PM business value - Henning Zeumer Projektmanagement

Why Project Managers and CEOs are very Similar

These days, as a Project Manager, I had the opportunity to listen to a presentation by real professionals. The management consultancy McKinsey lectured about the role of the CEO in the company, about his important tasks, his contribution to the company’s success, and also about why he receives an appropriate salary for it.

I had to smile. Because I often discuss exactly the same things with CEOs, managing directors, division heads and other decision-makers in management when it comes to the appropriate staffing and thus also payment of their projects with a project manager.

That’s why I exemplary took an original slide from the presentation with the roles and tasks of a CEO at McKinsey and added those of a project manager to compare. Of course, this could be extended as desired. But I think it’s enough to show that the two roles and their responsibilities actually only differ in “altitude” and budget.

Perhaps this is food for thought for the future staffing of your projects: Project Management is not a commodity but a management job. Recruiting does not belong in purchasing, and price should not be the decisive criterion…

Expert vs. Project Manager ?

You know this discussion, for sure: Does a project manager need to be primarily a specialist in project management or in the professional field, and how much professional know how for the product to develop or implement does he need to lead the project successfully?

Using the example of myself:

My background started ca. 30 years ago in a bank, followed by retail and consumer goods industry. Here I spent many years with topics like Category and Enterprise Resource Management (ERP). In the 20 years since I switched my focus from Industry Consulting to professional Project Management, I also added a lot of experience in Discrete Manufacturing, Machine and Plant Engineering, Telecommunication, Energy, multiple Services, Automotive, and at an Airline. From Strategic Branding and Business IT Strategy over M&A, Organizational Change, Digital Transformation and Process Optimization up to Development, Construction, Implementation, Commissioning, or After Sales and Customer Service I experienced kind of everything that could happen in project management. I even saw Civil Engineering in the Nuclear Industry.

Team - Project Management, Project Manager

My Experience:

It doesn’t harm a project manager to have some insight and affinity with the project scope and the industry processes, which can be learnt fast with adequate deepth though. In the end his main tasks will be planning, coordination, communication, and leadership – the professional part is the experts’ task. His add value is in the efficiency and effectivity of the total.

Much more you as the project accountable manager should ask yourself: Are we looking for an experienced specialist in the professional topic or for an experienced in methods and leadership project manager, who ensures the project’s execution to plan? At which of the two we prefer sound education and skills? How much of his daily working time and attention should he put in the respective task, specifically: if trouble occurs in project, what may drown in case of conflict of time and objectives?

2 ways - Project Management, Project Manager

Conclusion:

Your priorities are the answer. Both in one person in most cases leads to conflicts in time and objectives, and therefore to distress in projects.

A compromise: Read here, if you need both…

How to sell Project Management to Executives

Statistics tell us about 60% Executives who well know about the opportunity cost of distressed projects, but only 20% actually do support project management initiatives in their companies. Paradox, isn’t it? But we all who are working in project management (business) know how hard it often is to get budget for an (persumedly) expensive, but good project manager from upper management and deciders. Instead projects repeatedly get longer and more expensive than planned – well, is that more favourable?!

Everyone in our business probably has already intensively wondered how to best “sell” good project management to his superiors. I myself have contributed to many initiatives and circles who shared thoughts about the topic and intended to do marketing at the Executives. In most cases these initiatives got stuck at the point when own contacts should be supplied.

That is why I would like to broaden the base here in the blog and collect opinions and suggestions publically, i.e. for all who contribute, why it is that hard to break up this contradiction, and how we eventually could succeed yet. Let’s leave it open what each contributer may take away from it – but may be it will be reported here whether and how it happened… 😉

The PMI Pulse of the Profession 2018 here for Download

If you as being a PMI member didn’t already receive a press notice: The new PMI Pulse of the Profession report is out and is available for download on the PMI website as well as also here. Its title this time:

Success in Disruptive Times

Success starts with the right approach to support project delivery. The 2018 Pulse of the Profession^® findings show that regardless of whether predictive, agile or hybrid is used, organizations that use some type of formal project management approach are successfully meeting their goals. And champions are better at choosing the best-fit approach.

Organizations are facing heightened competition and ongoing disruption. They see that no one single factor drives success. Smart organizations understand that proven project management practices lead to greater success and less waste.

