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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
The industry validated Project Management Maturity Model developed by Dr. Harold Kerzner--updated and expanded Using the Project Management Maturity Model offers assessment tools for organizations of all sizes to evaluate their progress in effectively integrating project management along the maturity curve. This Third Edition includes maturity metrics, examples of Project Management Maturity Model (PMMM) reports, a new chapter on the characteristics of effective PMMM, assessment questions that align with the PMBOK® Guide--Sixth Edition, all-new illustrations that define advanced levels of maturity, assessment tools for organizations using traditional PM methods, and detailed guidance for organizations using Agile and Scrum. Using the Project Management Maturity Model: Strategic Planning for Project Management, Third Edition is broken down into three major parts. The first part discusses the principles of strategic planning and how it relates to project management, the definition of project management maturity, and the need for customization. The second part details the Project Management Maturity Model (PMMM), which provides organizations with general guidance on how to perform strategic planning for project management. The third part of the book looks at some relatively new concepts in project management such as how assessments can be made to measure the firm's growth using PM 2.0 and PM 3.0. * Features customizable maturity model assessment tools for organizations of all sizes * Includes assessment questions updated to line up with PMBOK® Guide--6th Edition * Offers detailed guidance on applying the maturity model for Agile and Scrum * Includes PowerPoint decks to aid in teaching the maturity model Using the Project Management Maturity Model: Strategic Planning for Project Management, Third Edition is an ideal book for senior level and middle level corporate managers, project and team managers, engineers, project team members, and business consultants. It also benefits both business and engineering students in courses on advanced project management.
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Using the ProjectManagement MaturityModel
Strategic Planning for Project Management
Third Edition
HAROLD KERZNER, PH.D.
This book is printed on acid-free paper.
Copyright © 2019 by John Wiley & Sons, Inc. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
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Library of Congress Cataloging-in-Publication Data:
Names: Kerzner, Harold, author.Title: Using the project management maturity model : strategic planning for project management / Harold Kerzner, Ph.D.Description: Third edition. | Hoboken, New Jersey : John Wiley & Sons, Inc., [2018] | Includes bibliographical references and index. | Identifiers: LCCN 2018048264 (print) | LCCN 2018050929 (ebook) | ISBN 9781119530879 (Adobe PDF) | ISBN 9781119530824 (ePub) | ISBN 9781119530824 (pbk.)Subjects: LCSH: Project management. | Strategic planning.Classification: LCC HD69.P75 (ebook) | LCC HD69.P75 K494 2018 (print) | DDC 658.4/04—dc23LC record available at https://lccn.loc.gov/2018048264
CONTENTS
Cover
Preface
Introduction
Chapter 1 The Need for Strategic Planning for Project Management
Introduction
Misconceptions
Project Management Becomes a Strategic Competency
General Strategic Planning
Participation by the Project Manager in Strategic Planning
What Is Strategic Planning for Project Management?
Executive Involvement
Critical Success Factors for Strategic Planning
Identifying Strategic Resources
Why Does Strategic Planning for Project Management Sometimes Fail?
Concluding Remarks
Note
Chapter 2 The Need to Plan for Project Management Maturity
Introduction
The Need for a PMMM
Other Purposes for the PMMM
Defining Project Management Maturity
Advantages of Using a PMMM
Disadvantages of Using a PMMM
Selecting a PMMM
Changing the Strategic Direction
Maturity and Core Competencies
Maturity and Assessment Timing
The Importance of Intangible Maturity Metrics
Notes
Chapter 3 Customizing the PMMM
The Need for Pmmm Customization
Understanding Customization
Issues with Public-Sector Project Management Maturity
Olympic Games Project Management Maturity
Capturing Olympic Games Lessons Learned
Chapter 4 An Introduction to the Project Management Maturity Model (PMMM)
Introduction
The Foundation for Excellence
Overlap of Levels
Risks
Assessment Instruments
Notes
Chapter 5 Level 1: Common Language
Introduction
Roadblocks
Advancement Criteria
Risk
Assessment Instrument for Level 1
Questions
Explanation of Points for Level 1
Opportunities for Customizing Level 1
Notes
Chapter 6 Level 2: Common Processes
Introduction
Life Cycles for Level 2
Roadblocks
Advancement Criteria
Risk
Overlapping Levels
Assessment Instrument for Level 2
Questions
Explanation of Points for Level 2
Opportunities for Customizing Level 2
Notes
Chapter 7 Level 3: Singular Methodology
Introduction
Integrated Processes
Culture
Management Support
Informal Project Management
Training and Education
Behavioral Excellence
Roadblocks
Advancement Criteria
Risk
Overlapping Levels
Assessment Instrument for Level 3
Questions
Explanation of Points for Level 3
Opportunities for Customizing Level 3
Chapter 8 Level 4: Benchmarking
Introduction
Characteristics
The Project Office or Center of Excellence
Benchmarking Opportunities
Roadblocks
Advancement Criteria
Assessment Instrument for Level 4
Questions
Explanation of Points for Level 4
Opportunities for Customizing Level 4
Chapter 9 Level 5: Continuous Improvement
Characteristics
Continuous Improvement Areas
The Never-Ending Cycle
Examples of Continuous Improvement
Developing Effective Procedural Documentation
Project Management Methodologies
Continuous Improvement
Capacity Planning
Competency Models
Managing Multiple Projects
End-of-Phase Review Meetings
Strategic Selection of Projects
Portfolio Selection of Projects
Horizontal or Project Accounting
Organizational Restructuring
Career Planning
Assessment Instrument for Level 5
Questions
Explanation of Points for Level 5
Opportunities for Customizing Level 5
Notes
Chapter 10 Sustainable Competitive Advantage
Introduction
Strategic Thrusts
The Need for Continuous Improvement
Project Management Competitiveness
Products versus Solutions
Enterprise Project Management
Engagement Project Management
Note
Chapter 11 Advanced Project Management Maturity Assessments
Introduction: Changing Times
Redefining Maturity from PM 1.0 to PM 2.0/3.0
Some Critical Issues with PM 1.0
The Need for PM 2.0
The Need for PM 3.0
Criticisms of PM 2.0 and PM 3.0
Implementing Continuous Improvement Changes
How to Update the Assessment Instruments
Changing Definitions for PM 2.0 and PM 3.0
Assessing Maturity for PM 2.0 and PM 3.0
Statements
Measuring Intangible Benefits and Value
Customizing PM 2.0 and PM 3.0 Assessments
PMMM and the Agile Environment
1
Notes
Chapter 12 How to Conduct a Project Management Maturity Assessment
1
Introduction
Find Ways to Bypass the Corporate Immune System
Explain Why You Are Doing This
Pick the Model that Is Best for Your Organization
Maturity Models: How Do They Compare?
