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Your Execs Need a Wake-up Call--Start the Conversation

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PMI's The High Cost of Low Performance 2014 reveals the major issues that organizations and leaders worldwide are facing. This year's Pulse research exposes a wide chasm between an organization's actual state and the state of success. Projects, including those focused on an organization's highest priorities--its strategic initiatives--are suffering. And while strategic initiatives are essential to success in today's increasingly complex business world, an alarming 44% of initiatives fail in implementation.

To remain competitive, organizations must focus on three critical areas:

  • People: Organizations must focus on the development of their talent and managing their people through rapid organizational changes that stem from new strategic initiatives. Furthermore, organizations need to ensure executive sponsors are in place to help drive these changes. 
  • Processes: Organizations must fully understand the value of project management and mature their project, program and portfolio management capabilities along with establishing and using standardized project management practices.
  • Outcomes: Organizations must continually focus on the outcomes of the intended benefits of their projects and programs by measuring and communicating the value of these benefits to the organization.  
The full 2014 Pulse of the Profession® report is available on PMI.org. Know what's keeping your executives up at night. What you'll learn will help you start a conversation with them on the importance and value of aligning project and program management with your organization's strategic goals.

The newest edition of the Pulse features feedback and insights from over 2,500 project management leaders and practitioners across North America; Asia Pacific; Europe, the Middle East, and Africa (EMEA); and Latin America and Caribbean regions.

Beat Communications Pitfalls

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When it comes to communications, organizations talk a big game -- but few get it right. And that's downright dangerous. For every US$1 billion spent on a project, 56 percent, or US$75 million, is at risk due to ineffective communications, according to PMI's Pulse of the Profession™ In-Depth Report: The Essential Role of Communications

The data also reveal that of the two in five projects that fail to meet business intent, half do so because of poor communications. Still, everyone likes to believe they're making their point -- completely oblivious that their intended audience didn't quite get the message. For example, the report found that while 60 percent of executive sponsors think they're clearly communicating how projects align with strategy, just 43 percent of project managers agree. Some organizations are smart enough to see the gap -- and take action to close it. The U.S. Centers for Disease Control requires everyone on a project, from senior executives to functional managers, to participate in a formal project review or stage gate governance review at all 10 project stages.

On the flip side of that communications equation, there are the project managers who often get mired in project jargon. They just can't resist breaking out the Gantt chart. The result is a fundamental disconnect between project managers and stakeholders. Here, too, some smart organizations are implementing processes to foster crystal-clear and transparent communications. NorthWestern Energy, for instance, faced a tough sell for a multi-year project to upgrade its infrastructure. The revamp will mean better services, but also potentially higher rates and prolonged construction. So the company formed a stakeholder group. Based on their input, the team then translated internal project and business speak into layman's terms to create roadside signs that said: "This project will provide safe, reliable energy for today and tomorrow." The message was upfront about delays caused by the construction, but did so in a way that reinforced the project's ROI. 

Another big takeaway from Pulse was that effective communications can't be a one-off. The Pulse data show that only 54 percent of projects with infrequent communications containing sufficient detail meet original intent. That number jumps to 84 percent for projects with frequent clear communications. Standardizing communications practices at the project plan phase can help. IT services company Atos, for example, sets up a framework that details how often to communicate what information to which stakeholder.

Granted, standardization can be time-consuming and just seem like adding more layers of bureaucracy, but the benefits outweigh the effort. Pulse reports that high performers -- organizations that complete 80 percent or more projects on time, budget and target -- are nearly three times more likely than low performers (those that complete 60 percent or fewer projects by the same measures) to standardize practices. The former experience better project outcomes -- and risk 14 times fewer dollars in the process.

Read more about the power of effective communications in PMI's Pulse of the Profession™ In-Depth Report: The Essential Role of Communications.
On June 12, 2013 the US House of Representatives Government Efficiency Caucus hosted the discussion "Doing More with Less: Reducing Waste and Improving Service Delivery." Hosted by House Representatives Todd Young (R-IN) and Jim Matheson (D-UT), the speakers addressed issues related to efficient program management in U.S. government agencies.

