Projects in Contemporary Organizations

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The past several decades have been marked by a rapid growth in the use of project management as a means by which organizations achieve their objectives. Project management provides an organization with powerful tools that improve its ability to plan, implement, and control its activities as well as the ways in which it utilizes its people and resources.

It is popular to ask, "Why can't they run government the way 1 run my business?" In the case of project management, however, business and other organizations learned from government, not the other way around. A lion's share of the credit for the development of the techniques and practices of project management belongs to the military, which faced a series of major tasks that simply were not achievable by traditional organizations operating in traditional ways. The United States Navy's Polaris program, NASA's Apollo space program, and more recently, the space shuttle and the strategic defense initiative ("star wars") programs are instances of the application of these specially developed management approaches to extraordinarily complex projects. Following such examples, nonmilitary government sectors, private industry, public service agencies, and volunteer organizations have all used project management to increase their effectiveness.

Project management has emerged because the characteristics of our late twentieth-century society demand the development of new methods of management. Of the many forces involved, three are paramount: (1) the exponential expansion of human knowledge; (2) the growing demand for a broad range of complex, sophisticated, customized goods and services; and (3) the evolution of worldwide competitive markets for the production and consumption of goods and services. All three forces combine to mandate the use of teams to solve problems that used to be solvable by individuals.

CHAPTER 1 / PROJECTS IN CONTEMPORARY ORGANIZATIONS

First, the expansion of knowledge allows an increasing number of academic disciplines to be used in solving problems associated with the development, production, and distribution of goods and services. Second, satisfying the continuing demand for more complex and customized products and services depends on our ability to make product design an integrated and inherent part of our production and distribution systems. Third, worldwide markets force us to include cultural and environmental differences in our managerial decisions about what, where, when, and how to produce and distribute output. The requisite knowledge does not reside in any one individual, no matter how well-educated or knowledgeable. Thus, under these conditions, teams are used for making decisions and taking action. This calls for a high level of coordination and cooperation between groups of people not particularly used to such interaction. Largely geared to the mass production of simpler goods, traditional organizational structures and management systems are simply not adequate to the task. Project management is.

The organizational response to the forces noted above cannot take the form of an instantaneous transformation from the old to the new. To be successful, the transition must be systematic, but it tends to be slow and tortuous for most enterprises. Accomplishing organizational change is a natural application of project management, and many firms have set up projects to implement their goals for strategic and tactical change.

Another important societal force is the intense competition among institutions, both profit and not-for-profit, fostered by our economic system. This puts extreme pressure on organizations to make their complex, customized outputs available as quickly as possible. "Time-to-market" is critical. Responses must come faster, decisions must be made sooner, and results must occur more quickly. Imagine the communications problems alone. Information and knowledge are growing explosively, but the allowable time to locate and use the appropriate knowledge is decreasing.

In addition, these forces operate in a society that assumes that technology can do anything. The fact is, this assumption is reasonably true, within the bounds of nature's fundamental laws. The problem lies not in this assumption so much as in a concomitant assumption that allows society to ignore both the economic and noneconomic costs associated with technological progress until some dramatic event forces our attention on the costs (e.g., the Chernobyl nuclear accident or the Exxon Valdez oil spill). At times, our faith in technology is disturbed by difficulties and threats arising from its careless implementation, as in the case of industrial waste, but on the whole we seem remarkably tolerant of technological change. For a case in point, consider California farm workers who waited more than 20 years to challenge a University of California research program devoted to the development of labor-saving farm machinery (37|. The acceptance of technological advancement is so strong it took more than two decades to muster the legal attack.

Finally, the projects we undertake are large and getting larger. The modern machine tool company, for example, advances from a numerically controlled milling machine to a machining center to a flexible manufacturing system. As each new capability extends our grasp, it serves as the base for new demands that force us to extend our reach even farther. Projects increase in size and complexity because the more we can do. the more we try to do. The path from earth orbit to lunar landing to interplanetary flight is clear—indeed, inevitable.

