By Fernando Ladeira, FALCONI Partner
Projects are means to achieve a specific objective in a finite period. They have to do with changes in perspective and with the generation of unique products or services. Projects are conducted to launch satellites into space, to perform rock concerts, to develop a new mobile phone model, to restructure the commercial area of a company or to build a new paper mill.
In a scenario of major technological changes, with the need for more challenging goals and the growing demand for new products and services, the number of projects is increasingly higher. Thus, Project Management becomes highly relevant. In 2008, there were about 270 thousand professionals certified by the Project Management Institute (PMI) in project management (PMP stands for Project Management Professional). In 2015, this number reached an impressive mark of 700 thousand, that is, two and a half times higher. In addition to the increasing quantity, it is possible to notice that it has spread all over the world. In 1997, 93% of certified professionals were in North America, in 2015, only 48%.
We have been watching two trends in those years of growth of Project Management: the rise of an endless novelty and the use “with no filter” of a relevant set of best practices and broad application, the Project Management Body of Knowledge (PMBoK) (1). New software for corporate project management, agile methodologies, and use of big data for risk estimates, as well as critical current, among other tools and methods that have emerged. In parallel, a platform (PMBoK) developed from the experience in managing very complex projects tends to be used in full, while it should be a reference.
Most projects conducted by the companies do not require such sophistication, given that they are not as complex. Complex projects are characterized by uncertainty, ambiguity, dynamic interfaces, and significant political and external influences. Usually, they are developed in a span of time that exceeds the cycle of technologies involved (2) – that is, you can always discover something new, new events can arise and there is strong external influence.
Several times, we are called to “improve project management” of companies, and more often than not our first recommendation is: “Stop doing a couple things that you do; take less medication and drink more water”. Then, the question: “What is essential”? In our experience, we believe that three key aspects for effective project management are related to the origin and choice of projects, to people organization and to the management process.
Projects are means. Do not lose focus on the purpose.
If projects are means, they cannot exist alone. Therefore, the definition of the goal of a project is more important than its object, that is, what it will be done for, instead of what will be done. What are the expected benefits in the execution of a certain project?
The document used to answer this question, highly underestimated is called “business plan”. Its sophistication varies according to the amount of resources to be used and according to the project’s complexity. A well-prepared business plan must state clearly the benefits that will be obtained throughout the project implementation and the necessary resources for that – or, in extreme cases, make it clear that the project should not exist, because it is not justified from the technical-economic point of view.
Good viability studies allow comparing options. There are several ways to fulfill an objective. A company may grow, for example, by expanding their production lines, exploring new markets or acquiring competitors. What is the best option? We can only answer this question if we have elements that show us the costs, benefits and risks of each one. Good choices depend on the quality of information, and it helps us in avoiding wasting time, money and human resources with the wrong projects.
Throughout projects implementation, we should periodically check not only aspects such as schedule, cost, scope and risks. Those variables ensure good delivery of the means; however, more than that, we must verify whether the expected benefits are still feasible. Business plans are not meant to be in a drawer.
Conducting projects demands specific organization of people
The companies may be rated into three types according to their revenue source. Project-oriented (profit generated by the execution of projects, e.g. construction companies); non-project-oriented (results associated to production and products with a life cycle, e.g. paper and cellulose); and hybrid ones (primarily process-oriented, but with several projects, with emphasis on new product development, e.g. Telecom). The way people are organized and demanded depends heavily on this classification.
Hybrid companies and non-project oriented do not naturally have a suitable structure to conduct projects and need a good governance system (3) that coexists with the formal structure. This might be the most difficult aspect because it demands decisions related to power, non-formal hierarchy and level of exposure to conflict. The question to be answered, though, should be clear: “What is the most appropriate arrangement (4) to deliver the projects’ expected results with the minimum noise level possible”?
Project management should be simple and disciplined
The project management process is divided into two sub processes: planning and control. Time saved in planning is time saved in the execution. True – but beware of exaggerations! One of the major faults that we have been observing is the imbalance between the effort put in the planning and the lack of discipline in course monitoring and correction throughout the project. Projects are unique efforts. Therefore, there will be issues. In addition, the broad majority of projects is not complex. Then, why do we have project plans with pages and pages and no one uses them?
On the other hand, why choose to believe that the plan is perfect and overlook the need for verification and correction of the project course? We all love to plan, but we do not like to be pressured for results. The role of project “controller” should be carried out by the Projects’ Office. We have seen that the Projects’ Offices have given a good support to the managers in the design of their plans, but without fulfilling the role of “playing the bass drum”. Perfect plan designs do not exist and good plan designs need to be redesigned from time to time.
Those three aspects are being observed by some companies successfully. A company in the paper and pulp segment, for example, managed to reduce the average delay of their investment portfolio of about 40% to 10% (5) over five years. As well as this company, the ones that know how to put aside fads and exaggeration and identify what is really essential to the result will be successful.
(1). The guide for the set of knowledge in project management (PMBoK) is a recognized standard for the project management profession. A standard is a formal document that describes regulations, methods, processes and established practices. Just like other professions such as law, medicine and accounting, the knowledge contained in this standard has evolved from the recognized best practice of project management professionals who contributed to its development.
(2). Stephen Hayes – Introduction to Complex Projects– 10th International Workshop in PM – Lille (France) – 2010.
(3). It is considered that good governance exists in a certain scenario when the right decisions are made at the right time, by the right person, producing the right and expected results. (ADAMS, S. Governança: chegou a hora de desmistificar o conceito).
(4). Roles, responsibilities, authority, incentive mechanisms, etc.
(5). Medical portfolio in the order of 70 projects and dozens of millions in BRL per year.
Published in the May issue of O Papel magazine.