THE WILEY GUIDE TO MANAGING PROJECTS

The Wiley Guide to Managing Projects. Edited by Peter W. G. Morris and Jeffrey K. PintoCopyright © 2004 John Wiley & Sons, Inc.

THE WILEY GUIDE TOMANAGING PROJECTS

Peter W. G. Morris

Jeffrey K. Pinto

JOHN WILEY & SONS, INC.

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Library of Congress Cataloging-in-Publication Data:

Morris, Peter W. G.The Wiley guide to managing projects / Peter W. G. Morris, Jeffrey K. Pinto.

p. cm.Includes bibliographical references and index.ISBN 0-471-23302-1 (cloth)1. Project management. I. Title: Guide to managing projects. II. Morris, Peter

W. G. III. Title.HD69.P75P552 2004658.4’04—dc22

2003026695

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

v

CONTENTS

Preface xi

Introduction xiii

SECTION I: KEY ASPECTS OF PROJECT MANAGEMENT

1 Project Control 5

Peter Harpum

2 Qualitative and Quantitative Risk Management 30

Stephen J. Simister

3 Project Management Structures 48

Erik Larson

4 An Overview of Behavioral Issues in Project Management 67

Dennis P. Slevin and Jeffrey K. Pinto

vi Contents

SECTION II: THE MANAGEMENT OF PROJECTS

SECTION II.1 STRATEGY, PORTFOLIO, AND PROGRAM MANAGEMENT

5 Project Success 99

Terry Cooke-Davies

6 Management of the Project-Oriented Company 123

Roland Gareis

7 Strategic Business Management through Multiple Projects 144

Karlos A. Artto and Perttu H. Dietrich

8 Moving From Corporate Strategy to Project Strategy 177

Ashley Jamieson and Peter W. G. Morris

9 Strategic Management: The Project Linkages 206

David I. Cleland

10 Models of Project Orientation in Multiproject Organizations 223

Joseph Lampel and Pushkar P. Jha

11 Project Portfolio Selection and Management 237

Norm Archer and Fereidoun Ghasemzadeh

12 Program Management: A Strategic Decision Management Process 257

Michel Thiry

13 Modeling of Large Projects 288

Ali Jaafari

14 Managing Project Stakeholders 321

Graham M. Winch

15 The Financing of Projects 340

Rodney Turner

16 Private Finance Initiative and the Management of Projects 359

Graham Ive

Contents vii

SECTION II.2: TECHNOLOGY MANAGEMENT

17 Requirements Management in a Project Management Context 391

Alan M. Davis, Ann M. Hickey, and Ann S. Zweig

18 Design Management 422

Peter Harpum

19 Concurrent Engineering for Integrated Product Development 450

Hans J. Thamhain

20 Process and Product Modeling 471

Rachel Cooper, Ghassan Aouad, Angela Lee, and Song Wu

21 Managing Configurations and Data for Effective Project Management 498

Callum Kidd and Thomas F. Burgess

22 Safety, Health and Environment 514

Alistair Gibb

23 Verification 543

Hal Mooz

24 Managing Technology: Innovation, Learning, and Maturity 567

Rodney Turner and Anne Keegan

SECTION II.3: SUPPLY CHAIN MANAGEMENT AND PROCUREMENT

25 Integrated Logistic Support and all that: A Review of Through-Life ProjectManagement 597

David Kirkpatrick, Steve McInally, and Daniela Pridie-Sale

26 Project Supply Chain Management: Optimizing Value: The Way We Managethe Total Supply Chain 621

Ray Venkataraman

27 Procurement: Process Overview and Emerging Project ManagementTechniques 643

Mark E. Nissen

28 Procurement Systems 654

David Langford and Mike Murray

viii Contents

29 Contract Management 678

David Lowe

30 Tender Management 708

George Steel

31 Project Changes: Sources, Impacts, Mitigation, Pricing, Litigation, andExcellence 743

Kenneth G. Cooper and Kimberly Sklar Reichelt

SECTION II.4: CONTROL

32 Time and Cost 781

Asbjørn Rolstadas

33 Critical Chain Project Management 805

Lawrence P. Leach

34 Project Performance Measurement 830

Daniel M. Brandon, Jr.

