What CEOs Must Demand To Compete and Collaborate in 2005

What CEOs Must What CEOs Must Demand Demand

To Compete and To Compete and Collaborate Collaborate

in 2005in 2005

Russell D. Archibald, PMPRussell D. Archibald, PMPPMI FellowPMI Fellow

2002 PMI Region 6 PM Conference 2002 PMI Region 6 PM Conference & Expo& Expo

Houston, TX May 9-11, 2002Houston, TX May 9-11, 2002

May 11, 2002 2002 PMI PM Conference & Expo - Archibald

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Unleashing the Full Power Unleashing the Full Power of Project Managementof Project Management

In the Internet AgeIn the Internet Age


3

Presentation Presentation Objectives:Objectives:

To provide a road map to CEOs and To provide a road map to CEOs and senior executives for achieving the senior executives for achieving the full power of project management.full power of project management.

To help PM professionals show their To help PM professionals show their senior managers where the senior managers where the development of project development of project management should be going.management should be going.


4

My Point of ViewMy Point of View

Considering the total enterprise.Considering the total enterprise. Focusing on the essence of Focusing on the essence of

effective project management.effective project management. With a perspective of 50 years as With a perspective of 50 years as

project engineer, project manager, project engineer, project manager, corporate executive, consultant, corporate executive, consultant, author, and teacher in project author, and teacher in project management.management.


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CEOs’ Greatest ChallengesCEOs’ Greatest Challenges

1.1. Changes in competitionChanges in competition 41%41%

2.2. Impact of the InternetImpact of the Internet 3838

3.3. Industry consolidationIndustry consolidation 3737

4.4. Downward pressure on pricesDownward pressure on prices 3333

5.5. Skill shortagesSkill shortages 3232

PC Magazine, June 12, 2001 – 506 companies PC Magazine, June 12, 2001 – 506 companies >$5bn sales>$5bn sales


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Challenges Posed By the Challenges Posed By the InternetInternet

Transform or PerishTransform or Perish Exploit It to Grow and ProsperExploit It to Grow and Prosper What changes to make?What changes to make? How to compete?How to compete? How to collaborate?How to collaborate? How to match Internet Speed of competitors?How to match Internet Speed of competitors? How to prioritize and manage strategies and How to prioritize and manage strategies and

projects?projects? One Way: Unleash your project management!One Way: Unleash your project management!


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CEO DemandsCEO DemandsTo Unleash Full PM Power:To Unleash Full PM Power:

Four general demands -- Four general demands -- THAT:THAT:

1.1. Project portfolio management supports Project portfolio management supports the growth strategies.the growth strategies.

2.2. Coherent PM processes exist & are Coherent PM processes exist & are understood.understood.

3.3. PM processes & tools are fully PM processes & tools are fully integrated.integrated.

4.4. Internet & WWW are used properly for Internet & WWW are used properly for PM.PM.


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SpecificSpecific

CEO Demands:CEO Demands:31 specific demands are presented relating to:31 specific demands are presented relating to:

1.1. Strategic direction of the company through Strategic direction of the company through

project management.project management.

2.2. The project management processes.The project management processes.

3.3. The three basic project management The three basic project management

principles.principles.

4.4. The impact of the Internet on organizations.The impact of the Internet on organizations.


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Strategic management of Strategic management of growth requires:growth requires:

A vision of the future.A vision of the future. Consensus and commitment.Consensus and commitment. Documentation of key objectives & Documentation of key objectives &

strategies.strategies. Execution of specific projects to Execution of specific projects to

achieve the objectives.achieve the objectives. Management of Project Portfolios.Management of Project Portfolios.


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The Hierarchy of The Hierarchy of Objectives and StrategiesObjectives and Strategies

ObjectivesObjectives are descriptions of where are descriptions of where we want to go.we want to go.

StrategiesStrategies are statements of how we are statements of how we are going to get there.are going to get there.

Strategies are carried out and Strategies are carried out and objectives are reached throughobjectives are reached through

Execution of projects.Execution of projects.


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Objectives of Strategic Objectives of Strategic Project ManagementProject Management

1. To assure that each project supports 1. To assure that each project supports higher level strategies and objectives higher level strategies and objectives and contains acceptable risks:and contains acceptable risks:• Competitive, technical, cost, scheduleCompetitive, technical, cost, schedule

2. To plan, control and lead each 2. To plan, control and lead each project with all other projects so each project with all other projects so each will meet its strategic objectives:will meet its strategic objectives:• Specified results on time and within Specified results on time and within

budgetbudget


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Specific Specific

CEO Demands:CEO Demands:1. Every project clearly supports an 1. Every project clearly supports an

approved corporate strategic approved corporate strategic objective.objective.

