Managing Complex Projects. Part 1
Setting the Stage
It is no secret that our record of complex project performance is rife with failed and significantly challenged projects. This is true for virtually all types of projects. Examples abound and we offer just a few here.
|Public Works Projects||Boston Big Dig: Went from estimates of $2.6B to a final price tag of $14.8B
Conceived in the 1970s and finished, more or less, in 2005, the Big Dig is modern America’s most ambitious urban-infrastructure project, spanning six presidents and seven governors, costing $14.8 billion, and featuring many never-before-done engineering and construction marvels.[i]
|The Chunnel: 70% cost overruns on the original contract
The banks and the shareholders who financed the Channel Tunnel knew — or should have known — that the risks of building giant projects are very great. “No projects are harder to achieve,” a consultant advised the Channel Tunnel’s five lead banks in 1984. “To work on giant projects is always exhausting and often demoralizing.” He ought to have added “bankrupting.” Despite the consultant’s warning, the banks pressed ahead. They were under pressure from their governments, which wanted to do something grand without paying for it. They were under pressure from their good customers among the large construction companies to lend for something grand, and the banks also had internal pressure to keep up the pace of business. It became the largest privately financed project in history.[ii]
|Defense Acquisition Projects||Defense Acquisition R&D Projects Average 42% over budget
Research and development costs of the Pentagon’s weapons programs have increased 42 percent more than originally estimated, with an average delay of 22 months in delivering initial capabilities, according to a new assessment of the Defense Department’s major acquisition programs in 2008.[iii]
|NASA||Mars Program: Total cost is expected to run over by more than 30 percent
NASA’s flagship mission to land a nuclear-powered, next-generation rover on Mars is facing development problems and ballooning costs that could threaten its scheduled launch next year. NASA Administrator Michael Griffin told a congressional hearing this month that engineers had to redesign the heat shield on the Mars Science Laboratory after tests showed the protective layer would not survive entry through the Martian atmosphere. The extra work is expected to add $20 million (euro13.23 million) to $30 million (euro19.84 million) to the $1.8 billion (euro1.19 billion) price …[iv]
In addition to these examples, we see complex projects in all aspects of life, e.g., the World Bank and World Health Organization (addressing AIDS in Africa), world governments (addressing the current financial crisis and climate change), and business transformation projects that in some instances have led to bankruptcy (mergers, acquisitions, re-engineering business processes and large IT systems implementations).
The economic cost of failed and challenged projects is sizeable, often in the billions of dollars. For our economic competitiveness and security, we simply must improve project performance. For these reasons, many thought leaders believe that Complex Project Management will be the next big thing in our quest to achieve better project performance. Potential benefits from the improved management of complex projects are significant. Not only will there be substantial direct returns to those organizations embracing CPM, there will also be an increase in the capacity of the global community to effect the strategic change objectives required for the complexities of the 21st century.
What is Complex Project Management?
Australia seems to be leading the charge to professionalize CPM. According to Queensland University of Technology (QUT), Brisbane Australia,[v] the CPM strategic partner of the Australian Government’s Defence Materiel Organization (DMO), complex projects are those that:
- Are characterized by uncertainty, ambiguity, dynamic interfaces, and significant political or external influences; and/or
- Usually run over a period which exceeds the technology cycle time of the technologies involved; and/or
- Can be defined by effect, but not by solution.
Although there is no universally accepted definition for Complex Project Management, we can simply say it is the management of projects that have the characteristics outlined above.
Why Complex Project Management? Why Now?
As demonstrated above, across the globe, awareness is emerging of the urgent need for improved delivery of projects that are complex, critical, often large and long term, and in the multiple billions of dollars. Research indicates that traditional, linear project management tools and techniques, while still necessary, are often insufficient to manage the complexities of 21st century projects. At the same time, it is apparent that the current workforce of project managers, business analysts, engineers and architects has limited capacity to meet the challenges posed by complex projects.
In the twenty-first century, business processes have become more complex; i.e., more interconnected, interdependent, and interrelated than ever before. In addition, businesses today are rejecting traditional management structures to create complex organizational communities comprised of alliances with strategic suppliers, networks of customers, and partnerships with key political groups, regulatory entities, and even competitors. Through these alliances, organizations are addressing the pressures of unprecedented change, global competition, time-to-market compression, rapidly changing technologies, and yes, increasing complexity. As a result, business and technology systems are significantly more complex than in the past; and for many reasons the projects that implement new business systems are more complex. To reap the rewards of significant, large-scale business/technology initiatives designed to not only keep organizations in the game but make them a major player, we must find new ways to manage project complexity.
