The
Project Management Excellence
Seminar
Dr. Aaron J. Shenhar
Institute Professor of Management
Stevens Institute of Technology
CEO,
The Technological Leadership Institute
Hoboken, NJ 07030
Tel: (201) 323-3246,
E-mail: ashenhar@strategicprojectleadership.com
The Technological Leadership Institute - TLI
Copyright Aaron J. Shenhar 2005
The Increasing Share of Projects
Projects
Operations
Time
1800s
1900s
2000s
Agricultural
society
Industrial
society
Information
society
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Industries,
Companies,
Society
Copyright Aaron J. Shenhar 2005
1
Motivation
A Wide Use of Projects in all Industries
Problem: Low Project Success
Most projects overrun
Many disappointing business results
Changes, instability, conflict, crisis
Why? What Can We do About it?
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Copyright Aaron J. Shenhar 2005
Outline
¾ Introduction - Motivation
¾ A Brief History of Project Management
¾ The Project Management Discipline Today
¾ The Future of Project Management
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2
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Copyright Aaron J. Shenhar 2005
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Copyright Aaron J. Shenhar 2005
3
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Copyright Aaron J. Shenhar 2005
PM History
o Before 1950s - Gantt Charts, Ad hoc techniques
o 1950s Invention of PERT, and Critical Path
o 1969 Establishment of Project Management Institute – PMI
o 1986 PMI PMBOK 1
o 1990s PMP Exam for Certification
o 2000 PMI PMBOK 2
o 2003 OMP3 Maturity Model
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Copyright Aaron J. Shenhar 2005
4
Generations in PM Research
Period
Perspective
Approach
1960s
Scheduling
Planning, Coordinating
activities, IT
1970s
Teamwork
Cooperation, Roles,
Process facilitation
1980s
Uncertainty
Stabilize decisions,
Success Factors
1990
Simultaneity
Risk management,
Contradicting demands
2000s
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Copyright Aaron J. Shenhar 2005
5
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Copyright Aaron J. Shenhar 2005
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Copyright Aaron J. Shenhar 2005
6
Project Performance Studies
• Standish Group 2000 – 28% success
• Standish 2003 – IT projects $82B out of $382B were a waste
• Shenhar 1996 –Overrun in 85% of projects (60% B, 70% T)
• Cooper 1993 – Commercial Success only in 1 of 4 projects
• Bull Corp 1998 – 75% of projects missed deadlines
• Rand Corp 1988 - 88% Cost overrun, Only 1/3 were profitable
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Copyright Aaron J. Shenhar 2005
Performance of Large
Transportation Projects
Project
Cost Overrun
Boston’s artery/tunnel project
196%
Humber Bridge, UK
175%
Boston-Washington-New York rail, USA
130%
Great Belt rail tunnel, Denmark
110%
Shinkansen Joetsu rail line, Japan
100%
Washington metro, USA
85%
Channel Tunnel, UK, France
80%
Karlsruhe-Bretten light rail, Germany
80%
Mexico City metro line
60%
Tyne and Wear metro, UK
55%
Great Belt link, Denmark
54%
Øresund coast-to-coast link
26%
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Copyright Aaron J. Shenhar 2005
7
Actual Versus Expected Traffic
Project
Actual Traffic
1st year
Calcutta metro, India
5%
Channel Tunnel, UK and France
15%
Miami metro, USA
18%
Paris Nord TGV line, France
25%
Humber Bridge, UK
25%
M65 Huncoat Junction to Burnley Section, UK
35%
Tyne and Wear metro, UK
50%
Mexico City metro
50%
Denver International Airport
55%
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Copyright Aaron J. Shenhar 2005
Showcase Project
The English Channel
Tunnel Project
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Copyright Aaron J. Shenhar 2005
8
Project Performance During the
20th Century
300
Cost overrun %
200
100
0
-100
1910
1920
1930
Figure 1. A century of cost overrun
1940
1950
1960
1970
1990
1980
2000
Source: Flyvbjerg, Bruzelius and Rothengatter [5] (2003:18)
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Copyright Aaron J. Shenhar 2005
Is it the Tools?
