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The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield
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© Cranfield and Team Animation
White Paper
February 2014
Thinking differently – Introducing the
concept of the energised projects
organisation.
“Managers do projects but they don’t feel them”
A Senior Project Manager
Authors: Liz Lee-Kelley, Cranfield Business School and Donnie MacNicol , Team
Animation Ltd
The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield
and Team Animation
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CONTENTS
1. Executive Summary
2. Overview: The Project Management Profession
3. Current Thinking: Failure-Success Paradigm
4. Thinking Differently: Organisational Energy
5. Alternative Paradigm: The Energised Projects Organisation
6. The Next Phase
7. Business Significance
8. References
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1. EXECUTIVE SUMMARY
Given the stream of bad news on public and private sectors projects, we argue that it is
time for the project community to think differently. The current failure-success
paradigm is inadequate for creating a sustainable, high-performing organisation capable
of meeting the APM’s vision that ‘all projects succeed’.
Our ‘thinking differently’ project aims to uncover an alternative diagnostic that can take
a whole-organisation view of projects. We began by looking beyond the project
management literature. The notion of ‘energy’ in organisations as an important and
renewable resource provided the impetus for the paper. Successful organisations are
those that can channel the collective energy to create an organisational ‘can-do’ climate.
In this paper, we present an overview of the project management profession, highlight
the shortfalls of the existing failure-success paradigm, discuss the energy literature and
its role in organisations and introduce the idea of an energised projects organisation.
We use the human body metaphor to explain the importance of addressing both the
‘hard’ structures which provide the organisation with a framework for practice and
governance, and ‘soft’ human efforts which are often felt or observed as a certain, ‘je ne
sais quoi’ or energy. We pilot tested the energy concept with two large project-based
organisations. Further reading and soundings with a number of business leaders,
project organisations, professional bodies and senior project professional indicated that
collective energy may be an alternative paradigm for explaining the intensity, pace and
resilience of a projects-based organisation.
The next phase of our project is to complete our research by investigating the
organisational conditions essential for sustaining energy. We will then pilot test and
validate the complete energised project organisation diagnostic with a view to helping
managers develop an informed, holistic strategy for organisational project excellence.
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2. OVERVIEW
The Project Management Profession
Projects and programmes (hereafter referred to as ‘projects) have become the main
delivery or change mechanism in large and small organisations, underlining the rise of
project management as a discrete profession in the UK and abroad. Membership of the
Association for Project Management (APM) now stands at 20,500. Many who work for
multinationals may be members of more than one professional body. The US Project
Management Institute reports a global membership numbering over 700,000 and the
International Project Management Association (IPMA) is a Federation of 55 professional
bodies around the world, of which the APM is a leading member.
Attention of the professional bodies has been on setting technical and administrative
standards through their Body of Knowledge (BOK) and special interest publications on
specific areas of excellence. Expressed purpose, clear scope, structured planning and
control, exemplary leadership, systematic risk, information and quality management are
common topics in the various BOKs and practice frameworks. Other recent
recommendations include introducing gateway processes for increased governance and
assurance.
We observed from our visits to institutions and interactions with a broad range of large
and small organisation a shared will to institutionalise and standardise project
management practices across the piece. Some of the larger organisations have
developed, or are looking to create, their own Centre of Excellence or Project Academy.
Contract organisations working on major projects are also increasingly expected to
provide suitably qualified or accredited project personnel. These market and
institutional forces have given rise to a global community of ‘like-minded’ project
managers, trainers and consultants keen on professional endorsement and a shared
drive for better performance.
3. CURRENT THINKING
Failure–Success Paradigm
Despite the standards and best-practice guides, including Martin Cobb’s assertion
(1995) that ‘we know why projects fail, we know how to prevent their failure…’ success
has been elusive for many in both the pubic and private sectors. The media continue to
report large and small projects being delayed, over-spent or whose outcomes fall short
of user needs or expectations. Failures in the public sector appear to be more prevalent
than the private sector largely because of their stringent reporting requirement. The
size and value of projects (which often involve future and emergent technologies) also
mean that losses are more striking.
The table below shows five UK projects (amongst many) reported to have failed to
deliver their expected ‘value’ i.e. the costs shown were believed to deliver little or any
value to the organisation.
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Project or Program Organisation c. Lost ‘Value’
The Digital Media
Initiative
British Broadcasting Corporation
£125M
Mobile Information
Programme (MIP)
Home Office
£102M
FiReControl Fire Services
£469M
C-NOMIS (Integrated
Offender Management
System)
National Offender Management
Service
£234M
Automated Supply-Chain
Management System
Sainsbury’s £260M
The stream of bad news gives the impression of a profession struggling to develop the
necessary capability to deliver projects successfully, making the need to change public
perception both real and urgent. Hence, the many attempts by academics and
practitioners to identify the common causes of failure and the common solutions to fix
them.
Realising that a focus on failure might be too negative and uninspiring, the Cabinet
Office (2009) issued a list of the Ten Causes of Confidence in Major Projects and
Programs (below) to encourage the project community to emphasise success.
The APM has also revised its vision to that of ‘all projects succeed’ and recently
commissioned a research project on discovering project success factors. It appears that
the next ‘holy grail’ is the quest for a comprehensive list of critical success factors
(CSFs).
The blueprint of the failure-success paradigm is classical problem-solving (diagnosis,
action selection and implementation). If something is identified as bad or ineffective,
stop doing it. Find another way. If something is seen as a contributory reason for a
project meeting its objectives, let’s do more of it or let’s take that as a lesson for other
projects. If the positive or negative condition is persistent and long-lasting let’s
incorporate solutions into the organisation’s standard planning, governance and
assurance processes. We would argue that while it is psychologically more positive to
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emphasize success rather than failure, they are essentially opposite sides of the same
coin. Both aim to plug practice-gaps.
Many of the identified failure causes are really more outcomes or symptoms of failure.
