Dr. Harold Kerzner's Project Management Predictions for 2020

By Harold Kerzner, Ph.D. | Senior Executive Director, International Institute for Learning (IIL)

The landscape for project management changes almost every year. Some changes are relatively small or incremental, whereas other changes can be significant. Major changes to project management will occur in 2020 due to much of the new material that the Project Management Institute (PMI) has published and will be testing on in the new version of the Project Management Professional (PMP)® exam beginning in June 2020.

Most of the critical changes that I see happening in 2020 can be clustered into the six pillars of project management. These six pillars could very well change the face of project management for at least a decade rather than just for 2020.

Pillar #1: Project managers will be expected to manage strategic projects rather than just traditional or operational projects.

For several decades, project managers were only responsible for traditional or operational projects that:

  • Had a well-defined statement of work
  • Used the traditional “waterfall” methodology that was often based upon a one-size-fits-all approach
  • Relied upon earned value status reporting that focused mainly upon the time, cost and scope constraints

Strategic projects were assigned to functional managers whom executives trusted more than project managers. Functional managers were permitted to use whatever approaches they believed would work on their projects, and often without any of the processes, tools or techniques used in traditional project management practices.

Today, more and more companies believe that they are managing their business as though it is a series of projects. As executives begin to recognize the benefits of utilizing effective project management practices, and more trust is placed in the hands of the project managers, project managers are being asked to manage strategic projects as well as traditional or operational projects.

But as will be seen in some of the pillars that follow, many new techniques are accompanied by significant changes in the way that work is executed, e.g. new methodologies, new status reporting processes and new tools and techniques. Strategic projects (such as those involving innovation, R&D and entrepreneurship) may require different skills, a greater understanding of risk management (especially business risk management), and the use business metrics in addition to the traditional time, cost and scope metrics.

Pillar #2: Project management is now recognized as a strategic competency rather than just another career path position.

In Pillar #1, it was stated that project managers are now managing strategic as well as operational or traditional projects. Executive management now appears to recognize and appreciate the contributions that the PMs are making to the growth of the business.

Many companies will conduct a study every year or two to identify the four or five strategic career paths that must be cultivated in the company so that the growth of the firm is sustainable. Project management makes the short list of these four or five career path slots. As such, project management is now treated as a “strategic competency” rather just another career path position for the workers.

How do we know this? Partly, by considering the fact that many project managers now present and report project status to senior management. Historically, PMs conducted briefings for the project sponsors, and only occasionally for senior management. Now, with the responsibility to manage strategic projects that may impact the future of the firm, project managers may be conducting briefings for all senior management and even the board of directors.

Pillar #3: There will be a significant change in the skill set that some project managers may need.

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 referring to Pillar #1, where project managers are now responsible for managing strategic projects, new skills may be necessary.

Strategic projects will vary from company to company, and even in the same company there can be a multitude of different types of strategic projects included in innovation, R&D, entrepreneurship and new product development. The skills needed can vary based upon the type of strategic project. As an example, different skills may be needed whether we are discussing innovation projects that are radical rather than incremental. Some of the new skills needed for strategic projects include design thinking, rapid prototype development, crowdstorming, market research, brainstorming and change management. For project managers involved in multinational strategic projects, the list of skills might also include an understanding of local cultures, religions and politics.

Pillar #4: There will be a significant change in how we define the success (and failure) of a project.

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, 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 they were unable to identify how to do it because of the lack of project-related business metrics. Third, this definition of project success was restricted to traditional or operational projects. Functional managers that were responsible for 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.

Today, companies believe they are managing their business as a stream of projects, including both strategic and traditional projects. As such, there must exist a definition that satisfies all types of projects. The three components of success today are:

  • The project must provide or at least identify business benefits
  • The project’s benefits must be harvested such that they can be converted into sustainable business value that can be expressed quantitatively
  • The project must be aligned to strategic business objectives

With these three components as part of the project’s success criteria, companies must ask themselves when creating a portfolio of strategic projects, “Why expend resources and work on this project if the intent is not to create sustainable business value?” These three components can also be used to create failure criteria as to when to pull the plug and stop working on a project. Since these three components are discussed in current PMI literature, it is expected that these three components will appear in the new version of the PMP® exam, beginning in June 2020.

Pillar #5: There will be a significant growth in the number of metrics, especially business-related metrics, to be used on projects.

The four pillars discussed previously made it clear that 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.

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. 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 for business decision-making and strategic planning.

  • Business profitability
  • Portfolio health
  • Portfolio benefits realization
  • Portfolio value achieved
  • Portfolio mix of projects
  • Resource availability
  • Capacity utilization
  • Strategic alignment of projects
  • Overall business performance

Exhibit 1 shows typical categories of metrics and that new versions of project management (i.e. PM 1.0 – PM 5.0) may appear in the literature. The growth in metrics is due to the growth in measurement techniques. Today, we believe that we can measure anything.

Exhibit 1. Growth in Metrics

Pillar #6: There will be a growth in 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 successfully been used for years, but this approach 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 of measuring and reporting value created through the project, than other approaches. In the future, we can expect more flexible project management approaches such as Agile and Scrum to appear.

Conclusions:

It is unrealistic to think that these six pillars will be the only changes that will occur in 2020. There will be other changes, but perhaps not as significant as these six pillars. The implementation of these six pillars requires that companies try to envision the future and plan for it. 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.