INTD
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Copyright Aaron J. Shenhar 2005
9
Project Management Today
Time
Budget
Performance
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Copyright Aaron J. Shenhar 2005
Where is PM Today?
• Planning Based on Scope, WBS, and Scheduling
• Basic Plan – a Network of Activities
• Project Management – Manage the Process
• Focus on Meeting Time, Budget, Performance
• Standard Applications – E.g., Microsoft, Primavera
• Maturity Models and Education
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Copyright Aaron J. Shenhar 2005
10
WBS Structure
New Car
Brakes
Engine
Structure
Interior
Mechanical
Project SOW
Electrical
Material
Design
Testing
Pre
production
Production
Logistics
Management
Typically 3 to 6 levels
Other Structures: Project phase, Organization, Client Structure, etc.
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Copyright
Aaron Aaron
J. Shenhar,
2002 2005
Copyright
J. Shenhar
Scheduling Network and Critical Path
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Copyright Aaron J. Shenhar 2005
11
Bar Chart - Gantt
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Copyright Aaron J. Shenhar 2005
Project Processes
Planning
Processes
Initiating
Processes
Controlling
Processes
Executing
Processes
Closing
Processes
Project Management Institute, A guide to the
project management body of knowledge
(PMBOK® Guide) (Newtown Square: The Project
Management Institute, 2000), p. 31
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Copyright Aaron J. Shenhar 2005
12
PMBOK Knowledge Areas
Procurement
Integration
Scope
Risk
Project Management
Communications
Human
Resource
Time
Cost
Quality
PMBOK - Project Management Body of Knowledge
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Copyright Aaron J. Shenhar 2005
Project Specific Processes
Phase
Initiation Planning Execution Control Closure
Knowledge
Areas
Integration
Scope
1
1
2
2
Time
4
1
Cost
3
1
Quality
1
1
HR
2
1
Comm.
1
1
Risk
5
Procurement
2
3
21
7
Overall 39
1
1
1
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1
1
1
1
1
8
2
Copyright Aaron J. Shenhar 2005
13
Risk Management
„
What is Risk?
- An undesired event as a result of uncertainty, complexity, constraint,
or lack of resources - something that can go wrong
„
Risk Management
- Prepare action items for project risks - “ Create an Insurance Policy”
- Add activities to project plan
„
Risk Identification - Areas, Types
- Program Risks - Delays, overspending, market changes, politics
- Product Risks - Unit failure, inadequate performance, hazards
„
Risk Analysis
- Effect of risks, Probability of failure, Consequences
- Table: Risks, Outcomes, Probabilities = Expected Values
„
Risk Mitigation
- Effect of risks, Responses, Available resources, Costs
- Responses:
» Elimination, Reduction, Avoidance, Transferring, Redundancy
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Copyright Aaron J. Shenhar 2005
Risk Management Table
Program
Risk or
Name of
Task
WBS
No.
Possible
Event
(What may
Happen)
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Probability
of Event
Cost if
Happens
Expected Cost
of Event
Mitigation
Action
Cost of
Mitigation
Yes
or
No
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14
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Copyright Aaron J. Shenhar 2005
OPM3 Fundamentals
Organizational project
management, its
maturity, relevant Best
Practices and how to
use OPM3
Sequence for
developing
Capabilities
aggregating to
Best Practices
Methods for
evaluating Best
Practices and
Capabilities
The essence of OPM3 is the blending of knowledge,
assessment, and improvement.
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Copyright Aaron J. Shenhar 2005
15
OPM3 Components
PMI Identified 600 Best Practices
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Copyright Aaron J. Shenhar 2005
OPM3 Maturity Assessment
Maturity:
• Process
Improvement
• Project, Program
and Portfolio
Management
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Copyright Aaron J. Shenhar 2005
16
PM Training, Education, and Certification
o Basic courses – study applications
o Detailed Courses – Planning, Risk, Portfolio
o PMI PMP, IPMA Certification, APM BOK
o Certificate programs in project planning
o Academic MSc. Degrees in PM
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Copyright Aaron J. Shenhar 2005
Traditional Project Management
Time
Budget
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Performance
Copyright Aaron J. Shenhar 2005
17
Current PM Concept
¾Focus on meeting time, budget, and
requirements – the “Triple Constraint”
¾Plan and stick to the plan
¾Get the Job Done – Operational Mindset
¾One size fits all
¾No specific business focus
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Copyright Aaron J. Shenhar 2005
Why Projects Fail?
