Project Management - Week 02

7/28/2019 Project Management - Week 02

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Mission

Objectives Goals

Strategies

Programmes Projects Operational PlansOrganizational

Design

Vision

Facilitative Services

Policies Procedures Protocolls Systems

Key Parameters of the Enterprise (1)

David I. Cleland / Lewis R. Ireland, Project Management: Strategic Design and Implementation, 4th ed., p. 8


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Key Parameters of the Enterprise: Vision

A Vision is a short, succinct, and inspiring statement of what the

organization intends to become and to achieve at some point in the

future, often stated in competitive terms. It refers to the category of

intentions that are broad, all-intrusive and forward-thinking. It is the

image that a business must have of its goals before it sets out to

reach them. It describes aspirations for the future, without specifying

the means that will be used to achieve those desired ends

Corporate success depends on the vision articulated by the chief

executive or the top management. For a vision to have any impact of

the employees of an organization it has to be conveyed in a dramatic

and enduring way. The most effective visions are those that inspire,usually asking employees for the best, the most or the greatest.


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Key Parameters of the Enterprise: Examples of Visions

General Electric: We Bring Good Things to Life

The Ford Motor Company: to become the world's leadingconsumer company for automotive products and services

Boehringer Ingelheim: Value Through Innovation


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Key Parameters of the Enterprise: Mission Statement

A Mission Statement is an organization's vision translated into written form. It

indicates the type of business, direction and purpose of the organization. Formany corporate leaders, the mission statement is a vital element in any

attempt to motivate employees and to give them a sense of priorities

A mission statement should be a short and concise statement of fundamental

objectives and priorities.

Example of a mission statement:

- Boeing Corporation: to be the number one aerospace company in the

world, and among the premier industrial firms, as measured by quality,

profitability and growth


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Key Parameters of the Enterprise: Objectives and Goals

An Objective is a statement about the on-going purposes in theenterprise that must be carried out to support the organizational

mission. It relates to a desired future state of the organizationexpressed in quantitative (e.g. attainment of a specified marketshare percentage) and/or qualitative (becoming a market leader inthe development and marketing of Products X,Y and Z) terms.Failure to maintain an organzational objective can jeopardise theaccomplishment of the enterprises mission

A Goal is a specific achievement in the satisfaction of enterpriseobjectives. Whereas an objective is an aspiration to be pursued on acontinuous basis, is broadly formulated and more outward-focussed i.e. usually stated in terms of some ongoing achievement in a

relevant external environment - a goal is an achievement which is tobe realized at some future, often prespecified point in time.Moreover, goals are comparatively more specific and inward-focussed


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Key Parameters of the Enterprise: Strategy

Strategy is the design of the means, through the use of resources(organizational capacity, capital, manpower, managerial andtechnological know-how etc.), to pursue and accomplish endpurposes (enterprise goals, objectives and the mission) in aneffective and efficient manner

Strategic Management entails the review and definition of theenterprises mission, setting its long-term goals and objectives,

analysing and formulating strategies with a view to achieving goalsand objectives and implementing strategies through projects.Projects are thus an essential element in helping the enterprisetowards accomplishment of its goals, objectives and mission


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Projects as the Building Blocks of an Organizations Strategy

EnvironmentalOpportunitiesAnd Threats

Organizations

Strengths andWeaknesses

GatherInformation

EvaluateInformation

EvaluateFeasible

Strategies

SelectStrategy

ImplementStrategy

ProjectPortfolio


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Core Truths About Projects And Project Management

Major projects are considered the building blocks in thedesign And implementation of an organizations strategy

Project Management helps organizations successfully tacklechange in an environment economic, social, political, legal

technological, competitive, international and others which is characterized by a high degree of complexity,

dynamism and uncertainty

Project Management allows a focused, integrated and process-driven application of an organizations scarce resources foreffective and efficient realization of the organizations goals

and objectives, and its mission

Project Management is an important means for ensuring thesurvival and growth of an organization


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Factors Favouring Project Management (1)

Compression of the Product Life-Cycle - Goods and services are being

inceasingly expected to become available on the market within comparatively

much shorter periods of time than was the case years / decades ago. Project

delays mean loss in revenue and market share. Speed has thus become

synomynous with competitive advantage and project teams are an appropriate

means of achieving this goal

Global Competition - Intense global competition has resulted in a demand not

only cheaper but also better products and service: high-quality at low price is

now international standard. Quality Management, for its part, is an important

aspect of Project Management, where emphasis lies on cost, time and

performance.


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Knowledge Explosion - The rapid and vast expansion in knowledge has given

rise to demand for highly-complex products, such as in the electronics industry.

