A Radical Mindshift—Managing Bleeding Edge Projects

Transcript

Narrator

The future of project management is changing fast. On Projectified™ with PMI, we’ll help you stay on top of the trends and see what’s really ahead for the profession—and your career. 

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Stephen W. Maye

Hello, I'm Stephen Maye, and this is Projectified™ with PMI. I'm here with my co-host, Tegan Jones, and in this episode we're talking about bleeding edge projects: the projects that incorporate technology so new that it’s still unreliable—something that obviously introduces a lot of risk.  

Tegan Jones

But they’re not always the type of risks that you might expect. If you’re rolling out new technology, for instance, you know that it might not work out as planned, that there will be bugs that you’ll have to address. But there’s also that domino effect that’s a lot harder to predict. Sometimes the biggest issue is knowing how doing something completely new in one area is going to impact how things work down the line.

Stephen W. Maye

And sometimes it’s more about whether people are willing to accept the technology—whether they’re willing to change their thinking and change their behaviors. 

I just saw a story out of Florida, where the city of Clearwater wants to launch a groundwater replenishment facility that would purify wastewater so that it’s safe to drink. That water would then go back into the aquifer the city draws its drinking water from. And a lot of people are, understandably, really uncomfortable with this innovation. And it has earned the unfortunate label of “toilet to tap” technology.

Tegan Jones

Yeah, when you say it that way, it does sound kind of gross. But I can see the value of this type of technology. I mean, so many communities are experiencing clean water shortages due to drought or pollution, and this could really help address that issue. Still, I imagine it’ll take a lot of work to get people on board, to convince them that treated wastewater is really safe to drink.

Stephen W. Maye

Well, absolutely. And it actually reminds me of—going back a number of decades—to the first nuclear power plant in France. And there was a lot of resistance to building this. No one wanted the reactor in their backyard. And some of the steps that they went through to build acceptance and to build support for that were really interesting.

You know, three of the things that come to mind was the local leadership—and I believe it was the equivalent of a mayor—was actually given shut-down authority. Also, they required the plant leadership and their families to live downwind of the plant. So the people building this and who are going to run it, and are trying to assure people, are actually going to have to live downwind of the plant. And then, finally, they gave free power to that community. And through the steps that they took, they actually considerably lowered the resistance and increased the willingness and commitment to do this. And of course, ultimately, as history tells us, they got it done.

Tegan Jones

Yeah, that often is the type of legwork it takes to get people to adopt these really revolutionary technologies. 

And we’re starting to see how this might play out in regards to artificial intelligence, even though this technology is still pretty much in its infancy. When I was at PMI Global Conference in L.A., I talked about this trend with Marc Lahmann, who’s the director of the transformation assurance division for PwC in Zurich, Switzerland. And he talked about how artificial intelligence can help organizations run more successful projects—as well as what leaders have to do to build buy-in for this new way of working.

Stephen W. Maye 

Leaders definitely have to approach first-of-its-kind projects from a couple of different directions. They have to address the emotional element—whether people are willing to make a change—but also the mental or intellectual element, meaning whether people actually have the skills they need to do something new.

James Stewart, a vice chair at KPMG in the U.K., says that skill-building—particularly putting leaders with the right skills in charge—is a major success factor for bleeding edge projects. We’ll hear more from him on that later in this episode.

Tegan Jones

But let’s start in the biotech sector, where there’s tons of cool, new technologies giving patients a new lease on life.  

Our first guest is Michael O’Connor, director of strategy and project management for Medtronic, one of the world’s largest medical device companies. Medtronic was actually a pioneer of the first pacemaker, and it recently ran a program to revolutionize that technology all over again. 

Stephen W. Maye

When you’re building something that’s meant to live in someone’s body, that is an enormous responsibility. Let’s hear how they get it right. 

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Tegan Jones

Medtronic first disrupted the medical field in 1957, with the invention of the battery-operated pacemaker. And in 2016, the company raised the bar again with the roll-out of Micra. Roughly the size of a large pill, Micra is 93 percent smaller than a traditional pacemaker, but has the same battery life. 

And that has huge implications for patients, says Michael O’Connor, Medtronic’s director of strategy and project management.

Michael O’Connor

We’ve drastically miniaturized the size of this device with the same quality, and in some cases better quality than we had before. So we basically reinvented our largest market that we’ve been the leader for at least 50 years.

