People, Planet, Profits & Projects

Conflict as an engine for innovation.  What a concept.  We often think of conflict as bad.  Agree or disagree with President Obama’s State of the Union speech (here is the full text), it’s clear that he touched on this topic last night - mentioning conflict and innovation and even linking the two at times. 
 

Here's some of what he said:

A better politics doesn’t mean we have to agree on everything. This is a big country, with different regions and attitudes and interests. That’s one of our strengths, too. Our Founders distributed power between states and branches of government, and expected us to argue, just as they did, over the size and shape of government, over commerce and foreign relations, over the meaning of liberty and the imperatives of security.

To our point, we want to start off by entertaining you.  Have a look at this short, stupendous presentation of a popular classical piece (“Summer” from “The Four Seasons” of Antonio Vivaldi).
 

What these fantastic artists have done is to embody conflict, at the start of the performance.  Individuals are staking their territories.  Musical ideas are almost literally set down like a gauntlet, or a threat.  But as the performance (the project) unfolds, we can see that the conflict is driving new ideas, innovation, and eventually, some pretty incredible collaboration.

We see that as an important lesson for project managers.  We’re not saying that you need to learn to play the piano or cello upside down (these women do both of that in the video – go ON, watch it!), what we want you to take away is that conflict is not necessarily a bad thing, especially when it comes to innovating.  

Sometimes conflict arises on projects when the concept of sustainability – perhaps in the form of thinking about the environmental effects of the project or its product is introduced to a PM or to a project team that is cynical about its benefit.  We get that.  No matter which side you’re on, think about this little musical expression of conflict.   Is there a way to harness the ‘argument’ to drive innovation?  Is there a way to make some beautiful music from the apparent dissonance of disagreement?  We assert that the answer is yes.  But you need to give it a chance.

Play the video for your team.  Who knows?  Maybe you’ll end up with a symphonic result!

We  close with these words from the State of the Union Address:  [bracketed words are our own]:

[Our project] grinds to a halt without a willingness to compromise; or when even basic facts are contested, and we listen only to those who agree with us. Our [project communication] withers when only the most extreme voices get attention. Most of all, [project teams] break down when the average [team member]  feels their voice doesn’t matter; that the system is rigged in favor of the rich or the powerful or [a particular stakeholder].

Here at People, Planet, Profits, and Projects, we have been promoting the importance of integrating long-term thinking, sustainability, “green”, and strategy – into your projects for at least seven years.  Two books (Green Project Management, and Driving Project, Program, and Portfolio Success) and all these years later, it’s very reassuring to see these aspects of PM on the “hot list”.  This article from CIO magazine by Moira Alexander, PMP, features the “5 Trends That Will Transform Project Management”, and these aspects explicitly come out in not one, but two of the trends.  Let’s have a look.

In Trend 1, “The laser focus on strategy over progress”, we see the elevation of strategy and cross-project, long-term thinking as being key.  This is in line with the idea of benefits realization versus simple project metrics, and as you’ll see below, is also very connected to Trend 3 – in which companies (and therefore projects!) had better align themselves with social responsibility and environmental accountability.  Here’s an extract of Trend 1:

"Trend 1: The laser-focus on strategy over projects

Competition, limited resources, internal and external environmental factors, time and budgetary constraints, are increasingly impacting businesses. Leaders will need to transform their PMOs or project management teams to focus all efforts around reaching business goals. 
…
It may also serve the business better if individuals are selected for goal-centric projects based on their high-value core strengths in relation to business requirements, instead of selecting project team members in the traditional style of departmental representation. Taking this laser focus approach to strategy over projects can optimize resource, time and budgetary use."

In summary, it’s important that project managers are not sub-optimizing their projects to accomplish goals that are perhaps aligned with a smaller business unit’s goals but are not connected to the corporate strategy.  And because organizations are increasingly including the social and environmental elements in their annual report and strategy (see below), projects need to increasingly check their goals to look for that “golden thread”.

Here’s an extract of Trend 3:

Trend 3: The increased need for accountability and social responsibility 

With the whole world watching, businesses can no longer conduct themselves in anonymity, while  
People and businesses want to do business with companies that provide transparency, offer visibility and conduct themselves in ways that are ethical, socially responsible and accountable. Projects are no exception.
Safeguards should be identified and implemented to ensure accountability is at the forefront to protect stakeholders, clients and the general public as it applies to the project activities and outcomes. Ultimately these factors do have the power to directly or indirectly influence the bottom line. giving no thought to social or environmental factors.  

