Economic crisis? Support organizations, promote project management
We must overcome a deep and painful crisis. Organizations have to decide how and when to cut expenses and, if necessary, reduce personnel. Even in this difficult environment we can increase project management adoption if we exactly understand top management needs and create an indispensable tool for them. To win this challenge, we must involve personnel with proven experience in project management and adopt maximum flexibility to present innovative proposals and to apply project management tools and methodologies in a highly effective way. Our target must be to cover critical organization's needs in a very short period of time. Producing results quickly, and with low cost, will help us create the basis from which to start, and, with consecutive step-by-step successes, increase the organization's project management orientation. We must pay attention not to abandon project management standards application, but apply them in a way to fulfill customers' immediate needs.
Global economic crisis and its relation with A Guide to the Project Management Body of Knowledge (PMBOK® Guide)4th ed.
We are in the middle of a deep, painful and difficult-to-understand economic crisis. We must reflect, as project managers (PMs), on how to use our professionalism, our discipline and our experience and prepare innovative “weapons” and act in order to help our organizations move in the correct direction. Let's start relating PMBOK® Guide with economic crisis.
Project Management Knowledge Areas and their presence in the World Wide Web
Utilizing Google™ to search the Internet about project management articles referring to ‘financial crisis’ and ‘economic crisis,’ we can elaborate numbers regarding Internet pages relative to PMBOK® Guide Knowledge Areas (PMBOK® Guide, 2008) and reach interesting results. Let's start with a table relative to financial crisis (Exhibit 1) and then and continue with one relative to economic crisis (Exhibit 2):
Exhibit 1. Google Internet pages connecting Financial Crisis to PMBOK® Guide Knowledge Areas
Exhibit 2. Google Internet pages connecting economic crisis PMBOK® Guide Knowledge Areas
Pages related to a financial or economic crisis increased between December 2008 and June 2009 by about 50% and 45% respectively. From these pages only a small percentage contains words defining a PMBOK® Guide Knowledge Area. The only exception relates to the word Time. In December 2008 about 54% of the pages regarding financial crisis contained the word Time, while in June 2009 they reached 72%! Similarly the pages regarding economic crisis containing the word Time equaled 59% and 68% respectively. Unfortunately the word management in the above PMBOK® Guide Knowledge Area words can be found in about 1% of the relative pages, with the exception made for Human Resource Management and Risk Management.
Other key words related with project as well with organization's Management
Repeating the same process we have reached the following results:
- In the pages regarding financial crisis the word Information is mentioned in about 88% of pages in December 2008 and in the 96% of the pages in June 2009! Respectively, we found the words Control in 13% and 14%, Governance in 4.5% and 4.5%, Sustainability in 2.5% and 3% and Coordination in only 2% and 2% of the pages;
- In the pages regarding economic crisis, the word Information is mentioned in only 9% of the pages in December 2008 and in the 23% of the pages in June 2009! Respectively, we found the words Control in 7% and 18%, Governance in 2% and 2%, Sustainability in 1.5% and 1.5% and Coordination in less than 1% and 1% of the pages!
In conclusion, let's keep in mind that the most mentioned words are Time and Information and the less mentioned Coordination and the word Management accompanying the words with which they define PMBOK® Guide Knowledge Areas (e.g. Integration Management, Scope Management).
Acquiring investments for project management in an environment with lack of resources
News is not good at all! Organizations are reducing their personnel and cutting their expenses drastically or, even important, cutting expenses for investments in information technology (IT), for new products, customer services, etc. In this environment, we must seek to increase investment in project management. To achieve this goal we have to fight to promote the value of project management while being conscious about the power of our standards, methodologies, and tools as well as be ready to apply them in a clear and effective way. This will help our organizations improve their execution of strategy and operational performance. We have to adopt a top-down strategy and follow a step-by-step approach.
Capture and satisfy critical top management needs
Our first step is to establish a direct contact with top management. Even if our position in the organization is not adequate, we must find an alternative way such as utilizing an internal catalyst (e.g., a division manager) or an external one (e.g., consultant, Project Management Institute (PMI) chapter).
At the same time we must have clear ideas on what we are going to propose and how propose it. Top Management, in most cases, is not interested to know the details we are going to follow in a Project/Program or even how a Portfolio is managed and its Projects prioritized! The reasons are simple: a) because Top Management knows almost nothing about PM standards and b) because for our Organizations, found in the middle of a storm, a project, a program or a portfolio has less importance than, for example, a detailed/innovative way to prepare, follow up and update the Annual Budget, in an efficient and effective way. After all, Annual Budget is a “temporary endeavor undertaken to create a unique result” (PMI, 2008, p 5) and as in any other project we have to manage Scope, Quality, Schedule, Budget, Resources and Risk (PMI, 2008, p 6)!