I wish you much pleasure when reading and many good inspirations for your company and business!

To download the report, please click the PDF icon:

The new PMI Pulse of the Profession 2017 is out

PMI members have already received mail, for all others it is available here: The new PMI Pulse of the Profession Report is out. Again it is constituted that companies with a higher maturity in project management have better and more profitable projects – seems to be no wonder. But different to the preceding years the study for the first time since five years has detected an improvement of meeting project objectives: “Only” 9.7% of the investment sum were “burnt”, that is 20% less than the year before!

Consequently the report describes this time less what advantages companies have when taking care of good project management, but focuses the actual benefits that a “champion” with more than 80% of projects conducted to plan (time, cost, quality) has compared to an “underperformer” with less than 60% success rate. That applies specifically at strategic important projects where achieving the intended business goals and savings from better project performance does not only pay back during the project but even more after it with long and sustainable effects.

I wish you much pleasure when reading and many good inspirations for your company and business!

To download the report, please click the PDF icon:

PMI Pulse of the Profession 2016

I admit that this time I take up this year’s PMI report very late due to project engagements, and that while I was “hawking around“ with it at my clients whom I was able to help out of some bad project distresses again this year: Look, You are not the only ones who have to catch up backlogs here !

pmi-pulse-of-the-profession-2016 The PMI Pulse of the Profession 2016 (again) shows very clearly and easy to understand why project success, business success and good project management are directly interrelated: projects are 2 ½ times more successful (and profitable) when proven project management practices are used. It bases its argument this time as expected on PMI’s newly introduced Talent Triangle and stresses the necessity of interacting technical project management, leadership, and strategic and business management for corporate success.

Unfortunately the research’s findings also show a deterioration of the project results correlated with a decrease of maturity in corporate project management: We see US$122 million wasted for every US$1 billion invested due to poor project performance, a 12 percent increase over last year !

PMI considers the reason to be anew decreasing awareness and acknowledgement for good project management practices at the Executive Management, and appeals:

Look beyond technical skills of your project managers, and seek added skills in leadership and business management
Recognize the strategic role of corporate project management and an enterprise-wide Project Management Office (EPMO) aligned to the company’s strategy
Drive success with engaged Executive Sponsors

But discover it yourself – and use the study as an (additional) argumentation aid for good project management in your company. Have an inspiring reading.

To download the PMI Pulse of the Profession 2016 report, please click the PDF icon:

Turnaround for Enterprises with project-driven Business

My last article dealt with the way how to turn a distressed project to success or at least receive a useful benefit from it. It ended with an appeal towards the managers responsible for projects and company not to stop at this point but to use the insights received from the mistakes made to reasonably terminate the ultimate causes for repetitive issues in projects, to achieve a sustainable turnaround.

Theses causes are sufficiently known latest after my many previous articles (see https://eobz.de/category/tips-discussions/), but also looking at the uncounted studies on this subject. In most cases the sources can be found in the company’s acknowledgement of projects in general and of good project management in particular.

Companies with project-driven business model are impacted most

At this business model the dominant business happens in projects, e.g. in customer projects. But also enterprises whose business is vastly influenced by changes that imply a high number or frequency of investments and adaptations in their business are project-driven.

Linienorganisation_E - Turnaround, Organization, Project Management, project-driven Business In Europe enterprises typically have an established line organization structure with functional and central departments. This is especially the case in our traditionally strong industries like Mechanical and Plant Engineering and in particular in privately owned, mid-size companies, but also at consulting and IT firms, engineering and development bureaus etc. Often I find a distinctive own life of the departments, production locations or plants with silo thinking, insufficient communication and cooperation. This becomes very evident with cross-functional work in projects.

A pity if the company actually depends on profitably delivering projects i.e. seamless overall collaboration, and actually not on prospering of single organizational units. In most cases of companies with a traditional set-up but project-driven business this discrepancy can be detected also in the books with revenue, profit and market share decreases. That is because for them the market has changed dramatically in the recent years. These companies urgently need a turnaround not only in single distressed projects but for the entire organization.

Rebuilding the culture must be the first step

Nothing is harder to change than established, beloved habits. Many entrepreneurs and executives already have failed to break up traditional structures and delineated thinking, to “turn” department princes, and to have their enterprise undergo a drastic treatment to achieve the turnaround. To succeed the company culture concerning its projects first needs to change authentically. And this starts at the very top at the executive management.

