Patricia S. Peters, director of program management for Worldwide Services, cites the statement as NCR's supporting link between the business offices and the project offices. In a like form of commitment, AT&T has been investing heavily in project management training for years, paying for weeks of preparation for the PMP (Project Management Professional) certification examination. Lucent Technologies, formerly part of AT&T, continues the policy. NYNEX concentrates its projects management efforts under Vice-President of Engineering and Construction Paul Lacouture, PMI's keynote speaker at the 1996 Annual Symposium. Projects from within his area are handled using the project management policies and practices in place. Lacouture also maintains a project management support group for projects relative to other areas. That support group provides procedures, orientation, training, and if necessary, leadership, to ensure that project objectives are met.

It's Not All Roses! There's backlash of course. Some managers and members of the core organization are averse to embracing a technique that will make them even more accountable. After all, “finishing projects on time, within budget, and to quality specification and satisfaction of the client” smacks of “measurability.”

There are other reactions. “Is this the management fad of the month?” is a comment I heard from a group at PMI ’96 in Boston. Folks who have been reengineered and resized have developed a healthy cynicism for the latest trend from academia or wherever. Higher management, sometimes accused of “managing by best-seller,” is reluctant to bestow on the organization something that might seem “faddish.”

On the other hand, there are the fanatics, those so imbibed with the virtues of project management that they want to replace everything with project-oriented techniques. These proponents, coupled with the more overzealous software vendors, are enough to turn off any prudent senior executive.

The quality folks may also claim that they do project management since they do continuous improvement projects as part of the movement. Why add more to an already overflowing bag of tricks? the supporters of this theory argue.

So, there's a healthy balance of pros and cons on the topic. The winds are clearly filling the sails of project management, pushing it toward broader applications. Yet choppy waters lie ahead for the short term, as the new view encounters natural resistance and organizational inertia.

Still, the secret is getting out, if it is a secret at all these days. Project management is indeed taking on forms that promise to bring strong contributions to the bottom line of organizations. The question is not so much “Is it a good thing?” or “Will it bring in the bacon?” but “Is the timing right?” After all, only a small percentage of CEOs and senior managers are cutting-edge risk-takers inclined to lead the pack with a new managerial twist. Most are “followers along” and will sign on once the initial turbulence has settled.

When CEOs discover the impact of strategically positioning project management within their organizations, and how it can influence the bottom line, they may find a way to break through the subtle stonewalling that goes on in the higher echelons of corporations. When that happens, and the bottom line begins to bulge, the new trend may reverberate not only throughout organizations, but all the way to Wall Street. ▄

Paul C. Dinsmore, PMP, PMI Fellow, is president of Dinsmore Associates, affiliated with Management Consultants International Group, based in Rio de Janeiro, Brazil. He is the author of six books, including the AMA Handbook of Project Management.

Reader Service Number 5079

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.

PM Network • December 1996

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