Mark A. Langley, President and CEO, Project Management Institute, presented findings from PMI's 2013 "Pulse of the Profession™" study on the high cost of low performance. The study revealed that government lags behind private sector industry in key success areas. Mr. Langley also noted that there are pockets of excellence in the Federal government using strong program management practices and seeing positive results. "It is essential to continue nurturing a program management culture government-wide," Mr. Langley said. 

Featured speakers also included Dr. Paul Light, Wagner's Paulette Goddard Professor of Public Service, New York University and Mr. Richard Garrison, Vice Chancellor, US Department of Veterans Affairs, Acquisition Academy. 

Learn more at Government Executive and The Hill, both of which reported on the caucus proceedings.

Share your thoughts below along with your Twitter handle, and Voices on Project Management will publish the best response as a blog post.

Smart Organizations Sync Talent With Strategy

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For all the talk of an economic recovery, many organizations continue to obsess over headcount. But a smaller (and smarter) group is focusing on getting the right people on the right projects -- positioning those people and the organization itself to grow. 

The payoff can be huge, according to PMI's Pulse of the Profession™ In-Depth Report: Talent Management. On average, 72 percent of projects meet their original goals and business intent at organizations with significant or good alignment between their talent management and organizational strategies. Now put that up against the 58 percent rate at organizations with moderate or weak alignment. 

Despite the potential ROI, only 10 percent of organizations report significant alignment. That stat takes on added significance when you consider what's shaping up as a true talent crisis. 

Pulse data revealed four in five organizations report difficulty in finding qualified project management candidates to fill open positions. Some organizations are resorting to some serious poaching -- check the battle for project talent between Silicon Valley tech titans Apple, Google, Yahoo! and Facebook. China Road and Bridge Corporation is adopting a more long-term approach, according to China Daily. Looking to build talent in a strategic market for its projects, the company is sponsoring a group of Congolese students to study engineering and project management in Xi'an, China. 

In this case, organizations that align talent management and strategy have an edge, reporting less difficulty in filling open positions. 

Organizations that align talent management to organizational strategy are also more effective at implementing formalized career paths, with 83 percent moving new hires to advanced project management positions. Among organizations with weak alignment, that number drops to 62 percent. 

The MD Anderson Cancer Center, for example, clearly outlines the path up. It requires 10 years of experience (including five years of project management) and a Project Management Professional (PMP)® credential for senior project managers who manage highly complex strategic projects that span three or more organizational boundaries. Establishing a career path not only makes employees feel like the organization has a vested interest in them, it also helps the organization spot -- and close -- any skills gaps that might prevent it from delivering on its business goals.

Recruiting and retaining top talent will only get organizations so far. They need to measure results, too. Across the board, organizations with strong alignment are more likely to measure outcomes such as staff turnover, learning development, and employee engagement, retention and productivity. 

U.S. space agency NASA (National Aeronautics and Space Administration), for example, tracks the effectiveness of its professional development courses by assessing enrollment numbers and feedback from senior leadership. Armed with that information, the PMI Global Executive Council member knows what's working -- and what's not. 

No doubt, creating a talent management program comes with a hefty price tag. But consider the danger of skimping: On a US$1 billion project, organizations with significant or good alignment of talent management programs to organizational strategy put US$50 million fewer dollars at risk than organizations with moderate or weak alignment.  

With those kinds of numbers on the line, the bigger question is: Can an organization afford not to make the investment? 

PMI's 2013 "Pulse of the Profession™" Report Identifies the High Cost of Low Performance

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Every year, I speak with hundreds of executives about their strategic initiatives and the challenges they face. And every year, I hear similar stories from executives, regardless of nation or language: business environments are increasingly complex, global priorities are expanding, there is a continued drive for innovation as well as a prevalent "do more with less" attitude.  And perhaps most frequently, I hear about risk--that is, the unacceptable financial risk of failed projects.  Because  failed projects waste a lot of money. For every $1 billion spent on a project that doesn't meet its business objectives, $135 million is lost for good, according to PMI's 2013 Pulse of the ProfessionTM report.