Even if we really know the ‘root causes’, we are still in danger of what Professor Roberto
of the Harvard Business School calls the ‘Root Cause Trap’. Over focus on ‘fixing’ the
identified causes without acknowledging their inter-relationships or unintended
secondary effects can be a risk in itself. In practice, managers would scrutinise processes
and problems in minute detail and then attempt to build a wall of rules and procedures
to replicate the conditions for success and reduce the chances of failure. Over time many
walls are erected which are patched together and presented as a coherent practice
framework.
Similarly, success tends to reflect the consequences of apparent sound practice. As with
failure any list of success factors will be in generalised form, divorced from their
originating circumstances. If we accept the principle that projects are context specific
with unique requirements and that lessons from past events are useful as guidance but
cannot guarantee future performance, then the failure-successful paradigm is unlikely to
provide practitioners and their organisations the answer to their quest for consistent
performance. Besides, the debate on what constitutes failure and success is on-going.
We often hear and read about the importance of prioritising and selecting the right
project and the need to have the right practice framework. Along with the growing
consensus that projects are part of a larger environment involving complex interactions
with other functions, suppliers and partners, there is also increasing talk about the need
to develop the right people and select the right team for any project. But the focus of
management remains about ‘getting the job done’. A manager explains, “We are not into
innovation or doing things better, we are into compliance. People are important only as
a resource for the doing bit”. The comment may be unfair or jaundiced but it illustrates
the low attention given to people effect.
Human factors has only recently gained more prominence in in the professional agenda,
as exampled by the elevation of ‘people’ as a second chapter in the 6th edition of the APM
BOK. Likewise, the 5th edition of the PMI BOK now includes ‘stakeholder management’
as a new 13th chapter. Although their mantra is about engagement, the language and
toolkit focus indicate a mind-set that continues to believe decisions are rational and
people are a resource that can be manipulated and controlled through structured
organisational design and management tools. Noticeably absent is any substantive
reflection on the identified interpersonal-skills in different contexts or the dynamics
between people and institutional structures.
The conclusion by the PWC Saratoga (2011/12) US Human Capital Effectiveness Study
that responsibility, accountability and trust are major issues in organisations has
significance for the project profession because making ‘all projects succeed’ requires
commitment and collaboration. This may not be readily given. Behavioural research on
choice has long shown that people use sensory cues to diagnose their surroundings and
in situations of imperfect knowledge or weak cues, people tend to ascribe motives (e.g.
Brunswick, 1947; Hammond, 1955). The seminal work of Herbert Simon (1945) also
found that people feel constrained by their role or position and by the structure and
norms around them in the organisation. The low interest in people in practice means
that we are surprised when responses and behaviours are ‘irrational’ (i.e. emotional or
instinctive).
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Given the continuing reports of struggling projects, what is clear is that our current
thinking is not working. It’s time for us to stop and ask, is there another way?
4. THINKING DIFFERENTLY
Our discussion above suggests that the current failure-success paradigm will have
limited impact on achieving organisational excellence. In fact, it can encourage what we
would term as two ‘organisational evils’:
 the tendency to rely on techno-centric fixes
 the tendency to overlook human effects
Addressing one ‘evil’ without considering the other produces a partial solution that is
counter to the very idea of integrative management that is being promoted here in the
UK and across the Atlantic (APM BOK, pg. 91; PMI BOK, pg 63)..
We should heed Einstein’s advice to think differently. This involves questioning our
existing assumptions and adopting a different lens for the problem, namely:
We should not be asking ‘what are the factors for success or failure?’ in order to derive a
list of general characteristics against which managers can attach fixes or best-practice
solutions. Without understanding we cannot define excellence, let alone achieve it.
Hence, we should be asking:
 Why do some organisations outperform others consistently?
 What does a high performing organisation look like?
 How do we achieve a level of excellence that is right for our organisation?
We should be clear that integrative management is more than joined-up processes.
Standards, policies, reporting hierarchy and processes are only the structural conditions
to support human activity. Understanding how much effort individuals are willing to
invest to help their organisation succeed is rarely taken into account in our decisions. To
make a difference, we should be taking a more holistic approach that accounts for both
‘hard’ structures and processes and ‘soft’ people aspects .
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Finally, as traditional management thinking has so far failed to deliver project
excellence, we should look beyond the profession’s collective wisdom and published
literatures to other disciplines and domains for alternative paradigms that can help us
explore what is required to create a sustainable, high-performing organisation capable
of meeting the APM’s vision that ‘all projects succeed’.
Organisational Energy
Following our argument above for the need to think differently, the first task of our
‘thinking differently’ project was to establish what is required to create a high
performing organisation that can deliver projects repeatedly. We scoured different
literatures to help us visualise such an organisation and came upon the notion of energy
as an important and renewable resource in organisations. The concept was first raised
back in the 1980s, receiving little attention until recently when Schippers & Hogenes
(2011) attempted to link a diverse set of literatures (e.g. Bruch & Ghoshal; 2003; Dutton,
2003; Spreitzer, Sutcliffe, Dutton, Stonenshein & Grant, 2004) to suggest that harnessing
employee energy is a worthwhile management activity.
Energy may be defined as the extent to which people have mobilised their cognitive,
emotional and behavioural potential (e.g. Bruch and Ghoshal, 2003; Dutton, 2003). It is
the capacity of people for vigorous activity, their sense of curiosity, enthusiasm,
liveliness, vitality and stamina. Energy may be generated from internal motivation or
interest in the job or inspired by others within the organisation or one’s social network
(Cross, Baker & Parker, 2003; Quinn and Dutton, 2005). The mental state of a person
who is fully immersed can be felt by others who interact with them, often sweeping
others along in a positive or negative way (Cross et al, 2003; Cross, Linder and Parker,
2007). Cross et al (2003) call high energy employees ‘energizers’. They are the
‘catalysts’ for action in others. Low energy employees, on the other hand, have a de-
energising effect. They create mental, emotional and physical stress in themselves and
others. Being tacit and invisible, its presence may be observed from the way people
work, face and solve problems.