Create the Right Fit
Choose an Appropriate Delivery Method
Establish Responsibility
Decide Who Should Participate
Turn the Results into an Action Plan
Develop a Remedial Training Curriculum
Keep Top Management Informed
Virtual Reporting
Benchmark Your Results to Others
Do It Again
Notes
Chapter 13 Using the PMMM to Extract Best Practices
Introduction
The Best Practices Process
Step 1: Definition of a Best Practice
Step 2: Seeking Out Best Practices
Step 3: Validating the Best Practice
Step 4: Levels of Best Practices
Step 5: Management of Best Practices
Step 6: Revalidating Best Practices
Step 7: What to Do with a Best Practice
Step 8: Communicating Best Practices Across the Company
Step 9: Ensuring Usage of the Best Practices
Common Beliefs
Best Practices Library
Best Practices and the PMMM
Notes
Chapter 14 Case Studies
Case 1: Simone Engineering Company
Questions
Case 2: NorthStar Software Company
Questions
Case 3: Colmar Automotive
Questions
Case 4: Ferris HealthCare, Inc.
Questions
Case 5: Clark Faucet Company
Questions
Case 6: Macon, Inc.
Questions
Case 7: The Blue Spider Project
Questions
Case 8: Corwin Corporation
Questions
Case 9: The Trophy Project
Questions
Notes
Appendix The Kerzner Project Management Maturity Model
XXXX KPMMM
Introduction
Respondents by Project Roles and Countries Represented
Executive Overview of the Assessment Results
Level 1: Common Language (Max 800)
Level 2: Common Processes (Max 60)
Level 3: Singular Methodology (Max 210)
Level 4: Benchmarking (Max 75)
Level 5: Continuous Improvement (Max 48)
A Study of Level 1 Performance
A Study of Level 2 Performance
A Study of Level 3 Performance
A Study of Level 4 Performance
A Study of Level 5 Performance
Suggested Actions
Index
End User License Agreement
List of Tables
Chapter 8
Table 8.1
Chapter 10
Table 10.1
Chapter 11
Table 11.1
Table 11.2
Table 11.3
Table 11.4
Chapter 14
Table 14.1
Table 14.2
Table 14.3
Appendix
Table A.1
Table A.2
List of Illustrations
Chapter 1
Figure 1.1 Basic strategic planning.
Figure 1.2 Hierarchy of strategic plans.
Figure 1.3 Methodology structuring.
Figure 1.4 Project-selection process.
Figure 1.5 Project resources.
Figure 1.6 Differences in strategic importance.
Chapter 2
Figure 2.1 Project management learning curve.
Chapter 4
Figure 4.1 The five levels of project management maturity.
Figure 4.2 Overlapping levels.
Figure 4.3 Feedback among the five levels of project management maturity.
Figure 4.4 Degree of difficulty associated with each level of the PMMM.
Chapter 5
Figure 5.1 Characteristics of Level 1.
Figure 5.2 Roadblocks to completion of Level 1.
Chapter 6
Figure 6.1 Characteristics of Level 2.
Figure 6.2 Life-cycle phases for Level 2 of project management maturity.
Figure 6.3 The components of survival.
Figure 6.4 Roadblocks to completion of Level 2.
Chapter 7
Figure 7.1 Characteristics of Level 3.
Figure 7.2 The hexagon of excellence.
Figure 7.3 Totally uncoupled processes.
Figure 7.4 Totally integrated processes.
Figure 7.5 Integrated processes for the twenty-first century.
Figure 7.6 Ways to overcome resistance to change.
Figure 7.7 Project management costs versus benefits.
Figure 7.8 Growth in successes.
Figure 7.9 Roadblocks to completion of Level 3.
Chapter 8
Figure 8.1 Characteristics of Level 4.
Figure 8.2 Simplified PMO organizational chart.
Figure 8.3 Quantitative process improvement opportunities (generic integrated process stra...
Figure 8.4 Qualitative process improvement opportunities (generic performance improvement ...
Figure 8.5 Roadblocks to completion of Level 4.
Chapter 9
Figure 9.1 Characteristics of Level 5.
Figure 9.2 Factors to consider for continuous improvement.
Figure 9.3 The five levels of maturity.
Figure 9.4 Interrelationship of project activities with various functional/organizational ...
Figure 9.5 Categorizing procedural documents within a work breakdown structure.
Figure 9.6 Activities in a continuous-improvement cycle.
