Post on 28-Jun-2018
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Dr Lynn Crawford Professor of Project Management Institute for Sustainable Development and Architecture Bond University, Australia
Director Human Systems International Limited
Strategic Drivers of Delivery Capability
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Outline
Why and how to invest in corporate PM capability
Delivering value through the concept of fit
Fitting corporate PM capability to strategy
Guidance from research
Conclusions
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The underlying assumption
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Organizational
Context
Improved
Project Management
Capability
Corporate
Success
Improved
Project Outcomes
“Organizational project
management improves your
processes and ensures that
you’re not just executing
projects randomly. It ties your
projects to your business
strategy and needs, making
sure those projects are
delivering results that support
your organizational goals” ,
PMI, 2011 http://www.pmi.org/BusinessSolutions/Pages/OPM3.aspx (2011)
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But what does “improvement” mean?
Maturity models
The “silver bullet”
Generic
Offer an “ideal” development path
For all organizations in all sectors
When investing in improvement
How do you choose between hundreds of “best practices” and thousands of underlying capabilities?
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Investing in PM capability improvement
You can’t do everything
So how do you set priorities and decide what to do?
How do you know which investments will be most effective
How much improvement is enough?
Investment decisions need to be made in context
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PM capability in context
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Organizational
Context
Business
Orientation
Business
Environment
Strategy
Project Management
Capability
Value of
Project Management
See also Thomas & Mullaly, 2008
“Researching the Value of Project Management” ,
Newtown Square, PA: PMI
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The concept of “fit”
Different configurations of organization systems and structure can be successful
If they “fit” the internal and external contexts (Miles & Snow, 2003; Thomas & Mullaly, 2010)
Specific corporate strategies will “drive the different ways that projects are managed”
(Srivannaboon & Milosevic, 2006; Cooke-Davies, Crawford & Lechler, 2009)
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Strategic drivers
“A company possesses a performance discipline when
The risks of performance against a particular objective have been largely eliminated and only hard work remains” (Michael Treacy, 2007)
Examples:
Dupont – safety
FedEx – reliability
GE – productivity
BMW – product innovation
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Strategic drivers
Operational excellence
Seamlessly providing reliable products and services at competitive prices
Customer intimacy
Customer loyalty and repeat business through
• Knowing the customer and adding value
• Responsiveness
• Operational flexibility
Product leadership
Innovation, leading edge products and services
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Treacy, M. & Wiersema, F. (1993). Customer Intimacy and Other Value Disciplines. Harvard Business Review, 71, 84-93.
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Organisational PM Capability
Corporate capabilities require
Know-what and Know-how
Human resources
Business processes
Corporate PM capability encompasses tools, techniques and processes for:
Portfolio management
Program management
Project management
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Fitting PM Capability to Strategy
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Strategy
Project Management
Capability
Operational
Excellence
Customer
Intimacy
Product
Leadership
Portfolio Program Project
Organizational
Context
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Research
Initial qualitative study reporting on strategic drivers of PM in nine industry sectors
Quantitative follow-on study – subset of data reported here
344 senior managers in 4 sectors
• Finance & Business Services (38%)
• Engineering & Construction (23%)
• Government (23%)
• IT & Telecoms (16%)
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Note: the target group was senior managers – not PM practitioners
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Qualitative study
Interviews with senior management
representatives of permanent rather than temporary organization
In 9 industry sectors:
• Automotive
• Aerospace and Defence
• Engineering & construction
• Finance & Business Services
• Government
• IT & Telecommunications
• Petrochemical
• Pharmaceutical
• Utililities
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Questions about strategy
What needs to be done superbly in this industry sector?
What criteria and measures are used to assess success?
What key things need to be achieved to satisfy shareholders and other stakeholders?
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Key Strategic Drivers: All Sectors
000 001 001 002 002 003 003 004 004
Ability to deliver strategy
Relationships, Collaboration & Partnering
Predictability & meeting commitments
Profitability
*Innovation
*Customer focus and satisfaction
*Financial Performance
*Execution Performance
Da
ta f
rom
qu
alit
ative
stu
dy
- a
na
lysis
of
inte
rvie
ws w
ith
se
nio
r m
an
agers
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Key Strategic Drivers: Government
000 001 002 003 004 005
Risk management
Stakeholder engagement
Benefits realization
Compliance
Customer satisfaction
Media sensitivity
Business change
*Financial Performance (Revenue)
Ability to deliver strategy
*Execution Performance
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Government sector issues
Financial performance
“We don’t have a share price but we do get our budget handed from government. And it’s how our budget is performing is almost a sense of how we’re performing as an organization.” [21:5]
‘We build to a budget, but we also work to special social needs; by definition, these can be in opposition. The budget cannot be our single point of reference’ [Project Manager (A)]
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Government sector issues
Lack of portfolio control
“Organizationally we don’t have any real discretion as to whether we do [projects] or not, we just have to do them, or the government gets very upset.” [21:21]
‘”Things change quickly on a Minister’s whim. If a new minister comes in with a new agenda, your successful project may get shelved.’ [Project Manager (B)]
Consistent process
“…it is really important that people are able to use a consistent process to deliver programs successfully and to learn lessons from that.” [24:16].
