MANAGING, MONITORING AND MEASURING MANAGEMENT PROJECTS - MSc Dissertation

UNIVERSITY OF WARWICK BMS PROGRAMME

FINAL DISSERTATION

AN INVESTIGATION INTO THE PROBLEMS OF MANAGING, MONITORINGAND MEASURING 'MANAGEMENT' PROJECTS

STUDENT No : 9225594

A dissertation submitted in part fulfillment of the degree of MSc in Business Management Systems, Universityof Warwick, September 1995.

All the work contained within is my own unaided effort and conforms with the University'sguidelines on plagiarism.

MSc Business Management Systems - Final Dissertation

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TABLE OF CONTENTS

1. INTRODUCTION

2. STRUCTURE & METHODOLOGY

3. LITERATURE REVIEW - PROBLEMS OF MANAGING CHANGE ANDMANAGEMENT BY PROJECT

4. CASE STUDIES - ISSUES OF MONITORING AND MEASURING INPRACTICE

5. A FRAMEWORK FOR PROJECT PERFORMANCE MONITORING &MEASUREMENT

6. CASE STUDY - THE FRAMEWORK IN PRACTICE

7. REFINING THE FRAMEWORK

8. THE MANAGEMENT OF CHANGE BY PROJECT - TOWARDS ACHANGE PROJECT LIFECYCLE

9. CONCLUSIONS

APPENDICES

A. REFERENCES & BIBLIOGRAPHY


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1. INTRODUCTION

The rationale for this paper originates in the problems and frustrations arising fromattempting to use traditional project management techniques to monitor and control projectswith ill defined objectives and, often, no formally identified schedules or budgets.

The ideas that are central to the development of the framework presented here are basedon direct experience gained in project and change management, typically in the areas ofmanagement information systems, quality management, process re-engineering andorganisation development, and three project case studies are presented to illustrate thisexperience.

Management projects, due to the uncertainty that often surrounds them, have variouslybeen described as 'unconventional' (Breure & Hickling, 1990) and 'novel' (Boddy &Buchanan, 1992).

In that every project is concerned with some form of change, every project is also unique,and therefore project management can be considered as being as much about themanagement of change as it is the achievement of project objectives. It is the degree ofuncertainty that makes management projects 'unconventional'.

Management projects can be characterised by :

o evolving objectives and an ill-defined scope

o a requirement for effective management of conflict - because they deal with socialsystems, and

o a requirement for a high level of commitment to the results - because they arefollowed by a continuous process of implementation(Breure & Hickling, 1990).

As a result, 'Consensus over the proposed solution, and commitment to it...' are as importantto the success of the project as confidence that its outcome will be successful (Breure &Hickling, 1990).

This paper examines the issues surrounding 'management' projects and has, as its primaryobjective, the development of a model for monitoring and measuring the success of suchprojects.


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As organisations move closer to the idea of change management by project, there is anincreasing risk that traditional project management principles will be applied to situationswhere they are inappropriate (Breure & Hickling, 1990).

These traditional project management principles suggest that a project's objectives can beclassified under three main headings - performance and quality, budget, time to completion(Lock, 1995) - and are therefore geared towards verifying and validating progress againstestimates (i.e. of costs, time to produce and resources required) and specification.

Whilst these objectives may still apply to management projects, projects with nospecification, no budget or no schedule (or, on occasion, without all three!) clearly need analternative approach.

This paper will also explore the implications this alternative approach will have on the natureof project monitoring and control.

The key conclusion to be drawn from this investigation will be that there is a growing needfor an alternative means of assessing the nature of, and reporting on, the progress of theseprojects, using a range of qualitative measures to supplement, or in some cases replace,traditional quantitative measures of progress.

This will have, at its core, an organising framework based on the principle that the objectivesof management projects, and therefore, the definition of their success, evolve over time. Theframework will, therefore, focus on the need for a continuous process of evaluation aimed atproviding the project's manager, team and stakeholders an evolving 'context map’ of theproject that will facilitate understanding of the organisational environment and the choice ofthe most appropriate project management tools and methods, and provide a means ofpredicting the likely outcome of the project.


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2. STRUCTURE & METHODOLOGY

This chapter gives a brief overview of the structure of the paper, summarising the content andfindings of each succeeding chapter, and outlining the methodology in developing the ideasexpressed here.

Chapter 3 takes the form of a literature review, and focuses on three areas :

i) the problems of managing change - which identifies that there is a need for contextualunderstanding of the organisation in which the change is to be implemented, andconcludes that, when endeavouring to deal with planned change (as opposed toemergent change), the approach adopted must allow the manager to adopt an ongoingprocess of organisational assessment that allows a choice of methods and tools to beemployed in support of the change ;

ii) project managing 'management' projects - which follows on from the previous reviewand attempts to describe the process of organisational assessment in terms of four keyproject management responsibilities ;

iii) performance measurement issues - which examines the problem of understandingwhat constitutes a successful project and establishes the need for qualitative measuresthat are both sensitive to the organisational context and indicative of the likelyoutcome of the project.

Chapter 4 consists of two case studies with contrasting outcomes and views of success. Abrief comparative analysis is presented, and from this are identified a number of contrastingreasons for the actual and potential outcome of each case. The cases highlight the fact thatactual outcome is heavily dependent on the process of project management, irrespective ofthe quality and relevance of the 'objectives'.

Chapter 5 presents the rationale for a new model of monitoring and measuring projects suchas those described in the two cases, and links elements of the model back to specific issueshighlighted in the cases. The model is based on two dimensions of measurement - that whichmeasures the results of what has already been done, and that which determines the results ofthat which is being or will be done. This two dimensional approach allows a series ofmeasurements to be defined that reflect the organisational assessment discussed earlier,which can then be used as a guide to the project manager in choosing an appropriate set ofproject management tools and methods.

Chapter 6 uses a third detailed case study to illustrate the monitoring and measurementframework, and the 'Project Assessment Report', in practice.


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Chapter 7 then assesses the strengths and weaknesses of the framework in meeting four keyobjectives :

i) as a means of evaluating the environmental context of the organisation ;

ii) as a means of establishing, confirming and revising project objectives ;

iii) as a means of confirming or revising the project strategy adopted ; and

iv) as a means of predicting the likely outcome of the project.

In addition, the implications of this approach to project management on 'traditional' reportingand information systems are investigated, and the need for a review of the nature of thesesystems and their approach to reporting project progress is identified.

Chapter 8 reviews the principle of the management of change by project itself, with theobjective of assessing its effectiveness, and then uses the ideas behind the monitoring andmeasurement framework to look at the traditional project lifecycle. This chapter concludesthat the traditional view of projects as a series of linear phases with a defined start and endpoint is not applicable to 'management' projects. The outcome of research into the factorscontributing to the management of change for competitive success is used to propose acyclical, event driven lifecycle. This reflects the fact that an organisation is continuallyevolving that, therefore, management understanding of an organisation's requirements mustalso evolve.

Finally, chapter 9 presents some concluding thoughts relating to the lessons that have beenlearnt during the construction of this paper.


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3. LITERATURE REVIEW - PROBLEMS OF MANAGING CHANGE ANDMANAGEMENT BY PROJECT

Inasmuch as managing change by project implies some form of planning, this review ofchange and project management literature will focus on 'planned' change as opposed tochange that 'happens' to an organisation (Cummings & Worley, 1993), otherwise described as'emergent' change (Wilson, 1992).

However, as will be seen, the 'problems' of managing change are often those elements that areemergent - i.e. those which cannot easily be planned in the first place, either because thechange project manager cannot predict their emergence, or because s/he fails to understandtheir existence.

Cummings and Worley, in a discussion on the nature of planned change, show that changeactivities can vary depending on the type of change being embarked upon, the degree towhich members of the organisation understand the nature of the change and the structure ofthe organisation. In their critique of planned change models, they note that most of themdefine a set of steps that are intended to be applicable in all situations. However, theyconclude, these models assume that change is a rationally controlled, orderly process. Inreality, changes are often embarked upon without a clear definition of strategies and goals.Furthermore, the existence of 'emergent' conditions, such as shifting goals, unexpectedevents, and the appearance of new stakeholders, make planned change a '...far moredisorderly and dynamic process than is customarily portrayed...'.

Thus, the implementation theories of change based on these models focus on a general set ofcircumstances and neglect to explain how they work in specific, or changing, situations(Cummings & Worley, 1993).

A further limitation is the fact that these models 'begin' at the point that the decision has beentaken that change is required (Kanter, 1983). This implies that they are not able to recognise,or prescribe an appropriate reaction to those events which have preceded this decision, andwhich may contribute to, or contradict, the direction of change decided upon.

Wider research in the literature, however, reveals a body of thought that focuses on a moreinterpretative approach, both to change management and to project management, that is basedon the need for contextual understanding of the organisation, and all that implies, both beforeembarking on, and during the course of the project.



This approach can be further extended into the area of performance measurement, with theidentification of the need to introduce ongoing qualitative measurement into project reportingas a barometer of the changing (or potentially changing) organisational context in which theproject is being conducted.

3.1 PROBLEMS OF MANAGING CHANGE

Resistance to change can come from many sources, from individuals or groups, from insideor outside the organization. Common reasons for resistance from individuals include self-interest, lack of trust coupled with misunderstanding, differing viewpoints or assessments ofthe benefits, and a low tolerance for change (Kotter, Schlesinger & Sathe, 1986).

The essence of most models of planned change is the need for those individuals responsiblefor 'implementing' change to be trained to recognise both the driving forces to be encouraged,and the restraining forces to be overcome (Wilson, 1992), and are clearly heavily based onLewin's force field analysis (Lewin, 1951). For example, Dunphy and Stace's framework ofchange strategies and conditions for their use (Dunphy & Stace, 1988) includes a 'coercive'approach where key interest groups exist that oppose the proposed change. However, themajor problem is perhaps not in overcoming these areas of resistance, but in understandingwho these groups are and why they are opposing the change in the first place.

Thus, for an organization to empower its managers to plan for change is not enough. In orderto be able to steer through the dynamics of change, a manager must '...understand thecomplexities of the organisation and the nature of the change...' (Wilson, 1992). That is, thekey to handling change is the ability to understand and learn from the 'wider context', in orderto be able '...to predict the likely outcome of any action taken.' (Wilson 1992).

The wider context of the organisation will incorporate the following key aspects, each ofwhich the manager will have to understand if they are to be involved in change of anysignificant nature (Wilson & Rosenfeld, 1990) :

o The balance of power - including political imbalances

o Organisational structure - especially where it appears to have been designed tomaintain the status quo

o Management and leadership styles

o Organisational history.

The difficulty is that these aspects are interlinked and impact on each other, so thatunderstanding of each aspect implies the need to understand the effects of changes toeach on the other.



The Balance of PowerFor example, power can be analysed in terms of each of the other three. The strategiccontingencies theory (e.g. Hickson et al, 1970) is an analysis of power through structureand suggests that the acquisition of power is dependent on being in the right place at theright time, being considered indispensable and to be doing a critically important job. Thefive key bases of power (French & Raven, 1960), however, focus on perception andbehavioural styles, but are not necessarily associated with an individual's seniority in theorganisation.

Furthermore, it has been recognised that power can be exercised in more subtle ways thanthese analyses identify (Wilson & Rosenfeld, 1990). For example, the lack ofinvolvement of a group of employees in a key decision making process will influence theway they behave in relation to their responsibility in implementing the outcome of thedecision. In addition, the power relationships within an organisation may be influencedby the customs and practices that have developed over time, that is, by the nature of theorganisation itself and by its history.

Therefore, to specify an 'action step' that is intended to assure the support of key powergroups, and then to use 'leadership behaviour' to generate support for a change and toshape the political dynamics of an organisation (Nadler, 1980), is an over-simplificationof the need to understand and respond to the balance of power.

Organisational StructureDescribing an organisation in terms of its structure may be a more immediate andaccessible means of gaining understanding (Wilson & Rosenfeld, 1990), but anorganisation chart should not be mistaken for a description of how the organisation reallyfunctions. Here too, there will be links to the style of leadership at the top of theorganisation and to the environmental history of the firm, that is, in what sort ofcompetitive environment the organisation has been developing.

The key issue is to understand how the structure supports or hinders the informalprocesses, and many change management methods focus on the use of mechanisms thatexist outside or span across the formal structure. For example, Earl's use of 'bright-sparks'to act as catalysts for 'Inside-out Innovation' (Earl, 1989) ; Pettigrew's heretics - typicallyoutsiders - who can '...say the unsayable and think the unthinkable...', in order toencourage recognition of the need for change (Pettigrew, 1986) ; or Hastings 'coalitions',networks, working as project teams and promoting information sharing as part of theprocess of '...elimination of...barriers to...co-operation and communication...' (Hastings,c1992).



Managerial & Leadership StylesThese techniques, however, often need to be re-enforced by changes in leadership and/ormanagement styles, although it is recognised that leadership, power and position are notalways equated with one another in any organisation (Wilson & Rosenfeld, 1990).

Earl recommends the loosening of managerial control during the early stages ofdevelopment or change, followed by a tightening up as the project draws to a close (Earl,1989). Hastings also recognises the need to allow individuals autonomy, but emphasisesthat they must then exercise '...considerable accountability and responsibility.' (Hastings,c1992). Nadler (1980) and Pettigrew (1986), on the other hand, refer to the need todisplay 'leadership' behaviour to generate the need for, and to promote, change.

Organisational HistoryAn understanding of an organisation's history provides the context in which theorganisation, and each of the aspects discussed so far, has developed, the impact of pastactions over current beliefs, behaviours, values and attitudes. This is, in effect, oneelement of the corporate culture - 'The basic values, ideologies and assumptions whichguide and fashion individual and business behaviour.' (Wilson & Rosenfeld, 1990, p229)- which also encompasses reward and control mechanisms, the means by whichbehaviours are identified as acceptable or unacceptable and the ways in which employeesare motivated and their commitment obtained.

Pettigrew (1986) recognised the need to reinforce '...embryonic cultural shifts...' withmatching changes in the organisational structure, strengthening these changes via thereward system, and ensuring that new beliefs are carried '...deep into the organisation...'through training and via revamped employee communication systems.

The extent to which corporate culture can be changed through top-down programmes,however, is increasingly under question (e.g. Hope & Hendry, 1995), particularly as aresult of the delayering and restructuring aimed at moving organisations towards leaner,more focused units of project working, multifunctional, 'professional knowledge workers'(Drucker, 1993).

The new 'psychological contract' between organisation and employee has been defined asan 'Employability Security Contract' (Kanter, 1993). Kanter describes how anorganisation could create '...the flexibility to add or delete products, open or closefacilities, and re deploy the work force...' by recognising the need to recruit '...for thepotential to increase in competence...' and then providing challenging jobs, emphasisingteam-building, rewarding achievement and encouraging entrepreneurship.



That is, the emphasis is very much on building (or re-building) a work force that ismotivated by 'employability security', whether inside or outside the organisation, to beadaptable to the organisation's needs, and which will, presumably, be less influenced bythe organisation's history and its prevailing culture.

The conclusion that can be drawn, however, is that each approach might prove to beapplicable to a specific organisation under a specific, pre-defined, set of circumstances. Amore effective approach is likely to employ a combination of elements geared to addresseach unique situation.

Understanding those circumstances remains the key problem. Enabling management tomonitor and measure the extent to which they understand them would bring the issuesinto focus and enable an appropriate methodology to be employed to tackle them. This, inturn, would enable, a suitable combination of approaches and actions to be selected.

3.2 PROJECT MANAGING 'MANAGEMENT' PROJECTS

The previous section identified the importance for management to understand the widercontext of the organisation if they are to be involved in any significant attempt to changeit. This section continues this theme of contextual understanding, and applies it to fourkey project management responsibilities :

i) Controlling the project

ii) Assessing the risk of failure, and mitigating accordingly

iii) The balance of strategy vs. tactics in project management, and

iv) Gaining consensus and commitment to the method as well as confidence in theproposed solution.

Project ControlIf top-down change programmes are contrary to the new 'psychological contract', whatimpact might this have on the traditional control models of project management?

Project managers traditionally have a responsibility to '...guard the physical assets of theorganization, its human resources and its financial resources.' (Meredith & Mantel, 1995).



Three control mechanisms are typically employed to help discharge this responsibility(Meredith & Mantel, 1995) :

i) cybernetic control - employed as a means of tracking and automatically notifyingthe project manager when things begin to go wrong ;

ii) go/no go controls - to establish whether a pre-set condition has been met, forexample by testing ; and

iii) post control - which is geared towards identifying the lessons to be learnt fromthis project and ensuring they are available to be applied to the next.