Tegan Jones

But getting Micra ready for market was a long and costly process. So the project’s success depended on internal advocates who understood its true potential.

Michael O’Connor

When the project started out, it needed champions that saw a longer-term vision and a commercialization. So the people that were orchestrating that, I would call them ‘mavericks.’ They actually had a plan of where they wanted to go with this. They were able to articulate the risks in a way that management would see what the current risk was to payoff, which I think is very important—how much this could really grow our market and disrupt our own market, which we’re the leaders in. 

Tegan Jones

Yet, a clear vision was only one part of the equation. Over the years, the team also had to regularly communicate its progress to show that Micra was still a worthwhile investment.

Michael O’Connor

You can’t innovate and create disruptive technology with nothing. You have to have, you know, resources to be able to do that. It’s leaders being able to ask the questions of where do you see this, this potential technology or innovation in a year or two years, and also breaking it down into the smallest executable step that you can. What little step can you do today that can move that technology or disruptive innovation to the next step that someone else could pick up or that you could take to another leader or stakeholder and show them.

Tegan Jones

Setting clear expectations with stakeholders also helped the project stay afloat when things didn’t work out exactly as planned.

Michael O’Connor

It’s important to message it in the right way, cause if you don’t message it the correct way, someone’s gonna make up their own mind that that was a failure because of X, Y, Z when it was not. It’s more about what you learned, not how you failed.

Tegan Jones

Micra was ultimately a success for Medtronic, but that success was never guaranteed. Michael O’Connor says the best way to deal with uncertainty when it comes to innovation is to diversify the project portfolio.

Michael O’Connor

In this disruptive, innovative area, you need to have a lot of different technology bets. So you don’t want to just put all of your time, money and effort and project managers and project team members onto one disruptive technology that may work. You want to have many different projects out there that you could invest in and potentially become that next billion-dollar commercial market.

None of us know early on in technology and innovation what may or may not work. Things may even change or morph over time to be something different than they started with. But by having these visionaries and having this leadership support, it helps keep these things going, and we can continue to change and have a portfolio of projects that will lead to those one or two big businesses or big hits for us to help patients lead a better life.

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Stephen W. Maye

When you’re out in the front of a trend or a technology, you definitely need a vision for where you’re going. There’s simply no one to follow. 

Tegan Jones

Even if you can’t pinpoint exactly where you’ll land or how you’ll get there, you do need a clear idea of what you’re trying to achieve. And everyone at the organization or on the project team has to share that vision.

Stephen W. Maye

It’s that shared understanding that makes it possible to make smart decisions when things go off the rails on a first-of-its-kind project, which is certainly bound to happen at some point along the way. James Stewart, vice chair of KPMG in the U.K., spoke with us about what he’s seen work when it comes to navigating the curveballs that come with extreme innovation.

Tegan Jones

You’ve always got to expect the unexpected—and James has a lot of experience with that. So let’s hear what he has to say.

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James Stewart

The one piece of advice I would give an organization embarking on these first-of-a-kind projects is to plan upfront.

The initial planning phase is so vital because that plan will make you think through all the various scenarios that are going to arise on that project. They will make you build in flexibility in both your resourcing and your plan. And when I use the word flexibility, I’m not talking about contingency. Contingency is a different thing. What I’m talking about is this ability to flex your resources, to flex your plan, to move to a Plan B when things arise.

A first-of-its-kind project, by its very nature, will be unique. You will not know exactly what to expect. And therefore bringing the right skills and experience to a project of that kind is difficult and very different. So the big question that I think leaders need to ask to make sure they’re ready for a leading-edge project is, first of all, do they have the right leadership for the project? And in my experience, that does boil down to an individual.

And then, underneath the leader you need a breadth of skills. You’re not gonna have the exact skills for that particular project, cause by definition it’s gonna be different to anything you’ve done before, but you need a full breadth of skills so that the team as a whole can manage the risks and all those things that undoubtedly you’re gonna come across which will be unexpected.

So I think for these first-of-a-kind projects, you need to go beyond the usual stakeholders. And certainly best practice to me is to put together a group of people who can bring a sort of non-executive perspective. These are people who are not involved in the day-to-day engine room of project management. These are people who come in periodically and review what’s going on, and give the benefit of their experience. And maybe that’s going to be a change of direction. Maybe it will just be supporting a current activity. But as I said, it’s an external, non-executive-type input.