PMI's Pulse research, which is consistent with other studies, shows that fewer than two-thirds of projects meet their goals and business intent. About 17% fail outright. So if projects have always failed, why should we pay attention now? Because projects and programs continue failing at an increasing rate - this year's study showed that only 62% of projects met their original goals and business intent - down from a high of 72% in 2008, when Pulse first started tracking it this way.

We all know that projects fail for many reasons. But our Pulse research showed one that stands out for me: it's because executives continue to think of project and program management as a tactical competency with no connection to strategy. It's interesting that most executives don't even recognize that every strategic initiative in their business is essentially a project or program, and that all strategic change in an organization occurs through projects and programs. What they don't yet know, and what we need to be telling them, is: organizations that combine excellence in tactical project implementation with alignment to strategy complete projects successfully 90% of the time, while poorer performers are successful only 34% of the time. And that gap (which nets out to somewhere in the neighborhood of $260 million dollars saved on a billion dollar project) is where project, program and portfolio management can deliver competitive advantage and shareholder value for the organizations that do it well. 

John Kotter, acclaimed author and former Harvard Business School professor, probably says it best. He wrote recently that "Strategy should be viewed as a dynamic force that constantly seeks opportunities, identifies initiatives that will capitalize on them, and completes those initiatives swiftly and efficiently." Kotter recognizes the link between strategy and execution, which is where project, program and portfolio management deliver unparalleled value to organizations. Read the Pulse of the ProfessionTM report to find out how. And let us know what you think.

Executive Sponsorship: Benefits of Advising Upward

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The purpose of a project or program is to have its deliverables create value. But this value can only be realized if the new process or artifact 'delivered' by the project is actually used to achieve the intended improvements.

Executives have a central role in this process. There is a direct link between the decision to make an investment in a project and the need for the organization to make effective use of the deliverables to generate the intended benefits. In turn, this creates a valuable ROI.

According to PMI's 2012 Pulse of the Profession, in organizations where senior management has at least a moderate understanding of project and program management, 59 percent of the projects successfully meet or exceed the anticipated ROI. This is compared to just 51 percent of the projects in organizations where the senior management has a limited comprehension of project and program management.

This is where a project sponsor comes in.

An effective sponsor is the direct link between the executive and the project or program. The sponsor is crucial to ensuring top-level management support for the project contributes to the project's success and is critical to achieving the ultimate goal of generating an ROI.

According to Pulse, 75 percent of high-performing organizations have active sponsors on 80 percent or more of their projects.

If your project has an effective sponsor, make full use of his or her support. The challenge facing the rest of us is persuading less effective sponsors to improve their level of support.

To impart project knowledge into other areas of the business, the team needs to be able to 'advise upward.' Here are three tips to do so:

1. Create a conversation about value with other project managers and teams within your organization. This is a very different proposition to being simply on time, scope and budget. It's about the ultimate value to the organization created by using the outputs from its projects and programs. The key phrase is "How we can help make our organization better?"

2. Use the right evidence. Benchmarking your organization against its competitors is a good start, as is understanding what high-performing organizations do.
 
3. Link the information you bring into the conversation with the needs of the organization. Show your organization's executive how this can provide direct benefits.

In most parts of the world, organizations need to do more with less to stay competitive. Developing the skills of project sponsors so they are active is one proven way to achieve a significant improvement with minimal cost.

In fact, if projects are supported more effectively, there may be cost savings and increased value at the same time. And what's in it for us as project managers? We have a much-improved working environment. Everyone wins.

Do you have an active sponsor on your project? Do you think active sponsors improve project success? How involved are the executives in your organization?

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The Strategic Role of Project Management

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I have a bit of resentment for organizations that view the role of a project manager as that of a 'traffic cop.' That is, as someone who simply ensures that requirements are documented, meetings facilitated, conference call numbers set up and everyone has their assignments in on time.

