Business Management Consultants Creating the Project-based Company An Executive Briefing with Dr. Tom Johns Ph.D, PE,PMP, MAPM 1st International Athens

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Business Management ConsultantsBusiness Management Consultants

Creating the Project-based

CompanyAn Executive Briefing

with

Dr. Tom Johns Ph.D, PE,PMP, MAPM



1st International Athens Conference onProject Management Best Practices

Athens, July 1st, 2006



Business Management Consultants

The Project-based Companies

The Leading Edge in Management




The Project-based Company

Trend toward Project-based way of working

Projects

TheCompany

PM PM

ProjectA

ProjectB

Customer Bus Dev

Sales Ops MIS




PMIPMBOK Guide

What is a Project?

Quality(Planned Results)

Resource(Budget)

Schedule(Time)

An EnterpriseUndertaken to Achieve Planned Results

within a Time Limitand a Budgeted Resource

An EnterpriseUndertaken to Achieve Planned Results

within a Time Limitand a Budgeted Resource




An Example of the Project-based Ideology at BAE Systems:

• Each project is to be run as a business,

• Project Director is the project’s ‘Managing Director’ with full support of the Groupand Business Unit Senior Management,

• Integrated Project Teams (IPTs) have fundamental responsibility for Financial andperformance,

• Milestone and risk owners are named within the IPTs, and an attitude of “I own theproblem; I represent the whole of BAE Systems” is fostered,

• Individual rewards are linked to one’s ‘contribution’ to success of project.

BAE Systems, 1999Management of Projects - Charter

The Project-based Culture British Aerospace




66% say employee morale improved 62% say management moral improved 80% say profit improved 81% say productivity improved 90% say product or service quality improved

Published BenefitsOf

Project-based Management




Boeing reduced lead time parts & matl 30%, design time 90%,

McDonald Douglas reduced scope changes by 68%,

Northrup reduced engineering changes by 45%,

US DOD reports 50% reduction in product lead time,

Published Effects on Performance




“The difference between companies

with ‘Mature’

Project Management Systems

and poor ones is

13.5 points to your ROI”

What is your Company’s Maturity?

“ISO, TQM and Six Sigma

Are all fine, but...”

There is an unmistakable trend in the world today




Business Roundtable reports difference of 13.5 ROI points

in 2000 capital projects representing 300 B USD from various

industries having good to poor project management systems

and practices.

Published Effects on Performance




The First Steps in Developing aProject Management Culture

for Executive, Senior and Middle Managers

Write clear policy statement stating your support of Project Teams responsibility and authority,

Continually repeat the message that Project Teams are Empowered by you and demonstrate it.

An Example of the Project-based Ideology at BAE Systems:

• Each project is to be run as a business,

• Project Director is the project’s ‘Managing Director’ with full support of the Groupand Business Unit Senior Management,,

• Integrated Project Teams (IPTs) have fundamental responsibility for Financial andperformance,

• Milestone and risk owners are named within the IPTs, and an attitude of “I own theproblem; I represent the whole of BAE Systems” is fostered,,

• Individual rewards are linked to one’s ‘contribution’ to success of project.

BAE Systems,Management of Projects - Charter




Passion without a systemis as bad as

a system without Passion




Principles & Methods

Teams as BuildingBlocks (People)

OrganizationalSupport

A Complete Project-basedManagement

System




METHODS&TOOLSPEOPLE &PRACTICEORGANIZATIONALSUPPORT

• Tells the business how it should work• Defines working philosophy and influences working culture– Links to Organization Principles– Links to Business Process Model– Corporate & Executive Working Philosophy• Tells the business what Methods & Tools to employ• Defines Methods & Tools– Project Types– Phases & Milestones– Procedures & Guidelines– Actions & Deliverables

• Supporting the Business Operations• Developing People– Roles, Responsibilities & Accountabilities– Competencies– Career Development

The AIRBUS Project Management System

AIRBUS




PeopleOrganisational

Support

Principles


Support

Principles


Support

Principles


Support

Principles

Organisational Support

Principles

Level 5Level 5

Level 4Level 4

Level 3Level 3

Level 2Level 2

Level 1Level 1

PeopleBMC’sProject Management Maturity Model

An OrganizationalDevelopmentTool

Level 5 – Super Project-basedLevel 4 – Project-based

Level 3 –ResponsibleLevel 2 –Recognition

Level 1 – Relaxed




The World Management Maturity is Low

SOURCE: Project Management Maturity Benchmark, Center for Business Practices,

Research based on assessments using industry standard Project Management Maturity Model (PMMM).

