Living on the Edge: Managing Project Complexity
What is it in the 21st Century that makes projects so difficult?
These are tumultuous times. Businesses are faced with unprecedented challenges in the hyper-connected 21st-century global economy.
Extraordinary gale-force winds of change are swirling faster than ever, causing us to rethink our approach to business, project, and performance management models.
This three-part series was adapted from the book Managing Project Complexity, A New Model by Kathleen B. Hass. ©2009 by Management Concepts, Inc. The book was the recipient of the 2009 PMI David I. Cleland Project Management Literature Award recognizing authors of a published book that significantly advances project management knowledge, concepts, and practice. All rights reserved. www.managementconcepts.com. If you would like a copy of all three articles, please request by emailing the author at [email protected].
In Part 1 of the series, we discuss the nature of business complexity in the 21st Century. We then present a new model to diagnose and manage project complexity.
Exhibit 1.0 – The 21st Century
The Integrated Economy
Everyone is feeling the effects of the globally integrated economy. Many jobs are becoming commoditized; they can be performed by internal resources, contractors, or even outsourced resources located anywhere across the globe. Global wage scales have made U.S. employees too expensive to perform standard, repetitive tasks. Many U.S. jobs are gone and not coming back. For these reasons, basic tasks are beginning to be outsourced or performed by contractors.
The Technology and Information Explosion
IT applications have also impacted global jobs by automating repetitive activities, often increasing the quality and predictability of outcomes. Smart IT applications are replacing knowledge workers across industries. The demand for new, innovative apps delivered quickly is making traditional requirements and development methods obsolete.
Convergence of Digital, Social and Mobile Spheres
Social/mobile media has connected us all in obvious and subtle ways, some of which we don’t yet fully understand; and new applications emerge that we can’t even imagine until they reach us. As we see across the Middle East, Europe and elsewhere, people are using social media to bring about major changes to social and political systems. Project teams are using social media to enhance collaboration among key stakeholders across the globe.
Innovation vs. Business as Usual
The call to action for today’s businesses is ‘innovate or vanish’. For businesses to be competitive, they must be first to market with innovative, leading-edge products and services that are intuitive, easy to use, and offer surprising new features. It is no longer enough to ask business partners and customers what they want or need. Project teams must foster creativity and innovation during their working sessions, continually asking the question: ‘Are we truly innovating?’
Business Value Realization
Businesses cannot afford to waste project investments or precious resource time unless there are significant business benefits in terms of innovation, value to the customer, and wealth to the bottom line. 21st-century project leaders understand the business value proposition and focus on value throughout the project. Business visionaries work with business analysts and project managers to develop release plans prioritized based on business benefits to deliver value early and often.
With business success riding on innovation and first-to-market speed, we must be able to deliver new products and business capabilities that meet benchmarks for time, cost, and, value. However, according to the CHAOS Manifesto 2015 by the Standish Group, technology-enabled business change initiatives are only 29 percent successful, as measured by on time, on budget, and with satisfactory resultsi. This comes at considerable cost according to Roger Sessions, the world’s leading expert in IT Complexity Analytics: real sunk costs and the price of lost opportunity is estimated to cost the U.S. economy more than $1 trillion per yearii.
The 21st Century Challenges us to Change
As we are struggling to bring about positive change within our companies, and our companies are struggling with the challenges of the new economy, the nation states where our companies operate are under immense pressure to build and sustain the fundamental elements of a thriving economic culture. These involve investment in several major areas: education – to ensure the availability of a skilled workforce; immigration – to reach across the world for the best minds; infrastructure – to provide the basic services for your family and your company to operate effectively and efficiently including clean air and water, health care, transportation; rules and regulations – to provide an environment of fairness; research and development – to continue to innovate and create; business development – to coordinate education and training with the jobs that are needed for a thriving economy; and community development – to build and sustain healthy communities including integration of all of the abovementioned elements. In the developed nations of the world, investment in these fundamentals has fallen drasticallyiii. Projects are emerging at every turn to build, rebuild and advance these fundamental elements of a thriving society. The result is constant change and immense complexity for individuals, families, companies, communities, states and nations.
Exhibit 2.0 – The 21st Century Challenges us to Change
The Onslaught of Complexity
All of these forces are influenced by the unrelenting change and unprecedented complexity that exists at all levels, globally, nationally, locally, and within projects. With complexity comes dynamic, unpredictable, adaptive change. Since projects are complex adaptive systems operating within a complex environment, typical plan-based project and requirements management practices are insufficient when attempting to bring about speed and innovation in the face of complexity. Since we are in a new, technology-driven world, virtually all business projects are now dependent on information technology (IT), and all companies are technology companies. And new technologies are complex by their very nature.
Breakthrough Practices for the 21st Century
So what does all this have to do with risk? The root cause of our dismal project performance is twofold, gaps in two breakthrough practices, value-based Enterprise Business Analysis so that we make decisions based on value, and innovation-based Complex Project Management so that we manage and leverage complexity. Both of these relatively new disciplines are emerging to address our 21st-century project challenges. In other publications, this author has delved into enterprise business analysisiv. In this chapter, we define the need for and a repeatable, easy-to-use implement approach for building a breakthrough complex project management practice within your organization.