2. Each project’s 2. Each project’s risksrisks are evaluated and are evaluated and proactively managed using currently proactively managed using currently available methods and systems.available methods and systems.

3. All projects are evaluated, prioritized 3. All projects are evaluated, prioritized and approved using the same and approved using the same corporate criteria.corporate criteria.


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Project Portfolio Project Portfolio ManagementManagement

Projects are investments.Projects are investments. They must be managed like They must be managed like

investments: on a portfolio basis.investments: on a portfolio basis. ‘‘Multi-project’ and ‘program Multi-project’ and ‘program

management’ are no longer management’ are no longer adequate.adequate.

““Project Portfolio Steering Group.”Project Portfolio Steering Group.”

152002 PMI PM Conference & Expo - Archibald

May 11, 2002

StrategicObjective

1

OperationalStrategy 1.3



Project 1.1.3

Project 1.1.2

Project 1.1.1

Project 1.2.2

Project 1.2.1

Project 1.3.3

Project 1.3.2

Project 1.3.1

Program 1.1

Project Portfolio for Strategic Objective 1


May 11, 2002

Portfolio vs Multi-Project Portfolio vs Multi-Project Mgt.Mgt.

Dye & Pennypacker, PMI 2000Dye & Pennypacker, PMI 2000

Multi-Project Multi-Project ManagementManagement

Project Project Portfolio Portfolio ManagementManagement

PurposePurpose Resource Resource allocationallocation

FocusFocus TacticalTactical

Planning Planning EmphasisEmphasis

Short-termShort-term

(day to day)(day to day)

ResponsibiliResponsibilityty

Project/Project/

Resource Resource mgrs.mgrs.


May 11, 2002

Portfolio vs Multi-Project Portfolio vs Multi-Project Mgt.Mgt.

Dye & Pennypacker, PMI 2000Dye & Pennypacker, PMI 2000

Multi-Project Multi-Project ManagementManagement

Project Project Portfolio Portfolio ManagementManagement

PurposePurpose Resource Resource allocationallocation

Proj. Proj. selection & selection & prioritizationprioritization

FocusFocus TacticalTactical StrategicStrategic

Planning Planning EmphasisEmphasis

Short-termShort-term

(day to day)(day to day)Long/Long/medium medium term term (year/qtr)(year/qtr)

ResponsibiliResponsibilityty

Project/Project/

Resource Resource mgrs.mgrs.

Executive/Executive/

senior mgt.senior mgt.


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The The Project PortfolioProject Portfolio Management Process: 12 Management Process: 12

StepsSteps

1.1. Define the project portfolios required.Define the project portfolios required.

2.2. Define project categories/types.Define project categories/types.

3.3. Identify and group projects by type Identify and group projects by type

within each portfolio.within each portfolio.

4.4. Validate each project with strategic Validate each project with strategic

objectives. objectives.


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The Project Portfolio The Project Portfolio Management Process Management Process

Steps Steps (cont’d)(cont’d)

5.5. Prioritize projects within Prioritize projects within programs and portfolios.programs and portfolios.

6.6. Develop Project Portfolio Master Develop Project Portfolio Master Schedules.Schedules.

7.7. Establish/maintain key resources Establish/maintain key resources data bank.data bank.

8.8. Allocate resources to programs & Allocate resources to programs & projects.projects.


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The Project Portfolio The Project Portfolio Management Process Management Process

Steps Steps (cont’d)(cont’d)

9.9. Compare financial needs with Compare financial needs with availability.availability.

10.10. Decide how to handle shortfalls and Decide how to handle shortfalls and approve list of funded projects.approve list of funded projects.

11.11. Plan, authorize and manage each Plan, authorize and manage each project using the PM Process.project using the PM Process.

12.12. Periodically re-prioritize, re-allocate Periodically re-prioritize, re-allocate resources and re-schedule all resources and re-schedule all projects.projects.


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The The Project ManagementProject Management ProcessProcess

For each For each project type/category project type/category the PM the PM process:process:

Defines the project life cycle.Defines the project life cycle. Provides guidelines for risk analysis, Provides guidelines for risk analysis,

planning and control.planning and control. Specifies the project management Specifies the project management

information systems and tools to be used.information systems and tools to be used. Specifies the planning, authorizing, Specifies the planning, authorizing,

controlling and reporting methods and controlling and reporting methods and documents to be used.documents to be used.


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The Project Management The Project Management Process Process (cont’d)(cont’d)

Identifies the key roles and defines Identifies the key roles and defines responsibilities and authority for responsibilities and authority for project and functional project and functional management.management.

Specifies escalation procedures for Specifies escalation procedures for un-resolved issues.un-resolved issues.

Format: flow chart with narrative Format: flow chart with narrative descriptions and references.descriptions and references.