So I think for these new types of projects, the buzzword at the moment is ‘project assurance.’ And really, take it one step further, ‘progressive assurance.’ And what this means to me is putting in place a team of people whose job is to assure the activities of the project manager on behalf of the sponsor and the client.

Now in my experience, this is relatively new. But it does involve a completely independent team sitting away from the engine room of the project management activity and assuring their activities. And that assurance should be a positive experience, so it’s not just criticizing and reviewing what’s been done—it’s also suggesting things that can be done and bringing innovation and ideas.

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Stephen W. Maye

No one, of course, likes having an auditor or controller looking over their shoulder, but James is right—it doesn’t have to be a negative experience if everyone really is working together toward shared objectives.

Tegan Jones

It can be really helpful to have someone offering oversight and advice on how you can improve. But it can also be tough to get feedback that might seem a little negative.

Our next guest actually talks about this from a kind of interesting perspective. Marc Lahmann, who’s director of the transformation assurance division at PwC in Zurich, Switzerland, says he’s starting to see artificial intelligence play a larger role in this type of governance. And he says some people are having a hard time adjusting, partly because AI tells the truth in a way that’s just a little too stark.

Stephen W. Maye

Right, and when you’re talking to a machine, there’s none of the niceties that we’re so used to. A project’s either on track—or it’s not. And that can be, perhaps, a little jarring. 

Tegan Jones

Yeah, it can. And Marc talked a little bit about how you get people over that uneasiness when I spoke to him at PMI Global Conference in L.A. And I think we have an excerpt of that conversation to share now.

Stephen W. Maye

Good. Let’s hear what he had to say.

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Tegan Jones

Good morning, Marc. Thank you so much for joining me here on this episode of Projectified™ with PMI. I’ve got your title here as you are the director of the transformation assurance division at PwC Switzerland. Is that right?

Marc Lahmann

That’s correct. Good morning, Tegan.

Tegan Jones

So why don’t we get started here. I wanna, I want to know a little bit more about your work at PwC in the transformation assurance division. So what does that mean? What is it that you do there?

Marc Lahmann

So what we are doing is to have our clients on large-scale transformation programs to really bring the benefits to the end, and as well realize those, and as well protect investment.

So what we are seeing is that really there are technological breakthroughs really coming into the business, helping organizations to be more efficient and to optimize the processes, and as well a lot is nowadays concentrating on automation of processes, integration of workflows. That is where our company’s investing. 

And for sure they’re using new technologies like big data, science machines, and as well as the machine learning part, the natural processing languages, to really get it done. And that’s what artificial intelligence is, as well, really bringing machines into the real business.

Tegan Jones

So what does that look like? How do you actually incorporate artificial intelligence into the way an organization does whatever work it’s trying to do?

Marc Lahmann

So artificial intelligence can be used everywhere where you’re able to automate parts. So that means before you have to standardize things, and you need like good maturity on your process level in the organization, because machine learning needs data from the past. But you have to create data first and use the data. And that’s one of the biggest challenges which we are facing now.

Tegan Jones

So what’s some of the most valuable data that an organization would want to pull from?

Marc Lahmann

So first of all, you need the data on the daily work. So really identify, first of all, the processes that have a clear workflow defined which can be followed. And that’s a workflow can use specific factors to really get into the data. That means as well if people are working on a specific process, then you need some data points on that. That can be a time sheet, that can be a writing status report. So it needs something entered into the data coming from the human to really get the data point.

Tegan Jones

Once you have the data that you need and you’ve been able to start using AI to predict, you know, what’s going to be happening in the future, what are some of the ways that organizations can use AI to make their workflows more efficient?

Marc Lahmann

That’s really the automization and the integration. So really getting line automated project scheduling in the project management area. As well, getting the project budget forecast automatically if you have a change scope or if you have to really bring insights into your data.

So the second part is as well to bring like more of the human voice as well to the using language processing tools into it, like using checkpoints so that your project team is able to ask specific questions to the data which is on the line. That’s what we are seeing currently.

Tegan Jones

Is this changing the way that people work on projects? How are people having to alter the way they think or alter the way they work in order to use these tools effectively?

