P a g e | 1Thomas G. LechlerThe Project Value Mindset of Project ManagersThomas G. Lechler, Stevens Institute of TechnologyAbstractThe triple constraint (TC) paradigm constitutes the conceptual foundation of projectmanagement. Although limited in its effectiveness, as documented by the high projectfailure rates, and strong criticism from several authors, the research on the TC paradigmlacks a theoretical base allowing an integrative perspective of the different lines ofcritiques.As an alternative, the project value paradigm (PVP) is offered enabling a reevaluationand integration of the widely discussed limitations of the TC paradigm. It is derived fromthe economic theories of entrepreneurship and serves as the conceptual base for anempirical study conducted over the last two years. The main research goal of this study isto answer the questions why and how project managers are creating project value duringa project’s implementation.Following the TC paradigm, project managers are charged with reducing, if not avoiding,project risks and project uncertainties. In contrast, the economic literature argues thatuncertainties are the precondition for entrepreneurial opportunities. It follows thereforethat as projects face more or less uncertainties, the question remains if project managerswho were able to create project value were actually seeking and exploiting opportunitiesto improve the value proposition of a project. The disposition or attitude of projectmanagers towards these decisions and activities seems to be a central variable. These
P a g e | 2Thomas G. Lechlerdispositions are integrated in the construct of a project manager’s project value mindset(PVM). The PVM stands in contrast to the basic premises of the TC-paradigm. Itsuggests that those project managers with a PVM, will more likely create more projectvalue. Thus, the central hypothesis investigated in this study proposes a link between aproject manager’s PVM and the created project value.Over a period of two years, data were collected with a survey instrument developed bythe author and co-investigators. To avoid single informant bias, data were collected foreach individual project from the responsible project manager, three project teammembers, and the senior manager (sponsor) responsible for funding the project. The finalsample consists of 594 individual responses related to 114 projects. Using structuralequation modeling, it could be demonstrated that the higher the perceived value of aproject manager’s PVM, the higher the likelihood that value opportunities are exploitedand the higher the achieved project value. The results support the hypothesis positing arelationship between a project manager’s PVM and project value. The research makes thetheoretical discussion of the entrepreneurship research field accessible to develop acomprehensive theory of project management. Finally, the research stimulates thediscussion of the TC paradigm limitations as well as it supports the call for changing theparadigm in order to explain common project management issues.IntroductionThe discrepancy between project management practices and theoretical efforts to explainthem is criticized by many different authors over the past decade. The critique is focusedat questioning the theory and, as a consequence, requesting a new or alternative theory of
P a g e | 3Thomas G. Lechlerproject management. Most of these critiques are based on the general projectmanagement paradigm, resulting in a discussion of symptoms without reflecting on thespecific underlying assumptions of the existing paradigm. This approach leaves stillmany questions unanswered. This paper reports on a study that was partially funded bythe Project Management Institute (PMI) in 2008 and 2009 with the objective to offer analternative perspective to the general discourse in project management. It is an attempt tochange the thinking about how to explain project management specific phenomena or asAlbert Einstein is quoted as saying “we will never solve problems using the same logicwe were using when we created them.”This study focuses on the central role that project managers assume when implementingprojects. In recent discussions, authors suggest that the mindset of project managers is animportant variable to understand the pattern of decisions made during a course of action.But the mindset is not independent of the underlying and accepted paradigm. Despite itscritique the TC paradigm is still dominating the literature and the standardization ofproject management related education. In general, the TC paradigm is based on twofundamental assumptions: satisficing and determinism. These two assumptions will bechanged to maximizing and entrepreneurism to build the foundation for the PVP.Based on the two project management paradigms, the overarching research question is tounderstand to which degree a project manager stays closely to the TC paradigm bysatisficing the triple constraints versus the degree to which a project manager attempts tomaximize the project value and achieves better project results. Differently phrased, thequestion could be also described as to which degree a project manager “breaks with” theTC paradigm and demonstrates a value maximizing mindset.
P a g e | 4Thomas G. LechlerThe main research objective is to empirically demonstrate the importance of a projectmanager’s value mindset on the creation of project value. The empirical establishment ofthis relationship will help to understand the interaction of project management specificprocedures (planning, controlling, etc.) with the behavioral decision level of themanagement of projects. It will also have significant theoretical and practicalimplications for the discussion of improving project performance and for the training ofproject personnel in general.Research Objectives and ContributionsUncertainties of projects are sources for opportunities and, as such, have to be recognizedand exploited. This is only possible if project managers are alert for these opportunities.A precondition for this alertness is the motivation to maximize a project’s value, which isdriven by the established paradigm. These arguments are linked to the field ofentrepreneurship that is occupied with the question of opportunity recognition,evaluation, and exploitation. A comprehensive literature review suggests that research onentrepreneurial behaviors of project managers is sparse and the possibility of theoccurrence of opportunities on the project level is not systematically explored. Thistheoretical gap leads to the second major research objective.With this research effort the main arguments of the entrepreneurship research field areintegrated into the conceptual discourse of project management. For once, this discussionwill allow the theoretical treatment of the existence and occurrence of uncertainty duringproject implementation. The importance of uncertainty and its theoretical differentiationfrom the concept of risk is not well understood. In most practical and theoretical
P a g e | 5Thomas G. Lechlerdiscussions, uncertainty and risk are treated as closely related theoretical phenomena.Furthermore, uncertainty is seen in most discussions as a negative consequence formanaging projects. This is the general conclusion when uncertainty is analyzed throughthe lens of the TC paradigm. In addition, changing the paradigm perspective to amaximization paradigm allows the discussion of the potential positive effects ofuncertainties. The treatment of project uncertainty through the lens of the maximizationparadigm leads to the second contribution of this study. The enrichment of the theoreticalfoundation of project management by changing the paradigm from a satisficing and riskavoidance to a maximizing and opportunity-based perspective. This conceptual paradigmchange allows the reevaluation of many empirical results and their importance for projectsuccess. One major question which the empirical research on success factors is concernedwith is the importance of senior managers for project success. In a TC-paradigm drivenproject management organization, opportunities could only be perceived and exploited bysenior managers as they make decisions about project changes.Basic Assumptions of TC Paradigm and PV ParadigmIn the view of Thomas Kuhn (1970), paradigms are guidelines for theoretical thoughtsand scientific research. They represent conceptual views of the world consisting offormal theories. By choosing a paradigm, its user accepts the actual scientific practice,which includes law, theory, application, and instrumentation together (Kuhn 1970, p.10).From the perspective of management, Pfeffer (1982, p. 228) mentions that “A paradigmis not just the view of the world but embodies procedures for inquiring about the worldand categories into which these observations are collected. Thus paradigms have within