Organisational energy reflects the collective force of managers, employees and their
interactions. The apparent ‘buzz’ or apathy felt in the organisation is often described as
its climate to distinguish it from the more enduring and harder to change organisational
culture. Small group research has already shown that high performing teams have an
inexplicable energy. Cole et al (2012) found that the intensity and quality of personal
energy flows (seen and felt by others as enthusiasm, passion and drive) are infectious
and transforming. The Energy Matrix below (reproduced with the kind permission of
Professor Vogel) relates the different types of energy to their level of intensity and
quality. Transported to the workplace, individual energy becomes the ‘fuel’ of an
organisation (Dutton, 2003) and successful organisations are those that can channel the
collective energy for effective performance (Casullo, 2012).
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The Organizational Energy Matrix
Energy researchers have also found that organisations move back-and-forth through
different energy zones. Bruch and Ghoshal’s Passion, Comfort, Resignation and
Aggression labels are subsequently portrayed as Productive, Comfortable, Resigned
Inertia and Corrosive by Bruch and Vogel (2011) in their book, Fully Charged. These
correspond with that used in the Management of Portfolio guide (below). The first two
zones display low quality, low intensity organisational energy. Those in the comfort
zone are trading on their past successes while those in the resigned zone may be facing
intense change or competition and struggling to find their way forward. For different
reasons, both are in a state of organisational inertia. Unlike those in the productive
(passion) zone who feel pride and joy in their work, there are intense and often negative
emotions for organisations in the corrosive (aggression) zone. Senior management may
be driving employees to achieve this state as they value a workforce that thrives on
competitive aggression. Oracle Corporation’s mantra of “It’s not good enough to win; all
others must lose” reflects this view. In addition, just as excessive pride can lead to
resistance to change and inflexible responses, organisations in a persistent state of
change or high aggression can lead to burnout. Those who are reliant on structured
channelling of staff efforts risk stifling creative thinking and willingness to take
ownership of projects. People in the comfort zone are in tune and aligned with the
organisation and its mission. However feeling too comfortable can create complacency
and remove the drive for innovation and change.
Returning to our critique of the management preference for technocratic fixes and low
focus on people effects, we see organisational energy as a possible alternative paradigm
to current failure-success thinking. Authors such as Cameron & Caza (2004), Cole et al,
(2012) and Cross et al (2003) have successfully tackled the challenge of addressing
concerns about the lack of valid and reliable instruments to measure individual energy
and the assumed linked between individual and collective energy. They demonstrated in
influential business journals such as Harvard Business Review and MIT Sloan
Management Review that it is possible to map the sources of new ideas and innovative
actions back to individual ‘energizers’ and how de-energizing attitudes and behaviours
of certain individuals can dampen overall enthusiasm, passion and ultimately
commitment. (e.g. Bruch and Ghoshal, 2003; Bruch and Vogel, 2011; Cross et al, 2003).
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5. AN ALTERNATIVE PARADIGM
The Energised Projects Organisation
When we talk about the energy of an organisation, we are referring to the collective
perceptions, social interactions and physical efforts of the individuals within it. Hence
we cannot but notice how some companies just seem to exude positive energy. Ideas
appear free flowing and employee motivation and job satisfaction are high. Change is
embraced and supported by employees and the organisational structures and processes.
Conversely, in some organisations the atmosphere or climate is often described as
negative or even toxic. While few organisations are aware of the potential of
organisation energy Apple, GE, and Cartier are reputed to have harnessed the energies
of their leaders and workers and channelled them as an infectious spirit throughout the
organisation. In spite of their company size, these companies have maintained an
entrepreneurial can-do spirit, allowing risk-taking and rewarding performance. GE even
used the term ‘boundarylessness’ to describe their strategy to encourage focus, self-
motivation and synchronised effort (Casullo, 2012). The Cabinet Office has also made
multiple references to the energy concept in its Management of Portfolios (MoP) Guide.
These include the Portfolio Management Cycles and Model (shown respectively below)
and also reference to the Organizational Energy Matrix and underlying thinking.
Organizational energy is depicted here as an essential catalyst for effective portfolio
management. It highlights the dynamic nature of the project and programme world with
organizational energy providing the energy to power the cycles and ultimately drive the
design and delivery of projects and programmes. However, there is little specific
guidance on how to harness and optimise that energy. It seems that the importance of
organizational energy is understood by those at the heart of defining key areas of the
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professions knowledge but not how this can be translated into actual application by
those responsible for improving project performance.
Our project seeks to understand why and how some organisations are consistent high
performers. In line with our argument for the need to integrate both the soft and the
hard elements in an organisation, we are interested in the source and nature of different
energies and how they can be identified and optimised in the projects organisation.
In order to help us visualise the ebb and flow of energy states, we
use the human body metaphor. Its wellbeing and ability to function
at a high level is dependent on the extent to which the physical and
non-physical elements within it are in harmony.
In the organisation, this is equivalent to the relationship between
the structural conditions (e.g. strategic vision, reporting structures,
policies, processes, methodologies etc.) and the energy of
employees. Projects, like the human body, are constantly
bombarded by forces outside their direct control. How well an
organisation can cope with the encroaching environment (i.e.
political, economic, social, technical, legal and environmental
forces) will depend on the match between the human and structural
systems.
We envisage that an energised projects organisation (EPO) is like a
healthy and fit human body with a high capacity to resist, react and
recover from infections. The key to organisational resilience is its
capability for encouraging a ‘can-do’ energy from individuals and teams who are willing
to work hard(er) and feel that they have the capacity to respond to internal and external
demands. But we should be aware of the risk of burn-out (apathy).
The first stage of our project is to examine the energy concept in projects organisations.
We work on the premise that organisations, and the people in them, know more than
they realise about how to improve practices around the delivery of change. We want to
see how project personnel perceive and respond to the enabling and constraining
organisational conditions around them. We are aware from the literature that energy
levels can change with circumstances so our energy questionnaire is designed to locate
the ‘hot’ and ‘cold’ energy spots under different project conditions, i.e. for ‘when things
are going well’ and ‘when things are not going well’. This is a novel approach that will
allow managers to ‘feel the project’ from the perspective of those doing it so that any
strategy for remedy or intervention will be designed with the broader consequences in
mind.