A Strategic Opportunity




Teams as BuildingBlocks (People)



A Complete Project-basedManagement

System




BMC’s Maturity-based Curriculum




AIRBUSAIRBUS UKUK Competencies FrameworkCompetencies Framework




PersonalValues

PersonalValues

CorporateValues

Societal Values

A Management SystemWith Different Values




IndividualismSpecific

Achievement

Emotional

Future

Sequential

Particular

Collectivism

Diffuse

Ascription

Neutral

Past

Synchronic

Universal

External Control

Internal Control

Relationships&

Rules

Time

Environment

Dimensions of Cultural Difference




Institutional Implicationsof

Pervasion of Value Relativism

Power may be substituted for ideology

Expediency may replace ideological criteria

Decentralization of decision making may be made difficult

Policy becomes impossible - continuity & consistency are non-existent - decision makers become immobilized

Ronald S. Paul Battelle Values




For an Project-based Companywith

Managed RiskDevelop the Appropriate Project Management skills in everyone throughout the company and at all levels,

Work through Cross Functional Project Teams,

Conceive middle management as facilitators and coaches, Participated management, eliminate fear,Maintain few organizational layers,

Maintain a client minded organization andand project-based accounting,

Operational procedures support teams.






Thank you

Questions?



Business Management ConsultantsBusiness Management Consultants

Assessment Tools

For Project Management Improvement

with

Dr. Tom Johns Ph.D, PE,PMP, MAPM



1st International Athens Conference onProject Management Best Practices

Athens, July 1st, 2006





Teams as BuildingBlocks





ClientRequirements

Organizing&

Staffing

Planning

Directing&

Leading

Controlling

Reporting

Reprogramming

1

2

3

4

5

Process GroupsKnowledge Area Initiating Planning Executing Controlling Closing4. Project IntegrationManagement 4.1 Project PlanDevelopment 4.2 Project Plan Execution4.3 Integrated ChangeControl5. Project ScopeManagement 5.1 Initiation 5.2 Scope Planning5.3 Scope Definition 5.4 Scope Verification5.5 Scope ChangeControl6. Project TimeManagement 6.1 Activity Definition6.2 Activity Sequencing6.3 Activity DurationEstimating6.4 ScheduleDevelopment6.5 Schedule Control

7. Project CostManagement 7.1 Resource Planning7.2 Cost Estimating7.3 Cost Budgeting 7.4 Cost Control8. Project QualityManagement 8.1 Quality Planning8.2 Quality Assurance8.3 Quality Control9. Project HumanResourceManagement 9.1 OrganizationalPlanning9.2 Staff Acquisition9.3 Team Development10. ProjectCommunicationsManagement 10.1 CommunicationsPlanning 10.2 InformationDistribution10.3 PerformanceReporting 10.4 AdministrativeClosure11. Project RiskManagement 11.1 Risk ManagementPlanning11.2 Risk Identification11.3 Qualitative RiskAnalysis11.4 Quantitative RiskAnalysis11.5 Risk ResponsePlanning11.6 Risk Monitoring andControl

12. Project ProcurementManagement 12.1 ProcurementPlanning12.2 Solicitation Planning12.3 Solicitation12.4 Source Selection12.5 ContractAdministration 12.6 Contract Closeout

Knowledge AreasMapped into behaviors

Life Cycle

Behaviors

Project Life Cycles, Knowledge Areas Project Life Cycles, Knowledge Areas andand Planning BehaviorsPlanning Behaviors

KnowledgeAreas




Management Tools to CreateAppropriate Management

Behaviors

ClientRequirements

Organising&

Staffing

Planning

Directing&

Leading

Controlling

Reporting

Reprogramming

1

2

3

4

5





Brussels Chicago Houston Istanbul Lisbon Nashville Ottawa Phoenix Rotterdam Singapore Washington DC

Project ManagementInventory

andAction Planning

Kit™

How are our Project Managers Doing?

The Assessment Inventory Kit™The Assessment Inventory Kit™

ALeading Edge

Management Tool

ALeading Edge

Management Tool




How are our Project Managers Doing?(An example of the scoring)

I. Planning

1. I reach a clear agreement with the project’s client concerning the overall project objectives

2. I appropriately involve key project staff members in project planning

A B C D E

Total

0 1 0 1 0 Percentage of Time You Agree A B C D E

90-100 75-89 50-74 25-49 0-24

Percentage of Time You Agree A B C D E

90-100 75-89 50-74 25-49 0-24

Scoring5xA + 4xB + 3xC + 2xD + E = ?5x0 + 4x1 + 3x0 + 2x1 + 0 = 6

Scoring5xA + 4xB + 3xC + 2xD + E = ?5x0 + 4x1 + 3x0 + 2x1 + 0 = 6




How Do our Project Managers Compare to Very Successful Project Managers?