P a g e | 6Thomas G. Lechlerthem an internal consistency that makes evolutionary change or adoption nearlyimpossible.”Only few authors explicitly analyzed the TC paradigm’s limitations for theimplementation of projects. A major underlying critique of the TC paradigm and itsrelated tools and techniques is that they cannot explicitly handle uncertainty, for example,the critical path method is criticized for not being able to model uncertainty appropriately(Whitty & Maylor, 2009). The underlying assumption is that uncertainty could beavoided by maximizing determinism, for example, the more effort that is put intocollecting data about a project in the planning stage, the less likely it will face risks.Uncertainty is not really mentioned and is often mixed with risk.Another major critique is the definition and measurement of project success. Oneproblem is, as Freeman and Beale (1992) pointed out, that, “... success means differentthings to different people.” This perspective is supported by the view that it could beambiguous when determining whether a project succeeded or failed (Belassi &Tukel1996; Freeman & Beale 1992; Pinto & Slevin 1989). Other authors differentiate betweenproject success and the project management success (Baccarini, 1999; de Wit, 1988) orthey add criteria that are industry specific. The problems of defining and measuringproject success are related to the conceptual level. Many authors start with the TCparadigm in mind and try to extend and supplement it. This approach does not change thebasic principles under which the criteria are selected. Project success is still measured asan adherence to the triple constraints with some other criteria that should be fulfilled aswell. The underlying assumption of these discussions is that project success could be
P a g e | 7Thomas G. Lechlerachieved by satisficing predefined objectives, for example, it is the measurement againstpredefined objectives and not the type of objectives that poses the limitation.The two identified assumptions pose limitations on the management of projects. From aproject manager’s perspective, the challenge is to avoid variation from the baseline. Avalid performance measure with this approach would be only possible if the project isimplemented under deterministic conditions, for example, uncertainty that leads to aradical change of a project’s value proposition is encountered neither in the availablemanagement tools nor in the management approach. Consequently uncertainties are nottaken into account even though projects are facing uncertainties. The other problem isthat the baseline has to be “realistic.” If the baseline is too ambitious, a negative deviationis built into the project plan. Another less obvious and less discussed possibility is when abaseline is too low and the baseline could be met easily. From the perspective of the TCparadigm, this conceptually means that the project manager needs to minimize thenegative variation from the baseline, but is not challenged to maximize the value of aproject beyond the baseline. There is no empirical evidence about the practical magnitudeof this conceptual problem.Conceptual Framework of the StudyThis chapter provides an overview of the different components that are considered in thisstudy. Rather than conceptually developing the different components of the frameworkfor this study, the study’s framework is shown. This gives the reader a structuredoverview of the model discussion that follows in the succeeding chapters of this book.The research framework of this study consists of four variables:
P a g e | 8Thomas G. Lechler1) Project Value Mindset—The project value mindset (PVM) describes theattitude of a project manager, which maximizes the value of a project, bymaking value-focused project decisions and by seeking and exploitingopportunities beyond the baseline that will lead to increased project value.2) Exploited Opportunities—Those opportunities recognized and exploited by theproject manager during the project implementation.3) Project Value—Those values defined by efficiency, scope, stakeholder, andshareholder satisfaction.4) Project Situation—Those characteristics of the project which includeuncertainty and complexity.An overview of the relationships between the model variables and the researchhypotheses are indicated in Figure 1.Figure 1: Project Value Mindset (PVM) Research FrameworkThe hypotheses are depicted in Figure 1 by the arrows which describe the proposedrelationships between the model variables. The proposed hypotheses for this study are:Project Value Mindset(PVM)Exploited OpportunitiesOpportunitiesProject ValueH1H2H3
P a g e | 9Thomas G. LechlerH1: The higher a project manager scores on the project value mindset (PVM) scale, thegreater the likelihood that project value opportunities are exploited.H2: The higher a project manager scores on the project value mindset (PVM) scale thegreater the likelihood of an increase in project value.H3: The more project value opportunities that are exploited by a project manager, thegreater the likelihood of increased project value.The theoretical basis of the model variables and their proposed relationships arediscussed in the next sections of this article.Project Success vs. Project ValueMost authors agree that project success is insufficiently defined by the TC paradigm, buta general definition is still not agreed upon. The problems of defining and measuringproject success are related to a conceptual level as many authors begin with the TCparadigm in mind and try to extend and supplement it. This approach does not change thebasic principles under which the criteria are selected. Project success is still measured asan adherence to the triple constraints complemented with other criteria that should befulfilled as well. It is measuring project success towards a baseline that is predefinedbefore a project is started and modified during the project execution. From a projectmanager’s perspective, the challenge is avoiding variation from the predefined baseline.This enforces a satisficing approach that does not necessarily lead to the valuemaximization of a project. A valid performance measure with this approach would beonly possible if the project is implemented under completely determined conditions, forexample, negative deviation is then directly related to poor management performance of
P a g e | 10Thomas G. Lechlerthe project manager or stakeholders. This means also that projects are successful if thebaseline is met.The main problem with this approach is that uncertainties are not taken into account.Contextual conditions of projects are changing constantly and what once looked likecriteria to define value could dramatically change, for example, a new productdevelopment project now competing against another product, although it was startedwithout the expectation of a competitor’s product. It is impossible to accurately predict aproject’s objectives because of the inevitable occurrence of uncertainty.The basic TC principle of determining project success leads to critical conclusions likesuccessful projects do not appear as time and budget critical (Wateridge 1995). To ask, ingeneral, which performance criteria are more important than others, is an incompletequestion. This question has to be modified as it depends on the specific circumstancesunder which a project is implemented. The question should be “which success criteriabest reflect the achievement of project value?” (e.g., time is a very critical successcriterion for consumer product development projects). A delay leads to significant lossesof market share. Also project budget can be an important success criterion for example,significant cost overruns in a fixed price contract will lead to an overall loss.The question has to be changed from a generic normative view on determining projectsuccess with a general set of criteria towards a value-oriented perspective. Severalauthors have indirectly addressed this perspective, for example, the Thames Barrierproject took twice as long to build and cost four times the original budget, but it providedprofit for most contractors (Morris & Hough 1987). The success of this project could not
P a g e | 11Thomas G. Lechlerbe explained with the TC-based approach. Turner and Muller (2004) suggest that projectoutcome should be measured and remunerated on a wider set of objectives, not just theachievement of time, cost, and technical requirements.Although the discussions are TC paradigm-centric, the critiques and suggested extensionsto measure project success have a common thread by pointing at a different paradigm. Itis widely accepted that a project is not necessarily successful if the triple constraints aremet and it is more important to create a certain level of satisfaction. This leads to someextend away from a satisficing approach and points at a maximizing paradigm.Definition 1: Project ValueA project’s value is defined by the value a project creates for its stakeholders. The projectvalue could be represented by a single or any combination of efficiency, technicaleffectiveness and the satisfaction of a project’s stakeholder with emphasis on clients andshareholders.As definition 1 suggests, project value is not defined in a normative sense, rather it isdefined in a relativistic sense as the value of a project could be determined in manydifferent ways depending on its specific context and situation. The question of whetherthe achieved project value represents a maximum can never be answered accurately. Thisquestion is addressed only by evaluating the management process of a project in theperspective of the maximization paradigm. The expression project value was chosen todifferentiate clearly from the mainstream discussion of project success.
