By Dr. Al Zeitoun and Dr. Harold Kerzner
July 24, 2024
The future of project management must have a balance between the tactical and strategic focus, in addition to a balance between digital and human. This balance will be key to achieving effective and sustainable strategic value realization.
Getting to this balance is a key to future experiencing culture. Much of achieving the balance topics were also addressed in the interview conducted by PMWJ. The interview was conducted by Yu Yanjuan PMR (2022). Project Management is a Strategic Competency: Interview with Dr. Harold Kerzner and Dr. Al Zeitoun; Project Management Review; republished in the PM World Journal, Vol. XI, Issue IV, April.
Q1) Based on your observation, what are the challenges facing project management now? What should we pay attention to in the era of PM 4.0?
Harold Kerzner / Al Zeitoun (Kerzner/Zeitoun): For decades, project management appeared restricted to traditional or operational projects where the requirements were well-defined at the onset of the project. We used to tell students to initiate planning, scheduling, and budgeting activities after you get a scope statement or detailed statement of work. The result was that most of the projects could be executed using a one-size-fits-all methodology. Most traditional or operational projects used the one-size-fits-all approach.
Today, we are seeing new types of projects coming into the mix. These new projects are strategic in nature, such as innovation, research & development, new product development and strategic planning initiatives. Many of the traditional project management processes, tools, and techniques used in operational projects do not apply to strategic or innovation projects.
Today, executives have realized the value in using project management for all types of projects. Flexible approaches such as agile and Scrum have been found to be more effective than the traditional waterfall approach on many projects. We find the key here is to not think ‘either or’ but choose a mix that most fits the project’s context.
Another challenge is that many strategic and innovation projects start out with an idea, rather than a well written statement of work or business case. Strategic projects have a greater likelihood of being impacted by even small changes in the enterprise’s environmental factors. In addition, decisions in strategic projects entail a higher degree of business risk than with the traditional projects. New metrics will be required to determine the true status and value of strategic and innovation projects. These challenges are now changing the knowledge requirements and the mix of skills that we expect project managers to possess in the future.
Project Management (PM) 4.0 is strategic and, deep understanding of customer needs, and creating a set of principles that must be practiced by forward-thinking organizations who want to grow, adapt, and succeed. PM 4.0 is an area of emerging interest to us, because it is well suited for projects of significant strategic performance for the future of organizations.
Q2) As to how to deal with Volatility, Uncertainty, Complexity and Ambiguity (VUCA), do you have some suggestions for professionals?
Kerzner/Zeitoun: When there is commonality among the projects in a firm such that a one-size-fits-all approach can be used during project execution, the needed skill sets may be known with some degree of certainty. In such cases, there exists a well-defined Statement of Work (SOW) and the impact of the enterprise environmental factors is relatively low. But today, where project managers are now responsible for managing strategic projects, new skills are needed to meet the new business challenges.
Today, and in the future, project management will take place in a VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) environment. Strategic projects are more susceptible to the enterprise environmental factors in the VUCA environment than are traditional projects, thus requiring the reskilling of project managers.
The meaning of the VUCA components can change from industry to industry, company to company, and possibly project to project. The impact of VUCA can also change the environment in which the project takes place. The enterprise environmental factors in a project can have a serious impact on VUCA analysis and subsequent risk management.
VUCA of a project also impacts the culture of a firm. 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, new product development, and changes in business models. The skills needed can vary based upon the type of strategic project.
As an example, different skills may be needed for strategic projects that demand radical rather than incremental changes from how the firm conducts business. Some of the new skills needed for strategic projects include design thinking, rapid prototype development, crowd storming, 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, values, and politics that are evident during a VUCA analysis.
Effective project management requires not only an understanding of project management and the deliverables expected from the project, but also the relationship that the project has with ongoing business activities and strategic planning. VUCA activities add significant risks to all of these relationships. Therefore, risk management—especially business risk management—could be one of the most important skills needed for future project managers. In the past, business risk management related to projects was considered a responsibility of the project sponsor, the project governance committee, and even senior management.