35 Making Risk Management More Effective 852

Stephen Ward and Chris Chapman

36 Value Management 876

Michel Thiry

37 Improving Quality in Projects and Programs 903

Martina Huemann

38 The Project Management Support Office 937

Martin Powell and James Young

SECTION II.5: COMPETENCE DEVELOPMENT

39 Contemporary Views on Shaping, Developing, and Managing Teams 983

Connie L. Delisle

40 Leadership of Project Teams 1014

Peg Thoms and John J. Kerwin

Contents ix

41 Power, Influence and Negotiation in Project Management 1033

John M. Magenau and Jeffrey K. Pinto

42 Managing Human Resources in the Project-Oriented Company 1061

Martina Huemann, Rodney Turner, and Anne Keegan

43 Competencies: Organizational and Personal 1087

Andrew Gale

44 Projects: Learning at the Edge of Organization 1112

Christophe N. Bredillet

45 The Validity of Knowledge in Project Management and the Challenge ofLearning and Competency Development 1137

Peter W. G. Morris

46 Global Body of Project Management Knowledge and Standards 1150

Lynn Crawford

47 Lessons Learned: Project Evaluation 1197

J. Davidson Frame

48 Developing Project Management Capability: Benchmarking, Maturity,Modeling, Gap Analyses, and ROI Studies 1214

C. William Ibbs, Justin M. Reginato, and Young Hoon Kwak

49 Project Management Maturity Models 1234

Terry Cooke-Davies

SECTION III: APPLICATIONS IN PRACTICE

50 How Projects Differ, And What to Do About It 1265

Aaron J. Shenhar and Dov Dvir

51 Managing New Product Development Projects 1287

Dragan Milosevic

52 Pharmaceutical Drug Development Project Management 1315

Janet Foulkes and Peter W. G. Morris

53 Project Management in the Defense Industry 1329

John F. Roulston

x Contents

54 Project Management in the Construction Industry 1350

Peter W. G. Morris

55 Project Management in the Automotive Industry 1368

Christophe Midler and Christian Navarre

56 Professional Associations and Global Initiatives 1389

Lynn Crawford

INDEX 1403

xi

PREFACE

The management of projects represents one of the most significant undertakings in whichmodern organizations can engage. The economic, social, and technological forces that

shape our world are creating an environment that seems, every day, to be oriented moreand more towards a project-based approach to getting things done. Everywhere there isevidence of an increased interest in managing projects: Thousands of new members areenrolling every year in project management professional organizations; hundreds of privateand public sector enterprises are pushing their operating models toward project-based work-ing; scores of universities and technical agencies are offering courses, certification, and de-grees in project management. It is clear that we are experiencing a revolution in the waywe organize and manage, happily one not threatening disruption and confusion but prof-fering improvement and opportunity.

When we, as editors, set out to develop this ‘‘handbook,’’ our clear motivation was tocreate a product that was timely, accessible, and relevant. ‘‘Timely’’ in that project-basedwork has continued to grow at such an enormous pace, attracting large numbers of newadherents, both as individuals and as organizations. ‘‘Accessible’’ in that we sought also tocreate a work that spoke the appropriate language to the largest possible audience, appealingto both project management practitioners and academic researchers. But above all ‘‘rele-vant’’: Too much of project management writing addresses only the basics of time, cost,and scope management (or people and organizational issues) and fails to address the day-to-day nuances that become so important in practice. The reality is that there is far morethan this to managing projects successfully. For this book to be useful, it needed to reflectnot only well-known and widely used basic project management practices but also the new,cutting-edge concepts in the broader theory and practice of managing projects. To this endwe have consciously built on our individual (but in many ways parallel) research to capturethe insights of many of the world’s leading experts, explicitly organized, as we explain inthe Introduction, around a ‘‘management of projects’’ framework.

xii Preface

In short, our goal was to provide a resource that demonstrated the widest possibleusefulness for readers seeking to develop and deliver successful projects, regardless of theirprofessional background.

Hence, in The Wiley Guide to Managing Projects, we have endeavored to provide a clearview of the cutting edge in project management best practice. Wherever possible, we dothis within a soundly based conceptual framework, founded in research and practical ex-perience, which we have endeavored to make explicit. In doing so we have been joined bya truly notable range of authorities, all leaders in their field, drawn from many differentindustry sectors, practice areas, and countries. Together they address the most significanttopics and problems currently facing project managers and project-based organizationstoday.

Whether you view this book as a comprehensive resource that should be read cover-to-cover or choose a selective subset of the topics that appeal to you directly, we hope youwill find the experience rewarding. As a collective whole, we believe the book holds togetherwith clarity and structure; as individual essays, each chapter can provide value to the reader.