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Public Sector Ethos
‘”….the whole reason that we’re here doing this job is to do something that matters … the projects that we build are things that make the lives of [people] better. So we feel very privileged to be doing the stuff that really matters.’ [Project Manager (D)]
‘…employees tend to be very committed and devoted professionals. They have the freedom to perform to very high standards. Because this is a state owned department project managers are allowed to be very good instead of focusing exclusively on profit at the expense of excellence.’ [Project Manager (A)]
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Study Sample
Engineering/Construction(n=78)
Financial & BusinessServices (n=132)
Government (n=79)
IT/Telecommunications(n=55)
NETLIPSE (n=6)
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Respondent roles
0 5 10 15 20 25 30 35 40 45
Human Resource Management
Marketing / Sales
Program Management
Professional / Technical
Finance
Project Management
General Management
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Relative importance of strategies
According to Treacy & Wiersema, organizations focus on one strategy while meeting standards in the other two
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2,5000
2,6000
2,7000
2,8000
2,9000
3,000
3,1000
3,2000
3,3000
3,4000
OperationalExcellence
CustomerIntimacy
ProductLeadership
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Importance of strategies by industry sector
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2,000
2,2000
2,4000
2,6000
2,8000
3,000
3,2000
3,4000
3,6000
Engineering/Construction
Financial &BusinessServices
Government
IT/Telecomms
Product Leadership
Operational Excellence
Customer Intimacy
Operational Excellence
important for all
Customer Intimacy
most important for
Financial &
Business Services
Product Leadership
strongest for
IT/Telecomms
Government less
focused on
competitive
strategies
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Relative importance of strategies: Government & NETLIPSE Sample
According to Treacy & Wiersema, organizations focus on one strategy while meeting standards in the other two
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00
01
01
02
02
03
03
04
04
Operational Excellence Customer Intimacy Product Leadership
NETLIPSE Sample
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Percentage of organisations with project related processes in place
May only be considered
necessary in environments
subject to significant change
?????????????
Confirms Program
Management as both a
general and project
management capability
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Results
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Stronger
Strategic
Focus
More project
related
practices used
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Results
Operational Excellence
Strategic driver associated with use of widest range of project related practices
• But less likely to use Portfolio Management practices
More likely to use Program Management
More likely to use Benefits Management practices
• Consistent with operational excellence, optimizing “business processes across functional and organizational boundaries” (Treacy & Wiersema, 1993)
• But Benefits Management practices only used by 32% of organisations in sample
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Results
Customer Intimacy
Wide use of project related practices
More likely to use
• Portfolio management
• PM development and career paths
• Value management
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Results
Product Leadership
Overall, a weaker strategic driver
More likely to provide supportive (rather than controlling) PM practices such as
• Process management
• PM methods and methodologies
• PM development and career paths
• Support and tools for PM
Slightly less likely to use
• Portfolio management
• Risk management
Indicative of balancing act between creativity and control
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Industry sector differences
Similar results overall
But different sets of practices in each sector
IT/Telecomms strongest overall
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Engineering/Construction
Financial/BusinessServices
Government It/Telecomms
Overall use of PM practices
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Government sector
0%
10%
20%
30%
40%
50%
60%
70%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Portfolio management
0%
5%
10%
15%
20%
25%
30%
35%
40%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Benefits management
0%
10%
20%
30%
40%
50%
60%
70%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Program management
0%
10%
20%
30%
40%
50%
60%
70%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Risk management
67% 83%
100%
0%
NETLIPSE
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Government sector
0%
10%
20%
30%
40%
50%
60%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Project time management
0%
10%
20%
30%
40%
50%
60%
70%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Contracts management
0%
10%
20%
30%
40%
50%
60%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Change control processes
0%
10%
20%
30%
40%
50%
60%
Engineering/Construction
Financial/BusinessServices
Government IT/Telecomms
Project cost management
83% 83%
83% 100%
NETLIPSE
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Fitting PM Capability to Strategy
The stronger the strategic focus, the wider the range of PM practices used
Taking a generic view masks important strategic & industry differences
Wise investment in PM capability improvement should look beyond generic models to context
Fit PM capability to strategy to deliver corporate value
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Strategy
Project Management
Capability
Operational
Excellence
Customer
Intimacy
Product
Leadership
Portfolio Program Project
Organizational
Context
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Questions |
Lynn.Crawford@humansystems.net
lcrawfor@bond.edu.au
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References
The full report of this research is available from the Project Management Institute (soft copy free to members)
Crawford, L. H. & Cooke-Davies, T. J. (2012). Best industry outcomes. Newtown Square, PA: Project Management Institute.
Other publications that might be of interest:
Crawford, L. H. & Helm, J. (2009). Government and governance: the value of project management in the public sector. Project Management Journal, 40, 73-87.
Crawford, L. H. (2006). Developing organizational project management capability: theory and practice. Project Management Journal, 37, 74-86.
Cooke-Davies, T. J., Crawford, L. H., & Lechler, T. S. (2009). Project management systems: moving project management from an operational to a strategic discipline. Project Management Journal, 40, 99-109.
Crawford, L. H. & Cooke-Davies, T. J. (2012). Aligning project managment capability with strategy: results of an empirical investigation. In EURAM (European Academy of Management) Conference, 6-8 June, 2012 ( Rotterdam: EURAM.
Crawford, L. H., Costello, K. L., Pollack, J. B., & Bentley, L. (2003). Managing soft change projects in the public sector. International Journal of Project Management, 21, 443-448.
Crawford, L. H., Hobbs, J. B., & Turner, J. R. (2005). Project Categorization Systems: Aligning Capability with Strategy for Better Results. Newtown Square, PA. USA: Project Management Institute , Inc.
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