Don’t Invest in the Wrong Project Management Improvements
Project success: everyone wants it, yet successful completions are rare. But why? We each have our opinion based on our experience, but what if we’re wrong? We could end up investing in things that make no difference, or worse, making investments that harm our performance.
That’s why I commissioned an independent research firm to help us learn what is really making a difference in project performance, including:
- What are the most common practices being applied?
- What practices are producing the best results?
- What practices are not?
- Do managers understand the root causes of good performance?
If your organization is like most, it has made significant investments in project management over the last decade. But as the research found, they are probably not getting the expected payoffs. In fact, today’s investments are not delivering results in two key success factors—budget and schedule.
A Disconnect Between Perceived and Actual Drivers of Project Success
To understand why these success factors are lagging, first consider what most project managers believe are the core drivers of project success:
- Improved planning
- Enhanced maturity
- Better executive sponsorship
- Well-defined goals
- Minimal scope changes
The research shows that contrary to popular belief, what differentiates the best executors are several strategic and process elements:
- Stable schedule
- Transition from build to operation
- Having a culture of delivery excellence
- Alignment to organizational strategy
- Executive sponsorship
- Skilled leaders
Managers believe they are providing “suitable project structures to execute projects,” but many of the processes and practices that they think make a difference vary from those that actually drive the best results.
The Impact of Today’s Project Management Investments
Driven by these faulty perceptions, managers have been investing heavily in project teams by:
- Providing training for project managers, with teams following the rigor of PMI’s PMBOK® to build maturity and capability
- Establishing PMOs to build project management skills
- Aligning projects to business strategy, putting a business focus on projects at high levels
Not surprisingly, these investment decisions are not delivering all the results that managers want.
Investments in training, control, and planning have led to significant improvement in organizations’ ability to satisfy scope requirements for projects, produce results that satisfy customer requirements, and deliver business benefits. However, these improvements have been offset by widespread failures in cost and timelines. For example, an Accenture survey found that more than 30 percent of capital projects are now completed over budget, and more than 35 percent of projects are finished late.
Training and PMOs Will Not Save Your Projects
When analyzing the results of investments specific to project team training and PMO establishment, the situation is no better.
Despite a 1,350 percent increase in the number of Project Management Professionals over the last 20 years, organizations report that training has improved results only in scope, quality, and business benefits. Amazingly, more training correlates to a decline in schedule and budget performance.
PMOs have fared even worse. Even though 70 percent of organizations surveyed have invested in a PMO, a PMI survey found that the overall difference in performance between organizations with and without a PMO is only 1 percent. Further, a PwC survey found that organizations implementing a PMO are experiencing declines in all five key project success factors: scope, quality, business benefits, budget, and schedule. We can’t blame this on inexperience, since even after 5 years of practice, results in project successes are still no better than without PMOs.
Keeping it Simple
These results are even more concerning when considering that executives are increasingly wanting a streamlined approach, executing fewer initiatives with expectations of perfection. As a FD/Forbes Insights survey found, there has been more scrutiny on how capital is spent, and as one respondent noted, companies are aiming to improve the success of strategic plans by “decreasing the scale and number of strategic initiatives undertaken to a critical few.”
It is clear that building project management infrastructure has its rewards, but schedules and budgets are being sacrificed. And Agile teams are no exception; they work on speed, but not necessarily budget or hitting the release date.
The Missing Emphasis on Project Execution
So what is primarily causing the negative results of today’s project management investments? Simply, it is a widespread reliance on the PMBOK®, which emphasizes specification and control; it offers almost no guidance for executing projects. Less than 10 of the over 450 pages in the PMBOK® guide reference project execution, leaving it fully to the expertise and experience of each project manager.
Organizations that are successful in project execution are reaping significant rewards, both in financial performance and success of their strategic initiatives. The “best executors” have financial performance well above average: a striking 65 percent better than other companies.
I’m neither suggesting that training should not be delivered, nor that PMOs or centers of process excellence are bad ideas. Instead, we need to take a look at the content and methodology. It’s clear—what we’re doing isn’t working—at least in two critical areas.
Employing the Project Execution Maturity Model
To deliver the results they want, senior executives must build a culture of delivery excellence that aligns projects to strategic objectives, makes on-time delivery a primary performance measurement, and emphasizes execution and planning results.
To do this, organizations must develop the processes to execute well and establish appropriate governance to reinforce behaviors that drive results. These processes and behaviors are defined and quantified in the Project Execution Maturity Model.
The Model proposes three levels of execution capability, each a reflection of the organization’s capability to manage activity and time:
- Basic Collaboration (green): emphasizes task velocity or flow
- Improved Collaboration (gold): emphasizes meeting deadlines and extending capabilities to remote work groups
- Integrated Planning and Execution (blue): emphasizes creating and executing detailed, optimized plans once a foundation of appropriate behaviors and focused communications has been established
The Benefits of Achieving Only Basic Collaboration
Basic collaboration focuses on transparency, communication, and collaboration—striving to kill the biggest source of capacity loss and delay: multitasking. It does this by employing the processes/principles of collaborative execution, functional goals alignment, priority control, and control work in progress.
By achieving basic collaboration, project teams have a clear view of the project, its status, and the most important issues to address. Local teams have the same view of status and action requirements, and each team member knows what they need to do. No one can hide, so the right problem solvers are promptly deployed to the right problems.
Moving just from ad-hoc to basic collaboration can increase productivity by more than 20 percent and rates of project completion by nearly 30 percent, as well as produce greater accountability for results, increase rates of on-time delivery, and shorten project durations. Similar gains can be experienced with subsequent moves to improved coordination and integrated planning and execution.
Ultimately, this level of focus on building project execution maturity—more than project planning—will yield meaningful progress in the way your organization delivers projects.
For More Information. Download the full research findings, which were compiled using surveys of over 4,000 professionals in over 40 industries and countries, as well as interviews with C-level executives in 22 countries. Training and PMOs will not Save Our Projects
To learn more about the Project Execution Maturity Model and elements that drive effective project execution excellence, get the eBook “Why Do Projects Succeed or Fail? Discover What Really Makes a Difference.”