Figure 9.7 The need for continuous improvement.
Figure 9.8 Classical capacity planning over time.
Figure 9.9 Capacity-planning activities.
Figure 9.10 Competency model for Eli Lilly.
Figure 9.11 Core competency analysis.
Figure 9.12 Competency models and training.
Figure 9.13 Portfolio classification matrix.
Figure 9.14 Potential benefits of a project.
Figure 9.15 Characteristics of the resources needed to achieve a project’s benefits.
Figure 9.16 Strategic importance of projects.
Figure 9.17 Strategic guide to allocating project resources.
Figure 9.18 Basic portfolio.
Figure 9.19 Typical high-risk project portfolio.
Figure 9.20 Typical conservative, profit-oriented project portfolio.
Figure 9.21 Typical balanced project portfolio.
Figure 9.22 The evolution of integrated cost-schedule management. Phase I—Budget-based plan...
Figure 9.23 The evolution of integrated cost-schedule management. Phase II—Cost/performance...
Figure 9.24 The evolution of integrated cost-schedule management. Phase III—Updating and re...
Chapter 10
Figure 10.1 R&D efforts for a sustained competitive advantage.
Figure 10.2 Strategic thrusts.
Figure 10.3 Risks associated with maintaining a sustainable competitive advantage.
Figure 10.4 Project management competitiveness.
Figure 10.5 Identifying the mission and vision.
Figure 10.6 Growth of enterprise project management.
Chapter 11
Figure 11.1 Growth in the number of metrics.
Figure 11.2 Growth in the importance of business value.
Figure 11.3 Growth in a new definition of project success.
Figure 11.4 Growth in project management health checks.
Figure 11.5 Growth in assumptions and constraints tracking.
Figure 11.6 Growth in committee governance.
Figure 11.7 Growth in flexible project requirements.
Figure 11.8 Growth in the importance of flexible methodologies (frameworks).
Figure 11.9 Growth in project management trust.
Figure 11.10 Growth in transformational project management.
Chapter 13
Figure 13.1 Best practices processes.
Figure 13.2 Levels of best practices.
Figure 13.3 Six Sigma categories (nontraditional view).
Figure 13.4 Levels of best practices.
Figure 13.5 Creating a best practices library.
Figure 13.6 Best practices library.
Chapter 14
Figure 14.1 Organizational chart for Corwin Corporation.
Appendix
Figure A.1 Five evolutionary phases.
Figure A.2 XXXX Assessment by Countries Represented.
Figure A.3 XXXX Assessment by Project Roles.
Figure A.4 Sample Level 1 Scoring.
Figure A.5 Score by Level 1 Subject Category.
Figure A.6 Normal Distribution and Standard Deviation Analysis.
Figure A.7 Sample Level 2 Scoring.
Figure A.8 Score by Level 2 Phase.
Figure A.9 Sample Level 3 Scoring.
Figure A.10 Score by Level 3 Area.
Figure A.11 Sample Level 4 Scoring.
Figure A.12 Level 4 (Benchmarking) Scores.
Figure A.13 Sample Level 5 Scoring.
Figure A.14 Level 5 (Continuous Improvement) Score.
Figure A.15 Geographical comparisons by region.
Figure A.16 Normal distribution and standard deviation analysis.
Figure A.17 Geographical comparisons by country.
Figure A.18 Normal distribution and standard deviation analysis.
Figure A.19 Comparison of scores between project roles.
Figure A.20 Normal distribution and standard deviation analysis.
Figure A.21 Comparison of scores between career development groups.
Figure A.22 Normal distribution and standard deviation analysis.
Figure A.23 Geographical comparisons by region.
Figure A.24 Normal distribution and standard deviation analysis.
Figure A.25 Geographical comparisons by country.
Figure A.26 Normal distribution and standard deviation analysis.
Figure A.27 Comparison of scores between project roles.
Figure A.28 Normal distribution and standard deviation analysis.
Figure A.29 Comparison of scores between career development groups.
Figure A.30 Normal distribution and standard deviation analysis.
Figure A.31 Geographical comparisons by region.
Figure A.32 Normal distribution and standard deviation analysis.
Figure A.33 Geographical comparisons by country.
Figure A.34 Normal distribution and standard deviation analysis.
Figure A.35 Comparison of scores between project roles.
Figure A.36 Normal distribution and standard deviation analysis.
Figure A.37 Comparison of scores between career development groups.
Figure A.38 Normal distribution and standard deviation analysis.
Figure A.39 Geographical comparisons by region.
Figure A.40 Normal distribution and standard deviation analysis.
Figure A.41 Geographical comparisons by country.
Figure A.42 Normal distribution and standard deviation analysis.
Figure A.43 Comparison of scores between project roles.
Figure A.44 Normal distribution and standard deviation analysis.
Figure A.45 Comparison of scores between career development groups.
Figure A.46 Normal distribution and standard deviation analysis.
Figure A.47 Geographical comparisons by region.
Figure A.48 Normal distribution and standard deviation analysis.
Figure A.49 Geographical comparisons by country.
Figure A.50 Normal distribution and standard deviation analysis.
Figure A.51 Comparison of scores between project roles.
Figure A.52 Normal distribution and standard deviation analysis.
Figure A.53 Comparison of scores between career development groups.
Figure A.54 Normal distribution and standard deviation analysis.
Guide
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Preface
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E1
Preface
Excellence in project management cannot occur, at least not within a reasonable time frame, without some form of strategic planning for project management. Although the principles of strategic planning have been known for several decades, an understanding of their applicability to project management has been slow in acceptance. Today, as more companies recognize the benefits that project management can provide to their bottom line, the need for strategic planning for project management has been identified as a high priority.