In Reality…
¾ Meeting time and budget goals = success
¾ There are dynamic changes
¾ One size does Not fit all projects
¾ Projects are done for Business Results
¾ Project management is not just planning
¾ Successful projects need leadership
¾ Project management is an integrative, businessrelated activity
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Copyright Aaron J. Shenhar 2005
18
We Need a New Approach
Traditional Approach
New Approach
Projects are focused on
meeting time and budget
Projects are business
related initiatives
Project management is a
process of activities that
need to be managed to
deliver the triple constraint
Project management is
an integrative leadership
function with a
responsibility to achieve
the business results
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Copyright Aaron J. Shenhar 2005
Strategic Project Leadership®
The New Approach
¾ Projects are Done for Business Results
¾ You are the Leader, and Responsible for
Project Business Results
¾ You are a Mini CEO!
¾ Combine strategic, operational and human
sides of leadership
¾ One Size Does Not Fit All!
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Copyright Aaron J. Shenhar 2005
19
A New Organizational Culture
• Give Project Leaders the authority and
held them accountable
• Spend a long time on project definition
before project approval and start
• Define expected business results upfront
and constantly focus on achieving them
• Be ready to make changes in the plan if it
serves better business results
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Copyright Aaron J. Shenhar 2005
From Project Management to
Strategic Project Leadership®
SPL
To
ta
Processes
t
igh
Complexity
R
gs
hin
lR
es
Value
tT
gh
Ri
po
ns
ib
ilit
Time
e
th
ing
Do
y
PM
Metrics
Budget
Performance
Strategic, Operational, and Human
Sides of Leadership
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Copyright Aaron J. Shenhar 2005
20
Efficiency (e)
Effectiveness (E)
Is the:
•
End ,What
•
Goal, Destination
•
Products, Markets
Is the:
•
Means, How
•
Methods, Journey
•
Cost, Time
Its:
•
Strategic & Long Term
•
Doing the Right
Things
Its:
•
Tactical & Short Term
•
Doing Things Right
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Copyright Aaron J. Shenhar 2005
Power of Effectiveness
Ability to
Influence
Outcome
Typical
Executive
Activity
Profile
Study
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60%
4%
Design
1%
Development
35%
35%
Production
Marketing
Copyright Aaron J. Shenhar 2005
21
Importance of Early Stages
% of Project Funds
100
80
Committed
60
40
Spent
20
0
Concept
Planning
Implementation
Turnover
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Copyright Aaron J. Shenhar 2005
Cost Spending vs Committed Cost
Project Costs
Planning Design Implementation Testing
Cost
Incurred
5%
5%
3
Production
2
85%
Cost
Committed
5%
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60%
20%
10%
5%
Copyright Aaron J. Shenhar 2005
22
The Technological Leadership Institute - TLI
Copyright Aaron J. Shenhar 2005
From Project Management to
Strategic Project Leadership®
Project Manag.
