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 Peter Tarhanidis, Ph.D.

One of the impacts artificial intelligence has had is prompting a reconstitution of project management. Here I look to leading industry experts to explore the benefits to project management systems due to matured AI software; and the maturity of the project manager as a data- and fact-driven champion of business outcomes and innovation. This combination of advanced project systems performance and leadership competence will significantly transform project success rates.

As a background to the current state of project management, HBR states that $48 trillion is invested annually in projects. The Standish Group notes that only 35% of projects are successful, and 65% of projects waste resources and have unrealized benefits.

Additionally, Proofhub attributes project failure to firms that lack project management delivery systems; they are prone to miss targets and overspend. It noted that 67% of projects fail because project management is undervalued; 44% of all managers do not believe in the importance of project management software; and 46% of firms place a high priority on project management. Also noted: Utilizing a good software program reduces failure by 10%, and scope creep by 17%.

More specifically, a PMI Learning Library article noted some reasons for project failure:

1. Unclear goals and objectives
2. Lack of resource planning
3. Poor communication across the organization
4. Inadequate stakeholder management
5. Poorly defined project scope
6. Inaccurate cost and time estimates
7. Inadequate risk management
8. Inexperienced project managers
9. Unrealistic expectations

Maturing Systems
An HBR article suggests that poor project success rates are due to a low level of available mature systems. Many firms continue to rely on spreadsheets, slides and other applications that haven’t matured current practices. While the current tools are adequate in measuring project performance, they do not allow for the development of intelligent automation and collaboration across the portfolio of projects. The opportunity to apply AI to project management could improve the success ratio by a quantifiable 25%, or trillions of dollars of newly realized benefits for firms and society.

Gartner Inc. analysts predict that by 2030, AI software—driven by conversational AI, machine learning and robotic process automation for gathering data, reporting and tracking—will eliminate 80% of all project management office tasks. Gartner identifies project management disruption in six aspects:

1. Better selection and prioritization
2. Support for the project management office
3. Improved, faster project definition, planning and reporting
4. Virtual project assistants
5. Advanced testing systems and software
6. A new role for the project manager

PwC envisions AI-enabled project management software will improve a project leader’s decision-making process across the following five key areas crucial to success:

1. Business insights improvements by filtering better data for relevant knowledge
2. Risk management assessing scenarios that offer mitigation strategies
3. Human capital in allocating resources more appropriately to meet the business priorities
4. Integrating various technologies and specialists to improve project outcomes
5. Active assistance by enhancing administrative tasks and stakeholder progress communications

PwC posits the advancements in project management software are an opportunity for firms and leaders that are most ready to take advantage of this disruption and reap the rewards.

PM Competence
PMI’s Project Manager Competency Development (PMCD) Framework provides an assessment and development of a project manager’s competence. It is based on the premise that competencies have a direct effect on performance. A project manager’s competence can be categorized in terms of project management knowledge, project management performance and their accomplishments, and personal competency in performing the project activities and personality characteristics. This combination is the stated success criteria for a competent project manager.

AI’s capability to assess disparate sources of big data to obtain actionable insights arms project managers with improved decision-making competence throughout the project lifecycle. However, a challenge noted by PwC’s recent analysis of OECD data (covering 200,000 jobs in 29 countries) warns that AI’s job displacement effect will automate 30% of jobs involving administrative manual tasks by the mid-2030s. This indicates a clear need to upskill project manager competence in order to thrive in the future.

In order to succeed, a firm’s culture of adaptability and lifelong learning is a cornerstone for shifting today’s project management roles into the future. They will need to expand competence in soft skills, business and management skills, technical and digital skills—all working in concert with each other.

IAPM states project managers will face fundamental changes over the next 10 years with job descriptions and roles. It suggests AI will make logical analysis and decisions, allowing the PM to focus their main area of responsibility on creativity, resolving conflicts, and innovation.