Note the important reference here to the word “outcome”.  More than ever, we assert (and the trend says!) project managers should be “thinking through” the long-term application/use of the product of the project and not just the handover and pizza party.  Success should be thought of not only as accomplishing scope, time, and budgetary goals, but (and yes, this does take time and patience) whether or not the project outcome yields the expected benefit it was meant to provide.  That benefit should also be thought of in terms of economic, social, and environmental outcomes.  So, and we know you don’t like to hear this, but if a project is done on time, within budget, and meets all requirements, it’s still not really a success if, for example, one of the side effects of the factory expansion project is that the system is leaking poisons into local streams.- or if the coffeemaker’s steady-state use generates millions (or billions!) of non-recyclable plastic cups.  On the plus side, there are examples of projects in which the outcome reduces energy use or waste, or provides an improvement in the quality of life for the local population.  These minuses and pluses should not be parenthetical discoveries but rather part of the planning of the project, combining 2 of these 5 transformational trends. 

Imagine, just by doing this you are grabbing yourself 40% of the trendiest and important project management trends for 2016!  What a great New Year’s Resolution!
 

Sure, it sounds like a great name for an edgy punk band.  Or not.  But rest assured, it’s just the name of our blog post, for reasons which will make themselves clear presently.

Recently, on our companion blog site we posted a story about an editorial by George Will who wrote about the fact that sometimes (and he’s right here) folks with a message about sustainability can be a bit… preachy.   You can read that post here – our main point there was not to disagree with Will about the preachiness, but rather to take issue with the way he denigrated sustainability as a subject, by putting it in quotes and generally denying any possibility that the science was right – or even that science matters at all.

 The very next day, Will’s editorial appeared literally directly next to an editorial in the Cape Cod Times which we’ll quote from below.

There was simply too much karma here (irony intended).  The story next to Will’s was about how the Pope will be taking action in terms of an upcoming Encyclical which will deal quite directly with Climate Change from the Vatican’s perspective.  Why does this matter to project, program, and portfolio managers?  Well, when 1 billion Catholics are getting advice from their leader, it’s a bit of a game-changer.  These people, this belief system – it is likely threaded through your stakeholders, whether they be stakeholder individuals or stakeholder organizations.  And since stakeholders have influence, interest, and attitudes towards your project(s), it pays to understand the underlying context from which they are driven, and from which they’re basing decisions.

Actually, we think it would behoove you to read both editorial pieces together to see just how diametrically opposed viewpoints can be on this topic.

That said, here is the first piece of this editorial piece, which was entitled "Climate Action":

"Vatican poised to challenge religious, political leaders

Pope Francis is poised to call on all Catholics — more than a billion of them — and political and religious leaders around the world to take climate action.    The Vatican is set to host a major conference on climate change this month that will feature leading researchers on global warming and an opening address by U.N. Secretary-General Ban Ki-moon.

The meeting is another sign of Pope Francis’ “green agenda” and another potential red flag for far-right conservatives who are already alarmed over an expected papal teaching document on the environment that is scheduled for release this summer."

By now we hope you agree that wherever you stand – religiously, politically, and demographically – the fact that there is significant information transfer that involves the UN Secretary-General and the Pope, and at least one billion people – is good to know.  We are not saying that you must agree, just that it is good to know.

It’s not just Catholics, by the way:

The one-day summit on April 28 will also include participants from major world religions and aims to “elevate the debate on the moral dimensions of protecting the environment in advance of the papal encyclical,” as the papal document is known.

The pope is looking at the Bible’s mandate to “subdue the earth” in terms of stewardship and sustainability, in contrast to the rapacious exploitation of fossil fuels executed by the most profitable companies in history.     The Catholic Church has embraced the issue of climate change as a moral and social justice issue, giving voice to what should be hollered day in, day out: Our consumption-based economy of global trade, travel and transit is reliant on fossil fuels, and the energy giants that enable it are serving a very small group and punishing the rest of the planet … and in the end, no one will profit.

Stanford researcher Mark Jacobson is quoted in Naomi Klein’s 2014 book, “This Changes Everything: Capitalism vs. The Climate”:

“This really involves a large-scale transformation. It would require an effort comparable to the Apollo moon project or constructing the interstate highway system. But it is possible, without even having to go to new technologies. We really need to just decide collectively that this is the direction we want to head as a society.”

Again, we’re not asking you to agree.  But we think you should agree that the transition of which they speak is going to involve many of us as project managers – quite directly in some cases, as new projects and programs (and even portfolios) will be launched.  However, there will also be just as large, if not larger, of an indirect effect because of the not-so-subtle shift that this will create in existing and planned projects that have nothing to do (apparently, anyway) with sustainability.  Certainly, as we started off the post, it should cause you to step back and reappraise your stakeholder set.