It is with genuine gratitude that we would like to acknowledge the efforts of severalindividuals whose work contributed enormously to this finished product. Bob Argentieri,acquisition editor at Wiley, first conceived of the idea from which this book eventuallyemerged (the successor to the famous Cleland and King Project Management Handbook, as weexplain at the outset of the Introduction). It was his energy and enthusiasm that led, in largepart, to what you now see. To the contributors of the individual chapters we owe a greatdebt of thanks as well. To have so many busy professionals first agree to participate in thisproject and then to contribute work of such outstanding quality, and work with us so pa-tiently in crafting the chapters, has been extremely gratifying. We thank them sincerely.Third, we should especially thank Gill Hypher of INDECO, who has patiently and withgood humor shepherded a host of queries and a vast quantum of correspondence in gettingthe details right to allow publication to proceed, and to Naomi Rothwell of Wiley, who hasworked with Gill to embed the emerging document in Wiley’s production machinery.

And last, though never least, to our families, we acknowledge a bond that can neverbe broken and a wellspring that continues to lead to greater and better things. Two peoplewere never better blessed than we have been with this support.

Peter Morris and Jeff Pinto

xiii

INTRODUCTION

Peter Morris and Jeffrey Pinto

In 1983 Dave Cleland and William King produced for Van Nostrand Reinhold (nowJohn Wiley & Sons) the Project Management Handbook, a book that rapidly became a classic.

Now over 20 years later John Wiley & Sons is bringing that landmark publication up-to-date with this, The Wiley Guide to Managing Projects.

Why the new title—indeed, why the need to update the original work?That’s a big question, one that goes to the heart of much of the debate in project

management today and that is central to the architecture and content of this book. First,why ‘‘the management of projects’’?

Project management has moved a long way since 1983. If we take the founding ofproject management to be somewhere between about 1955, when the first uses of modernproject management terms and techniques began being applied in the management of theU.S. missile programs, and 1969 to 1970, when project management professional associa-tions were established in the United States and Europe (Morris, 1997), then Cleland andKing’s book was reflecting thinking that had been developed in the field for about the first20 years of this young discipline’s life. Well over another 20 years has since elapsed. Duringthis time there has been an explosive growth in project management. The professionalproject management associations around the world now have thousands of members—theProject Management Institute (PMI) itself having over 140,000—and membership continuesto grow. Every year there are dozens of conferences; books, journals, and electronicpublications abound; companies continue to recognize project management as a core busi-ness discipline and work to improve company performance through it; and increasinglythere is more formal educational work carried out in universities in teaching programs atboth the undergraduate but particularly postgraduate levels and in research.

Yet in many ways all this activity has lead to some confusion over concepts and appli-cations. The basic American, European, and Japanese professional models of project man-

xiv Introduction

agement, for example, are different. PMI’s is, not least because of its size, the mostinfluential, with both its Guide to the Project Management Body of Knowledge (PMI, 2000) and itsnewer Organizational Project Management Maturity Model, OPM3 (PMI, 2003). Yet it is also themost limiting, reflecting an essentially execution, or delivery, orientation. This tendencyunderemphasizes the front-end, definitional stages of the project, the stages that are socrucial to successful accomplishment. (The European and Japanese models, as you will see,give much greater prominence to these stages.) An execution emphasis is obviously essential,but managing the definition of the project, in a way that best fits with the business, technical,and other organizational needs of the sponsors, is critical in determining how well the projectwill deliver business benefit and in establishing the overall strategy for the project.

It was this insight, developed through research conducted independently by both thecurrent authors shortly after the publication of the Cleland and King Handbook (Morris andHough, 1987; Pinto and Slevin, 1988) that led to Morris coining the term in 1994 ‘‘themanagement of projects’’ to reflect the need to focus on managing the definition and deliveryof the project itself to deliver a successful outcome.

These are the themes that we explore in this book (and to which we will revert in amoment). Our aim is to center the discipline better by defining more clearly what is involvedin managing projects successfully, and in doing so, to expand the discipline’s focus.

So second, why so big? At around 1,400 pages, this is clearly more than a handbookthat will neatly slip into one’s bag. It was both John Wiley’s desire and our own to producesomething substantial—something that could be used by both practitioners and scholars,hopefully for the next 10 to 20 years, like the Cleland and King book, as a reference to thebest thinking in the discipline. But why over 1,400 pages? A second driver, significantlyresponsible for the sheer size of the book, is that it is reflective of the growth of knowledgewithin the field. The ‘‘management of projects’’ philosophy forces us (i.e., members of thediscipline) to expand our frame of reference regarding what projects truly are beyond of thetraditional PMBOK/OPM3 model.