Lastly, with any transformation or disruption, one must consider the actions and obstacles—whether financial, management support, or workforce ability—to embrace and enact change. Here are some key considerations to reflect on:

1. Does your firm value project management?
2. Is your firm a quick adopter of intelligence-based project software?
3. Will your firm invest in your competence development?

Post your thoughts in the comments!

References

1. PMI: Project Management Competency Development Framework—Second Edition
2. PMI: Why do projects really fail?
3. HBR: How AI Will Transform Project Management
4. Gartner Says 80 Percent of Today’s Project Management Tasks Will Be Eliminated by 2030 as Artificial Intelligence Takes Over
5. IPAM: Will project managers soon be replaced by AI?
6. PWC: A Virtual Partnership? How Artificial Intelligence will disrupt Project Management and change the role of Project Managers
7. Proofhub: Top 10 Reasons Why Projects Fail (And How to Solve Them)

by Dave Wakeman

I was scrolling ProjectManagement.com recently, looking for inspiration and ideas for this month’s piece when I saw one author pose a question about “business context” and another one post about “business acumen.”

These got my attention, because over the years, my entire collection of posts has been about reinforcing these two points:

1. One, the business context matters.
2. Two, business acumen will make you a better project manager.

So this month, I want to reinforce the importance of your business skills to be a better project manager by highlighting two key ideas.

1. The best project manager can’t fix the wrong project. Peter Drucker said something about the worst waste of timing being doing something that need not be done at all.

One of the key ways that you can use your business skills to improve your PM performance is by understanding what projects are really going to push your business toward its key strategic goals.

This speaks directly to context. You get there with your business acumen.

Why does this matter? First, a lot of projects end up taking place due to momentum. A project starts gaining steam, no one steps in to ask if it is “essential.” It just seems important. So, it gets done.

Second, a lot of projects are done because that’s the way similar projects have been handled in the past. So, a project is just done because it is consistent with “best practices” even if there have been no lessons learned to update the process.

These scenarios highlight the importance of context and business acumen for PMs, because being able to step in and understand if a project is essential and impactful can stop the wrong projects from taking place.

2. Context is key in any situation. The best project manager in the world is still operating in a situation filled with context, no matter what.

The idea of any project, business or PM operating in a vacuum is funny, because nothing occurs in a vacuum. Great PMs know that context matters in every situation, and that context is fluid.

Andy Jordan recently wrote about there being “multiple” contexts, and that is right to a point, but it can be confusing to people. A good PM’s frame of reference for “context” in their projects revolves around the answer to the question of, “What does success look like?”

Why does this matter? One, we need to isolate the signal from the noise. I agree with Andy that there are multiple contexts for any project decision. Where I want you to focus your attention is on recognizing which one is most important.

In the modern business environment, you are never going to be able to manage all the contexts, so the process of isolation and focus matter more than ever.

So, look for the thing that is going to help you achieve “success,” whatever that means in your situation.

Two, the proper context should help you justify your project’s execution. Above, we discussed business acumen and the “right project.” Here is where context helps that come true because the context can change—and likely will change.

So, it is your job to make sure you know what success looks like so that you can place the project in the proper context to ensure that the right projects move forward.

Remember, the best project manager in the world can’t save the wrong project—and that’s where the meeting of business acumen and business context come together.

What do you think? Am I off the mark?

By Peter Tarhanidis, Ph.D.

There is a dramatic increase in the strategies corporations implement to meet the needs of their stakeholders. Driving value from all parts of an organization and its functions may seem like repetitive exercises—and even feel more like a medieval gauntlet with only a few successful programs. HBR (2021) wrote that by 2027, about 88 million people will be working in project management—with economic activity reaching $20 trillion USD. Also noted: Only 35% of projects are successful, leaving immense waste of resources.

There are many reasons projects fail. HBR (2021) states of the 70% of failed projects, and after exhaustive root-cause analysis across all industries, one can identify common themes such as undervaluing project management skills and methods, and poor performance. Yet organizations that apply project management methods recognized their performance had a 2.5 more times chance to be successful, and organizations can waste 28 times less resources. As such, when applied, the implementation of PM methods works.

