Week03 slides spring_2013

Mgt 610 Strategic Perspectives on Project Management

Session 3

Project Manager’s Value Mindset

Dr. Thomas Lechler Phone: (201) 216-8174

FAX: (201) 216-5385

email: [email protected]


(c) 2013, Thomas Lechler. All rights reserved. For academic use only. 2

Session 3: Evidence

1. Success factors describe the constraints of the traditional

project management paradigm, how could a new paradigm

look like?

2. Project value differs from traditional project success. What

are the consequences?

3. A framework for a project strategy will be developed to

maximize project value.


(c) 2013, Thomas Lechler. All rights reserved. For academic use only. 3

Module 3: Agenda

Project Value Management Framework

1. Basics of Strategic Management

2. Project Value Perspectives

3. Project Value Network

4. Project Value Strategy

5. Project Value Statement


Uncertainty Focused PM Perspective

1. Project uncertainty can be managed by seeking,

discovering and exploiting project value opportunities

during project implementation.

2. The project manager is instrumental in discovering and

exploiting project value opportunities.

3. The project manager needs to have a project value

mindset (PVM) to discover and exploit opportunities.

For academic use only. (c) 2013, Thomas Lechler. All rights reserved. 4

Change Focus to Value


Research Framework: Hypotheses


Exploited Value

Opportunities

Project Value

H 1 H 2

H 3

PM’s Project Value

Mindset

Project Value Mindset Study


PM’s Value Mindset – Definition

Project Manager’s Project Value Mindset

.. is a mental state involving dispositions and traits resulting in

activities to seek, discover and exploit opportunities

beyond a pre-defined value proposition with the intent to

maximize a project’s value.

Project Value Opportunity

.. represents a potential to exceed the pre-defined project

value occurring during a project’s implementation.

Project Value

.. could be represented by a single or any combination of

efficiency, technical effectiveness and the satisfaction of a

project’s stakeholder.



Research Framework: Definitions


• 5 key informants per project: Project Manager, Project

Sponsor, 3 key members of project team.

• The U.S. sample includes responses from 387 core team

members, 114 project managers and 95 senior managers.

• Successful projects (104) unsuccessful projects (10).

• New product development projects (20%), software

development projects (28%), constructions projects 10%,

and IT projects (31%) implemented in many industries.

• All projects had a budget of at least $500,000 and their

average duration is 18 months.


Research Method: Sample



PM Value Mindset – SEM Estimates


Exploited Value

Opportunities

R2=.41

Project

Value

R2=.52

.63* (7.49) a

.19 * (2.04)

.59* (5.93)

Strat_Rqmnt

Spec_Rqmnt

Traits

Overachievement

Ambiguity

Opportunity Disp.

.59*

.59*

.65*

.60*

.64*

.77*

PM Value

Mindset

Standardized Path Coefficients of the Structural Equation Model* t-Valuesa

Fit Statistics

RMSEA AGFI NNFI NFI CFI X 2 df

0.002 0.93 1.00 0.99 1.00 14.98 (p=.53) 16



Conclusions

• PM Value Mindset is important:

• to manage uncertainty,

• and capture project value.

• Project value opportunities occur in situations of

uncertainty.

• Opportunities must be perceived and exploited to

maximize project value.




• Technical opportunities are less frequent than expected!

• Not every situation of uncertainty leads to opportunities!

Nature of Opportunities Opportunity Category Opportunities Frequencies

Technology Testing solution 3

Implementation process Monitoring, process improvement,

outsourcing, versioning

8

Project & Business Multiplier, identified new opportunities of

original solution

11

Future Business Project life cycle opportunity, beyond

project

7

(c) 2013, Thomas Lechler. All rights reserved. 10 For academic use only.


• 4 cases identifying real opportunities and misperceiving opportunities

• 2 cases having both exploited and unexploited opportunities

• Identifying opportunities is not easy or natural!

• Exploitation of more than two opportunities not observed!

• Very few rejected opportunities!

Opportunity Recognition & Exploitation

Number of Opportunities per Project Frequencies Percentage

One opportunity identified & exploited 15 36%

Two opportunities identified & exploited 7 17%

Opportunities identified but not exploited 2 5%

No identified opportunity 4 10%

Misperceived opportunities 20 48%



• Opportunities are mainly recognized by the project managers!

Context of Opportunity Recognition

Stakeholders Frequencies

Board of directors 3

Project steering committee 1

Project sponsor 3

Project manager 15



• Business perspective is key to opportunity perception and exploitation!

• Constraint management is constrained to risks!

Project Manager Type

PM Types Uncertainty

misperceived

Opportunity

misperceived

Opportunity

identified by

PM

Opportunity

identified by

others

Technocrat (6) 0% 100% 0% 0%

TC (24) 46% 58% 21% 21%

Business (9) 33% 11% 78% 22%



Value Effects of Project Opportunity Frequencies Percentage

Stakeholder Satisfaction 17 77%

Shareholder Satisfaction 15 68%

Financial Returns 13 59%

Schedule 13 59%

Quality (Performance) 12 55%

Budget 11 50%

Outcome (Specs) 10 46%

Quality (Grade) 8 36%

Non-financial Benefits 6 27%

Other 4 18%