This, then, is not a short how-to management book but very intentionally a resourcebook. We see our readership not as casual business readers but as people who are genuinelyinterested in the discipline and who are seeking further insight and information—the think-ing managers of projects. More specifically, the book is intended for both the general prac-titioner and the student (typically working at the postgraduate level). For both, we seek toshow where and how practice and leading thinking is shaping the discipline. We are delib-erately stretching the envelope, giving practical examples, and providing references to others’work. The book should, in short, be a real resource, allowing the reader to understand howthe key ‘‘management of projects’’ practices are being applied in different contexts, andpointing to where further information can be obtained.

To achieve this aim, we have assembled and worked, at times intensively, with a groupof authors who collectively provide truly outstanding experience and insight. Some are, byany count, among the leading researchers, writers, and speakers in the field, whether asacademics or as consultants. Others write directly from senior positions in industry, offeringtheir practical experience. In all cases, they have worked hard with us to furnish the rele-vance, the references, and the examples that the book as a whole aims to provide.

Introduction xv

What one undoubtedly gets as a result is a range that is far greater than any individualalone would bring. (One simply can’t be working in all these different areas so deeply as allthese authors, combined, are.) What one doesn’t always get though are all the angles thatany one mind might think are important. To an extent this is both inevitable—if, at times,a little regrettable. But to a larger extent, we feel it is beneficial, for two reasons. One, thisis not a discipline that is now done and finished. Far from it. There are many exampleswhere there is need, and opportunity, for further research and for alternative ways of lookingat things. Rodney Turner and Anne Keegan, for example, in their chapter on managinginnovation, ended up positioning the discussion very much in terms of learning and maturity.If we had gone to Harvard, to Wheelwright and Clark (1992) or Christensen (1999), forexample, we would almost certainly have gotten something that focused more on the struc-tural processes linking technology, innovation, and strategy. This divergence is healthy forthe discipline and, in fact, inevitable in a subject that is so context-dependent as manage-ment. Second, it is also beneficial because seeing a topic from a different viewpoint can bestimulating and lead the reader to fresh insights. Hence, we have Steve Simister giving anoutstandingly lucid and comprehensive treatment early in the book on risk management,but then later we have Stephen Ward and Chris Chapman coming at the same subject froma different perspective and once again offering a penetrating treatment of it. There aremany similar instances, particularly where the topic is not an easy one or may vary inapplication—for example, with regard to strategy, program management, finance, procure-ment, knowledge management, performance management, scheduling, competence, quality,and maturity.

In short, the breadth and diversity of this collection of work (and authors) is, we believe,one of our book’s most fertile qualities. It represents a set of approximately 60 authors fromdifferent discipline perspectives (e.g., construction, new product development, informationtechnology, defense/aerospace) whose common bond is their commitment to improving themanagement of projects, who provide a range of insights from around the globe. Thus, theNorth American reader can gain insight into processes that while common in Europe haveyet to make significant inroads in other locations, and vice versa. IT project managers canlikewise gather information from the wealth of knowledge built up through decades of prac-tice in the construction industry, and vice versa. The settings may change; the key principlesare remarkably resilient.

But these are big topics, and it is time to return to the question of what we mean byproject management and the management of projects, and to the structure of the book.

Project Management

There are several levels at which the subject of project management can be approached.We have already indicated one of them in reference to the PMI model. As we and severalothers of the Guide’s authors indicate later, this is a wholly valid but essentially delivery-, orexecution-, oriented perspective of the discipline: what the project manager needs to do inorder to deliver the project ‘‘on time, in budget, to scope.’’ If project management profes-

xvi Introduction

sionals cannot do this effectively, they are failing at the first fence. Mastering these skills isthe sine qua non—the ‘‘without which nothing’’—of the discipline. Section I addresses thisbasic view of the discipline, though by no means exhaustively (there are dozens of otherbooks on the market that do this excellently—including some outstanding textbooks: Mer-edith and Mantel, 2003; Gray and Larson, 2003; Pinto, forthcoming).

