Adaptation and Value Creation for All Projects: An Exploration of Principles

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Categories: PMI, standards


By: Nader K. Rad, PMBOK® Guide-Seventh Edition Development Team member

Once Upon a Time!

There was a policy in one of the companies I used to work for about 20 years ago: “Every procurement activity should be done in the headquarters, rather than in projects’ construction sites”. They believed it was more cost-effective.

One day, I realized that in one of the attempts at cost-effectively purchasing material for covering the joints of concrete sections, the process was so prolonged that the critical concrete work was paused in one of the sites for four days. I was the project planner at that time and I immediately went to the project manager, who simply told me that organizational processes should be respected! I went to the procurement department and realized that we just didn’t speak the same language. So I went back to my desk, called the project site, and asked the technician responsible for that section whether they could buy the material locally. He said they could do it in one hour. The cost? Only about €250 for two weeks’ supply!

I sent them €250 from my own pocket to buy the material and resume work. The company reimbursed me but asked me not to do something like that again, and of course, I kept doing that.

Diagnosis

I’m sure you’re thinking about many problems  in this scenario: They needed a more proactive  project manager, they needed to use “manage  by exception”, etc.

One aspect of the problem was that they cared  about money (which is fine), but not in the  correct way. It’s not only about the money we  spend, but also about the money we [can] gain.  What we want to optimize is not the cost, but the “benefits ÷ cost” ratio – given that we consider all types of benefits, short-term and long-term, and direct and indirect (e.g., reputation, market reach, and knowledge).

Value

This relatively subjective “benefits ÷ cost” ratio is what we usually call business value, or value for short. We can always ask ourselves whether our selected choice is the one that contributes most to the value of the project/product.

Do you consider value in your decisions?

Adaptation

The other problem is that they were not adaptive enough.

When we talk about adaptation, it’s usually about adapting the product of the project to the environment, which is what happens in adaptive (Agile) projects and is very important and interesting. However, that’s not the only type of adaptation; there’s another one that applies to every type of project: adaptation of our delivery and management approach to their environment.

In my example, those problems could have been prevented if proper planning and risk management were in place. However, for some reason, that level didn’t exist. In such a case, when we see that we can’t fix our planning and risk-management system in order to have the ideal procurement method, we need to change our procurement method to adapt to this situation and prevent bigger problems.

Do you stick to your ideal methods or adapt to the environment?

Outcome

Another issue with concrete work in that project was that the concrete was going to be exposed in the final product, and therefore, we needed to do some extra work to make sure the surface was clean enough. One day, someone suggested a simpler way of doing that; according to experienced engineers, the quality was much lower, but it was a lot faster and less expensive. So we decided to experiment with something!

The project was for building a central library in a university, and we had access to thousands of end-users! We offered €30 to any student who wanted to join our experiment, and we picked the first 100 volunteers. We had two walls finished, one with each of the two methods, and we asked the students to tell us which one was better. In the end, we found no significant difference in the number of votes for the two methods, and we concluded that the new method was as good as the old one for our end-users, and so we decided to proceed with it.

It happens a lot: Either we spend too much money on an element of the product that doesn’t make any difference for the end-users, or we make it in a way that doesn’t satisfy them.

Isn’t it a good idea to focus on outcomes before outputs and activities?

Conclusion

It doesn’t matter what type of project we have; it seems like we can always ask these three questions in our activities and decision-making process:

  • How does it impact the value of the project/product?
  • What impact does it have on the outcomes?
  • Am I adapting to my environment, or just trying to force my ideals?

If these have the potential to help us in all or most projects, then maybe we’re talking about principles for running projects! Perhaps those principles could be summarized as:

  • Continually evaluate project alignment to business objectives and intended value
  • Utilize capabilities and learning throughout the life cycle to change, recover, and advance
Posted by Marjorie Anderson on: September 24, 2019 10:06 AM | Permalink

Comments (11)

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Good points, but in reality this happens in several company's. Thanks for sharing.

Very Informative and Useful Points in The Post.. Thanks for sharing..

Thank you for sharing. The key point is: value is subjective and has to be transformed in something objective. We discusse the definition a lot when I was part of the group of authors of BRM standard (I was there in the begining of the process). To define value you have to define client and quality first, mainly the first one.

