The Right Combination of the Right Projects Done Right

Interest in project management continues to grow astoundingly in the twenty-first century. Since the early 1990s, membership in professional project management associations such as the Project Management Institute (PMI) and the International Project Management Association (IPMA) has grown from a few thousand people to hundreds of thousands. Projects have become recognized as a valid way of working not just in the traditional industries, such as engineering, defense, and construction, but in every corner of the private, public, and even voluntary sectors. Libraries of books have been written on the topic. The rate of project success, however, has failed to keep up with the growth of the profession. Mega projects continue to show cost overruns. Sizable sums are spent on information technology projects, some of which are never implemented. A majority of organizational projects fail to deliver even half the benefits they were designed to provide. This book pinpoints the reasons for these shortcomings and puts forth a series of solutions. Those solutions are founded not on advocating standard practices but rather on a fresh way of looking at the problem. Einstein is reputed to have said, “You can’t solve a problem using the thinking that created it.” And this book presents fresh thinking about what is involved in managing projects—to manage projects consistently and successfully, across the enterprise. It focuses on the growing trend toward broadening the scope of traditional project management. That broadened scope takes place in two different directions. The first expansion is stretching out the span of the traditional life cycle. A classic view would say that project management starts when the project is authorized and funds are provided and that it ends once the tasks outlined are completed and it’s turned over to whoever is responsible for the next ongoing stage, such as operations. The broadened view extends the project life cycle both “upstream” into “mission and vision” and “downstream” into “total asset life cycle management.” This is a growing worldview—the Japanese Project Management Forum, for instance, has developed a model known as P2M that adds a “mission model” to the front end of projects and a “service model” to the back end. In this view, projects start during the thinking stage, when feasibility is still under consideration, and are completed only when the business results or benefits, as initially proposed, are in fact achieved. The second expansion is to encompass multiple project settings and related organizational issues, which fall under the umbrella known as enterprise wide project management. This trend started gaining momentum in the 1990s and continues to grow as companies come to grips with the challenges of responding to market demands by systematically managing multiple projects through improved portfolio management and project support groups such as project management offices. Broadening the view of project management diffuses its implications throughout the enterprise and brings to light major issues not traditionally dealt with under the project management banner.

Three “Rights”
Prosperity in organizations hinges on the successful application of a simple formula: the right combination of the right projects done right. So prosperity depends not only on good strategy but also on implementing that strategy effectively. Success thus depends on the effective management across the enterprise, involving an array of unique, timely, and finite initiatives called projects. The right projects are designed to meet specific needs like cost reduction, new product launches, capital expansion, marketing campaigns and quality enhancement. To be effective, these right projects have to be done right—they must meet objectives within specific guideposts of quality, time, and cost. These right projects done right are major components in achieving success in organizations. Yet these right projects done right must be applied in the right combination. In other words, balance is needed to ensure that overkill isn’t applied to, say, marketing projects, without making sure that product launch will come through as envisioned. To take another example, spending money on improving the quality or lowering the cost of existing products makes sense only if adequate attention is paid to the new products that will replace the present ones in the marketplace. So it takes all three project rights—right projects, right combination, right implementation—to attain solid success. Two rights won’t make it, just as a two-legged stool won’t stand firm. Our triad of rights is key to both prosperity and survival in all project-sensitive organizations (see Figure 1.1). The challenge of achieving the right combination of projects lies firmly with top management; doing the right projects involves line management, project sponsors, and other stakeholders; and doing projects right is of primary concern to the project management community and to individual project teams.

So in spite of the fact that distinct groups deal with the specific issues in enterprise wide project management, the views are closely intertwined. As outlined in the ensuing chapters, each “right” concerns different criteria for success and focuses on factors critical to delivering that success (see Exhibit 1.1). Other factors not directly related to the management of projects also strongly influence the well-being of organizations. These include investment policies, operating efficiencies, human resource management, leadership, systems, procedures, strategies, and organization structures. So the survival and future status of companies partially hinges on the appropriate application of general management principles. Indeed, this determines the status quo of most organizations. Yet the future of organizations rests heavily on how well a multitude of new initiatives or projects are carried out across the enterprise. For that to happen, two groups must join hands in an effort to put future business strategy flawlessly into place. And how well enterprise wide project management is carried out depends strongly on how well the two groups understand each other and work together.

Two Groups, Shared Objectives
Two related yet distinct groups hold the key to business and organization success. The first group, devoted to strategy, direction, and design, accounts for two legs of the three-legged stool: picking the right projects and selecting the right combination of projects. These actions set the stage for the second group’s transforming the strategies and decisions into tangible results by doing projects right. The two groups are made up of people with different motivations, backgrounds and viewpoints—the first of people whose calling is to divine the future and develop a winning business strategy, the second of professionals obsessed with getting things done. Each looks at the world through very different eyes. But in spite of these differences, business strategists and project managers are interdependent partners who must in fact conspire to move companies toward their goals. The functions differ, yet they are highly complementary; and for companies to be successful, these sometimes at- odds camps must interact synergistically (see Figure 1.2).