This is no longer the case. Project teams must become more proficient in risk management resulting from the VUCA factors. This mix of skills and shifts required of professionals to deal with this VUCA environment confirm the need for strengthening the muscles of adaptability and resilience.
Q3) Recently, there have been a lot of talk about “Project Economy”. It is believed that projects will serve as the engine of the future economy. What are your views on it? It seems that the future of project management is promising, right?
Kerzner/Zeitoun: Today, more companies believe that they are managing their business as a series of projects. Trust in the abilities of project managers has increased significantly. As executives recognize the benefits of utilizing effective project management practices on all types of projects, and more trust is placed in the hands of project managers, project managers are being asked to manage strategic projects as well as the traditional or operational projects.
Trust in asking PMs to manage strategic projects has resulted in the establishment of a line-of-sight from project managers to senior management such that project managers are kept informed about strategic business objectives to ensure that strategic projects are aligned correctly. Line-of-sight creates not only a correct decision-making mindset, it also provides project managers with more knowledge about the company, thus reducing the chance for ineffective behavior. Line-of-sight can also make it easier to develop the proper risk management mindset. The notion that “information is power” is disappearing in the project management landscape as strategic information is being shared.
Many companies today conduct a study every year or two to identify the four or five strategic career paths in the company that must be cultivated 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.
Part of this is evident by looking at to whom project managers now report project status to and make presentations. Historically, PMs conducted briefings for the project sponsors and occasionally 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 executive management and even the board of directors. As this shift from running the business to growing the business continues, the future of project management is certainly promising for decades to come.
Q4) Virtual work is getting increasingly common. What are the challenges and opportunities resulting from virtual work?
Kerzner/Zeitoun: Companies have come to the realization that knowledge needed for sustainable business growth may not reside entirely within their company. Developing global business partnerships provide significant business advantages, such as lowering of project costs, faster time to market, improvements in quality and reliability of products and services, greater customer satisfaction, and lowering of project and business risks.
All of these benefits are achievable as long as the parent company maintains a good grasp of virtual teams. Understanding the benefits is often easier than understanding the challenges. Some of the challenges include time zone differences, limited collaboration opportunities, people being afraid to state their true feelings, and possibly the inability of team members to possess the same and comprehensive information as they would if the team were collocated.
Virtual meetings are somewhat more difficult than onsite meetings because the virtual environment requires a different set of tools and software for communication, viewing, recording and displaying of ideas, and interaction among participants. If the group must be broken down in smaller groups, multiple concurrent virtual sessions may be necessary.
Virtual teams have advantages and disadvantages. The benefits include:
- Participants are under less peer pressure and may not be intimidated by others on the call
- It may be easier to put together a diverse team of participants
- People are working alone or in small groups and may come up with more fruitful solutions to project problems than in larger groups
- Large groups can participate virtually, and it is less likely that someone will want to dominate the discussion with their ideas
- Large groups can be subdivided into smaller groups without worrying about title, rank, and expertise
- There is less wasted time in virtual sessions than with in-person sessions
Disadvantages of virtual teams include:
- Facilitators must ensure that the proper virtual tools are in place
- It may take more time at the onset of the meeting to make sure that everyone is on the same page
- Sharing documents may be difficult virtually; facilitators must ensure that all participants have the appropriate materials
- The way that communication takes place may make it difficult for people to build on the ideas of others or to combine ideas
- It may be difficult to break large groups into smaller groups virtually
- Virtual participants may be less likely to ask questions than if they were in the room with the other team members
- Having an open dialogue where everyone gets to speak may be difficult to enforce
- Having too large a group may prevent or discourage members from providing input
- People may be multitasking or distracted, and the facilitator has limited control over the meeting
- Perhaps the biggest challenge in virtual teams is the inability to read bod language and therefore not fully knowing how others feel. Difficulty in observing facial expressions and non-verbal behavior such as what they do with their hands, or the way they are sitting as an indication of whether one is upset or in agreement, are examples of body language.
Q5) What are the characteristics of projects in the future?
