What to Expect: Anticipating and Adapting to Dynamic Economic Trends
project management office,
critical success factors,
Managing for Stakeholders,
Categories: Project Leadership, Continuous Learning, Collaboration, Servant Leadership, Priorities, Value, Cultural Awareness, project management office, Project Failure, Best Practices, Project Delivery, Metrics, project management, critical success factors, Managing for Stakeholders, execution, Project Success, Culture, Project Dependencies, Business Transformation, Transformation, Disruption, Design Thinking, Project Management, Cost, Risk, Career Development, Stakeholder, Change Management, Leadership, Program Management, Benefits Realization, Complexity, Consulting, Decision Making, Business Analysis, IT Strategy, Business Case
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:
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:
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:
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?
In my previous post, I promised to tell you a sad but true story of a sponsor who was against his own project. As you know, lack of sponsorship is one of the major causes of failure in projects. It is very hard to make things happen without senior-level support.
According to author and business consultant John P. Kotter, building a guiding or supporting coalition means assembling a group with the power and energy to lead and sustain a collaborative change effort. That is when strong sponsorship comes to mind in project management.
Unfortunately, I was the project manager tasked with the initiative featuring the unfriendly sponsor. By that time, I knew some of the tricks of the change management trade. However, I naively ignored that people have their own hidden agendas.
Sizing Up the Sponsor
The sponsor, let’s call him John, was a division manager with almost 25 years dedicated to the same organization. He proposed an audacious project to outsource almost half of his division, creating a new company to own the assets.
It was a brilliant idea, strictly aligned with the organizational strategy. There was a solid business case supporting headcount and cost reduction, improved service levels and an outstanding return on investment. The board of directors promptly approved the project and it took off with strong support.
You already know that a project, by definition, is a disturbance in the environment. “Project” is synonymous with “change.” Change usually implies resistance. This project faced enormous challenges related to cultural and structural change, power, politics and more.
It took me some time to realize John was a real threat to the project. At first, I shared all my information with him, and I trusted that he was an enthusiastically.
But along the way, I noticed John was not performing his sponsor role properly. In particular, he was not working on selling or on leadership.
Figure 1 – Sponsor’s roles (Trentim, 2013)
Consequently, crucial organizational decisions were postponed, resulting in serious negative impacts on the project. John was responsible for leading change, but he wouldn’t do it. The project was failing because I could not overcome the ultimate resistance barrier: the sponsor.
I started asking myself about John’s real intentions. It was a very uncomfortable situation.
One day, I was discussing the sponsorship issue with my core team members. Alice asked me, “Do you really think John wants this project to be successful?” A few weeks before, my answer would have been “Sure!” Now, I decided to hold a problem structuring session based on Alice’s doubt.
To our amazement, we concluded that if we were in John’s shoes, we would want the project dead.
It was simple. Although there was a solid business case with wonderful benefits, none of them appealed directly to John. In fact, John would be demoted from senior division manager to manager of a department of less than half its former budget and staff. He could even lose his job after the successful startup of the outsourcing project.
I confronted John. He tried to change the topic several times. Finally, he confessed. I will never forget his words: “Corporate politics forced me to initiate this project. If I did not propose the project, someone else would initiate it and carry it on successfully, destroying my division. I had no choice.”
After John’s confession, he was replaced by another sponsor and the project was soon back on track.
Ideals vs. Reality
This experience permanently altered the way I view sponsors. Ever since then, I’ve never assumed my stakeholders are ideal.
In an ideal project, you would have:
In reality, you have:
The fundamental lesson learned here is that managing stakeholders is far from simple. It is a combination of science (tools, techniques, and best practices), art (soft skills, communications, political awareness) and craft (experience).
What was your biggest stakeholder management challenge? Share your experiences and lessons learned below.