Woodward hugh

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Woodward hugh

  1. 1. The Surprising Key to Project Success Hugh Woodward February 6, 2007Macquarie Advanced Business Concepts
  2. 2. Modern Project Management • Gantt Chart 1917 • CPM 1957 • PERT 1958 • PMI 1969Macquarie Advanced Business Concepts
  3. 3. A Growing ProfessionMacquarie Advanced Business Concepts
  4. 4. A Growing Profession 1992 2006 PMI members 8,800 219,000 PMP’s 800 212,000Macquarie Advanced Business Concepts
  5. 5. A Growing Profession PMI chapters 248 PMI SIG’s 30 Countries 156Macquarie Advanced Business Concepts
  6. 6. A Growing ProfessionMacquarie Advanced Business Concepts
  7. 7. Management’s PerspectiveMacquarie Advanced Business Concepts
  8. 8. Management’s PerspectiveTechnical Needs Assessment 2002• Selling project management to senior executives• Project management linkage with strategic planning• Virtual teamsMacquarie Advanced Business Concepts
  9. 9. PMI Research Conference 2002 Ideas for research • Selling project management to senior executives • Value/return on investment of project management • Linking strategy and project management • Project management linkage with strategic planning Macquarie Advanced Business Concepts
  10. 10. Management’s Perspective1. Our claims do not match the observed results2. We are selling a product that does not address the need3. We promise results, but substitute bureaucracy for effective processes Macquarie Advanced Business Concepts
  11. 11. Boston Central Artery • Initial estimate: $2.3 billion • Current estimate: $14.6 billionMacquarie Advanced Business Concepts
  12. 12. Sakhalin II LNG• Initial estimate: $10 billion• Current estimate: $20 billion Macquarie Advanced Business Concepts
  13. 13. Scottish Parliament• Initial estimate: £40 million• Final cost: £431 million Macquarie Advanced Business Concepts
  14. 14. Observed ResultsCrawford & Pennypacker• Implementation of PM Practices Financial measures Customer measures Project/process measures Learning and growth measures Macquarie Advanced Business Concepts
  15. 15. Management’s Perspective1. Our claims do not match the observed results2. We are selling a product that does not address the need3. We promise results, but substitute bureaucracy for effective processes Macquarie Advanced Business Concepts
  16. 16. Our Product COST SCHEDULE PERFORMANCEMacquarie Advanced Business Concepts
  17. 17. Our ProductPinto & Slevin “Projects are often rated successful because they have come in on or near budget and schedule and achieved a successful level of performance.” Macquarie Advanced Business Concepts
  18. 18. 2002 Olympic Winter Games • Projected $100 million deficit • Actual $400 million profit Key to success: profitabilityMacquarie Advanced Business Concepts
  19. 19. Batu Hijau Copper Mine• $100 million under budget• 1 month early Key to success: rapid startup Macquarie Advanced Business Concepts
  20. 20. Manufacturing Plant Optimization • Original schedule: 18 months • Actual completion 5 years Key to success: productionMacquarie Advanced Business Concepts
  21. 21. Project successFour success dimensions (Shenhar) • Project efficiency • Impact on customer • Business success • Preparing for the future Macquarie Advanced Business Concepts
  22. 22. Management’s Perspective1. Our claims do not match the observed results2. We are selling a product that does not address the need3. We promise results, but substitute bureaucracy for effective processes Macquarie Advanced Business Concepts
  23. 23. Typical Implementation Cycle1. Organization experiences a “crisis”2. Team assigned to implement PM3. Team develops process for most complex project imaginable4. Team urges “common sense” for simpler projects5. Memory of “crisis” fades away6. Ambitious executive eliminates PM to reduce overhead costs Macquarie Advanced Business Concepts
  24. 24. Project Management’s ChallengeDistinguish between• Value-adding project management• Unnecessary overhead expense Macquarie Advanced Business Concepts
  25. 25. The Key to Success1. Understand the goals of senior management Cost Revenue Schedule Profit Shareholder value2. Understand why project was selected3. Position project to exceed the assumed contribution Macquarie Advanced Business Concepts
  26. 26. The Key to Success4. Be prepared to do crazy things • Offer faster schedule at higher cost • Recommend additional scope at higher cost • Offer delays to accelerate other projects • Recommend cancellation Macquarie Advanced Business Concepts
  27. 27. The Key to Success“The biggest blight affecting project management is that it is still seen as just a bunch of tools and techniques for bringing in a task ‘on time, in budget, to scope’. Unfortunately, there are still too many, even in the profession, who still see it this way.” - Professor Peter Morris University College London Macquarie Advanced Business Concepts
  28. 28. Contact Information Hugh Woodward woodwardh@macquarie-abc.com 513-383-8728Macquarie Advanced Business Concepts

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