P a g e | 12Thomas G. LechlerA Project Manager’s Project Value MindsetThe specific characteristics of a project manager’s value mindset are derived fromconceptual differences of the TC paradigm and the PV paradigm. One fundamentalcharacteristic of the PV paradigm is its maximization premise in contrast to thesatisficing premise of the TC paradigm. Another premise is that uncertainty occurs duringthe implementation of projects and that these uncertainties are a potential source foropportunities to increase a project’s predefined value. The definition of PVM is based onthese two fundamental assumptions. It is obvious that PVM cannot be derived from onesingular perspective rather it is a complex concept that is related to different attitudes andtraits of a project manager as discussed in the following sections.Project Manager’s Opportunity DispositionUncertainties during the implementation of projects are more likely a general rule and notthe exception. The strategic management literature amply points out that developing theplan addresses the market while the implementation of the plan is an operations-basedendeavor. The plan will most likely face uncertainties. The economists argue thatuncertainty is the conditio sine qua non for the existence of business opportunities(Knight, 1948). Furthermore, entrepreneurs only evolve if individuals are “alert” toopportunities, that is, they are actively seeking or are open for opportunities (Kirzner1973). Following this line of thought, it is imperative for project managers to seek forthose opportunities that could significantly change the value proposition of a project. Thedisposition for seeking and creating opportunities to maximize the project value beyondthe predefined value proposition is a necessary attitude. These attitudes express the questof a project manager to seek a project value maximum beyond the baseline of a project.
P a g e | 13Thomas G. LechlerProject Manager’s Overachievement DispositionThe main critique of the TC paradigm is its inherent premise of satisficing, as evidencedby the concept of trade-offs. But if projects face more or less uncertainties, it isimpossible to set project objectives that reflect the future “reality” of a project. Thiswould be possible only in a deterministic world and the main objective for a projectmanager would be to satisfy these objectives.The conditions are completely different under the premise of uncertainty. It is impossibleto define ultimate project objectives. Changing objectives is a given and a projectmanager, who strictly follows the rules of the TC paradigm, would most likely notachieve the full value potential of a project.Most discussions see uncertainty negatively related to a project’s value proposition, forexample, the targets of the objectives have to be lowered. However, uncertainty, asdiscussed earlier, could also open the door for opportunities that could lead to a highervalue proposition of a project. What if the initial project targets were set too low? In thissituation, the initial value proposition of a project should be completely changed. Underthese conditions, it is obvious that a satisficing approach would not lead to achieving thepotential project value. Only if seeking to increase the initial value proposition, would theproject manager be alert for opportunities and be willing to exploit opportunities. Thus,the attitude for overachievement is a defining component of the PVMProject Manager’s Dialectic Requirement DispositionFor any project manager, it is imperative to understand the “constraints” of a project, forexample, the requirements and the specifications laid out in a project charter. Often aproject manager is charged with fulfilling the requirements for which involvement during
P a g e | 14Thomas G. Lechlertheir definition was likely minimal, if at all. Under these conditions, project managers arecharged to “find” the best fit between the requirements and the management processnecessary to fulfill them. The traditional way to do so is to create a project baseline thatbest meets the requirements. In acting in compliance with the TC paradigm, projectmanagers are calculating the critical path under the given resource constraints to assure amost likely project implementation process with a high likelihood of fulfilling thepredefined requirements. This planning process that complies with the constraints followsthe satisficing premise. As discussed earlier, the best possible compliance for a given setof requirements would not necessarily lead to the best possible project results or as it iscalled here—project value.However, if the premise is changed from satisficing to maximizing a project’s value, asthe PV paradigm suggests, it is imperative for the project manager to question the givenproject requirements and specifications. It is most likely that the derived requirements arenot representing an “optimal” set of constraints defining a “solution space” in which themaximal potential project value lies. Given that project managers have a certain level ofexpertise about the relationship between intended requirements and the implementationof specific problems, it seems important to question the given set of requirements and toput some effort into modifying and prioritizing requirements before and during theimplementation process, in particular with the occurrence of uncertainty. Only a constantsearch for modifying and exceeding predefined specific requirements will lead to apotential possibility to maximize a project’s value. The questioning and constantvalidation of project requirements and technical specifications under the maximizationpremise seems to be an essential attitude in describing a project manager’s PVM.
P a g e | 15Thomas G. LechlerProject Manager’s Ambiguity DispositionThe creation and exploitation of opportunities is related to situations of ambiguity. Onlythose project managers who are accepting ambiguous situations will be able to exploitopportunities. The disposition to tolerate ambiguous situations was defined by Budner(1962) as an individuals propensity to view ambiguous situations as either threatening ordesirable first. A project manager’s disposition towards ambiguity could be seen as aprecondition to exploit opportunities. A disposition towards ambiguity is related to thedirect treatment of uncertainty and thus an essential facet in describing a projectmanager’s PVM as it is supported by the general literature on ambiguity.Project Manager’s Personality TraitsThe attitude which an individual displays and acts upon is intertwined with one’spersonality and to some degree with individual’s intelligence. Intelligence is a generalconcept that underlies nearly every human behavior and is not specific enough for thePVM concept. The traits of a project manager are more specific and are easier to bemonitored. The common traits typology consists of extraversion and stability as well asconscientiousness, openness, and agreeableness. Other personality traits that areimportant to the project manager include an ability to be comfortable in making decisionsunder ambiguous situations.Under the conditions of uncertainty and value maximization, the personality of a projectmanager to seek and exploit opportunities is an important characteristic of the person’smindset. A PM’s traits are linked to the decision process and thus an important facet ofthe PVM concept.