6. THE NEXT PHASE
We have shared our views about the need to think differently by critiquing the
prevailing paradigm. We suggest that organisational energy can be an alternative lens
for the project community to understand why some organisations are consistently high
performers. We used the human body as a whole-organisation metaphor to explain that
a symbiotic relationship exists between the ‘hard’ structural conditions and the ‘soft’
human systems. How well the two are interfaced and balanced determines the energetic
‘buzz’ of the organisation and its capacity to cope with the unexpected and manage
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change. To achieve this, organisations need to gain the necessary insights and critically,
stakeholder buy-in on how to achieve an appropriate level of energy for effective
performance. We have developed and carried out initial testing of an Energy Diagnostic.
The next phase of our project relates to the question of how we can achieve a level of
excellence that is appropriate for our own organisational context. We aim to complete
our research by investigating the organisational conditions essential for sustaining
energy. We will then pilot test and validate the complete EPO diagnostic with a view to
helping managers develop an informed, holistic strategy for organisational project
excellence.
The object of the completed EPO Diagnostic is to help organisations discover:
• How organisation can support individuals to contribute their knowledge
and insight?
• How can we do it in a way that engages and motivates people to be part of
the solution?
We envisage that findings and conclusions from the EPO Diagnostic will enable senior
managers to make holistic, evidence-based decisions and choices about how to achieve a
level of excellence that is right for their organisation. The diagram below shows our
vision of a 2-step diagnostic.
Purpose of each stage of the diagnostic project:
 Energy Diagnostic - to assess the energy of the individuals involved in delivering
change using a structured questionnaire and by aggregating this to get an indication
of the spread of organisational energy and locate ‘hot’ or ‘cold’ spots;
 Structural Conditions Diagnostic - to identify from the community, the structural
conditions perceived as either positively or negatively impacting personal efforts in
delivering the project successfully and their suggestions for making further
improvements / minimising the ‘friction’;
 EPO Diagnostic – to analyse findings from the Energy and Structural Conditions
Diagnostics for insights on how to reduce ‘friction’ and unblock the energy channels
(allowing organisations to prioritise their investment in capability development).
 Capability Improvement – Managers to evaluate option and prioritize their strategy
for implementing chosen interventions that will increase and maintain high energy
project performance.
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As stated previously, this is ongoing research by the authors and associates. The
progress to date is shown below together with areas where the authors are seeking
support.
Where we are now and support required
Energy
Diagnostic
 Initial testing has been completed with senior PPM community leaders
 Two major corporates have tested at the end of 2013
 Further testing and enhancement to the Energy Diagnostic are
underway
Structural
Conditions
Diagnostic
 Underlying Structural Conditions model representing the organisation
and key relationships is under development
 Diagnostic structure is partially complete
 Organisations within which we can test the Structural Conditions
Diagnostic are being sought
EPO
Diagnostic
 EPO Diagnostic will be designed following the successful testing of the
Structural Conditions Diagnostic
Strategy for
capability
improvement
 A generic framework is under development (including a suite of
potential interventions) which will help deliver the improvements
identified by the organisation
7. BUSINESS SIGNIFICANCE
This white paper is part of a broader research project by the authors in this critical area.
With the importance of successful strategy delivery becoming a government minister
and C-suite level priority; it is important that the PM world responds by providing
holistic and robust approaches to the development of this critical organisational
capability. We believe the EPO Diagnostic can play a part in informing business leaders
of the underlying issues their organisation faces in reaching and sustaining high
performance.
From the beginning of the research, we have been focused on achieving practical
outcomes that can be of direct use to organisational leaders and the PPM Community.
These key objectives are identified below together with our anticipation on the way in
which they will be met.
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What we wanted to achieve How we achieved it
Identify the impact on individuals of their
involvement in change (through direct or
indirect involvement in projects / programs)
Introducing the concept of Individual Energy and the Energy
Diagnostic Tool to assess this impact
Identify the organisational factors which
impacts the individual and in turn the
organisation (both +ve & –ve)
By considering the Organisation as a Human Body, introduced a
Structural Conditions Diagnostic to capture individual
perspectives across a broad range of organisational factors
(and by combining gaining an organisational perspective)
Identify how the individual (and in turn the
organisation) is impacted by these
organisational factors
Through the combination of the above into the EPO
Diagnostic, we will gain insight into the impact of particular
factors on the individual and in turn the organisation
(supported by interviews and workshops)
Take advantage of knowledge held by
individuals and engage them in identifying the
underlying problems and potential solutions
thereby obtaining their collective buy-in and
support
Through asking appropriate questions, built into both
Diagnostics, draw on their experience and insights to shape &
deliver the necessary improvements
Identify how to best deploy the wealth of PPM
tools at our disposal (including the Best
Management Practice suite)
As part of the Structural Conditions Diagnostic, PPM, as one
of a number of perspectives, will be explicitly assessed and
improvements identified by the community (including use of
the BMP suite) where thought to be a priority
It is our intention that the completed EPO Diagnostic complements the Portfolio,
Programme, and Project Management Maturity Model (P3M3), a revised version of
which will be issued in the first half of 2014. P3M3 analyses the balance between the
process, the competencies of the people who operate it, the tools that have been
deployed to support it and the management information used to manage delivery and
improvements. P3M3 focuses on 8 Perspectives which exist across the 3 models
(project, programme and portfolio) and are assessed at all five maturity levels.
Perspectives are one or more typical processes grouped together, namely
Organisational Governance, Management Control. Benefits Management, Risk
Management, Stakeholder Management, Resource Management, Commercial
Management and Finance Management.
The EPO Diagnostic will take a broader perspective looking at the overall organisational
and inter-organisational context. As well as treating P3M as an “entity” (likely including
similar perspectives to those identified above within P3M3) but also extending to
include in equal measure how each of the following impacts the delivery of change:
 the structure and functioning of the Executive Body
 the relationship with the key organisational functions such as HR, Finance and
Information Management / Technology
 type and quality of relationship with external customers and key stakeholders
 commercial and contractual relationships with suppliers and partners.
It is intended that professionals from other functions are equally represented during the
completion of the Diagnostic to ensure that a broader organisational context is obtained.