Sorry Nader but I remain a skeptic about this approach. How does "Adaptation" or "Value Creation" apply uniquely to PROJECTS?

Doesn't it apply equally to Operations? Or "Business as Usual"?

IF you want to focus on PRINCIPLES, then why not focus on WHY, after 6000 years of experience in construction, entertainment and new product development, that projects STILL fail with such alarming regularity?

THAT is a worthy "value-added" contribution but simply stating fundamental truths that apply to management, in general, is going to get you nowhere.

Here is a bit more elaboration on this topic along with specific, actionable items- https://is DOT gd/25jw1B

BR,
Dr. PDG, Jakarta

Nader K. Rad before you go running off and try to reinvent the wheel, why not do what is expected of ANY graduate student writing their thesis and conduct a thorough LITERATURE REVIEW?

What is it George Santayana told us? Something about those who fail to learn from history are doomed to repeat it? Unfortunately, PMI has given us PLENTY of evidence of having done that (i.e. Walt Lipske and Earned Schedule?, Single dimension WBS structures? US DoD application of EVM?)

Have you investigated the PRINCIPLES espoused by Henry Fayol, whom I consider to be one of the Fathers of Modern Project Management with his 14 principles of management and his 5 roles and responsibilities? https://is DOT gd/y2MckM

Or how about Clarence "Kelly" Johnson of SKunkworks fame with his 14 rules? https://is DOT gd/iI5ggi

And don't forget Demming's 14 Total Quality Management points- https://is DOT gd/JOestr Surely those apply to project management?

There is plenty of evidence that the entertainment, construction, and new product development sectors have been "initiating, planning, executing, controlling and closing" projects for 6000 years. And during that time SURELY we have learned or should have learned the process as well as the tools & techniques?

And while you and your team are doing your Literature Review don't forget to include principles showing HOW or WHY projects fail, having been identified and documented by Glenn Butts (NASA) over 10 years ago https://is DOT gd/Mzo3rz and Bent Flyvbjerg (Oxford) http://bit DOT ly/2wDnh4e; http://bit DOT ly/2eEugA2 and http://bit DOT ly/1ly0JDu and to add a new reference- EC Harris/Arcadis Annual Construction Dispute Review- https://is DOT gd/giiuW8

These are all "root cause" problems that any book on PRINCIPLES is going to need to address if you expect it to have ANY credibility at all.

And don't forget to include the research done by Drucker https://www.leadershipnow.com/leadingblog/2012/03/8_essential_principles_of_effe.html and https://is.gd/yEffSd and https://is.gd/pTjJOh as well as the theories and philosophies of Mintzberg. https://is DOT gd/HDGtYP

Honestly, I believe you have your hands full just doing a complete Literature Review before you go publishing papers showing what you think you have discovered.

And I have only touched on the really big names. Haven't even begun to look at the work done by application-specific researchers, especially those in construction, entertainment and new product development as those are by far the most "mature" users of the project management processes.

BR,
Dr. PDG, Jakarta

Well, i would not comment on the value as value is an entity within the organization and a project is within an organization, its difficult to do value changes within the project.
Its dangerous yo fo execution as one in rhe case study. I cant imagine if every project manager or its team within an organization run their project without obey to the organization rules. Its against the rule means it has problem with governance. If this case happens in the governmental project Its easy to be find nongovernance business cases.

The proper detail plan and its scenario to achieve the plan should be developed properly inthe project plan. Use’ risk sharing partner’ approach for supply chain to maintain cost time vs quality, or sky line chart to

Manage supply chain much better and much more adaptive. (sorry for many typo in my previous posting)

Nader, I do not fully agree with your opinion. Because this is for PMBOK 7ed, I think there isn't enough data to draw conclusions from just one project case.

Besides that, I have a comment about your project case:
1. Violating procurement procedures is not a good example of adapting to the environment. Agile manifesto said "Individuals and interactions over processes and tools" but it doesn't mean that we can break the agreed process or policy. You've made an iteraction with procument but it is not final because they disagreed with your action.

2. We cannot adapt by lowering the quality even if we can give no-different outcomes. Any changes should get approval from the project sponsor or product owner (not from the end user survey).

Even though we can agree on the priciples, incorrect method of drawing conclusions will reduce the validity of the principles itself.

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