P a g e | 16Thomas G. LechlerProject Value Mindset Definition and ConclusionThe discussion of the different components of a project manager’s PVM suggests that itis a complex mix of personal characteristics, dispositions, attitudes, and context, theresult of which is strongly situation-dependent.Definition 2: Project Manager’s Project Value Mindset (PVM)The PVM of a project manager is a mental state involving several dispositions andattitudes resulting in activities to seek, discover, and create opportunities beyond a pre-defined value proposition with the intent to create and maximize a project’s value.The VPM is defined in contrast to a TC paradigm by questioning the underlying premisesof the satisficing concept. It is based on a maximization premise and focuses on themaximization of project value.Project Value OpportunitiesThe creation of economic value is closely related to the exploitation of opportunities andconsequently an important variable for the project value paradigm. The existence andnature of opportunities traditionally occupied the economic literature and were not yetconsidered by project management researchers. It is argued that occurrence ofuncertainties is one of the major preconditions for the existence of opportunities withinan economy (Kirzner, 1973; Knight, 1948; and Schumpeter, 1934), and and it isunderstandable that without uncertainties, entrepreneurial profits (e.g., extraordinaryprofits) would be impossible.The relevance of this topic for project management is obvious. The management ofprojects is challenged with managing uncertainties. If projects are unique, as all formalproject definitions suggest, then uncertainties (unknown-unknowns) are inevitable nomatter how much information is gathered before a project is initiated. This means that the
P a g e | 17Thomas G. Lechlerconcept of opportunity and its recognition and exploitation could be adopted for themanagement of projects. This argument is related to the unique nature of all projectswhich face, more or less, a specific level of uncertainty during their implementation.Thus, following the arguments of the economists, these uncertainties represent potentialsources for opportunities to increase a project’s value.The bottom line is that projects, as they are facing uncertainties, are predestined toexperience the emergence of opportunities and subsequently the recognition, evaluation,and exploitation of an opportunity during a project’s implementation is a major conceptof the project value paradigm as it is the source for maximizing project value.Definition 3: Project Value Opportunity (PVO)Project Value Opportunities represent a potential to exceed the predefined stakeholdervalue of a project during a project’s implementation.The project management literature acknowledges the concept of project risks (known-unknowns) and suggests many different approaches to analyze possible sources of projectvariation. The TC paradigm addresses these sources of variation by analyzing trade-offsand their consequences for the project results; however, it does not address the concept ofuncertainty. But as Baumol (1993) pointed out, situations of uncertainty defy anyoptimization calculus. Thus, under a paradigm of maximization, project uncertaintiescould also be linked to opportunities and if exploited, will exceed the predefined projectvalue.Research HypothesesThe guiding question of this study is the relationship between a project manager’s PVMand the creation of project value. The discussion of the potential TC paradigm constraints
P a g e | 18Thomas G. Lechleris a good starting point. One of the main critiques of the TC paradigm is that it is notconstructed to deal effectively with uncertainty. It also does not support a maximizationapproach, instead it encourages a satisficing attitude. The consequences are indicated bythe relatively high failure rates of projects. The main proposition is that uncertainty has tobe managed effectively with a maximization approach in mind.Project Value Mindset – Project Value Opportunity RelationshipThe relationship between PVM and project value opportunities is substantiated by thetheoretical arguments of the entrepreneurship research field. Opportunities have to becreated, discovered, selected, and exploited to enable an entrepreneur or an organizationto generate entrepreneurial profit (Shane & Venkataraman, 2001). One majorprecondition is the alertness of entrepreneurs (Kirzner, 1973) to seek for opportunities.The alertness, as Kirzner defined it, is reflected by the presented definition of the PVMconstruct. This leads to the first research hypothesis:Hypothesis 1: PVM – PVO RelationThe higher a project manager scores on the project value mindset scale, the greater thenumber of project value opportunities that were exploited during a project’simplementation.This hypothesis describes the relationship between the PVM and opportunity variablesthat are represented by specific measurement scales. The measurement scales aredeveloped in the next section.Project Value Opportunity – Project Value RelationshipThe second relationship in the introduced research framework is the direct influence of aproject manager’s PVM on project value. As expressed with Hypothesis 1 and shown inthe research model in Figure 1, the influence of PVM on project value is mediated by the
P a g e | 19Thomas G. Lechlerexploitation of project value-related opportunities. However, the recognition andexploitation of opportunities is not the only source to maximize project value. The PVMis also related to the decisions and specific activities that project managers make whenimplementing a project. Thus a direct relationship between PVM and project value isproposed.Hypothesis 2: PVM – PV RelationThe higher a project manager scores on the project value mindset(PVM) scale thegreater the created project value.Exploited Project Value Opportunities – Project Value RelationshipThe third relationship in the introduced research framework represents the impact ofexploited project value opportunities on the created project value. The conceptualtreatment of this hypothesis is straightforward. It builds on the assumption that the PVMrepresents the attitude of a project manager to create and seek project value opportunities.But the search alone would not necessarily lead to an increase in project value. It isactually the opportunity that was exploited that has the potential to increase a project’svalue.Hypothesis 3: PVO – PV RelationshipThe more project value opportunities (PVO)that are exploited, the greater the createdproject value.This relationship is a result of the underlying assumption that opportunities which areexploited were chosen under the maximization premise.
P a g e | 20Thomas G. LechlerResearch Methodology and Data CollectionThe chosen research method to address the raised research questions and to finally testthe research hypotheses are discussed in this section. A correlational research design waschosen to analyze quantitatively the role and influence of a project manager’s PVMacross many different projects within different industries.Data Collection MethodA survey instrument was developed and data were collected during 2008 and 2009 frommany different projects across a variety of industries including manufacturing, software,and telecommunication industries and many different organizations. One of the majorgoals was to obtain a large-scale sample allowing for advanced statistical analyses. Toachieve a high return rate and to have some control over the data collection process,participants of this study were recruited from a part-time graduate program ofprofessional who were studying and/or earning their certifications in projectmanagement. They were instructed on how to conduct the data collection and theirquestions about the data collection process were directly answered by the principalinvestigators of this study. The questionnaires were distributed to them as hardcopies oron request as files via email.For the purpose of this research, it was necessary and important to gather data frommultiple sources. As the focus of this study is a project manager’s PVM, it was importantto collect data on the perceptions from several members of the project manager’s team asto which project-related decisions were made by the project managers, whatconsiderations where taken, and which decisions could have or should have been made.To prevent single-informant bias issues, the contacts of this study were asked to identify
P a g e | 21Thomas G. Lechlerfive members of a project and to return five completed questionnaires for each project:from three key members of the project team, one from the project manager, and one fromthe senior manager (sponsor) responsible for the funding of the project. All respondentsreceived the same questionnaire to avoid confusion in the data collection process on theside of the contact person. Due to their direct involvement, these respondent groups werebelieved to be the most knowledgeable about the project decisions and processes. Further,given that project team members and project sponsors were directly affected by projectdecisions and processes, understanding their views about the PVM and the project resultswas most important.Finally, to ensure a reasonably comparable level of familiarity with the projects acrossthe sample, project members were instructed by the contact person to choose a projectwith which they were most familiar and involved with throughout its implementation.Many empirical studies conducted in project settings use retrospective methods forreasons of feasibility (Meyer & Utterback, 1995; Tatikonda & Montoya-Weiss, 2001). Toimprove the accuracy of retrospective reports, respondents were asked by the contactperson to select recent projects to control the elapsed time between the events of interestand the data collection.Data for this study were mainly collected in the U.S. The total sample obtained thus far is596 questionnaires. The sample includes responses from 387 core team members, 114project managers and 95 senior managers. Actually, the original number of collectedquestionnaires was higher but 21 cases had to be rejected because they were incompleteor had other serious quality issues (e.g. questionnaires filled out by incorrect respondentsor each respondent reported on different projects) or they did not meet the required