The diagnostic, and resulting improvement planning is therefore not from a purely
project management perspective but from the broader organisational perspective of
helping people focus their energies to where many of the underlying challenges exist.
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8. REFERENCES
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Measuring Business Excellence, 11(3), 69-78.
Spreitzer,G., Sutcliffe, K., Dutton,J., Stonenshein, S. and & Grant, A.M. (2004). A socially
embedded model of thriving at work. Organization Science, 16, 537-549.
END

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Thinking differently – Introducing the concept of the energised projects organisation

  • 1. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 1 © Cranfield and Team Animation White Paper February 2014 Thinking differently – Introducing the concept of the energised projects organisation. “Managers do projects but they don’t feel them” A Senior Project Manager Authors: Liz Lee-Kelley, Cranfield Business School and Donnie MacNicol , Team Animation Ltd
  • 2. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 2 CONTENTS 1. Executive Summary 2. Overview: The Project Management Profession 3. Current Thinking: Failure-Success Paradigm 4. Thinking Differently: Organisational Energy 5. Alternative Paradigm: The Energised Projects Organisation 6. The Next Phase 7. Business Significance 8. References
  • 3. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 3 1. EXECUTIVE SUMMARY Given the stream of bad news on public and private sectors projects, we argue that it is time for the project community to think differently. The current failure-success paradigm is inadequate for creating a sustainable, high-performing organisation capable of meeting the APM’s vision that ‘all projects succeed’. Our ‘thinking differently’ project aims to uncover an alternative diagnostic that can take a whole-organisation view of projects. We began by looking beyond the project management literature. The notion of ‘energy’ in organisations as an important and renewable resource provided the impetus for the paper. Successful organisations are those that can channel the collective energy to create an organisational ‘can-do’ climate. In this paper, we present an overview of the project management profession, highlight the shortfalls of the existing failure-success paradigm, discuss the energy literature and its role in organisations and introduce the idea of an energised projects organisation. We use the human body metaphor to explain the importance of addressing both the ‘hard’ structures which provide the organisation with a framework for practice and governance, and ‘soft’ human efforts which are often felt or observed as a certain, ‘je ne sais quoi’ or energy. We pilot tested the energy concept with two large project-based organisations. Further reading and soundings with a number of business leaders, project organisations, professional bodies and senior project professional indicated that collective energy may be an alternative paradigm for explaining the intensity, pace and resilience of a projects-based organisation. The next phase of our project is to complete our research by investigating the organisational conditions essential for sustaining energy. We will then pilot test and validate the complete energised project organisation diagnostic with a view to helping managers develop an informed, holistic strategy for organisational project excellence.
  • 4. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 4 2. OVERVIEW The Project Management Profession Projects and programmes (hereafter referred to as ‘projects) have become the main delivery or change mechanism in large and small organisations, underlining the rise of project management as a discrete profession in the UK and abroad. Membership of the Association for Project Management (APM) now stands at 20,500. Many who work for multinationals may be members of more than one professional body. The US Project Management Institute reports a global membership numbering over 700,000 and the International Project Management Association (IPMA) is a Federation of 55 professional bodies around the world, of which the APM is a leading member. Attention of the professional bodies has been on setting technical and administrative standards through their Body of Knowledge (BOK) and special interest publications on specific areas of excellence. Expressed purpose, clear scope, structured planning and control, exemplary leadership, systematic risk, information and quality management are common topics in the various BOKs and practice frameworks. Other recent recommendations include introducing gateway processes for increased governance and assurance. We observed from our visits to institutions and interactions with a broad range of large and small organisation a shared will to institutionalise and standardise project management practices across the piece. Some of the larger organisations have developed, or are looking to create, their own Centre of Excellence or Project Academy. Contract organisations working on major projects are also increasingly expected to provide suitably qualified or accredited project personnel. These market and institutional forces have given rise to a global community of ‘like-minded’ project managers, trainers and consultants keen on professional endorsement and a shared drive for better performance. 3. CURRENT THINKING Failure–Success Paradigm Despite the standards and best-practice guides, including Martin Cobb’s assertion (1995) that ‘we know why projects fail, we know how to prevent their failure…’ success has been elusive for many in both the pubic and private sectors. The media continue to report large and small projects being delayed, over-spent or whose outcomes fall short of user needs or expectations. Failures in the public sector appear to be more prevalent than the private sector largely because of their stringent reporting requirement. The size and value of projects (which often involve future and emergent technologies) also mean that losses are more striking. The table below shows five UK projects (amongst many) reported to have failed to deliver their expected ‘value’ i.e. the costs shown were believed to deliver little or any value to the organisation.