From the data presented previously, the results clearly indicate that the most important factor is time! Let's reflect for a moment to try to answer to the following questions: Which discipline gives consistency to time planning and follow-up? Which discipline relates time consumption with cost and quality? Which discipline gives the opportunity to prepare “what if” scenarios to react promptly if some conditions change? How can an organization apply activity based management or activity based cost, taking into consideration time and interrelationships between activities? How is it possible to ensure and control correct application of quality or Six Sigma procedures, without having control over time and interrelationships? And last, but not least, how is it possible to make a serious risk analysis or resource management without relating them to TIME!
We have encompassed many necessary processes into our standards. We have enriched our professionalism, but during this hard period, it is important to stay tuned to the basic principles. Let's remember our famous triangle, representing time, cost and quality relationship. An organization willing to manage cost or quality has the opportunity to choose between various disciplines and utilize its relative tools and methodologies. But if it is willing to manage effectively cost, quality and TIME, it has to choose project management!
First results to be achieved at the earliest possible time
In such a difficult period, it will be impossible to convince top Management to take into consideration a proposal that will produce results after one year. Since we are trying to satisfy critical needs, a three to four month period will be acceptable, depending on the subject, organization's size, etc. But this is not enough. We must try to produce each month, specific outputs, according to the relative milestones foreseen in our project plan.
Minimum utilization of resources
Our motto will be “max result, min cost”! In fact we have to utilize resources that will create the minimum cost or no additional cost to our organization. Forget about hiring personnel or asking for the creation of a new office. Even in the case where you have top management's approval to create a Project Management Office (PMO), evaluate starting with an “informal” solution, building this in parallel your structured procedures. (Of course, for the organization in which a PMO has been established, everything becomes easier!). We are not going to ask for furniture, computers, software, etc. This will help us gain top management's approval for a PMO, but also will keep the focus on our project and its short deadlines. Just one exception is permitted: If project management software is not available, we have to procure it. This software will be utilized as a basis for the development of our “Strategic Project Management System” (SPMS).
The SPMS to cover top management's needs will likely not be working perfectly in one to three months. In addition, we foresee it to exceed its expectations for preparing and proposing additional tools/services/reports, with the scope to become indispensable and open the road for increasing adoption of project management tools and methodologies. Having the challenge to reach difficult goals in a short period of time, we must follow a step-by-step approach. Especially in regard to data collection and elaboration is crucial for the success of our project. We can follow a S.MA.R.T. approach:
- Step 1. Static: Trial data collection from each source, in any format and according to availability.
- Step 2. MAnual: Specific data, in fixed format collected periodically from each source and centrally inserted to the SPMS.
- Step 3. Remote: Each sector/division/department collects and inserts its data to the system.
- Step 4. Timeless: Each source has online access to the system.
Necessary conditions for sustainable success
Strategic project management team creation
Invest in a leader with prestige and respect. Proven experience in project management is a must. We state the obvious, but in reality it is not always as simple as this. Answering the following questions can help us make the right decision:
- Inside our organization, is there a leader available with sound experience in project management?
- Have the projects under his/her leadership been successfully completed or successfully abandoned because of his or her early advice?
- Has he or she has gained the respect of the members of the teams he/she was leading?
- Is the PM seen inside the organization as holding promise but, at the same time, not a threat to management?
- Is his or her integrity and confidentiality bulletproof?
Unfortunately, we are seeking someone with all the above characteristics. If we can't find someone with these characteristics inside our organization, as a first option, we must consider the support of an external consultant for points “1” and “2” or as a second option to utilize the consultant as a project leader. His contract will be signed for short periods of time with fixed, well-defined, and measurable objectives. If the external consultant has worked before with us, knows the organization and fulfills the characteristics “2” to “4”, it will be an easy decision. In any other case, we have to examine his/her resume carefully and verify that a series of projects similar to what top management is requesting have been successfully conducted, preferably in organizations similar to our own. Of course, if we are going to utilize an external consultant as team leader, we must create a “dream team” to support the consultant. This team will include the employee who will later become the team leader.
Create a small team of employees, with “access” to the organization's key positions and data, on which company is relying and investing.
All the characteristics we have mentioned about the team leader are also valid for our strategic project management team members. A few more considerations can also be listed. Since our team will be small but highly effective, the employees we want involved must be the “right hand” of sector/division managers. Only this type of employee has access to organization's key positions and data. But since their principals are relying and investing in them, they are indispensable and have limited time availability. How will it be possible to utilize them in our team? This is very simple: Helping them to reduce the amount of time needed to collect and elaborate the data needed for their sector/division head. If we succeed and their reports become more precise, clear, and effective, we will win the battle and gain the support of their supervisor for our efforts! We have to satisfy top management needs, but also the needs of who is going to support us in the collection and elaboration of data. Sector/division managers have to participate actively in our effort to be the first to know how their sector/division is going to “appear” to top management. Trust is the cornerstone to succeed in this type of engagement.
