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PROJECT MANAGEMENT: Traditional and New Models

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    "A manager is not a person who can do the work better than his men; he is a person who can get his men to do the work better than he can." – Fred Smith Project Leadership Project management provides a foundation for the art of leadership. The best project managers are also outstanding leaders. Creating a High-Performing Team Creating a high-performing team takes commitment on the part of the project leader to lead both the project management and team processes. You need to be a good facilitator, helping the team work through the steps of these processes. Developing Team-Based Skills While developing your team and mastering teamwork, you'll need to hold regular team meetings so that team members can monitor progress and solve problems as they arise. You may also want to focus on your team skills, such as: Holding effective meetings; Motivating and communicating; Practicing active listening; Providing constructive feedback; Resolving conflicts; Making team decisions; and Recognizing accomplishments and celebrating success. Evolving Entrepreneurial Role of the Project Manager Today project managers have to go beyond the traditional project delivery practices and master the business systems approach. This new system requires thinking of the project as a business enterprise and managing the project as a business venture. Thus you have to consider not only the success of the project itself but also the success of the project outcome. You need to understand how your organization creates value for its major stakeholders – shareholders, customers, and the business team, and also take responsibility for delivering that value. The new role of the project manager requires an ultimate knowledge of the strategy the project is supporting. Taking the business systems approach requires also knowledge of organization, motivation, marketing, accounting, cost control, finance, and quantitative decision making from the project manager's perspective. The entrepreneurial approach to project management essentially expands two dimensions of the project management process – time and boundaries. Considering the project outcome and its lifecycle expands time beyond the traditional horizon of project completion. Project boundaries are also expanded. Stakeholders start playing more important role as partners. On the other side, market forces now go beyond the customer and end-user to include additional factors such as competition.

    Deficiencies in Conventional Project Management The very heart of conventional project management texts is centred invariably on activity management – the targeting, scheduling, measuring and controlling of tangible activities through time. The real business issue is far less the management of interlocking details, however. Instead, it is about making sure that managers do not lose sight of the really big picture. Where projects are riddled with uncertainty the relatively precise definition of activity durations becomes an academic irrelevancy. The most important critical success factor is to identify how projects can be made more resilient generally rather than worrying about whether a particular activity might overrun by a few percent. In today’s rapidly changing business environment, it becomes a kiss of death to organizational speed to place burdensome demands on form-filling for projects. Strategic Project Management (SPM) Defined SPM is the process of managing complex projects by combining business strategy and project management techniques in order to implement the business strategy and to deliver organizational breakthroughs. Using Strategic Thinking for Strategic Project Management (SPM) There is just the same need for more localized strategic thinking for specific projects as there is at much higher organizational level. Strategic thinking is useful for: checking whether a particular project is the appropriate vehicle for the strategy in any event; generating other options for implementing the project; understanding key opportunities and threats that the project faces in its environment and its internal strengths and weaknesses; interrelating the project with others in order to understand its total rationale and value. Adapted from Strategic Project Management , Tony Grundy and Laura Brown

    Two Approaches to Project Management Project Administration – focuses on finding solutions within given constraints (output, time, and budget); characterized by an early design freeze that creates a stable target for the project; effective when duration of the project – or the time required to innovate – is shorter than the rate of change in the business environment. Business Synergies – focuses on adding value to the organization and maximizing return on investment; does not lock down design earlier than absolutely necessary not to miss a newly emerging opportunity; effective for managing innovation projects in the rapidly changing environment, where change cycle is shorter than or equal to the duration of the project. Selecting the Right Management Approach for Different Types of Projects For Lifestyle Projects , focusing on develop ment of new or improv ement of existing products, services or infrastructures in a lifestyle business environment , use Project Administration –  classic approach built on the triple constraints of project management - cost, duration, and outcome . For Venture Projects focusing on develop ment of new products or services for rapidly changing and highly competitive markets , use Business Synergies – new entrepreneurial approach to managing projects; goes beyond the triple constraints to consider project and project outcome lifecycle in a wider context of the overall organizational strategy . From Old Constraints to New Processes and Results From delivering fixed outcome to crafting for value addition to the organization in the dynamic marketplace From duration (fixed deadline, schedule) to timing the completion of product/service development for maximum cash flow Fixed cost (budget) to investing to develop competitive advantage Shift to New Project Success Measures From meeting fixed specifications to satisfying customers Meeting fixed deadlines to s electing the best time to market From j ust implementing the project to h elping to implement the organizational strategy