Rising product complexity in turn requires a correspondingly large pool of

diverse specialist expertise and input, for which Project Management, with its

cross-functional character, is well suited

Corporate Downsizing - Significant organization restructuring, as witnessed

over the past several years in many enterprises, have upgraded both the status

of, and demand for, Project Management at the expense of Middle

Management (Lean Management)


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Developing and Transforming Economies - Economic liberalization and

deregulation programmes being pursued by developing and transformation

states over the past several years, and notably since the end of the cold war,have given rise to a huge demand for consumer products and services as well

as for creating new, or massively overhauling existing, physical infrastructure.

Project Management has and is being used extensively in this context

Multi-Project Environment - Many enterprises and organizations may have

several projects running concurrently in order to remain competitive. A large

number of projects may in turn pose a considerable managerial challenge given

that they have varying degrees of duration, complexity, resource requirement,

risk and so forth. Management shortcomings vis-a-vis projects may add up

collectively to huge losses


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ProjectManagement

Organizational Reputation

Importance of the Project

Resource Sharing

Interdependence Market Change

Unfamiliarity

Size of the Undertaking

David I. Cleland / Lewis R. Ireland, Project Management: Strategic Design and Implementation, 4th ed., p. 69

Intra-organizational Considerations in Project Management (1)


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Organizational Reputation PM helps here because failure to

perform a project successfully could be damaging to an

organizations public image

Size of the Undertaking The size of a task may overwhelm a

department but still be manageable as a project

Unfamiliarity Unfamiliar tasks can be performed more

effectively and efficiently by using PM techniques

Market Change Rapid changes in market trends, demands for

products and services, competitor responses and technologicalchange, necessitate innovation, flexibility and a correspondingly

rapid response by the organization, which is better achieved with

PM techniques


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Interdependence PM techniques are better suited in case of

tasks where several functional units of an organization are

involved and close coordination is required

Resource Sharing PM is useful where skilled human resources

in an organization are scarce and should be efficiently utilized with

a view to minimizing direct and indirect costs and achieving

needed results

Importance of the Project A major project which is necessary

to execute in order to realize the strategic objective the

organization or which entails high cost and risk should be handled

with PM techniques


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Project Management: Major Advantages (1)

Project Management can result in numerous significant benefits for the

enterprise:

Timely development of complex products and services

Notable improvements in organizational processes

Cost reduction

Accomplishment of more work in less time and with less resources

without compromising quality

Enhancement in the quality of goods and services

More customer influence on product or service design, cost,

schedule and project plan, and customer satisfaction

Higher project schedule and cost estimating accuracy

Better cooperation, communication and coordination across

functional-organizational delineations


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Project Management: Major Advantages (2)

Better suited for highly complex and interdependent tasks

increased employee motivation and productivity Increased profitabilty for, along with a new spirit of dynamism in the

enterprise

Project managements focussed, flexible and systematic nature

makes the organization more likely to realize its goals, objectives

and mission in an effective and efficient manner

Project management is solutions-driven and offers a structured

process for effectively tackling problems

Enhancement in the organizations reputation and business

prospects

Increase in shareholder value

Virtually all industries can benefit from project management


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Project Management: Implications of Failure

Project Management can, if improperly implemented or applied in the

wrong context, can have a detrimental impact on the organization:

x Loss of reputation for the organization

x Higher cost and lower profit

x Marginal or no improvement in the quality of goods and services

x Decreased customer satisfactionx Confusion in the patterns of cooperation, communication and

coordination across functional-organizational delineations

x Decreased employee motivation and productivity


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Convincing Senior Management to Adopt Project Management

SENIORMANAGEMENT

Cost-BenefitAnalysis of PM

Impact onCustomers?

How will businessImprove?

Cost of AdoptingPM?

How do competitorsUse PM?

How long will it taketo adopt PM culture?

Immediate benefitsOf PM?


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Strategic Challenges of Projects for the Enterprise

A fundamental challenge for senior management is to identify

and implement those projects which contribute towards the

most effective and efficient realization of the enterprises

objectives and goals. In doing so, senior managers must

ideally take into account all factors which are relevant for the

successful realization of the project(s) in question and, in

particular, they must pay special attention to those factors

which may impede or prevent the project(s) from attaining

successful completion

As the number, scope, complexity and resource requirement of

projects being executed and/or planned in an organization

increases, the responsibility lies with senior management toincreasingly ensure a very careful periodic assessment and

review of all projects and notably those having strategic

character - to avert potentially serious destabilising

consequences for the organization


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Quantity and Quality of Projects: An Observation

