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© 2012 International Institute for Learning, Inc.
Introduction to Managing Complex Projects
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Presentation Overview
This module includes the following topics:
Complexity and Projects
Fibonacci Framework
Emotions and Decision Making
Importance of Risk Management
Scheduling Tools
Leadership in Complex Projects
© 2012 International Institute for Learning, Inc.
Group Discussion
Despite
PMI, IPMA
PMBOK, PRINCE2
Hundreds of thousands or PMPs, etc.
Continuing unacceptable level of project failures
WHY?
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The “Somewhere In Between”
Ordered
Deterministic
Random
Sensitive to initial conditions
Simplicity Chaos
Edge of Chaos
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Complex Systems Characteristics
Non-linearTipping
points/phase shifts“
EmergenceMacro different
from micro; non-deterministic
Dancing Landscape
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ICCPM
Characteristics of Complex Projects
Uncertainty, ambiguity, dynamic interfaces, and significant political or external influences
Run over a period which exceeds the technology being used at the start of the project
You know what you want to produce, but you don’t know how you’re going to build it
Adapted from presentation by Stephen Hayes, CEO ICCPM, at the ICCPM Research and Innovation Conference, Lille, France, 16 Aug
2010
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7IIL’s Complex Project Framework – FIBONACCI
F
I
B
O
N
A
C
C
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Introduction to FIBONACCI
Based on IIL’s project methodology (UPMM), which:
Starts with PMI’s five standard process groups
Adds: Originating to address issues around properly
setting project expectations Continuous improvement added to address issues
around landscape adaptation– Structural– Temporal– Technical– Directional
Re-orients the phase names to reflect added elements required to handle complexity. (FIBONACCI)
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Framing
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Summary and Importance of Framing
Need to have a realistic understanding of project expectations and risks prior to and during the project.
Budget
Scope
Schedule
Business value
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Potential Pitfalls & Possible Solutions
Potential pitfalls:
Conspiracy of optimism
Related theories, e.g., Prospect Theory
Possible Solutions (objectivity)
Reference class forecasting
Pre-mortem
Benefits analysis audits
Push back
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Prospect Theory
Daniel Kahneman and Amos Tversky – 1979
Challenged the “expected utility” theory of economic decision making which suggests rationality of decisions
Excessive attention to low-probability high-drama results vs. higher-probability common occurrences (traveling during “high terrorism” alert vs. traveling anytime by automobile)
Ignoring regression to the mean (gambling “hot streak,” 2008 economic crisis)
Problem framing affects decisions
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Framing the Issue
Problem 2Disease breakout in a small town – 1800 people may die - two possible vaccines available to deal with the crisis
Vaccine X: 1200 of 1800 people will die
Vaccine Y: 33% probability no one will die; 67% probability 1800 people will die
Problem 1Disease breakout in a small town – 1800 people may die – two possible vaccines available to deal with the crisis
Vaccine X: 600 people will be saved
Vaccine Y: 33% probability all will be saved; 67% probability all will die
K/T experiments: 72% chose the risk-averse (600 will be saved) selection,
Vaccine X.
K/T experiments: 78% chose the risk-seeking
(could not tolerate sure loss of 1200) selection,
Vaccine Y.
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Framing Conclusions
We’re risk averse when a problem is framed in a particular manner, and risk seeking when the same problem is framed differently.
We tend to focus on parts of problems (particularly those that most immediately affect our thinking) rather than the problem as a whole.
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15Reference Class Forecasting – An Outside Look
Lovallo/Kahneman and Flyvbjerg both suggest Reference Class Forecasting
Select reference class
Assess distribution of outcomes
Predict your project’s position in the distribution
Assess reliability of your prediction
Correct intuitive estimate
Adapted from Lovallo, D. and Kahneman, D., Delusions of Success, Harvard Business Review, p. 7
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Pre-mortem
A “post-mortem” before the project starts:
Envision failed project one year hence
Consider why the project might have failed
Correct initial top-down estimates
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Inception
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Before We Look At Inception…
SIX VOLUNTEERS
PLEASE!