Trends in the World of Complex Project Management
Competency Standard for Complex Project Management. Again we look to Australia to lead the way. Prior to engaging QUT, the DMO, in concert with the UK Ministry of Defence and an international team of executives experienced in managing very large projects, spent considerable energy reviewing and refining a professional competency standard as an extension to the existing A Guide to the Project Management Body of Knowledge (PMBOK® Guide), defining the essential competencies required for the successful leadership of complex projects, programs and portfolios. The draft Competency Standard for Complex Project Management was developed and authored by Dr. David H. Dombkins. After an extensive review process in consultation with Industry via the Defence and Industry Advisory Council, and the Australian Institute of Project Management (AIPM), the final draft was approved by the Defence and Industry PM Council in June 2006. The College of Complex Project Managers in Switzerland will retain custodianship of the standard on behalf of the international project management community. The Competency Standard is comprised of nine competency views:
View 1 – Strategy and Project Management
View 2 – Business Planning, Lifecycle Management, Reporting and Performance Measurement
View 3 – Change and Journey
View 4 – Innovation, Creativity and Working Smarter
View 5 – Organizational Architecture
View 6 – Systems Thinking and Integration
View 7 – Leadership
View 8 – Culture and Being Human
View 9 – Probity and Governance
The International Centre for Complex Project Management
The International Centre for Complex Project Management (ICCPM) is a not-for-profit organization working to advance knowledge and practice in the management and delivery of complex projects.[vii] ICCPM (formerly College of Complex Project Managers) was officially launched in Rome on 10 November 2008 at the 22nd IPMA World Congress on Project Management. The International Centre for Complex Project Management was established in 2007 as part of an initiative that started in 2005 when Australian, UK and US Government bodies and defense industry organizations launched an initiative designed to improve the international community’s ability to successfully deliver very complex projects and manage complexity across all industry and government sectors. There is a growing list of global corporate partners including BAE Systems, Boeing, Lockheed Martin, Mallesons Stephen Jaques, Raytheon and Thales.
The ICCPM has embraced a research and innovation strategy that will enable it to work with partners and the international community to fund, facilitate and conduct applied CPM research. The goal is to share the research study findings with organizations across industry and government sectors, both nationally and internationally.
With support from its corporate partners and its major sponsor, the Australian Government’s DMO, the ICCPM has already made a significant contribution towards the development and delivery of the world’s first Executive Masters in Complex Project Management (EMCPM) through the Queensland University of Technology (QUT). The program is a master’s curriculum that complies with the CPM standard and is designed to accelerate the career of accomplished traditional project managers into senior leadership positions in project-based organizations. The program focuses on the art of project leadership as distinct from the competency in the engineering and project management disciplines. In designing the EMCPM program, QUT worked extensively with a number of industry collaborators including the UK Ministry of Defense, USA Department of Defense, Lockheed Martin (Fort Worth), Boeing (St Louis), Raytheon (Washington DC) and BAE Systems (UK and Australia).
What Does this Mean for Project Managers and Business Analysts?
The is an opportunity for project managers and business analysts who are working at senior levels of the organization to accelerate their careers, transitioning from accomplished traditional project managers and business analysts into senior leadership positions in their organizations. For starters, we recommend consideration of the following strategies.
Transition to a Shared Project Leadership Model. In an attempt to deliver projects successfully, we have traditionally focused on management and control, and virtually excluded the vital role of leadership. Traditionally, the project manager focuses on planning, budgeting, organizing, staffing, monitoring, and controlling. All project team members report to the project or program manager regarding project work assigned to them.
It is now becoming clear that complex projects thrive on collaboration, teams, and leadership rather than management, command and control. In the 21st century, managing complex projects is transitioning from a focus on project management to a focus on shared team leadership. Consider transitioning to the shared project leadership model. Using this approach, the project leadership team is small (four to six members), multi-disciplined, highly skilled, dedicated to the project full time, and co-located. This core leadership team shares responsibility for guiding the project, each taking the lead when their expertise is needed most. Clearly, complex projects are just that: too complex for the traditional project manager and requiring expertise leadership from several key experts.
