Voices on Project Management

By Conrado Morlan

In a previous post, “The Impact of Unforeseen Risks,” I described how two major events have impacted projects I’ve lead in the past: the eruptions of Eyjafjallajökull in Iceland in 2010 and Fidel Castro’s death in 2016.

Many project professionals don’t include unforeseeable circumstances in their risk log, unless their projects are being executed in an area where natural and unavoidable catastrophes are known to occur. Due to the dynamics of geopolitical events, they may not be included during the initial risk identification process. As the project progresses, however, the risk log should be updated to identify the impact of these risks on project progress and the enterprise as a whole.

Risk management strategies help project management practitioners forecast and evaluate risk, while also identifying ways to avoid or minimize their impact on desired project outcomes.

Conducting SWOT on COVID-19

Late last year, news of a novel illness affecting a city in China failed to capture the attention of most people and businesses around the world; many thought the impact would be similar to SARS or swine flu—a blip on the breaking news radar and no real threat to the global economy. They were wrong.

Many organizations failed to consider the COVID-19 outbreak an enterprise risk and continued their business-as-usual operations. Around mid-February, I met with colleagues and friends who work in the telecommunications industry, and they expressed their concerns about how their projects would be impacted if the factories in China that produce the electronics needed for their work shut down. They wondered if that would break an important link in their supply chain and if it would jeopardize the final delivery of their projects.

Those in the telecommunications industry were not alone. Supply chains in multiple industries have strong ties to China. By the time they were primed to react, the risk was already an issue and without the procedures to avoid or minimize the impact, industries and countries were facing a pandemic with no plan in place.

Sharing enterprise risks identified during the planning and strategic phases of a project isn’t always a common practice within organizations. But not being aware of such risks has a direct impact on project success, and important assumptions may not be considered for the projects and programs that lie ahead.

People in charge of developing the multi-year strategy at an enterprise can use SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis to identify potential risks. This analysis uses a matrix, in which the strengths, weaknesses, opportunities and threats are listed and prioritized. 

The SWOT matrix can be evaluated and updated as the enterprise strategy is reviewed or on an ad hoc basis. Moreover, threats identified during the SWOT analysis may have an associated opportunity. For example, in the event that the plant producing vital electronics in China shuts down, it will impact the supply chain. An opportunity to avoid that threat would be identifying another country where the vital electronics could be produced in order to reduce supply chain disruptions.

As we’ve learned, the importance of communicating the risk identified by the enterprise risk management process needs to be shared with business units to achieve strategic alignment and empower teams to achieve strategic objectives.

As a project professional, how do you interact with the strategic team within your organization to learn about enterprise risk?

In my previous post, I emphasized the importance of engaging and involving stakeholders proactively in a learning process about project definition and planning. I highlighted soft systems methodology as a powerful problem-structuring method.

But how exactly can we incorporate problem-structuring methods into the project management practice? Are they really useful and feasible? Let me guide you through an example below, step by step, according to the Soft Systems Methodology.

Project: Build a New Power Plant

1. Problem situation unstructured: Our energy supply isn’t meeting demand.
2. Problem situation expressed: This expresses the area of concern through a rich picture containing both appropriate symbols for real-world activities and words.

Figure 1: Simplified rich picture for the project “Build Power Plant” (Trentim, 2013)

3. Root definition: The purpose of the project is not to build a new power plant; the end objective is to deliver enough energy to the client. The client expresses the most important human activity system (HAS) to be further studied. We could define more than one root definition to represent a different HAS. For each HAS, we have an analysis of the customer, actors, transformation, weltanschauung (comprehensive worldview), owner and environment (CATWOE).

• Root definition: to ensure that the client has enough energy.
• CATWOE Analysis

Customer: client

                           Actors: sponsor, project manager, team and contractors

Transformation: provide enough energy

Weltanschauung: energy fuels operations

Owner: client

Environment: client environment

4. Conceptual models: We could develop many models in different levels to better understand the problem. Simplifying, I’ve created a conceptual model of how the client uses energy, based on the root definition stated before.

Figure 2: Conceptual model based on root definition “to ensure that the client has enough energy” (Trentim, 2013)

5. Comparison between conceptual models and the real world. This stage compares what we are now to what we want to be able to do. The conceptual model (or models) represents how things should work. The reality has to be changed in some way to improve the problem-situation.

