Strategic Drivers of Delivery Capability - NETLIPSEnetlipse.eu/media/53704/nwm warsaw - crawford -...

© Human Systems Pty Ltd. All Rights Reserved 1

Dr Lynn Crawford Professor of Project Management Institute for Sustainable Development and Architecture Bond University, Australia

Director Human Systems International Limited

Strategic Drivers of Delivery Capability

© Human Systems International Ltd. All Rights Reserved

Outline

Why and how to invest in corporate PM capability

Delivering value through the concept of fit

Fitting corporate PM capability to strategy

Guidance from research

Conclusions

2


The underlying assumption

3

Organizational

Context

Improved

Project Management

Capability

Corporate

Success

Improved

Project Outcomes

“Organizational project

management improves your

processes and ensures that

you’re not just executing

projects randomly. It ties your

projects to your business

strategy and needs, making

sure those projects are

delivering results that support

your organizational goals” ,

PMI, 2011 http://www.pmi.org/BusinessSolutions/Pages/OPM3.aspx (2011)


But what does “improvement” mean?

Maturity models

The “silver bullet”

Generic

Offer an “ideal” development path

For all organizations in all sectors

When investing in improvement

How do you choose between hundreds of “best practices” and thousands of underlying capabilities?

4


Investing in PM capability improvement

You can’t do everything

So how do you set priorities and decide what to do?

How do you know which investments will be most effective

How much improvement is enough?

Investment decisions need to be made in context

5


PM capability in context

6

Organizational

Context

Business

Orientation

Business

Environment

Strategy

Project Management

Capability

Value of

Project Management

See also Thomas & Mullaly, 2008

“Researching the Value of Project Management” ,

Newtown Square, PA: PMI


The concept of “fit”

Different configurations of organization systems and structure can be successful

If they “fit” the internal and external contexts (Miles & Snow, 2003; Thomas & Mullaly, 2010)

Specific corporate strategies will “drive the different ways that projects are managed”

(Srivannaboon & Milosevic, 2006; Cooke-Davies, Crawford & Lechler, 2009)

7


Strategic drivers

“A company possesses a performance discipline when

The risks of performance against a particular objective have been largely eliminated and only hard work remains” (Michael Treacy, 2007)

Examples:

Dupont – safety

FedEx – reliability

GE – productivity

BMW – product innovation

8


Strategic drivers

Operational excellence

Seamlessly providing reliable products and services at competitive prices

Customer intimacy

Customer loyalty and repeat business through

• Knowing the customer and adding value

• Responsiveness

• Operational flexibility

Product leadership

Innovation, leading edge products and services

9

Treacy, M. & Wiersema, F. (1993). Customer Intimacy and Other Value Disciplines. Harvard Business Review, 71, 84-93.


Organisational PM Capability

Corporate capabilities require

Know-what and Know-how

Human resources

Business processes

Corporate PM capability encompasses tools, techniques and processes for:

Portfolio management

Program management

Project management

10


Fitting PM Capability to Strategy

11

Strategy

Project Management

Capability

Operational

Excellence

Customer

Intimacy

Product

Leadership

Portfolio Program Project

Organizational

Context


Research

Initial qualitative study reporting on strategic drivers of PM in nine industry sectors

Quantitative follow-on study – subset of data reported here

344 senior managers in 4 sectors

• Finance & Business Services (38%)

• Engineering & Construction (23%)

• Government (23%)

• IT & Telecoms (16%)

12

Note: the target group was senior managers – not PM practitioners


INTERVIEWS QUALITATIVE STUDY

13


Qualitative study

Interviews with senior management

representatives of permanent rather than temporary organization

In 9 industry sectors:

• Automotive

• Aerospace and Defence

• Engineering & construction

• Finance & Business Services

• Government

• IT & Telecommunications

• Petrochemical

• Pharmaceutical

• Utililities


Questions about strategy

What needs to be done superbly in this industry sector?

What criteria and measures are used to assess success?

What key things need to be achieved to satisfy shareholders and other stakeholders?


Key Strategic Drivers: All Sectors

000 001 001 002 002 003 003 004 004

Ability to deliver strategy

Relationships, Collaboration & Partnering

Predictability & meeting commitments

Profitability

*Innovation

*Customer focus and satisfaction

*Financial Performance

*Execution Performance

Da

ta f

rom

qu

alit

ative

stu

dy

- a

na

lysis

of

inte

rvie

ws w

ith

se

nio

r m

an

agers


Key Strategic Drivers: Government

000 001 002 003 004 005

Risk management

Stakeholder engagement

Benefits realization

Compliance

Customer satisfaction

Media sensitivity

Business change

*Financial Performance (Revenue)

Ability to deliver strategy

*Execution Performance


Government sector issues

Financial performance

“We don’t have a share price but we do get our budget handed from government. And it’s how our budget is performing is almost a sense of how we’re performing as an organization.” [21:5]

‘We build to a budget, but we also work to special social needs; by definition, these can be in opposition. The budget cannot be our single point of reference’ [Project Manager (A)]

18


Government sector issues

Lack of portfolio control

“Organizationally we don’t have any real discretion as to whether we do [projects] or not, we just have to do them, or the government gets very upset.” [21:21]

‘”Things change quickly on a Minister’s whim. If a new minister comes in with a new agenda, your successful project may get shelved.’ [Project Manager (B)]

Consistent process

“…it is really important that people are able to use a consistent process to deliver programs successfully and to learn lessons from that.” [24:16].

