Long-Term Value of Project Outcomes

Long-Term Value of Project Outcomes

Major undertakings produce outcomes that are believed to deliver great value to their users. It is difficult to know whether a major project will be short-lived or will endure over time. As necessary as they may be when begun, some projects deliver important results for only a short period of time and then are replaced by new methods or new technology. Others persist.



The Panama Canal connected two great oceans, and the reversal of the Chicago River—an engineering marvel—linked the East Coast shipping trade with the great Mississippi transportation corridor. But railroads swift-ly replaced shipping as a low-cost method of moving people and goods over long distances. The railroad projects across the northern states adopted a standard gauge and could be connected into a vast transportation network. But the southern states adopted a narrower gauge and had to reset their tracks to benefit from this vast network.

There are intangible benefits to project outcomes as well. The Eiffel Tower in Paris and the Space Needle in Seattle—both engineered to draw attention to a big event—put those cities on the map for tourism and marked them with emblems of innovation that have endured. The astro-nomical wonder of Stonehenge in England, huge stone statues in Africa and Asia, South America’s “lost cities” in the Andes, and the cathedrals of Europe inspired the people of the past, and they continue to inspire us today (see Figure 1-4).

Viewing the results of massive projects in history reminds us that our advanced technology, learning, and project methods have shortened the timeframes needed to get project results. Cathedrals sometimes took 200 years to complete; the World Trade Center was built in 20 years. But a still longer view is needed. Sometime in the next five years the United States will have to address the upgrade of its vast network of interstate highways, which were built after World War II. But five years is not an adequate length of time for such a large undertaking. Many of the government planning agencies were found in the late 1980s to have no plan for raising funds to maintain society’s infrastructure.17

Not only our individual enterprises but also our society as a whole needs to have the infrastructure in place to initiate, fund, plan, and execute major projects. Currently, many separate agencies are responsible for dif-ferent parts of these massive projects. Running nationwide projects without a central project authority in government is much like running projects sep-arately within a large organization. A realistic supportive environment is important if we want to ensure project success and keep costs down. Where is this project management initiative to come from?

In Capetown, South Africa, a large segment of freeway stands above town along the waterfront, built by government officials without consider-ation for the funding required to link it with other transportation systems. Local project managers say that the city leaves it there as a reminder to think long range in their planning.18

Professional ethics address the professional project manager’s respon-sibility to society and the future. While it is easy to say that a project is only responsible for the outcome defined for that project over the period of time it is in existence, we know that the outcomes have a life cycle, and quality and value are assessed over the entire life cycle of a product or service until it is eliminated, demolished, or removed from service. Considering how it will endure over time or be maintained is part of management’s responsi-bility, but the project manager has the opportunity to build such considera-tions into the plan.

Cooperation Builds the Future

Fortunately, professional societies in the field of project management have begun working with government agencies in a number of different countries to integrate project management with the school systems and the policies governing public projects. More on these topics will be addressed in later chapters.19 In Chapter 12 we address how mature project environments manage the interdependent elements of projects.

Failed Projects Spur Improvement

Thanks to modern communications technology, failed projects also have staked out a space in human history. We may not consider them projects or even know why they failed, but they sit as examples in our minds as we con-template a new undertaking. We see images of ancient cities in the Middle East covered by desert sands, victims of environmental degradation. The steamship Titanic rests on the ocean floor, an engineering marvel that fell prey to its own self-confidence. Other less visible project failures are in our conscious minds through the news media. The Alaskan oil spill, the release of nuclear pollution onto the Russian plain, attempts to stem the AIDS epi-demic’s relentless march—all are common project examples in our news media and our history books. All share the legacy and challenges of project management. Ambitious projects continue to be conceived, planned, executed, and completed—with varying degrees of “success.” Sometimes teams study these examples to capture learning and improve our project track record in the future. Sometimes we have no answers, just the reminder of risk unmanaged or faulty assumptions.

Projects typically are carried out in a defined context by a specific group of people. They are undertaken to achieve a specific purpose for inno-vators, sponsors, and users. But project delivery of something new is also judged in a broader context of value. Projects are not judged at a single point in time but over the life cycle of the project’s product or outcome. Managing complex project interdependencies as well as the future effects of the proj-ect is part of the professional challenge. It is the profession of project man-agement that is devoted to increasing the value and success of projects and ensuring that what is delivered meets expectations of not just immediate users but of a broader set of stakeholders. This broader definition of project success is another element driving project management toward a profession.