Table 1: Comparison to reality (Trentim, 2013)

6. Feasible desirable changes: The project manager and his or her team propose solutions (project scope). In stage 5, we compare the ideal conceptual model to reality, so we can propose feasible solutions and create action plans.
7. Implement solutions: project execution.

Actually, the solution implementation might encompass all of the project life cycle. Stages 1 to 6 may happen prior to project initiation or in the beginning of the planning phase. Once we have the problem statement and the proposed solution aligned strategically to stakeholders’ expectations and needs, we can use our traditional project management knowledge, as compiled in the PMBOK^® Guide, for example.

A successful project delivers solid benefits. That’s why we have to understand the problem before we start creating a solution. In other words, well-crafted plans and detailed scope definitions are useless if they do not address the real needs of stakeholders. Don’t you think?

Have you ever solved the wrong problem? Please leave your comments and thoughts below.

A successful project must satisfy stakeholders. But how can we agree in advance what success means if we don’t have all the information?

Although you cannot control stakeholders’ expectations, you can influence and persuade them. The key is to engage and involve stakeholders in value creation. Success hinges on a stakeholder-centered approach to project management.

Your job as project manager is a cross between a physician, a consultant and a professor. You have to guide and educate stakeholders, diagnosing their pain to uncover their real needs. If you really want to uncover stakeholders’ needs, you have to learn how to ask the right questions.

Since 2011, I’ve been applying problem structuring methods (PSM) to project management. These methods guide stakeholders through a learning process in which you define the boundaries of a problem to be solved. You understand more as you advance progressively and iteratively, tilting the project toward success.

Soft systems methodology (SSM) is one of the most powerful PSMs I know. It is organized into seven steps:

1. Problem situation unstructured: area of concern, purpose and end objectives.
2. Problem situation expressed: rich picture created to represent the structure and processes of the problem situation.
3. Root definition: clarifies what needs to be addressed and which human activity system is of concern. You can have more than one root definition, representing the HAS (human activity system).
4. Conceptual models: use creativity and logical argument to derive relevant activities in the HAS and build conceptual models in different levels of abstraction.
5. Comparing #4 to #2 (real world and the conceptual model), provide comments and recommendations.
6. Identify feasible solutions: you can use a multi-criteria model to compare alternatives.
7. Improve the problem situation by implementing the solution.

_{Soft systems methodology (adapted from Checkland, 1981, Fig. 6).}

In my next post, I’m going to provide a real project example showing how to use SSM. 

Do you have any other ideas or experience on how to engage your stakeholders in a learning process? Please leave your comments.

by Lung-Hung Chou

For practitioners who manage the construction of green buildings, projects can be complicated by different environmental standards around the world.

Taipei, Taiwan-based Sinotech Engineering Consultants, Inc. (SEC) set out to solve this problem by customizing a Building Information Modeling (BIM) software application used in the engineering and construction industry.

To help its project managers execute a project to build a new research and development building in Taipei, the organization incorporated environmental standards and concepts, along with a work breakdown structure (WBS) and critical chain approach to project management, in innovative ways.

Let’s take a closer look at this project, which PMI’s Taipei, Taiwan chapter recognized with a Project Management Benchmarking Enterprise Award.

A Solution for the Entire Life Cycle

Sinotech’s custom BIM application didn’t only collect different environmental standards for building construction that might apply to the project at hand. It also allowed standards to be applied at each stage of the building's progress from design to completion.

This means that during design, planning and construction phases—and even demolition and disposal—project managers could find the relevant standards and incorporate them into blueprints and project plans. For example, because the research and development building sought U.S. Green Building Council’s Gold LEED certification, the team imported into their plans the standards upon which that certification level is based.

Sinotech’s custom BIM application allows managers to comprehend all applicable environmental requirements throughout the entire life cycle of a building.The idea was to help project managers consider all green standards early in the project so they could be translated into specific design, planning and construction requirements.

This would allow architects and engineers to know—even before a single brick or slab of concrete was laid—if a building would meet a targeted environmental certification. If it wouldn’t meet the certification, inexpensive design changes could be made—and expensive changes after construction was underway could be avoided.

With all design and construction team members given access to the relevant information about green building standards, the custom BIM application strengthened communication—helping teams catch problems early in the project. 