However, these control mechanisms may be appropriate for a 'rational/linear' model ofproject management, where analytical and problem/solving skills are required, but notwhere the focus is on managing an ambiguous, uncertain project in a dynamicorganisational context.

A more participative or political model, using consultative, inter-personal and politicalskills '...to gather softer, unstructured information about (project) progress...', may bemore appropriate (Boddy & Buchanan, 1992, ch10).

Boddy & Buchanan suggest four dimensions along which the 'critical features of thecentral project task which shapes the manager's role...' can be assessed :

i) the proximity of the project to the organisation's core operating activities ;

ii) the extent to which the project involves novel solutions ;

iii) the pace at which change will be introduced as a result ; and

iv) the extent to which the project may promote internal conflict or controversy.

They go on to suggest that the key dimensions, core/margin and novel/familiar, can becombined into a model of change (see figure 1), where the challenges posed to projectmanagers of being in the core/novel quadrant are consistent with the four aspects oforganisational understanding discussed above, and include :

o changing goals, for example, as the balance of power moves from one stakeholdergroup to another

o changes in the stance and priorities of senior management

o changes in the priorities of the project owners.



Novel

Familiar

Core MarginFig. 1 - The four quadrant model of change (Boddy & Buchanan, 1992)

Boddy & Buchanan's research identified numerous examples of control processessatisfying the need for project managers, in addition to tracking progress and obtainingacceptable performance from their teams, to be able to :

o anticipate and identify blockages that might jeopardise progress at a later date

o assess the attitudes of those working on the project, especially to identify signs ofresistance

o monitor changes elsewhere, both inside and outside the organisation, that mighthave an impact on the project.

Using structured control and reporting mechanisms that focus solely on time and costs,such as those identified by Meredith and Mantel, tends to risk masking the 'real' projectproblems identified in Boddy & Buchanan's research. A further danger is that, because oftheir basis in calculations together with the fact that progress reports are often computerproduced, there is a tendency to accept that they are accurate.

As a result, these are clearly of limited use in managing the less predictable, moreuncertain activities implied by the need for this level of organisational understanding.

Risk AssessmentIt can be seen from the discussion above that there are risks to a change project inherentin failing to understand each of the four organisational contexts described. Acomprehensive means of assessing these risks, and of linking the outcome to anappropriate set of management tools, is therefore required.

Research has identified three dimensions as being influential in the level of risk incurredin a project : uncertainty with the technology to be employed, project structure (i.e. thedegree to which outputs are defined) and project size (Cash, McFarlan and McKinney,1992).



Although Cash et al.'s work is based on IT projects, their conclusions can equally well beapplied to management projects. The technical dimension can be broadened to considerthe level of uncertainty surrounding the type of work being undertaken or themethodology being employed. For example, if a project was an organisation's firstattempt at process re-engineering, it would score highly on a 'general inexperience'dimension. This would enable an assessment of the impact of the project on theorganisational structure and, therefore, how many specialist roles might be needed tohandle events that might be unpredictable or need constant monitoring (Perrow, 1967).

Cash et al. go on to identify four types of project management tools :

i) external integration tools, such as selecting an 'end user' as project manager,creating a user steering committee - that is, ensuring maximum possibleinvolvement from the ultimate owners of the change ;

ii) internal integration tools, such as selection of an experienced professional to leadthe team, frequent project team meetings, external assistance, managed lowturnover within the team - that is, ensuring high technical quality and stability inthe project team itself ;

iii) formal planning tools, such as PERT, critical path analysis, specificationstandards, feasibility studies ; and

iv) formal results control, such as periodic formal status reports versus plan, changecontrol disciplines, variance analysis.

As can be seen, these range from organisational and communications devices, through avariety of personnel controls, to the more traditional methods of structuring the sequenceof tasks and evaluating progress.

Figure 2 summarises how Cash et al. evaluated the relative contribution to project successof each group of tools according to the type of project, and its associated risk, beingundertaken. For example, project type 7 is defined as being a large project with uncertainor changing objectives and using technology or methods that are unknown orunpredictable. This is classified as a very high risk project, where external and internalintegration tools, i.e. to ensure user ownership and involvement and a high quality andstable project team, are much more likely to contribute to success than formal planning orresults control tools.

They conclude that 'The right approach for managing a project...', and also, therefore, formonitoring and measuring a project, '...flows from the specific characteristics of theproject.' (Cash et al., 1992, p191), that is, the style of project management requiredshould be driven by the type of project to be managed, and not the reverse.



Too often, the problem is one of fitting a project into the existing culture and structure ofthe organisation when, as highlighted in the discussion above, there is a need to operateoutside the existing structure of the organisation.

Contributionof Tools toSuccess :

Project Type Level ofRisk

ExternalIntegration

InternalIntegration

FormalPlanning

FormalResultsControl

1 High structure -low technology,large

Low Low Medium High High

2 High structure -low technology,small

VeryLow

Low Low Medium High

3 High structure -high technology,large

Medium Low High Medium Medium

4 High structure -high technology,small

Medium- Low

Low High Low Low

5 Low structure -low technology,large

Low High High Medium High

6 Low structure -low technology,small

VeryLow

High Low Medium High

7 Low structure -high technology,large

VeryHigh

High High Low Low

8 Low structure -high technology,small

High High High Low Low

Fig. 2 - The effect of structure, technology and project size on risk, and the relative contribution of tools toensuring project success (from Cash et al., 1992)

Strategy vs. TacticsIt has been suggested that the most important job for a project manager is to strike abalance '...between planning and action - strategy and tactics...' (Slevin & Pinto, 1987),and that failure to do so can result in either 'errors of inaction' where the emphasis is toomuch on the planning and not enough on getting things done, or 'errors of action' wherethere is too much emphasis on actions and insufficient thought given to planning.

Slevin and Pinto identify ten critical success factors for a project, and classify them aseither strategic or tactical (see figure 3).



Factor ClassificationMission StrategicTop Management Support StrategicProject Schedule/Plans StrategicClient Consultation TacticalPersonnel TacticalTechnical Tasks TacticalClient Acceptance TacticalMonitoring and Feedback TacticalCommunication TacticalTrouble Shooting TacticalFigure 3 : Ten key factors of the Project Implementation Profile(from Slevin & Pinto, 1987)

The implication is that, as the project progresses, so the emphasis will shift from thestrategic issues to the more tactical issues, and that project managers must be able to shifttheir focus accordingly. However, it must also be recognised that there will be an ongoingneed to monitor the strategy. Strategies and goals will continue to drive the project, andmay change during the life of the project.

Two issues arise from this research :

i) The need for both strategic and tactical stages in a project, and

ii) The need for a project manager to be able to operate equally effectively as astrategist and a tactician.

It is possible, according to Slevin & Pinto, to monitor strategic and tactical performancethrough an assessment of project activity (or inactivity). That is, if actions should havebeen taken but have not been, or where actions resolve a problem, but are not thensubsequently used, then the emphasis is likely to be too strategic. In contrast, if actionsare taken that should not have been, or solve the wrong problem, or are otherwiseineffective, then the emphasis is likely to be too tactical.

Consensus, Commitment and ConfidenceReference has already been made, earlier on in this paper, to the equal importance ofconsensus and commitment to a solution, compared to confidence in its appropriateness(Breure & Hickling, 1990).

The organic model of project management on which Breure & Hickling's work is based,provides for a prolonged consensus generating interface between 'technical' work (i.e. thedevelopment of the proposed solutions) and 'socio-political' work (i.e. the decision-takingprocess), achieved by commencing both types of work simultaneously. This interfaceconsists of a series of interactive 'events', typically staged in reaction to the production ofa document of some sort - a proposal, draft policy or strategy etc. - that requires formalstudy and reaction from the decision-taking groups.



Breure & Hickling also suggest that items such as newsletters and minutes of meetingscan constitute the input into such an event, albeit of a less formal nature, but contributingnevertheless to the consensus building process.

In reality, if the output of one area of work is the input to the other and vice versa, there isreciprocal interdependence (Thompson, 1967) between the two groups, and it is clearlynot possible to commence both types of work simultaneously.

However, it has been suggested that high reciprocal interdependence can tend to unitegroups in a common purpose, although this may tend to lead to conflict when thecontribution of each group can be easily distinguished (Miller, 1976).

The key conclusions that can be drawn from this are that the socio-political work mustcommence as early as possible in the project life cycle, and that the relationship betweenthe socio-political and technical groups must be carefully managed (using, for example,the external integration tools described above), as it is only through the generation ofconsensus that sufficient commitment to the project from the decision-takers can beassured.

3.3 PERFORMANCE MEASUREMENT ISSUES

For any project, the primary objectives of measurement are generally considered to be toestablish :

i) Whether it will be successful, and

ii) Whether it was successful.

A key question arising from this, however, is 'what constitutes success?'

It has been said that '...a distinction needs to be made between the success of the projectand the success of the project management activity.' (de Wit, 1988, p165). This suggestsa focus on whether the outcome of the project will or does satisfy the project's owners(whose over-riding objective, in a commercial environment, is likely to be profitability(de Wit, 1988)), and whether it will be/was completed on time, within budget and tospecification.

Morris and Hough identify three measures of project success along similar lines :

i) Project functionality - the performance of the project, '...financially, technically orotherwise...' ;

ii) Project management - concerned with the implementation of the project to budget,on time and to specification ; and



iii) Contractors' commercial performance - i.e. 'Did those who provided a service forthe project benefit commercially?'(Morris & Hough, 1987, p193).

These views of success raise a number of problems and issues, however :

i) For a number of projects, it may not be possible to establish success for theowners until the end of the payback period, or until the internal rate of return hasbeen shown to be satisfactory (Morris & Hough, 1987), and this may clearly belong after the project itself has ended ;

ii) Many projects involve a variety of stakeholders, both within the organisation (e.g.the project team itself, the directors, 'end users', other departments) and outsidethe organisation (e.g. shareholders, environmentalists, Government, etc.), whoseobjectives are '...unlikely to be congruent.' (de Wit, 1988) ;

iii) In 'unconventional' projects, there may not be a clear view of what the outcomeshould be and, therefore, there may not be a detailed specification, a schedule or abudget ;

iv) The completion of a project on time and within budget is only a measure of thesuccess of the project management activity if original estimates were accurate ;

v) The nature of the benefits to be delivered by a project may be '...identified andrefined as the project proceeds...' (Edwards, c1990), implying that the project mayneed to change in order to take advantage of where and how the best benefits canbe delivered.

These suggest that to focus on success defined by satisfying the project's owners and thethree traditional measures (time, budget and specification/quality) is insufficient.

The approach needs to be refined by :

i) a qualitative measure of the nature of the project itself that will identifyconflicting or moving objectives and goals, and can be used as an ongoingmeasure of what project stakeholder success actually means, and

ii) a measure of the productivity of the project that can be used to monitor teamperformance and the accuracy of estimates and plans.

The question of when measures should be taken also needs to be considered.Clearly, the success of the project, and of the project management activity (in de Wit'sterms) can only be measured when the project has completed.



However, criteria for the qualitative and productivity measures proposed need to beestablished prior to commencement, and a qualitative assessment made before the projectgets underway. Information supporting both measures could then be collected throughoutthe life of the project in order to monitor changes.

Quantitative measures, e.g. earned value, milestones achieved, and tests completed,monitoring progress against plans based on cost, time and specification, may also berequired throughout the life of a project.

However, the objectives of each phase of a project may vary. Even though these 'lower-level' objectives will still be subordinate to those of the project overall (de Wit, 1988), themeasures taken will have to reflect these differences. For example the trade-off betweencost, time, and quality (Barnes, in Lock, 1995) may change, particularly where a projectinvolves self-contained sub-projects with different priorities. Therefore, the emphasis andlevel of detail of these quantitative measures will vary.

Finally, if controlling mechanisms are to be effective, measures may be required both asdecision making criteria and also as a means of evaluating 'go/no go' decisions. Cancelledprojects, for example, potentially give the impression that they failed. However, the decisionto cancel may have been made on an entirely reasonable basis, e.g. a feasibility phaserecommending no further activity on a project (Morris & Hough, 1987).

3.4 CONCLUSIONS

Project management, in line with any other form of organisational control, can be defined asthe process of ensuring that actions and strategies are being pursued that will enable theproject's goals to be achieved (from Fitzgerald et al., 1991).

The characteristics of management projects, and the conclusion that contextual understandingis critical to success that both bodies of literature lead us to draw, cause problems in this area.

A range of performance measures and monitoring mechanisms are required, chosen in thelight not only of the project's objectives, but also of the nature of the project itself, i.e. thecontext in which the project is undertaken.

In common with modern management accounting requirements, this suggests that aneffective measurement model should be based on the need for both feed forward andfeedback control, and should consist of two conceptually different categories : those thatreflect the success of the project, 'results', and those that will determine the success of theproject, 'determinants' (Fitzgerald et al., 1991).



Whilst it may still be necessary to measure results in terms of project outcomes and projectprogress, the mix of determinant measures will be dependant on the context of the project andthe strategies adopted by it, may change through the life of the project to reflect changes inthat context, and may also be used as a barometer of those contextual changes.

The case studies examined in the next chapter highlight and illustrate the points drawn fromthe bodies of literature reviewed above. The first case illustrates the effectiveness of internaland external integration methods in dealing with a highly charged political set ofcircumstances, whilst the second underlines the risks associated with misunderstanding theorganisational context in which the project was being conducted.


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4. CASE STUDIES - ISSUES OF MONITORING AND MEASURING INPRACTICE

The first case study presented here concerns a project to implement financial accountingsoftware at the London offices of a large US financial services organisation, FinCo.

Although, on the face of it, this was not a particularly high risk project, the changing politicalenvironment placed considerable pressures on the project team. It will be seen that extensiveuse was made of internal and external integration tools during the course of the project andthat, despite the unfavourable circumstances, the project was ultimately a resounding success.

The second case study is a classic example of the problems that can result from a systembeing imposed by Head Office, especially when the system is to be implemented into a groupof culturally, as well as geographically, distant regional offices.

For both cases, it is possible to identify and analyse the primary reasons for the actualoutcome, success at FinCo and failure at SoftCo, and compare them with the potentialreasons that would have resulted in the opposite outcome. This serves to re-enforce the pointsmade previously concerning the need for ongoing understanding of the organisational contextsuch that the appropriate tools to support the project management process can be employed.

4.1 INTEGRATED FINANCIAL ACCOUNTING SYSTEM - FINANCIALSERVICES SECTOR

Like many companies in the financial services sector during the middle eighties, FinCo hadinvested considerable sums in trading floor systems but had largely ignored supportingmanagement information and accounting systems. However, with 'Big Bang' approaching, theneed to bring, in particular, the financial accounting systems up to date was realised.Accordingly, a new Financial Systems team was established within the Computer ServicesDivision with a remit for implementing and supporting financial and human resourcessystems.

The individual chosen to head up this team at the outset had several years experience ofworking at FinCo, and was a highly competent systems analyst with an impressive trackrecord elsewhere in the division. However, he also had a reputation, amongst the usercommunity (in particular the Finance user project team) and within the division, for beingdifficult to deal with.



Accordingly, whilst the Human Resources system project progressed, personality clasheswith Finance led to a prolonged stalemate in terms of the proposed systems design, andindeed the objectives and scope of the system to be implemented - Financial Systems werekeen to implement a multi-currency, integrated accounts payable/general ledger for FinCoInternational (FCI), whilst Finance Division's priorities lay with FinCo Europe (FCE), toreplace an existing manual accounts payable and a general ledger running on obsolete micro-computer equipment.

Packaged software had already been purchased that was capable of meeting both system'srequirements, although it was recognised that it would need some additional bespokedevelopment if it was to meet the requirements of the FCI project.

Training in the software was provided for both systems team and user community, but, as noreal development progress was made, staff attending training had little or no opportunity toput what they had learnt into practice.

The stalemate lasted from the formation of the financial systems team in the summer of 1986until January 1988, when the systems team manager was transferred into another area ofcomputer services. After a short delay, a successor was appointed from within the team.

In December 1987, the Finance User Team had developed, independently of the systemsteam, a detailed project plan for the FCE system, using traditional work breakdown structuremethods. Shortly before his departure, the systems team manager had agreed to the schedules,but without any consultation within the team itself. It became apparent that only 5 calendarmonths had been allowed to complete the project, against the original systems team estimatesof around a year, but with no provision for additional resources. (Subsequently, however,additional contract resources were obtained).

