By Harold Kerzner, Ph.D.
June 21, 2023
The landscape for project management changes almost every year. Some changes are relatively small or incremental, whereas other changes can be significant. Historically, most of the changes appeared in the methodology, processes, tools, and techniques. Now, many of the changes are behavioral changes.
There are also changes taking place where project teams are being given choices on what is the best approach to manage the projects. Companies no longer live by a one-size-fits-all methodology or tools. If organizations are expected to achieve the full benefits of project management, project teams must have the freedom to customize.
There will be a significant change in how we define the success (and failure) of a project. This is one of the changes I discussed in previous years, and I am reiterating the need for this change again because some companies are still reluctant to make this change necessary for critical improvements in project management.
For years, the definition of project success was the creation of project deliverables within the constraints of time, cost, and scope. While this definition seemed relatively easy to use, and is still being used today, it created several headaches. First, companies can always create deliverables within time, cost, and scope, but there is no guarantee that customers would purchase the end results. Second, everyone seemed to agree that there should be a “business” component to project success but were unable to identify how to do it because of the lack of project-related business metrics and how to effectively use business metrics. Third, this definition of project success was restricted to traditional or operational projects. Functional managers that were responsible for the strategic projects were utilizing their own definitions of project success, and many of these strategic projects were being executed under the radar screen because of the competition in the company for funding for strategic projects.
Another headache with the traditional definition of success was that its basis was on the belief that time, cost, and scope are the only three constraints on a project. When PMI introduced the concept of competing constraints, the definition of success had to ultimately change because it may be impossible to complete a project within all the competing constraints.
What companies either did not realize, or failed to admit, was that every company for which they implement projects may have a unique definition of project success. The definition of success is not a company definition of success but varies from project to project. Although each project may include time, cost, and scope as part of the success definition, there are now components related to business value created, risks, safety, legal liability, alignment to strategic objectives, and other components. The components can also be broken down into short-term and long-term components of project success.
Because of the uniqueness in the definitions of success, project teams must communicate with customers at the start of the project, or even in the project’s conceptual phase, to understand the customer’s definition of success. Then, the project team and the customer will decide upon which metrics should be used to validate progress toward the client’s definition of success.
With the growth in new types of projects, especially strategic projects that require innovation and creativity, the chances of many of these projects failing is quite large. Executives and project governance personnel must provide project teams with the criteria for when to shut down a project. Without having failure criteria, project teams may spend excessive amounts of time on projects that may have no hope of creating the expected business value. By having failure or cancellation criteria, which may be different for each project, resources can be reassigned to more promising projects in a timely manner.
There will be a significant growth in the number of metrics, especially business-related metrics, to be used on projects. When we discuss competing constraints, we must realize that every constraint will have a tracking metric and many of the new constraints are business-oriented constraints. The business side of projects will need to be understood much better than in the past. This will require significantly more metrics than just time, cost, and scope.
Today’s project managers are no longer viewed as simply managing a project. Instead, they are seen as managing part of a business and are expected to make business decisions as part of project execution. In the past, project managers made primarily technical decisions and business decisions were the responsibility of the governance personnel or senior management.
The growth in the number of metrics is also attributed to the new methodologies that are selected. Some methodologies make it easier to track certain metrics. As an example, Agile and Scrum are much better at tracking and reporting the creation of business value than the waterfall approach.
Companies will need to create metrics that can track benefits realization, value created from the benefits and how each project is aligned to strategic business objectives. To do this may require the creation of 20-30 new metrics. Some companies have metric libraries that contain more than 50 metrics. This will undoubtedly lead to major changes in the earned value measurement systems (EVMS) currently being used.
The new project business metrics must be able to be combined to answer questions that executives have concerning business and portfolio health. The list below identifies metrics that executives need to make decisions concerning business and portfolio health:
- Business profitability
- Portfolio health
- Portfolio benefits realization
- Portfolio value achieved
- The mix of projects in the portfolio
- Resource availability
- Capacity utilization
- Strategic alignment of projects
- Overall business performance
Project-based business metrics must be able to be combined to create the list of metrics that executives and project managers need for business decision-making. Companies will need to have a metrics library since the number of metrics can become significant. Companies may use a set of “core” metrics that are required on each project but then establish other metrics unique to this project. Since each project has many different success criteria, the unique metrics must support the criteria for measuring and reporting success.
There will be one person on each project team with the responsibility of monitoring all the project’s metrics. Not all project team members will be pleased with the significant number of new metrics. Some people are afraid that the new metrics might remove them from their comfort zone and, what’s worse, be used as part of employee performance reviews. As such, some workers may resist the use of new metrics.
Each project team in the near term will have one team member responsible for verifying that the correct metrics are being used and are being used properly.
There will be a growth in the creation of manifestos attributed to flexible project management frameworks or methodologies that are capable of measuring benefits and business value as the project progresses and after the deliverables have been created. The traditional “waterfall” approach to project management implementation has been used successfully for years, but has the limitation that value is measurable primarily at the end of the project. Companies want to have value and benefits metrics reported throughout the project so that they can cancel or redirect non-performing projects.
Techniques such as agile and Scrum appear to do a better job measuring and reporting value created through the project, compared with other approaches. In the future, we can expect more flexible project management approaches such as agile and Scrum to appear.
As new flexible frameworks appear, we will also see more documents like the Agile Manifesto that discusses the best ways to use the approach. I would expect most of the information in each new manifesto to be more behavioral than just continuous improvements in the processes, tools, and techniques traditionally used in project management applications.
We believe there will be a significant change in the behavioral or people-oriented skill set that some project managers may need to support the introduction of new and more flexible methodologies. When there exists some commonality among the projects in a firm such that a one-size-fits-all approach can be used during project execution, the skill set for the project managers may be known with some degree of certainty. But when project managers are now responsible for managing new types of projects, especially with flexible frameworks, new skills may be necessary.
Flexible methodologies focus on better people-oriented leadership, more collaboration, and a concern for the health and well-being of team members, rather than just a focus on the creation of deliverables. Some of the newer skills being taught in people-oriented rather than task-oriented leadership on projects include how to conduct brainstorming sessions, design thinking, and creative problem-solving.
Many of the newer types of projects we will be working on are longer in duration than traditional projects and mandate much closer collaboration between project team members. Project managers must find and adopt a leadership style that makes it easier for team members to be engaged in the project.
It is unrealistic to think that these will be the only changes that will occur in 2024. There will be other changes, but perhaps not as significant as these changes. The implementation of these changes requires that companies try to envision the future and plan for it beginning with changes to the corporate culture. For companies that believe in “business as usual” or “let’s leave well enough alone”, these changes will not be implemented. Those companies that believe in “doing things the same old way” will most likely struggle to stay in existence.
About the Author
Dr. Harold D. Kerzner, Ph.D., is Senior Executive Director at the International Institute for Learning, Inc., a global learning solutions company that conducts training for leading corporations throughout the world.
He is a globally recognized expert on project, program, and portfolio management, total quality management, and strategic planning. Dr. Kerzner is the author of bestselling books and texts, including the acclaimed Project Management: A Systems Approach to Planning, Scheduling, and Controlling, Thirteenth Edition. His latest book, Project Management Next Generation: The Pillars for Organizational Excellence, co-authored with Dr. Al Zeitoun and Dr. Ricardo Viana Vargas, delivers an expert discussion on project management implementation of all kinds.
Disclaimer: The ideas, views, and opinions expressed in this article are those of the author and do not necessarily reflect the views of International Institute for Learning or any entities they represent.