Strategic Project Leadership
Focus
Efficiency
Effectiveness, Efficiency
Mindset
Operational
Strategic, Operational, Human
PM Role
Get the Job Done
Getting Business Results
PM Style
One Size Fits All
Adaptive Approach
PM Define Project Scope
Business Opportunity,
Strategy, Success Criteria,
Project Type, Scope
Reviews
Progress,
Milestones,
Needs, Strategy, Expectations,
Progress
Human
Teams, Conflict
Vision, Spirit, Motivation
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Copyright Aaron J. Shenhar 2005
23
po
ns
ibi
Re
s
Organizational
Processes
,
gs
hin
tT
Addressing
Complexity
t
gh
Ri
To
tal
Value
Creation
igh
eR
th
ing
Do
lity
Project Excellence Based on
Strategic Project Leadership®
Metrics
Strategic, Operational, and Human
Sides of Leadership
The Technological Leadership Institute - TLI
Copyright Aaron J. Shenhar 2005
Integrated Business-Focused
Strategic Approach
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3
4
1
2
Copyright Aaron J. Shenhar 2005
24
Showcase Project
Sydney Opera House
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Copyright Aaron J. Shenhar 2005
From Traditional Project Management to
Strategic Project Leadership®
PM Success
SPL Metrics
Business Results
Time
Efficiency
Budget
Performance
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Team
Customer
Future
Copyright Aaron J. Shenhar 2005
25
Showcase Project
Los Angeles Subway
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Copyright Aaron J. Shenhar 2005
From Traditional Project Management to
Strategic Project Leadership®
SPL Adapting to Project
Complexity
PM
Time
Complexity
Novelty
Budget
Technology
Performance
Pace
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Copyright Aaron J. Shenhar 2005
26
The Framework:
Distinguishing by Project Type
Complexity
NCTP Model
Array
System
Novelty
Breakthrough
Technology
Assembly
Platform
Derivative
Regular
LowTech
MediumTech
HighTech
Super
HighTech
Fast/Competitive
Time-Critical
Blitz
Pace
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Copyright Aaron J. Shenhar 2005
Showcase Project
Denver International
Airport
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Copyright Aaron J. Shenhar 2005
27
Denver Airport
Complexity
Array
System
Assembly
Breakthrough Platform
Technology
Derivative
Low
Tech
Novelty
Medium
Tech
Regular
High
Tech
SuperHigh
Tech
Fast/Competitive
Actual style
Required style
Time-Critical
Pace
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Copyright Aaron J. Shenhar 2005
Integrated Business-Focused
Strategic Approach
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3
4
1
2
Copyright Aaron J. Shenhar 2005
28
From Traditional Project Management to
Strategic Project Leadership®
PM
SPL Planning
Time
Strategy
Spirit
Budget
Performance
Organization
Processes
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Tools
Copyright Aaron J. Shenhar 2005
The Project Manager’s Assets
• Project Requirements
• - System requirements - Operational, Functional, Specifications
• Commitments
• - Contract, Milestones, SOW, Payments, Ts &Cs
• Resources
• - Budget, Personnel, Equipment
•
•
•
•
•
Strategy
Spirit
Organization
Processes
Tools
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Copyright Aaron J. Shenhar 2005
29
A Framework for
Strategic Project Leadership®
Strategy
Competitive Advantage
Business Success Goals
Strategic Focus
Organization
Spirit
Structure
Teams
People
Vision
Culture
Values
Fun
Tools
Processes
Planning
Monitoring
Controlling
Schedule
Budget
Documentation
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Copyright Aaron J. Shenhar 2005
Integrated Business-Focused
Strategic Approach
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3
4
1
2
Copyright Aaron J. Shenhar 2005
30
Project Excellence: The New Maturity Framework
Strategic
Strategic
Focus
Focus
High
3
1
4
2
Low
Low
High
Operational
Operational
Excellence
Excellence
Current Maturity Models
High
InspirationalLeadership
Leadership
Inspirational
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Copyright Aaron J. Shenhar 2005
Strategic Project Leadership®
The Seven Principles
1. Leadership – Total Responsibility
2. Strategic Project Portfolio
3. Strategy – Each Project Needs a Strategy
4. Spirit - Exciting Vision, Spirit, and Fun
5. Adaptation – One Size Does not Fit All
6. Integration - Integrated SPL Plan
7. Learning – Project a Learning Organization
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Copyright Aaron J. Shenhar 2005
31
Strategic Project Leadership®
The Seven Principles
1. Leadership – Total Responsibility
2. Strategic Project Portfolio
3. Strategy – Each Project Needs a Strategy
4. Spirit - Exciting Vision, Spirit, and Fun
5. Adaptation – One Size Does not Fit All
6. Integration - Integrated SPL Plan
7. Learning – Project a Learning Organization
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Copyright Aaron J. Shenhar 2005
Project Strategy:
The Missing Link
Business
BusinessStrategy
Strategy
The
TheMissing
Missing
Link
Link
Project
ProjectStrategy
Strategy
Project
ProjectPlan
Plan
Project Strategy:
Implementation
Implementation
What to do and How to do it - to achieve the highest
Competitive Advantage and the best Value
from the project
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Copyright Aaron J. Shenhar 2005
32
Product, Project Boundaries
and Strategy Components
Business
BusinessPerspective
Perspective
Product
Objective
Objective
Project
Product
ProductDefinition
Definition
Competitive
CompetitiveAdvantage/Value
Advantage/Value
Why would the
customer buy?
