A New Way of Thinking About Organizational Projects

In my most recent series of columns, I have talked a great deal about the challenges projects face in most organizations. Many of these challenges stem from the fact that project management is not the primary purpose of organizations, and never will be. Companies are created, structured and run primarily to deliver operational products and services. Projects, however, are still critical to these organizations success – in creating, enhancing, replacing and retiring products and services in response to competitive and market demands. The challenge, then, is to arrive at an approach to managing projects in organizations that can co-exist with their current operational focus. This series addresses the practical steps that organizations can and must take to successfully create an effective project management capability.

Many companies pride themselves on their management discipline and rigor. Dell for its tight supply-chain integration and made-to-order factories. General Electric for its discipline to become the market leader in industry segments, or to get out of those markets. IKEA for popularizing the concept of affordable, stylish and flat-packed assemble-it-yourself furniture. Starbucks for good coffee and better customer service. What characterizes these companies is a single-minded commitment to attaining operational excellence in what they do. They understand their market and their capabilities, and have developed the structures, processes and capabilities necessary to execute consistently and effectively.

What you see very seldom, however, are companies that consistently, effectively and reliably execute projects. Project management is regarded as a bolt-on capability, and one that relies more upon the skills of the project manager than the support of the organization. As I have argued in an earlier column, organizations are – and will increasingly become more – willing to secure their projects in whatever way is most efficient and cost effective and still allows for competitive advantage. This does not mean, though, that they do not have a role to play in either realizing or sustaining a consistent approach to managing projects.

Regardless of how project success is arrived at, there are fundamental responsibilities that the organization has in order to ensure their success. Taken alone, they are not a guarantee of project success. Without them, however, no organization can hope or expect to realize consistent and reliable performance in developing and delivering its projects effectively:

• A clear sense of direction and a plan for its attainment. Lets be frank. Strategic planning is typically looked upon with as much fondness as an ex-lover at a wedding. Strategic plans are all too often viewed as airy-fairy, theoretical statements that have no practical bearing on the direction of the company; they are the original shelf-ware. The disconnect here is that, while they don't necessarily bear on the operation of the company, they should most assuredly define its direction. The disconnect for many is the failure to follow through. The mechanism for delivery, however, is project management – every strategic plan should articulate the projects that will allow for its attainment, and every project should directly align with and support the delivery of the strategic plan.
• An objective means of defining project priority. For many companies, the priority of projects is determined by who last screamed loudest. For others, priority is ‘high' – for everything. In both cases, priority is a reaction rather than a deliberate choice. To be successful, a prioritization must be objective, flexible and balanced. It must be able to allow the organization to determine a clear order of delivery. It must be able to respond to changes in the marketplace and the availability of resources, money and time. And it must be able to provide a balanced picture of the fit, value and risk factors associated with a project.
• Clearly defined project outcomes and benefits. One of the key failures of projects today is not defining and agreeing on requirements and scope. While requirements may change over the course of the project, the reality is that all projects are initiated for a reason. They are intended to deliver some tangible benefit for the investment being made, and this return must be understood and objectively defined. While I have argued that requiring the development of a business case for anything that moves may be considered to be overkill, this doesn't change the fundamental need to consider and quantify what constitutes project success. And sometimes a business case is exactly what is required.
• A commitment to realize the project outcomes. Even where projects take the time to define the outcomes they are expected to deliver, for the majority of projects there is no formal effort to evaluate whether the benefits were actually attained. The realization of project benefits – ensuring that we receive our return on investment, in whatever form it was defined – is essential to both governing individual projects and verifying the attainment of the organization's overall strategic goals. Without ensuring that the benefits are delivered, we should be questioning whether project investments should even be made.

As I have said, these factors will not in and of themselves guarantee project success. Without their being present, however, companies can have no clear and objective understanding of what projects are being conducted, why they are being done, or whether they are being effective. It is time that organizations made the same commitment to project excellence that they do to attaining operational excellence. And this is a good a place as any to start.