Marc Lahmann

So there are two types of people. First, the first type is really using it and seeing there is a value to it, because they can be more efficient, get insight, can be used to it.

But there is the other type around that really more have fear of using artificial intelligence because they bring insights in their normal work. And as well, they show deficiencies, as well. And people don’t love to see deficiencies, their own deficiencies. And that’s the biggest challenge as well. It’s a cultural change. Trust in using artificial intelligence to get the right answer, because people not really like those answers sometimes.

Tegan Jones

Right, cause sometimes it’s bad news.

Marc Lahmann

Yeah, for sure. That’s not bad; that’s a true picture.

The other part you have a big challenge machines are not human. There’s no humankind behind. So machines are very direct. So if you’re using like older automization workflows and integrations, and if you have checkpoints in your environment, they will ask all those freaky questions about what is the status of your project, why you have a deviation on your budget. That’s all asking questions without having any humanity behind. So they will not accept any excuses on that.

Tegan Jones

Right. Do companies seem nervous about adopting AI in their organizations, or are you seeing a lot of leaders being kind of scared of making the change? Or are a lot of organizations kind of boldly moving ahead? What’s the feeling on that?

Marc Lahmann

So what we are seeing is that companies heavily investing into that tool to adapt it. But what we’re seeing as well, not all organizations are ready yet to really use artificial intelligence as a tool or as a machine, because they are not ready from a data perspective. They have not enough structured data to really get the machines to be learning on a specific area.

Tegan Jones

What are some successes that you’ve seen? We’ve talked a lot about kind of the obstacles. But is there a way an organization has implemented AI that has helped them really become more efficient or run a very difficult project in a successful way that you’ve seen?

Marc Lahmann

So those companies who have really realized the full artificial intelligence environment—that means really have the prediction on it—they get insights which other companies does not have. So like on the portfolio network you see which project in your portfolio is going well and which is close to be failing. And that’s really good because then you can steer and control the project more efficiently.

Tegan Jones

What are some of the things that AI can really help predict? So in terms of portfolio performance and picking the right projects, are there any specific areas that predictive AI really helps the most in?

Marc Lahmann

Yeah, so we would love to have like the success on the project predicted, but that’s not so easy as it sounds. So it’s more like it’s a timeline predicted, what would be the end of a project predicted under certain circumstances for culture and the environment if it’s not changing. And as well what would be the budget forecast. So the budget can be as well predicted and as well like right off one specific project. So all those areas where you have really data are what you can rely on.

Tegan Jones

So if you were trying to build the business case for adopting AI, what are some of those numbers that you’d want to be projecting out for your executives?

Marc Lahmann

So what you need, first of all, the current project cost in the company. So often companies have no clue about what the project costs are. But if you know that, and if you know the number of FTEs as well that really are working on projects, then you can really show if you bring artificial intelligence into it from a percentage perspective, if your automization process are running, that you can really be sensitive on the cost on that, then you can start with that. But if you have already a high maturity and a very lean project management organization, then it’s much more than difficult to get artificial intelligence in your project automization, unfortunately.

Tegan Jones

So if you go in to meet with an organization and it’s the first conversation, what are the first questions that you ask an organization that’s wanting to get started with this process?

Marc Lahmann

So the first question I’m asking is, “Do you know your five largest programs running in the organization, and do you know if they stick to the plan?” And often there’s a pause, and people start to really get an answer on it because they have no clue in the moment, just no real time information available, so they have to reach out to the organization to get that information. So that’s an easy question, but organizations are often not able to answer that immediately.

Tegan Jones

So that’s what an organization should start with, is asking that question and trying to gather the data internally.

Marc Lahmann

Absolutely. To have transparency on their whole portfolio, and how that portfolio is really supporting the strategy. Strategies are changing, and in that time, due to all the technological breakthroughs, it’s changing much more and faster, and therefore they have to adapt all their business strategies. And that means they have to adapt their portfolio and project as well because that’s supporting the strategy. And therefore you need like a real time view of where your projects are running and if they’re really supporting still the strategy.

Tegan Jones

Excellent. Well, those were all the questions that I had for you today. Thanks so much for joining me. And I hope you have a great time with the rest of the conference.

Marc Lahmann

I will. Thank you.

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Narrator

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