• Integration

• Time

• Cost

• Scope

• Risk

• Human Resources

• Communications

• Quality

• Procurement

Initiate Plan Execute Control Close Out

• Time

• Budget

• Scope

“given” “delivered”

PROJECT MANAGEMENT:

“On time, in budget, to scope” execution/ delivery

• Integration

• Time

• Cost

• Scope

• Risk

• Human Resources

• Communications

• Quality

• Procurement

Initiate Plan Execute Control Close Out

• Time

• Budget

• Scope

“given” “delivered”

PROJECT MANAGEMENT:

“On time, in budget, to scope” execution delivery

The overriding paradigm of project management at this level is a control one (in the cy-bernetic sense of control involving planning, measuring, comparing, and then adjustingperformance to meet planned objectives, or adjusting the plans). Interestingly, even thismodel—for us, the foundation stone of the discipline—is often more than many in otherdisciplines think of as project management. Many, for example, see it as predominantlyoriented around scheduling (or even as a subset in some management textbooks of operationsmanagement). In fact, even in some sectors of industry, this has only recently begun tochange, as can be seen toward the end of the book in the chapter on project managementin the pharmaceutical industry. It is more than just scheduling, of course: There is a wholerange of cost, scope, quality, and other control activities. But there are other importanttopics, too.

Managing project risks, for example, is an absolutely fundamental skill even at this basiclevel of project management. Projects by definition are unique: Doing the work necessaryto initiate, plan, execute, control, and close out the project will inevitably entail risks. Theseneed to be managed.

Introduction xvii

Both these areas are mainstream and generally pretty well understood within the tra-ditional project management community, as represented by the PMI PMBOK Guide (PMI,2000), for example. What is less well covered is the people side of managing projects. Clearly,people are absolutely central to effective project management; without people projects simplycould not be managed. There is a huge amount of work that has been done on howorganizations behave and perform and how people do too, and much has been written onthis within a project management context. (That so little of this finds its way into PMBOKis almost certainly because of its concentration on material that is said in PMBOK to be‘‘unique’’ to project management.) A lot of this information we have positioned later in thebook, around the general area of competencies, but some we have kept here in the earlier‘‘project management’’ section, deliberately to make the point that people issues are essentialin project delivery.

It is thus important to provide the necessary balance to our building blocks of thediscipline. For example, among the key contextual elements that set the stage for futureactivity is the organization’s structure, so pivotal in influencing how effectively projects maybe run. But organizational structure has to fit within the larger social context of the orga-nization—its culture, values and operating philosophy, stakeholder expectations, socioeco-nomic and business context, behavioral norms, power and informal influence processes, andso on. This takes us to our larger theme: looking at the project in its environment andmanaging its definition and delivery for stakeholder success—‘‘the management of projects.’’

The Management of Projects

The thrust of the book is, as we have said, to expand the field of project management. Thisis quite deliberate. For as Morris and Hough showed in The Anatomy of Major Projects (1987),in a survey of the then existing data on project overruns (drawing on over 3,600 projectsas well as eight specially prepared case studies), neither poor scheduling nor even lack ofteamwork figured crucially among the factors leading to the large number of unsuccessfulprojects in this data set. What instead were typically important were items such as clientchanges; poor technology management; poor change control; changing social, economic,and environmental factors; labor issues, poor contract management; and so on. Basically,the message was that while traditional project management skills are important, they areoften not sufficient to ensure project success. What is needed is to broaden the focus to coverthe management of external and front-end issues, not least technology. Similarly, at aboutthe same time and subsequently, Pinto and his coauthors, in their bespoke studies on projectsuccess (Pinto and Slevin, 1988; Kharbanda and Pinto, 1997), showed the importance ofclient issues and technology as well as the more traditional areas of project control andpeople.

The result of both pieces of work has been to change the way we look at the discipline.No longer is the focus so much just on the processes and practices needed to deliver projects‘‘to scope, in budget, on schedule’’ but rather on how we set up and define the project todeliver stakeholder success—on how to manage projects. In one sense this almost makesthe subject impossibly large, for now the only thing differentiating this form of management

xviii Introduction

from other sorts is ‘‘the project.’’ We need therefore to understand the characteristics of theproject development/life cycle but also the nature of projects in organizations. This becomesthe kernel of the new discipline, and much in this book is oriented around this idea.

Morris articulated this insight in The Management of Projects (1994, 1997), and it signifi-cantly influenced the development of the Association for Project Management’s Body ofKnowledge, as well as the International Project Management Association’s CompetenceBaseline (Morris, 2001). As a generic term, we feel ‘‘the management of projects’’ still works,but it is interesting to note how the rising interest in program management and portfoliomanagement fits comfortably into this schema. Program management is now strongly seenas the management of multiple projects connected to a shared business objective. (See, forexample, the chapter by Michel Thiry.) The emphasis on managing for business benefit,and on managing projects, is exactly the same as in ‘‘the management of projects.’’ Similarly,the more recently launched Japanese Body of Knowledge, P2M (Program and Project Man-agement), discussed inter alia in Lynn Crawford’s chapter on project management standards,is explicitly oriented around managing programs and projects to create, and optimize, busi-ness value. Systems management, strategy, value management, finance, and relations man-agement, for example, are all major elements on P2M. Few if any appear in PMBOK.