P a g e | 22Thomas G. Lechlerproject characteristics. These 21 cases were discarded from further analyses. The finalsample used in the data analyses includes the data of 114 projects and consists of 104mainly successful projects and only 10 unsuccessful projects. Some unsuccessful projectswere possibly not reported because they were never completed. Such restriction in rangetends to impact correlations more than regression weights and path coefficients andconsequently do not expect seriously distorted results. All projects had a budget of atleast $500,000 and their duration was at least three months.Research MethodologyOne of the main challenges this research project faced was the measurement of a projectmanager’s project value mindset (PVM). However, the PVM is not directly observableandan adequate measurement tool that could be applied for this study was not existent.Over the course of this research project, many different steps were incorporated todevelop a valid and reliable measurement tool.In behavioral organizational science, it is quite common to use Likert-scales to measure arespondent’s feelings or attitudes about a variable that is not directly observable. EachLikert-scale consists of several questions that are called items. Each item describes acontinuum between two extremes from “strongly disagree” to “strongly agree”. Therespondents indicate how closely their feelings match the question or statement on arating scale consisting of numbers ranging between 1 and 5 or more. During the summerof 2006, a 118 item questionnaire was developed. A pilot-scale investigation wasperformed in the fall of 2006 and spring of 2007 to evaluate the quality of the surveyinstrument. In total, 30 respondents with project experience were asked to providedetailed feedback of how well they understood the questions. Based on this investigation,
P a g e | 23Thomas G. Lechlerseveral minor modifications were made to improve the survey instrument. Besidesrewording some items, the survey instrument was extended to 120 items.The analyses of the data were conducted in several steps. In the first step, the quality andfinal configurations of the measurement scales were determined. This step was conductedon the full sample of 596 surveys. Several statistical tests were used to analyze the qualityof the measurement scales. In the second step the constructed scales were used to analyzethe proposed relationships between the model variables depicted in Figure 1.The first step tests validity and reliability of the developed measurement scales.Reliability refers to the consistency of a measure and a measure is considered reliable ifthe same result is received repeatedly. Cronbach’s Alpha test was used to test forreliability of the measurement scales. It is a test commonly used as a measure of theinternal consistency reliability of Likert-scales. Values below 0.70 would lead to arejection or modification of the constructed scale. Values above 0.80 are acceptable andvalues above 0.90 very good. The value of alpha is not related to the factorialhomogeneity because it depends on the size of the average inter-item covariance, whileunidimensionality depends on the pattern of the inter-item covariances.For the latter reason, Principal Component Analysis was used to investigate the constructvalidity of the measurement scales. Only if the resulting factor achieved an explainedvariance of at least 60% and all factor loadings were at least 0.7 for each individual itemor each component of a scale, it was accepted and not further modified.In a second step, all scales were aggregated to the project level. In this step of the dataanalyses, the responses of the project managers were used for the specific projectinformation (name, size, etc.) and to replace missing values in the individual answers.
P a g e | 24Thomas G. LechlerOtherwise, to avoid any respondent specific biases, only the responses of the teammembers and the senior managers were aggregated by calculating the mean across thedeveloped scales of project value, PVM, and exploited opportunities. The aggregatedscales were used as the input for the final step. To test the derived research hypotheses, astructural equation modeling (SEM) technique was employed. This technique allowstesting simultaneously interactions between several model variables. Furthermore, it is acombination of a factor analysis combined with a regression analysis, allowing themeasurement model (different scales) of a latent variable (not directly observablevariable) and testing its influence on other similar constructed variables. This has anadvantage in that the estimates are more accurate since a total aggregation of differentscales measuring a variable is not necessary and specific measurement errors could beincluded in the estimation without distorting the estimates. This is in particular necessaryfor the PVM variable. The results of the SEM are direct tests for the hypotheses. For themodel estimation LISREL version 8.51 (linear structural relationships) was used.LISREL is a statistical method that allows simultaneous analyses of hypothesized causalrelationships for multiple variables (Jöreskog & Sörbom, 1993). The use of SEM alsooffers several test statistics to evaluate several aspects of the validity of the measurementscales. In particular, it was used to test for criterion validity by checking if the proposedcausal relations are indeed of statistical significance (predictive validity) and if theconstructs (model variables) are clearly explained by the several scales (concurrentvalidity).
P a g e | 25Thomas G. LechlerMeasures for Project ValueThe achieved project value is a complex and multidimensional construct that is difficultto measure and many different alternative measures for project success are suggested.Pinto and Mantel (1990) identified three distinct aspects of project performance: theimplementation process, the perceived value of the project, client satisfaction with thedelivered project outcome. Shenhar, et al. (1997) suggested four different criteria toassess project success: meeting design goals, benefits to customers, c) commercialsuccess, and future potential. Even though there is no convergence about the scales to beused to determine project success, it is commonly agreed, as the examples from theliterature show, that multiple measures are necessary to determine project success.Following this line of thought, a project’s value was measured by four different scalesderived from the literature review and the conceptual discussion of the project valueparadigm by using and developing 19 different items as shown in Table 1.Individual PVM Scale Number of Items Cronbach´s Alpha Variance ExplainedProject_Value 4 0.97 0.781. The project was an economic success for the organization that completed it.2. All things considered, the project was a success for the organization that completed it.3. The project will achieve a positive net present value (NPV) for the organization that completed it.4. The project will achieve a positive return on investment (ROI) for the organization that completed it.Client_Satisfaction 4 0.88 0.741. The clients were satisfied with the project implementation process.2. Clients using this project’s outcomes will experience more effective decision making and / orimproved performance.3. The project results led to an improvement in client performance.4. The clients are satisfied with the results of the project.Scope_Satisfaction 3 0.87 0.791. The project outcome met all technical requirements.2. The planned project scope was fully met.3. The project outcome does what it is supposed to do.Technical_Quality 3 0.83 0.74
P a g e | 26Thomas G. Lechler1. A high number of defects were discovered after initial acceptance by the client.2. The number of hours of rework to previously completed deliverables was high.3. The total support costs after project completion are expected to significantly exceed the originalestimates.Efficiency 5 0.86 0.641. The project was completed on schedule.2. The project was completed within budget.3. The scheduled milestones had a high on-time completion rate.4. This project was finished faster than comparable projects.5. The process by which this project was completed was very efficient.Table 1: Quality measures of the project value scalesThe scales of efficiency, satisfaction with scope and technical quality are standardmeasures of the TC paradigm. The statistics for the efficiency scale testing reliability andconstruct validity reach satisfying levels. Originally, six items were developed to measurea project’s effectiveness. The first and the third item were used from an effectivenessscale developed by Pinto (1986). Although an orthogonal factor analysis with varimaxrotation of the effectiveness items yielded in two different factors representing differentaspects of project effectiveness. One scale measures the achieved technical quality of theproject output and the other scale measures the level of satisfaction with the fulfillment ofa project’s scope requirements. In summary, both effectiveness scales satisfy thestatistical criteria for reliability and validity.Client satisfaction as a success criterion is mentioned by many authors and represents anextension of the TC paradigm. The perceived client satisfaction was measured with fouritems. The first three items were adopted from Pinto’s (1986) client satisfaction scale. Asdemonstrated in Table 1, the client satisfaction scale satisfies all statistical requirements.The fifth scale measures the perception of the value the project has created for theorganization that implemented the project. The implementing organization might not benecessarily the project owner. The project value scale consists of four items and, asshown in Table 1, satisfies the discussed requirements for reliability and validity.