Also at the end of 1987, it had begun to be strongly rumoured that the company wasconsidering outsourcing its entire computer services division. Since the dramatic falls in thestock market on 'Black Monday', FinCo's business, which was based primarily on volume,had suffered considerably. It was generally expected that the computer operations side of thedivision, based at a large purpose built data centre in London's Docklands, would be acandidate for facilities management, as it was under-utilised and expensive to run. However,the news that the development teams would also be included sent shock waves though thedivision resulting in a decline in morale and motivation that had still not fully recovered ayear later.



Consequently, when the new Financial Systems Manager took over, there were three distinctproblems to be dealt with :

i) Relations with the user project team were poor. Although the project structure in placegave responsibility for project management to the systems team, the personalityclashes between the user project manager and the former systems project managerwere such that neither was prepared to give ground to the other, irrespective of whoseresponsibility it was or in whose area of expertise the issue lay.

ii) The long delay in getting the project off the ground meant that there was a generallack of confidence in the systems team's ability to deliver. Finance, in order to try toincrease their influence and control, had recently recruited a systems liaison manager.The individual appointed had formerly worked in computer services division, but hadleft 'under a cloud'. The Computer Services Director had specifically advised Financenot to recruit him ;

iii) Morale in the team was very low, both due to the rumours of outsourcing and becauseit was generally felt that the former manager's agreement to the project plan had been'unwise' (to say the least!). The team consisted of only five permanent staff, includingthe manager, and two of these were known to be looking elsewhere for work.

In isolation, each of these problems would have damaged the project's chances of success.Taken together, however, they left all parties in little doubt that the project would fail.

The following actions were taken as a means of at least getting the project moving.

In order to deal with the user project team situation, formal joint project managementresponsibility was established. This meant that in all issues, decisions could only be madewith the full agreement of both the project managers. In order to convince the user projectteam that this arrangement was genuine, the systems team had to accept and commit to theproject schedule. In return, the user team were obliged to accept the systems team'simplementation methodology.

Weekly project review meetings were instigated and held in a meeting room, located veryclose to the systems team, which was 'block booked' for the entire project - weekly in the firstthree months or so, full time during the latter stages. The minutes of these meetings were verydetailed and widely distributed, both in London and New York.



The meetings had two effects : firstly, Finance users attending were 'invited' into the Systemsarea, thus giving the impression that the team was being open about its work - effectively, thesystems team's working environment was open to external scrutiny ; secondly, the nature anddistribution of the minutes meant that all project decisions, achievements and problems werehighly visible. This enabled both sides of the project team to combat any political situationsthat threatened the project.

Three other things happened that, combined with, or as a result of these actions, resulted in acomplete turnaround of systems and user team morale during the course of the project :

i) The project review meeting room was rarely used for other purposes. Even though itwas only booked to the project on a weekly basis, it was actually used much moreoften for ad hoc meetings and discussions. In addition, a number of team membersdemonstrated both their sense of humour and their artistic abilities by drawing teammember caricatures on the white board - these were taken in good spirit and left therefor the duration of the project.

During the final stages, when the room was permanently allocated to the project, itliterally became the 'hub' of the project, and all issues of any importance were takenthere for resolution ;

ii) Although the full-time systems project team was relatively small in terms of staff, itwas organised into the overall systems manager, two project leaders and two analystprogrammers. In other words, it was made up of a relatively senior and experiencedgroup of people. The author, as systems manager, adopted a completely non-technicalrole, opting to deal entirely at a 'political level', leaving all technical and systemsdecisions to the project leaders. This was directly opposite in style to the formermanager, and both project leaders welcomed the opportunity to use their owninitiative and bring their not inconsiderable experience to bear without having to waitfor systems manager approval ;

iii) At about the same time the project started up, so a new PC based electronic mailsystem was being implemented in the company. The project team made extensive useof this for normal project communications, but in addition, a supplementary, satirical,level of communications began to emerge. This initially took the form of attachinggarish, dazzling graphical images to messages (very effective on a Mondaymorning!), but eventually became a series of fictional 'episodes' featuring, thinlydisguised, the key political 'opposition' figures to the project. At the end of the project,the systems manager compiled all of them and issued them as the 'postimplementation review' manual. The user project manager and the project leaders stillretain their copy to this day.

The project was completed on time, in July 1988, and the systems are still in use today.



4.2 EUROPEAN SALES AND MARKETING SYSTEMS - SOFTWARESERVICES SECTOR

It is perhaps surprising, but generally not challenged by people in the industry, that themajority of software companies, whilst striving to develop the best possible computersystems to help their customers, fail to invest any time or money in implementing systems tosupport their own business.

SoftCo in Europe were no exception to this and, during the eighties, boom time for thepackaged software industry, clearly felt no need to break the mould.

However, during the recession of the early nineties, the market began to shrink, marginsbecame tighter and the competition fiercer. It became increasingly apparent that the salesforce was not very productive, often chasing leads for some time before losing out to a 'pre-selected' supplier (i.e. the evaluation process was staged to satisfy the prospect's purchasingprocedures), or realising that this particular prospect was simply not in the market place forthe kind of products that SoftCo sold.

Furthermore, forecasting sales revenue volumes with any accuracy became increasinglydifficult, as sales executives sought to postpone the inevitable staff cutbacks with overoptimistic assessments of likely contract value and probability ratings that the prospect wouldsign with SoftCo rather than any of the other short listed suppliers.

This project was the European leg of a global programme, already implemented in theAmericas, to roll out sales and marketing software aimed at improving the visibility of thesales 'pipeline'. As it was to be implemented on leading edge laptop PC technology, andwould include up to date office automation and presentation tools, it was also intended toimprove the credibility of the sales force with prospects.

The software chosen to run the sales and marketing database was produced by a sister SoftCocompany. During the Americas roll-out, the US project team had significantly tailored thedatabase as supplied in order to meet the requirements not only of the US software salesenvironment, but also to bring it into line with the US lead qualification and salesmethodologies.

In the UK, a small team looking at lead qualification criteria had produced a preliminaryreport of findings in November 1993. This proved to be significantly more detailed than theprocesses the US team had implemented in the database and, moreover, was tailored to theUK and European marketplace.

However, at a European project planning meeting held in Atlanta (the US headquarters ofSoftCo) in December 1993, it was decreed that the sales and marketing software would beimplemented in Europe unchanged.



The European project team, as well as the various Country and Sales Managers who would beaffected, raised several concerns at the approach :

i) The implication was that the software would be implemented in English languageversions only. It also transpired that the supporting office automation packages, inorder to interface with the software, also had to be English language versions. Whilstthere was clearly no issue with this in the UK, the remaining European subsidiaries(France, Benelux and Spain) had a different view. Although English was a pre-requisite for sales executives joining the company, the Spanish in particular foundusing English language software very difficult. In addition, it was not known at thetime whether basic word processing functions such as the spell checker would beavailable for the local language. For most of the Europeans, these limitations seemedat odds with the stated objective of improving the profile of the company’s sales forceby supplying them with state of the art technology ;

ii) It transpired that the French had, completely independently, initiated negotiations withSoftCo's sister company in France for the purchase and customisation of a laterversion of the sales and marketing database. This was not at a particularly advancedstage, but an evaluation copy had been made available to the French marketingmanager for the purpose of loading up prospect data generated by a major campaign.This work had commenced. Furthermore, the software was available in a Frenchlanguage version, and interfaced with French language word processors ;

iii) European management had only recently completed work on a new salesmethodology, presenting it to the sales force at the 1994 ‘launch’ convention inJanuary. It was not the same methodology as used in the Americas, and was notsupported by the software ;

iv) Historically, the European offices had operated, by and large, autonomously from theUS head office. Partially because of poor financial performance, and partially forpolitical reasons, the US was intent on reducing this autonomy, and clearly saw globalsales performance visibility as one means of ‘shortening the leash’ ;

v) The intention to roll-out the software unchanged meant that US sales and marketingmanagement, not to mention the US project team, felt little or no need to involveEuropean management in project definition or planning. It was only at the insistenceof the European project leader that any concession was made - the US project teamagreed to host ‘telephone conference’ meetings with each of the country managers inturn, in order to explain to them the benefits of the standard approach and thus toobtain their ‘buy-in’.



The project progressed in this way through to July/August 1994, when training courses wereorganised for the European sales and marketing executives. As these were given by membersof the US project team, they too were in English. Despite the trainers’ best efforts, progressthrough both courses was very slow. Explanations of some of the technical sales andmarketing jargon had to be given, not only to those without English as a first language, butalso to UK staff, as the jargon originated in the sales and marketing methodologies in use inthe Americas.

Not surprisingly, there was little or no consensus as to the approach. Despite the fact that USmanagement were reputed to be conducting ‘account reviews’ to ensure that sales staff wereusing the system correctly (and firing those who were not), the majority of European staffwere focused on establishing the absolute minimum number of data items that had to bemaintained in the system (i.e. those which the software rather than the sales and forecastingmethodologies defined as mandatory).

All European offices were implemented with the sales and marketing ‘executive workstation’on time, within budget and to specification (albeit the US specification).

Within three months of implementation, however, US and European management agreed thatthere was no longer a mandatory requirement to use the Sales and Marketing database. Theold system for pipeline forecasting is still in use.

4.3 CASE ANALYSIS

Neither of these projects could be described as technically challenging, and both had definedobjectives, budgets and schedules, together with an allocation of resources which, althoughperhaps not sufficient at the outset, was ultimately appropriate to the task in hand. On the faceof it, neither project would normally be considered to be any more than medium risk.

Both projects completed on time, within budget and to specification, yet it is clear not onlythat the relative success of the projects differed, but that also the perception of whether eachproject was successful differed across the various interested parties in each organisation,particularly within SoftCo.

Both projects are interesting because of the political and organisational pressures placed uponthem. In FinCo, these were :

o lack of faith in the project team

o poor inter-departmental relations

o lack of employment security,

whilst in SoftCo they resulted from the imposition of US working practices for control andvisibility purposes.



Despite the problems at FinCo, the project succeeded to a very high degree, meeting allcritical success factors and generating an extraordinary team identity. This may have beenpartially in reaction to the adverse environmental conditions in which the project was beingconducted, but was also facilitated by the internal and external communications systems, andthe organisational changes made at the outset.

At SoftCo, however, whilst the European sales force benefited from the up to date technologyand the office automation and presentation tools provided, there was insufficient support tomaintain the prospect database that was the original driving objective for the system.

The reasons for the success at FinCo and the failure at SoftCo, are listed in figure 4, togetherwith the potential reasons that could have resulted in the opposite outcome.

Both cases illustrate that, irrespective of the business need for the ultimate project objectives,actual outcome is heavily dependent upon the processes used throughout the course of theproject itself.

At SoftCo, the congruence of business strategy and project objectives, coupled with theunderlying business need for technology in the sales and marketing division, should havebeen powerful drivers for success.

Similarly, at FinCo, the fact that the project was not very close to the Company's coreoperations, coupled with the disrespect that the systems team were held in and the generallack of commitment from all parties, ought to have guaranteed failure.

In both cases, the reasons for success (at FinCo) and failure (at SoftCo) resulted from the'process' of project management.

This further re-enforces the point made earlier regarding the nature and mix of determinantmeasures. The project manager needs to understand the organisational context in which theproject exists such that the appropriate tools can be employed to manage and control theproject in that context.

The reasons for success and failure in these projects will be used, in the next chapter, toderive a series of qualitative and quantitative measures that will form the basis of a model forthe monitoring and measuring of management projects such as these.



FinCo SoftCoReasons for Success Potential Reasons for

FailureReasons for Failure Potential Reasons for

SuccessProject Team Identity Lack of confidence in

systems team abilityLack of consensus Congruence of

business strategy andproject objectives

Consensus (betweenproject teams and keyusers)

Lack of commitment(due to job insecurity)

Lack of involvement(project team andusers)

Business need (fortechnology)

Geographicalproximity of all teams

Political opposition(vested interest infailure)

Conflicting objectives(between US andEuropean users)

Morale (and thereforeincreasedcommitment)

Hidden agenda (for USMgt)

Communications Closed approach todecision making

Open approach todecision making

Lack of recognition ofcultural differencesLack of recognition ofworking practicesMorale (user andproject teams)Geographically splitproject teamPoor communicationsImposed solution

Fig. 4 - Reasons for success and failure in the FinCo and SoftCo cases


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5. A FRAMEWORK FOR PROJECT PERFORMANCE MONITORING &MEASUREMENT

With hindsight, it is perhaps relatively easy to see the reasons for success and failure in theseprojects. The key question to be examined here, however, is whether a series of qualitativeand quantitative measures can be derived from an analysis of these reasons, and used as thebasis for a framework that can then be applied during the course of a project in order to :

i) evaluate the environmental context, both at the outset, and during the course of theproject, so that progress can be monitored according to this context, rather than justthrough completion of work packages or expenditure of budget ;

ii) establish, confirm or revise objectives through the project ;

iii) confirm or revise the project management strategy ;

iv) predict the likely outcome and assess the actual outcome of the project.

This section draws together the reasons for success and failure in the two cases, with theissues raised and discussed in the literature, into an organising framework divided intothe two categories of 'results' and 'determinants', and consisting of 6 generic 'performancedimensions' (see figure 5). In addition, four mechanisms for monitoring various aspectsof the project are proposed.

These measurement categories and monitoring mechanisms are explained in detail below,and are then drawn together into a framework for monitoring and measuring projectperformance that illustrates their relationship to the stages of the project life cycle.

5.1 MEASURING RESULTS

i) OutcomeFrom the financial standpoint, measuring the final outcome of the project would involvecalculating, for example, that the internal rate of return on the investment has beenachieved.

However, this information is not likely to be available until some time after the end of theproject. In addition, where management projects are faced with a 'continuous process ofimplementation' (Breure & Hickling, 1990), this method may simply not be appropriate.



Therefore, it will be necessary to implement a programme of (post-) implementationreviews, together with an analysis of stakeholder feedback, gathered, for example, fromsurveys.

This is an open-ended process, reflecting the idea of a continuous process ofimplementation and suggesting that it may be necessary to collect measures in this areaindefinitely.

ii) ProgressIn a complex environment where both time and money are important, the calculation ofproject time, cost, schedule and/or resource variances, using earned value analysis maybe required, or even critical ratios for each activity (Meredith & Mantel, ch10).

On the other hand, if measurable achievements can be identified, or where time and costestimates are considered unreliable or do not exist, then milestone reporting may besufficient. If so, then a key question to be answered will be whether work can commenceon any activity that is dependent on the achievement under review (Lock, 1992), and theproportion of 'go' versus 'no go' decisions taken by the review groups, together with timelost as a result of a 'no go' decision, could be used as measures of progress in their ownright.



CATEGORY PERFORMANCEDIMENSIONS

TYPES OF MEASURES

RESULTS OUTCOME Payback/IRRPost Implementation ReviewsStakeholder Feedback AnalysisUsage

PROGRESS MilestonesEVAGo/No Go DecisionsNo Go Delays

DETERMINANTS CONTEXT Stakeholders Success CriteriaConsensus/Commitment/ConfidenceCongruence with Business StrategyInvolvement in Decision Making ProcessStabilityInterfaces

RISK Structure/Uncertainty/SizeNature of ChangePlans

PROJECTQUALITY

CommunicationsProductivityEfficiencyFlexibilityAccuracy (of Estimating)Mix of Strategy/TacticsChanges (e.g. to Original Specification)Proximity (e.g. of Team/Customers)

PRODUCTQUALITY

Test ResultsReview OutcomesConformance to Specification

Fig. 5 - Performance measures across six dimensions (framework adapted from Fitzgerald et al., 1991)

5.2 MEASURING DETERMINANTS

i) ContextThis dimension is intended to provide an evolving, qualitative view of the political andorganisational context of the project, which, together with the assessment of project risk,could be used to select an appropriate set of tools and techniques with which to deal withthe various situations anticipated.