Position the team directly under CEO, supporting board of directors
There is no other solution! Be at the top or nothing! The principal cause for PMO failure is position (Bolles & Hubbard, 2007, p.19). A PMO has to collect and elaborate data and has to support equally all the organization's sectors/divisions/departments to become the organization's central nervous system. A central nervous system has to be connected directly to the brain (top management), helping arms, legs, and body (sectors/divisions/departments) to move in the desired direction in a coordinated and efficient way.
Don't be afraid to answer yes to the question: Can we apply project management tools and methodologies for internal processes, production management, marketing, etc.
As organizations are forced to change faster and more radically than ever before, so are we. We have to go back to the basics, free our mind from stereotypes and apply project management tools and methodologies to solve time, cost, and quality matters to internal processes, production management, marketing, etc. For example let's discuss production. We think that production is a repetitive process, but we have to reflect on the fact that there are existing production plans. Production plans are prepared aggregating lots of same/similar types of products, according to various orders clients are forwarding. Each lot of products and a sequence of different lots will require the use of different types of machines, particular personnel involvement, relative transportation and warehouse availability, idle time to shift from one production to another, etc. It becomes clear that the cost of the same product will be reduced, if we optimize our production plan. For this particular reason, we can find a market-specific software vendor that will incorporate, in their high costly software, years of experience in the same industry sector. In most of the cases this software is taking into account only production optimization and not all the other factors mentioned previously. And this software has to be updated/modified by its vendor, each time we are going to change something in the production (new product, modifications to products, new equipment, etc.). A “heavy” project management tool can support this decision-making process in an excellent way.
What about preparing our next marketing campaigns utilizing project management tools and methodologies?
Involve as much as possible company's sectors, especially Accounting and Budgeting sector
Our strategic project management team will evolve gradually into a PMO. Having to succeed in addressing top management needs, while as the same time, cover sector/division/department managers' needs, the PMO must become the organization's central nervous system, through which information will circulate in a proper and timely manner. At this point, it is obvious that the information needed must come from any vital part of the organization, especially the accounting and budgeting sector that normally has no communication with the rest of the organization.
Unify the various worlds inside the organization
In the management literature you can find numerous books, articles, and research studies about each organization's part (marketing, sales, accounting, production, projects, etc.) but only a few about how to put them in contact with and “translate” for each other, how to operate to achieve the organization's strategic goals. (e.g., if top management's order is maximize cost savings, someone has to collect all available data, create a detailed simulation plan utilizing our project management software and treat the equipment we have to buy as a resource.) The result that will ensue will demonstrate to the procurement department why the production department is asking to choose the more expensive equipment. Equipment cost for the procurement department is an instant cost, but for production it is evolving over time. If we succeed to unify the worlds inside our organization, not only will horizontal communication gain, but also we will succeed in correctly translating each language of the strategic goals.
Demonstrate the positive economic impact of investing in project management
Who ever collects and elaborates data from different sectors is going to discover where each sector is diverging from the organization's strategic goals and where inefficiencies are increasing costs and time consumption. Top management, utilizing project management tools and methodologies from the beginning will start directly controlling how the organization's strategy is translated and executed, will then become familiar in preparing detailed strategyexecution plans and finally be in the position to simulate the impact of proposed changes in Strategy! With an external environment in continuous evolution, an organization must be prepared to detect the earliest possible internal and external signals and react efficiently and rapidly.
Always focus on the next steps
From the beginning, we have to trace a road map with precise time and scope milestones. We must propose this plan to the top management, satisfying one major need or group of needs at each milestone. We have to treat our effort as a project, considering that there will be no possibility to fail. Each of the proposed milestones must be a success, exceeding management expectations and forcing them to request more services. Selling more services means that resource availability will increase for our project. In order to succeed, we must work not only for what is foreseen as deliverable for the next milestone, but we also have to create the bases for the future ones. We must possess both capacity and responsibility to understand where things are going and address our efforts accordingly.
Not just words. Support your argumentation with specific case studies
In order to convince top management to accept our proposal, we have to utilize the most powerful weapon man's mind has created: examples, or in other words, case studies. Here we will examine some interesting case studies but we must always dedicate enough time to find and propose the most appropriate case study for our organization.
Five Case Studies
Intracom Telecom is Greece's largest multinational provider of telecommunications products, solutions, and services. They had an established PMO and they wanted to create a project management system to satisfy portfolio, program and project management needs across the whole company, including their financial planning and accounting division. Planning and follow up of external projects, internal projects, and operations had been foreseen. In this way, it became possible to prepare complete resource allocation plans. In the same system budget preparation and follow up they had also foreseen, giving the possibility to the top management to drill down and discover group of projects, activities, or resources that are creating budget deviations.