Comparing Project Management with Problem Solving

Comparing Project Management with Problem Solving

The phases of a project are basically the same as an individual’s method of problem solving, but when the project’s outcome is bigger or more chal-lenging, the system breaks down. People in separate functional departments see the problem differently. Agreed-on approaches get interpreted differ-ently by specialists with diverse values and training. Actions influence other actions, sometimes undercutting each other or slowing implementation. Somehow, small problems can evolve into a myriad of complexities, dependencies, and challenges. Priorities become difficult to sort out.

Projects require a process just like in problem solving (see Figure 1-3). The first phase, usually called initiation, is when the idea is worked out and described, its scope and success criteria defined, its sponsors identified, its resources estimated, and its authority formalized. Then the project manager and team decide how it can be achieved practically, plan it out, and allocate the resources and risks by task and phase. Finally, the project manager and team put the plan into action during project execution. Project management professionals counter the complexity just described by formalizing the process. They then orchestrate it with teams, managing task interfaces, reducing risk, and solving the remaining implementation problems within resource and time constraints. Once they have the experience behind them, they assess whether it turned out the way it was expected to, why or why not, and define what can be done better next time. The group applies the learn-ing to sequential projects and makes best-practice examples available to

FIGURE 1-3 Comparing project management with problem solving. Both proj-ect management and problem solving require a process to be effective.

other projects in the organization. The phases of a project closely resemble

the stages of problem solving: initiation/concept development (analyze the

problem), high-level/detailed planning (identify options/select one), execution/

control (implement an option/see if it works), and closure and lessons

learned (refine for next cycle of analysis).

Benefits of Managing Organizational Initiatives Systematically

Benefits of Managing Organizational Initiatives Systematically

Why do organizations need project management? When initiatives with
high risk and change are undertaken, a systematic process for managing
known unknowns frees time, energy, and resources for managing unknown
unknowns. This sort of “risk triage” increases the chances that the project
will deliver successfully on its commitments using the committed
resources. There are a lot of elements to manage. Figure 1-2 shows some of
the benefits to managing them more systematically using project management
disciplines and practices.
■ Visibility into the problem. The analysis that goes into systematic
management reveals a lot of hidden issues, overlaps, and trends that
were not visible before. If management is to resolve organizational
challenges, it must first make them visible. A precept of project
management is to make the invisible visible so that it can be managed.
16 Management consultants consider the biggest challenges in
working with organizations not to be the identified problems but
rather to be the unspoken ones.
■ Leveraging scarce resources. The money, time, and effort to undertake
organizational initiatives are finite. To get the most leverage
out of them, resources should be made available only when they are
needed, and they should be transferred to more pressing needs
when a particular initiative is over. Unless management knows
what exists and its status in terms of completion, scarce resources
can be scattered and not used effectively.
■ Building a skills base. Most of the key functions present in organizations
are also present in projects, but they are abbreviated, condensed,
or applied in unique ways. For individuals in project
management, learning the fundamentals of most organizational
functions, as well as those unique to project management, comprises
the basics. Mastery takes commitment and dedication over a
number of years. As staff members learn project management, they
also learn the fundamentals of organization functions so that they
make more informed decisions in their work for the organization.
■ Planning for easy changes in the future. Managing organizational
initiatives systematically preserves the overall quality of the outcomes
for stakeholders and the organization as a whole.
As an analogy, consider a person building a house with only a general
plan and no architectural drawings. By means of routine decisions, myriad
minor compromises occur without any overall intent to compromise:
The number and placement of electrical outlets can affect the use of appliances
and limit future work capacity; unplanned placement of vents and
piping can affect future comfort and ability to manage temperature; and
placement of load-bearing walls can affect remodeling or later modification.
Use of different standards for different parts of the construction can
prevent later consolidation of separate systems.Seemingly minor compromises can erode the overall quality of life for
the occupants and limit what can be done with the house in the future.
Many such ad hoc houses are in fact demolished and replaced because it is

FIGURE 1-2 Benefits of managing organizational initiatives systematically. When initiatives are planned systematically, the results are more effective and efficient, and the organization benefits from the professional development of the project team.

cheaper to rebuild than to remodel, particularly if new standards must be taken into account.