  • 5. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 5 Project or Program Organisation c. Lost ‘Value’ The Digital Media Initiative British Broadcasting Corporation £125M Mobile Information Programme (MIP) Home Office £102M FiReControl Fire Services £469M C-NOMIS (Integrated Offender Management System) National Offender Management Service £234M Automated Supply-Chain Management System Sainsbury’s £260M The stream of bad news gives the impression of a profession struggling to develop the necessary capability to deliver projects successfully, making the need to change public perception both real and urgent. Hence, the many attempts by academics and practitioners to identify the common causes of failure and the common solutions to fix them. Realising that a focus on failure might be too negative and uninspiring, the Cabinet Office (2009) issued a list of the Ten Causes of Confidence in Major Projects and Programs (below) to encourage the project community to emphasise success. The APM has also revised its vision to that of ‘all projects succeed’ and recently commissioned a research project on discovering project success factors. It appears that the next ‘holy grail’ is the quest for a comprehensive list of critical success factors (CSFs). The blueprint of the failure-success paradigm is classical problem-solving (diagnosis, action selection and implementation). If something is identified as bad or ineffective, stop doing it. Find another way. If something is seen as a contributory reason for a project meeting its objectives, let’s do more of it or let’s take that as a lesson for other projects. If the positive or negative condition is persistent and long-lasting let’s incorporate solutions into the organisation’s standard planning, governance and assurance processes. We would argue that while it is psychologically more positive to
  • 6. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 6 emphasize success rather than failure, they are essentially opposite sides of the same coin. Both aim to plug practice-gaps. Many of the identified failure causes are really more outcomes or symptoms of failure. Even if we really know the ‘root causes’, we are still in danger of what Professor Roberto of the Harvard Business School calls the ‘Root Cause Trap’. Over focus on ‘fixing’ the identified causes without acknowledging their inter-relationships or unintended secondary effects can be a risk in itself. In practice, managers would scrutinise processes and problems in minute detail and then attempt to build a wall of rules and procedures to replicate the conditions for success and reduce the chances of failure. Over time many walls are erected which are patched together and presented as a coherent practice framework. Similarly, success tends to reflect the consequences of apparent sound practice. As with failure any list of success factors will be in generalised form, divorced from their originating circumstances. If we accept the principle that projects are context specific with unique requirements and that lessons from past events are useful as guidance but cannot guarantee future performance, then the failure-successful paradigm is unlikely to provide practitioners and their organisations the answer to their quest for consistent performance. Besides, the debate on what constitutes failure and success is on-going. We often hear and read about the importance of prioritising and selecting the right project and the need to have the right practice framework. Along with the growing consensus that projects are part of a larger environment involving complex interactions with other functions, suppliers and partners, there is also increasing talk about the need to develop the right people and select the right team for any project. But the focus of management remains about ‘getting the job done’. A manager explains, “We are not into innovation or doing things better, we are into compliance. People are important only as a resource for the doing bit”. The comment may be unfair or jaundiced but it illustrates the low attention given to people effect. Human factors has only recently gained more prominence in in the professional agenda, as exampled by the elevation of ‘people’ as a second chapter in the 6th edition of the APM BOK. Likewise, the 5th edition of the PMI BOK now includes ‘stakeholder management’ as a new 13th chapter. Although their mantra is about engagement, the language and toolkit focus indicate a mind-set that continues to believe decisions are rational and people are a resource that can be manipulated and controlled through structured organisational design and management tools. Noticeably absent is any substantive reflection on the identified interpersonal-skills in different contexts or the dynamics between people and institutional structures. The conclusion by the PWC Saratoga (2011/12) US Human Capital Effectiveness Study that responsibility, accountability and trust are major issues in organisations has significance for the project profession because making ‘all projects succeed’ requires commitment and collaboration. This may not be readily given. Behavioural research on choice has long shown that people use sensory cues to diagnose their surroundings and in situations of imperfect knowledge or weak cues, people tend to ascribe motives (e.g. Brunswick, 1947; Hammond, 1955). The seminal work of Herbert Simon (1945) also found that people feel constrained by their role or position and by the structure and norms around them in the organisation. The low interest in people in practice means that we are surprised when responses and behaviours are ‘irrational’ (i.e. emotional or instinctive).
  • 7. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 7 Given the continuing reports of struggling projects, what is clear is that our current thinking is not working. It’s time for us to stop and ask, is there another way? 4. THINKING DIFFERENTLY Our discussion above suggests that the current failure-success paradigm will have limited impact on achieving organisational excellence. In fact, it can encourage what we would term as two ‘organisational evils’:  the tendency to rely on techno-centric fixes  the tendency to overlook human effects Addressing one ‘evil’ without considering the other produces a partial solution that is counter to the very idea of integrative management that is being promoted here in the UK and across the Atlantic (APM BOK, pg. 91; PMI BOK, pg 63).. We should heed Einstein’s advice to think differently. This involves questioning our existing assumptions and adopting a different lens for the problem, namely: We should not be asking ‘what are the factors for success or failure?’ in order to derive a list of general characteristics against which managers can attach fixes or best-practice solutions. Without understanding we cannot define excellence, let alone achieve it. Hence, we should be asking:  Why do some organisations outperform others consistently?  What does a high performing organisation look like?  How do we achieve a level of excellence that is right for our organisation? We should be clear that integrative management is more than joined-up processes. Standards, policies, reporting hierarchy and processes are only the structural conditions to support human activity. Understanding how much effort individuals are willing to invest to help their organisation succeed is rarely taken into account in our decisions. To make a difference, we should be taking a more holistic approach that accounts for both ‘hard’ structures and processes and ‘soft’ people aspects .
  • 8. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 8 Finally, as traditional management thinking has so far failed to deliver project excellence, we should look beyond the profession’s collective wisdom and published literatures to other disciplines and domains for alternative paradigms that can help us explore what is required to create a sustainable, high-performing organisation capable of meeting the APM’s vision that ‘all projects succeed’. Organisational Energy Following our argument above for the need to think differently, the first task of our ‘thinking differently’ project was to establish what is required to create a high performing organisation that can deliver projects repeatedly. We scoured different literatures to help us visualise such an organisation and came upon the notion of energy as an important and renewable resource in organisations. The concept was first raised back in the 1980s, receiving little attention until recently when Schippers & Hogenes (2011) attempted to link a diverse set of literatures (e.g. Bruch & Ghoshal; 2003; Dutton, 2003; Spreitzer, Sutcliffe, Dutton, Stonenshein & Grant, 2004) to suggest that harnessing employee energy is a worthwhile management activity. Energy may be defined as the extent to which people have mobilised their cognitive, emotional and behavioural potential (e.g. Bruch and Ghoshal, 2003; Dutton, 2003). It is the capacity of people for vigorous activity, their sense of curiosity, enthusiasm, liveliness, vitality and stamina. Energy may be generated from internal motivation or interest in the job or inspired by others within the organisation or one’s social network (Cross, Baker & Parker, 2003; Quinn and Dutton, 2005). The mental state of a person who is fully immersed can be felt by others who interact with them, often sweeping others along in a positive or negative way (Cross et al, 2003; Cross, Linder and Parker, 2007). Cross et al (2003) call high energy employees ‘energizers’. They are the ‘catalysts’ for action in others. Low energy employees, on the other hand, have a de- energising effect. They create mental, emotional and physical stress in themselves and others. Being tacit and invisible, its presence may be observed from the way people work, face and solve problems. Organisational energy reflects the collective force of managers, employees and their interactions. The apparent ‘buzz’ or apathy felt in the organisation is often described as its climate to distinguish it from the more enduring and harder to change organisational culture. Small group research has already shown that high performing teams have an inexplicable energy. Cole et al (2012) found that the intensity and quality of personal energy flows (seen and felt by others as enthusiasm, passion and drive) are infectious and transforming. The Energy Matrix below (reproduced with the kind permission of Professor Vogel) relates the different types of energy to their level of intensity and quality. Transported to the workplace, individual energy becomes the ‘fuel’ of an organisation (Dutton, 2003) and successful organisations are those that can channel the collective energy for effective performance (Casullo, 2012).