Kerzner/Zeitoun: There are numerous characteristics that we can predict for projects of the future, but perhaps the greatest characteristic will be the use of flexible methodologies, new metrics, and new leadership styles. Historically, companies used a one-size-fits-all methodology that was inflexible and used the same life cycle phases for every project. Unfortunately, this rigid methodology was not effective on several types of projects. With the growth of flexible methodologies, project teams will be allowed to establish their own life cycle phases, and ways of working, within reason.
Previously we stated that project management has become a strategic competency and that most projects are aligned to strategic business objectives. To select and evaluate these new types of projects, there must exist strategic project metrics. We cannot rely entirely on the traditional metrics of time, cost, and scope to determine project status and business impact.
Strategic business metrics must be able to be combined to answer questions that executives and active stakeholders might ask. 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
- Portfolio mixture of projects
- Resource availability
- Capacity utilization
- Strategic alignment of projects
- Overall business performance
Project teams must provide input to these metrics for alignment to strategic objectives.
For decades, companies have recognized the existence of intangible assets, but only recently has the importance of measuring intangible assets such as improvements in project governance become important. Measuring intangible assets can improve project performance, and today the growth in measurement techniques has made this possible. Measuring the growth in intangible assets may be dependent upon management’s commitment to the measurement techniques used. Also, the techniques must be free of manipulation.
Examples of intangible assets related to projects include:
- Improvements in goodwill
- Improvements in customer satisfaction
- Improvements in our relationships with our customers
- Improvements in our relationship with our suppliers and distributors
- Improvements in our brand image and reputation
- Growth in patents, trademarks, and other intellectual property
- Effectiveness of the execution of business processes
- Effectiveness of executive governance
- The company’s culture and mindset, and how they impact projects
- Growth in human capital, including retained knowledge and the ability to work together
- The effectiveness of strategic execution and decision-making
All these assets are measurable. The value of intangibles can have a greater impact on long-term strategic business considerations rather than short-term factors. Management support for the value measurement of intangibles can also prevent short-term financial considerations from dominating project decision-making.
Another challenging topic will be project leadership. Most people seem to agree that effective leadership in project management can contribute significantly to successful outcomes. Unfortunately, there have been limited empirical studies and research on project management leadership styles and their impact on the performance of team members and their present and future assignments. On the other hand, there are volumes of information related to project management processes, methodologies, tools, and techniques.
Project management environments are generally unstable and likely to change from project to project. Each company, even in the same industry and with similar projects, can operate in different settings based upon a variety of factors. Some educators believe that although no definitive leadership style is recommended, project management is closely aligned to situational leadership practices.
New methodologies, such as agile and Scrum, have a strong focus on collaboration. Project managers will no longer view team members as a cost. Projects are getting longer and more challenging. Project managers must develop leadership skills that engage, secure commitment and participation, and foster an environment where everyone feels safe to express their true opinions and feelings. Social project leadership will replace the traditional autocratic leadership styles that are still being practiced in some organizations.
Q6) What are the skills to manage projects in the future? Design thinking, systems thinking, resilience, adaptability, etc.? Please offer your list and a little bit elaboration on each.
Kerzner/Zeitoun: Given that many of the projects we will manage in the future focus on strategic objective accomplishment and business value rather than traditional deliverables, project teams must learn new skills. Some of these skills include:
- Brainstorming: More projects in the future will begin with just an idea rather than a business case and detailed statement of work. Project teams must therefore learn how to participate effectively in brainstorming sessions.
- Creative problem-solving: This involves ways for looking at a fresh perspective to solve a critical problem. This requires out-of-the-box thinking.
- Design thinking: This is a structured process for exploring ill-defined problems that were not clearly articulated, helping to solve ill-structured situations, and improving outcomes. The focus of design thinking is generally finding solutions to a problem rather than identifying the problem.
- Idea management: This involves ways of capturing all ideas for solutions to a problem and retaining all ideas, whether they are used or not, in an information warehouse for future usage.
- Rapid prototype development: Techniques for developing rapid prototypes throughout a project to support continuous decision-making are needed, rather than just one prototype near the beginning of commercialization.