The definition of project management maturity is constantly changing as the landscape for project management changes. Techniques such as agile and Scrum have forced us to rethink our definitions of project management maturity. Maturity in project management is a continuously evolving process. Traditional project management maturity models must now allow for customization because each company can have a different definition of project management maturity. One size no longer fits all.
This book is broken down into three major parts. The first part, Chapters 1 to 3, discusses the principles of strategic planning and how it relates to project management, the definition of project management maturity, and the need for customization. The second part, Chapters 4 to 9, details the project management maturity model (PMMM), which will provide organizations with general guidance on how to perform strategic planning for project management. The various levels, or stages of development, for achieving project management maturity, and the accompanying assessment instruments, can be used to validate how far along the maturity curve the organization has progressed. The PMMM has been industry validated. One large company requires that, each month, managers and executives take the assessment instruments and then verify that progress toward maturity is taking place from reporting period to reporting period. Other companies have used PMMM to assess the corporation’s knowledge level regarding project management as well as a means for assessing the needs for a project management office, a best practices library, external and internal benchmarking, and the identification of the type of project management training needed. Options exist for customization in the various levels.
Chapters 10 to 13 discuss some relatively new concepts in project management such as how assessments can be made to measure the firm’s growth using PM 2.0 and PM 3.0. Many of these concepts are the result of strategic planning for project management activities.
Perhaps the major benefit of the PMMM is that the assessment instruments for each level of maturity can be customized for individual companies. This customization opportunity makes Using the Project Management Maturity Model highly desirable as a required or reference text for college and university courses that require students to perform an individual or group research project. The book should also be useful as a required text for graduate courses on research methods in project management. In addition, the book can be used as an introduction to research methods for project management benchmarking and continuous improvement, as well as providing a brief overview of how to design a project management methodology.
Seminars on strategic planning for project management using this book, as well as other training programs on various project management subjects, are available by contacting Lori Milhaven, Vice President, at the International Institute for Learning, 212-515-5121. Contact can also be made through the website (iil.com). PowerPoint slides of the material in this book may also be found on the supporting website, www.wiley.com/go/pmmm3e.
Harold Kerzner
International Institute for Learning
110 East 59th Street
New York, NY 10022-1380
Introduction
People often ask me how I came up with the idea for creating a project management maturity model (PMMM). In 1996, the International Institute for Learning (IIL) partnered with Microsoft and Nortel to sponsor a global videoconference where I discussed some of the project management best practices that companies were using. After the broadcast, I was flooded with questions, with conference participants asking me how “quickly” their company could implement some of these best practices and become good at project management. I responded to the participants that maturity and excellence in project management cannot be achieved easily or quickly without some type of strategic direction focusing on project management maturity. The direction soon became the PMMM.
In 1997, when I first prepared the foundation for the PMMM, there were very few maturity models in the marketplace. Today, there are more than 30. Every model has its pros and cons. Some models take a great deal of time to do the assessments, whereas others are fairly quick and cost-effective to use. Some models are more applicable to specific industries, such as construction or IT, whereas other models are more generic.
The PMMM was created to prepare companies for the future rather than the present. To understand this, you must first recognize what makes project management work well. Having an enterprise project management methodology does not necessarily lead to maturity. Having policies and procedures embedded throughout the methodology is also no guarantee that maturity will be forthcoming. Even following the PMBOK® Guide exactly cannot guarantee maturity.1
Before you start sending me nasty e-mails, let me state my position on the previous paragraph. Project management methodologies based on rather rigid policies and procedures were created because management wanted standardization in the way that projects were planned, scheduled, and controlled. This was a necessity because executives had concerns about the ability of their project managers to make the correct decisions. Some people have argued that these rigid approaches mandated “obedience to regulations” and limited the freedom that most project managers need. The problem with standardization is that it often pulls people out of their comfort zones, and they must work differently when assigned to projects. People who are asked to work outside of their comfort zone often dislike working on project teams and may look forward to the end of the project so they can return to their previous assignment. What I have observed in the past five decades is that project management excellence comes from four critical components:
Effective communications
Effective cooperation
Effective teamwork
Trust
With this in mind, the PMMM is significantly more behavioral than quantitative. People manage projects; methodologies function as supporting tools. You can have the greatest methodology in the world and still not reach a level of maturity, because the correct human behavior is not in place. Maturity in project management occurs when people work together correctly. The PMMM assessments focus on people interacting with other people rather than just tools.
Over the years, executives have seen the benefits of using project management correctly. As executives demonstrate more trust in project managers’ capabilities, rigid methodologies are being replaced with forms, guidelines, templates, and checklists. Today, at the beginning of a project, the project manager will walk through the “cafeteria” and select from the shelves only those forms, guidelines, templates, and checklists that are appropriate for that project and that client. We now have flexible methodologies, or frameworks. If the project manager believes that this project is a very low risk, then the project manager may not want to follow or even use the “Risk Management” section of the PMBOK® Guide. Project managers are now being given more freedom over how to apply project management practices to satisfy the customer's needs. This leads to customer satisfaction and repeat business.
But even with this new freedom, project managers must still recognize the importance of the behavioral assessments in the PMMM, which focus on effective communication, cooperation, teamwork, and trust. Behavioral assessments indicate whether people believe that they are working within their comfort zone. If continuous improvements are made correctly (i.e., Level 5 of the PMMM) and people are happy with their comfort zone, some degree of project management maturity can be achieved quickly. The focus in the PMMM is that people manage projects; people manage tools; tools by themselves manage neither people nor projects. As a former Air Force lieutenant general stated, “You must never allow the tool to control the hand that's holding it.” Maturity models should certainly include an assessment of whether the organization has the right tools and practices in place. But in my opinion, there should be an equal or possibly heavier emphasis on the necessary human behavior.
