Project managers are in for some big changes. Coming in on schedule and within budget is all well and good--but it's not enough.
That's been the running mantra for a while now, but it seems to be gaining even more traction as Harold Kerzner, PhD, explained in the first-ever closing session at a PMI global congress in North America.
"Time and cost used to drive all decisions," said Dr. Kerzner, senior executive director, project management at the International Institute for Learning Inc. "Now we're saying, 'Wait a minute, are we providing value?'"
Without that, the project will be axed.
"If management doesn't see how a project will deliver a value, that project will be canceled even if it's meeting time and budget constraints," he said.
Not all constraints have equal value, Dr. Kerzner said.
That's quite a mind shift for project managers--and it's going to take a whole new skill set.
Indeed, Dr. Kerzner boldly predicted earned value management will be "obsolete very shortly," upstaged by value measurement methodologies that consider intangibles such as goodwill or reputation.
And while a mastery of technical knowledge use to suffice, that's now considered "old school."
"Project managers must understand business," he told the crowd.
They will also need an understanding of politics, culture/religion, stakeholders and people. And Dr. Kerzner predicted a new wave of certifications in complex projects, virtual teams, cultural differences and morality and ethics.
Project managers who go in armed with those skills will find a receptive audience in the executive crowd.
"The biggest change in the last several years has been in senior management support of project management," he said. "Senior management no longer views project management as a career path. It is now viewed as a strategic competence necessary for survival of the company."
Do you agree with Dr. Kerzner? Are you seeing increased demand for business understanding--or should project managers stick to what they do best?
That's been the running mantra for a while now, but it seems to be gaining even more traction as Harold Kerzner, PhD, explained in the first-ever closing session at a PMI global congress in North America.
"Time and cost used to drive all decisions," said Dr. Kerzner, senior executive director, project management at the International Institute for Learning Inc. "Now we're saying, 'Wait a minute, are we providing value?'"
Without that, the project will be axed.
"If management doesn't see how a project will deliver a value, that project will be canceled even if it's meeting time and budget constraints," he said.
Not all constraints have equal value, Dr. Kerzner said.
That's quite a mind shift for project managers--and it's going to take a whole new skill set.
Indeed, Dr. Kerzner boldly predicted earned value management will be "obsolete very shortly," upstaged by value measurement methodologies that consider intangibles such as goodwill or reputation.
And while a mastery of technical knowledge use to suffice, that's now considered "old school."
"Project managers must understand business," he told the crowd.
They will also need an understanding of politics, culture/religion, stakeholders and people. And Dr. Kerzner predicted a new wave of certifications in complex projects, virtual teams, cultural differences and morality and ethics.
Project managers who go in armed with those skills will find a receptive audience in the executive crowd.
"The biggest change in the last several years has been in senior management support of project management," he said. "Senior management no longer views project management as a career path. It is now viewed as a strategic competence necessary for survival of the company."
Do you agree with Dr. Kerzner? Are you seeing increased demand for business understanding--or should project managers stick to what they do best?
There are compelling arguments both for and against the PM shift from cold, hard data (EVM)/triple constraint) to intangibles (goodwill, value). Can a project manager assume that throughout their project life cycle, the political, social, financial, and competitive landscape remains static? Do organizations provide ways to capture and measure these variables, or do project managers possess or know how to obtain this information to facilitate measuring project success or failure? Are organizations structured sufficiently to enable a project manager to be successful? Should the business and project decision process be inseparable? At initiation only or throughout the project life cycle? Would a project manager find it advantageous to understand both? Would it help or hinder their own value as a project manager and their viability?
What Dr. Kerzner is referring to in my opinion is the need for proper IT governance/ project portfolio management. As project managers we do not want to do a great job of delivering a project that has negligible or zero business value. That is where establishing operational necessity and/or ROI is a prerequisite in the form of a business case.
Whilst in agreement with the broad direction of Dr. Kerzner's thinking—too many projects trundle on merrily with no real regard for the purpose of their being, their "Why?"—my concern would be the intangible nature of business value.
A focus on delivering business value at the expense of the "traditional" metrics of time and cost could be a mandate for poor project controls. Couldn't it be said that the discipline of project controls—such as earned value management—are exactly the things that have given project management the credibility to talk at executive level? To abandon these, however noble the ambition, may be to the overall detriment of project management.