Similarly, taking a more comprehensive view of an initiative—and systematically planning its development, deployment, and resourcing—can provide benefits to the organization as a whole by leveraging its common potential and protecting quality.

Why Organizations and Teams Undertake Projects

Why Organizations and Teams Undertake Projects

People embrace change when the value to be gained makes the pain worth
risking. Thus a project is formed. The assumption is that if a project is
formed, the value of the results will be achieved, and the pain everyone goes
through will be worth the effort. Implicit in project management is the concept
of commitment to change and the delivery of results. It is not always a
good assumption that the people on the project team favor the change or
even support it. They receive it as “duties as assigned” in their job description.
The project manager takes on the role of leader and shapes the commitment
and motivation of the individual team members. If the assumptions
made about the project and its ability to deliver are not realistic and achievable,
it is the project manager’s responsibility to validate or change those
assumptions before embarking on the project. Part of the value set of a professional
is not to take on work that is beyond one’s means to deliver. Sales
and management sometimes “sell” a concept because of its appeal, without
a full understanding of the challenges involved in achieving those results.
After all, nothing is impossible to those who do not have to do it.
If you happen to be the individual selected to implement change, it
feels a lot better if the change is desirable and people support the effort. But
having support at the beginning of a project does not guarantee acceptance
later, when the discomfort of change sets in. And popular support seldom
delivers the value of change over time. If change were that easy, someone
already would have done it. People usually support the comfort and familiarity
of the “old way” of doing things before the project came along. In
some cases the project changes things that people rely on, alters their familiar
data, or replaces their old product or service with a new one. Engaging
and managing the risk of human attachments to their familiar methods is
one task of the project management professional. It takes conscious, dedicated
effort on the part of the project’s sponsors, project managers, and
project teams to deliver change that meets expectations. Increasing the
chances of a successful outcome is one element that gets the team working
together on project management activities, methods, and practices.
Delivering on the project’s commitment to results that have value in a challenging
modern context is what gets people inside and outside the project
to work together toward success.

THE RELATIONSHIP OF PROJECT MANAGEMENT TO IMPLEMENTING DESIRED CHANGE

THE RELATIONSHIP OF PROJECT
MANAGEMENT TO IMPLEMENTING
DESIRED CHANGE

Traditionally, project management has been how organizations managed
anything new. Organizations always have used projects to manage initiatives
that found “normal operations” inadequate for the task. Normal operations
are designed to accomplish a certain function, but they lack
flexibility. Managing a project to implement any truly new venture is
fraught with ambiguities, risks, unknowns, and uncertainties associated
with new activity.
Change is often a by-product of projects. Creating a project that operates
differently simply adds to the chaos. “Why don’t we just do it the old
way?” people ask. They usually are referring to the tried-and-true methods
of operations that had the benefit of continuous improvement; for example,
the inconsistencies had already been worked out of them by repetition.
When change is needed, in most cases someone already tried getting the
desired change using operations processes, and the “old way” failed to produce
results. Given the discomfort of change, there is usually a compelling
business reason for organizations and their management to undertake it voluntarily.
Usually, the reason is that change is a necessity. In most cases,
someone in a leadership role has determined that the results of the project
(the product or service and even the change) are desirable and that the outcomes
of making that change have value. In other cases, the dangers inherent
in not creating a project and making the change simply are too risky to
tolerate.
Once the outcome of a project has been established as beneficial, and
the organization is willing to undertake a project, the project manager and
team are engaged. Seldom is the project manager brought in at the earliest
concept development stages, although early involvement of the project
manager occurs most frequently in organizations where projects are linked
to the main line of business. The people who are engaged in the project—
as project manager or team member—are not involved voluntarily in creating
change. “My boss told me to,” is a more common reason why someone
becomes involved in a project.