An intensive Change Management process commences which can’t happen overnight. This is what counts:

Understand where the money comes from. That is no more just having a good product. It also needs to be delivered reliably, assembled and commissioned, at a fair price as contracted. The business actually is no longer product- but project-driven. And by the way the company needs to earn good money (after all). Ergo
Comprehensive instead of local optimization. This means that the profit doesn’t derive from the single production lines and functional departments but in the projects which deliver the whole completely as a package. Efficient collaboration across department borders makes nice company margins, not good single functions’ results alone. It also takes to consequently
Incorporate prestages and suppliers. They also need to be driven by the projects, at least when collaborating with them. Because if they don’t contribute to plan even the own, compelling project planning becomes maculation. Therefore you need to accurately investigate who fits in concerning his performance and organizational maturity, re-negotiate contracts with the new criteria, sharpen and align control mechanisms, expediting and claim management accordingly.

Only if all involved have understood what project-driven business is about, and only if the management backs it up authentically, the turnaround will succeed. And only then you will succeed to implement the reshaping now following without costly resistance.

Rebuilding the organization is logical consequence and fundament

If you focus on your projects’ commercial success your corporate organization needs to fit and reflect this. A profitable, project-driven firm needs to have a good and professional project management. Ergo your company in the future needs a strong

Project management as a core competency and strong department. Quit with functional specialists who lead the projects at the side. Project management needs full attention on planning, coordination and leadership – actually same as with corporate management. Time and objective conflicts of two hearts in the project leader’s chest are poison for concentrating on the essentials. His “thinking” also needs to be project-driven, no longer product love struck. Everybody contributes his core competence, the engineer his functional knowledge, and the project manager his PM skills, for success of the total. Process models and best practices make it replicable and calculable.

Flanking focused resource assignement and legwork

Unfortunately companies mostly have too few of both subject matter experts for all of the important projects at hand. This is why they need a structured and economically effective

Portfolio management, to prioritize their projects objectively and assign their resources for an optimum of business benefit. It’s not gut feeling and preferences, and not at all who shouts the loudest that determines which projects are important for the company. You need to consider that there still will be critical internal projects which are only linked indirectly with the revenue even with a project-driven business model. Criteria for all projects need to be corporate objectives, strategy, risk, profit, balance of initiatives and load capacity of the organization. The means are cost-utility analysis, (may be) Balanced Scorecard and tangible KPIs. Controlling must be consequently according to facts and to time. That is how the discussions und decisions get transparent and safe.

So far with the „new brooms“, but to succeed with the transition for the turnaround you still need a re-shaping at the layout and self-image of

Functional and central departments as service providers for the projects. The previously gone through change in your corporate project culture will help you here. The engineers’ provisions will now not only serve for the product’s perfection but also for the whole task’s delivery to contract. Procurement will not only look at the terms and conditions but also (may be even sometimes with concessions supporting the project targets) at the reliability of delivery. Legal will probe partnership in collaboration; QM controls the project’s product quality and drives process quality (Continuous Improvement). HR will search for skills instead of positions, train for future project requirements, take care for a corporate identity among the employees, etc.

This is no „clean sweep” but indeed an extensive re-shaping of the corporate organization, not only in its structure, because accompanying you need to

Also relaunch incentive systems

All structure and mind-set changes will fall back into old patterns and the turnaround will get stuck if the colleagues will go on to be rewarded for the old instead of the new behaviours i.e. not project-driven as well. Department managers must no longer be measured by their departments’ success and size only, colleague no longer primarily by product quantity or quality. What’s essential is the contribution to the complete picture, the performance in the projects, teaming, reliability, taking responsibility, process improvement, personal growth and skills enhancement, usability and flexibility. These are the success factors for the turnaround and the company’s fitness for the future.

For example Sales will no longer be provisioned for a maximum of sold projects but for good ones with good margins and realistic agreements on delivery. Procurement’s target will no longer be highest discounts possible but favourable conditions which allow suppliers realistic approaches and calculations and still are attractive for prioritized, reliable deliverables. A success measurement could be e.g. provisions on time or low failure.