Become a CPM Activist. Join ICCPM and support the research and innovation activities it promotes. Dedicate your professional development activities to becoming an expert in CPM through readings, self-study and formal course work. Sponsor a workshop for your organization to diagnose the complexity of your critical projects and determine strategies to manage the complexity dimensions. Advocate to establish a CPM Competency Center in your organization. Attend CPM conferences to keep abreast of the latest developments. Hone your expertise in the areas identified in the Competency Standard for Complex Project Management mention above. In addition, concentrate on the seven high priority topics that were identified as critical to the success of complex projects and are integrated into the EMCPM academic program:
- Managing customer requirements
- Subcontractor performance and relationships
- Software/hardware integration
- Strategic approaches to risk management
- Diversity in government/industry perspectives
- ‘Preparing the battlefield for change’
Seek out professional development opportunities that mirror the EMCPM offerings:[viii]
Domain 1: Managing Yourself and Others: People in Organisations, Building Effective Teams, Strategic Management of Complex Projects, Communicating Effectively, Creative and Entrepreneurial Thinking, Self Realisation and Personal Development, Systems Thinking, Understanding Complex Projects
Domain 2: Performing for Results: Negotiation Strategies, Business Planning, Strategic HRM, Managing for Innovation, Planning for Risk and Change, Performance Measurement, Complex Projects and the Law, Workplace Project
Domain 3: Leading for Results: Issues Management, Accountability and Governance, Managing Contract Relationships, Change and Journey, Leadership for Results, Implementation of Complex Projects, International Study Tour
This is the first in a series of articles based on the award-winning book Managing Complex Projects, A New Model , by Kathleen Hass, that was awarded the 2009Project Management Institute (PMI) David I. Cleland Project Management Literature Award. Look for the second article in the November 25 Project Times
[i]Nicole Gelinas, Lessons Learned of Boston’s Big Dig, Autumn 2007 City Journal, Online at: http://www.city-journal.org/html/issue_17_4.html (accessed October 2009)
[ii]Thomas G. Donlan, Lesson of the Chunnel, Monday, January 12, 1998 Barrons Editorial Commentary. Online at: http://online.barrons.com/article/SB884389006427386000.html (accessed October 2009)
[iii]Katherine McIntire Peters, GAO: Staggering cost overruns dwarf modest improvements in Defense acquisition, March 31, 2009. http://www.govexec.com/story_page.cfm?articleid=42393&dcn=e_gvet (accessed October 2009).
[iv]Alicia Chang, Flagship Mars project faces technical problems and cost overruns; could jeopardize 2009 launch, AP Worldstream, February 28, 2008. Online at: http://www.encyclopedia.com/doc/1A1-D8V3HR300.html (accessed October 2009)
[v]Professor Caroline Hatcher, Queensland University of Technology (QUT) Executive Master of Business in Complex Project Management Course Coordinator and Bob O’Connor, QUT Director Corporate Education
[vi]Commonwealth of Australia (Department of Defense), College of Complex Project Managers and Defense Materiel Organization, Competency Standard for Complex Project Managers, 2006. Public Release Version 2.0. Online at: http://www.defence.ogv.au/dmo/proj_man/Complex_PM_v2.0pdf, pp. 17-18. (accessed October 2009)
[vii]International Centre for Complex Project Management. Online at http://www.iccpm.com/ (accessed October 2009)
[viii]GS51 Executive Master of Business (Complex Project Management) EMCPM Canberra 2010 Part Time Enrolment. Online at: https://www.projecttimes.com/wp-content/uploads/attachments/EMCPMCanberraPartTime2010CourseSummary2009-09-09.pdf (accessed October 2009)
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Kathleen B. (Kitty) Hass, PMP is the President and Principal Consultant for Kathleen Hass & Associates, Inc., a practice that specializes in building mature business practices including strategy execution, project management and business analysis. Kitty also serves on the board of directors and the senior leadership team for IIBA, International Institute of Business Analysis.
Kitty is a prominent presenter at industry conferences, author and lecturer. Her expertise includes BA/PM organizational maturity assessments and BA/PM competency and workforce evaluations; IT strategic planning; implementing and managing PMOs, BACOEs, and portfolio management processes; leading technology and software-intensive projects; executive coaching, building and leading strategic project teams, and managing large complex programs. Ms. Hass has over 25 years experience providing professional services to Federal agencies, the intelligence community, and various Fortune 500 companies. In addition to the PMP, certifications include: SEI CMM appraiser, Baldrige National Quality Program examiner, and Zenger-Miller facilitator.
Kitty has authored numerous white papers and articles on leading edge business practices, the PMI award-winning Managing Complex Project, A New Model, the Business Analysis Essential Library series, and was a contributor to The 77 Deadly Sins of Project Management. Feel free to contact Kitty for information about her services, including a cutting edge Complex Project Management Interactive Workshop based on the award-winning book. Kitty can be reached at: 303.663.8655, [email protected], and at her Website, www.kathleenhass.com.