Success
Successand
andFailure
FailureCriteria
Criteria
Project
ProjectDefinition
Definition
Strategic
StrategicFocus
Focus
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Copyright Aaron J. Shenhar 2005
Project Strategic Focus
• Relentless pursuit of Competitive Advantage - articulate
guidelines on “How to Win!”
• Focus Activities and Behavior on Competitive Advantage –
Specify Team and Individual Roles
• Create a Strategic Policy for Decision Making
• Design, Testing, Materials, Components, Vendors
• Embark on Company Strengths, Synergies, and External
Alliances
• Examples • Cost, Time, Product Advantage, New Technology
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Copyright Aaron J. Shenhar 2005
33
Wireless Phone Performance
(Source: Fortune-Technology – 1999)
Company
Motorola
Ericsson
Qualcmm
Samsung
Nokia
Siemens
Sony
Model
StarTAC
KH-618
Q Phone
SCH1000
6160
g1050
Z
$50
$75
$199
$100
$200
$50
$200
1
1.75
1.5
2
3.25
1.75
2.5
14
33
20
20
200
30
24
Price
$
Talk
Time
Hrs
Standby
Time
Hrs
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Copyright Aaron J. Shenhar 2005
Strategic Project LeadershipTM
The Seven Principles
1. Leadership – Total Responsibility
2. Strategic Project Portfolio
3. Strategy – Each Project Needs a Strategy
4. Spirit - Exciting Vision, Spirit, and Fun
5. Adaptation – One Size Does not Fit All
6. Integration - Integrated SPL Plan
7. Learning – Project a Learning Organization
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Copyright Aaron J. Shenhar 2005
34
Project Spirit
• What is Project Spirit:
• An inspired state of mind, and a project culture, which is focused on an
exciting vision of the project goal
• A good spirit creates excitement, drive, and motivation
• Vision: An exciting statement expressing the unique state that will be
achieved after project completion
• Motto: A catchy phrase, slogan, or legend that expresses the product
uniqueness or advantage
• Examples of Visions and Mottos:
•
•
•
•
BMW – “A muscular car that wants to be driven!”
3M – “Sticks around”; “The fastest gun in town”
Apple’s I-Book - “Throw it in your backpack”
Major Newspaper – Vision: Never miss a day of print; Motto: “Keep it up!”
• Creating Spirit – vision, motto, norms, values, fun, social experience,
ceremonies, icons, project name,
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Copyright Aaron J. Shenhar 2005
Strategic Project Leadership®
The Seven Principles
1. Leadership – Total Responsibility
2. Strategic Project Portfolio
3. Strategy – Each Project Needs a Strategy
4. Spirit - Exciting Vision, Spirit, and Fun
5. Adaptation – One Size Does not Fit All
6. Integration - Integrated SPL Plan
7. Learning – Project a Learning Organization
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Copyright Aaron J. Shenhar 2005
35
Project Analysis Framework:
The UCP Model
Uncertainty at the moment of
project initiation
Complexity
Risk
Uncertainty
Complexity size,
# of elements,
variety,
interconnectedness
Pace available time frame
Pace
Copyright
Aaron Aaron
J. Shenhar,
2002 2005
Copyright
J. Shenhar
The Technological Leadership Institute - TLI
What Impacts Project Type?
Environment
Product
UCP
Project
NCTP
Task
Complexity
Novelty
Technology
Pace
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Copyright Aaron J. Shenhar 2005
36
The Framework:
Distinguishing by Project Type
Complexity
NCTP Model
Array
System
Novelty
Technology
Assembly
Breakthrough
Platform
Derivative
Regular
LowTech
MediumTech
HighTech
Super
HighTech
Fast/Competitive
Time-Critical
Blitz
Pace
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Copyright Aaron J. Shenhar 2005
Project Type Impact
on Project Management
Complexity
Formality
System engineering.