The Project Management Connection

By adopting a work breakdown structure (WBS) for all the different standards involved in any given building management project, Sinotech integrated into its BIM system an understanding of project management.

This meant that standards would directly correlate to the work packages required to meet those standards. With complicated environmental standards translated into concrete goals and work packages, managers and workers can avoid being overwhelmed by different levels of requirements and complicated information for each work item.

SEC also built a critical chain project management approach into the application. Suppliers and subcontractors, and the resources they require across the entire supply chain, can be efficiently scheduled in accordance with their cost and co-dependence by integrating an enterprise resource planning (ERP) system into the BIM system. This helps building projects move closer to lean construction.

The End Results

For green building standards to deliver their financial and environmental benefits, they have to be incorporated into every stage of the project.

By facilitating that process, Sinotech brought clear value to the organization’s project. As planned, the new research and development building in Taipei’s Neihu Light Industrial Zone obtained green building certifications including Gold LEED level and Taiwan Architecture & Research Center’s Intelligent Building Silver level and Gold EEWH level.  

The new Knowledge Area, stakeholder management, was cheerfully welcomed in A Guide to the Project Management Body of Knowledge (PMBOK^® Guide)—Fifth Edition.

We all agree on the importance of stakeholder management. It’s common sense. However, it is not common practice. Few project managers have a formal approach to stakeholder management. And many organizations lack guidelines to manage stakeholders.

Figure 1: Lack of stakeholder management leads to poor results. (Trentim, 2013)

Most of us rely on soft skills, communication and leadership to manage stakeholders. But while they’re helpful, interpersonal skills are far from being the sole way to implement stakeholder management. As a matter of fact, there are hard skills in stakeholder management — tools, techniques and methods that should be diligently applied to enhance stakeholder management and improve project success rates. 

For example, there are at least 10 different tools for stakeholder identification. Often, project managers rely only on brainstorming to write a stakeholder registry, conforming to the methodology imposed by a project management office (PMO). That’s why I believe we need a paradigm shift.

Figure 2: The virtuous cycle—as opposed to the “vicious cycle”—for managing stakeholders (Trentim, 2013)

A project manager’s goal is to add value. Value depends on stakeholder expectations and perception. Consequently, the project manager’s goal is to engage and involve stakeholders in value creation. This is what we call managing for stakeholders.

On the contrary, the term stakeholder management assumes we can manage expectations. This is wrong. We cannot manage people, to paraphrase U.S. author and businessman Stephen Covey. We lead people. We persuade and influence stakeholders.

In 2013, the Project Management Institute published my book, Managing Stakeholders as Clients. It presents a framework with a paradigm shift from traditional stakeholder management by first setting the premise that we can’t manage stakeholders or their expectations — we can only lead, influence and persuade people. To my surprise, I was the recipient of PMI Educational Foundation’s 2014 Kerzner Award* at PMI^® Global Congress 2014—North Americafor my results in managing projects and programs. But in particular, the award recognized my creation of this stakeholder management framework and the results of its application.

The main difference between stakeholder management and managing for stakeholders is this: Stakeholder management’s goal is to manage stakeholders’ expectations, enhancing support and reducing negative impacts — a reactive measure. It’s almost as if project managers develop stakeholder management plans to protect themselves from external interference.

Managing for stakeholders means involving and engaging stakeholders in value creation, boosting their support and having them take ownership in a proactive way. Managing for stakeholders embraces change as a learning process.

While stakeholder management is instrumental, employing processes for conformity, managing for stakeholders is results-oriented. In summary, stakeholder management is an attempt to manage stakeholders’ expectations toward the project. On the other hand, managing for stakeholders is clearly oriented to manage the project and its results for the stakeholders, on behalf of their changing needs and expectations.

Now that it’s clear we should start approaching stakeholder management from a different perspective, in my next post I’ll share more tips and details from Managing Stakeholders as Clients. Don’t miss it!

How do you manage for stakeholders?

*The PMI Educational Foundationadministers the prestigious Kerzner Award. The Kerzner Award is sponsored by International Institute for Learning, Inc. (IIL)to recognize a project manager who most emulates the professional dedication and excellence of Dr. Harold Kerzner, PhD, MS, MBA.