Defining Complex Projects

There has been a lot written about ‘complex project management’ over the last few years much of which as confused projects with programs, complexity with big and complexity with complicated technology. For an overview of complexity theory see: A Simple View of ‘Complexity’ in Project Management.

A sentence in the paper ‘Translation and Convergence in Projects: An Organisational Perspective on Project Success’ (Project Management Journal, Sept.2011) triggered this post and sums up project complexity nicely: “The key difficulty with complex projects is that those managing them will often be ‘feeling their way’ towards a solution rather then following a reliable blueprint or project plan”.

Our view has consistently been that complexity is a function of complexity theory and it is a dimension of every project and program. This means every project has a degree of complexity in the same way that it has a defined size, a degree of technical difficulty and a degree of uncertainty, and all 4 dimensions interact and affect each other.  These four dimensions are discussed in the White Paper at: http://www.mosaicprojects.com.au/WhitePapers/WP1072_Project_Size.pdf.

What the thought from the paper above highlighted is the very close linkage between complexity which we see as being primarily a function of the project’s stakeholder community and the degree of uncertainty associated with the project outcome. The blog post, Projects aren’t projects – Typology outlines one way of measuring uncertainty based on a model by Eddie Obeng.

I’m not sure how to measure this empirically yet, but I do have a feeling there is a need to define a measurement system that incorporates the type of uncertainty within the overall matrix of stakeholder engagement and supportiveness already embedded in the Stakeholder Circle® methodology  – any thoughts will be appreciated.

The rise of Stakeholders

Google have released a fascinating tool to analyse the data in some 5 million books scanned as part of their ‘Google Books’ project.

There have been some 129 million books published since the invention of printing, so-far Google have scanned 15 million of these and the researchers have selected 5 million books that have a sufficient level of quality to be useful. The information in these books has been digitised and the contents made accessible as data through the Google Ngram Viewer (see: http://books.google.com/ngrams/). The tool effectively maps the rise of social phenomena by plotting the number of times a work or phrase is used in books published in any particular year. To compensate for the growth in the number of books published year-on-year, the data is normalised. For more on this see: http://www.ted.com/talks/what_we_learned_from_5_million_books.html

Using the Ngram Viewer, the rise of ‘Stakeholders’ from a pure legal/gambling term (the neutral party who holds the ‘stakes’ during a game of chance or similar) to its current status is amazing. Pre 1970 there is a continual low-level reference primarily in legal books dealing with disputes over various ‘stakes’. Through the 1980s the focus shifted to corporate stakeholders (ie, shareholders and others). From the 1990s on the term has had an increasingly wider use.

The Stakeholder Ngram Plot

It is fascinating to see this data supporting the analysis of the history of stakeholders contained in my first book Stakeholder Relationship Management: A Maturity Model for Organisational Implementation (soon to be in its 2nd Edition – see: http://www.mosaicprojects.com.au/Book_Sales.html#Book_Bourne)

I have a feeling the Google Ngram Viewer will become an increasingly useful research tool, particularly as the raw data can be downloaded for independent analysis.

Stakeholder Analysis is key for project success!!

The September edition of All PM Today, the IIL Newsletter (see: www.allpm.com) in its monthly poll posed the question “Stakeholder analysis is a key factor for project success?” The answer was an overwhelming ‘yes’. The results published today (October edition) are:

Stakeholder analysis is a key factor for project success
a) For all projects regardless of size – 95.41 %
b) Only for mission critical projects – 0 %
c) Only for projects that are politically sensitive – 3.67 %
d) Stakeholder analysis is minimally important – 0.92 %

Compared to the level of interest a year or so back, we are seeing similar trends in enquiries about the Stakeholder Circle® – maybe at last the vast majority of PMs are recognising that project success is directly associated with fulfilling stakeholder expectations. The 1% who voted ‘no’ may find my paper Avoiding the successful failure! helpful.

Stakeholder Management Thesis

My original thesis has recently been published as a book by Lambert Academic Publishing AG & Co (www.lappublishing.com).

Details of the book are:
Project Relationship Management and the Stakeholder Circle [Paperback]
ISBN-13: 978-3838398167
Available from Amazon at: http://www.amazon.com/Project-Relationship-Management-Stakeholder-Circle/dp/3838398165/ref=sr_1_1?s=books&ie=UTF8&qid=1282809735&sr=1-1

The research described in my thesis underpins the Stakeholder Circle methodology and tools which led to the publication of Stakeholder Relationship Management: A Maturity Model for Organisational Implementation and the SRMM maturity model available from Gower Publishing at http://www.gowerpub.com/isbn/9780566088643

PMO Survival

Research by Dr. Brian Hobbs, University of Quebec at Montreal, Quebec, Canada published in a White Paper prepared for the Project Management Institute (PMI) highlights the precarious existence of the majority of Project Management Offices (PMOs). Approximately half of the PMO’s in existence are seeing their relevance or very existence questioned.