- Innovation leadership: The ability to provide leadership to projects in the future that may begin with just an idea and require different forms of innovation, is essential.
- Strategic planning: The ability to make project decisions that must be aligned to strategic business decisions will be key.
- Managing diversity: The ability to manage teams, perhaps in a virtual environment, that have team members from various backgrounds is crucial.
- Co-creation team management: This is the process of working with external resources that bring knowledge, expertise, and ideas to your project.
- Supply chain management: Given that it may be cost-effective to outsource more work than previously done, project teams will take a more active role in supply chain management.
- Advanced risk management: Many of the new types of projects will require business and strategic decisions, as well as being impacted by the VUCA environment. This will add more challenges to the team’s ability to respond to risks.
- Change management: The results of many projects may require critical organizational change management. Project managers will be participating in change management activities.
Q7) How should PMOs transform to adapt to the future needs?
Kerzner/Zeitoun: Project management success is ownership-based. For any of the changes we highlight in this interview to succeed, we need a maturing discipline to the practice of project management. The only logical place for that ownership is a refreshed view of the future PMOs. It is not our goal here to predict what to call these PMOs. All names would work. Whether we talk about an Enterprise PMO, a Strategy Execution Office, or a Global Center of Excellence, these versions could all work if the context is properly understood.
The future context of PMOs is true empowerment-based. This means that it is no longer a luxury for the PMO to be fully authorized to operate strategically. This is the only accepted currency in the future. The PMO has to be able to operate objectively and drive most critical strategic dialogues in tomorrow’s organizations. How else would the project economy continue to prevail, or the supporting teams’ autonomy succeed? How can we have assurance that the next useful set of practices be implemented or could all critical benefits be realized?
The PMO has to transform. Just like the many changing project management skills highlighted in this interview, the skills of strong collaboration, high adaptability, and strategic thinking are going to drive leaders in future PMOs. The PMO has to realize that its success hinges on saying “no’ much more often than saying “yes” to ensure that strong strategic choices are being consistently made. This also mean that enterprise risk management will prevail in how PMOs instill the project management principles across project teams and organizations of the future.
The command in the use of digital will also draw a very different picture for tomorrow’s PMOs. Understanding how to use digital as a true enabler will free up time for project professionals, allowing them to step into the strategic role projects and their teams could play. They will also need to address many of the demanding expectations of the VUCA environments, and the expanding social and diverse agendas that will prevail in the coming decade.
Q8) What should the profession of project management do to help deal with global crises? David Pells has advocated that the profession of project management should shoulder more social responsibility. Do you agree? Why or why not?
Kerzner/Zeitoun: Companies today maintain a self-regulated strategy called corporate social responsibility (CSR) that is integrated into the firm’s business model and identifies the ethically oriented activities the firm will undertake for the benefit of consumers, society, ecology, and government regulations. Included in the description of a firm’s CSR is usually the term “sustainability” which may be defined as improving human life without impacting the capacity of the supporting eco-systems. This leads us to the term “sustainable innovation” which is the creation of products and services that support sustainability and CSR. The outcomes of sustainable innovation must support the economy environment and society.
However, before a firm invests heavily in sustainable innovation activities, it must understand possible tradeoffs between short-term profitability, pressure from investors for a reasonable ROI, and social and environmental goals. Companies believe that, by creating a social value proposition that supports sustainability efforts, they will gain consumer loyalty and trust. Sustainable innovation has traditionally been used in reference to business innovation sustainability, which is the continuous development of new products and services to increase the firm’s financial objectives such as market share, revenue, profitability, and shareholder value. However, sustainable innovation can also be aligned with social innovation and environmentally friendly innovation activities that are part of business innovation sustainability.
Social innovation involves more than just improving the quality of life and human wellbeing. The social activities that the firm can consider as part of CSR include philanthropy, volunteer work, the way it markets and sells its products and services, and the products it creates using natural or renewable resources that do not impact the environment. Environmentally friendly sustainability includes the consumption of certain natural and renewable resources such as water, energy, and other materials. Environmental innovation activities might force us to consider the impact that our innovation and commercialization decisions can have on global warming, depletion of the ozone layer, land use and human health considerations resulting from the use of toxic pollutants.