It is reasonable to assume that an organization whichundertakes a larger number of projects than another

enterprise, is more dynamic and probably more likely tosurvive and grow in a competitive and dynamic corporate

environment

but

the quantity of projects under execution and/or in planning inan organization is no substitute the quality of projects: Anorganization, which has a comparatively small portfolio of

carefully conceived, well-planned and properly implemented

projects, which are wholly consistent with its mission,objectives, goals and strategy, is more likely to survive andflourish in a competitive, dynamic and uncertain corporateenvironment than a similar organization which maintains alarge portfolio of not so well-conceived, well-planned and

implemented projects

Project Portfolios: A General Observation


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Project Portfolios: A General Observation

A typical medium-sized or large-sized enterprise and any otherpublic-sector and non-governmental organization - would probablyhave a portfolio of projects at any given point in time. The projectstherein would normally vary individually, inter alia, in terms oftheir:

- Inherent complexity

goals (e.g. production of new and ormodification/refinement of existing goods, services aswell as organizational processes)

underlying character (strategic or operational)

resource requirements (amount of capital, manpower andorganizational capacity)

time-frames (short, medium and long-term) risk levels (low, medium and high)

and they would each have a varying impact on the enterprise

Ch ll f S i M t i th P j t E i t


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Challenges for Senior Management in the Project Environment

SENIOR MANAGEMENT

(Interest, Conceptual Input, Selection, Guidance, Insight, Evaluation

& Control, Intervention (if and where necessary)

Enterprise

Project

Portfolio

Information

Risks

Organizational Capacity

Stakeholders

ConsumersFinancial and Human

Resources

Other Projects in the

execution and/or planning

phase

Competition

A

BC D

E

F

Mission, Objectives &

Goals of the Enterprise Return on Investment

Strategic Issues

Time

R l t f S i M t T Ad t P j t M t


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Reluctance of Senior Management To Adopt Project Management

Failure to see project management as an effective and efficient vehicle of

bringing about change in the organization and as an essential element in

in implementing the organizations strategy No visble committment to project management

Interest in maintaining the status quo and putting self-interest over the

interest of the organization

Overinvolvement with traditional management functions and processes

Apprehension that if project management is treated as a core

competency, it would require decentralization of authority and delegating

decision-making to project managers resulting in a decline of executives

power and authority base

Problem in communicating the benefits of project management to senior

management and other internal stakeholders

Non-familiarity with project management

Some Typical Errors of Senior Managements in Regard


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to Project Management (1)

A lack of visible committment to project management and to continuously

improving project management methodology with time and project

experience

Attitudes, behaviours, communication patterns and leadership styles are

inconducive to project management

Organizational culture conducive for project management is not

encouraged

Selection of projects and project managers which may not be most

appropriate for realizing the organizations goals and objectives

Failure to create appropriate delineation of formal authority, responsibility

and accountability of senior managers, functional managers, project

managers and work package managers



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Inadequacies in on-going monitoring, control and evaluation in relation to

project resources

Failure to adequately review key project decisions, project plans,

schedule, risks, costs, technical performance considerations,

implementation and utilization of funds

Lack of interaction with the project leader and key project team members,

project contracters and project stakeholders

Failure to forsee the obstructive influence of the projects secondary

stakeholders and strategic issues on the project

Failure to assess the project in question in a broader, strategic context


to Project Management (2)

The Stakeholders (Primary Stakeholders (1))


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Stakeholders are individuals and organizational entities who, broadly speaking,

have or who believe they havea stake (interest) in the project or projects in

question which are being undertaken - or which may - be undertaken.Stakeholders should be involved in a project as early as possible so that:

Their concerns and ideas are taken into consideration

They can contribute towards the outcome of the project

They understand the project decisions made and accept them more

readily

They will be project advocates instead of project opponents

Project Managers who ignore Stakeholders can expect

a potentially damaging impact on their project outcome!



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Primary Stakeholders are those persons or groups who have a

contractual or legal obligation to the project team and have the

responsibility and authority to manage and commit resources according to

schedule, cost and technical performance objectives

They have direct and operational roles through their participation in the

design, engineering, development and production, and after-sales

logistical support of the project outcomes

Primary stakeholders belong to the project team and its supporting

oganizational infrastructure and typically include functional or resource

managers, general managers, senior managers, customers etc.