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CEO Demands:CEO Demands:CEO Demands:CEO Demands:

4. The company’s project 4. The company’s project management processes be management processes be documented in a coherent, documented in a coherent, easily understood manner.easily understood manner.

5. All projects be managed 5. All projects be managed within their appropriate, within their appropriate, defined portfolios.defined portfolios.


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Three Basic PM PrinciplesThree Basic PM Principles

1. Assignment of integrative 1. Assignment of integrative responsibilities.responsibilities.

2. Application of integrative and 2. Application of integrative and predictive project planning and predictive project planning and control systems.control systems.

3. Integrated project team-working.3. Integrated project team-working.


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1. The Key Integrative 1. The Key Integrative RolesRoles

Executive levelExecutive level• The General ManagerThe General Manager• Project Portfolio Steering GroupProject Portfolio Steering Group• The Project SponsorThe Project Sponsor

Multi-Project LevelMulti-Project Level• Manager (VP, Director, etc.) of PMManager (VP, Director, etc.) of PM• Multi-project or Program ManagerMulti-project or Program Manager


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The Key Integrative Roles The Key Integrative Roles (cont’d)(cont’d)

Project LevelProject Level• The Project ManagerThe Project Manager

Functional/Project Contributor Functional/Project Contributor LevelLevel• Department ManagersDepartment Managers• Functional Project LeadersFunctional Project Leaders• Work Package/Task LeadersWork Package/Task Leaders


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General Manager’s PM General Manager’s PM RoleRole

Link the project portfolio(s) to the Link the project portfolio(s) to the overall business strategies.overall business strategies.

Oversee the overall PM process.Oversee the overall PM process. Monitor integration of the PM Monitor integration of the PM

process with all other aspects of the process with all other aspects of the company.company.

Ensure timely availability of money, Ensure timely availability of money, people and other resources needed people and other resources needed for all authorized projects.for all authorized projects.


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Project Portfolio Steering Project Portfolio Steering GroupGroup

Approves the Project Portfolio Approves the Project Portfolio Management Process.Management Process.

Approves project selection, Approves project selection, prioritization and funding of prioritization and funding of projects within each portfolio.projects within each portfolio.

Monitors the overall environment Monitors the overall environment and provides strategic direction to and provides strategic direction to Project Sponsors.Project Sponsors.


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The Project Sponsor’s RoleThe Project Sponsor’s Role

Integrates ongoing strategic Integrates ongoing strategic direction of his/her project with direction of his/her project with ongoing company operations.ongoing company operations.

Provides this direction to/through Provides this direction to/through the project manager.the project manager.


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Manager of Project Manager of Project ManagementManagement

Integrates work on all projects in the Integrates work on all projects in the portfolio(s). portfolio(s).

Integrates and directs development and use Integrates and directs development and use of project management methods and tools of project management methods and tools on all projects.on all projects.

Develops project managers.Develops project managers.

Manages the project management “home”: Manages the project management “home”: PMOPMO


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CEO Demands:CEO Demands:

6. Roles clearly assigned.6. Roles clearly assigned.

7. GM role understood.7. GM role understood.

8. Project Sponsors 8. Project Sponsors appointed .appointed .

9. Mgr. of PM appointed.9. Mgr. of PM appointed.

10. PM home established.10. PM home established.


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11. Train Project Managers. 11. Train Project Managers.

12. PMs respect functional 12. PMs respect functional lines of authority.lines of authority.

13. Functional Mgrs respect 13. Functional Mgrs respect project lines of authority.project lines of authority.

S p on sor o f P ro jec t "A "

M an ag er o fP ro jec t

M an ag em en t

F u n c tion a lD ep artm en t

M an ag er

P ro jec t M an ag ero f P ro jec t "A "

P ro jec tS p ec ia lis t

S ta ff

F u n c tion a lP ro jec t L ead er

W ork P ackag eL ead er

W ork P ackag eL ead er

In d ivid u a lC on trib u to rs

H ow

W h o

H owW ell

O th erF u n c tion a lD ep artm en ts

W h atW h enH ow M u ch

P ro jec t P lan n in gan d C on tro l

G en era l M an ag er


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2. Integrative & Predictive 2. Integrative & Predictive Project Planning and Project Planning and

ControlControl

Each project is planned and Each project is planned and controlled by integrating:controlled by integrating:• All contributing functional areas.All contributing functional areas.• All life cycle phases.All life cycle phases.• All elements of information: Schedule, All elements of information: Schedule,

Cost, Technical, Risk.Cost, Technical, Risk. Using Web-based PM software Using Web-based PM software

systems.systems.


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14. PM Process is adhered to.14. PM Process is adhered to.

