I mentioned in my last blog about the concern over a slowing of the supply of money and its impact on fixed capital investment (FCI). There is something else about the economic crisis that is bothering me... for now, let me call it the giant global distraction. I know that sounds strange to call the current global economic crisis a "giant global distraction," but the fact is that economic cycles are, well, cyclical, and it will get better. Assuming we go into a global recession (HELLO!), we could be in for 16-20 years of sluggish economies... or we could come out of it as we did in the 1990s within a couple of years (...well, maybe 4-5 years).
Either way, we end up distracted from critical global issues that we face. Global sustainability, for example, is not a transient issue. It is real need, and it faces us everyday. Food shortages, problems in water supplies, finding cures for AIDS and cancer, education... all critical issues to the quality of life in the future. We cannot get distracted from solving the associated problems. And, yet, I can guarantee that our focus will start to narrow, inexplicably to... yep, you guessed it... cost management. Risk management may very well shift to risk aversion, and creativity and innovation will slow down. Timidity will prevail. Look back over the last 50 years and tell me it didn't happen.
By the way, I am not delusional. We need more prudent financial management in the markets... no doubt at all. I know the economic crisis is real and powerfully impactful throughout the world. And, I am well aware that cost management and risk management are critical to successful projects, especially large complex projects. But if we are so distracted that we fail to consider the management of value, or worse, not look for the opportunities to project success when managing risk, then we will see a regression of prosperity and the gains we have made in solving the problems associated with global sustainability. And worse, we won't tap the unlimited potential of our PM colleagues around the world.
I am reminded of a great quote that I heard two weeks ago at a Forbes Conference on Innovation out in
Yes, we need to innovate our way of it... we need to rely on project managers to use their creativity and innovation to get the job done, in spite of the economy. We have the potential... I have seen it in action throughout the world, with PMs solving crisis after crisis. In
Let's innovate out of the crisis, not hesitate and withdraw until we see the end of the crisis... let's get the job done now.
It is tempting in these times to look to regulating everything, cutting costs, going back to the way things were. We had a great run and it seemed to be working out (we even had time and capital to consider "fring issues"). Now is the time for reality, to realise that we were beyond our means and that we should return to what we know: regulate, cut costs, take no chances.
I think not, we have stretched the bounds of our possibilities (perhaps a little too far) but like a miner tunnelling for gold we must put in the required supports and work through to the next level.
We need to ensure that the supports are in place, that the risks are managed. We need then to take up the challenge of moving forward from our current position and for this we need leadership; for this we need the skills of project management.
We need to select projects for value, but we also need to be wary that we are not too conservative as
“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” (Colin Powell).
Dear Mr.Greg,
You have touched a sensitive topic of Global recession and that's a reality. Having been involved in Steel Sector, we were anticipating a slump, but not a downfall like this. This has started to spread its tentacles to all the industries and ultimately all the Infrastruture projects are affected.
No one can isolate from this ecomomic catastrophe and feel comfortable with the fact of facing the reality of the market.
These are indeed troubled times.We look at scenarios presented to us. Whatever I perceive of other industries are either from the media or heresay, which sometimes are biased/myopic.
I suggest PMI to group its members based on their current background and conduct a survey to bring out the impact of the recession. This canbe easily corroborated since all members of the same sector (for eg. Steel Sector) would give the similar picture.
This would facilitate PMI members to understand and prepare for the hardtimes.
If we apply the vital few concept, the high ROI projects will be less than 10% of the total conceived projects, and all other projects have become unviable at this juncture. It's the gloomier side for PMs in that perspective.
On the brighter side, all the Stakeholders are looking for strict adherance to Scope, Time & Cost and this has become a necessity. That brings in lot of scope for qualified PMs.
I am sure, the proposed survey can serve the purpose of Project community as well as the Industry to look forward to a better times.
Thanks
Best REgards,
Syed Ehsan
PMI member - EMEA Region
Dear Mr Balestrero
As an attendee and speaker at a number of the PMI congresses, I would like to say that the opening Key note speaches by you and Colin Powell this year were superb and probaly the best to date. As someone in project management for over 20 years it was good to be inspired.
One minor point I would like to make a small suggestion and request, is that in your 'thank you's' would it be possible to remember in future the superb organisation that is done by Jacque kardon and her team with the speakers, and also a small thank you too the speakers.
While it is a great privilage to speak at the PMI Congresses, it does take a lot of effort and commitment to produce the papers, and often costs in flying in to particpate ( I am from the UK and finance all of my own costs). At the end of the day without the speakers and the organisation there would be no Congress.
Kind regards
Liz Goodman PMP
This is an excellent perspective Greg. I truly hope that the collective "we" don't focus on cost-cutting at the expense of value creation. One of the wonderful things about portfolio management is the ability to understand which projects are delivering the most value.
You could make an assessment of the human capital at work on the lowest ROI projects and seek out higher returns elsewhere. In other words, kill the projects delivering least value and re-deploy those people on higher value projects.
If we cease innovating through our projects and maintain the status quo it's going to be a long, rough ride.
Here's a corollary: I hope organizations keep the people who are innovators and high-performers on staff. In times of cutting costs, some companies will look at their highest paid staff and decide that someone at a lesser pay scale can do the job. So they release decades of knowledge and expertise and put a satisfactory performer in the place of a star. It's the quickest way to kill innovation in a company.
Josh Nankivel
pmStudent.com