    What is Business Synergies Approach? The business systems entrepreneurial approach is concerned with discovering possibilities for adding value to the organization, not with finding solutions within given constraints. Though this approach is built on the old triple constraints of project management – cost, duration, and outcome, – it goes beyond these constraints to consider factors for developing business results. New Tasks of the Project Manager Entrepreneurial management is fundamentally different from corporate management that is focused on delivering the annual operating plan. You need to consider your project and your project outcome lifecycle in a wider context of the overall organizational strategy. Unlike traditional project manager who has to meet static constraints of project deadlines, budget, and outcome, you should act as an entrepreneur and deal with a dynamic business system. You should be able to manage for broader economic and financial gain for the project and project outcome lifecycle, thereby contributing increased shareholder value to your company. To achieve that goal, you would require to have a broader understanding of the whole business and the way your project supports the overall strategy and fits into the dynamics of the business system. You should also be prepared to fine-tune the project in response to market changes and competitor actions in order to react timely to arising problems and emerging opportunities. New System of Success Measurement and Control Entrepreneurial approach to project management that understands the dynamics of the marketplace and competition may require radical change in the project success measurement and control systems of most organizations. Business-oriented controls should focus on market performance, timing and investing for higher return rather than on meeting fixed specifications and constraints. They should not use operating-plan logic to manage new ventures. New Mindset of the Upper Management Organizations should provide an enabling environment to empower the project manager to act as a CEO and thus to contribute his best to the corporate strategy. Apart from providing the necessary funding, the organization should shield the project manager from organizational restrictions, reward results, and exercise minimal control.

    Management of the venture-building process is fundamentally different  from corporate management that is focused on delivering the annual operating plan. Management of a new high-growth business is built around a  customer-driven idea or a technology. It requires entrepreneurial mindset and skills. Being first to the market is the top priority for the venture manager. The core competence of an entrepreneur, the ability to move quickly from idea to market, is a key enabler of success. Venture Market Focus What makes a venture succeed is the ability to identify emerging attractive markets and to seize on unmet, unserved customer needs. Hot markets do not last forever. Entrepreneurs must be prepared to adapt quickly to the market changes. The market focus means flexibility: watch the market dynamics, spot what has gone wrong, and move quickly to turn market changes and your errors into opportunities. Venture Management Focus The core activities that must be performed by the entrepreneur - because no one else can perform them as well as the company founder - are those that give the company its competitive advantage over other companies in the industry. The core management team should be picked very carefully because its business and interpersonal style becomes the foundation of the company's culture and grows the value system. They should have skills, and depth of experience in the areas most important to the sustainable competitive advantage of the company.  Don't settle for a few average employees - "if you want a track team to win the high jump, you find one person who can jump seven feet, not seven people who can jump one foot." Case in Point: Dell Inc. "As a start-up, we'd been willing to try lots of things," writes Michael Dell, the Founder & CEO of Dell Computer Corporation. "And obviously, where product and technological innovation were concerned, we would still put a high priority on being experimental and innovative. But as far as focusing the business was concerned, our mandate was clear: We need to get serious." "Once we established clear metrics and measurements, it was easy to see which businesses were performing or not, and to change the strategy accordingly. We instituted the practice of strong profit and loss management. By demanding a detailed P&L for each business unit, we learned the incredible value of facts and data in managing a complex business. As we have grown, Dell has become a highly data- and P&L-driven company, values that have since become core to almost everything we do."