The Occupation of Managing Projects

The Occupation of Managing Projects

The field of project management includes not only project managers but also specialists associated with various functions that may or may not be unique to projects. Those who identify themselves with the occupation of “managing projects” implement projects across many types of settings. They are familiar with the basics in project management and know how projects are run. They may take on different roles within a project setting or the same role on different types of projects. But they always work on projects. Specialists exist in a type of work associated with projects, such as a project scheduler, a project cost engineer, or a project control special-ist. Others will specialize in the use of a particular software tool, knowing all the features and capabilities of that tool, even targeting a particular industry (see Chapter 12). Some specialists perform a sophisticated proj-ect function, such as an estimator on energy-development sites (a specific setting) or a project recruiter (a specific function). Still others specialize in implementing a unique type of project, such as hotel construction, trans-portation networks, large-scale training programs, or new mainframe soft-ware development.

Some of the individuals associated with projects may have entered the field by happenstance, perhaps through a special assignment or a promo-tion from a technical role in a project. What distinguishes those in the proj-

Project Management 15


ect management occupation from those in the technical occupation of that project is that they choose to tie their future and their development to proj-ect management, expanding their knowledge and skills in areas that support the management of a project rather than the technical aspects of creating, marketing, or developing the product or service resulting from the project. There are thousands of people engaged in the occupation of project man-agement, most of them highly skilled, and many of them extremely knowl-edgeable about what it takes to plan, execute, and control a project.

Emphasis on the Profession of
Project Management

A growing number of people recognize the emerging profession of project management. The profession encompasses not only project managers but also other project-related specialists taking a professional approach to the development, planning, execution, control, and improvement of projects. The profession is getting broader because of a number of factors in busi-ness today:

■ The increased rate of change in the business environment and the economy. It used to be okay to say, “If it ain’t broke, don’t fix it.” Today, if you don’t fix it before it breaks, the window of opportu-nity may already be closed.

■ External factors. Technological changes, market changes, com-petitive changes—these all influence projects, as well as chang-ing expectations of those who use or receive the products, services, or benefits of the project. Some may change without the project organization’s participation or knowledge. Government regulations are an example of an external change, as are legal decisions in the courts. Understanding project management is necessary to integrate these changes into the organization’s prod-ucts and services.

■ Internal factors. Some organizations have to release new docu-ments, products, or services to stay in business. Whether it is a software company creating “not so necessary” releases or a govern-ment organization refining aviation maps or making policy changes, the changes may be generated internally. Project managers are need-ed to manage these revenue-generators.

Different industries are driven by varying motives to implement projects:

■ Revenue generation

■ Technology
16 The McGraw-Hill 36-Hour Project Management Course

■ Changes in the environment

■ Changes in markets or competition

The project management profession draws from those in the occupa-tion, but it targets individuals who consciously address the more sophisti-cated and complex parts of project management—building knowledge, skills, and ability over time.

WHY MAKE A DISTINCTION BETWEEN PROJECTS AND OPERATIONS?

WHY MAKE A DISTINCTION BETWEEN PROJECTS AND OPERATIONS?

It is important to make a distinction between projects and operations for several reasons, the first of which is that there are major differences in:

■ The decision-making process

– The delegation of authority to make changes
– The rules and methods for managing risk
■ The role expectations and skill sets

– The value sets
– The expectations of executive management for results
– Reporting relationships and reward systems

Project scope or complexity can vary, so size can cause a project to fall within the generally accepted definition of project. A subgroup enter-prise unit may initiate its own products or services using projects, complete them autonomously with a single person in charge, and then turn them over
12 The McGraw-Hill 36-Hour Project Management Course


to another group to operate. Whether this is a project or not depends on its temporary nature and reassignment of the staff member after completing the unique product or service (contrasted with just moving on to another job assignment).

The Decision-Making Process

The decision-making process relies on delegation of authority to the project manager and team to make changes as needed to respond to project demands. A hierarchy of management is simply not flexible enough to deliver project results on time and on budget. The detailed planning carried out before the project is begun provides structure and logic to what is to come, and trust is fundamental to the process. The project manager uses the skills and judgment of the team to carry out the work of the project, but the decision authority must rest with the project manager. Whether the project is large or small, sim-ple or complex, managed by a temporary assignment of staff from other groups (matrix structure) or with full-time team assignments, the delegation of authority is fundamental to the project manager’s ability to perform the job.