• Integration

• Time

• Cost

• Scope

• Risk

• HumanResources

• Communications

• Quality

• Procurement

Initiate Plan Execute Control Close Out

• Time

• Budget

• Scope“delivered”

ProjectDefinition

Project Delivery

• Strategy & finance

• Technology (requirements, design, make, test)

• Commercial (supply chain, procurement, etc.)

• Organizational (structure & people)

Interaction with the business and general environment

THE MANAGEMENT OF PROJECTS involves managing the definition and delivery of the project for stakeholder success. The focus is on the project in its context. Project and program management – and portfolio management, though this is less managerial – sit within this framework.

Concept Feasibility Definition Execution Close-out/Operations

(‘‘The management of projects’’ model is also more relevant to the single project situationthan PMBOK incidentally, not just because of the emphasis on value but via the inclusionof design, technology, and definition. There are many single project management situations,

Introduction xix

such as design-and-build contracts, where the project management team has responsibilityfor elements of the project design and definition.)

Section II addresses at length issues in the management of projects. How?We’ve already said that one of the major challenges is how to structure such a broad

field. Because so many factors interact, it is difficult to create a placement that, while logical,does not appear to suggest unnecessary dependencies, such as first strategy, then technology,then finance, then organization, and so on. For the truth is that though there may well bea sequence such as this, this need not always be the one to be followed, and in practicethere may well be considerable iteration between topic areas. Nevertheless, there must ob-viously be some structure, and we have adopted the following:

• Strategy, portfolio, and program management• Technology management• Supply chain management and procurement• Control• Competence development

These are pretty broad headings, however. Let’s see what we have in each.

Section II.1: Strategy, portfolio and program management

Strategy represents the fundamental goals and objectives that drive the organization andthat, if well understood and delineated throughout it, should affect the manner in whichprojects are selected, shaped, and executed. The organization’s strategy encompasses theway in which it makes sense of its external environment, identifies opportunities, and eval-uates its performance. In this manner, projects become, in a term David Cleland coined,‘‘the building blocks of strategy,’’ allowing the organization to operationalize its goals inmeaningful, measurable ways (Cleland, 1990). The organization’s use of its strategic portfolioof projects and the manner in which it shapes and maintains its programs reflects its com-mitment to a proactive, rather than reactive, means of achieving its goals.

Acknowledging the links between strategy at the corporate, portfolio, program, andproject levels allows organizations to focus on improving their portfolio and program man-agement. These are themes explored in several different chapters in this section, along witha chapter on process modeling, a very useful one on stakeholder management, and two thataddress how the financing of projects influences their management (the chapter by GrahamIve is particularly important in exploring the influence of ‘‘private finance’’ initiatives onthe practice of managing public infrastructure projects.) The result is that our basic ‘‘man-agement of projects’’ model can now be expanded to reflect our increased knowledge ofprogram management, and its concerns—managing for business benefit, managing products(brands, technology), resource allocation, and so on—and portfolio management and itsspecial challenges.

xx Introduction

Pro

ject

Def

init

ion

Project Delivery

ProgramManagement• Business benefit

• Resourcing

• Technology

• Brand etc.

Portfolio Management• Prioritization

• Evaluation (Value/Risk)

• Resourcing

Projects are subsumed under programs. Program management emphasizes issues such as managing business benefits, the technology base, and inter-project resourcing.

Portfolio management is concerned with decisions on choosing andprioritizing programs and projects. It is more analytical emphasizing evaluation of potential value and risk and resourcing options.

Section II.2: Technology management

Unusually perhaps for project management, there is quite a lot in this book on the man-agement of technology. This is partly because our research showed that technology has amajor influence on project success, partly precisely because it is so typically under-represented in the literature. There is a huge opportunity, and need, to understand this areabetter.

Logically the place to begin is requirements. As the seer said, if you don’t know whatyou want, don’t be surprised if you don’t get it! Requirements management is one of thoseareas that is often not done well and is generally not well understood. Many people cheer-fully talk about business requirements without being very clear about how these should bedefined or developed.

Product—and process—design builds off the project’s requirements; significantly, itsmanagement is also not well understood. Project management’s responsibility is not thedesign itself but to make sure the design is developed as effectively and efficiently in termsof the stakeholders’ requirements as possible. Process skills are very important in this. Theway development gates are deployed and managed—hard/soft, design reviews, value man-agement, risk management, health and safety/HAZOP management reviews, and so on—are important examples. Modeling, configuration management, and information man-agement are often critical support tools. The proper management of verification and vali-dation is essential.