P a g e | 27Thomas G. LechlerThe scores for each scale were calculated by averaging the scores across the single itemsof each scale. These values were used as a basis for the following statistical analyses.Measures for Project Value Mindset ComponentsThe PVM definition indicates that the operationalization of the variable PVM to test theresearch hypotheses is complex and requires several scales representing the differentaspects of PVM. This problem constitutes one of the major methodological challenges ofthis study: How to measure the PVM of a project manager?In this step a comprehensive measurement model consisting of seven scales wasconstructed. In total, seven different scales were developed based on 29 items to measurethe PVM of a project manager. The scales correspond with the different conceptualcomponents discussed in the previous sections.
P a g e | 28Thomas G. LechlerConceptual PVMComponentsEmpirical PVM Measurement ScalesOpportunity Disposition Value Opportunity Search—Project manager seeks outways to improve efficiency and effectiveness, whichshould result in lowering the budgeted costs,shortening the time, or improving the functionality forthe benefit of the managing firm and client.OverachievementDispositionOverachievement—Project manager seeks tooverachieve the original objectives.Dialectic RequirementDispositionStrategic Gap Analysis—The Project manager putseffort into understanding the requirements that arebeyond the written scope statement and that arerelevant for the achievement of project value.Specifications Analysis—At the project start, projectmanager looks for inconsistencies, seeks accuracy, andanticipates missing data or project requirements.Ambiguity Disposition Change Anticipation—The project manager constantlytries to anticipate sources of change.Ambiguity—The project manager is not risk averseand, if an opportunity occurs, accepts uncertainty inorder to increase the value of the project.Traits Traits—Adopted from the five-factor personalitycharacteristic, attitudinal views, and attention to detail.Table 2: PVM component—PVM scale relationsTwo components of the PVM concept are measured by two scales. The dialecticrequirement analysis is measured with the strategic gap analysis and the specificationsgap analysis. The first scale measures attitudes and activities to specify or seek for projectrequirements that are not formally defined. These activities consume resources that aremost likely not considered in the project plan and therefore it is the project manager’sdecision to “invest” in these activities. Since the investment of resources in theseactivities could be seen as a strategic decision the scale is called strategic gap analysis.The other scale measures activities and attitudes to adjust, modify, and identify projectspecifications and is therefore called specifications gap analysis. The literaturedifferentiates between specifications as technical issues from requirements that arebroader including nontechnical issues as well.
P a g e | 29Thomas G. LechlerThe ambiguity deposition is also measured with two scales. The ambiguity scalerepresents the positive attitude of a project manager towards uncertainty. The changeanticipation scale represents the avoidance of changes by anticipation. The latter stands tosome extent as a contrast to ambiguity.The only scale that was not developed for this study is the traits scale. It was adoptedfrom a five-factors personality scale to measure a project manager’s traits.The following analyses to construct a scale to measure a project manager’s PVM wereconducted in two steps: First, the individual scales measuring the different components ofthe PVM were developed. The second step tests if these scales are representing themindset of project managers as a whole.
P a g e | 30Thomas G. LechlerIndividual PVM Scale Number of Items Cronbach´s Alpha Variance ExplainedProject Manager_Value OpportunitySearch4 0.87 0.711. The project manager was always seeking solutions to improve the project value (beyond theoriginal plans).2. The project manager contacted experts to find opportunities to exceed project requirements.3. The project manager was open to new ways to achieve better project results.4. During the project implementation the project manager was seeking opportunities to exceed theplanned functionality of the output.Project Manager Overachievement 3 0.80 0.701. The project manager routinely tries to exceed stated specifications.2. The project manager considers giving clients more than is specified.3. The project manager exhibits awareness of opportunities to improve or “over achieve” projectperformance.Strategic Gap Analysis 5 0.87 0.661. The project manager spent a significant amount of time to identify the needs of the differentstakeholders (clients, management, and shareholders).2. The project manager invested effort to identify stakeholder needs (clients, management, andshareholders), that were not included in the original project plan or contract.3. The project manager routinely tried to anticipate new risks or changes to project requirements.4. The project manager exceeded the project requirements.5. The project manager prevented conflicts by putting a significant effort into the requirementanalysis.Specifications Gap Analysis 5 0.88 0.671. The project manager critically evaluates or challenges the project specifications2. The project manager routinely corrects project specifications.3. The project manager routinely modifies project specifications.4. The project manager looks for weaknesses or inconsistencies in project specifications.5. The project manager tries to identify a mismatch between project specifications with the company’scapabilities.Traits 5 0.90 0.711. The project manager is sociable, talkative, dominant, exhibition, confident, andactive.2. The project manager is good natured, nurturing, gentle, warm, cooperative, andforgiving.3. The project manager is careful, thorough, detailed, responsible, dependable, organized, and self-disciplined.4. The project manager is calm, enthusiastic, poised, in control, and secure.5. The project manager is imaginative, creative, aware, sensitive, cultured, curious, intellectual, andpolished.Change Anticipation 3 0.80 0.701. The PM looks for unrealistic goals in project specifications.2. The PM anticipates unwritten (undocumented) specifications.3. The PM anticipates new or a change in project specifications.Ambiguity 4 .82 .691. The project manager accepts uncertainty in an attempt to improve the project.2. The project manager is open to take chances to improve the project.3. The project manager has the vision to see opportunities for project improvement.4. The project manager invites the views of others to improve project performance.
P a g e | 31Thomas G. LechlerTable 3: Quality of individual PVM scalesThe developed individual PVM scales achieve good to very good values, as the statisticalvalues in Table 3 demonstrate, indicating that the developed scales could be used forfurther analyses.Aggregated Measures for Project Value MindsetIn this section, the different scales are combined to measure the project-value-mindsetscale. Several statistical tests were conducted to test if these scales are indeedrepresenting the mindset of project managers.Both statistical scale tests, the Cronbach’s Alpha test as well as the PCA indicated thatthe scale project manager change anticipation had to be removed from the final PVMscale. The inclusion of this scale lowered the Alpha to an unacceptable level and itlowered also the portion of explained variance estimated with the PCA concluding thatthe project manager’s change anticipation could not be statistically integrated into theoverall PVM scale. From a practical perspective, this result is consistent with the entirediscussion. The relatively low variance of the project manager’s change anticipation scaleindicates that the anticipation of changes is an act that all project managers, independentof their mindset, are considering. After this step, the number had to be reduced fromseven subscales to finally six subscales. The final results of the analyses are demonstratedin Table 4.