  • 9. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 9 The Organizational Energy Matrix Energy researchers have also found that organisations move back-and-forth through different energy zones. Bruch and Ghoshal’s Passion, Comfort, Resignation and Aggression labels are subsequently portrayed as Productive, Comfortable, Resigned Inertia and Corrosive by Bruch and Vogel (2011) in their book, Fully Charged. These correspond with that used in the Management of Portfolio guide (below). The first two zones display low quality, low intensity organisational energy. Those in the comfort zone are trading on their past successes while those in the resigned zone may be facing intense change or competition and struggling to find their way forward. For different reasons, both are in a state of organisational inertia. Unlike those in the productive (passion) zone who feel pride and joy in their work, there are intense and often negative emotions for organisations in the corrosive (aggression) zone. Senior management may be driving employees to achieve this state as they value a workforce that thrives on competitive aggression. Oracle Corporation’s mantra of “It’s not good enough to win; all others must lose” reflects this view. In addition, just as excessive pride can lead to resistance to change and inflexible responses, organisations in a persistent state of change or high aggression can lead to burnout. Those who are reliant on structured channelling of staff efforts risk stifling creative thinking and willingness to take ownership of projects. People in the comfort zone are in tune and aligned with the organisation and its mission. However feeling too comfortable can create complacency and remove the drive for innovation and change. Returning to our critique of the management preference for technocratic fixes and low focus on people effects, we see organisational energy as a possible alternative paradigm to current failure-success thinking. Authors such as Cameron & Caza (2004), Cole et al, (2012) and Cross et al (2003) have successfully tackled the challenge of addressing concerns about the lack of valid and reliable instruments to measure individual energy and the assumed linked between individual and collective energy. They demonstrated in influential business journals such as Harvard Business Review and MIT Sloan Management Review that it is possible to map the sources of new ideas and innovative actions back to individual ‘energizers’ and how de-energizing attitudes and behaviours of certain individuals can dampen overall enthusiasm, passion and ultimately commitment. (e.g. Bruch and Ghoshal, 2003; Bruch and Vogel, 2011; Cross et al, 2003).
  • 10. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 10 5. AN ALTERNATIVE PARADIGM The Energised Projects Organisation When we talk about the energy of an organisation, we are referring to the collective perceptions, social interactions and physical efforts of the individuals within it. Hence we cannot but notice how some companies just seem to exude positive energy. Ideas appear free flowing and employee motivation and job satisfaction are high. Change is embraced and supported by employees and the organisational structures and processes. Conversely, in some organisations the atmosphere or climate is often described as negative or even toxic. While few organisations are aware of the potential of organisation energy Apple, GE, and Cartier are reputed to have harnessed the energies of their leaders and workers and channelled them as an infectious spirit throughout the organisation. In spite of their company size, these companies have maintained an entrepreneurial can-do spirit, allowing risk-taking and rewarding performance. GE even used the term ‘boundarylessness’ to describe their strategy to encourage focus, self- motivation and synchronised effort (Casullo, 2012). The Cabinet Office has also made multiple references to the energy concept in its Management of Portfolios (MoP) Guide. These include the Portfolio Management Cycles and Model (shown respectively below) and also reference to the Organizational Energy Matrix and underlying thinking. Organizational energy is depicted here as an essential catalyst for effective portfolio management. It highlights the dynamic nature of the project and programme world with organizational energy providing the energy to power the cycles and ultimately drive the design and delivery of projects and programmes. However, there is little specific guidance on how to harness and optimise that energy. It seems that the importance of organizational energy is understood by those at the heart of defining key areas of the
  • 11. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 11 professions knowledge but not how this can be translated into actual application by those responsible for improving project performance. Our project seeks to understand why and how some organisations are consistent high performers. In line with our argument for the need to integrate both the soft and the hard elements in an organisation, we are interested in the source and nature of different energies and how they can be identified and optimised in the projects organisation. In order to help us visualise the ebb and flow of energy states, we use the human body metaphor. Its wellbeing and ability to function at a high level is dependent on the extent to which the physical and non-physical elements within it are in harmony. In the organisation, this is equivalent to the relationship between the structural conditions (e.g. strategic vision, reporting structures, policies, processes, methodologies etc.) and the energy of employees. Projects, like the human body, are constantly bombarded by forces outside their direct control. How well an organisation can cope with the encroaching environment (i.e. political, economic, social, technical, legal and environmental forces) will depend on the match between the human and structural systems. We envisage that an energised projects organisation (EPO) is like a healthy and fit human body with a high capacity to resist, react and recover from infections. The key to organisational resilience is its capability for encouraging a ‘can-do’ energy from individuals and teams who are willing to work hard(er) and feel that they have the capacity to respond to internal and external demands. But we should be aware of the risk of burn-out (apathy). The first stage of our project is to examine the energy concept in projects organisations. We work on the premise that organisations, and the people in them, know more than they realise about how to improve practices around the delivery of change. We want to see how project personnel perceive and respond to the enabling and constraining organisational conditions around them. We are aware from the literature that energy levels can change with circumstances so our energy questionnaire is designed to locate the ‘hot’ and ‘cold’ energy spots under different project conditions, i.e. for ‘when things are going well’ and ‘when things are not going well’. This is a novel approach that will allow managers to ‘feel the project’ from the perspective of those doing it so that any strategy for remedy or intervention will be designed with the broader consequences in mind. 6. THE NEXT PHASE We have shared our views about the need to think differently by critiquing the prevailing paradigm. We suggest that organisational energy can be an alternative lens for the project community to understand why some organisations are consistently high performers. We used the human body as a whole-organisation metaphor to explain that a symbiotic relationship exists between the ‘hard’ structural conditions and the ‘soft’ human systems. How well the two are interfaced and balanced determines the energetic ‘buzz’ of the organisation and its capacity to cope with the unexpected and manage