To be sure, these are all important facets of a project. But I believe that any qualified project manager should be performing these actions as a reflex. In other words, this is not the primary role of a project manager but simply the basic administrative tasks of a much bigger role.

That's why I was pleased to see the results of PMI's 2012 Pulse of the Profession report. Among many interesting findings, this observation hit home:

Research conducted with senior project management leaders on PMI's Global Executive Council found that the most important skill for managing today's complex projects and programs is the ability to align the team to the vision of the project and design the project's organizational structure to align people and project objectives.

This is the key to the future growth and a value-add of project management in today's organizations. If your company is not positioning project managers to help define, communicate and drive the strategic vision and goals of the projects project managers are responsible for, it is under-utilizing their resources.

Project managers should not view themselves as simply the administrative support team for a group of subject matter experts and executives. They should take ownership of the overall success of the projects they run. This goes well beyond meeting the key performance indicators that have been set out for them. It also includes recognizing and providing the strategic value of the project to the organization.

Beyond understanding the fundamentals of project management as laid out by A Guide to the Project Management Body of Knowledge (PMBOK® Guide), you should also take the initiative to know your business and the industry in which you work. This way, you not only recognize the obvious success indicators but also the more subtle success factors -- and risks -- of the decisions you and your team make.

Take heart, Project Managers. It appears our true value-add is finally starting to be recognized. But also take heed: You must up your game to ensure you remain valuable in today's project management field.

How can project managers help align projects to organizational goals?

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Create a Project Plan to Reach Success

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In project management, if basic technical knowledge is lacking, or the basics are ignored or underestimated, a project's success is not guaranteed.

On the contrary, mastering the project management basics is a prerequisite for project success.

PMI's 2012 Pulse of the Profession revealed that organizations that use basic, standardized project management practices have a 71 percent success rate, compared to the average success rate of 64 percent.

One of these basic pillar practices is taking the time to create a realistic implementation plan. But how do we build a comprehensive, yet realistic project implementation plan? Here are a few tips:

1. Start the project plan while keeping the final objective in focus. Write down and highlight why the project is being conducted and what the project objectives are.

2. Make sure that the project's requirements and overall project scope are clearly captured, along with the project deliverables and the given constraints.
 
3. Implement a well-defined change management process, agreed upon by all stakeholders. The Pulse report revealed that of the projects that used change management, 71 percent were successful.

4. Document the estimated project costs, the funding approach, how the actual costs will be monitored and how cost deviations will be handled.

5. Plan how project communication will be managed. Who are the project stakeholders? What are their project roles and responsibilities and how can they influence the project?

6. Do not underestimate the risks the project can encounter. The Pulse also showed that 72 percent of successful projects used risk management. Assess and document risks throughout the project and plan for mitigation and contingency approaches.
 
What role does project management basics and the project plan play on your projects?

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A Different Mindset: From Project To Program Manager

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As a project manager, leading a project to success provides a feeling of accomplishment. Having been successful at several projects, project managers could see becoming a program manager a likely career move.

But when PMO managers were asked about the most critical factors for success, developing the skill sets of project and program managers were an area of concern, according to PMI's 2012 Pulse of the Profession. As a result, many organizations will renew their focus on talent development, formalizing processes to develop competency.  

In my opinion, developing a program management mindset is a key first step to successfully transitioning to a program management role. For example, moving from the linear world of a single project to the molecular world of programs can be daunting. Plus, you'll face the new experience of leading other project managers.

Here are some practices I have found valuable to adopting a program management mindset:

1. Think big picture  
A common misperception about programs is when they are viewed as one big project. Keep in mind that a program is an interconnected set of projects that also has links to business stakeholders and other projects. Adopt a 'big picture' attitude to the overall program and avoid fixating on a single project's details.

2. Create a project manager trust model  
As a project manager, you develop trust with individual contributors performing delivery activities. As a program manager, you have to develop trust with project managers. Create a common interaction framework with every project manager for progress reporting, resource management, etc.