Six types of measurement are suggested in figure 5 :

o Stakeholders Success Criteria - it is essential to recognise the hierarchy of projectobjectives, both within the organisation and held by the various stakeholders. Astakeholder assessment, such as the Project Success Framework (de Wit, 1988) orthe Stakeholder Map and Interest Grid (Boddy & Buchanan, 1992), identifies keystakeholders and interest groups, clarifies the relationships and interdependenciesbetween the various stakeholders objectives, and can be used to illustrate eitherthe client's or a contractor's perspective. Being in a position of understanding theperspectives of each interest group, and thus being able to mitigate against thosewho originally expected (or wanted) the project to fail, was a critical successfactor for the project team at FinCo ;

o Consensus/Commitment/Confidence - Breure and Hickling identify the need forinteractive events in order to promote consensus for the proposed solution, whichthey consider to be the key to commitment and confidence in it (Breure &Hickling, 1990). Ensuring that these are planned into the project from the outset,and that they take place, and monitoring their outcome, will serve as an indicatorof the levels of consensus that are being generated. It is also essential that theseevents are effective. The US project team at SoftCo thought that teleconferencingwith the European managers would be sufficient to ensure their commitment.However, they failed to understand the difficulties inherent in joining a meetingby telephone, particularly when there are several people at 'the other end' and it isimpossible to hear all that passes between the individuals who are meeting face toface ;

o Congruence with Business Strategy - the project's overall mission needs to becongruent with the organisation's business strategy for there to be any chance oflong-term senior management support, both of which have been identified as keystrategic factors in a project's implementation profile (Slevin & Pinto, 1987).However, it must be recognised that an organisation's strategies are likely to beincreasingly dynamic in order to keep pace with the increasingly turbulentbusiness environment. This is illustrated by the SoftCo case, where the project'sobjectives at the outset were very much in line with US management's perceptionthat increased global pipeline visibility was essential going forward. However, theeffect of European management's challenge to this concept was never reflected inthe project's overall mission, one reason for its ultimate failure ;

o Involvement in Decision Making Process - there is a strong overlap here with theidea of consensus discussed above. A key difference between the two cases wasthe extent to which all parties were involved in key project decisions at FinCo ;



o Stability - this should be a measure both of the project team, and of the project'sobjectives. Regular changes to both are likely to cause confusion and delays ;

o Interfaces - if there are multiple interfaces to departments or firms outside theimmediate control of the project manager, then there will be considerabledependency on those outside links delivering what is required in a timely andeffective manner.

ii) RiskRisk analysis is a key part of any project, and it is essential that it is carried out at thestart of the project (which is, of course, when the project manager has the least timeavailable to do it!). Three suggestions for measuring risk, and the extent to which it isunderstood, are made in figure 5 :

o Structure/Uncertainty/Size - using the model discussed earlier (from Cash et al.,1992), the size of the project, the stability of the outcome (project structure) andthe level of inexperience or uncertainty with the type of project or technologybeing introduced, can be combined to assess the likely risk, and a set of projectmanagement tools chosen according to Cash et al.'s assessment of theircontribution to the success of each project 'type'. The FinCo project was amedium to large project. Although there was no prior experience within theorganisation of the software packages to be implemented, both the project teamand some users had received some basic training. Project objectives were fairlywell defined, however, therefore this could be defined as a medium risk project.The SoftCo project was a large project, using new technology, but with a welldefined and, as it turned out, unshakeable set of objectives. It too would warrantclassification as a medium risk project.

Clearly, attempting to classify projects is a complex process, and the projectmanager will need to exercise judgement in selecting which of the proposed toolsets are appropriate. For example, Cash et al's classification would suggest arelatively low contribution of external integration tools in medium risk projects.However, the FinCo project clearly benefited from the appointment of a user asjoint project manager ;



o Nature of Change - Boddy and Buchanan identify four 'features' of a projectrelating to the nature of the change to be introduced by it : its proximity to theorganisation's core operations, the familiarity of the solution being proposed, thepace at which it will be introduced, and the degree of controversy it is likely tocause (Boddy & Buchanan, 1992), which can be used to identify the likely threatsand opportunities for the project manager, both in terms of project success and ofcareer progression. Although the UK project team at SoftCo warned of theresistance likely to arise from insisting on a carbon copy US implementationthroughout Europe, US management were unable, or unwilling to recognise thelevel of controversy this would ultimately generate. (Although there is someoverlap here with the ideas discussed above, but this is seen as positive in that theconclusions drawn from each analysis will serve as cross-reference and re-enforcement) ;

o Plans - analysing the 'problem' in a systematic way in order to identify areas ofuncertainty and of risk, and then making a technical assessment of thoseuncertainties and risks, enables the project manager and stakeholders to recognisewhere problems may emerge later in the project. 'Technical planning' (Ould,1990) requires formal documentation of risk assessment, enabling characterisationof the problems likely to be faced, which in turn contributes to an understandingof which methods and tools are appropriate.

iii) Project QualityThis dimension is intended to facilitate measurement of the project management process,as well as the project team itself. Several types of measure are suggested in theframework :

o Communications - are communications, within and between, the various partiesinvolved in the project active? Are all parties fully informed, and do theyunderstand their responsibilities? Levels of communication clearly differsignificantly between the two case projects. It is also important to assess whetherany 'underground' communications are damaging to the project. In the FinCo case,the use of the electronic mail 'stories' added to the identity of the team. However,had it become a distraction or an end in itself rather than an outlet for frustrationand tension, it could just as easily have further undermined their commitment ;

o Productivity - this can be measured through an analysis of quality costs, definedas 'the expenditure incurred in defect prevention and appraisal activities pluslosses due to internal and external failures' (British Standards Institution, 1979).



These can be further defined as (from Gibson, Hoang & Teoh, 1991) :

i) Prevention costs - '...investigating, preventing and reducing defects.'

ii) Appraisal costs - assessing quality, e.g. by a process of inspection

iii) Failure costs - failing to meet customer requirements, internally, i.e. priorto release to the customer, or externally.

The primary concern here would be to measure the amount of rework arising fromerrors (suggesting poor internal communications, understanding of requirements,or team ability, for example), or from changes to the specification (and used tosupport the instability measures being reported) ;

o Efficiency/Flexibility - the ability of the team to deal with changes in thespecification or unexpected changes to the plan (for example) ;

o Accuracy (of estimates) - Measures involving time and budget can only be usedas measures of project quality if the original estimates were accurate. Otherwise,they merely reflect poor estimating. Therefore, variance analysis may beconsidered appropriate for each work package completed, with the results fedforward into estimating for the remainder of the project underway, or used asinput into estimating for subsequent projects ;

o Strategy/Tactics - it is considered a critical success factor to have the correctbalance of strategic and tactical input into a project (Slevin & Pinto, 1987). Bothproject manager and the stakeholder group should be monitoring activities toensure that actions are taken when they should be, and that they are effective insolving the problem they were designed to address. For over a year, the project atFinCo suffered from 'errors of inaction' as a result of poorly established ormissing tactical factors, whereas the SoftCo project could be said to have sufferedfrom 'errors of action' resulting from efficient implementation but missingstrategic factors (such as an agreed project mission and management support) ;

o Changes - all changes to the project, whether as a result of inaccurate initialspecification, or changing goals, should be recorded as a means of assessing thestability of the project overall ;



o Proximity - as a support to measures of communications, the physical proximityof the various teams involved should be evaluated and understood. For example,the fact that the SoftCo project was, to all extents and purposes, being driven by amanagement team based in Atlanta communicating to key European users viateleconference, was a major factor in failing to generate either consensus orcommitment to the projects overall objectives.

iv) Product QualityProduct quality is a means of establishing the likely acceptability of the product underdevelopment, and is therefore a predictor of the project's outcome. Four means ofmeasuring product quality have been suggested in the framework :

o Tests - ensuring that appropriate test plans are developed, that the product istested against them at the relevant point in the project schedule, that sufficienttime is allowed for resolution of problems, and that sufficient autonomy to makedecisions based on the outcome of testing is available to the project manager ;

o Reviews - similar to testing, reviewing ensures that all 'deliverables' are validatedand verified against the part of the specification relating to them. In the main,these form the 'interactive events' discussed above in support of consensusgeneration ;

o Conformance to Specification - as output from testing and reviewing, and as acontribution to productivity analysis, it will be possible to assess the extent towhich each part of the product conforms to the original specification. In addition,where decisions have been made to proceed without taking appropriate correctiveactions to resolve problems, this will serve as a record of where the final productwill not conform to specification ;

o Usage - in cases where evolutionary prototyping is used, for example, or wherethe product is implemented using a phased approach, monitoring the extent towhich it is being used is another indicator of consensus with the project'sobjectives, and of conformance of the product to specification. At SoftCo, despitethe threats implied by the programme of account reviews with US sales staff, thesystem was not being used. An analysis of the quality of information comingthrough into the 'global' pipeline, coupled with the number of fairly basic systemproblems discovered by the European project team, would have made thisapparent fairly quickly.



5.3 MONITORING MECHANISMS

Each monitoring mechanism described below can be considered as a sub-project in itsown right. The purpose of incorporating these into the framework being developed here isto recognise that the measurement profile of a project may change throughout its life. Inother words, the measures and reporting requirements that are considered appropriate atthe start of a project, may not be relevant at a subsequent stage, due, for example, to achange in the project's overall objectives, or in the political landscape of the organisationconducting the project.

i) Measurement PlanningThe types of measures shown in figure 5 are not intended to be exhaustive, or evenmandatory. Measurement planning uses as input the results of the initial assessment ofproject context and risk, with the objective of identifying the specific measures neededfrom the other dimensions in order to contribute most effectively to the project manager'sown understanding of progress and satisfy stakeholder reporting and informationrequirements.

Feedback from subsequent assessments, and from project productivity, progress andquality measures, should be brought into a regular review of the effectiveness of themeasurement plan, and adjustments made to the measures employed, or to the way inwhich they are presented, as appropriate.

ii) Benefits ManagementBenefits management is intended as a means of identifying and analysing the componentsof the benefit intended to be delivered by the project, as the project proceeds, so that thenature of the project itself can also be refined. The objective of this analysis is to ensurethat the best possible benefit can be delivered to the customer (Edwards, c1990).

For example, the SoftCo project was initially intended to deliver benefits to the salesmanagement in Atlanta by providing global sales pipeline visibility. Had there been aprocess of benefits management in place, the following may well have reflected itsfindings :

a) An accurate pipeline would only be possible if there was sufficient consensusamongst the European management and users to ensure that accurate informationwas input into the system ;

b) The information required by the US to support the pipeline benefit was designedaround the US forecasting and sales methodologies. These were not accepted inEurope (they were tailored to the US marketplace and not appropriate elsewhere) ;



c) Therefore, the package needed tailoring to the European methodologies, in orderthat its use would be more palatable to European users. At the same time, arelatively simple 'mapping' process could have been developed to 'translate'European data into the format required by the sales management for the pipeline.In this way, by slightly refining the nature of the project, genuine benefit couldhave been delivered to the European users without greatly compromising the USrequirements.

Edwards defines three stages of benefits management relative to the main project :

o Project start-up - the concern at this stage is with identifying the sources ofbenefit, and ensuring that predictions and assumptions about benefits to beaccrued are made with the appropriate authority ;

o Development phases - here the focus will be on identifying the detail of benefits,and what measurements need to be in place to demonstrate that they have beendelivered ;

o Implementation - measuring the benefits delivered, and identifying and explainingunplanned or undelivered benefits.

iii) Project ControlsThe inappropriateness of mechanistic approaches to project control have already beendiscussed above. However, it is recognised that management projects will still need to becontrolled, and may well need tighter controls in some areas, due to their uncertainnature. In any event, it is a prerequisite of any control system that there be a method ofmeasuring the effect of any instruction issued from it (Lock, 1992).

Thamhain and Wilemon identify 17 criteria for effective project control, suggesting thatit involves the ability to work out detailed plans, obtain agreement to the plan from theproject team, sponsor, customer, etc., obtain commitment from the team andmanagement, define measurable milestones, attract and hold quality people, establish acontrolling authority for each package of work, and detect problems early (Thamhain &Wilemon, 1986).

It is suggested here that four key areas of control need to be addressed, over and abovethose concerned with financial or physical assets :

o Go/No Go Controls - based on progress and quality measurements, these test toestablish whether activities that are dependant on the reported activity to deliverall or part of its output can start at this point. Typically, it will be sufficient toconfirm that '...pre-determined specifications for project output have been met.'(Meredith & Mantel, 1995) ;



o Change Management - despite assertions that a pre-condition for success is for aproject definition to be '...properly defined...not fully committed to until...(it)...isshown to workable ; and then "frozen"...' (Morris & Hough, 1987), it is rarelyfeasible in management projects.Often, the project definition will evolve as the project progresses, with any initialdocument produced being suitably 'skeletal' to provide for this situation. It isessential, therefore, to have in place a formal change management system, to'...control the process by which the change is introduced and accomplished...'(Meredith & Mantel, 1995), that is, to facilitate and track change as much as tocontrol it ;

o Performance Appraisal - to ensure the best use of feedback from projectproductivity measures, a formal system of performance appraisal for project teammembers should be in place.This does not have to be separate from, or in addition to, whatever standardsystem is in place, but should ensure that performance objectives are directlyrelated to project activities.An effective system should aim to move the emphasis of project managementaway from control, and towards commitment, placing '...more reliance on thestrengths of shared norms and values amongst the group working on theproject...(so)...that a substantial part of the control process can be carried out bythem, exercising internal self-control over the project work.' (Boddy & Buchanan,p160).

This was the effect of the Systems Manager at FinCo adopting an entirely non-technical role, thus allowing the project leaders to take responsibility for theirown performance.

o Control of Creative Activities - where processes or projects depend on thecreativity of individuals or teams, particular problems of control can arise. Themore creativity, the greater the uncertainty surrounding the outcomes. However, itis suggested that too much control may inhibit creativity (Meredith & Mantel,1995). A combination of three approaches can be adopted for this situation :

i) Progress reviews must focus on the process rather than the outcome ;

ii) Team members who are not productive should be reassigned away fromthe creative process ;

iii) There must be a focus on efficiency - '...efficiency is not synonymous withcreativity...but...Creativity is not synonymous with extravagant use ofresources.' (Meredith & Mantel, 1995, p534).



iv) Project Performance AuditingAs with benefits management, project performance auditing consists of three phasesrelative to the main project. Ideally, auditing should be carried out by an independentthird party with sufficient access to authority that any recommendations, includingstopping the project, can be properly considered and acted upon.

The three phases involve the following (from Duff & Thomas, 1989) :

o Project start-up - an audit of the initial assessment of context and risk, of theproject objectives, and of the implementation strategy. This should aim toestablish the relevance and accuracy of the assessment, and the viability of theobjectives and strategy. Also, the commitment to provide the appropriate level offunding should be clarified ;

o Development phases - a diagnosis of a project's problems, and providingrecommendations as to how performance can be improved ;

o Implementation - defining and recording the lessons learnt, providing feedforward information into subsequent projects.

Duff and Thomas identify several factors that should be reviewed through such an audit,including time, money, procurement strategy, site access, commissioning and operationsprocedures etc. For management projects the audit should include project organization,communications, restraints, consensus and commitment, risk, etc.

The audit should be planned at the outset of the project, tailored around the measurementdimensions in use, and focus on ensuring the measurements are appropriate.

5.4 TOWARDS A PERFORMANCE MONITORING AND MEASURINGFRAMEWORK

A brief discussion of when measures should be taken, or when monitoring shouldcommence, has already been entered into above.

Breure and Hickling define 7 stages in the project life cycle, beginning with Goal Settingand ending with Follow-Up, although this latter is clearly ongoing where there is aprocess of continuous implementation (as in the outcome of a strategic planning project,for example).

Figure 6 illustrates the measurement dimensions and monitoring mechanisms inrelationship to these seven phases.



Fig.6 - Framework of Project Performance Monitoring and Measurement

An assessment of the project context and risk measurement dimensions commences at thesame time as the project enters the goal setting phase, i.e. at the start of the project (or as soonthereafter as a project manager is appointed). This assessment is ongoing, as is shown on theframework, until Finalisation.

The context and risk assessment feed into measurement planning, which commences as soonas the assessment has been completed, as does benefits management. Measurement planningis ongoing until Finalisation, but benefits management should continue until the end of thepayback period or until the process of continuous implementation either ends or is cancelled.

Measurements of project progress, project quality and product quality, should be taken as theproject 'proper' starts up, and continue through to Finalisation, revised or refined by theongoing measurement planning process. Similarly, project controlling mechanisms willcommence at start-up and continue to Finalisation.

Project performance auditing also commences at start-up, but, as with benefits management,continues on past Finalisation until the project's outcome has been determined.

Project outcome measures, shown on the framework as commencing after Finalisation,clearly continue on until the end of the payback period or the continuous implementationprocess, but may also commence earlier to reflect the requirements of a phased projectimplementation or evolutionary prototyping approach.