  • 12. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 12 change. To achieve this, organisations need to gain the necessary insights and critically, stakeholder buy-in on how to achieve an appropriate level of energy for effective performance. We have developed and carried out initial testing of an Energy Diagnostic. The next phase of our project relates to the question of how we can achieve a level of excellence that is appropriate for our own organisational context. We aim to complete our research by investigating the organisational conditions essential for sustaining energy. We will then pilot test and validate the complete EPO diagnostic with a view to helping managers develop an informed, holistic strategy for organisational project excellence. The object of the completed EPO Diagnostic is to help organisations discover: • How organisation can support individuals to contribute their knowledge and insight? • How can we do it in a way that engages and motivates people to be part of the solution? We envisage that findings and conclusions from the EPO Diagnostic will enable senior managers to make holistic, evidence-based decisions and choices about how to achieve a level of excellence that is right for their organisation. The diagram below shows our vision of a 2-step diagnostic. Purpose of each stage of the diagnostic project:  Energy Diagnostic - to assess the energy of the individuals involved in delivering change using a structured questionnaire and by aggregating this to get an indication of the spread of organisational energy and locate ‘hot’ or ‘cold’ spots;  Structural Conditions Diagnostic - to identify from the community, the structural conditions perceived as either positively or negatively impacting personal efforts in delivering the project successfully and their suggestions for making further improvements / minimising the ‘friction’;  EPO Diagnostic – to analyse findings from the Energy and Structural Conditions Diagnostics for insights on how to reduce ‘friction’ and unblock the energy channels (allowing organisations to prioritise their investment in capability development).  Capability Improvement – Managers to evaluate option and prioritize their strategy for implementing chosen interventions that will increase and maintain high energy project performance.
  • 13. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 13 As stated previously, this is ongoing research by the authors and associates. The progress to date is shown below together with areas where the authors are seeking support. Where we are now and support required Energy Diagnostic  Initial testing has been completed with senior PPM community leaders  Two major corporates have tested at the end of 2013  Further testing and enhancement to the Energy Diagnostic are underway Structural Conditions Diagnostic  Underlying Structural Conditions model representing the organisation and key relationships is under development  Diagnostic structure is partially complete  Organisations within which we can test the Structural Conditions Diagnostic are being sought EPO Diagnostic  EPO Diagnostic will be designed following the successful testing of the Structural Conditions Diagnostic Strategy for capability improvement  A generic framework is under development (including a suite of potential interventions) which will help deliver the improvements identified by the organisation 7. BUSINESS SIGNIFICANCE This white paper is part of a broader research project by the authors in this critical area. With the importance of successful strategy delivery becoming a government minister and C-suite level priority; it is important that the PM world responds by providing holistic and robust approaches to the development of this critical organisational capability. We believe the EPO Diagnostic can play a part in informing business leaders of the underlying issues their organisation faces in reaching and sustaining high performance. From the beginning of the research, we have been focused on achieving practical outcomes that can be of direct use to organisational leaders and the PPM Community. These key objectives are identified below together with our anticipation on the way in which they will be met.
  • 14. The Energised Projects Organisation White Paper 7 Feb 2014 v1.0.docx © Cranfield and Team Animation 14 What we wanted to achieve How we achieved it Identify the impact on individuals of their involvement in change (through direct or indirect involvement in projects / programs) Introducing the concept of Individual Energy and the Energy Diagnostic Tool to assess this impact Identify the organisational factors which impacts the individual and in turn the organisation (both +ve & –ve) By considering the Organisation as a Human Body, introduced a Structural Conditions Diagnostic to capture individual perspectives across a broad range of organisational factors (and by combining gaining an organisational perspective) Identify how the individual (and in turn the organisation) is impacted by these organisational factors Through the combination of the above into the EPO Diagnostic, we will gain insight into the impact of particular factors on the individual and in turn the organisation (supported by interviews and workshops) Take advantage of knowledge held by individuals and engage them in identifying the underlying problems and potential solutions thereby obtaining their collective buy-in and support Through asking appropriate questions, built into both Diagnostics, draw on their experience and insights to shape & deliver the necessary improvements Identify how to best deploy the wealth of PPM tools at our disposal (including the Best Management Practice suite) As part of the Structural Conditions Diagnostic, PPM, as one of a number of perspectives, will be explicitly assessed and improvements identified by the community (including use of the BMP suite) where thought to be a priority It is our intention that the completed EPO Diagnostic complements the Portfolio, Programme, and Project Management Maturity Model (P3M3), a revised version of which will be issued in the first half of 2014. P3M3 analyses the balance between the process, the competencies of the people who operate it, the tools that have been deployed to support it and the management information used to manage delivery and improvements. P3M3 focuses on 8 Perspectives which exist across the 3 models (project, programme and portfolio) and are assessed at all five maturity levels. Perspectives are one or more typical processes grouped together, namely Organisational Governance, Management Control. Benefits Management, Risk Management, Stakeholder Management, Resource Management, Commercial Management and Finance Management. The EPO Diagnostic will take a broader perspective looking at the overall organisational and inter-organisational context. As well as treating P3M as an “entity” (likely including similar perspectives to those identified above within P3M3) but also extending to include in equal measure how each of the following impacts the delivery of change:  the structure and functioning of the Executive Body  the relationship with the key organisational functions such as HR, Finance and Information Management / Technology  type and quality of relationship with external customers and key stakeholders  commercial and contractual relationships with suppliers and partners. It is intended that professionals from other functions are equally represented during the completion of the Diagnostic to ensure that a broader organisational context is obtained. The diagnostic, and resulting improvement planning is therefore not from a purely project management perspective but from the broader organisational perspective of helping people focus their energies to where many of the underlying challenges exist.
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