Business managers, project managers, and business analysts must and will become visionaries, innovators, strategists, and transformational leaders, executing strategy through project outcomes. Successful business teams will learn how to embrace organizational values, empower their teams to thrive, bring customers into the change process, and drive innovation through collaboration, creativity, design principles, and global partnerships. Don’t blink, or you may miss out on this exciting business experiment.
Project Management is becoming a dynamic, self-improving discipline to meet the energizing new challenges and opportunities ahead. We need to change the way we do projects to achieve faster time to market and deliver innovative solutions that add value to the customer and wealth to the organization. Only then will we be contributing to a sustained competitive advantage for our organizations.
Traditional project jobs are going away and are not coming back. Tools are growing up, and typical project tasks are being automated and commoditized. Instead of being regarded as project managers, business analysts, or technologists, individuals are being sought out to focus on strategy, value, creativity, innovation, complexity – in a word, leadership.
Complexity is a concept that is difficult to define. You sort of know it when you see it. Some say complexity is the opposite of simplicity; others say complicated is the opposite of simple, while complex is the opposite of independent. A complex structure is said to use interwoven components that introduce mutual dependencies and produce more than a sum of their parts. In today’s systems, this is the difference between a myriad of connecting “stovepipes” and an effective set of “integrated” solutionsv. A complex system can also be described as one in which there are multiple interactions between many different components . In the context of a design that is difficult to understand or implement, complexity is the quality of being intricate and compoundedvii.
Complexity is everywhere. 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 government enterprises are significantly more complex than in the past; and the projects that implement new solutions are more complex. Huge cost and schedule overruns are commonplace. To reap the rewards of significant, large-scale business/technology change projects designed to not only keep organizations in the game but make them a major player, we must find new ways to manage project complexity.
There are many different ways projects can become both complicated and complex. The business problem might be difficult to define. The solution may be elusive and difficult to determine, describe, visualize or grasp. Business boundaries might be unclear. Business process relationships are likely to be non-linear and contain multiple feedback loops. Today’s complex business systems will change constantly, and therefore need to be dynamic, adaptive, and flexible. Some business systems are nested; i.e., the components of the system may themselves be complex. There are a number of dimensions of project complexity, including team size and composition, project duration, schedule, cost and scope flexibility, clarity of the problem and solution, stability of requirements, strategic importance, level of organizational change, inter-project dependencies, political sensitivity, and unproven technology.
Managing Project Complexity – A New Model
The Project Complexity Model presented here is used to evaluate project size, complexity, and risk and determine the specific dimensions of complexity that are present on a project. The project complexity model describes the project characteristics in terms of complexity dimensions for projects that are (1) small, independent, and low risk, (2) medium-sized with moderate complexity and risk, (3) large, with high complexity and risk, and (4) breakthrough innovative initiatives employing concepts and engineering techniques that have never been used. Note: characteristics for each level of complexity may be customized for a specific industry, sector, or other variables.
Exhibit 3.0 – Project Complexity ModeNote: if you would like a copy of the project complexity model, please request by emailing the author at [email protected].
i. Hastie, Shane and Wojewoda, Stephane (2015). Standish Group 2015 Chaos Report – Q&A with Jennifer Lynch. ONLINE AT: https://www.infoq.com/articles/standish-chaos-2015, (ACCESSED JULY 2015).
ii. Sessions, Roger (2009). The IT Complexity Crisis: Danger and Opportunity. Online at: http://simplearchitectures.blogspot.com/2009/11/it-complexity-crisis-danger-and.html, (ACCESSED JULY 2015).
iii. FRIEDMAN, THOMAS, MEET THE PRESS, (SEPTEMBER 4, 2011) ONLINE AT: HTTP://WWW.NBCNEWS.COM/VIDEO/MEET-THE-PRESS/44391320#44391320, (ACCESSED JANUARY 2014).
iv. Hass, Kathleen (2011). The Enterprise Business Analyst, Developing Creative Solutions to Complex Business Problems. Vienna, VA: Management Concepts, Inc.
v. Lissack, Michael R., Roos, Johan. (2002) The Next Common Sense, The e-Manager’s Guide to Mastering Complexity. London, UK: Nicholas Brealey Publishing.
vi. Rind, D. (2 April 1999), Complexity and Climate, Science Magazine, Complex Systems Special Issue, 2 April 1999: Vol. 284. no. 5411, pp. 105 – 107.
vii. Alawneh, Luay, Debbabi, Jarraya, Yosr, Soeanu, Andrei, Hassayne, Fawzi. A Unified Approach for Verification and Validation of Systems and Software Engineering Models, 13th Annual IEEE International Symposium and Workshop on Engineering of Computer Based Systems (ECBS’06) pp. 409-418.