Whilst PMOs have been popular since the middle to late 1990’s and new PMOs are being created at a relatively high rate; PMOs are also being shut down or radically reconfigured at a similar rate. As shown in the figure below most PMOs in existence today are rather recent creations. The sample suggests more than half the PMOs in existence today (54%) were created in the last two years and only 17% have been in existence for more than five years.

This data suggests a PMO often has only a short time to demonstrate its ability to fit into the organisations culture and create value before it is restructured or closed down. We have looked at some of the issues and challenges associated with PMOs in a Mosaic White Paper ‘PMOs’.

Based on years of observation, the key to achieving an effective start up for a PMO has more to do with the PMO’s management being able to effectively manage their key stakeholders, particularly in the executive suites than any methodology or reporting processes the PMO may import or develop. For more on this see the numerous papers we have published [paper listing]. The key message is technical competence is never going to be enough to justify the existence of a PMO.

Cost Management is an Oxymoron!

Cost performance is a symptom of other management functions. It is impossible to ‘manage costs’. The only way to change cost outcomes is to change the other processes that incur costs.

The three key areas of business operations and project management that incur costs and where a change in the process will cause a change in costs are:

1. Changing the procurement / purchasing / supply chain processes that acquire the required inputs to the process being managed.
2. Changing the way the work that transforms inputs to outputs is undertaken through enhanced management and leadership including skilling, motivating and directing the people involved in the work and ensuring they have the correct resources and equipment to undertake the work.
3. Focusing on the quality of the outputs produces to ensure the ‘right scope’ has been delivered at the ‘correct quality’. Too low and there are cost consequences in rectification, too high and you may have spent money unnecessarily.

These three elements exist in a risk frame. Whilst risk management will not ‘control’ the future, it will allow opportunities to be identified and grasped and threats mitigated and avoided by changing the way the work is undertaken and as a consequence optimise cost outcomes.

The two key facets that permeate all of the above are stakeholder management and time management.

• Stakeholder management both within the team and externally, (including effective communication) is central to achieving a successful outcome at the best price. Stakeholders are in the supply chain, include the project team and contractors and can have a major impact on the risk profile of the work. For more posts on stakeholder management see: https://stakeholdermanagement.wordpress.com/category/stakeholder-management/
• Time management focuses on ensuring the right people are in the right place at the right time, with the right resources and equipment to do the work in the optimum sequence. For more posts on time management see: http://mosaicprojects.wordpress.com/category/project-controls/scheduling-project-controls/

Both of the above need regular reviews and adjustment within the overall frame of the emerging risk profile.

Where ‘cost management’ adds value is via techniques such as Earned Value (EV). Applying EV effectively allows the symptoms of a deviation from the expected performance to be highlighted through Cost Variances and other reports.

As with medicine and diseases, it is capability to recognise and correctly interpret symptoms that allows diagnosis that leads to the effective treatment of the under-laying problem. In project and business management space, this should translate to the requirement for managers not only to report a cost variance, but also to identify the cause of the variance and to recommend and/or implement corrective actions.

Whilst it is impossible to directly manage or control costs; timely and accurate information on cost performance can be a valuable diagnostic tool to remedy the real issues. What’s needed is for senor managers to stop focusing on ‘cost’ and start asking deeper questions about performance and risk. I know many readers of this blog will say this already happens in their organisations, but I also know that far too many other managers focus on the symptom of cost performance rather than the under-laying problem to the detriment of their businesses.

Stakeholders and Risk

One of the interesting similarities between stakeholder management and risk management is the challenge of knowing what we know and more importantly understanding what we don’t or can’t know.

An enduring part of Donald H. Rumsfeld’s legacy will be his somewhat garbled comment at a DoD news briefing in 2002: “as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.” Despite the wide spread ridicule these comments have attracted, Rumsfeld was right!

The challenge in both risk and stakeholder management is to identify the things we don’t know. This is made more important because what we don’t know about key stakeholders may constitute a significant risk to the project or business.

Plotting what we know in terms of our knowledge of the person’s wants expectations and attitudes in one dimension and how aware we are of that knowledge in another offers four possibilities.