3. Encourage project managers to say "so what?"
As a program manager, you will deal with additional reports, metrics and other information that you didn't experience as a project manager. Encourage your project managers to start dialogs with "so what" outcomes. This will get right to the direct impact on the program. Have them support these outcomes with relevant information from their reports, dashboards and metrics.    

4. Establish credibility with business leaders   
With programs, customers are typically in business functions. Immerse yourself and your project managers in their business. Training, site visits and status meetings held at business locations are good ways to immerse your team in the customer's business.

5. Develop long-distance forecasting skills
Forecasting several weeks in the future is satisfactory with a project. However, a program with projects moving at different speeds and directions requires a longer forecast horizon. Set your forecast precision in terms of months, not weeks. In addition, look for multi-project forecasting considerations such as holiday blackout periods and external project dependencies.   

What have you found effective to make the mental leap from project manager to program manager?

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Stick to Project Management Basics

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The importance of fundamentals in project management is obvious, but easy to lose sight of.

As professionals who constantly strive to improve, we study, read, take courses, attend seminars, listen to podcasts and more -- all to become better project managers. Ironically, sometimes this desire to learn causes us to lose focus on the fundamentals.

Instead, we look to novelty, the latest trends and perhaps even the latest fads in the interest of improving.

Likewise, we might embrace sophisticated techniques without ensuring that we've properly implemented the basic things on which the sophisticated techniques depend.

I've often heard great sports figures and musicians emphasize the importance of fundamentals in their success. Project managers would do well to place similar emphasis on the basics of our profession. I'd go even further to suggest that before we embrace any new or sophisticated technique, we should first look at how well we are implementing the fundamentals.

For example, what good does it do us to implement the latest agile techniques on a project where we haven't adequately implemented rudimentary change management disciplines? Similarly, what good would it do to implement Monte Carlo simulations in a context where we haven't adequately identified basic risks?

In my estimation, our success depends almost entirely on how well we have implemented fundamental risk and change management processes.

Things go wrong and plans change -- yet we often charge ahead without adequately planning and preparing for those realities. Certainly, our intuition tells us this is true, and our experience validates our intuition. Yet it still often happens that we lose sight of the obvious fact that the basics matter and matter most.

If you should ever waiver in your conviction, look no further than PMI's 2012 Pulse of the Profession. The report notes that change management and project management basics are among the most critical project success factors.

New and sophisticated techniques have their place, but the best thing to do in any profession is to go back to basics. Don't let the allure of the sophisticated or the novel, distract us from the value of fundamentals.

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Project Skills Improvement Through Formal Plans

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It is very likely that you have some members on your project team who are more talented or experienced than others. As project managers, we tend to utilize their skills as much as possible because we know that more often than not, they will be able to produce excellent results and meet expectations. 

Nevertheless, this group of people still needs the opportunity to improve their skills and knowledge. This is especially true when an organization needs to stay relevant in the current economic conditions. 

According to PMI's 2012 Pulse of the Profession report, a critical success factor of projects was staffing the team with the appropriately skilled people. Organizations that had a formal process for developing project/program competency saw a 70 percent success rate on projects, versus a 64 percent overall average. 

Unfortunately, Pulse of the Profession also showed that in 2011, only 47 percent of organizations had a formal "talent management" process, down from 52 percent in 2010.

But we must have formal talent management processes to develop project managers and team members, and you must tailor it to the people involved. An effective project manager is only as good as the information that he or she has.

An "accidental project manager," for example, might not have attended formal project management training courses. But fundamental knowledge helps project managers achieve effective and high-quality deliverables. For this group, it would be good to start them off with proper training on the core skills they'll need to grow and succeed as project managers.

Team members who are familiar with project management fundamentals might need help developing in other areas, such as soft skills. Since 90 percent of a project manager's job is communication, maybe you will help them improve in that area. 

Have the team member sign up for a communication course, for example. Choose topics such as influencing skills, which is important in convincing clients and partners. Or, suggest courses on negotiating skills, which is helpful in negotiating a more achievable schedule.