The World as Seen by Top Management and Business Strategists
Top managers and business strategists are charged with seeing that company goals are met and that bottom-line objectives are achieved consistently over the long haul. This requires keeping eyes on an ever-changing horizon and involves charting the course of the enterprise in a way similar to that of a sailing vessel scheduled to pass through stormy seas. Just as certain currents and winds can be fathomed in the sailing analogy based on historical data and maps, so can certain economic and industry trends be foreseen in the business arena. These are the known unknowns—the exact timing of the currents and winds are unknown, but the probability of the occurrence of natural phenomena is known. In business, the known unknowns include peaks in toy sales at Christmastime, ice-cream sales in the summer, and the sale of mittens in wintertime. The exact numbers are unknown, but the trends are foreseeable based on historical data. (Unknown unknowns, such as volcano eruptions and terrorist attacks, are also part of the top-management kaleidoscope and must be dealt with as well. This means that flexibility and agility have to be factored in to the strategies so that the organization isn’t toppled by nasty surprises.) Upper management is out to “win the war,” meaning to prosper over the long term. This may mean retreating in certain market situations or taking a loss position while investing in a given market. It could even mean losing a battle or two and possibly sacrificing a project here and there when that makes strategic sense. The results over the long time frame are what matter. Aside from strategic development, which invariably involves projects, top management also focuses on operational issues, since efficiency in operations is a key success factor in any organization. The operating area usually represents the core of the organizations’ activities; it’s what companies are about. Yet since companies strive for organizational efficiency, paradoxically, for that to be achieved, project management once again comes to the forefront. That’s because increased operational efficiency is generally brought about by the implementation of projects, whether they be of the continuous improvement type or those involving quantum leaps, such as building a new factory with state-of-the-art technology and subsequently deactivating the older facility. Top management faces major decisions that will ultimately spell out success or failure. For instance, it’s up to top management to decide to improve existing processes (where one may run the risk of “upgrading the past”) or to wipe the slate clean and go for cutting-edge systems and technology (which may involve monumental investments).

The World as Seen by Project Managers and Teams
Project managers and team members, on the other hand, are charged with achieving specific deliverables (completion of projects), so they must zero in on given targets. Traditionally, company goals are set by the business strategists, and project managers are tasked with carrying out the projects that take those strategies from dream to reality. So a prime quality of project managers is tunnel vision aimed steadfastly at achieving results. Successful project managers have a fixation about getting the job done, whatever the assignment may be. Unlike business strategists, who strive to achieve sustained, longrange corporate success, project personnel are tasked with meeting finite objectives: to complete projects as defined, within cost parameters, time constraints, and quality specifications. So whereas top executives and business strategists are akin to generals in a war room who ponder and push about various alternatives and struggle through the analyses of relative advantages and disadvantages, project teams are made up of officers and soldiers out on the battlegrounds who carry out the plans and deal with daily happenstance. The project team deals with the field maneuvers and in-the-trenches matters to achieve desired outcomes. In the case of the military, this may signify taking out a bridge or arriving at a given destination pinpointed on the map. In project parlance, it simply means getting a given project completed as specified. The battlegrounds of the military and business are both mined with booby traps and unforeseen factors. Some of these changing scenarios affect the business strategy, and others influence the course of specific projects. And some fall into the fuzzy area in between, affecting both the overall picture and project objectives, thus calling for a collaborative approach between business strategists and project people.

The Gaps to Be Bridged
Since gaps exist between the responsibilities and the mind-sets of the key players in the two groups, challenges in communication are commonplace. Therefore, major alignment is called for, aimed at dealing with the fuzzy area between strategic planning and project implementation where roles and responsibilities are unclear and communication and relationships are equally opaque. Bridging the gap means organizing the company’s portfolio of projects so that the contribution to an organization’s objectives is maximized. This requires formal interfacing to make sure that completed projects contribute substantially toward corporate targets. Effective alignment requires major improvement over the well-known “grenade over the wall” approach, in which the business planning staff identifies and characterizes projects and then tosses the project objectives over to an uninformed and uninvolved project management group that is shackled with successfully completing a project, which may or may not be fully aligned with company objectives. Any primer on modern management says to involve people, to get “buy-in,” to make sure everyone is on board before charging ahead. The concurrent engineering approach to managing projects is based on this theory. Yet the corporate-strategy-to-project-implementation transition is sometimes overlooked—perhaps because of past fine performance by both the business planning people and the project management group. Normally, both of these groups do a sterling job in their respective areas. In most companies, however, hundreds of strategically important projects are under way: transformation projects, continuous improvement programs, plant expansions, maintenance fix-ups, worker empowerment, resizing, outsourcing, and qualify-of-life projects. Managers, who in the old days supervised people or acted as information brokers between lower and upper corporate levels, now act as project managers or as managers of project managers. Since the nature of work for managers has changed, a corporate commitment to the art and science of managing projects must be promoted throughout the organization. To avoid the grenade-over-the-wall syndrome, early involvement by the project office is required. Though this principle seems sound, its practice presents a challenge. First, the business planning people may prefer to plan without the help of perceived “outsiders.” Then there’s the likelihood that the right project people are busy on other projects—they are not sitting around waiting to brainstorm on a new business proposal or analyze its early progress. Finally, there’s the effort required by senior management and sponsors to articulate the interface between the business planning people and the project management office. This calls for various forms of alignment if the organization is to achieve its project-related goals.

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