Voices on Project Management

By Peter Tarhanidis, Ph.D.

In the ever-evolving landscape of corporate strategic planning, organizations face the perpetual dilemma of choosing between capital spending for growth—and optimizing operations for efficiency. Striking the right balance amidst economic trends and leveraging organizational strengths becomes paramount when navigating through strategic projects. Meeting shareholder and stakeholder needs, while aligning with the organization's mission, presents a constant challenge.

To anticipate potential initiatives, project managers must consider global macroeconomic conditions and CEO outlooks. A preliminary assessment based on the United Nations World Economic Situation and Prospects and OECD Economic Outlook reports for 2024 reveals a projected global economic growth slowdown from 2.7% to 2.4%. This trend suggests a delicate balance between slow growth and regional divergences. Key considerations include:

• Global inflation showing signs of easing from 5.7% to a projected 3.9%
• Slowed global investment trends due to uncertainties, debt burdens and interest rates
• Fading global trade growth attributed to shifting consumer expenditure, geopolitical tensions, supply chain troubles, pandemic effects and protectionist policies
• Notable regional examples include the United States expecting a GDP drop from 2.5% to 1.4%, China experiencing a modest slowdown from 5.3% to 4.7%, Europe and Japan projecting growth rates of 1.2%, and Africa's growth expected to slightly increase from 3.3% to 3.5%

Examining the corporate landscape, a survey of 167 CEOs in December 2023 indicated a confidence index of 6.3 out of 10 for the 2024 economy—the highest of the year. The CEO upsurge assumes inflation is under control, the Fed may not raise interest rates and instead reverse rates, setting up a new cycle of growth. Furthering the CEO agenda, McKinsey & Co. identified eight CEO 2024 priorities:

• Innovating with GEN AI to dominate the future
• Outcompeting with technology to drive value
• Driving energy transition for net zero, decarbonization, and scaling green businesses
• Cultivating institutional capability for competitive advantage
• Building out middle managers
• Positioning for success amidst geopolitical risks
• Developing growth strategies for continued outperformance
• Considering the broader macroeconomic wealth picture for identifying growth

As project managers, navigating the uncertainty of economic shifts necessitates staying vigilant. The year may bring variables and predictions that impact the execution probability of strategic projects. Shifting between growth plans and efficiency drivers demands different preparation. To stay prepared, consider the following:

• Regularly monitor global economic indicators and CEO outlooks
• Foster agility within the team to adapt to changing priorities
• Develop scenario plans that account for potential economic shifts
• Collaborate with key stakeholders to gather real-time insights
• Continuously reassess project priorities based on evolving economic conditions

In an environment of perpetual change, proactive monitoring, adaptability and strategic collaboration will be key to successfully steering projects through the dynamic economic landscape.

How else can you stay prepared as the demands shift on you and your team?

References

1. JP Morgan: Economic Trends
2. Economic outlook: A mild slowdown in 2024 and slightly improved growth in 2025
3. UN: World Economic Situation and Prospects 2024
4. McKinsey: What matters most? Eight CEO priorities for 2024
5. CEOs Gain Confidence About 2024 On Hopes Of Lower Rates

By Christian Bisson

A key artifact for any successful team is a healthy backlog: a list of what’s needed to bring value to the project—written in a way the team can understand and ordered so the team is always focused on what brings the most value.

Yet between all the user stories, enabler stories, technical stories, bugs, defects and so on, it can be quite challenging for a product owner to order all of this properly. 

Here are a few (ineffective) ways I’ve seen it done:

Pitfall 1: Prioritizing what’s understood

Product owners tend to be less technical, and not everyone can properly explain something technical in a way that conveys its value. The result is that items the product owner understands well are prioritized, leaving the other items on the side, which comes with a great long-term cost.

Pitfall 2: Going with instinct

I once heard the following about an item: Its value depends on how we feel that day. When people rely on pure gut feeling, the value of an item will vary depending on their emotions at the time. That means the decision of what will bring value to the product is more or less random, often resulting in leading the team to work on items that end up being pure waste.

Pitfall 3: Leaning into the noise

Some people even order their backlogs based on who complains the most! This merely encourages a culture in which whoever screams the loudest gets what they want.

So what works? There are many ways to take a more mathematical approach to giving value to items. What’s critical is to have an approach that allows the team to properly calculate the value of each item, regardless of what type of item it is. With clear guidelines, all three pitfalls can be avoided—and the decisions can be based on something more reliable.

How do you define the value of your backlog items?