Refresher courses could be helpful for everyone on the team. Look for training that zooms into specific project management areas, such as effective cost and scheduling control, risk management or quality control management. Aim for at least one training session every quarter. 

Do you have a formal talent management system? How do you develop your project managers?

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See more on the Pulse of the Profession. 

Project Risks + Proactivity = Success

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Risk management as a best practice is critical to project success. It forces the team to consider the deal breakers on a project, and to proactively prepare and implement solutions.

PMI's recent 2012 Pulse of the Profession report found that more than 70 percent of respondents always or often use risk management techniques to manage their projects and programs and these practices lead to higher success rates.

Here's an example of how risk management could have saved a project:

A project manager oversees an electrical team that is responsible for installing electrical and audio-visual equipment. The construction and civil engineering teams hand over the completed and decorated site, ready for the final phase of the project. To the project manager's dismay, the projectors do not align with the screens, rendering them not fit for the purpose.

What went wrong?

The civil and construction teams had altered the dimensions of the rooms; the customer failed to communicate the changes to the electrical team. Assuming the project was executed according to plan, the project manger planned and submitted the electrical drawings based on the original dimensions of the room. These plans were made redundant when the room dimensions changed, which upset the equipment's position.

To correct the situation, the project manager drew and submitted new electrical drawings. The site's walls and ceilings had to be reopened to accommodate the changes, which caused delays and increased cost, rework -- and frustration.  

Had there been a robust risk identification and implementation plan, they would not be in this situation. Too many assumptions were left unchallenged and risks pertaining to the many external dependencies were overlooked.

As part of this risk management, proactive communication with the customer and other teams should have been planned. For example, the project manager should have considered and asked questions about how the contractors and sites would be monitored and controlled. What would the frequency and type of communication be like with stakeholders?

There should have been an assessment of 'what if' scenarios. What happens if the deliverables are not as expected? What are the risks if there are problems with contractors? What is the impact of not having dedicated resources on the team?

These types of discussions and questioning would have alerted the project manager and team to proactively plan to manage the quality of contractor work and employ the necessary resource on the project team.

Do you practice risk management? How does risk management planning make your projects successful?

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Tracking Project Management Trends

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Faced with sluggish growth and shifting market priorities, organizations are often tempted to latch on to whatever's being heralded as the next big thing.

But the smartest project players are going back to the basics, according to PMI's 2012 Pulse of the Profession report.

Over the next several weeks, Voices bloggers will address some of the project management trends identified in the report, including:  

Talent development: Looking to gain an edge in new markets, organizations are scrambling to ensure the right people with the right skills are allocated to the right programs. And Pulse of the Profession data shows a payoff for those organizations that get it right.

Among high-performing organizations -- defined as those companies with 80 percent or more of their projects completed on time, on budget and having met business goals -- 63 percent have a defined career path for project managers. Compare that to only 26 percent of low-performing organizations, defined as those with less than 60 percent of their projects completed on time, within budget and having met business goals.

Project portfolio management: A still-fragile economy spotlights the need for good project portfolio management, with more than half of respondents reporting its frequent use in 2012. Pulse of the Profession data also indicates that 72 percent of high-performing organizations use portfolio management compared to only 39 percent of low-performers.

Organizational agility: As organizations are forced to deal with ever-increasing market volatility, use of change management, risk management and iterative practices is on the rise.

Pulse data shows that 80 percent of high-performing organizations use change management techniques and 84 percent practice risk management. Plus, 40 percent of high performers use agile approaches in project management, versus 20 percent of low performers.

Benefits realization: Companies don't do projects because they can; they do projects because they deliver a strategic outcome. Pulse of the Profession data reveals that defining key objectives, benefits and expectations is the second-most important factor for project success.

Additionally, having sponsors who are actively engaged is one of the primary factors that lead to projects meeting an organization's business objectives. Organizations with active sponsors on at least 80 percent of their projects have a success rate of 75 percent, compared to the average 64 percent.

To discuss Pulse of the Profession on Twitter, please use #pmipulse.

Learn more about PMI's 2012 Pulse of the Profession.

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