A few years ago, I was interviewed for an article on maturity models with an emphasis on the PMMM. Following are some of the questions I was asked.
Q1: How much project management maturity does a company really need?
The amount of maturity a company needs is quite often customer driven rather than internally driven. Whenever a contractor allows its customer to become more mature than it is, very unfavorable results can occur. Among them, (1) the customer tells the contractor how the work should be done, (2) the customer may perform the work by themselves, and (3) the customer may seek out a more mature contractor during competitive bidding. Therefore, companies that rely heavily on external customers for their revenue stream, such as project-driven companies, must
never
allow their customers to achieve a greater degree of maturity than theirs. For these companies, project management maturity is a necessity for survival, and the frequent use of a maturity model should be mandatory.
Companies today should be willing to perform a frequent self-assessment to make sure that the firm is continuously improving and reaching some level of maturity. During competitive bidding activities, customers are now asking contractors to show how mature their organization is with regard to project management. Maturity assessments could be the difference between winning and losing a potential contract.
Q2: Which industries are making the greatest strides toward maturity?
First of all, it is questionable if maturity can ever be accurately defined or measured because saying that you are mature in project management might imply that there is no further room for improvement. This can lead to complacency and a loss of competitiveness. But if I were asked which industries appear to be more mature than others, I would begin with project-driven companies that rely on competitive bidding for their revenue stream and must sell their delivery system as well as the expected project outcomes. They have come to the realization that they must try to remain more mature in project management than their customers simply to stay in business. As companies become more mature, tremendous pressure is exerted on their supplier base to improve in project management, and organizational maturity assessment information is appearing as a requirement in the RFP. In fact, reaching certain maturity levels in project management has now become a competitive weapon during competitive bidding activities. In general, organizations where projects have profit expectations and the project manager is responsible for generating the profits appear to mature faster than organizations where there are no profit margins assigned to projects.
Q3: What can companies just starting out on the maturity process learn from those leading the pack?
It is always better to learn from the mistakes of others rather than from your own mistakes. Several lessons can be learned. First, strategic planning for project management maturity is essential, even a necessity. Without guidance from some sort of project management maturity (strategic planning) model, achieving maturity could take decades as you learn from your own mistakes. All project management maturity models, in my opinion, are a form of strategic planning. Second, there must be a corporate commitment (especially at the executive levels) for maturity to occur, and the executives must see the value in achieving a defined level of maturity in a reasonable time frame. There are assessment questions on this in the PMMM. Third, there must exist a dedicated organization that drives the maturity process, and this normally becomes the responsibility of the project management office (PMO). Companies where PMOs take the lead in the assessment and continuous improvement processes generally reach levels of maturity more quickly than those that do not have any involvement by the PMO.
Q4: Should every company be pursuing maturity? What keeps some companies back?
Given the fact that many executives today view their company as being a stream of projects, the project management approach permeates the entire organization, mandating that maturity is necessary. Only those companies that want to stay in business and remain competitive should pursue maturity. The alternative is rather unpleasant.
Pursuing and even obtaining some degree of maturity does not guarantee that business will improve. The company must still make realistic and practical business decisions, and executives must visibility promote the continuation of project management excellence.
Q5: What would prevent a company from achieving the height of maturity?
Other than the behavioral issues I discussed before, several factors prevent companies from achieving maturity. These include: (1) executives not seeing the value in project management or in project management maturity; (2) executives not recognizing that project management maturity is now a competitive weapon; (3) executives not realizing the importance of project management maturity to customers and competitors; (4) executives not willing to establish a PMO to guide the maturity process; and (5) executives not willing to commit sufficient resources to achieving maturity. Obviously, there is a common theme in these five factors:
executives
. Hence, executive education has been a priority in recent years. Executives must see the return on investment as a result of using assessment instruments such as the PMMM. There are assessment questions on executive expectations and involvement in the PMMM. And once again, this emphasizes the importance of behavioral assessment.
Q6: There are a number of available maturity models in the marketplace. How does a company choose the maturity model that's right for its needs?
There are several PM maturity models in the marketplace. And while they all have a different approach, they all have the same ultimate objective: maturity! The decision of which model is best for a given company might be based on the time frame allotted, number of resources available for implementing changes that are needed, pressure from customers, maturity level of competitors, and whether the company is project- or non-project-driven.
Today, there are numerous papers published as well as master's degree and Ph.D. theses that benchmark the various models. Even though I am somewhat partial to the PMMM, there are other models for maturity assessments that are equally as good or better for certain applications. What should be important is not necessarily what model you select but the fact that you are doing an assessment. In my opinion, all of the models in the marketplace provide some type of value if used properly.
Q7: What components differentiate the best models from the pack?
I think that two primary components must be considered: simplicity and assessment capability. Published articles on maturity model benchmarking may have dozens of components, many of which are industry specific. I prefer just these two components as starters. The prospect of using a complex maturity model may very likely scare away senior management because they may not be able to determine time frames or resources needed to achieve maturity. With maturity models, complexity breeds avoidance. With regard to capability, assessment instruments are needed to identify areas of improvement and show that progress is being made and that continuous improvements in project management are adding value to the business.
Q8: What are the advantages and disadvantages of adopting a model using levels of maturity versus one that does not?