The Knowledge / Awareness Matrix

The consequences of the four quadrents are:

• Management Zone: When we are aware of our knowledge proactive management is possible. We know we know and can take appropriate actions. This is where tools such as the Stakeholder Circle® are at their most useful.
• Risk Zone: When we are aware that we don’t know something, we can assess the implications and invest effort as needed. This is the zone traditional risk management works best in and we can use risk management techniques to asses the probable impact of our lack of knowledge and take appropriate actions to mitigate any undesirable consequences.
• Research Zone: We don’t know we have access to knowledge that we could use ‘if we ask the right questions’. This zone is created by amnesia, inexperience and false assumptions (eg, assuming you cannot ask someone a question). Research and experience minimise this quadrant. Facilitated processes such as brainstorming, affinity diagrams and focus groups can help to unlock the knowledge that exists and allow it to be used effectively.
• Reactive Zone: We don’t know we need to know. Particularly with people, there can be many issues problems and opportunities that you are simply unaware of. This area cannot be managed, you have no knowledge you need to be managing something. When issues and opportunities arise you need to be ready to react quickly and there needs to be processes in place to regularly scan the overall stakeholder environment to identify emerging opportunities and issues as early as possible.

Effective stakeholder management is focused on moving all of the key and important stakeholders into the Management Zone. However, you can never be 100% certain you know everything about everyone that matters and need to regularly review the other three quadrants to identify opportunities and minimise issues.

Several thousand years before Rumsfeld, Confucius said: To know that we know what we know and that we do not know what we do not know – that is true knowledge. Given the continually evolving nature of the stakeholder community surrounding any endeavour, achieving true knowledge is always going to be a major challenge.

Stakeholder Relationship Management

In addition to normal bound books, Stakeholder Relationship Management: A Maturity Model for Organisational Implementation, is also available as a Gower eBook. We have just been updated on the first quarter sales for the 150 or so Gower books that are available as eBooks and Stakeholder Relationship Management is the second best-seller for the last quarter.

Gower’s eBook can be purchased in their entirety or you may opt for short term access to the book or access to only one or two chapters. The eBook format currently available is Adobe eBook (pdf). For more information visit the Ashgate/Gower website.

To purchase normal books, see http://www.mosaicprojects.com.au/Book_Sales.html for the options available.

The Central Role of Stakeholder Management

20 years ago, stakeholder management and shareholder/owner management were almost synonymous. In the intervening period, much has changed.

Most enlightened thinkers now place stakeholder management at the centre of effective business operations. The business needs to support, empower and satisfy the people working within the organisation, the general public and customers (now classes as Corporate Social Responsibility or CSR) and the owners of the business. All of these people are stakeholders.

Since the passing of the Sarbanes Oxley Act, organisational governance has become an important focus. For all types of organisation this is directly linked to governing the work of the people engaged in the work of the business; ie, stakeholders.

Since the GFC effective risk management has also become of increasing concern. Risk management is not the foolish attempt to avoid all risk – this is impossible, rather the effective management of risk within the risk tolerance thresholds of key stakeholders including the organisations owners and managers; ie, stakeholders.

Stakeholder Management

As summarised by the diagram above, business operations are intrinsically linked to, and require, effective governance, to meet the expectation of the organisations owners, within acceptable risk parameters to deliver value to society and the organisations clients or customers.

However, whilst stakeholder management is central to all of these processes, effective stakeholder management requires the allocation of scarce management resources to focus on the relationships between the work and the most important stakeholders. At the most fundamental level, the purpose of the Stakeholder Circle® methodology is understand ‘who’s who, and who’s important’ in the stakeholder community surrounding your work.

Once you understand this the effective management of stakeholders becomes possible. However, without the clarity of insight created by the careful analysis of the stakeholder community to determine who is really important the potential for wasted effort is enormous. As with most planning process, the payback from effort expended in analysis, is the reduced incidence of issues and problems as the work proceeds.

Can you afford not to focus some effort on effective stakeholder management?

The PMI Marketplace now selling Stakeholder Relationship Management

PMI has selected Stakeholder Relationship Management: A Maturity Model for Organisational Implementation for its on-line book store and will be promoting the book at the PMI EMEA congress in Milan (10-12 May).

I will be in Milan for the congress to present on ‘The future of the PM Hero’ followed by my SeminarsWorld® workshop ‘The science and art of communicating effectively’.

I will be happy to sign copies of the book for anyone who buys a copy during the congress and look forward to exploring the delights of Italy.