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Public Sector Ethos

‘”….the whole reason that we’re here doing this job is to do something that matters … the projects that we build are things that make the lives of [people] better. So we feel very privileged to be doing the stuff that really matters.’ [Project Manager (D)]

‘…employees tend to be very committed and devoted professionals. They have the freedom to perform to very high standards. Because this is a state owned department project managers are allowed to be very good instead of focusing exclusively on profit at the expense of excellence.’ [Project Manager (A)]

20


SURVEY QUANTITATIVE STUDY

21

© Human Systems International Ltd. All Rights Reserved 22

Study Sample

Engineering/Construction(n=78)

Financial & BusinessServices (n=132)

Government (n=79)

IT/Telecommunications(n=55)

NETLIPSE (n=6)


Respondent roles

0 5 10 15 20 25 30 35 40 45

Human Resource Management

Marketing / Sales

Program Management

Professional / Technical

Finance

Project Management

General Management


Relative importance of strategies

According to Treacy & Wiersema, organizations focus on one strategy while meeting standards in the other two

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2,5000

2,6000

2,7000

2,8000

2,9000

3,000

3,1000

3,2000

3,3000

3,4000

OperationalExcellence

CustomerIntimacy

ProductLeadership


Importance of strategies by industry sector

25

2,000

2,2000

2,4000

2,6000

2,8000

3,000

3,2000

3,4000

3,6000

Engineering/Construction

Financial &BusinessServices

Government

IT/Telecomms

Product Leadership

Operational Excellence

Customer Intimacy


important for all

Customer Intimacy

most important for

Financial &

Business Services

Product Leadership

strongest for

IT/Telecomms

Government less

focused on

competitive

strategies


Relative importance of strategies: Government & NETLIPSE Sample

According to Treacy & Wiersema, organizations focus on one strategy while meeting standards in the other two

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00

01

01

02

02

03

03

04

04

Operational Excellence Customer Intimacy Product Leadership

NETLIPSE Sample


Percentage of organisations with project related processes in place

May only be considered

necessary in environments

subject to significant change

?????????????

Confirms Program

Management as both a

general and project

management capability


Results

28

Stronger

Strategic

Focus

More project

related

practices used


Results


Strategic driver associated with use of widest range of project related practices

• But less likely to use Portfolio Management practices

More likely to use Program Management

More likely to use Benefits Management practices

• Consistent with operational excellence, optimizing “business processes across functional and organizational boundaries” (Treacy & Wiersema, 1993)

• But Benefits Management practices only used by 32% of organisations in sample

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Results

Customer Intimacy

Wide use of project related practices

More likely to use

• Portfolio management

• PM development and career paths

• Value management

30


Results

Product Leadership

Overall, a weaker strategic driver

More likely to provide supportive (rather than controlling) PM practices such as

• Process management

• PM methods and methodologies

• PM development and career paths

• Support and tools for PM

Slightly less likely to use

• Portfolio management

• Risk management

Indicative of balancing act between creativity and control

31


Industry sector differences

Similar results overall

But different sets of practices in each sector

IT/Telecomms strongest overall

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


Financial/BusinessServices

Government It/Telecomms

Overall use of PM practices


Government sector

0%

10%

20%

30%

40%

50%

60%

70%



Government IT/Telecomms

Portfolio management

0%

5%

10%

15%

20%

25%

30%

35%

40%




Benefits management

0%

10%

20%

30%

40%

50%

60%

70%




Program management

0%

10%

20%

30%

40%

50%

60%

70%




Risk management

67% 83%

100%

0%

NETLIPSE


Government sector

0%

10%

20%

30%

40%

50%

60%




Project time management

0%

10%

20%

30%

40%

50%

60%

70%




Contracts management

0%

10%

20%

30%

40%

50%

60%




Change control processes

0%

10%

20%

30%

40%

50%

60%




Project cost management

83% 83%

83% 100%

NETLIPSE


Fitting PM Capability to Strategy

The stronger the strategic focus, the wider the range of PM practices used

Taking a generic view masks important strategic & industry differences

Wise investment in PM capability improvement should look beyond generic models to context

Fit PM capability to strategy to deliver corporate value

35

Strategy

Project Management

Capability

Operational

Excellence

Customer

Intimacy

Product

Leadership

Portfolio Program Project

Organizational

Context


References

The full report of this research is available from the Project Management Institute (soft copy free to members)

Crawford, L. H. & Cooke-Davies, T. J. (2012). Best industry outcomes. Newtown Square, PA: Project Management Institute.

Other publications that might be of interest:

Crawford, L. H. & Helm, J. (2009). Government and governance: the value of project management in the public sector. Project Management Journal, 40, 73-87.

Crawford, L. H. (2006). Developing organizational project management capability: theory and practice. Project Management Journal, 37, 74-86.

Cooke-Davies, T. J., Crawford, L. H., & Lechler, T. S. (2009). Project management systems: moving project management from an operational to a strategic discipline. Project Management Journal, 40, 99-109.

Crawford, L. H. & Cooke-Davies, T. J. (2012). Aligning project managment capability with strategy: results of an empirical investigation. In EURAM (European Academy of Management) Conference, 6-8 June, 2012 ( Rotterdam: EURAM.

Crawford, L. H., Costello, K. L., Pollack, J. B., & Bentley, L. (2003). Managing soft change projects in the public sector. International Journal of Project Management, 21, 443-448.

Crawford, L. H., Hobbs, J. B., & Turner, J. R. (2005). Project Categorization Systems: Aligning Capability with Strategy for Better Results. Newtown Square, PA. USA: Project Management Institute , Inc.

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