    Confronting uncertainties and reducing them: The complex set of uncertainties on multiple dimensions in the radical innovation environment makes traditional project management approaches impractical. Hence, new skills must be added to the traditional project management toolbox. Dealing with the chaotic nature of the radical project management environment: "Without order nothing can exist – without chaos nothing can evolve." Radical projects are experimental as experimentation is the key to discovery. The radical project manager must balance formal processes at one extreme with the fluid creative chaos of ideas, relationships, interests, and transactions at the other. Developing resource acquisition skills: Incremental innovation projects are usually fully funded. Experimental and chaotic radical projects have to deal with various resource challenges and discontinuities. Overcoming project discontinuities: The occurrence of unanticipated crises may force the project to regress to a less mature level. The radical project manager should work toward establishing both formal and informal project legitimacy in the eyes of the organization to counter organizational resistance to radical innovation. Improvising and taking tactical detours: The levels of uncertainties may rise and fall throughout the project. The project manager must be able to solve problems creatively and to lead the team in adapting and redirecting its focus as necessary to keep the project moving. Preparing a project for acceptance by a manufacturing partner – an existing business unit, a new business unit, or a spin-off company. It is difficult and unusual for radical innovation projects to reach the level of maturity expected by most business units before handoff. The receiving unit wants to be confident that: the technology will work; the product can be produced reliably; the product has features and attributes desired in the marketplace; customers and applications are well enough understood so that sales, marketing and distribution functions can be implemented successfully; projected revenues can be achieved. A "transition team" may be used to accelerate the project through the final stages.

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    PROJECT MANAGEMENT: Traditional and New Models - Presentation Transcript