Inventory Score

0

20

40

60

80

100

24 26 28 30 32 34 36 38 40

Inventory Score

0

20

40

60

80

100

24 26 28 30 32 34 36 38 40

Inventory Score

0

20

40

60

80

100

24 26 28 30 32 34 36 38 40

Inventory Score

0

20

40

60

80

100

24 26 28 30 32 34 36 38 40

Inventory Score

0

20

40

60

80

100

24 26 28 30 32 34 36 38 40

Planning Organizing & Staffing

Directing & Leading Controlling

Reporting

%

%

%

%

%

Find the Percentage of People Whose Scores are Less than Yours




Measuring Change in Project Manager’s Performance

0

5

10

15

20

25

30

35

40

45

50

Planning OrganizingStaff

Directing &Leading

Controlling Reporting

Before After

Best practice benchmark% % of International Companies demonstrating better PM Practice

32% 40%

6%

55% 45%

8% 2% 0%

70%

29%

Airbus UK November 2001



Business Management ConsultantsJuly 03

Sept 02Sept 02

Improvementin Mean ScoresAcross AIRBUS

Advanced Development ProgramManagers




Improvementin Consistency

Across GSKProject Teams




PlanningOrg. &

Staffing LeadingControlling

Reporting

Before Training LineManagers

Six Months After TrainingLine Managers

25

30

35

40



PlanningOrg. &

Staffing LeadingControlling

Reporting



25

30

35

40



Effects of Project Management Trainingon

Assessment Inventory ScoresBefore & after

line only managers were trained Dresser Industries New Product Development




Percentage of Companies in the Data BaseScoring Less Than

Assessment Inventory Score Shown

Planning

Inventory Score

0

10

20

30

40

50

60

70

80

90

100

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

Inventory Score

0

10

20

30

40

50

60

70

80

90

100

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

After Line ManagersWere Trained

Before Line ManagersWere Trained







The BMC Project Management System





Support

Principles


Support

Principles


Support

Principles


Support

Principles


Principles

Level 5Level 5

Level 4Level 4

Level 3Level 3

Level 2Level 2

Level 1Level 1

PeopleBMC’sProject Management Maturity Model




Level 1 – Relaxed





Support

Principles


Support

Principles


Support

Principles


Support

Principles


Principles

Level 5Level 5

Level 4Level 4

Level 3Level 3

Level 2Level 2

Level 1Level 1

People

BMC - PMMM PMI® - OPM3




BMC’s Project Management Maturity Model (Composition)




Measuring Maturity (Level and Variance)

Projects

Bus Dev

Sales Ops MIS

TheCompany

PM PM

ProjectA

ProjectB

CustomerMktg Sales Ops MIS

MaturityLevel

MaturityLevel

MaturityVarianceMaturityVariance










Percentage of the time you agree that these are done

100-90% 89-75% 74-50% 49-25% 24-0%

1. A management committee or group formally existswhich meets regularly with Project Managers forthe purpose of reviewing the performance of project 27.9 31.6 13.7 20.6 6.6teams and assisting them in the removal of obstaclesthat impede their progress.

2. Project priorities are established, reestablished asnecessary and clearly communicated to the project teams 12.8 51.3 19.2 14.4 2.3and appropriate managers.

3. The project managers/leaders meet regularly with theirrespective line managers to review progress, problems and 19.6 32.3 43.1 2.5 2.5corrective actions regarding their projects.

4. Project planning and control processes exist, are 20.7 39.7 23.0 11.4 5.2documented, understood, and practiced across the organization.

5. A Project Execution Plan is required to be developed and 42.9 28.2 18.1 6.4 4.4approved before a project is permitted to begin.

6. Line managers are evaluated on the degree to which theysupport the performance of cross functional project teams as 5.4 21.9 30.3 31.1 11.3well as projects in their own areas.

7. Resource plans and commitments are maintained by the lineorganization and an appropriate mechanism exists for sharing 4.2 38.3 30.8 19.5 7.2and resolving resource problems.

8. One’s contribution and performance in support of project 14.2 34.7 23.4 19.1 8.6teams is formally recognized in managers’ performance reviews.

9. Project team members are adequately trained in project 9.6 22.4 26.8 29.1 12.1management techniques and methods.

10.Management reviews, audits and evaluations of the projectmanagement system are conducted regularly and actions are 9.8 26.8 21.6 26.2 15.6taken to improve the system.

Frequency of support Always Frequently Sometimes Infrequent Seldom

Strong WeakAdequacy of Support Organizational Organizational

Support SupportOctober 1997

The Results of a Survey

of Senior Managers

from 41 Companies

How doesYour

CompanyCompare?

5 4 3 2 1





Support

Principles


Support

Principles


Support

Principles


Support

Principles


Principles

Level 5Level 5

Level 4Level 4

Level 3Level 3

Level 2Level 2

Level 1Level 1

People BMC’sProject Management Maturity Model




Level 1 – Relaxed




Potential Impact of Performance from Increased Maturity

PMMM report




Thank you

Questions?






Come and VisitBusiness Management Consultants

and the

Centre of Excellence for Project

Management

http://www.bmc-online.comhttp://www.bmc-online.com

at



Documents

Business Management Consultants Creating the Project-based Company An Executive Briefing with Dr. Tom Johns Ph.D, PE,PMP, MAPM 1st International Athens