The first step is to develop senior management support for a project manage- ment program. If the managers at the top echelon of an organization are
EXHIBIT 13.1 A process for success and defaults for nonaction
Learning Organization
Senior Management
Support
Project Management
Office
Interdepartmental Input
Managing Project Managers
Project Selection Project
Management Career
New management
Process rejected Mistakes
repeated
Return to old ways Skills not
developed Position
not real
Fight for resources
forward-looking, this should not be too difficult. If upper managers, the people at the middle levels of an organization, are not forward-looking, they usually be- come enlightened after several project failures. For example, at Chevron a proj- ect management program was developed after a benchmarking study found that, on average, Chevron projects were taking longer and costing more than those of competitors.1At NCR, a project management program was started after several projects lost money.2The organization may follow the path of the revitalization process and enter the period of cultural distortion before realizing that signifi- cant effort is needed to break people out of their old departmental management habits and instill practices that support project management. However, it is not absolutely necessary to wait for a large failure in order to develop senior manage- ment support and senior management resolve. There are other ways.
One possibility is to hold a project inventory meeting. To do this, have all senior managers list the projects going on in their organization. When all the projects are put together, the managers may be amazed at how much total proj- ect work is going on in the organization. Determine how many projects there are in total, and then list those that were recently finished or canceled. Understand why the canceled projects were canceled. Are there any runaway projects? Have any languished for years, never canceled but never finished, always with an ex- cuse? Experience indicates that the senior management group may be struck by how many total projects exist and how much money is being wasted on poorly run ones. In addition, there may also be several potential runaway projects—
projects that have the potential of wasting still more money. A runaway project is described as one that has one or more of the following characteristics:
• It is way behind schedule.
• It is grossly over budget.
• When and if finally implemented, it subjects the enterprise to risk of a substantial financial loss.
Research by Martin suggests that at any time there is a runaway in every Fortune 200 company and that one-third of all companies have a runaway in progress.3 Usually technology is conveniently blamed as the cause of the run- away. Blaming one factor is an example of the man on the dock approach to ex- plaining organizational catastrophes. However, technology is usually not the only cause; more than 80 percent of the time, organizational, planning, or manage- ment problems are responsible. Thus, project runaways are much more of an upper-management issue than they are a project management issue. Projects that have run away, languished, or been recently canceled will probably lack a project sponsor, indicating that no one in senior upper management really wanted them to happen. Do any current projects lack an upper-management sponsor? If so, you might as well cancel them now; they will probably be canceled later anyway.
However, remember that the function of a project inventory meeting is to examine the state of projects and the management of the project portfolio. The next step is to look at how many person-years per year each of those projects
requires and find the total person-years being consumed by the entire inven- tory. Are that many person-years available to be devoted to projects in your or- ganization? Are there that many person-years in total in your organization? The normal result of a project inventory is that senior management sees for the first time that too many projects are being attempted, that they are not coordinated in any way to effectively reach organizational goals, and that they cannot possi- bly be accomplished with the resources of the organization.
Now examine how important project management is in your industry. In a commodity industry that produces standard off-the-shelf products that rarely change, project management may not be very important. However, if many projects are already under way in your organization it is a sign that proj- ect management is becoming very important in your industry. If you are expe- riencing increasing changes in products with a corresponding decrease in product life-cycles and increasing need for product quality and customer ac- ceptance, then project management is certainly becoming essential to your or- ganization’s survival.
The normal result of a project inventory is that senior management real- izes that management of the project portfolio is essential for the survival of the company, that the current portfolio probably does not represent the optimum use of resources to reach organizational goals, and that a coordinated effort to properly manage the portfolio of projects as well as the individual projects themselves is necessary for future survival. With this realization the senior managers should be ready to support a project management response.
An alternative to having a project inventory is to hire someone into senior management who has worked in another company and understands what needs to be done to have more effective projects. For example, an insurance company that was having trouble with information technology projects hired a senior manager from a leading computer firm as its information technology (IT) di- rector. This person convened a senior management meeting to discuss IT proj- ect problems and how they had been solved in the computer firm. A consultant was brought in to discuss the role of upper management in creating the envi- ronment for successful projects and to indicate how these problems had been solved in other organizations. This approach got senior management attention, and a project management program was begun.
Another approach is to have upper managers attend training courses with the project managers and then create a senior management review based on the comments from those courses. This can work well. In designing a project man- agement course for an engineering firm, for example, the members of the tech- nical committee (who were upper managers) were challenged to attend the course, one at a time, with the project managers. Thus, they heard the pain caused by upper and senior management firsthand from the lower-level partic- ipants. A survey instrument was also used to generate data about how bad things were in this company. Summarized and presented to the senior man- agers, these experiences and data allowed them to finally see the problems
through the eyes of their own project and upper managers, and the project management program was expanded throughout the organization.
If your organization does not have a tradition of challenging upper man- agement, you may not get good results from having upper managers in courses.
In organizations where open communication is not the norm, the presence of upper managers in courses tends to restrict conversations and the true expres- sion of perceived problems. If so, having a project inventory or getting the view from a respected outsider may work better. It is much less threatening to have an outsider talk about senior management problems in general than to have data from insiders reveal senior management problems in particular. Remem- ber that the important result of this step is to get attention to a problem, not to threaten the senior management team. Choose a method that will work in your organization.
If you are not able to get senior management support at this time, simply wait. Project failures will continue to grow; competitors who have adopted a project management approach will begin to develop superior products, better customer response, or better product service in much less time. Your organiza- tion will founder as its sales decrease and it enters the period of cultural dis- tortion. Then a new CEO will be appointed who will no doubt trumpet the virtues of project management, and you will then have senior management sup- port for change.