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Project Management

Chapter 6: How will the Project impact business

performance?

Part of a series considering different aspects of Business Change

Understanding and Supporting Business Change – by Martin Schyns/ FILE: Project Management_Chap6_Final.pptx

IntroductionWho am I?My headline would be…..Global Engineer Understands Successful Change

Key take away is that I have been doing projects my whole career. I am an engineer at heart with a diverse background and I recognize that all organizations, and individuals for that matter, must continually seek to proactively change and adapt. As I am sure most organizations can attest, Change is hard. I thought I would try using this medium to collect various themes and ideas on the subject of Business Change and share my insights.

Understanding and Support Business ChangeNaturally enough, Project Management is my first theme. It is a rich and complex endeavor and it is certainly an area where I

think most organizations would acknowledge they could do better. Typically the challenge is that if you ask five people within an organization, what needs to change, and how, you get five different responses.

The Initial Path for this Enquiry1. Chapter 1 – 10: Project Management – 10 questions to explore some involved situations

2. Chapter 11 > : Sustaining Business Health – physiology of a modern business

3. Chapter X > : Insights on making relevant Change happen – road map to the future

4. Chapter Y : CONCLUSIONS – reflection on the relevance / value of what we have uncovered

ApproachI thought it would be interesting to use the Socratic method to explore what can often be some what dry

material; and, because it helps me understand, a series of supporting diagrams that, I hope, encapsulate and convey the key ideas and their context.

I would welcome any comments and alternative views to help challenge my desire to grow and make a difference.

Thank you, Martin Schyns. 2

Ten common Project Management situations that are not easily understood…why?

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SITUATION KEY QUESTION

1. Reflection Was the Project a Success?

2. Prioritization How to make Project Portfolio Management (PPM) relevant?

3. Right Approach? How do you define a project?

4. Realism Level of confidence in the Project?

5. Sponsorship What does Project Sponsorship mean?

6. Planned results How will the Project impact Business Performance?

7. Justification What is the business case for the Project?

8. What or How? Is the business strategy working?

9. Audit Why am I not seeing results?

10. Soft value What are the lessons to take forward?

Do these questions echo you own experiences? How well do you really understand the challenges of Project Management?

Chap 6:

Chapter 6: How will the Project impact business performance?REF. Fig 6A - Introduction

Foundational questions provide the necessary business context :

1. How do we define our business performance?… Both from an external view point as well as the business leadership’s view >> What is our Performance Profile definition?

2. What is our business performance today? / are our goals for tomorrow? ….. >> Performance Profile base line – for a given set of critical business conditions today and projections for future performance; assuming certain business condition trends

3. How are the critical business conditions likely to change? … Definition of the expected trends and composite effects of the critical business conditions on business performance >> How is the climate for our business changing?

4. What is our business strategy? …… How will the business survive and thrive given the projected business condition trends? >> What is our recipe for success?

5. What is our road map? ….. Timeline and degree of change to realize strategy >> How much Change ? / How quickly?

6. What Changes have we been able to do historically? …… understanding proven capacity / capability to drive Business Change >> Level of Risk associated with the proposed road map

7. How will we breakdown the Change into manageable chunks? … top down portfolio management considers change logic, complexity and basic risk assessment to meet road map targets >> basic Project concurrency / inter dependencies

8. What does each Change chunk look like? … project scope, timing & phasing >> basic Project formulation

9. What Capability / Capacity do we have to make successful change happen? Project Management culture and sustained investment to drive capability & capacity in line with business need >> project management abilities

4Key Business Change Elements – but how do they relate?

#1B. Business Management ( Strategic) #1A. Business Management ( Tactical)

How will the Project impact business performance?Introduction – Business Change Context

5Successful Business Change Realization: Key elements, and their relationship,

to fully understand and realize successful / predictable business impact

FIGURE 6A

* Relative to the Project

#2. Change Management

#1A. Business Plan

#2A. Projections

#4. Strategy

#5. Road Map#6. Historical Business Change Performance

#7. Project Portfolio

#9. Project Culture, Capability &

Capacity

#8. Project#8. Project#8. Project

#1. Bus. Performance profile

#2. Bus. Performance baseline

#3. Business conditions/ trends

TODAY

#3. Business Execution #4. Project Lifecycle

Financial

Data

TODAY / Optimize – Tune/ Re tune

TRANSIT-ION / Adapt / Phase / Evolve

FUTURE/ Develop / Refine

Human

Physical

Intellectual

RESOURCES

How will the Project impact business performance?Introduction – Business Change Balance

6Successful Business Change Realization:

Ultimately determined by the ratio of A : B

FIGURE 6B

* Relative to the Project

#2. Change Management

#1A. Business Management ( Tactical)

#3. Business Execution #4. Project Lifecycle

#1B. Business Management ( Strategic)

A % B %

Financial

Data

TODAY / Optimize – Tune/ Re tune

TRANSIT-ION / Adapt / Phase / Evolve

FUTURE/ Develop / Refine

Human

Physical

Intellectual

RESOURCES

Chapter 6: How will the Project impact business performance?REF. Fig 6A&B - Classic Challenges

Factors that result in a Project being disconnected from the business it is designed to serve; limiting / negating the required business improvement:

1. Business gets locked into a cycle of Tactical Change; limiting / undermining Strategic direction / foundational preparation. With each budget cycle facing ever growing demands, it is forced to address in a tactical fashion – further exacerbating the underlying situation