GOALSETTING

START-UP ANALYSIS GENERATION JUSTIFICATION FINALISATION FOLLOW-UP

CONTEXT & RISK ASSESSMENT

MEASUREMENT PLANNING

PROJECT PROGRESS

PROJECT QUALITY

PRODUCT QUALITY

PROJECT

OUTCOME

PROJECT PERFORMANCE AUDITING

PROJECT CONTROLS

BENEFITS MANAGEMENT

Indicate feed forward/feed back controls, monitoring effectiveness of control mechanisms and appropriateness of measures implementedMeasurement

DimensionMonitoringMechanism

KEY:



5.5 REPORTING

Key to the success of any measurement system is the ease and means of reporting andcommunicating the implications of the measures taken.

Figure 7 is a suggested format for a Project Assessment Report. This consists of 6 mainsections :

i) Project Title - consisting of the project name, the point and date at which thisassessment was conducted ;

ii) Stakeholder Analysis - identifying the key stakeholders for the project, and theirlikely success criteria ;

iii) Context/Risk Assessment - following the format of the Project Profile Tool (Boddy &Buchanan, 1992, p36), this allows a quantitative assessment to be attempted, wherethe higher the overall score, the more ambiguous and uncertain the project is likely tobe. Cash et al's. risk model is also used to give an overall indication of the risk offailure, with room to add comments concerning, for example, the type of projectmanagement tools that may be appropriate ;

iv) Benefits - an opportunity to record the results of Benefits Management ;

v) Control Mechanisms - specification of the types of controlling mechanismsappropriate to the project :

vi) Measurement Plan - for each of the remaining dimensions, specification of the type ofmeasure to be used, and the method of data collection or reporting proposed.

The control mechanisms and measurement plan are simply specified on the AssessmentReport, and clearly require an additional means of reporting. This may, in some cases, besimilar to the standard reports produced by project management information systems (PMIS).

In the next chapter, the Project Assessment Report will be used to illustrate the monitoringand measurement framework in practice.



Fig. 7 - Project Assessment Report

CONTEXT/RISK PROBLEMS/COMMENTS

ALIGNMENT TO BUSINESS STRATEGY? Y N

PROCESS SOLUTIONCONSENSUS HIGH1 2 3 4 5LOW HIGH1 2 3 4 5LOWCOMMITMENT 1 2 3 4 5 1 2 3 4 5CONFIDENCE 1 2 3 4 5 1 2 3 4 5

INVOLVEMENT HIGH1 2 3 4 5LOWSTABILITY HIGH1 2 3 4 5LOWINTERFACES FEW1 2 3 4 5MANY

STRUCTURE DEFINED/I LL-DEFINEDUNCERTAINTY LOW/HIGHSIZE SMALL/LARGERISK

SIGNIFICANCE MARGIN1 2 3 4 5CORESOLUTION FAMILIAR1 2 3 4 5UNFAMILIARPACE GRADUAL1 2 3 4 5RAPIDINTENTIONS UNCONTROVERSIAL1 2 3 4 5CONTROVERSIAL

BENEFITS

PROJECT :

ASSESSMENT POINT : DATE :

CONTROL MECHANISMS

MEASUREMENT PLANDIMENSION MEASURE METHOD

OUTCOMEPROGRESSPROJECT QUALITYPRODUCT QUALITY

KEY STAKEHOLDERS SUCCESS CRITERIA

SOURCES

DEPENDENCIES


Student No. : 9225594 Page 1 of 1718/12/2014 6_case.doc

6. CASE STUDY - THE FRAMEWORK IN PRACTICE

This case study, based on a consultancy project that took place between February and August1995, required a process of almost continuous organisational assessment to be undertaken asthe political dynamics of the Company unfolded and changed during the course of theproject.

It therefore presents a very good opportunity to 'pilot' elements of the monitoring andmeasurement framework introduced above.

6.1 COMPANY BACKGROUND

LifeCo, formed in 1975, is a small UK life and pensions company with, currently, around0.5% of the marketplace, 500 Head Office and administration staff, and some 400 direct salesforce (DSF - mostly self-employed) and Independent Financial Advisor (IFA) accountexecutives.

Financially, the company made a loss in 1994, and is some 40% behind plan for 1995. TheDSF has not made a real contribution in the last two years, with the IFA channel,administered by only around 50 staff, now yielding around 60% of LifeCo's business.

It has, however, one major strength - since 1985 it has been owned by one of the top five lifecompanies in the world. Despite LifeCo's recent poor performance, 'USLife' remaincommitted to LifeCo as a way in to the UK financial services industry.

In 1994, LifeCo implemented a major cost cutting exercise, for the third year running, thatresulted in the loss of over 100 staff through redundancy.

6.2 PROJECT BACKGROUND

In early 1994, the Assistant Director of HR, had produced an HR 'vision' document definingas her ultimate aim the transformation of the HR department from a function focused onpersonnel processing and administration to a 'client-centred consulting group' that would :

i) Manage the dynamics of HR - recruiting, assessing, rewarding and retaining the rightpeople ;

ii) Support managers in developing themselves and their teams to meet the businessneeds today and in the future ;



iii) Facilitate change through contributing to resource planning, identification ofcompetencies, enabling structure and process change, and by monitoring employeeattitudes and behaviours against defined Corporate values.

Following a significant reorganisation of the Human Resources (HR) department as part ofthe redundancy programme implemented during 1994, however, serious problems arosearound the control and completion of work, particularly in the light of the increased workloadarising from pension transfers, a large number of year end leavers and annual bonus schemepayments. (Figure 8 illustrates the HR departmental organisation, shown in relation to theMD and Board of Directors, at the commencement of the project.)

As a result, the Assistant Director of HR, despite being a Board Member due to her directreporting line to the MD, found herself required to work in a clerical capacity in order toprevent unacceptable overruns in the completion of bonus payments, and, therefore, hadsignificantly reduced time available to attend to strategic HR issues.

This led directly to pressure from the Board, who expressed two concerns :

i) Service quality from the function was unacceptable, and

ii) Key strategic HR projects, such as Hay Benchmarking, were subject to unacceptabledelays.

Furthermore, the political climate, both at Board level and within the HR department itself,led to further problems :

i) The redundancy programme completed at the end of 1994 had left the majority offunctions under pressure to deliver. The apparent weakness of HR managementenabled the Board to apply considerably more pressure on the HR function than was,in reality, justified, in order to deflect attention away from their own problems ;

ii) The previous head of HR had been a Board Director, but was made redundant during1994. When the Assistant Director (who had been a senior manager at the time)succeeded him to run the function, she was perceived by the Board as 'having theMD's ear' (he had previously run an HR function and believed in the concept of'strategic HR' and client-centred consulting). This only served to increase the pressurethe Board placed on HR, as a means of discrediting her and thus spoiling therelationship she was developing with the MD ;

iii) The perception of the HR administrative staff of their own performance declined at amore rapid rate than their actual performance ;



iv) This led to increased pressure and longer working hours, in particular for those atmanagement and supervisor level (both of whom had come to LifeCo relativelyrecently), who then began to exert pressure upwards for improved terms andconditions. Requests for increases were resisted as the HR function's performance wassimply not perceived to be acceptable by the Board ;

v) Working relationships, both within the HR team and between HR and their customerdepartments, came under considerable stress both as a result of the increased workinghours and pressure on HR staff resulting from this loss of control, and because of theimpact on the quality of service HR were able to deliver.

This set of circumstances became, in effect, a self-fulfilling prophecy - the more HR wascriticised by the Board, the worse their performance became, the more the Assistant Directorfelt under pressure, the less she felt she could rely on her staff to improve or change anything.

Fig. 8 - HR departmental structure at project commencement (Feb. 1995)

ManagingDirector

Board ofDirectors

AssistantDirectorHR PA

(half-time)

HRManager

Assistant HR AdminSupervisor

AssistantAssistant(half-time -also PA)

TemporaryAssistant

TrainingAdmin.

SalesPersonnelMgr

Assistant

PensionsAdmin.



6.3 PROJECT OBJECTIVES

A preliminary consultancy study of the HR function, conducted in early February 1995,concluded the following :

o HR had been unable to process annual bonus scheme payments in a timely andeffective manner

o HR systems contained corrupt and inaccurate data, such as to make any reporting orprocessing of HR related data time-consuming at best, and impossible at worst

o Duplication of data processing effort, specifically for the payroll, was error prone andtypically resulted in an additional workload required to resolve resulting problems

o HR staff had not received sufficient training to make effective use of computingfacilities to support the function

o Morale in the HR team was extremely low, and there was a resulting risk thatestablished and valued staff might leave the company

o The upcoming annual pay awards were likely to cause similar workload and stressproblems as the bonus payments

o The design and implementation of HR strategy would not be effected unless theAssistant Director could be freed from day to day operational/clerical issues to carryout this work.

As a result of this initial study, a consultancy project, announced around the company as the'HR Re-Engineering Project', was commissioned in late February 1995 with the followingobjectives :

i) To establish, agree, get approval for and implement an HR 'blueprint' for addressingthe future needs of the business, including the resources required ;

ii) To eliminate, where possible, duplication of HR tasks and activities ;

iii) To establish an accurate database of employee information

iv) To conduct a comprehensive review of HR information systems requirements.



Two additional operational objectives were incorporated into the project's scope :

v) To ensure that the upcoming annual pay award was processed in a timely andeffective manner ;

vi) To endeavour to continue to meet the essential HR operating needs of the business, atthe current level of service, during the course of the project.

Finally, one further objective was privately established between the Assistant Director andthe Consultant, i.e.

vii) To establish an appropriate departmental structure to support the overall HR vision,and to ensure that staff working in the function had the correct mix of skills,experience and attitude.

In reality, as would be discovered once the project had got underway, the most importantobjective of this project would be to re-motivate the existing staff, by demonstrating to themthat they were not actually as bad as they perceived themselves to be!

6.4 PROJECT OVERVIEW

The project consisted of three major components :

i) Internal Analysis -

o the analysis of existing HR processes

o the identification and implementation of process improvement opportunities,through the elimination of process duplication and the devolving of non-coreactivities back to line management

o a review of the effectiveness of existing computer systems in use in HR, andrecommendations for improvement or upgrade as appropriate

o the analysis of existing staff training needs

o a review of staff utilisation, skills and experience

o a review of HR departmental structure.



ii) Customer Input -

o analysis of a survey conducted amongst Directors, Assistant Directors andSenior Managers of the Company

o feedback from a workshop conducted with Assistant Directors and Seniormanagers to analyse key operational issues - recruitment, training anddevelopment (including induction), and performance appraisal andmeasurement

o feedback from a workshop conducted with Directors to analyse key HRstrategic issues, i.e. the LifeCo Management Philosophy, the contribution ofHR to the Company's bottom line, and an examination of the corecompetencies of an LifeCo Manager and how they should be linked toperformance measurement and the Company's values.

iii) USLife Input -

o a comprehensive audit of the HR and payroll functions.

The findings of these three phases led directly to actions and projects intended to change theHR function in three key areas :

i) The internal processes and controls used to manage the flow of work both within thefunction, and through the interfaces between HR and other LifeCo functions ;

ii) The organisational structure, skills, and experience required within HR to meet thedemands of the Company ;

iii) The information systems and infrastructure required to support this organisationalstructure.



6.5 KEY EVENTS

It is useful at this point to review the key events and activities that occurred through theproject. These are outlined below :

22nd February Project Start-UpFeb-April Process Analysis & Redesign - identification of high-level process

model, detailed analysis of current processes, identification ofduplication and improvement opportunities

20th March Assistant Director HR tenders resignation (three months notice insistedon by MD)

March-April Preliminary Systems Review - identification of interim solution forpayroll processing to facilitate annual pay award processing in May

13th April HR Admin. Supervisor resigns - replaced by Training Administrator,who takes on both roles

9th May HR Manager resigns - two weeks notice period for handover to InterimManager, who also has specific responsibility for Hay Benchmarkingproject

Mid-May Following intervention from USLife International, Assistant Directorrescinds resignation, and is promoted to full Director

17th May Assistant Director's HR Workshop17th May HR Survey questionnaire distributed to Directors, Assistant Directors

and Senior ManagersMay 25th Annual pay award - all increases processed correctly and on time,

through payroll and pensions systemsMay-June USLife HR Audit - recommends transfer of payroll department to HR

controlJune PIA Audit of sales personnel recruitment, referencing and training

procedures12th June Recommendations for the 'Role of Human Resources' presented to

MD. Key recommendations that 'HR must be the leader of change' inthe Company and that an Organisational Design and Developmentteam be established to 'define, frame and manage the change process'agreed

25th June Salary anomalies identified through Hay Benchmarking paid, andprocessed correctly through payroll and pensions systems. LifeCo isnow upper quartile payer in terms of base salary

27th June Directors HR Workshop - includes presentation of feedback of HRsurvey results - most HR functions performance rated as 'poor'

4th July New structure for HR department agreed by MD4th July Sales Personnel and Pensions Administrator nominated for 'Brilliant in

the Backroom' award. (Sales personnel voted as winners)



11th July Commencement of HR/Payroll systems upgrade project - Financeattend initial objectives setting meeting but refuse to participate furtheruntil they have had opportunity to 'define their requirements of the HRfunction'

5th July HR stop providing confidential background information to Finance tosupport changes in payroll etc., supported by MD, Finance Directorand HR Director, but not by Payroll Manager. (Leads to increasingtension between HR and Payroll)

25th July Five year strategic planning process commences - Assistant Directorsand Senior Managers define requirement for HR related projects costedat c£4m

31st July First Management Guidelines to Human Resources Policies andProcedures approved by Board of Directors and published. Internalprocedures manual completed

4th August Consultancy assignment ends7th August Interim Manager announced as new Assistant Director, HR (effective

14th August)7th August Head of Organisation Development appointed with remit to continue

work commenced during consultancy assignment, but broadened toallow greater cross-functional impact.

The result of the organisational changes outlined above are illustrated in figure 9.

Fig. 9 - Current HR departmental structure (approved by MD Aug. 1995)

ManagingDirector

DirectorHR

OtherBoardMembers

PersonalAssistant

AssistantDirectorHR

Head ofOrg. Dev.

HRManager

AssistantPersonnelOfficer

TrainingManager(tba)

HR AdminManager

PensionsAdmin.

SalesPersonnelAdmin.

Personnel& PayrollAdmin.

OD ProjectLeader(tba)



6.6 USING THE MONITORING AND MEASUREMENT FRAMEWORK

As was suggested earlier, monitoring and measuring a project such as this is a continuousprocess. It was, in reality, necessary to carry out context and risk assessments on a regularbasis, in the same way that progress reports might be produced weekly, although often thesewere done for the benefit of the project manager alone, and not published, even to the client.

For the purpose of demonstrating the framework in use here, it is proposed to examine theproject at five key points :

i) Project Start-Up

ii) The resignation of the Assistant Director

iii) Her re-instatement, and promotion to Director

iv) New departmental structure agreed by MD

v) Project Finalisation, i.e. the end of the consultancy assignment, and the appointmentof an Head of Organisation Development to oversee further developments and the'continuous implementation' phase.

i) Project Start-Up

At the commencement of this project, there was no schedule or budget allocated to it. Theinitial consultancy contract was for four weeks, to carry out further investigation of HRprocesses. The need for further work was to be determined at the end of this period. (Thecontract was, in fact, extended fortnightly through April, then to mid-June, to coincide withthe Assistant Directors anticipated leaving date, then to 4th August, when it ceased). The onlymeans of control, at this point, therefore, was to ensure regular reviews of the project againstdefined and agreed milestones, the first of which would be at the end point of the initialassignment.

It was quite clear, from discussions with the Assistant Director and other HR staff, that thefunction was generally held in disrepute throughout the company. The main 'opposition' areasseemed to be IS and Branch Services, both of whom were recruiting at the time, andfrustrated by either the lack of input from HR (Branch Services were left largely to their owndevices), or by delays caused by too much involvement (IS wanted to be able to react veryquickly in order to ensure they recruited the people they wanted).

At Board level, the MD was very supportive of the HR function, and the Assistant Director inparticular, whom he regarded as one of his key 'change agents'. However, the majority of theremaining Board Members saw her rise through the Company (which had been fairly quick),and her ideas about strategic HR, as a threat to their positions. Consequently, they were veryaggressive during Board meetings.

The project objectives outlined above consist of a mix of quantifiable and unquantifiableoutcomes. For example, measuring that the annual pay award was processed in a timely andeffective manner is relatively easy : were all staff paid on time? and did they receive thecorrect increase? However, assessing whether a blueprint for HR has been implemented that'addresses the future needs of the business' is somewhat more complex.