None of this happens in isolation of the rest of the project, of course; integration withcost/value optimization and with compressed schedule realization is often key. Concurrent

Introduction xxi

engineering practices, for example, try and bundle all this into a project-managed, engi-neering-organized, business-optimized, integrated approach.

Having thus addressed issues related to strategy, finance, and technology, we then pro-ceed in a logical manner to issues relating to the procurement of resources, beginning firstwith a piece that links technology, strategy and procurement.

Section II.3: Supply chain management and procurement

Effectively integrating and exploiting the project resource base is a major challenge forproject-based organizations. The resource base is partly drawn from within the sponsoringorganization—and we shall be discussing people and competencies in Section II.5. However,for most projects an early structural, and continuing dynamic, challenge is to acquire andmanage external resources. Among key elements in this process are supply chain manage-ment, procurement, and tender and contract management; a long-term integrated logisticssupport (ILS) approach is also increasingly being recognized as necessary (following newfinancing pressures, as we see in the Ive chapter).

Rather like concurrent engineering, ILS wraps several ‘‘management of projects’’ topicstogether—technology, cost, value, time, organization, and so on—but this time under therubric of supply. Though the emphasis is on looking at long-term, whole-life operations—‘‘. . . ensuring that all the elements of design are fully integrated to meet the client’s re-quirements and asset’s operational and performance, including availability, reliability,durability, maintainability, and safety at minimum whole-life cost,’’ as David Kirkpatrickand his colleagues quote in their chapter—these need to be planned and managed fromthe very earliest stages of the project.

Similarly with supply chain management: As we see in Ray Venkataraman’s chapter,the manner in which an organization purposefully and proactively manages its supply chainplays a vital role in project delivery, including project features such as functionality, quality,and cost.

A theme that constantly emerges in our research and consulting experiences is theincreasingly active role that firms expect their project managers to take in understandingthe tender and contracting elements in ongoing projects. The old model, in which all cus-tomer disagreements were shunted to lawyers, has been changed to put more emphasis onproject managers ‘‘working the contract,’’ through better supply chain integration, align-ment, team building, and so on. The move toward more partnering-based contracting isjust one example of this trend. In general, project managers are these days expected to havemuch more control over terms and conditions and contract negotiation. There are a varietyof reasons for this shift, one obvious one being the need to streamline the developmentprocess by leaving as much decision-making authority in the hands of the project manageras possible. The end result is to require project managers to build teams rather than simplyrely on contractual law, while at the same time becoming more savvy commercially.

Section II.4: Control

Having developed the project strategy, assembled funding, gotten a project definition, andprocured the necessary resources, we now need to ensure we stay on track. ‘‘Control’’ is

xxii Introduction

more than just monitoring, however (as you will see in Section I). In this section we explorea number of issues of a control nature in ways that are not often found in books on projectmanagement.

Beyond conventional issues of project planning and control (scheduling, resource man-agement, and critical path development), we consider newer breakthroughs in the mannerin which projects are scheduled: Critical chain project management, for example, reflectsmore than simply a change in convention for how project activities should be sequencedand scheduled: It offers an alternative philosophy on the way in which we fast-track projectswhile improving team commitment and productivity.

Reporting performance is obviously a key part of project control, but as anyone whohas tried to do this soon realizes, it is not easy. The essential challenge is what measures touse and how to report on these in an integrated way. Issues such as what to measure, whento measure and how to interpret these findings play a critical role in establishing metricsfor project performance and subsequent control.

Other key elements in the control cycle include risk, value, and quality. We’ve alreadymentioned Stephen Ward and Chris Chapman’s fresh look at risk (uncertainty) manage-ment. Value management (VM), the process of formally optimizing the overall approach tothe project (including whether it should be done), could quite legitimately have been placedin the strategy section (II.1). However, because technology and procurement, among manyother things, need addressing before VM can really be brought to bear, we decided to delayit till these topics had been discussed. VM is positioned as a strategic process comprising,for Michel Thiry, sensemaking, ideation, elaboration, choice; for Michel, it is ‘‘the methodof choice to deal with the ambiguity of stakeholders’ needs and expectations and the com-plexity of changing business environment at program level and project initiation.’’

Quality management is a subject that bears both on strategic planning and operationalcontrol. Typically it tends to be described in terms of product quality; there is, however, asMartina Huemann shows, much opportunity for it to be applied to project managementprocesses and practices—and people—not least in quality assurance (project reviews, audits,health checks, etc.).