2. The above situation then gives rise to one, or more, of the following conditions:

a. Project is conceived to address purely Technical issues; such as IT infrastructure

b. Project is defined by what can be done – not necessarily what needs to be done; because of constraints such as budget, resources and time

c. Project is defined by the prevailing culture / confidence in what should be attempted – based on past performance

d. A combination of #1, #2, and #3 plus significant business need creates a large bottom-up defined portfolio of projects which exceed capacity and capability; leading to a perpetual round of prioritization dilemmas

e. Projects are created by a function / department – with a view it is independent of factors outside the function / dept.; this is rarely the case

f. Aggressive business plans do not fully appreciate the current business capabilities / capacities; driving the definition of projects which are far too ambitious / are un realistic

g. Project is a result of a “burning bridge” scenario – it has to be done – since the consequences of not doing it are unthinkable

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Project Context – ChallengesWhich may well have legitimate arguments – but ultimately are unlikely to serve the best interests of the business; often, not because

the Project is a bad idea – but because of the understanding that surrounds the decision to proceed is limited / flawed!

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Chapter 6: How will the Project impact business performance?Impact of the the Classic Challenges / A

Classic Challenges COMMENTS / IMPACT1. Business gets locked into a cycle of Tactical Change; limiting / undermining Strategic direction / foundational preparation. With each budget cycle facing ever growing demands, it is forced to address in a tactical fashion – further exacerbating the underlying the situation

1. Typically the management style is biased towards a reactive approach; leading to a greater preponderance of short term decisions

2. The inability to effectively manage larger, more complex projects, promotes smaller, more functional / tactical projects; as a way to de-risk investment

3. The effect of both #1 &/ or #2 is to limit the ability of the business change management process to fully address the underlying business challenges; which then get progressively more severe, over each subsequent budget cycle.

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Chapter 6: How will the Project impact business performance?Impact of the the Classic Challenges / B

COMMENTS / IMPACT COMMENTS / IMPACT2a. Project is conceived to address purely Technical issues; such as IT infrastructure

1. Many such projects are seen as ‘Maintenance’ or ‘Incremental’; based on an already committed technical path

2. Two issues; projects that are classed as Tactical may individually, or collectively, have more Strategic impact than is being acknowledged AND/OR the urgency of the work is used as an excuse to avoid challenging the current / projected performance against current / future business need

2b. Project is defined by what can be done – not necessarily what needs to be done; because of constraints such as budget, resources and time

1. This is typically driven by a budgeting process that is heavily based on historical trends

2. The business planning is too tactical in nature; with each year of limited future planning / provision, so the options in future planning cycles become progressively more limited

3. This spiral of declining project options is typically only broken with some form of crisis / dramatic business situation change

2c. Project is defined by the prevailing culture / confidence in what should be attempted – based on past performance

1. Whilst this is a pragmatic response to current conditions – it constantly under serves the business

2. Unless this is recognized and longer term plans put in place to address it often leads to a withering of PM capabilities / project performance

3. Ultimately this leads to expensive contracting / consultancy services; whose performance can be reduced by limited ability of the host business to fully define its needs

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Chapter 6: How will the Project impact business performance?Impact of the the Classic Challenges / C

Classic Challenges COMMENTS / IMPACT2d. A combination of #2a, #2b, and #2c ( above) plus significant business need creates a large bottom-up defined portfolio of projects which exceed capacity and capability; leading to a perpetual round of prioritization dilemmas

1. Fundamentally a tactically managed business trying to reconcile the needs of the business to consistently sustain performance with a lack of provision / capability to plan and manage the required Change

2. Companies often seek more sophisticated Project Management disciplines / techniques; such an Program Management and Portfolio Management as a way to address the mismatch

3. The reality is that when there is significant mismatch between business need and capability / capacity there will be a perpetual cycle of prioritization / re prioritization; attempting to respond to immediate needs

2e. Projects are created by a function / department – with a view they are independent of factors outside the function / dept.; this is rarely the case

1. Typically this is a response to manage what you can control.2. Often this further exasperates business performance by reducing

effective integration and lowering the coordination across macro business processes

3. May well be the product of focused performance metrics driving certain, more functional, behaviors

2f. Aggressive business plans do not fully appreciate the current business capabilities / capacities; driving the definition of projects which are far too ambitious / are un realistic

1. When business suddenly wakes up to a realization that a significant gap in business performance / capability; relative to the competition, has developed

2. When new business leadership is established without fully recognizing some fundamental realities

3. When there is a step change in market forces that the business is not well suited to address

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Chapter 6: How will the Project impact business performance?Impact of the the Classic Challenges / D

Classic Challenges COMMENTS / IMPACT2g. Project is a result of a “burning bridge” scenario – it has to be done – since the consequences of not doing it are unthinkable

1. This is a make or break approach to addressing some fundamental issues in the business

2. Can be good to create a cross organization focus and priority3. Often struggles to fully prepare / plan appropriately ; to maximize

the potential benefit

Chapter 6: How will the Project impact business performance?Good Practices to Mitigate the common challenges

What is the best way to keep tactical trends in check and ensure a positive cycle of improving business change performance?

1. Recognize all the elements that contribute to Business Change performance – see Slide 6A

2. Objectively monitor actual business impact of business change projects; against business case. Try and assess why there is an under performance.

3. Always have/ maintain a 5 year road map for the business change and use it in every investment decision

4. Recognize that, like business cycles, Project Management culture and capabilities/capacities will need to be flexed, often out of phase with the core business; and that underlying PM proficiency is a core business asset.

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Better Business Change Performance – four activities to drive positive trends