Furthermore, these were the objectives of the project from the point of view of the HRfunction itself, and specifically of the Assistant Director. Other HR staff were concernedabout the security of their jobs, about their reputations in the Company, and about the amountof hours they were required to work in order to complete projects such as the annual bonuspayment and pay award.

IS and Branch Services, however, were more concerned to have implemented a simple,effective recruitment service. However, Branch Services wanted more involvement from HR,whilst IS wanted less.

Finance division, who were responsible for managing the payroll, wanted error freeadjustments, particularly when it came to transferring staff from one cost centre to another.The inflexibility of their accounting systems was such that manual journals were required tocorrect cost centre errors, and these could be very time-consuming, depending on how long ittook to recognise that an error had been made.

Internal Audit, representing USLife, were concerned that HR had appropriate controls inplace, and that they were operating to the approved USLife format for an HR department.

Figure 10 is an illustration of how this Start-Up assessment might be recorded using theProject Assessment Report described earlier. This would need to be backed up with a basicreport format for controls and measurement reporting, listing the key milestones and controlpoints, followed by regular reports of the specific measures identified in the measurementplan.



Fig. 10 - HR Re-Engineering Project Assessment Report at Start-Up


ALIGNMENT TO BUSINESS STRATEGY? Y N MAYBE NOT FROM BOARD PERSPECTIVE

PROCESS SOLUTIONCONSENSUS HIGH1 2 3 4 5LOW HIGH1 2 3 4 5LOWCOMMITMENT 1 2 3 4 5 1 2 3 4 5CONFIDENCE 1 2 3 4 5 1 2 3 4 5


STRUCTURE DEFINED/I LL-DEFINEDUNCERTAINTY LOW/HIGHSIZE SMALL/LARGERISK HIGH EXTERNAL/INTERNAL INTEGRATION TOOLS


BENEFITS

PROJECT : HR RE-ENGINEERING

ASSESSMENT POINT : START-UP DATE : 22/2/95

CONTROL MECHANISMS


OUTCOME POST IMPL. REVIEWSSTAKEHOLDER FEEDBACK

PROGRESS MILESTONESPROJECT QUALITY COMMUNICATIONS AVAILABILITY & CLARITY - STAFF SURVEYS

STRATEGY/TACTICS INVOLVEMENT OF HR STAFF IN PROJECTPRODUCT QUALITY REVIEWS HR PERCEPTION SURVEY

KEY STAKEHOLDERS SUCCESS CRITERIAMANAGING DIRECTOR STRONG CENTRAL HR FUNCTIONIS/BRANCH SERVICES PERSONNEL SERVICE TAILORED TO REQUIREMENTSFINANCE ACCURACYHR - ASSISTANT DIRECTOR STRONG CENTRAL STRATEGIC HR FUNCTIONHR - STAFF LESS WORK, LESS STRESS, JOB SECURITYBOARD OF DIRECTORS ? FAILURE OF HR, REMOVAL OF ASSISTANT DIRECTOR?

1. ENSURE HR STAFF TIME MADE AVAILABLE2. REVIEWS AT EACH MILESTONE

SOURCES 1. INTERNAL HR PRACTICES - SHORTER HOURS, LESS STRESS 2. ASSISTANT DIRECTOR - LESS TIME IN HR OPERATIONS, CREDIBILITY WITH BOARD 3. ORGANISATION - EFFECTIVE PERSONNEL ADMIN. SUPPORT

DEPENDENCIES 1. BUY-IN FROM BOARD TO ‘STRATEGIC HR’ 2. HR STAFF TIME TO ‘FIX’ THEMSELVES



ii) Resignation of Assistant DirectorWhen the Assistant Director tendered her resignation to the Managing Director, she expectedto be released immediately. However, the MD reacted badly to the news, insisting that :

a) She work her full notice period, i.e. three months, and

b) That news of here resignation not be published to anybody, including the rest of theBoard of Directors.

A re-assessment of the project at this point would reveal the following changes to the originalreport :

o The MD's success criteria now included an element of self-protection. He knew thatnews of the resignation would be poorly received in New York, and suspected thatUSLife would choose to place a US national into the position. He therefore wasfocused on why she had resigned, and whether he could persuade her to change hermind

o The Assistant Director had, in fact, resigned as a result of both personal andprofessional pressures, and made the decision on the basis that, at the time, it seemedto be the only element she had the power to change. She had chosen not to divulge thepersonal reasons to the MD, however. Her focus was now on leaving with honour.

In addition, other problems had begun to arise at this point :

o It was clear that HR staff did not have sufficient time to get properly involved in theprocess analysis work

o In two cases, the HR Admin. Supervisor and the HR Manager, it was becoming clearthat they were not prepared to make sufficient time to get properly involved. Thesetwo individuals had already been identified in a report on the HR structure and staff asnot likely to be a contributory factor in the future of the organisation, as their attitudeswere clearly not in line with the overall 'mission' of the department. Furthermore, theywere seen (by internal and external staff alike) as being part of the reason why thedepartment was no longer functioning efficiently.

These issues would be illustrated on the Project Assessment Report by :

a) Amending the Stakeholder Success Criteria, to reflect the new positions held by theManaging Director and the Assistant Director HR ;

b) Increasing the Process Consensus and Commitment, and Involvement scores, tohighlight the problems with HR staff members ;



c) Increasing the Significance score to reflect the MD's concerns regarding the loss ofthe Assistant Director and her potential replacement with a USLife employee.

iii) Re-instatement, and promotion to Director

Following intervention by senior management in USLife International (the organisation withresponsibility for LifeCo within USLife overall), and on condition that she be made a fullDirector, the Assistant Director agreed to rescind her resignation.

As none of the Board had been aware of her resignation in the first place, this was perceivedas a demonstration of support from the MD, not only for the re-engineering project, but alsofor the concepts of strategic HR being put forward.

The departure of both the HR Admin. Supervisor and the HR Manager, and the appointmentof an Interim Manager pending recruitment of a new Assistant Director, had a significantimpact on HR staff morale. This had the knock effect of increasing the level of involvementof HR staff in the other aspects of the project.

Processing of the annual pay award had gone smoothly, based on the interim solutionrecommended following the preliminary systems review, and the Hay Benchmarking project,now in the hands of the Interim manager, was beginning to make progress.

Furthermore, plans were underway for an Assistant Director's HR workshop to discussoperational aspects of the function, and there was talk at Board level that the Directors wouldlike to participate in something similar, albeit at a more strategic level. This may have been inreaction to the fact that the Assistant Director's were going to be directly involved first, orbased on genuine interest in, and concerns for, the future of HR. Both groups still saw thefunction as providing basic personnel administration and support, however.

The impact of these points on the Project Assessment Report would be reflected by :

a) Amending the Stakeholder Success Criteria to reflect the new positions of theManaging Director and the Director HR ;

b) Amending the Stakeholder Success Criteria for the Board of Directors to reflect whatnow appears to be a vested interest in the success of the project, based on theirperception of the degree of support HR is getting from the MD ;

c) Adding the Assistant Director Group as a new stakeholder, with a success criteria of'Effective Personnel Administration and Support Function' ;



d) Process Consensus, Commitment and Confidence is now higher, following thesuccess of the pay award processing, but the solution rating now really needs toreflect the fact that there are two possible solutions, i.e. effective personneladministration and support, and client-centred consulting. Clearly, there is moreconsensus for the former than the latter. This suggests a possible weakness in theformat of the report, i.e. that there will likely be different levels of consensus fromdifferent stakeholder groups, and potentially different perceptions of the solutionbeing aimed for ;

e) The increased involvement of HR staff and other senior managers in the organisationshould be reflected by a reduction in the Involvement rating ;

f) The extent of MD and USLife International support, together with increasedcommitment to implementing the Hay recommendations (at least for basic salary),suggested that the project was nearer the core operations of the organisation than hadpreviously been assessed, therefore, this rating would need to be increased.

iv) New departmental structure agreed by MD

By the time the MD had agreed to the new structure, including the additional positions ofTraining Manager and, more significantly, Head of Organisation Development, bothworkshops had revealed a surprising degree of support.

The survey feedback contained little of surprise, in that HR were rated as either poor oraverage for virtually all the major processes. What was more interesting, however, was that,when asked to rate the major barriers to becoming the HR department required by theorganisation, most respondents listed change management related attributes as being the toppriority. (This, together with the anticipated output from the strategic planning process, was akey factor in recommending the need for a dedicated Organisation Development team).

At the Director's workshop, the Services Division Director had recommended thetransformation of HR into a strategic function with a remit to lead change through theorganisation as a whole. Whilst this still attracted considerable opposition from those otherBoard members who still believed HR should be personnel administration and support, thiswas a considerable step forward.

From the staff's perspective, the commencement of work on new Management Guidelinesprovided the framework they needed to revise their internal procedures. This process hadbeen stalled since the departure of the HR Manager, who's responsibility it had previouslybeen, primarily in order to allow the Interim Manager to focus on the Hay project, therecommendations from which having been implemented on schedule in the June payroll.

The increased visibility of the HR function, together with their better than expectedperformance in processing both the annual pay award and the Hay salary anomalies,culminated with the nomination of three staff (two from Sales Personnel and the PensionsAdministrator) for a Head Office 'Brilliance in the Backroom' award. This would have beenunheard of three months earlier, but, increasingly, recognition that HR's basic service qualitywas improving was being received from across the company.

One other key event at this time, was the publication of the draft Internal Audit report. Thiscontained a strong recommendation that responsibility for payroll should be transferred to



HR, in order to reduce duplication of work and remove the breaches of confidentiality thatwere unavoidable in the current environment.

The impact of these would be reflected on the Project Assessment Report by :

a) Amending the Stakeholder Success Criteria to reflect the changes, and conflicts, in theDirectors' perceptions, the changing views of line functions such as IS and BranchServices, and the changed focus of the HR staff themselves towards finding ways todeliver a better service ;

b) Also amending Finance Division's criteria to reflect their likely concerns regardingthe audit report ;

c) Adding Internal Audit as a new stakeholder and who, despite their objectivity, clearlyhave a vested interest in seeing their recommendations implemented ;

d) Decreasing the Process and Solution ratings for Consensus, Commitment andConfidence, but noting Finance as a likely exception ;

e) Decreasing the Involvement and Stability ratings, as the success criteria of some themajor stakeholders begin to coincide ;

f) Changing the size rating of the project to Large, as the project's remit, with theappointment of a specialist Organisation Development team, broadens, but changingthe Uncertainty rating to Low as the process has become more familiar and theStructure to Defined. This results in a change of the risk rating to 'Low'.

v) Project Finalisation

This point marks the end of the consultancy assignment, but clearly not the end of the projectoverall, The appointment of an Head of Organisation Development to oversee furtherdevelopments outside HR, and to take the various HR initiatives into the 'continuousimplementation' phase is both the 'Follow-Up' of the consultancy project, and the Start-Up ofa new project.



At this point, largely as a result of the Internal Audit recommendations, HR had implementedseveral changes in the way they deal with Finance. For example, all background informationfor payments, such as relocation etc., had been provided to Finance as evidence that thepayment was both justified and properly authorised. However, this was seen as a breach ofconfidentiality, so now evidence of authorisation of the payment is all that is supplied. Thishas caused a significant increase in tension between HR and Finance, who see themselves asresponsible for business controls in the widest sense, i.e. not just financial controls.

This tension overflowed into a meeting to establish the objectives of a new initiative toreview and replace the HR Management and Payroll systems. This meeting broke down, withFinance refusing to participate further until they had the opportunity to discuss amongstthemselves their 'requirements not only of an HR and payroll system, but of HR itself'.

Figure 11 illustrates the impact of these findings on the Project Assessment Report atFinalisation, and clearly reflects the changing nature and context of this project from Start-Up. There are also changes to the Benefits, Control Mechanisms and Measurement plan,highlighting the status at this stage of the project, as well as feeding forward into the nextstages.

In the next chapter, the strengths and weaknesses of the proposed framework, and the projectassessment report, as a means of measuring and monitoring project progress and as aninstrument for improving contextual understanding will be discussed.



Fig. 11 - HR Re-Engineering Project Assessment Report at Finalisation


ALIGNMENT TO BUSINESS STRATEGY? Y N SOME BOARD MEMBERS NOW IN AGREEMENT

PROCESS SOLUTIONCONSENSUS HIGH1 2 3 4 5LOW HIGH1 2 3 4 5LOW FINANCE STILL OPPOSE PAYROLL MOVECOMMITMENT 1 2 3 4 5 1 2 3 4 5CONFIDENCE 1 2 3 4 5 1 2 3 4 5


STRUCTURE DEFINED/I LL-DEFINEDUNCERTAINTY LOW/HIGHSIZE SMALL/LARGERISK LOW EMPHASIS - PLANNING & RESULTS CONTROL


BENEFITS

PROJECT : HR RE-ENGINEERING

ASSESSMENT POINT : FINALISATION DATE : 4/8/95

CONTROL MECHANISMS


OUTCOME POST IMPL. REVIEWSSTAKEHOLDER FEEDBACK

PROGRESS MILESTONES, IRR REVIEWS, COST BENEFIT/PAYBACK ANAL.PROJECT QUALITY COMMUNICATIONS AVAILABILITY & CLARITY - STAFF SURVEYS

STRATEGY/TACTICS INVOLVEMENT OF HR STAFF IN PROJECTPRODUCT QUALITY REVIEWS HR PERCEPTION SURVEY (BI-ANNUAL?)

KEY STAKEHOLDERS SUCCESS CRITERIAMANAGING DIRECTOR STRONG CENTRAL STRATEGIC HR FUNCTIONIS/BRANCH SERVICES SERVICE QUALITY, LEADERS OF CHANGE?FINANCE ACCURACY, TURF PROTECTION?HR - ASSISTANT DIRECTOR STRONG CENTRAL STRATEGIC HR FUNCTIONHR - STAFF EFFECTIVE WORKING PRACTICES - SERVICE QUALITYBOARD OF DIRECTORS STRATEGIC HR FUNCTION/PERSONNEL ADMIN. SUPPORTINTERNAL AUDIT IMPLEMENTATION OF PAYROLL RECOMMENDATIONS

1. REVIEWS AT EACH MILESTONE2. COST BENEFIT ANALYSIS FOR SYSTEMS UPGRADES3. GO/NO GO ON ORGANISATIONAL DEVELOPMENT INITIATIVES

SOURCES 1. INTERNAL HR - EFFECTIVE, IMPROVING SERVICE QUALITY 2. DIRECTOR - CREDIBILITY AT BOARD, FOCUS ON STRATEGIC HR 3. ORGANISATION - HR AS CHANGE LEADERS

DEPENDENCIES 1. BUY-IN FROM BOARD TO ‘STRATEGIC HR’ 2. HR STAFF TIME TO ‘FIX’ THEMSELVES



7. REFINING THE FRAMEWORK

In setting out to develop the monitoring and measurement framework, it was suggested thatapplying the framework would assist the project manager in meeting four key objectives,namely to be able to :

i) evaluate the environmental context, both at the outset, and during the course of theproject, so that progress can be monitored according to this context, rather than justthrough completion of work packages or expenditure of budget ;

ii) establish, confirm or revise objectives through the project ;

iii) confirm or revise the project management strategy ;

iv) predict the likely outcome and assess the actual outcome of the project.

This section, through further discussion of the problems inherent in understanding theenvironmental context, project objectives, project management strategy and project outcome,based on the experiences gained during the HR Re-Engineering project at LifeCo, willevaluate the extent to which the framework helped to meet these objectives.

7.1 EVALUATING THE ENVIRONMENTAL CONTEXT

Four aspects of the organisation, according to Wilson & Rosenfeld (1990), are key to theunderstanding of the wider context of the organisation :

o The balance of power

o Organisational structure

o Management and leadership styles

o Organisational history.

Although there is an established framework analysing the five key bases of power (French &Raven, 1960), to which Wilson & Rosenfeld add two further contributory factors, namelyorganisational structure and the operating environment (Wilson & Rosenfeld, 1990), it hasbeen suggested elsewhere that individuals have power ...'if others believe that they do.'(Bolman & Deal, 1994). However, as they go on to identify, power is often ambiguous, to theextent that it is sometimes difficult to see that it is being exercised.



Within the HR function at LifeCo, the IS Director was perceived to be very powerful. Thisperception had a significant influence over the way the department responded to any inputfrom his division. Criticism was usually expected, whether the department had performedwell or not, and praise was almost celebrated.