At HR this is analogous properly staffed projects or less resource bottlenecks at good utilization same time. QM receives bonus for process improvements that further increase efficiency and effectiveness of communication, process flow and cooperation. You probably have plenty more good examples now, do you? In any case the basis for incentives for sure will be a close collaboration and coordination with each other and with the project and portfolio management, because this is also the basis for the turnaround.

Your reward

When your company finally has managed the turnaround and is completely wired project-driven you will not need to fear any benchmark in your industry. You will regain eventually already lost market shares and even more. Most of all you will come back to enjoy your margins and profits, not to talk about the joint success that all colleagues will feel and appreciate. Success makes sexy – that also applies to enterprises !

I hope I could give you some helpful suggestions with these lines. Believe me: these thoughts can be continued infinitely. I find a lot of pleasure in it, and, if you like to, also together with you in your very individual turnaround.

Learn more about the topic organization and project-driven business model…

Increasing Project Management Efficiency – Project Management Office Implementation

Did you ever wonder what your project managers (PMs) do all day long? In one of my other articles here you can read a survey about this, and how project managers are “misused” for “work “foreign for the species”. In addition to that project managers often can only do their job “at the side” on top of hands-on work in the project. Today I’d like to talk about a third kind of project manager’s time misuse, those jobs that could be done much cheaper and more efficiently by others – in a Project Management Office.

Project managers accomplish valuable work

Rewind: Well educated project managers are well paid (or should be). In return they stem a lot of responsibility, keep oversight for their entire team, and ensure that nothing important gets forgotten in the project, and that it becomes a success. This is, taken by itself, a very sophisticated job.

There were some project managers of this kind in the company I’d like to tell about here, also many projects, and thus a lot of work. In an earlier initiative we had already defined common standards for a structured project approach along with appropriate tools and templates. The base for operational excellence in the daily project work was set and meanwhile showed the desired results. Only the project manager’s’ workload hadn’t decreased, and while the projects went tangibly smoother the project manager work day still had 10 and more hours.

As not expected differently the analysis showed that methodic procedures are joined by some routines which would not occur without. Many of these were cyclic, and most of them were to be applied in each of the projects. Though they all belonged to project management the project manager’s time was much too precious and expensive for this, respectively his time would have been used much more efficient at other tasks.

Release of routines increases project managers‘ efficiency

So I received the task to implement a project office for the company which was to centrally pool the repeating routine tasks and do the project managers‘ groundwork. That comprised e.g. organization of travel and accommodation for project team members, booking of rooms and phone conferences, collection and processing of time and work reports as well as updating planning and controlling tools.

Young project people were recruited to start their career path in project management who attended my courses in Project Management basics and in the company’s standard tools. Some of them continued to follow that path later with a IPMA Level D or PMI CAPM certification.

The project managers were released significantly that way; they had more time for planning and analytics thus achieving another push to project quality and efficiency.

Notabene: To implement a performing Project (Management) Office it takes a very experienced project manager who knows what counts. This is surely not a task for a young project manager to earn his spurs !

The Project Management Office (PMO) takes over management responsibilities

When implementing the new career path also a new organizational unit was created, a staff unit outside the traditional, functional line that primarily had to focus on project management. It would have been a logical consequence to allocate the project managers there also with disciplinary competences to consolidate education and promotion in this career path. But my client was not (yet) ready to go that far.

block2 - Project Management Office (PMO)

Nevertheless it got „higher“ responsibilities assigned during the second step of my commission: Maintenance and quality assurance of the Project Management standards, execution of the Change Control management and project controlling as well as follow up and processing of risk and contingency management.

The Project Office blossomed out step by step to a Project Management Office (PMO) which dispatched Project Managemnt knowhow fail-safe on multiple shoulders, and which could be used by the project managers efficiency boosting as a shared service. That turned out to be very beneficial when the company was granted two big programs and had the necessary infrastructure already in place with its Project Management Office.

Continuously develop corporate project management

How will this go on now? Well, my contribution already left that much know-how in the company and the Project Management Office that the organization meanwhile is able to identify and initiate necessary adaptations and enhancements by itself. I am currently called to assist only selectively for audits or trainings.

And that is well appreciated because Operational Excellence and internal project management competence was the goal – that was achieved. Now the “expensive” project manager resources can do their high-value jobs very effectively and efficiently, and the company benefits most of this…