Section II.5: Competence Development

Ultimately, as we’ve seen, projects are run, and delivered, by people. How one organizes,motivates, supports, and develops one’s people is absolutely critical to people’s ability toperform. Foremost among the issues occupying much of the work being done today arethose having to do with knowledge, learning, and maturity. But equally important are thebroader, more traditional areas like teams, leadership, power and negotiation, and compe-tencies.

For example, the manner in which teams perform on projects represents a number ofcontractions and conflicts between ‘‘ought’’ and ‘‘action.’’ ‘‘We have knowledge and wisdomto change, but why do we not do so, or even act in ways contradictory to successful teambuilding and management?’’ asks Connie Delisle. Among the reasons are the nature of theforces shaping teams and the dynamics of team development and management. Related

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issues of leadership, power and influence, and negotiation skills development simply reinforcethe point that the management of projects cannot proceed without the effective managementof people.

Competence has increasingly become recognized as a core descriptor of our ability tomanage. The basic idea of competencies is that they are what are required to fulfill a specificrole. ‘‘Competence is concerned with the capacity to undertake specific types of action andcan be considered as a holistic concept involving the integration of attitudes, skills, knowl-edge, performance and quality of application’’ as Andrew Gale puts its. Huge efforts havebeen, and are being, put into developing project management competencies—training, tools,coaching, and the like. But are we giving people the appropriate knowledge and skills; arewe supporting their learning and development as effectively as we could? These are theconcerns of knowledge management and organizational learning that have become of suchinterest since the late 1990s.

How do we know, for example, what are the rules, practices, insights, and other knowl-edge that we may wish to pass on to, or even impose on, others? And how do we get allthis to people in the best form, when needed? Clearly one of the things we have to do isdefine our frame of reference appropriately; this tells us at least what the ballpark looks like.Research on project-based learning suggests that while it ought to be possible to supportrole-specific learning (at a price), more general standards and accreditation can only go sofar and , reinforcing Andrew Gale’s point, may have limitations in ensuring real competence.If this is so, what does this mean for the profession and its aspirations for certification?

It’s the complexity of projects and the range of issues to be managed that makes themanagement of projects so difficult to generalize about, to create standards for, and tobenchmark. Simple comparisons are generally flawed; strict causality is almost impossibleto prove. Hence, even determined efforts to gauge the return on investment of projectmanagement, like those of Bill Ibbs and his colleagues at Berkeley on evaluating projectmanagement maturity, are frustratingly still some way from delivering really robust conclu-sions. Terry Cooke-Davies, in a thoughtful chapter, shows why we should be cautious inexpecting too much too soon from the application of maturity models to such a complexdiscipline.

What all these latter chapters emphasize is what so many authors have established inthis book: the importance of context in management (Griseri, 1999)—which is why we placeso much emphasis on context in this book, particularly in Section III.

Section III: The Management of Projects in Context

The last section of the book is in fact devoted to context. Aaron Shenhar and Dov Dvirbegin by reminding us that an organization’s shape and character are ‘‘contingent’’ uponits context, and we then have chapters exploring the realities of the management of newproduct development, pharmaceutical drug development, defense contracting, construction,and auto industry projects.

Across domains such as these—and, indeed, even wider—professionals have been meet-ing now for over 30 years trying to gather together the principles and practices of good

xxiv Introduction

project management. Lynn Crawford concludes the book by surveying these attemptsaround the globe. Even-handed, she maintains a cautious but fundamentally optimistic tone,as do we.

The Wiley Guide to Managing Projects represents an opportunity to take a step back andevaluate the status of the field, particularly in terms of scholarship and intellectual contri-butions, some 20 to 25 years after Cleland and King’s seminal Handbook. Much has changedin the interim. The discipline has broadened considerably—where once projects were theprimary focus in just a few industries, today they are literally the dominant way of organizingbusiness in sectors as diverse as insurance and manufacturing, software engineering, orutilities. But as projects have been recognized as primary, critical organizational forms, sohas recognition that the range of practices, processes, and issues needed to manage them issubstantially broader than was typically seen nearly a quarter of a century ago. The oldproject management ‘‘initiate, plan, execute, control, and close’’ model once considered thebasis for the discipline is now increasingly recognized as insufficient and inadequate, as themany chapters of this book have surely demonstrated.

The shift from ‘‘project management’’ to ‘‘the management of projects’’ is no merelinguistical sleight-of-hand: It represents a profound change in the manner in which weapproach projects, organize, perform, and evaluate them.

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