Using a maturity model without levels is like managing a five-year project without life-cycle phases. There is often a lack of structure and discipline, possibly a lack of metrics, and no well-established decision points for corrective action. I certainly would not like to manage a project without these elements in place.
Q9: How can a company maintain momentum after reaching a plateau?
The answer to this question is simple: executive support, executive support, and executive support. Need I say more?
Q10: How long and how much money does it typically take companies to reach the higher levels of maturity? Is it worth the investment in time and money? Can you prove it?
It has been my experience that the single most important force for achieving higher levels of maturity (other than continuous executive support) is the early-on establishment of a PMO. The PMO becomes the major driver for the maturity process. Without a PMO, it may take three to five years to reach certain initial levels of maturity. With early establishment of a PMO, however, and the right people assigned to the PMO, it may take only two years or less. The problem with deciding upon a time frame for maturity is heavily based on someone's definition of maturity, the speed with which tools are either purchased or developed, and the commitment to the right levels of project management education. Any organization can develop all the tools necessary to achieve maturity. But if the organization does not understand the benefits and value of project management or the use of the tools, what has it really accomplished? Maturity
is not
just the development of tools or processes. Maturity is the effective
use
of these instruments, and continuous improvement in the use of these instruments using captured best practices. Whenever companies ask me whether the investment of time and money to obtain maturity is worth it, my response is simple. You know the amount of money needed to achieve a certain level of maturity. But what is the cost or opportunity loss of not achieving it? Is it possible for the opportunity loss to be at least an order of magnitude greater than the cost of achieving maturity? You bet!
Note
1
PMBOK is a registered mark of the Project Management Institute, Inc.
CHAPTER 1The Need for Strategic Planning for Project Management
Introduction
For more than 50 years, American companies have been using the principles of project management to get work accomplished. Yet, for more than 40 of these years, very few attempts were made to recognize project management as a core competency for the company. There were three reasons for this resistance to project management. First, project management was initially viewed as simply a scheduling tool for the workers. Second, since this scheduling tool was thought to belong at the worker level, executives saw no reason to look more closely at project management, and thus failed to recognize the true benefits it could bring. Third, executives were fearful that project management, if viewed as a core competency, would require them to decentralize authority, to delegate decision-making to the project managers, and thus to diminish the executives’ power and authority base.
Misconceptions
As the twenty-first century approached, project management began to mature in virtually all types of organizations, including those firms that were project-driven, those that were non–project-driven, and hybrids. Knowledge concerning the benefits project management offered now permeated all levels of management. Project management came to be recognized as a process that would increase shareholder value.
This new knowledge regarding the benefits of project management allowed us to dispel the illusions and misconceptions that we had believed in for over 40 years. These misconceptions or past views are detailed next, together with current views.
Cost of Project Management
Misconception:
Project management will require more people and increase our overhead costs.
Present view:
Project management allows us to lower our cost of operations by accomplishing more work in less time and with fewer resources, without any sacrifice in quality or value.
Profitability
Misconception:
Profitability may decrease.
Present view:
Profitability will increase.
Scope Changes
Misconception:
Project management will increase the number of scope changes on projects, perhaps due to the project manager’s desire for extreme creativity.
Present view:
Project management provides us with better control of scope changes. Good project managers try to avoid unnecessary scope changes.
Organizational Performance
Misconception:
Because of multiple-boss reporting, project management will create organizational instability and increase the potential for conflicts.
Present view:
Project management makes the organization more efficient and effective through better application of organizational behavior principles.
Customer Contact
Misconception:
Project management is really “eyewash” for the customer’s benefit.
Present view:
Project management allows us to develop a closer working relationship with our customers. This can lead to increased business opportunities.
Problems
Misconception:
Project management will end up creating more problems than usual.
Present view:
Project management provides us with a structured process for effectively solving problems.
Applicability
Misconception:
Project management is applicable only to large, long-term projects such as in the aerospace, defense, and construction industries.
Present view:
Virtually all projects in all industries can benefit from the principles of project management.
Quality
Misconception:
Project management will increase the potential for quality problems.
Present view:
Project management will increase the quality and value of our products and services.
Power/Authority
Misconception:
Multiple-boss reporting will increase problems related to power and authority.
Present view:
Project management will reduce power/authority problems.
Focus
Misconception:
Project management focuses on suboptimization by looking at the project only.
Present view:
Project management allows us to make better decisions for the best interest of the company.
Project’s End Result
Misconception:
Project management delivers products to a customer.
Present view:
Project management delivers business solutions to a customer.
Competitiveness
Misconception:
The cost of project management may make us noncompetitive.
Present view:
Project management will increase our business (and even enhance our reputation).
Project Management Becomes a Strategic Competency
As senior management became more knowledgeable about project management, the misconceptions subsided and appreciation and understanding of how project management could benefit the organization grew. Today’s view of project management includes the following:
Project managers should no longer consider themselves as simply managing a project. Instead, they should see themselves as managing part of a business.
Project managers are now expected to make both project- and business-related decisions, whereas previously most business-related decisions were made by the project sponsor or governance committee.
Project managers are now managing both strategic as well as tactical projects. Previously, strategic activities were assigned to line managers rather than project managers.
Project management is now seen as the delivery system for achieving strategic business objectives.
Project management produces deliverables and outcomes that can be converted into business benefits and business value.
Companies that wish to prepare for the future perform a study every year or two to determine which four or five career-path positions are an absolute necessity for the company to survive. Project management often makes the list and is now regarded as a strategic competency rather than just another career-path position.
As a strategic competency, project managers are expected to have a better understanding than their predecessors had concerning the business itself and strategic planning.