Yet in a world filled with a variety of project taxonomies, many organizational boards are now contemplating the need to implement environmental, social and corporate governance (ESG) and corporate social responsibility (CSR) programs. Forbes states the benefits of ESG and CSR initiatives include:

1. Advancing organizational culture, empowering staff to do social good, and welcoming diversity.
2. Encouraging partners and investors who are interested in long-run strategy to manage risks and opportunities by emphasizing the organization’s ethics.
3. Raising an organization’s staff confidence and productivity, creating a workplace that achieves the business mission.

Therefore, to ensure success for ESG and CSR programs, an organization’s top leaders need to prioritize and align across all the organization’s businesses. Leaders can use the balanced scorecard to achieve this alignment, and can extend its use across the entire project portfolio.

This theory was developed by Kaplan and Norton, which state the balanced scorecard method converts the organization’s strategy into performance objectives, measures, targets and initiatives. Linking the concept of cause and effect, the balanced scorecard covers four perspectives:

1. Customer: How do customers see us?
2. Internal: What must we excel at?
3. Innovation and learning: Can we continue to improve and create value?
4. Financial: How do we look to shareholders?

Marr (N.B.) reported over 50% of companies have used this approach in the United States, the United Kingdom, Northern Europe and Japan. One clear benefit has been to align the organization’s structure to achieve its strategic goals.

In conclusion, applying project management methods and aligning an organization’s performance through the balanced scorecard can unlock ESG and CSR benefits that can supercharge a company’s efforts to achieve its mission.

References

1. HBR: The Project Economy Has Arrived
2. HBR: The Balanced Scorecard—Measures that Drive Performance
3. Project Management Statistics: Trends and Common Mistakes in 2023
4. Forbes: Three Reasons Why CSR And ESG Matter to Businesses
5. Balanced Scorecard: How Many Companies Use This To

by Christian Bisson

In a complex world where we strive to improve, there is one trending weakness that I’ve seen amongst many teams and organizations—they measure little to nothing, and make decisions based on “gut feeling.”

Having key metrics is a powerful tool to identify areas to improve, and not just for weak points—you want to recognize strong points as well so that you can continue them. Here are a few examples…

Value

How many times have you seen teams happy to deliver something—only to have absolutely no idea what value was ultimately gained from that delivery? There are a few ways you can be blind to the value being delivered (or not delivered):

• Not knowing how many users actually used a new feature (maybe none?)

• Was anything gained out of it? (Money? New hires or better retention?)

• What was the actual cost compared to the gain?

All too often, people waste money when they could focus their resources elsewhere if they measured the return on investment (ROI) and adapted accordingly.

Delivery predictability

What will be delivered, and when? Every organization faces a challenge to know this. And all too often, typical random delivery dates are given to stakeholders—and forced on teams. This in turn hurts the quality of the deliverable (not to mention the very small odds that the dates are even being respected).

By measuring on a small scale (like a team’s velocity throughout sprints) or a larger scale (like being familiar with SAFe and its “product increments”), you can compare results to actual data to make more reliable predictions (at the end of the day, it is still a guess).

Product backlog health

Throughout the years, I’ve seen many backlogs, from small to gigantic. And I rarely see any of them being measured to make sure they’re actually healthy.

The definition of “healthy” varies, but in this case let’s assume it means that the backlog is an ordered/usable artefact that teams can rely on to know what to work on next to bring value to stakeholders.

Here are a few things that can be measured:

• How many items are ready to be used by the team (i.e., refined)?

  • Is it too much? Too little?

• How many total items are there in the backlog? (If there are too many, it becomes clutter.)

• How much time do items spend in the backlog before they get started? (I’ve seen items rot in backlogs for years, never getting done,)

Conclusion

There are so many things that can be measured and used to properly align next steps—and they require the proper tools to do it efficiently. You want to spend as little time as possible getting the data and results that you need, and utilize reliable “live” information (with little cost to get it).

What will you be measuring in 2023? What do you think your blind spots are?