The relationship between power and leadership is equally ambiguous. Burns states that 'Allleaders are potential or actual power holders, but not all power holders are leaders' (Burns,1978), and this can equally be applied to project stakeholder groups.

For example, Internal Audit are not leaders in the organisation, but have significant powerdue to their close ties with USLife International. Similarly, it could be said that the HR staffthemselves had the power to influence the success of the project. Although two staff leftduring (and as a result of) the project, it clearly would not have been practical to replace theentire department. Therefore, ensuring their consensus to both the process and the solutionwas a critical success factor for the project.

Furthermore, if it is true that leadership '...is a fundamentally social phenomenon...' requiring,usually, face to face interaction (Hosking, 1988), then Bolman and Deal's assertion thatleadership '...is less a matter of action than of appearance.' (Bolman & Deal, 1994) clearlyadds to the difficulty in assessing where the balance of power lies.

However, the scope of a leader's influence need not be limited to face to face interaction.'Good' leadership may be measured by the ability of an individual to influence peoplewhether or not they deal with them directly or not, and is influenced by the '...historical,social and cultural context...' (Schein, 1988). Therefore an assessment of management andleadership styles must take into consideration both the type of leadership and the type oforganisation in which the project is being undertaken.

The IS Director had considerable influence over all members of his division, not just hisdirect reports, which resulted in all contacts with the HR function following the same lines ashis personal involvement with them, and the majority of the IS staff holding similar views asto the level of service quality HR was delivering, whether they were a true reflection or not..

Understanding whether the objectives of the project are likely to be controversial or not, andthe levels of consensus among the stakeholders to both the process and the solution, may beone way of assessing where the balance of power is likely to fall. It is essential, however, thatthe stakeholder analysis include not only those individuals or groups who obviously stand togain or lose from the project's outcome, but those behind the scenes who may have the powerto influence stakeholder opinion one way or another.



The need to understand the organisational structure must also take into consideration theorganisation's history, its '...antecedents of practice...' (Wilson & Rosenfeld, 1990), which aremore than likely to have been designed to maintain the status quo, i.e. the idea that if itworked before, there should be no need to change. LifeCo are organised along strongdivisional lines, to the extent that, at the end of the strategic planning process, oneanonymous manager suggested that 'all we need now is to get out of our silos and do it'.

Achieving any kind of change, but in particular, the kind of cultural change that is beingattempted at LifeCo, requires a lasting effect on both management philosophy and theorganisational structures supporting it (Wilson & Rosenfeld, 1990).

A project manager may need to attempt to build a network of managers, not just for the timethat this particular project is underway, but a group of individuals who, over time, may beable to influence '...values and behaviour both above and below them in the largerorganization.' (Charan, 1991). To a certain extent, one objective of the Assistant Director'sworkshop was to try to achieve this, and the resulting change in the consensus rating for theprocess reflects, to a degree, its success.

7.2 PROJECT OBJECTIVES

It has already been pointed out that the original objectives of the HR Re-engineering projectincluded some that were relatively easily quantifiable, for example, the accurate and timelyprocessing of the annual pay award.

However, there were others that were both less quantifiable and ill-defined - theimplementation of an HR blueprint addressing the future needs of the company.

Furthermore, additional objectives became apparent during the course of the project, some ofwhich were transitory, some specific to a particular stakeholder group, for example :

o During the time that the Assistant Director was serving her notice period, herprinciple objective was 'to leave with honour'. For her, this meant ensuring she hadrecruited a strong replacement who would be able to carry her ideas forward

o Following the publication of the Internal Audit report, Finance's principle objectivewas to block the transfer of responsibility for payroll processing to HR.

Beyond the work of Boddy & Buchanan, there appears to be little in the established projectmanagement literature that reflects the changing objectives of projects of this nature.



Both Meredith and Mantel (1995) and Lock (1992) refer to the primary objectives of projectsand project management as being performance and quality, time and cost. Meredith andMantel go slightly to further emphasise the need for a project's objectives to be '...clearly tiedto the overall mission of the firm.' (p200), but do not recognise that their may be inherentproblems in the fact that a firm's mission may well change during the course of the project.

Yeates defines the need for 'co-ordination planning' in order to avoid '...differences of opinionabout how objectives should be achieved and even about the objectives themselves...'(Yeates, 1991), but once again, once this has been done, the implication is that both theproject's and the project's teams objective are set.

In the change management and organisational behaviour literature, however, there isrecognition that, for example, 'Management is about change, anticipation, responsiveness,flexibility and adaptiveness.' (Chell, 1990, p458), which surely applies to projectmanagement as well, and that 'Organizations change in response to their environments,including their managements, but they rarely change in a way that fulfils the intentional planof a single group of actors.' (March, 1994, p55) such as a project team.

There is a need, therefore, to be able to measure and evaluate performance against a backdropof evolving objectives. This implies that it is necessary to determine what should bemeasured based on what it is that is to be achieved at any particular point during the project.

This supports the idea behind a continuous process of measurement planning andperformance auditing running in parallel with the 'main' project, which are both key elementsof the monitoring mechanisms defined in the framework.

7.3 PROJECT MANAGEMENT STRATEGY

According to Yeates, in order that the project manager can see a project through tocompletion, a formal procedure for doing so must be established (Yeates, 1991, p10). Boddyand Buchanan, however, recognise that project managers must use a wide range of methods,drawing on skills such as '...communicating, negotiating, team building, creatingownership...(which)...are quite different from those which figured in the original training ofmost project managers.' (Boddy & Buchanan, 1992, p52).

Cash et al's. risk model, which is a central element in the monitoring and measurementframework, recognises that project management is both complex and multidimensional, andis geared towards enabling the project manager to recognise that 'Different types of projectsrequire different clusters of project management tools if they are to succeed.' (Cash et al.,1992, p191).



In addition, monitoring that planned actions are taken, and that they are effective, allows theproject manager, and the stakeholder group, to assess whether there is the correct balance ofstrategic and tactical influence on the project. The multiple success factor model proposed bySlevin & Pinto enables a project manager to understand the variables affecting projectsuccess, and to be aware of their relative importance across the different project stages(Slevin & Pinto, 1987).

This last element was not used in the Project Assessment Report for the LifeCo project.However, its inclusion would have been helpful, particularly in the early stages when certainHR staff appeared not to be prepared to make the time to be involved in the process analysisstage of the project, which resulted in this key task being stalled for some weeks.

Despite these 'errors of inaction' (Slevin & Pinto, 1987) suggesting that the project wasstrategically strong and tactically weak at this time, it is at the current stage that the'handover' from a strategic to a tactical focus is actually underway. As Slevin and Pintophrase it, the team should be moving away from asking 'What do we want to do?' to 'Howare we going to do it?'. One of the first tasks for the incoming Head of OrganisationDevelopment will be to manage this transition.

7.4 PROJECT OUTCOME

For every project, but particularly for those with a 'continuous process of implementation'such as strategic planning, business process re-engineering and organisational development(Breure & Hickling, 1990), implementation cannothave completed until '...the outcomes of the exercise have been monitored and measured,satisfactory levels of performance achieved, and further learning and improvement occurs.'(Coulson-Thomas, 1994, p126).

This poses two problems for the project manager and, indeed, the stakeholder groups :

i) When to define that implementation is complete ; and

ii) How to predict that implementation will complete satisfactorily.

The project at LifeCo demonstrates these problems, which can be explained more fully byconsidering the output produced at the Finalisation stage of the consultancy project as theinput, or plan, for the 'Follow-Up' stage, which in fact consists of several other projects intheir own right.

In other words, the HR Re-engineering project more closely resembles a 'programme' than aproject, in that '...it does not have a single objective, nor a finite time horizon.' (Pellegrinelli& Bowman, 1994).



Therefore, it is increasingly important to know whether there is consensus to the process ofimplementation, as well as what it is that the stakeholder groups believe is beingimplemented.

It was recorded on the Project Assessment Report at Finalisation that there are still BoardMembers looking for the establishment of an effective personnel administration and supportfunction, but that the main thrust of the programme from the Managing and HR Directors'point of view was to develop a strategic HR function that could lead change through theorganisation. (These Directors may well be asking themselves why it is that an Head ofOrganisation Development has been appointed, and what that individual is going to bedoing!)

The point remains, however, that Monitoring and Measurement framework, together with theproject assessment report, is able to facilitate understanding of this potential conflict,hopefully enabling the 'programme manager' (either the Director, HR or the Head ofOrganisation Development) to plan their approach in order to continue to promote andincrease consensus.

7.5 IMPLICATIONS FOR THE FRAMEWORK

To be effective as a tool for helping project (or programme) managers to gain greaterunderstanding of the issues surrounding the project(s) they are responsible for, the monitoringand measurement framework, and the project assessment report based on it, should beproviding the project manager with information to support each of these areas.

Clearly, however, the framework cannot provide an understanding of the contextualenvironment of itself. It seeks to stand as a means of organising thoughts and presenting themin such a way as to enable understanding. In this respect, at LifeCo, it proved reasonablysuccessful.

There are, however, some weaknesses, some of which have already been identified above :

o It does not recognise that levels of consensus, commitment and confidence to theprocess and the solution may differ across different stakeholder groups

o Although there is an opportunity to record different success criteria for eachstakeholder group, the framework does not necessarily reflect that each group mayhave a different perception of the solution (or, in fact, of the problem). For example,the solution to 'the problem with HR' at LifeCo is still thought by some groups to beestablishing a strong personnel administration function. In reality, this is only part ofthe solution being sought



o The rating system is, by implication, highly subjective. In cases where the frameworkwas used for monitoring and measuring programmes employing multiple programmeor project managers, there may be some confusion should a new manager pick up thelast assessment report without any further explanation from the individual whoproduced it

o The Assessment Report is clearly oriented towards the project manager. It should,however, be usable by stakeholders or project sponsors, especially if the strategicversus tactical factors were also monitored on the report. In this way, projectmanagers who report what they think steering committees want to hear regardingprogress made etc., can be challenged with a closer assessment of the true situation

o Several of the elements of the framework are in themselves prescriptive, for exampleCash et al's. risk model.

Furthermore, there is no obvious means of flagging that a project is in critical condition,unless the project manager or stakeholder groups can recognise a certain combination orpattern of measures from experience. Clearly, computerisation of the project assessmentreport would enable certain settings to be colour coded, for example, or allow for a summaryreport to indicate the overall situation. However, the nature of the information contained onthis report is such that it may not be a tool for open public consumption - otherwise theproject manager might have to dilute some of the implications of the information containedon it. Therefore, it is likely that experience, both of project and change management and ofusing the techniques discussed above to produce the assessment report will become the bestmeans of assessing the project's overall condition.

Some basic changes to the Assessment Report could be made to accommodate most of theissues itemised above, for example :

o Changing the rating system to a simple Yes/No basis would go some way tomitigating the subjectivity inherent in a 5 point scoring system

o Enabling some of the key ratings, notable Consensus, Commitment and Confidence,to be assessed for each stakeholder group

o Expanding the stakeholder success criteria to include commentary relating to eachgroup's perception of the solution, as well as their consensus towards it

o By incorporating Slevin & Pinto's multiple factors model (Slevin & Pinto, 1987),enabling the Assessment report to be used by stakeholder groups and sponsorsthemselves, as a means of monitoring the effectiveness of the project manager.



Traditional project management techniques, based on the premise that a formal procedure isrequired to develop and implement a defined product or service within a defined time frame,to a budgeted cost and to a specified level of performance and quality, simply do not addressthe needs of a project manager faced with an uncertain set of project objectives in an evolvingorganisational environment.

The Monitoring and Measurement framework presented here is not intended to be aprescriptive replacement for these techniques. Rather it should be thought of as based arounda 'contingency theory' of project management that helps the project manager's understandingof the project environment to evolve as the environment itself is evolving. In this way, theproject manager can make a reasoned assessment of the nature of the project beingundertaken, and choose the tools and techniques most appropriate to that environment.

7.6 IMPLICATIONS OF THE FRAMEWORK ON PROJECT MANAGEMENTREPORTING AND INFORMATION SYSTEMS

The development of project management information systems (PMIS) is a rapid growth areafor software suppliers. However, few, if any, suppliers seem to attempt to do anything morethan make the basic 'model' of a PMIS 'slicker' or more integrated with office automationsystems such as spreadsheets or word processors.

The objective of this basic model is to provide a system that can automate scheduling, recordand monitor costs, calculate earned values, highlight variances, determine critical paths, andproduce 'management' reports in the format of Gantt charts, PERTS, network diagrams etc.

In other words, PMIS are focused very much on traditional projects and traditional projectmanagement techniques.

There are several problems with the use of PMIS, even for these traditional projects. Themain ones arising from the author's experience are :

i) To be effective at this level, PMIS require a great deal of information to be input intothem, and for this information to be updated at least for each reporting period. Thereis, therefore, a risk of 'computer paralysis', whereby so much time is needed tomaintain the PMIS that little time is left for project management ;



ii) Any computer generated report carries with it some authority, particularly if itcontains a large amount of 'information' or looks like it has been 'desk-top published'.Modern PMIS generate reports that are both. This has two possible risks :

a) the reports may be believed when they are not accurate - the reports can onlybe as good as the data input into the system in the first place, and whilst this isnot necessarily to suggest errors of input on behalf of whomever ismaintaining the system (deliberate or otherwise), it has already been suggestedabove that monitoring performance against estimates is really only a measureof the accuracy of the estimates

b) the reports may mask 'real' project problems, because they only report basedon time and costs ;

iii) PMIS reports are no substitute for genuine communications between a projectmanager and stakeholders, management or the project team itself, but can oftenbecome so. This is similar to the situation at SoftCo, where a weekly 'progress'teleconference between the teams in Europe and Atlanta focused entirely on the PMISreports which had, in some cases, only been produced hours before the 'meeting'.

These problems, together with others such as information overload, over dependence onPMIS reports (i.e. waiting to see what the reports 'say' before attempting to resolveproblems), etc., can result in '...managing the PMIS rather than the project itself.' (Meredith &Mantel, 1995, p466).

Beyond these problems, it has already been implied that PMIS cannot monitor or report onthe qualitative aspects of a project that are central to the Monitoring and Measurementframework. Clearly, the basic model of a PMIS would have to be discarded in order todevelop a system that could :

i) Produce the project assessment report ;

ii) Assess the risk model and 'suggest' a selection of project management tools that mightbe appropriate ;

iii) Record the rating system and develop sufficient historical information to 'predict'outcomes based on the spread of ratings (i.e. based on the application of neuralnetworking technology).

However, it is suggested that there is a need for simpler, more flexible reporting tools. TheProject Assessment Report has already been introduced, and it is not intended to present thatagain here, although it will clearly be a central element on 'progress' reporting.



At LifeCo, a 'project framework' was used as a '...systematic way of presenting the objectivesof a project, indicating how it is intended to check whether those objectives have been met,and noting what key assumptions have been made...' (Cracknell, 1989, p9). This reportingmechanism is a useful management tool for defining and encapsulating inputs and outputs,assumptions for success, and indicators for monitoring and evaluating performance.

Figures 12 and 13 illustrate the use of this reporting framework at two key stages of theproject, i.e. Start-up and 'Phase 2' (which marked the end of the first consultancy contractperiod).

A brief examination of the reports shown here reveal that all elements remain the same forthe Wider Objectives, as would be expected. The subsidiary sections define the short termobjectives, inputs and outputs for the two stages of the project in these examples.

The entries under the heading 'Assumptions/Issues' have become an indicator of theorganisational climate and mark the progress made in dealing with the political dynamics. Forexample, the level of support the senior managers are prepared to give to HR and theavailability of HR staff to contribute to elements of the project, have clearly not beenresolved by the commencement of Phase 2. An additional issue, relating to HR staff andtherefore classified as an Input, illustrates the growing problems in the HR department itself,and identifies the fear that the re-engineering project will be used to make further staffredundant. Although unfounded, this highlighted an urgent need for action, without which,further progress would have become increasingly dificult.