General Strategic Planning
Strategic planning is the process of formulating and implementing decisions about an organization’s future direction. This is shown in Figure 1.1. It is vital to every organization’s survival because it is the process by which the organization adapts to its ever-changing environment and achieves its strategic objectives. The process is applicable to all management levels and all types of organizations.
Figure 1.1 Basic strategic planning.
The critical box in Figure 1.1 is the last one, Strategy implementation. People tend to focus heavily on the steps to get to strategy formulation and fail to realize that project management is the delivery system necessary to implement the strategy.
As an example, a Fortune 500 company hired a consulting company to analyze all the firm’s product lines and to provide the firm with advice on business strategy. For a week, the executives met with the consultants. The beginning of the following week, after the consultants left, the executives convened in the board room to review what they had learned. The conclusion was that the consultants told them “what to do” but not “how to do it.” The executives realized quickly that project management would be needed to convert the “what” to “how.” The Human Resources department was given the mandate to begin training in project management so that the firm could become reasonably mature in delivering strategic objectives and to perform periodic assessments to see that progress was being made.
In another example, the Industrial Products Group (IPG) of a Fortune 500 company recognized quickly the need for project management to help achieve strategic business objectives. Part of the company’s business was an Aerospace Group that appeared to be reasonably mature in project management because it had been working on government contracts for more than 20 years. Several managers from the Aerospace Group were permanently transferred into the IPG in hopes of accelerating project management maturity.
After a short while, assessments were conducted that showed progress was not being made and, in some situations, conditions had gotten worse. The IPG then realized that many of the tools and processes used in the Aerospace Group were either too complex or not appropriate for the IPG. The company learned that the tools, forms, guidelines, templates, and checklists that helped bring some level of maturity in one division may not bring the same level of maturity in another division. Customization would be required.
Participation by the Project Manager in Strategic Planning
Historically, project managers were brought on board a project after the project was approved, the business case was created, and the priority was set. Then the project manager was told how much money they had and the time frame. Constraints were often established by senior management or marketing/sales with no input by the project manager. Then the project manager was expected to meet unrealistic expectations.
As stated previously, today’s project managers are more actively involved in business decisions and responsible for achieving business objectives. As such, they are being brought on board earlier and in some companies are participating in strategic planning activities.1 The formulation process shown in Figure 1.1 is the high-level process of deciding where you want to go, what decisions must be made, and when they must be made to get there in a timely manner. It is the process of defining and understanding the business you are in and how to remain competitive within that business. The outcome of successful formulation results in the organization doing the right thing in the right way (i.e. it results in project management) by producing goods or services for which there is a demand or need in the external or internal environment. When this occurs, we say the organization has been effective as measured by market response, such as sales and market shares or customer acceptance. A good project management methodology, whether a rigid methodology or a flexible methodology such as agile or Scrum, can lead to better customer satisfaction and a greater likelihood of repeat business. All organizations must be effective and responsive to their environments to survive in the long run.
All too often, projects are selected and approved without an accurate understanding of the organization’s capabilities at that time. This occurs because executive management does not know how much additional work they can undertake without overburdening the existing labor force. The benefit of having project managers brought on board this early is that they can provide information related to the following questions:
How many resources will be needed?
What skill levels must the resources possess?
Does the organization currently have sufficient resources available internally?
Will the resources be assigned full-time or part-time?
Can this project be accomplished with a virtual project team?
The formulation process is performed at the top levels of the organization, but involvement by the project manager can accelerate downstream decision-making and possibly reduce the number of action items. Here, top management values provide the ultimate decision template for directing the course of the firm.
Formulation:
Scans the external environment and industry environment for changing conditions.
Interprets the changing environment and the enterprise environmental factors in terms of opportunities or threats.
Analyzes the firm’s resource base for asset strengths and weaknesses.
Defines the mission of the business by matching environmental opportunities and threats with resource strengths and weaknesses.
Sets goals for pursuing the mission based on top management values and sense of responsibility.
The second step in strategic planning, implementation, translates the formulated plan into a reality. At this point, project management involvement should be mandatory. Implementation involves all levels of management in moving the organization toward its mission. The process seeks to create a fit between the organization’s formulated goal and its ongoing activities or projects. Because implementation involves all levels of the organization, it results in the integration of all aspects of the firm’s functioning.
Integration management is a vital core competency of project management. As shown in Figure 1.2, there is a hierarchy of plans, and they all require integration both within and across strategic business units (SBUs). Project management is now recognized as a vehicle for the integration of just about any type of plan for any type of project.
Figure 1.2 Hierarchy of strategic plans.
Middle- and lower-level managers spend most of their time on implementation activities. Effective implementation, supported by a mature project management organization, results in stated objectives, action plans, timetables, policies and procedures, and in the organization moving efficiently toward fulfillment of its mission.
What Is Strategic Planning for Project Management?
Strategic planning for project management is the development of the necessary tools for project management. Some companies have as many as 50 tools that the project manager can use. The tools, when combined, form a methodology or framework that can be used over and over again and that will produce a high likelihood of achieving the project’s objectives. Although strategic planning for the methodology and execution of the methodology or framework does not guarantee profits or success, it does improve the chances of success.
One primary advantage of developing a flexible or inflexible methodology is that it provides the organization with a consistency of action. As the number of interrelated functional units in organizations has increased, so have the benefits from the integrating direction afforded by the project management implementation process.
