Historically, Project Management was an activity that supported engineering related projects in aerospace, defense, and heavy construction. Naturally, most project manager practitioners had advanced degrees in a technical discipline. What has happened is that the role of the PM has changed. Today, Project Management is used to manage the business—think of your entire business as a project. In fact, everything you do can be characterized as a project; therefore, as a PM today you are not only making project based decisions, but also business decisions, whereas in the past, business decisions went to senior management.
Every year, top companies conduct a study on the most important career paths over the next decade or more. Project Management is on the short list. Within each of these companies, Project Management is considered to be much more than a career path; it’s a strategic competency.
There are approximately 46,000 PMs at one global technology company alone. These people are chartered with supporting and delivering the future business strategy. You may wonder what executives expect to receive back from 46,000 PMs worldwide. The answer: best practices and lessons learned, so they can share that knowledge with others and help to avoid mistakes. Accomplishing this feedback loop requires a cultural change—and PMs are considered to be the architects of change.
For years, the only performance metrics we measured were time, cost, and scope—nothing else. At the same time, we knew even 50 years ago, that one cannot measure success just from time, cost, and scope. The purpose of a project is to create business value; however, we didn’t know how to measure this value. Today, we have a much better understanding of what projects are designed to do, which changes the role of the PM. The PMs of today must think with a business mindset and also think strategically.
The reason why companies created methodologies is because they never trusted PMs. Prior, companies were afraid that PMs would make decisions reserved for the senior level managers, so they eliminated the freedom of PMs completely. It worked well, at the time, because executives were making all of the critical decisions. Now, executives have been forced to take PMs and their influence into consideration for the sake of the business. Agile and Scrum have been very successful, as a result of this newly instilled trust.
As one example, a utility had 300 people with a budget of $240M annually. Every time an executive wanted a project done, it was added to the queue. Eventually it might get done. Then, the executive told the PMO to establish a checklist or template for a business case for every project in the queue. The requestor had to fill it out and demonstrate what value it would bring to the stakeholders and to the corporation as a result of committing resources. Using this method, one-third of all project were cancelled – saving $80M in year one, all because the focus was on benefits and value.
The single biggest challenge in today’s business is how much work the business can take on without overburdening the labor force. Without PMs, they cannot answer those questions—they will not know the capacity of that organization.
Large companies can absorb a $100M failure, but a small company cannot handle a $100K failure. In smaller companies, PMs have become the lifeblood of the organization. What they sell to clients is the Delivery System—that being Project Management.
For a corporation, they are telling the world that they believe in the future of Project Management; they are forward thinking and innovative. For an executive, they have to understand that governance of a project is different than governance of an organization. Roles and responsibilities are different. We are asking executives to be part of governance committees to supervise a portfolio of projects and make decisions regarding that portfolio. In short, executives must understand their new responsibility and that’s why they should attend IPM Day. Register here.
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