Contact IIL to find out how we can support your individual, team, or organizational Learning & Development needs in 2020 and beyond. Email learning@iil.com, call +1-212-758-0177 or request a free consultation on our website.

About the Author
Harold Kerzner is Senior Executive Director with International Institute for Learning (IIL). He has an MS and Ph.D. in Aeronautical and Astronautical Engineering from the University of Illinois and an MBA from Utah State University. He is a prior Air Force Officer and spent several years at Morton-Thiokol in project management. He taught engineering at the University of Illinois and business administration at Utah State University, and for 38 years taught project management at Baldwin-Wallace University.

He has published or presented numerous engineering and business papers in addition to more than 80 college textbooks/workbooks on project management, including later editions. His latest book is Innovation Project Management: Methods, Case Studies and Tools for Managing Innovation Projects (Wiley, 2019).

 

Project Management Professional and PMP are registered marks of Project Management Institute, Inc.


“Cafeteria-Style” Project Management Comes of Age

By Harold Kerzner, Ph.D.     |     Senior Executive Director for Project Management, IIL

I can still remember my early years in project management.

The company handed me a notebook described as project/program management. The notebook identified the life cycle phases, all of the activities to be accomplished in each life cycle phase, and the forms that had to be completed in each phase and presented to the customer. The notebook also described what the project managers could and could not do in the execution of their duties. No deviations were allowed from the notebook partly because the notebook was approved by our customers.

While some project managers considered themselves as the “president” of their project, they were still having to endure wearing handcuffs that limited their authority, their responsibility, and the decisions they could make.

Project management in the early years was driven by customers that were demanding that the contractors use project management. Contractors reluctantly agreed for sake of winning contracts but feared that, if the project managers were given too much freedom, the project managers would make decisions that were reserved for the senior levels of management.

The solution was simple: implement project management for the customer’s benefit and, at the same time, grossly limit what the project managers are allowed to do.

In some companies, project managers served as puppets with the strings being pulled by senior management. The notebooks were explained to the project managers as a necessity for standardization and control of projects, but the real intent was for executives to get better control of the project managers.

Today, the landscape for project management has changed because of the following:

  • Decades of project management practices have shown that it can work, and work well.
  • Project managers know their limitations as to what they can and cannot do.
  • Customers are demanding that project managers have the authority to make decisions rather than always having to get approval from senior management.
  • Senior managers now have significantly more trust in the ability of the project managers to make decisions and execute projects correctly.
  • The handcuffs have been removed from the project managers.
  • Customers (especially those external to the project manager’s company) want to see the projects they were paying for managed by a methodology that was more closely aligned with the customer’s business model than with the contractor’s business model.

The last bullet point opened the door for project management flexibility, a necessity for Agile and Scrum users. Flexible methodologies are most often referred to as frameworks. With a framework, rigid project management methodologies are broken down into a multitude of forms, guidelines, templates and checklists. All of the forms, guidelines, templates, and checklists are then placed on the shelves in a cafeteria. As the project manager goes through the cafeteria, he/she can then select those tools, and only those tools, that are necessary to satisfy the needs of a particular client.

Using cafeteria-style project management, customers will see their project more closely aligned to their business model and the project manager has the flexibility he/she needs to eliminate unnecessary project management waste and create a value-based deliverable.

Cafeteria-style project management is, in my opinion, a necessity for successful project management in an adaptive environment. The benefits of cafeteria-style project management have become quite apparent with Agile and Scrum users, and it is my belief that this approach will eventually become common practice in most industries.

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Harold Kerzner, Ph.D. is IIL’s Senior Executive Director for Project Management. He is a globally recognized expert on project management and strategic planning, and the author of many best-selling textbooks, most recently Project Management 2.0.


Deciding How to Manage Projects – it’s like Buying a New Smartphone!

By Alan Ferguson

I don’t know about you, but I like Android phones.

I look at the different offerings from different manufacturers, and notice that each of them uses a slightly different flavor of Android. Which one to choose?

It’s kind of like deciding on a project management method or body of knowledge.

Personally, I like taking a project management body of knowledge and customizing it for my own use. Similarly, when I get a new phone there’s a lot of fiddling around to be done, but I can get it working just the way I want it to work. When I have time I might even go under the hood and start to modify the operating system.

But I’m a geek.

And it is not just a matter of personal choice anymore. If we equate a smartphone to organizational project management, we are not talking about buying a single phone for personal use. We are considering a bulk order for the whole company—a project management method for your organization.

You have three choices:

Option one – the ‘perfect’ solution

Choose a body of knowledge and build your own project management method. It will take time and you need project management experts, but you’ll end up with your own bespoke way of undertaking projects. Ideal if a substantial part of your business is running projects.

Option two – quick and dirty.

Adopt a project management method and tell everyone they have to adjust their behaviors and ways of working to fit in with the method. It’s quick… and brutal. But it’s ideal if you do a very small number of projects and just want to run those few project successfully.

Option three – the Goldilocks solution.

Choose a project management method that is built to be tailored. Then work out what you need to do to adjust existing working practices and behaviors, as well as to modify the project management method in order to make a cozy fit for your organization.

You can probably tell I’m a fan of option three – the Goldilocks solution.

PRINCE2® is an integrated approach to project management that can be tailored for different types of projects. By embedding PRINCE2’s structured project management in your organization in an orderly, realistic, and pragmatic way, you will achieve maximum business benefits.

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