The editorial from the Cape Cod Times ends with this piece (note the stress on long-term decision making):

"We like to argue that China and India should account for their emissions, but can we be so blind as to ignore for whom their factories are running? It is for our appetite as well as theirs -- we in the world's largest markets in Europe and North America.  Too many of our energy decisions are made based on current market conditions rather than long-term solutions.

It is our hope that Pope Francis’ anticipated encyclical to the world’s 5,000 bishops and 400,000 priests will offer practical things that anyone, not just a billion-plus Catholics, can do: reducing demand for power, and for goods that come from across the planet; shifting taxes from fossil fuel subsidies to public transportation subsidies.  The Pope is right. It is a moral and social justice issue. And action is needed now, not only from policy makers and corporate executives, but from each of us responsible to one another for the future survival of our world."

We hope you agree.  Not necessarily with Pope Francis, nor with George Will.  But rather, we hope you agree with us.  That is, we hope you agree that it makes sense to look at sustainability in a new light – that of an influencer of your stakeholders, who in turn, are going to influence your projects, like it or not.

Okay – that’s enough preaching from us, at least for today.

As project managers we are mightily aware of the fact that our Monitoring and Controlling processes look at the difference between planned (forecasted) and actual results.  We watch, for example, how a vendor actually delivers compared to what they said they’d deliver, and if it’s different – either better or worse – that difference is a variance.  We’re of course very focused on what that variance means in terms of our project deliverables.

Let’s kick it up a level.  In fact, let’s kick it all the way up to the planetary level.  That certainly is a move from project to portfolio level if ever there was one.

In a recent article in Scientific American (May 2015 – Waves of Destruction), the story is one that begins with seasickness – in this case a risk trigger that had oceanographer Jim Thompson realizing that larger-than expected waves were a root cause.

And the root cause of the large waves?  Well, let’s go back to variance.  Remember – that’s planned or forecasted versus actual.  Artic simulations from the Intergovernmental Panel on Climate Change- the very organization often accused of overestimating the effects of climate change, ice melt, and global warming, were not predicting ENOUGH ‘ice retreats’.  The decline in arctic ice is outpacing most of the models.  The variance is there.  Why?

We created the drawing below based on the effects identified in the article.

Notice a couple of things about this cycle, whether you believe in the science or not, and even if we got the cycle incorrectly:

·         There are significant interdependencies between ocean currents, air currents, presence and absence of ice, and strength of waves

·         If there are to be changes in the amount of sea ice, it will have effects not only on the arctic but also those which are geo-political and military (new drilling areas, changes in how nations can ‘reach’ each other by sea.

So what’s our point?

Well. For one thing, it cannot hurt to have some scientific background around what’s going on relative to our planet.  You don’t have to agree, but making yourself aware of the research is a good thing.  We suggest that you have a look at this article and the references that it in turn makes available.  I suppose that’s not as much a point as a ‘point of order’.

Next, our point is to look for overarching variance.  Just as we coach our PM students to look for overarching risk (see the video below, which has an ironic connection to ice, about overarching risk), we think you can look for overarching variances – things that will affect many of your projects, for which you may want to set aside management reserves.  As we seem to be dealing with larger and more extreme weather, for example, this idea of overarching variance may unfortunately require that skill and capability more and more often.

One of the toughest things to convey to those who study the PMBOK® Guide is the focus that PMI has on risk – a bifurcated focus that says “risk is not just a bad thing… it’s good and bad… we call the good risk opportunity and the bad risk threat”.  Well, those aren’t the exact words, but it’s the thinking behind this idea of a split-personality of risk.

Since this blog is focused on the “planet”, we decided to tackle the issue of regulations in China with respect to pollution, and how this may affect decisions made at the portfolio level of your organization.

We start with an astounding fact, courtesy of a very recent story in China Daily.

In brief, it says,

“Chronic air pollution and unclear regulations are the major obstacles for most of the United States-based companies operating in China, a survey said on Wednesday.

Of the 477 companies that participated in the annual business climate survey conducted by the American Chamber of Commerce in China, 53 percent said that they experienced difficulties in hiring senior executives to work in China because of the country's chronic air pollution.

This is the first time that air pollution has been cited as a reason by most of the companies that have participated in the survey's 17-year history.”

And of course, it’s not just an inability to hire senior executives that is of concern to China.  Disturbingly, air quality in the country’s cities is so bad, that a very active twitter feed, @BeijingAir, tracks air quality in China’s capital city on a daily basis.  A similar Twitter feed does the same for Shanghai - @CGShanghaiair (example below):

China is doing something about this.  In this story from Reuters, we see that in 2014:

“(China passed) amendments to an environmental protection law imposing tougher penalties on polluters in the most sweeping revisions to the law in 25 years amid mounting public anger over pollution.