STRUCTURE INDICATORS OFACHIEVEMENT

MEANS OFVERIFICATION

ASSUMPTIONS/ISSUES

Wider ObjectivesRe-engineer HRfunction

Increased confidence inHR function; reducedHR workload

Customer/staff satisfactionsurveys

Support & commitment fromDirectors

Immediate Objectives(to 31/3/95)Define & documentprocess standards;recommendations forhandling of annual payaward

Identification of valueadded/non-value-addedcosts; identification ofprocess improvementopportunities; annualpay award processingcompleted on-time

Quantified VA/NVA costs;quantified savings fromimprovements; signed off payreview data to bureau by Maypayroll deadline

Costs incurred outside HR areidentifiable; support of IS andFinance departments in re-engineering payroll; co-operation of bureau

OutputsDocumented existingprocesses; documentedprocess improvementopportunities;documented payrollrecommendations

High level HR businessprocess model; processflowcharts; completedvalue and root causeanalysis; revisedpayroll workflow

Sign off by AssistantDirectors and Directors

Willingness to sign-off/showsupport to HR AssistantDirector

InputsProcess consultancy;HR AD time; HR stafftime

20 days consultancy; 5days HR AD time; c4person weeks HR stafftime

Consultancy LetterAgreement signed; projectdefinition and schedulesigned off by HR AD; HRstaff released fromoperational responsibilities

Sufficient staff availability inweek to complete projectdefinition and schedule;access to HR 'customers';willingness of HR AD tomake staff available; budget

Fig. 12 - LifeCo HR Re-Engineering project framework at start-up



STRUCTURE INDICATORS OFACHIEVEMENT

MEANS OFVERIFICATION

ASSUMPTIONS/ISSUES

Wider ObjectivesRe-engineer HR function Increased confidence in

HR function; reducedHR workload

Customer/staff satisfactionsurveys

Support & commitment fromDirectors

Immediate Objectives(to 31/5/95)Implement interim payrollprocessingrecommendations;complete process analysis;implement improvedprocesses; develop &implement measurementplan; restructure HR team;HR systems requirementsanalysis

Annual pay reviewprocessing completedon-time; processguidelines agreed andpublished tomanagement; agreedmetrics produced;revised team roles &resps.; HR systemsrecommendationspublished

Signed off pay review datato bureau by deadline;process guidelines signedoff by AD HR andDirectors; agreed metricspublished in Newsflash;new structure published inNewsflash; implementationplan for recommendations

Co-operation from IS,Finance and Bureau;HR AD under notice -remaining in company to endof project? (MD insistenceon secrecy)

OutputsPay review data ;documented measurementplan, restructuring plan,new mgt guidelines &system requirements

Pay data model onspreadsheet; pay data tofinance; identifiedmetrics; HRcompetenciesidentified; businesssystems analysiscompleted

Sign off by Finance, ADHR, IS & Directors

Willingness to sign-off/showsupport to HR AssistantDirector; continued absenceof formal projectorganisation

InputsProcess/systemsconsultancy; HR AD timeand staff availability

28 days consultancy; 5days HR AD time; c3-5person weeks HR stafftime

Consultancy LetterAgreement signed; projectdefinition and schedulesigned off by HR AD; HRstaff released fromoperational responsibilities

HR staff availability - fear ofredundancy - problemsbetween HR AD andsupervisor & manager;impact of HR supervisordisciplinary - need for staffcontingency plan

Fig. 13 - LifeCo HR Re-Engineering project framework at Phase 2

At LifeCo, therefore, these reports, in conjunction with the Project Assessment Reports,became a valuable documented record of both project definition and progress that atraditional PMIS could never provide.

In conclusion, although PMIS can be used on change management projects, the quality andrelevance of the information they are able to provide is questionable. They are based on thetraditional model of project management that focuses on time and costs, and managesvariances in these elements. They are unable to report on any of the qualitative aspectsintroduced in the Monitoring and Measurement framework, nor are they able to analyse thevarious qualitative ratings in order to be able to provide any kind of decision support formanagers as to what tools should be used or the which elements may be the likely predictorsfor future success of the project.



The logical framework and project assessment reports, used together with basic milestoneand control point reporting, together provide a valuable record of project definition,environmental assessment and progress.

For projects that have no identified schedule or budget, such as the LifeCo project, theyrepresent an evolving 'map' of the project that can facilitate better understanding of theorganisational and political landscape through which the project is travelling.


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8. THE MANAGEMENT OF CHANGE BY PROJECT - TOWARDS A CHANGEPROJECT LIFECYCLE

In the light of the experience of the LifeCo project, this chapter seeks to examine twoquestions :

i) How effective is the management by project approach as a means of introducing andsustaining change?, and

ii) What is the impact of this approach on the traditional project life cycle?

Increasingly, there are pressures on organisations to maintain current levels of business whilstdesigning and planning change, and then implementing and learning from that change(Birchall & Lyons, 1995).

Successful implementation of changes such as those resulting from a business process re-engineering initiative, however, requires the effective management of change, whichconcerns '...feelings, attitudes, values, behaviours, commitments...Techniques, methodologiesand supporting IT are only elements of what needs to be done' (Coulson-Thomas, 1994,p112).

Managing this through current organisational forms, however, is increasingly difficult.According to Peters, the nature of change required by organisations in the future will meanthat 'Routinely working across functional barriers will be seen as the way business is done.Careers will become a series of projects.' (Peters, 1987). Boddy & Buchanan use 'projectmanagement' and 'change management' interchangeably '...to describe changes that arerelatively unstructured, with unclear starting points, which cannot usually call on establishedor structured methods...and where the end point will be open to different views andinterpretation' (Boddy & Buchanan, 1992, p9).

The reference to interpretation is significant. Management '...is inescapably shaped by theideas, meanings and interpretations human beings have of themselves...' and is no longer '...amechanical activity undertaken by a few...who are concerned with an objective social reality'(Tsoukas, 1994, p1). In fact, Tsoukas goes on to state that new organisational thinking placesinterpretation right at the centre of management.

This is supported by Wilson, who suggests that to understand change fully involves viewing'...outcomes and process as interwoven...', and goes on to reference Mangham's metaphor ofthe management process as a drama, which illustrates how '...roles are contextually derived,yet emphasises that performance (implementation) is the outcome of the learning and theinterplay of roles in the current setting.' (Wilson, 1992, p49).



If managers will become project managers, and change management is interchangeable withproject management, then it follows that interpretation should also be placed at the centre ofthe management by project approach to change.

This view is reinforced by Kanter, who identifies that formal models of change are no longerapplicable, but that '...an outline of patterns is more appropriate and realistic, a set of guidingprinciples that can help people to understand not how it should be done but how tounderstand what might fit the situation they are in' (Kanter, 1983, p305).

The 'change manager', therefore, must be able to adjust and adapt to the route the organisationis taking to achieve its vision, by monitoring the blend of business vision and learning from'bottom-up feedback' (Birchall & Lyons, 1995).

Major threats to success are not always from the active opposers of change, however. Groupswho appear to have accepted change, but then choose passive resistance or politics to delay it,will prove to be much more serious (Aghassi, 1994). This also requires a process wherebyorganisational knowledge can be interpreted and shared.

Similarly, symptoms of 'groupthink' in the change teams themselves can pose a threat, forexample, information not being sought beyond that which is immediately available or atendency not to seek or recommend change but to keep things as they are (in Wilson &Rosenfeld, 1990).

This places a responsibility on change managers to interpret the health of the organisationaround them as well. Analysing the presence of Bennis' three health criteria for organisations(in Schein, 1988), which include the '...ability to search out, accurately perceive, and correctlyinterpret the real properties of the environment...' (emphasis added), will be a critical taskduring the course of the change project.

The process of implementing change, and the management of that process to successfuloutcome is critical to the success of any change initiative.

Otherwise, there is a danger that ideas or innovations will be adopted by an organisation butthat people around the company will not understand what it is that they have to do. In otherwords, '...changes cannot reside on the level of ideas...but must be concretized...' (Kanter,1983, p299).

Pellegrinelli and Bowman suggest that the status quo cannot be used to change the status quoand that, therefore, the process of implementation must reside outside the systems, structuresand hierarchies that form the status quo (Pellegrinelli & Bowman, 1994). Their model,devised to illustrate the project management approach to strategy implementation, can beapplied generically to all change (see figure 14), and makes a strong case for adopting themanagement by project approach to change.



Although Pellegrinelli and Bowman go on to state that the disciplines of project managementmust be applied in order for this approach to be effective, they too realise the need for a moreinterpretative approach than is usually afforded in traditional project managementmethodologies by suggesting that senior management must '...step outside theparadigm...fundamentally re-examining their understanding of the implementation processesand personal managerial behaviours.' (Pellegrinelli & Bowman, 1994, p131).

Fig. 14 - The project management approach to change (after Pellegrinelli and Bowman, 1994)

Accepted project management methodologies, however, as suggested above and reinforcedby Boddy & Buchanan, usually focus on the structured aspects of the task in hand '...wherewell-established techniques of analysis, planning and control can be applied...' (Boddy &Buchanan, 1992, p11). They go on to propose the need for project managers to exercise basicinterpersonal skills and 'take the lead' in managing relationships and conflicts. Whilst this is aconsiderable advance on the traditional methods, they still constrain themselves to the idea ofproject phases, albeit somewhat less defined and perhaps more overlapping than the lifecycles implicit in methodologies such as PRINCE. (For a description of PRINCE - Projects ina Controlled Environment - see Yeates, 1991).

The results of a comparative research programme conducted by Pettigrew and Whipp,identified five central factors in managing change for competitive success, commencing withenvironmental assessment, and followed by leading change, linking strategic and operationalchange, managing HR, and coherence (Pettigrew & Whipp, 1993). The relationships betweenthese factors is illustrated in figure 15.

INTENDEDCHANGE

PROJECT (CHANGE)MANAGEMENT

EXISTING STRUCTUREPROCESSES &CULTURE

TRANSFORMS CURRENTPRACTICES ANDEMBEDS NEWBEHAVIOURS IN LINEWITH INTENTIONS

TRANSLATEDINTOPROJECTS

OPERATES ON

CONTINUAL LEARNING



Each factor has associated with it a series of 'primary conditioning features' and 'secondarymechanisms'. In discussing the 'Linking Strategic and Operational Change' factor, Pettigrewand Whipp state that 'Great attention is required to the secondary mechanisms if theoperational aspects are not to undermine the general strategic intentions. Not only must thoseintentions be broken down to actionable pieces, those components must become theresponsibility of change managers...The modification of overall vision in the light of localconditions is a major requirement.' (Pettigrew & Whipp, 1993, p35).

Fig. 15 - The five central factors in managing change for competitive success(Pettigrew & Whipp, 1993)

In other words, this factor requires the 'strategic intentions' to be broken down into projects,with responsibility for its implementation given to a change manager, who must be able tointerpret 'local conditions' in order to ensure that the outcome satisfies the overall vision inthe light of these local conditions.

This in turn, requires an environmental assessment, some form of change leadership, furtheranalysis resulting in the decomposition of 'intentions' into sub-projects or tasks, managing thehuman resources forming the project team, and 'programme management', which, inPettigrew and Whipp's terms, relates to the idea inherent in the 'coherence' factor.

Following the points put forward above relating to the need for interpretation to be central tothe task of management, and therefore of change and project management, each sub-projectwould also require an environmental assessment, as it would involve leadership, furtherbreakdown, the management of human resources and 'coherence'.

COHERENCE

ENVIRONMENTALASSESSMENT

HUMANRESOURCESAS ASSETS& LIABILITIES

LEADINGCHANGE

LINKINGSTRATEGIC &OPERATIONALCHANGE



It can be seen from this that the project life cycle, rather than being a linear model of 'phases'geared towards developing a defined outcome, is, in reality, a series of cyclical events, eachcommencing with an environmental evaluation that spawns actions requiring leadership,analysis, human resources and management, together with further events requiring furtherevaluation (see figure 16).

Fig. 16 - A cyclical, event driven change project life cycle

This event driven lifecycle starts with an intention to effect a change. This initiates the firstcycle, Event 0, which in turn may generate a further cycle, Event 1. This could be a sub-project or the commencement of the continuos implementation phase. Once the final elementof implementation has completed (Event n), an evaluation of the 'final' outcome of theoriginal change intention may generate a new intention to change, and so the cycle continues.(Clearly, there will be a process of evaluation during each cycle and after each event, not justafter the final event).

COHERENCE



LEADINGCHANGE


COHERENCE



LEADINGCHANGE


COHERENCE



LEADINGCHANGE


EVENT 1

EVENT 2

EVENT n

COHERENCE



LEADINGCHANGE


CHANGEINTENTION

EVALUATIONOF ‘FINAL’OUTCOME

EVENT 0



This view of the change project life cycle highlights the open-ended nature of changeprojects, and clearly illustrates the need for ongoing environment assessment to facilitatecontextual understanding, which in turn is central to the ideas used to define the Monitoringand Measurement framework discussed above, and is supported by the use of a tool such asthe Project Assessment Report.

If it is true that an understanding of change requires outcomes and process to be viewed asinterwoven, then, in conclusion, it is suggested here that a project management approach tochange is essential. However, traditional methodologies and life cycles do not facilitate theinterpretative approach necessary to gain this understanding. Therefore, it is necessary to re-define the traditional linear life cycle as a series of event driven 'cycles', each of whichinvolves an environmental assessment, which in turn may result in new events. In this way,and in conjunction with the Monitoring and Measurement framework and its associatedreporting mechanisms, a project (change) manager is able to develop their understanding ofthe project as it evolves within the organisation, which is itself also evolving.


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9. CONCLUSIONS

In the introduction to this paper, it was stated that the rationale for this work was born out ofthe frustrations arising from attempting to use traditional project management techniques tomonitor and control 'soft', management projects.

This frustration had been exacerbated by the recent experience at SoftCo, on a project that,despite detailed plans and regular progress meetings, had seemed destined for failure from thebeginning. Why had it been so difficult to gain consensus for the solution proposed by USmanagement? Why had US management ignored the warnings voiced by the European team?

Comparisons with the FinCo project began to highlight some key differences in the approachto project management. Although the actions taken at FinCo may not have originated in anyconscious decision to adopt a different approach, surely there had to be lessons that could bedrawn from them and applied to other projects?

With the commencement of the project at LifeCo (a company with, to say the least, achallenging and interesting political climate!), and the increased exposure that independentconsultancy assignments bring as part of the job, the need to draw these lessons into acoherent approach to project management became pressing.

Boddy & Buchanan's research (1992) provided the starting point for a literature review thatled, perhaps not surprisingly in hindsight, into theories of change management andorganisational behaviour, rather than deeper into the theory of project management .

Increasingly, it became clear that the project manager (a term Boddy & Buchanan useinterchangeably with 'change manager') must be able to gain a deep understanding of theorganisational context in which the project is being conducted. In addition, as LifeCo was anorganisation that was evolving and changing rapidly, it was also clear that a single processleading to understanding would not be sufficient. Therefore, whichever process was adoptedneeded to be continuous to enable understanding to evolve as the organisation evolved.

The LifeCo case study documented here follows the consultancy 're-engineering' project(which was, in effect, the foundation study for what is now a series of projects), andconcludes with the reorganisation of the HR department. Part of this reorganisation involvedthe creation of a new role, that of 'organisation development', with the objective of taking onand implementing the initiatives generated by the original project.


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Analysing this new role in the context of the project overall brought into focus the idea of'continuous implementation' expressed by Breure & Hickling (1990). However, experience atLifeCo suggested that this process was not continuous but a series of events, each of whichwas a project in its own right, requiring the same approach, tools and skills that the originalconsultancy assignment had demanded. This in turn led to the idea of the project life cycle as'cyclical' (as the term itself implies), and event-driven.

The objective in carrying out the research for this paper and developing the monitoring andmeasurement framework was not to produce a new project management methodology toreplace the traditional, linear approach based on meeting time, cost and conformance tospecification targets (although in some cases, the approach developed here may well replacethe traditional method - as it did in the early stages of the LifeCo project, when there were nodefined cost, time or specification targets).

However, it was intended to enhance the project manager's traditional skill set by focusingattention on the organisational issues that, ultimately, led to failure at SoftCo, and byproviding a means by which these can be monitored and measured throughout the life of theproject.

Several lessons have been learnt, or reinforced, as a result of the research that led to thedevelopment of the framework, and subsequently whilst applying the framework at LifeCo,the key ones being :

i) That project management, especially in 'soft' management areas, is in effect changemanagement ;

ii) That a detailed understanding of the organisation is essential if effective change is tobe implemented ;

iii) That effective change requires consensus, commitment and confidence among theultimate owners of the changed process or system ;

iv) That an assessment of organisational understanding, consensus, commitment andconfidence can be made, recorded, monitored and adjusted throughout the life of theproject, and used as a predictor for the project's ultimate outcome.

It is to be hoped that these lessons can be applied to all projects, in order to preclude anyrepetition of the SoftCo experience.


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APPENDIX A REFERENCES AND BIBLIOGRAPHY

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MANAGING, MONITORING AND MEASURING MANAGEMENT PROJECTS - MSc Dissertation

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