Methodologies need not be complex. Figure 1.3 shows the “skeleton” for the development of a simple project management methodology. The methodology begins with a project definition process, which is broken down into a technical baseline, a functional or management baseline, and a financial baseline. The technical baseline includes, at a minimum:
Statement of work (SOW)
Specifications
Work breakdown structure (WBS)
Timing (i.e. schedules)
Spending curve (S curve)
Figure 1.3 Methodology structuring.
The functional or management baseline indicates how you will manage the technical baseline. This includes:
Résumés of the key players, if needed
Project policies and procedures
The organization for the project team
Responsibility assignment matrices (RAMs)
The financial baseline identifies how costs will be collected and analyzed, how variances will be explained, and how reports will be prepared. Altogether, this process can be applied to every project.
Another advantage of strategic project planning is that it provides a vehicle for the communication of progress in accomplishing the overall goals and objectives to all levels of management in the organization. It affords the potential for a vertical feedback loop from top to bottom, bottom to top, and functional unit to functional unit. The process of communication and its resultant understanding helps reduce resistance to change. It is extremely difficult to achieve commitment to change when employees do not understand its purpose. The strategic project planning process gives all levels an opportunity to participate, thus reducing the fear of the unknown and possibly eliminating resistance.
The final and perhaps the most important advantage is the thinking process required. Planning is a rational, logically ordered function. This is what a structured methodology or framework provides. Many managers caught up in the day-to-day action of operations will appreciate the order afforded by a logical thinking process. Methodologies can be based on sound, logical decisions and customized for a client. Figure 1.4 shows the logical decision-making process that could be part of the project-selection process for an organization. Checklists can be developed for each section of Figure 1.4 to simplify the process.
Figure 1.4 Project-selection process.
The first box in Figure 1.4 is the project-definition process. At this point, the project-definition process simply involves a clear understanding of the objectives, which should be defined in both business and technical terms. Based on the type of project, the definition of the project may evolve as the project progresses.
The second box is an analysis of the environmental situation, which is similar to the enterprise environmental factors but with a greater understanding of the business base. This includes a market feasibility analysis to determine:
The potential size of the market for the product
The potential risks of product liability
The capital requirements for the product
The market position on price
The expected competitive response
The regulatory climate, if applicable
The degree of social acceptance
Human factors (e.g. unionization)
The third box in Figure 1.4 is an analysis of the competitive situation and includes:
The overall competitive advantage of the product
Opportunities for technical superiority:
Product performance
Patent protection
Exceptional price-quality-value relationship
Business attractiveness:
Type and nature of competitors
Structure of the competition/industry
Differences among competitors (price, quality, etc.)
Threat of substitute products
Competitive positioning:
Market share
Rate of change in market share
Perceived differentiation among competitors and across various market segments
Positioning of the product within the product line
Opportunities for market positioning:
Franchises
Reputation/image
Superior service
Supply chain management:
Ownership of raw material sources
Vertical integration
Physical plant opportunities:
Locations
Superior logistics support
Financial capabilities:
Available capital
Credit rating impact
Wall Street support
Efficient operations management:
Inventory management
Production
Distribution
Logistics support
The next box in Figure 1.4 is resources and capabilities. Analysis of resources and capabilities, combined with the analysis of competitive positioning just discussed, allows you to determine our strengths and weaknesses. Identifying opportunities and threats lets you identify what you want to do. However, it is knowing your strengths and weaknesses that lets you identify what you can do. Therefore, the design of any type of project management methodology must be based heavily on what the organization can do.
Internal strengths and weaknesses can be defined for each major functional area. The design of a project management methodology can exploit the strengths in each functional area and minimize its weaknesses. Not all functional areas will possess the same strengths and weaknesses.
The following illustrate typical strengths or weaknesses for various functional organizations:
Research and development:
Ability to conduct basic/applied research
Ability to maintain state-of-the-art knowledge
Technical forecasting ability
Well-equipped laboratories
Proprietary technical knowledge
An innovative and creative environment
Offensive R&D capability
Defensive R&D capability
Ability to optimize cost with performance
Manufacturing:
Efficiency factors
Raw material availability and cost
Vertical integration abilities
Quality assurance system
Relationship with unions
Learning curve applications
Subsystems integration
Finance and accounting:
Cash flow (present and future projections)
Forward pricing rates
Working capital requirements
Human resource management:
Turnover rate of key personnel
Recruitment opportunities
Promotion opportunities
Having a project management career path
Quality of management at all levels
Public relations policies
Social consciousness
Marketing:
Price-value analysis
Sales-forecasting ability
Market share
Life-cycle phases of each product
Brand loyalty
Patent protection
Turnover of key personnel
Having analyzed what you can do, you must now look at past performance to see if there are any applicable lessons learned files that could impact the current project or selection of projects. Analysis of past performance, as shown in Figure 1.4, is usually the best guide for the specifications of the present project.
Figure 1.4 represents a rough template of whether or not to undertake a project. This type of decision-making process is critical if you are to improve your chances of success. Historically, less than 10 percent of R&D projects make it through full commercialization where all costs are recovered. Part of that problem has been the lack of a structured approach for decision-making, project approval, and project execution. All this can be satisfied with a sound project management methodology.
In the absence of an explicit project management approach, decisions are made incrementally. A response to the crisis of the moment may result in a choice that is unrelated to, and perhaps inconsistent with, the choice made in the previous moment of crisis. Discontinuous choices serve to keep the organization from moving forward. Contradictory choices are a disservice to the organization and may well be the cause of its demise. Such discontinuous and contradictory choices occur when decisions are made independently to achieve different objectives, even though everyone is supposedly working on the same project. When the implementation process is made explicit, however, objectives, missions, and policies become visible guidelines that produce logically consistent decisions.