A thought-provoking article. Thank you!
I think we may be drifting a bit away from "project" management here. With all due respect to Dr. Kerzner (and I use his text in my class instructions, just btw), but to me, project management is just that: managing the project objectives for successful completion. The reason that "within schedule and budget" have become such a mantra is that those have traditionally been defined as the prime objectives of successful project completion. Perhaps other issues should be considered as important, such as social responsibility, environmental care, etc. But that is not a project management issue, in my humble opinion.
What I think Dr. Kerzner is describing is a shift in company goals, which should be reflected through portfolio and program management, but not project management. His question of whether we are providing value: That is already answered by the project charter. Once the goals and objectives are established, one doesn't need to ask, within the project management arena, whether we are providing value. If the market, corporate or customer's needs change, possibly putting the value of the project into question, that is not a project management issue, but one of portfolio or program management.
I think a project manager needs to understand business, politics, economics, ecology, etc., only in so far as the project manager is involved in establishing or managing the company's programs & portfolio or helps in establishing company goals. Within the boundaries of a project, these kinds of skills (except for politics) are of limited benefit or need UNLESS those skills are required to meet the project goals because they are part of the project charter.
The project charter has already made the business decisions. Recurring review of project completion should be done within the boundaries of the project charter and company goals.
Now, don't get me wrong, I think any of that knowledge is useful for a project manager, as well as the rest of the project team. I just suggest that we keep the issue in the proper perspective.
P. S. Perhaps what we have here is a pointer for career development for project managers as they progress from managing projects to managing programs and then rising to corporate strategic management, lol.
Earned Value Management Obsolete? That is a bold statement. I must respectfully disagree with this. Time and cost are the simplest tangibles to measure performance. Keep it simple will never be obsolete.
At the same time I agree with Dr. Kerzner that the "weight" of EVM will be diminished by intangibles. The problem with measuring intangibles is complexity. The convergence of culture, computers and creativity will increase our ability to approximate "Intangible Value Management." I think that EVM can be useful to measure "Intangible Value Management."
For example in October 2009 on the social network Twitter the meme #beatcancer was the fastest spreading social idea according to Guinness. Donors gave 1 cent for every mention of #beatcancer in 24 hours on the social network Twitter. They raised $70,000 in 24 hours.
So Time and Cost provided incentive and validation of an Intangible Concept "support to Cure Cancer." EVM won't become obsolete, we just need to use it as the great tool that it is.
Anyone know where to get his slide deck from the PMI congress closing speech that he gave? I didn't know i had to take notes and it doesn't appear to be on the congress website when I'm logged in.
This is very relevant now.
"Project Managers must understand the business"
Didn't it depends on what kind matrix organisation you are in? For eg: in a week-matrix organisation, the PM will not have much of power and control.
I would like to say in response to what Dr. Kerzner is speaking of here in this article is of great importance and interest to me. I am currently attaining my degree in project management and I see where the need for business and its structure is very significant to project management.
I realize that in my classes the students are being taught that cost effectiveness and time is what will make it happen on a projects success. I have never agreed with this concept entirely. Mainly because I am a people person and I believe that you have to value what, who, where and all other sorts of entity in which you will be working with. If project managers are not taught these skills then they are truly limiting their selves and resources.
We should understand that we are managing regardless of what is given to us to manage. In management we have to be taught how to manage effectively. In business management course a person will learn traint, have insight and other addition concepts that will attribute to the success of business relating to people, politics and the economy. Project management should not be undermined it its clear understanding of what "business" is for their career.
Dr. Kerzner is the leading thought leader in project management and has been so for some time. He is correct; we are no longer dominated by the familiar triple constraint -- we must consider other factors as he outlined. Are our projects and programs contributing to our organization's strategic goals and objectives? Are we doing more than just meeting ROI? What are the benefits of our work? Are we promoting innovation and transformation not only for our own organizations but also for our customers? We need to change the existing paradigms as to how we measure success in projects.
I commend Dr. Kerzner as always for causing each of us to think in new directions in this exciting field.
Dr. Ginger Levin, PMP, PgMP