    1. Inspirational micro-course (10 slides) by Vadim Kotelnikov Founder Inspirational Business e-Coach We don’t teach, we inspire! 1000ventures InsBeCo 1000advices success360 fun4biz Project Management Traditional and New Models
    2. Inspirational Business e-Coach The World’s #1 Source of Inspiration and Innovation! Enterprises: 3M, ABB, Adidas, Alcatel, Bayer, Boeing, BAT, BP, Canon, Cisco, Corning, GE, HP, Hitachi, Hyundai, IBM, Intel, J&J, Microsoft, Motorola, Nokia, Oracle, Philips, Samsung, Shell, Siemens, Sony Banks: Citicorp, Goldman Sachs, JP Morgan Chase, Standard Chartered Consultants: Deloitte, Ernst & Young, KPMG, McKinsey Customers in 100+ countries Customer segments Enterprises – 43% Consultants – 25% Individuals – 16% Universities – 12% Government – 4% North America 51% Europe 2 1 % Asia-Pacific 2 0 % Africa 5 % South America 3 % Different industry leaders choose InsBeCo Welcome to the world of inspirational micro-courses! We help new business champions grow! InsBeCo
    3. Managing Lifestyle Projects Traditional Project Administration Approach
      • PLANNING
      • Team
      • Scope
      • Description
      • Acceptance criteria
      • Boundaries
      • Organization Tree
      • Risk Assessment
      • Resources
      • Milestones
      • Outcomes
      • Budget
      • Change Management
      • Outcome Lifecycle
      • Lessons-Learned List
      • EXECUTION
      • Assigning Tasks
      • Monitoring Environment
      • Current status
      • Potential problems
      • Issues
      • Managing Change
      • Aligning strategy
      • Reviewing requests
      • Changing the plan
      • Tracking Progress
      • Risk
      • Scope quality
      • Schedule
      • Staff effort
      • Spending
      • Communicating Progress
      • Recognizing Accomplishments
      • Preparing Status Report
      • CLOSING OUT
      • Evaluation:
      • by Customer
      • by Sponsor
      • by Stakeholders
      • by Team Members
      • Customer Interview
      • Final Status Report
      • Lessons Learned
      • Recommendations
      • Close-Out Report
      • INITIATION
      • Business Case
      • Charter
      • Purpose
      • Direction
      • Issues List
      1000ventures.com
    4. Project Management The 10 Key Project Leader Skills
      • Developing a grand vision.
      • Building the project management team and leading the team.
      • Leadership skills; building and leading the project team.
      • Communication skills.
      • People-management skills.
      • Facilitation skills.
      • Skills at interfacing across the organization.
      • Ability to accept criticism, feedback, and input from others.
      • Skills in using team-based tools.
      • Selling skills. The ability to promote and sell the project.
      Evolving: Entrepreneurial Role of the Project Manager InsBeCo
    5. Strategic Project Management (SPM) The Process 1000ventures.com Defining the project Creating the strategy Project planning Implementation and control Review and learning Revisit the strategy Anticipate implementation difficulty Source: Strategic Project Management , by Tony Grundy and Laura Brown
    6. Strategic Project Management (SPM) Conventional Project Management vs. SPM 1000ventures.com Source: Strategic Project Management , by Tony Grundy and Laura Brown uncertainty analysis done first, then activities planned activities planned first, then critical path analysis done Dealing with uncertainty far-reaching stakeholder analysis – requires continual scanning emphasis on formal structures: project manager, team, sponsor Importance of stakeholders important but only in context – tries always to see the big ('helicopter') picture absolutely central – it is all about control Attitude to detail only done once a project strategy is set follows on directly from project definition Project planning highly flexible, creative, depending on options usually portrayed as a 'given' Project definition vague and distant direct and explicit Link with business strategy SPM Conventional Project Management  
    7. Project Management Two Approaches Concept Development Project Implementation STATIC: PROJECT ADMINISTRATION Traditional lifestyle model, focuses on finding solutions within given constraints – outcome, time, budget; effective if change cycle is longer than duration of project Concept Development Project Implementation Project Initiation Project Initiation Employing Outcomes Employing Outcomes DYNAMIC: BUSINESS SYNERGIES New entrepreneurial model, focuses on adding value to organization and maximizing return on investment; effective if change cycle is shorter than duration of project InsBeCo
    8. Project Management Project Administration vs. Business Synergies Approach 1000ventures.com Concept Dev’t Project Implementation Project Initiation Employing Outcomes Concept Development Project Implementation Project Initiation Employing Outcomes Project Administration Business Synergies © Vadim Kotelnikov Radical Incremental Innovation High Low Uncertainty Fast Slow Change Adding maximum value to the organization & stakeholders Delivering pre-defined output within given constraints Success Criteria Business Synergies Project Administration Working Environment
    9. Managing Innovation Projects Modern Business Synergies Approach Organizational Strategy Traditional Emerging Defining Project Contribution to Business Strategy Business Case Analysis PROJECT INITIATION Strategic Alignment Project Duration Project Cost Project Outcome Project Management Practices PROJECT EXECUTION Increasing Economic Value Employing Project Outcome OUTCOME LIFECYCLE Success Criteria: 1000ventures.com
    10. Radical Project Management Lifestyle vs. Venture Management InsBeCo Cash flow Profit / loss ratio Financial Focus Venture capital Annual plan Funding Source Faster; entrepreneurial style Slower; corporate approval procedures Decision Making Risk-reward structure Promotion Motivation Reversing at top speed & resuming speed Slow formal procedures Managing Change Experimenting, failing, adapting Caution, avoiding failure at any cost Risk Management Anarchic, demands space for action Responsibility and control Independence Moving quickly from idea to market Performing core manager's functions Core Competence Adapting to unmet customer needs Delivering an operating plan Focus Experimenting and adapting rapidly Methodical analysis of facts Market Research Market capitalization Profit Success Measure Must be the first to market Sacrificing speed for thoroughness Time-to-Market Quite unpredictable Quite predictable Results Entering emerging market Serving established customers Market Customer-driven idea or new technology Competence-driven idea Driving force Radical Innovation Projects Lifestyle Projects Application Venture Management Lifestyle Management
    11. Leading Radical Innovation Specific Skills of Radical Project Managers 1000ventures.com Adapted from Radical Innovation , Harvard Business School, Radical Innovation Project Trajectory Preparing a project for acceptance by a manufacturing partner ► Improvising and taking tactical detours ► Overcoming project discontinuities ► Developing resource and competency acquisition arts and skills ► Dealing with the chaotic nature of the radical project management environment ► Confronting uncertainties and reducing them ►
    12. Funding & Implementing Profitable Projects Spinout Model Financial Institution A Financial Institution B Financial Institution C Project X Project Y Project Z COMPANY Loan / Mortgage Loan / Mortgage Loan / Mortgage Consortium of Financial Institutions Special Purpose SPINOUT COMPANY for the New Project Contractors and Service Companies Loan / Mortgage / Equity Profit Share Investment Services Outcomes Traditional Model Spinout Model PARENT COMPANY (Sponsor)
    13. Project Management Inspirational Micro-course 1000ventures InsBeCo 1000advices success360 fun4biz InsBeCo Thank You! Vadim Kotelnikov We don’t teach, we inspire! Would you like to discover more? Click here!

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