P a g e | 32Thomas G. LechlerPVM_ScaleCronbach´s Alpha 0.90 VarianceExplained0.67PVM Subscales Factor LoadingsStrategic requirement gap 0.787Traits 0.861Requirement analyses 0.771Ambiguity 0.820Over achievement 0.771Opportunity recognition 0.895Table 4: PVM—Overall scaleOverall, the resulting PVM scale to measure the value mindset of project managersrepresents a very good base for further analyses to test the research hypotheses.Measures for Exploited Project Value OpportunitiesThe existence of a specific mindset could only be validated by the specific decisions thatcould be related to it. Seven items were developed to measure if opportunities wereexploited during the project implementation. Surprisingly, the analyses resulted in twodifferent scales measuring two kinds of exploited opportunities. One scale measuresexploited opportunities that are directly related to the TC paradigm as they describeopportunities to increase schedule, budget, and scope objectives (exploited TCopportunities). The second scale measures exploited opportunities with the purpose toincrease the value of a project.Exploited TC Opportunities Scale Number of Items Cronbach´s Alpha Variance ExplainedItems 3 0.82 0.741. During the project implementation, opportunities were exploited to exceed the plannedfunctionality of the output.2. During the project implementation, opportunities were exploited to shorten the project duration.3. During the project implementation, opportunities were exploited to lower the project budget.Table 6: Quality of exploited TC opportunities
P a g e | 33Thomas G. LechlerThe statistical parameters of the Exploited TC Opportunities scale indicate a very goodscale quality to measure if TC opportunities were exploited during the projectimplementation.Exploited Value Opportunities Scale Number of Items Cronbach´s Alpha Variance ExplainedItems 4 0.84 0.681. During the project implementation, opportunities were exploited to increase the satisfaction of theclient.2. Implemented project changes were financially beneficial to the project owner (the groupimplementing it) or client.3. During the project implementation, several opportunities were exploited to increase the projectvalue.4. During the project implementation, opportunities were exploited to significantly increase theshareholder value.Table 7: Quality of exploited value opportunitiesThe second scale measuring exploited opportunities to increase in general the projectvalue (Exploited Value Opps Scale) demonstrates also a good statistical quality.Several statistical tests were conducted, like a PC analysis across all seven items toconfirm these results. Despite the exploratory nature of this study, these results areconsistent with the initial idea about the constraints of the TC-paradigm and itsconsequences for managing projects and achieving project results.Empirical ResultsFor this step, all variables were aggregated by using the ratings of four responding projectparticipants, for example, three project team members and the project sponsor. Due to therisk of response bias, the responses of the project managers were excluded from furtheranalyses. These responses were only used to fill in for missing values. The dataaggregation led in total to 114 projects. All further analyses are based on the aggregateddata of the responses of the different respondents of 114 projects.
P a g e | 34Thomas G. LechlerComponent related descriptive resultsThe descriptive statistics of the scales show that means are pretty high across alldeveloped scales. This is not very surprising as most reported projects were classified bythe respondents as successful. Interesting are also the standard deviations of the scales.
P a g e | 35Thomas G. LechlerDescriptive StatisticsMinimum Maximum MeanStandardDeviationStrategic requirements gap 2.95 7.00 5.1178 0.76792Traits 3.30 7.00 5.5924 0.80222Requirement analyses 2.50 6.75 4.9814 0.81029Ambiguity 2.94 6.67 5.1240 0.81555OverachievementOpportunity recognition 2.88 7.00 5.1557 0.85906Business result 1.00 7.00 5.5154 1.02267Exploited TC opportunities 1.00 7.00 4.0293 1.05726Exploited value opportunities 1.94 6.88 4.6405 1.00356Quality 1.00 6.67 3.3198 1.32320Effectiveness 1.78 7.00 5.7879 1.00863Client satisfaction 2.12 7.00 5.5939 1.00134Efficiency 1.15 6.75 4.7048 1.15819Table 8: Descriptive statistics of the measurement scales
P a g e | 36Thomas G. LechlerBusiness Quality EffectivenessClientSaqtisfaction EfficiencyStrategic requirementsgap0.553 -0.242 0.510 0.562 0.388Sig. (2-tailed) 0.000 0.011 0.000 0.000 0.000Traits 0.614 -0.322 0.631 0.628 0.446Sig. (2-tailed) 0.000 0.001 0.000 0.000 0.000Requirements analyses 0.434 -0.214 0.434 0.448 0.360Sig. (2-tailed) 0.000 0.026 0.000 0.000 0.000Ambiguity 0.504 -0.357 0.522 0.608 0.498Sig. (2-tailed) 0.000 0.000 0.000 0.000 0.000Over achievement 0.480 -0.042 0.362 0.454 0.425Sig. (2-tailed) 0.000 0.663 0.000 0.000 0.000Opportunity recognition 0.591 -0.247 0.564 0.662 0.397Sig. (2-tailed) 0.000 0.010 0.000 0.000 0.000Project Value Mindset 0.644 -0.329 0.633 0.693 0.496Sig. (2-tailed) 0.000 0.001 0.000 0.000 0.000Exploited TCopportunities0.216 0.129 0.088 0.224 0.177Sig. (2-tailed) 0.024 0.187 0.362 0.019 0.065Exploited valueopportunities0.543 -0.035 0.325 0.504 0.277Sig. (2-tailed) 0.000 0.723 0.001 0.000 0.004Table 9: Correlations of mindset scales and exploited opportunities with projectvalueAll correlations between the mindset scales with the project value scales are significantand very strong.Empirical Tests of HypothesesThe developed measurement scales are the basis for testing the research hypotheses. Inthe final step of the statistical analyses, the three research hypotheses weresimultaneously tested with a structural equation model (SEM) by using LISREL VIII for
P a g e | 37Thomas G. Lechlerthe model estimation. The SEM shown in Figure 2 displays the structural model as wellas the measurement model of the PM’s Project Value Mindset consisting of the sixscales. The error terms are not shown.Figure 2Standardized Path Coefficients of the Structural Equation Model a* p < 0.05;Fit Statistics bRMSEA AGFI NNFI NFI CFI X 2df0.002 0.93 1.00 0.99 1.00 14.98 (p=0.53)16aT-values are in brackets.bRMSEA = Root-mean-square error of approximation; NNFI = Nonnormed Fit Index;NFI = Normed Fit Index; CFI = Comparative Fit Index; X 2chi-square, df = degrees offreedomThe evaluation of a structural equation model is quite complex since no single test offerssufficient evidence to accept or reject a model. Recognizing the problems associated withthe evaluation of linear structural equation models (Anderson &Gerbing, 1988; Bagozzi,1980; Baumgartner & Homburg, 1996; Bollen, 1989), a comprehensive set of tests was0.63* (7.49)a0.19 *(2.04)0.59 * (5.93)Strat_Req_GapTraitsReq_AnalysesOverachievementAmbiguityOpp_Recognition0.59*0.65*0.59*0.60*0.64*0.77*PM’s ValueMindsetProjectValueR2=0.52Exploited ValueOpportunitiesR2=0.41
P a g e | 38Thomas G. Lechleremployed to assess the goodness of fit. To accept the model, the following criteria haveto be satisfied: a chi square (p > 0.05), which tests the null hypothesis that the estimatedvariance-covariance matrix deviates from the sample variance-covariance matrix onlybecause of sampling errors. The chi-square test is limited to the extent that it is dependenton the sample size. Browne and Cudeck (1993) showed that with an increase of thesample size, any model could be rejected. Because of these weaknesses of the chi-squaretest, Jöreskog and Sörbom suggested two global fit indices, GFI (goodness of fit index)and AGFI (adjusted goodness of fit index). To evaluate a model’s fit the AGFI was used,since its calculation is based on the GFI but it also accounts for the degrees of freedom.Values below 0.90 indicate that the model should be rejected (Baumgartner& Homburg,1996). The RMSEA (root mean square error of approximation) is a measurement of non-centrality and estimates how well the fitted model approximates the populationcovariance matrix per degree of freedom. Browne and Cudeck (1993) suggest that aRMSEA <= 0.05 indicates a close fit and the model should be accepted. The CFI(comparative fit index) assesses the relative reduction in lack of fit as estimated by thechi square of a target model versus a baseline model in which all of the observedvariables are uncorrelated (Bentler, 1990). Models with a CFI below the 0.85 should berejected (Bentler & Bonett, 1980).The table of the fit statistics demonstrates that the estimated model fulfills all requestedstatistical benchmarks and demonstrates an acceptable fit. All path coefficients aresignificant (p < 0.05) suggesting that all model variables have to be included in thestructural equation model. Furthermore, the PVM variable explains 41% of the varianceof the exploited value opportunities during a project’s implementation. Both, the PVM
