Resistance To Change

Why was project management so difficult for companies to accept and implement? The answer is shown in Figure 2-7. Historically, project management resided only in the project-driven sectors of the marketplace. In these sectors, the project managers were given the responsibility for profit and loss, which virtually forced companies to treat project management as a profession.

In the non-project-driven sectors of the marketplace, corporate survival was based upon products and services, rather than upon a continuous stream of projects. Profitability was identified through marketing and sales, with very few projects having an identifiable P&L. As a result, project management in these firms was never viewed as a profession.

In reality, most firms that believed that they were non-project-driven were actually hybrids. Hybrid organizations are typically non-project-driven firms with one or two divisions that are project-driven. Historically, hybrids have functioned as though they were non-project-driven, as shown in Figure 2-7, but today they are functioning like project-driven firms. Why the change? Management has come to the realization that they can most effectively run their organization on a "management by project" basis, and thereby achieve the benefits of both a project management organization and a traditional organization. The rapid growth and acceptance of project management during the last ten years has taken place in the non-project-driven/hybrid sectors. Now, project management is being promoted by marketing, engineering, and production, rather than only by the project-driven departments (see Figure 2-8).

A second factor contributing to the acceptance of project management was the economy, specifically the recessions of 1979-1983 and 1989-1993. This can be seen from Table 2-3. By the end of the recession of 1979-1983, companies recognized the benefits of using project management but were reluctant to see it implemented. Companies

Project-Driven

Primarily production-driven but with many projects

Emphasis on new product development

Marketing-oriented

Short product life cycles

Need for rapid development process

FIGURE 2-7. Industry classification (by project management utilization).

Project Management

Hybrid

Primarily production-driven but with many projects

Emphasis on new product development

Marketing-oriented

Short product life cycles

Need for rapid development process

Program Management

Past

Non-Project-Driven

Very few projects

Profitability from production

Large brick walls

Long life-cycle products

Product Management

FIGURE 2-7. Industry classification (by project management utilization).

returned to the "status quo" of traditional management. There were no allies or alternative management techniques that were promoting the use of project management.

The recession of 1989-1993 finally saw the growth of project management in the non-project-driven sector. This recession was characterized by layoffs in the white collar/management ranks. Allies for project management were appearing and emphasis was being placed upon long-term solutions to problems. Project management was here to stay.

The allies for project management began surfacing in 1985 and continued throughout the recession of 1989-1993. This is seen in Figure 2-9.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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