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19Summary and Importance of Inception Phase
Inception phase parallels and enhances “Initiating”
Initiating is mission critical for complex projects
Key factors: Stakeholders Risk Project managers’
competencies
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Potential Inception Pitfalls
Beware of:
Assuming successful traditional PM can lead a complex project
Underestimating importance of: Charter’s acceptance by
key stakeholders Political dynamics in
stakeholder interactions Emerging (unknown) risk
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Risk Categories
Complex risk categories
Structural
Technical
Directional
Temporal
Adapted from Remington, Kaye and Pollack, J., Tools for Complex Projects (Surrey, Gower Publishing Ltd, 2008) pp. 6-8
Complex Project (Risk Breakdown Structure)
Structural
Technical
Directional
Temporal
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Structural Complexity
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Hugh effort
Difficult to schedule/track
Many parallel activities
Difficult to track all the risks
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Technical Complexity
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Never done before
Never seen before
Difficult technical solutions
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Directional Complexity
No consensus on strategic direction
Competing agendas
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Temporal Complexity
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Major external changes affect project Leadership M & A Regulatory Political
Extended duration projects
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Beware of Reinforcing Risks
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Risks
A B C D E F G
A X
B
C X
D
E X X X
F X
G X X
B
C
G
F
E D
A
DE
Risk Interface Matrix
Circle of Potential Risks
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Blueprint
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28Summary and Importance of Blueprint Phase
Multiple, differing life cycles may be needed
Precise planning for all phases of project not possible – rolling wave planning required
Importance of involving stakeholdersin planning process, getting buy-in
Need for exploring non-traditional procurement vehicles
Ambiguity in the planning process is normal
Repurposed scheduling/tracking tools
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Potential Planning Pitfalls
Discomfort with ambiguity leads to wasting effort trying to pin things down
Traditional scheduling tools not able to handle ambiguity/what ifs
Imposition of single, inappropriate life cycle due to organizational intransigence
Unwillingness of corporate purchasing organizationto pursue alternative procurement vehicles
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Scheduling/Tracking Tool Issues
Today’s scheduling tools are not difficult to use on simple projects, however:
They become much more cumbersome to use on medium to large projects
As comprehensive tools evolved, the difficulty of using them increased Difficulty of use limits its use to
scheduling specialists Stakeholder interaction with
scheduling process marginalized
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Shift in Scheduling Emphasis
Current scheduling tools
Linear
Deterministic
Complex projects are neither linear nor deterministic, so that:
Need exists for tools to reflect reality of complex projects
New tools need to: Facilitate non-
linearity & emergence
Promote polyarchic planning
Help to motivate project team members
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NetPoint
Graphical path method
Link gap
Drift, float
Collaborative planning
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Oversight, Navigation & Adjustments
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Summary and Importance of O, N & A
Changing organizational structures
Need for polyarchic leadership
Use of situational leadership styles
KPIs’ key to stakeholder management
Importance of networks to information management
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Potential O, N & A Pitfalls
Traditional hierarchical organization structures not enabling for complex adaptive systems
PM’s discomfort with continuing uncertainties, ambiguities leads to: Imposition of oligarchic leadership Squelching creativity Demotivating project team
Stakeholders not abiding by their agreements
KPIs improperly defined or not defined at all
Improperly skilled or motivated team members
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Chimneys to CAS Organization
Obolensky, Nick. Complex Adaptive Leadership (Surrey, Gower Publishing, 2010) p. 23
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The Leader/Follower Charade
Complex Adaptive Leadership1
Charade in today’s leader/follower relationship
Preponderance of solutions to problems originate in the middle and bottom of the organization.
Regardless, leaders pretend they’ve got all of the answers, followers are culpable in letting them continue the charade.
Subordinates need to challenge in order to follow, and superiors must listen in order to lead.2
1Obolensky, Nick. Complex Adaptive Leadership (Burlington, Gower Publishing Company) 2010
2 Hirschorn, L. and T. Gilmore. “The New Boundaries of the Boundaryless Company” Harvard Business
Review, May-June 1992 as cited in Obolensky.
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Exercise – Leaderless Team
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Presentation Recap
This module included the following topics:
Complexity and Projects
Fibonacci Model
Emotions and Decision Making
Importance of Risk Management
Scheduling Tools
Leadership in Complex Projects
© 2012 International Institute for Learning, Inc.
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Questions?
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