Humanitarian or social innovations are most frequently a subset of public sector innovations but can occur in the private sector as well, based on a firm’s commitment to its social responsibility program. We agree that in the expanding project economy, there will be a significant role that projects will play in the sustainability and social responsibility agendas of future organizations. Leaders with a project mindset will be able to govern in a balanced way between the short-term metrics and the long term socially responsible footprint these organizations leave behind.
Q9) Sustainable project management is a trend. What are your tips on persuading people to think beyond the “Iron Triangle” to consider long-term impacts such as sustainability of the deliverables?
Kerzner/Zeitoun: As we addressed earlier, the classic Iron Triangle has been dismantled with the shift to strategic projects, the heightened focus on value achievement, and inclusion of social responsibility and sustainability objectives.
No matter how digital the future might be, the human component is a critical ingredient of future views of success. There are organizations that are committed to humanitarian concerns such as the Global Alliance for Humanitarian Innovation (GAHI). The innovations created by these organizations are driven by humanitarian needs, usually involving health and safety concerns, and are designed to save lives and reduce human suffering of vulnerable people. Innovation projects can involve disaster sanitation, saving children and refugees, disease control and reduction, emergency relief possibly from weather concerns, sanitized water, medicines, electricity generation, and refrigeration.
Humanitarian innovations depend heavily on private donors and usually have spokespeople who are well-known actors, actresses, and/or professional athletes. The choice of spokesperson is based on the target audience for the humanitarian innovation, and possibly the geographical area where the spokesperson may be well known and has proven ability to promote donations.
As an example of a humanitarian need, many developing countries suffer from severe acute malnutrition, which is a life-threatening condition that requires urgent treatment.
Until recently, severely malnourished children had to receive medical care and a therapeutic diet in a hospital setting. With the advent of ready-to-use therapeutic food (RUTF), large numbers of children who are severely malnourished can now be treated successfully in their communities, which has the potential to transform the lives of millions of malnourished children.
The future of project management is bright if we are able to expand our views from any traditional view of measuring success. The Iron Triangle is past tense. The future tense involves business-, value-, and strategic-driven assessments of the intended success journey of projects and portfolios.
Q10) Throughout the PMBOK Guide (7th edition), creating value is the core theme. Compared with the previous editions, it has changed from process-oriented to principle-based. What’s your comment on it? What do you suggest organizations do to transform from plan-driven to value-driven?
Kerzner/Zeitoun: 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 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 who 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 of strategic projects.
Today, companies believe they are managing their business as a stream of projects, both strategic and traditional. As such, there must exist a definition that satisfies all types of projects. The three components of success today are:
(1) The project must provide or at least identify business benefits and value expected;
(2) The project’s benefits and value must be harvested such that they can be converted into sustainable business value that can be expressed quantitatively; and
(3) The projects 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 and PMBOK 7th edition, it is expected that these three components—especially business value creation— will appear in future developments in the standards for project management. The responsibility remains in organizations’ hands for selecting the right mix of processes and principles that enable the achievement of this maturing view of projects’’ success.
We are now focusing on value-driven project management rather than requirements driven deliverables. The intent is to create business value, and this will require a different thought process for many professional project managers.
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Disclaimer: The ideas, views, and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views of International Institute for Learning or any entities they represent
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.
Consultant and Trainer, International Institute for Learning
In his current role with Siemens DISW, Dr. Zeitoun is responsible for driving the global program management practices, master plan governance, and enable strategy transformation priorities.
Dr. Zeitoun’s prior roles include Executive Director for Emirates Nuclear Energy Corporation in Abu Dhabi where he led the transformation of capabilities to support the operational readiness of their $40 billion nuclear power plant across four facilities. He was Senior Transformation Executive & Strategic Portfolio Solutions expert at Booz Allen Hamilton in the U.S, where he envisioned and customized a digitally enabled EPMO to support their billion-dollar strategic initiatives. He also led the firm’s Middle East and North Africa Portfolio Management and Agile Governance Solutions.