The projects that command the most public attention tend to be large, complex, multidisciplinary endeavors. Often, such endeavors are both similar to and different from previous projects with which we may be more or less familiar. Similarities with the past provide a base from which to start, but the differences imbue every project with considerable risk. The complexities and multidisciplinary aspects of projects require that the many parts be put together so that the prime objectives—performance, time (or schedule), and cost—are met.

While multimillion dollar, five-year projects capture public attention, the overwhelming majority of all projects are comparatively small—though nonetheless important to doer and user alike. They involve such outcomes, or deliverables, as a new basketball floor for a professional basketball team, a new insurance policy to protect against a specific casualty loss, a new casing for a four-wheel minivan transmission, a new industrial floor cleanser, the installation of a new method for peer-review of patient care in a hospital, even the development of new software to help manage projects. The list could be extended almost without limit. These undertakings have much in common with their larger counterparts. They are complex, multi-disciplinary, and have the same general objectives—performance, time, and cost.

There is a tendency to think of a project solely in terms of its outcome—that is, its performance. But the time at which the outcome is available is itself a part of the outcome, as is the cost entailed in achieving the outcome. The completion of a building on time and on budget is quite a different outcome from the completion of the same physical structure a"year late or 20 percent over budget, or both.

The prime objectives of project management are shown in Figure 1-1, with the three specified project objectives on each of the axes. This illustration implies that there is some "function" (not shown in the figure) that relates them, one to another. And so there is. Although the functions vary from project to project, and from time

Performance

Required performance

Performance

Required performance

Target

Budget limit

Target

Budget limit

Cost

FlfWe 1-1: Performance, cost, time project targets.

to time for a given project, we will be constantly referring to these relationships, or trade-offs, throughout the rest of this book. The primary task of the project manager is to manage these tradeoffs.

it is in this context that the project manager is expected to integrate all aspects of the project, ensure that the proper knowledge and resources are available when and where needed, and above all, ensure that the expected results are produced in a timely, cost-effective manner. For these reasons, we often refer to the project manager as a supermanager.

The complexity of the problems faced by the project manager taken together with the rapid growth in the number of project-oriented organizations has contributed to the professionalization of the project manager. The Project Management Institute (PM1) was established in 1969 and now has almost 10,000 members. Its mission is to foster the growth of project management as well as "building professionalism" in the field. The Project Management }ournal and PM Networfe magazine were founded by the PMI as a means of communicating ideas about project management as well as solutions for commonly encountered problems. Another PMI objective is to codify the areas of learning required for competent project management. This project management body of knowledge, PMBOK, is meant to serve as the fundamental basis for education for project managers. The profession has flourished, with the result that many colleges and universities offer training in project management and some offer specialized degree programs in the area.

As we note in the coming chapters, the project manager's job is not without problems. There is the ever-present frustration of being responsible for outcomes while lacking full authority to command the requisite resources or personnel. There are the constant problems of dealing with the parties involved in any project— senior management, client, project team, and public, all of whom speak different languages and have different objectives. There are the ceaseless organizational and technical fires to be fought. There are vendors who cannot seem to keep "lightning-strike-me-dead" promises about delivery dates. This list of troubles only scratches the surface.

Difficult as the job may be, most project managers take a considerable amount of pleasure and job satisfaction from their occupation. The challenges are many and the risks significant, but so are the rewards of success. Project managers rarely lack organizational visibility, enjoy considerable variety in their day-to-day duties, and often have the prestige associated with work on the enterprise's high-priority objectives. The profession, however, is not one for the timid. Risk and conflict avoiders do not make happy project managers. Those who can stomach the risks and who enjoy practicing the arts of conflict resolution, however, can take substantial monetary and psychic rewards from their work.

This book identifies the specific tasks facing these supermanagers. We investigate the nature of the projects for which the project manager is responsible, the skills that must be used to manage projects, and the means by which the manager can bring the project to a successful conclusion in terms of the three primary criteria: performance, time, and cost. Before delving into the details of this analysis, however, we clarify the nature of a project and determine how it differs from the other

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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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