Projects with a strong link to the organization’s strategic objectives are most likely to be defined by executive management and managed at a broader level, with higher degrees of involvement and participation from multiple affected departments. Depending on organizational level, the proj-ect manager’s involvement in establishing strategic linkages for the project with the organization’s mission will be more or less evident. Some larger organizations use a process of objective alignment to ensure that projects complement other efforts and advance top management’s objectives.15 Projects at higher levels in the organization probably will state the link with the organization’s mission in their business case and charter documents. Projects at a lower level will need to clarify that link with management to ensure that they are proceeding appropriately in a way that supports the organization’s mission.

It is unlikely that a project linked directly with the organization’s cur-rent strategic initiatives would be implemented by a single person; a team would be assigned to implement it. The project manager has delegated authority to make decisions, refine or change the project plan, and reallo-cate resources. The team conducts the work of the project. The team reports to the project manager on the project job assignment. In non-“projectized” organizations, team members might have a line manager relationship for reporting as well. Line managers have little authority to change the project in any substantial way; their suggestions are managed by the project man-ager—along with other stakeholders. (Line managers, however, do control promotions and salary of “temporary” project team members.)

A subgroup project generally has more input from local management, less coordination with other departments, and generates less risk for the

Project Management 13


organization should it fail to deliver. It might be coordinated by an individ-ual working with a limited number of other people for a few weeks or months until completion of the deliverable. In many large organizations, only larger projects of a specific minimum duration or budget are formally designated as projects and required to use the organization’s standard proj-ect management process.

Role Expectations and Skill Sets

Whereas a few people can accomplish small projects, larger projects— especially those critical to an organization—tend to be cross-functional. Participation by individuals from several disciplines provides the multiple viewpoints needed to ensure value across groups. An important high-level project will be more likely to involve people representing various groups across multiple organizational functions; it may even be interdisciplinary in nature. The varied input of a cross-functional team tends to mitigate the risk of any one group not supporting the result. Interdisciplinary participation also helps to ensure quality because each team member will view other team members’ work from a different perspective, spotting inconsistencies and omissions early in the process. Regardless of whether the effort is large or small, the authority to manage risk is part of the project manager’s role.

Basic project management knowledge and understanding are required for the individual project manager to complete smaller projects on time and on budget. However, professional-level skill, knowledge, and experience are necessary to execute larger, more complex or strategic projects. The project manager leads, orchestrates, and integrates the work and functions of the project team in implementing the plan. The challenges of managing teams with different values and backgrounds require excellent skills in establishing effective human relations as well as excellent communication skills and team management skills. Honesty and integrity are also critical in managing teams that cross cultural lines.

The project manager of a small project may carry the dual role of managing the project team and performing technical work on the project. The project manager of a large, strategic, complex project will be perform-ing the technical work of project management, but the team will be doing the technical work necessary to deliver the product or service. Often a larg-er project will have a team or technical leader as well and possibly an assis-tant project manager or deputy. Small projects are a natural place for beginning project managers to gain experience. The senior project manag-er will be unlikely to take on small projects because the challenges and the pay are not in line with the senior project manager’s level of experience. An exception, of course, would be a small, critical, strategic project for top management, although if it is very small, it too could be considered simply “duties as assigned.”
14 The McGraw-Hill 36-Hour Project Management Course


People who work in project management will have varying levels of skill and knowledge, but they all will be focused on the delivery of project results. Their background and experience will reflect the functional spe-cialties within their industry group, as well as the size of projects they work on. The diversity of projects is so broad that some people working in the field may not even recognize a kinship or commonality with others in the same field. They may use different vocabularies, exhibit diverse behaviors, and perform very different types of work to different standards of quality and with differing customs and behaviors.

The project management maturity of the organization hosting the project also will cause the organization to place value on different types of skills and experience. A more mature project environment will choose pro-fessional discipline over the ability to manage crises. A less mature organ-ization or a small project may value someone who can do it all, including both technical and management roles, in developing the product and run-ning the project.

It stands to reason, then, that hiring a project manager from a differ-ent setting or different type or size of project may create dissonance when roles, authority, and alignment with organizational strategy are involved.