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Primary stakeholders are typically entrusted with:

Providing leadership to the project team

Allocating resources to be used in the design, development and

production of project results

Building and maintaining relationships with all stakeholders

Managing the decision context in the design and execution of strategies

to commit project resources

Motivating the project team members

Assessing the projects progress and initiate corrective measures, if

and when necessary

Periodically assessing the project teams effectiveness and efficiency

The Stakeholders (Secondary Stakeholders (1))


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Secondary Stakeholders are those persons and organizational entities

who have no formal contractual relationship to the project in question, but

which can have a strong interest in it

Secondary Stakeholders can, depending on the nature and

circumstances of the project, be comparatively harder to identify, and their

influence on the outcome of a project can be both considerable and

favourable or unfavourable

Caution needs to be excercised in dealing with secondary

stakeholders, particularly since they operate independently and outside

the control of project managers



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Typical attributes of secondary stakeholders include:

An unrestrained ability to try to influence the project

That their interests may be genuine or simply perceived

Involvement which is conditioned by the perception of gaining some

advantage

Teaming up with other stakeholders to campaign for or against the

project

Availability of a number of options to infuence the project

The Project Stakeholders: A Schematic Illustration


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The Project Stakeholders: A Schematic Illustration

Project

Strategies

Senior

Organizational

Managers

General

Managers

Functional

Managers

Project

Managers

Work Package

Managers Customers

Suppliers

Contractors

Sub-Contractors

Local, State and Federal

Agencies, Commissions,

and Judicial,Legislative and

Executive

Organizations

Unions

Employees Creditors

Shareholders

Primary StakeholdersIntervenor Groups

Private Citizens

Tourists

Professional

Organizations

Various Institutions

Media

Families

Social Organizations

Political Organizations

Environmentalists

Competitors

Local Communities

General Public

Consumer Groups

Anyone else who believes he/she/it has a stake in the project

Secondary Stakeholders

Managing Stakeholders: A Challenge for Project Managers (1)


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Stakeholders may, under certain circumstances, obstruct the project or

projects in question, causing project cost overruns, completion delays,

unforseen modifications or in the extreme case even bring about theabandonment of projects through, for e.g.:

Non-cooperation

Sustained campaign of public opposition and negative information dissemination

Boycotts

Media support Lobbying politicians and legislators

Petitioning and Litigation

Verbal and/or physical abuse and threats against project personnel

Blockage of project construction sites, facilities, logistics

Demonstrations, rioting, violence, acts of targeted sabotage and other scare

tactics



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Because secondary stakeholders may exert obstructive influence, the

project manager and other primary stakeholders have to pursue a course

of action which minimizes the risks for the project/projects in question, forinstance by:

Identifying all or as many of the projects secondary stakeholders as possible

based on the projects underlying strategic issue(s) and their respective

underlying factors (context assessment, brainstorming, consultants, surveys,public appeals, experience with similar projects undertaken in the past and so

forth)

Gathering and carefully analysing information from various sources on the

stakeholders and maintaining a Project Stakeholder Management InformationSystem



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Determining the stakeholders mission and intent (neutral, supportive,

adversarial)

Determining the stakeholders strengths and weaknesses and identifying their

strategy. An insight here may give an indication of what corresponding action

on the part of the project manager may be required to reduce risks to the

project

Predicting stakeholder behaviour through a careful analysis and, if and when

necessary, modifying the project strategy to accommodate or counter the

stakeholders actions through a stakeholder management strategy

Strategic Issues Effecting a Project


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Strategic Issues are conditions of pressure which will have a significant

effect on one or more factors relating to the project such as its financing,

design, engineering, construction and operation

Strategic Issues are context-dependent - they are determined primarily by

the nature of the project in question. For instance, the strategic Issues

relating to the construction and operation of a large industrial

manufacturing facility by a transnational corporation with a view to

catering to consumer demand in the domestic market of a developing

country would be expected to differ considerably from those strategic

issues concerning say a small, family-owned textile enterprise which

is developing of a new garment destined solely for overseas export

markets

Examples of Strategic Issues Effecting a Project


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Examples of Strategic Issues Effecting a Project

Environmental Conservation

Global Competition

Technological Advancements

Resistance to Change by Employees

Changing Public Attitudes

Future Legislation

Political Developments

Cultural Sensitivities



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It is imperative to identify all existing and potentially strategic issues concerning a

project as early as possible as these may effect the project in varying degrees

possibly adversely during its execution phase or thereafter. Once identified, the

potential impact of these strategic issues must be carefully and continuouslyanalysed and if and when possible corresponding action taken

Identification Phase

(which issues can be identified?)

Assessment Phase

(are the issues strategically relevant?)

Implementation Phase

(of the action deemed necessary)

Analysis Phase(what action is required?)

Strategic Issues in Pactice:Th N l C t ti I d t E l


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The Nuclear Construction Industry Example

Strategic Issues in the nuclear industry may, for e.g., typically include:

Licensability

Passive Safety

Power Costs

Reliability of Generating System

Nuclear Fuel Reprocessing

Waste Management

Capital Investment

Public Perception

Advocacy

Environment

Safeguards

Documents

Project Management - Week 02