The much-anticipated amendments follow a two-year debate among scholars, the government and state-owned enterprises over changes to the environmental protection law.

The amendments enshrine environmental protection as the overriding priority of the government, but fall short of calls by non-governmental organisations to allow all such groups to file lawsuits against polluters.

The amendments were passed by the Standing Committee of the National People's Congress, China's largely rubberstamp parliament, and take effect on Jan. 1, 2015.

They include provisions to help the government impose rules on powerful industrial interests. In contrast, the environmental legal code in the past was focused on growth, said legal experts."

 From BusinessInsider, we find:

“The much-anticipated amendments signal the close of a two-year debate among scholars, the government and state-owned enterprises over changes to the environmental protection law, and come in response to public anger over widespread pollution that has choked the country.”

And the law has teeth, as indicated from this article from The Japan Times:

"A Chinese court has fined six domestic companies a record $26 million for discharging tens of thousands of tons of waste chemicals into rivers, state media said.

The firms in Taizhou, in the eastern province of Jiangsu, were sued by a local environment protection organization and were found to have dumped 25,000 tons of waste hydrochloric acid into two rivers, the official Xinhua News Agency reported.

A court in the city ordered the companies to pay 160 million yuan ($26 million) in fines earlier this year, the highest ever penalty in Chinese environmental public interest litigation. A higher court upheld the punishment Tuesday, Xinhua said.

In August, 14 people involved in the case were sentenced by another court to prison terms of two to five years for causing environmental pollution, it added."

So we had a threat (devastating pollution effects) a risk response (the new regulations)… where is the opportunity?

Well, here, opportunity is in the form of helping with the risk response (amongst other things).  For example, in this article from Reuters, note how some enterprises have adjusted their project and program portfolios:

"Firms from Bill Gates-backed start-up EcoMotors Inc to Faurecia SA, a parts supplier controlled by French giant Peugeot SA, are jostling to help automakers meet new diesel emission rules taking effect in January, despite concerns the standards may not be strictly enforced.

"Generally speaking, we will benefit from higher emission standards in China as they will further spur our business growth," said Liu Xiaoxing, China vice president of Cummins Inc, a U.S. diesel engine maker that partners with Faurecia and counts China as its biggest and fastest-growing market.

Mathias Miedreich, Asia president of Faurecia's emission control technologies unit FECT, whose clients include makers of both diesel and gasoline-propelled vehicles, said annual sales stood to grow 40 percent faster than the broader auto industry's growth rate over the remainder of the decade.

The company forecasts FECT's China revenue will double to 2 billion euros ($2.72 billion) by 2020. FECT recently invested several million euros in a plant in Beijing to expand capacity for NS4-compliant exhaust systems.

"China represents the highest growth market ... We believe our products will give us significant advantage," Miedreich said.

Other players are also boosting investment. EcoMotors struck a deal in March with a unit of state-owned China FAW Group Corp [SASACJ.UL], one of China's biggest producers of commercial vehicles, to jointly build a $200 million engine plant in China.

EcoMotors President Amit Soman said many Chinese automakers were looking to skip straight to the latest technology in fuel efficiency rather than "just do small changes in conventional engines".

German automotive supplier Eberspaecher Group is also getting in on the act, setting up a joint venture in December with Shaanxi Automobile Group Co Ltd to make exhaust systems for the China market."

This article from Thomas talks further about the opportunities:

"This commitment by the government to exert some air pollution control measures has created an opportunity for U.S. companies in the industry to gain a slice of the Chinese pollution-control market. 

And that's just what some U.S.-based manufacturers are doing, though there are obstacles.

One U.S. company that has established a beach-head in China is Fuel Tech, a giant in air pollution control systems. Fuel Tech entered the Chinese market a little more than a decade ago and opened its first full office in Beijing in 2007, said company CEO and Chairman Doug Bailey. The Beijing Fuel Tech branch has 35 employees and subcontracts all the equipment the U.S.-based headquarters of Fuel Tech would sell. The company's employees are predominantly engineering-based.

"We're fully staffed by local Chinese citizens, and I think that does help us with local businesses looking for services like we offer," Bailey said."

And it’s not just the news media that has sensed this threat-opportunity pairing. The well-respected Conference Board will host a webinar on this topic on April 27^th

Check out a teaser video here in which you can see the very mixture of threat and opportunity which we cover in our post.

And here's a link to the upcoming event - should you want to ... er... take advantage of the opportunity...

https://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2928&subtopicid=260

Blogger's note: This is one of many new posts that will feature the Program and Portfolio level - and sometimes the Enterprise level - of the intersection of sustainability, and long-term thinking - with projects.  If you have ideas about this, suggestions of topics, issues that concern you, let us know.  We want to make this as meaningful to you as possible.  Thanks!