Ellaktor (ex-Elliniki Technodomiki) is the largest construction company in Greece. They had the need to create a system to prepare and follow up the annual IT budget while utilizing the same system to coordinate the IT projects and personnel. A virtual PMO has been established in a three-month period.
Asprofos Engineering, the major Greek engineering company, decided to create a PMO. The PMO was created successfully and was providing support to all divisions. Unfortunately it was positioned under the projects division manager and when company decided to change its CEO, the PMO became weaker and its role to support divisions coordination went lost.
Hellenic Power Company
Hellenic Power Company is the major player in the Greek electricity market. The Thermoelectric Plants division needed to create a system to prepare and follow its five-year plan, the annual budget and the ongoing projects. We have decided to adopt a top-down strategy and follow a step-by-step approach. In the first phase, utilizing proprietary project management software, we have created the system in a way to treat data at a strategic level. The results were excellent and were achieved in a two-month period. We are ready to proceed creating a formal PMO.
Hellenic Petroleum Company
Hellenic Petroleum Company is the largest oil refining company in Greece. The small projects department of Aspropyrgos Refinery, operated by Hellenic Petroleum Group had the need to create a system for projects estimation, planning and follow up. A virtual PMO has been established involving all employees.
Athens Municipality and three more Attica Region Municipalities
Municipalities represent a particular type of organization. At the beginning we started to utilize project management tools and methodologies for their construction projects, supporting the technical division. Very soon it became clear that only a holistic approach could represent a real solution for them. A virtual PMO and a strategic project management system have been created. Adopting a top-down strategy and following a step-by-step approach we have prepared the system described on our first scope of work, the preparation and follow up of the five years strategic plan and the annual budget. As a result, the above municipalities have completely changed the way to prepare and follow up their annual budget, passing from a reactive to a proactive way. The next step was to increase, in detail, the planning and follow up of projects and procurement, involving divisions in collecting and directly inserting data to the system.
Strategic PMO at Greek Council of Ministers level, supporting Prime Minister's Office
Between 1996 and 2004, Greece faced four major challenges with firm deadlines:
- Realign its economy according to European Union (EU) standards in order to adopt Euro,
- Optimize ministries coordination in order to complete all projects financed by EU,
- Organize the Greek Presidency of the Council of the European Union, and
- Organize the Olympic Games.
The magnitude of each one of the above challenges could create serious organizational and financial problems even in a bigger nation with a well-organized bureaucracy. As often happens, an organization facing a complex and critical situation is open to experimenting with new and not well-established practices. In this context project management methodologies and tools had been adopted and a “strategic” PMO had been established at Council of Ministers level, supporting Prime Minister's Office (Agrapidis, 2008, p.2). Data of approximately 54.000 public contracts had been collected from 7.500 public offices (Simitis, 2005, p.254). Credible and timely reports, based on reliable data had been produced for the Prime Minister, the Council of Ministers as well for almost the totality of Public Organizations. Transparency and efficiency in planning and execution of public contracts had been increased (Simitis, 2005, p.465). The whole effort succeeded because of the personal commitment of the Prime Minister and the positioning of strategic PMO under his direct supervision.
Any Organization, especially during this difficult period, perceives the necessity to produce changes in its processes. To address change, the organization must set strategic goals and prepare detailed strategic application plans, which must be based on sound data, taking into account time. Then strategy must turn into practice. This means continuous data collection and elaboration, in other words correct and reliable and up-to-date information.
The PMO can become the central nervous system of the organization and fulfill what has been described previously. To succeed the PMO must be positioned directly under top Management. A top-down strategy must be adopted and a step-by-step approach must be followed. As result the organization will take advantage of a more effective management and a better coordination and will be able to respond quickly and effectively to internal and external change drivers. As Jerry Ragovoy's song says: “Time is on my (our) side”! (Wikipedia, 2009)
Agrapidis, P. (2008, November). Projects & Programme Management applied at Council of Ministers level, supporting Prime Minister's Office. 22nd International Project Management Association (IPMA) World Congress 2008, Europe, Roma, Italy.
Bolles, D., & Hubbard, D. (2007). Power of Enterprise-wide Project Management. New York: AMACOM
Project Management Institute. (2008). A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fourth Edition. Newtown Square, PA: Project Management Institute.
Simitis, K. (2005). Politics for a Creative Greece. Athens, Greece: Polis.
Wikipedia (2009) Time is on My Side. Retrieved from http://en.wikipedia.org/wiki/Time_Is_on_My_Side
© 2009, Panayotis Agrapidis
Originally published as a part of 2009 PMI Global Congress Proceedings – Orlando, Florida