P a g e | 39Thomas G. Lechlervariable and the exploited opportunity variable explain 52% of the variance in the projectvalue variable. This percentage is very high given the many other possible influences onthe achievement of project success.The SEM also supports the proposed measurement model for a project manager’smindset. The path coefficients between the latent variable (project manager’s valuemindset) and the six different measurement scales are very high and significant on the 1%level (p < 0.01). In sum, the SEM demonstrates that the three research hypotheses shouldnot be rejected. It could be empirically demonstrated that links between the projectmanager’s value mindset the exploited opportunities during a project’s implementationand the perceived project value exist.Discussion of Empirical ResultsOverall the empirical results of this study are surprising. The initial expectation was thatmany project managers follow the dominant TC paradigm and try to create project valuewithin the predefined constraints of their projects. Instead the strong relationsdemonstrate that it is more common than not that project managers strive to maximizeproject value in seeking for opportunities to improve the value proposition of theirprojects. Given all other possible influences on project value, as mainly discussed bysuccess factor studies, the project value mindset of a project manager turns out to be animportant contributor in achieving project success.The empirical results demonstrate that the PVM should be measured with at least the sixdifferent scales measuring a project manager’s traits, attitudes, and behaviors. Thismeans, that project managers who are perceived by team members and peers to have aPVM receive simultaneously high scores on all six scales. It is possible that individual
P a g e | 40Thomas G. Lechlerproject managers could receive a high score on a specific scale but lower scores on otherscales. In these cases project managers demonstrate some aspects of the value mindsetbut in summary they do not demonstrate a PVM as a whole.The results show in summary how important each of the six scales are to measure aproject manager’s PVM. The importance of each scale was tested with two different tests(principle component analysis and SEM) with two different levels of data aggregationand both methods show similar results. The results also demonstrate the complex natureof the PVM variable and they underline the necessity to operationalize the construct independence of the specific context, in this case the management of projects.The main hypothesis of this study describes the importance of a project manager’s PVMfor the creation of project value. This hypothesis was tested with the SEM method,estimating the strength of the direct path of the PVM variable on project value whilesimultaneously considering the influence of exploited value opportunities on projectvalue. The high path coefficient is surprising and shows how important it is that projectmanagers manage their project continuously towards improving the value proposition oftheir project. The strong impact indicates also that project managers who seek to satisficethe initial project value proposition will likely fail to capture the potential project value.The openness towards change by questioning the initial requirements and seeking forimproving the value proposition of a project is an effective strategy to face uncertainty.This well-known companion of many projects could be addressed by seeking foropportunities to improve the initial value proposition of a project.The relatively high mean of the scale for exploited opportunities suggests thatopportunities to increase the project value obviously occur and are exploited to achieve
P a g e | 41Thomas G. Lechlerand create value. The strong impact of exploited value opportunities on the createdproject value, as suggested by the high path coefficient in Figure 2, demonstrates howimportant it is to exploit opportunities during a project’s implementation.An important precondition to exploit project value opportunities is a project manager’sdisposition to seek and identify opportunities by constantly questioning a project’srequirements and the motivation to maximize a project’s value. The proposed relationshipbetween the PVM and the exploited value opportunities is supported by the high pathcoefficient (Figure 2) and the high level of explained variance (R2=43%). This means thatwithout a mindset to maximize the project value, promising opportunities to extend aproject’s value proposition won’t be exploited. This link is crucial as it points to thefundamental limitations of the TC paradigm. The creation of project value by means ofthe exploitation of opportunities to increase stakeholder satisfaction is beyond the TCparadigm. The results support the basic critique of the TC paradigm in that only the questto maximize the value of a project will, in the end, lead to achieving a project’s valuepotential.
P a g e | 42Thomas G. LechlerBenefits of the StudyThe role of a project manager is often seen as an implementer with an operational focus,implicitly excluding the responsibility or the need for opportunity recognition andexploitation. After studying the impact of a project manager’s mindset on the creation ofproject value, the perspective on a project manager’s responsibilities and functions shouldbe changed. Project managers have much more influence on the creation of project valuethan the TC paradigm conceptually could explain.This study redefines the role of a project manager: from an implementer to a managerwith strategic responsibilities in generating value for the organization. Consequently theempirical results demonstrate the need for a greater empowerment of project managersand encouragement of project managers to use more entrepreneurial behaviors. It alsosuggests changes in criteria used to evaluate project managers’ performance beyond theestablished triple constraint measures. The consequences of this study for projectmanagement are manifold and could be related to three different perspectives: Thepractice of project management, the education and the research.Thomas G. Lechler was educated at the University of Karlsruhe, Germany and received thedegrees of Diplom Wirtschaftsingenieuer and PhD in Management. He was the cofounder andCEO of the Vivatech GmbH. He was a NASA research fellow in project management from 2003–2005. At present he is an associate professor at the Howe School, Stevens Institute ofTechnology. His research focuses on the value creation through innovation with particularemphasis on the management of projects and the recognition and exploitation of businessopportunities. He received several research grants from PMI (Project Management Institute) to
P a g e | 43Thomas G. Lechlerinvestigate the value creation of project managers. He is a member of the GPM and the Academyof Management.
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