System integration
Design and development.
Later design freeze
Novelty
Technology
Less market data.
Later requirement freeze
Autonomy
Pace
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Copyright Aaron J. Shenhar 2005
37
The Space Shuttle Analysis
Complexity
Array
System
Assembly
Breakthrough Platform
Technology
Derivative
Low
Tech
Novelty
Medium
Tech
Regular
High
Tech
SuperHigh
Tech
Fast/Competitive
Actual style
Required style
Time-Critical
Blitz
Pace
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Copyright Aaron J. Shenhar 2005
A Framework for Adaptation
Category
Project Types
PM Impact
Objectives
Strategic Goal
Strategic, Operational
Customer
External, Internal
Business Objective
NPD, Product Improvement,
Maintenance, Infrastructure, R&D
NCTP - Attributes
Novelty
Derivative, Platform, Breakthrough
Complexity
Assembly, System, Array
Technology
Low-tech, Medium-tech, High-tech,
Super High-tech
Pace
Regular, Fast/Competitive, TimeCritical, Blitz
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38
Strategic Project LeadershipTM
The Seven Principles
1. Leadership – Total Responsibility
2. Strategic Project Portfolio
3. Strategy – Each Project Needs a Strategy
4. Spirit - Exciting Vision, Spirit, and Fun
5. Adaptation – One Size Does not Fit All
6. Integration - Integrated SPL Plan
7. Learning – Project a Learning Organization
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Copyright Aaron J. Shenhar 2005
SPL Project Integrated Planning
• Project Charter
•
By Business to Project Team – Jointly Written
•
Need, Product, Project, Business Perspective
•
Responsibility, Authority
Project
Charter
• Project Initiation Document
•
By Project Team to Business – Jointly Written
•
Strategy, Spirit, Organization, Processes, Tools
•
SPL Hierarchical Plan – SPL Matrix
Project
Initiation
Document
Project
Plans
• Project Traditional Plans
•
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Scope, WBS, Authority, Schedule, Budget, Risk, etc.
Copyright Aaron J. Shenhar 2005
39
The SPL Hierarchical Plan
Area
Strategy
Spirit
Organiza.
Processes
Tools
Entire
Project
Design
Testing
Quality
Risk
Cost
………
Additional areas: All PMBOK areas, Marketing, Production, Commercialization, Distribution, Service, Training
Life-cycle cost, Safety, Environmental concern, Brand management, Systems engineering, Compatibility,
Manufacturability, Customer connection, Customer acceptance…
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Copyright Aaron J. Shenhar 2005
Integrated Business-Focused
Strategic Approach
The Technological Leadership Institute - TLI
3
4
1
2
Copyright Aaron J. Shenhar 2005
40
Project Excellence Based on
Strategic Project Leadership®
Addressing
Complexity
t
gh
Ri
lity
po
ns
ibi
To
tal
Organizational
Processes
,
gs
hin
tT
Re
s
igh
eR
th
ing
Do
Value
Creation
Metrics
Strategic, Operational, and Human
Sides of Leadership
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Copyright Aaron J. Shenhar 2005
Implementing the New Approach
• Custom Solution to Fit Company Culture and Process
• Top Management Must Buy in
• Gradual Implementation with Assessment Points
• Interaction Between Education and Process
• An Integrated Approach
• Process Involves Several Levels
•
•
•
•
Top Management
PMO
Project Managers
Project Teams
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Copyright Aaron J. Shenhar 2005
41
An Integrated Approach to
Implementation
Assessment
Educational
Program
Company
Processes &
Documentation
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Coaching &
Mentoring
Copyright Aaron J. Shenhar 2005
Showcase Project
The World Trade Center Project
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Copyright Aaron J. Shenhar 2005
42
po
ns
ibi
Re
s
Organizational
Processes
t
gh
Ri
Addressing
Complexity
,
gs
hin
tT
To
tal
Value
Creation
igh
eR
th
ing
Do
lity
Project Excellence Based on
Strategic Project Leadership®
Metrics
Strategic, Operational, and Human
Sides of Leadership
The Technological Leadership Institute - TLI
Copyright Aaron J. Shenhar 2005
43