15. All P&C systems are 15. All P&C systems are integrated.integrated.

16. Only one P P&C system 16. Only one P P&C system used.used.

17. 17. Earned valueEarned value applied. applied.



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18. PM Process describes the 18. PM Process describes the

P P&C system.P P&C system.

19. All modules in next slide 19. All modules in next slide are included in the PM are included in the PM Process andProcess and

P P&C System.P P&C System.



May 11, 2002

PM Information & Control PM Information & Control SystemSystem

Technical Technical Information and Information and Control SystemControl System

ModulesModules

Project InformationProject Information

and Control Systemand Control System

ModulesModules

Risk Information Risk Information and Control and Control

SystemSystem

ModulesModules Engineering MgtEngineering Mgt Procurement MgtProcurement Mgt Construction- Construction-

Production MgtProduction Mgt Test MgtTest Mgt Configuration MgtConfiguration Mgt

Project/WBS Project/WBS Planning/ SchedulingPlanning/ Scheduling Cost ManagementCost Management

-- Cost Estimating-- Cost Estimating

-- Cost Estimating Support-- Cost Estimating Support

-- Craft and Crew-- Craft and Crew

-- Unit Material-- Unit Material

-- Unit Labor hours-- Unit Labor hours

-- Source Document-- Source Document

-- Cost Control-- Cost Control

-- Cost Projection-- Cost Projection AccountingAccounting Data EntryData Entry On-Line QueryOn-Line Query

Planning Assurance Planning Assurance (Risk (Risk Assessment)Assessment) Quality AssuranceQuality Assurance ReliabilityReliability MaintainabilityMaintainability Safety AssuranceSafety Assurance


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20. All planning, authorizing, 20. All planning, authorizing, controlling and reporting controlling and reporting documents be produced by documents be produced by the supporting computer the supporting computer software systems software systems (with (with

authorized exceptions).authorized exceptions). [See Table 4][See Table 4]


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How Much Detail? How Much Detail?

Always a problem; resolve by:Always a problem; resolve by:

1.1. Systematic, hierarchical project Systematic, hierarchical project breakdown: the Project/WBSbreakdown: the Project/WBS

2.2. Avoid duplicating detail in existing Avoid duplicating detail in existing systems: manage the project systems: manage the project interfaces.interfaces.


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21. The concepts of the 21. The concepts of the P/WBS and project P/WBS and project interface management be interface management be applied to achieve a applied to achieve a sustainable level of detail sustainable level of detail in PP&C documents.in PP&C documents.


May 11, 2002


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3. Integrated 3. Integrated Project Team-WorkingProject Team-Working

Bring multiple disciplines together Bring multiple disciplines together from diverse organizations to from diverse organizations to collaborate creatively.collaborate creatively.

Understand and commit to project Understand and commit to project objectives.objectives.

Develop agreed plans, schedules & Develop agreed plans, schedules & budgets.budgets.

Achieve outstanding results.Achieve outstanding results.


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The 5 Requirements for The 5 Requirements for Good Team-workingGood Team-working

1.1. Team member list, defined Team member list, defined responsibilities.responsibilities.

2.2. Clear, well-understood objectives.Clear, well-understood objectives.

3.3. An achievable project plan and schedule.An achievable project plan and schedule.

4.4. Reasonable rules of the game.Reasonable rules of the game.

5.5. Leadership by the project manager.Leadership by the project manager.


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22. A complete team list.22. A complete team list.

23. The team defines 23. The team defines project objectives in their project objectives in their own terms.own terms.

24. Team has hard & soft 24. Team has hard & soft success criteria.success criteria.


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25. Team criteria for “excellence”.25. Team criteria for “excellence”.

26. Achievable team project plan.26. Achievable team project plan.

27. Rules of the game defined.27. Rules of the game defined.

28. Leadership training for 28. Leadership training for

Project Manager.Project Manager.


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29. A post-completion 29. A post-completion appraisal be performed appraisal be performed on every project:on every project:- Lessons learned,- Lessons learned,

- Improve PM process, practices - Improve PM process, practices and and procedures.procedures.


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30. The PM discipline is 30. The PM discipline is fully integrated with fully integrated with affected parts of the affected parts of the organization.organization.


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Using the Internet to Using the Internet to Respond to Its ChallengesRespond to Its Challenges

Enable improved collaboration.Enable improved collaboration. Provide risk and issue tracking, Provide risk and issue tracking,

and escalation processes.and escalation processes. Empower staff members.Empower staff members. Automate the PM processes.Automate the PM processes.


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Using the Internet to Using the Internet to Respond to Its Challenges Respond to Its Challenges

(cont’d)(cont’d)

Enable resource allocation across Enable resource allocation across the entire enterprise.the entire enterprise.

Enable tracking and evaluation of Enable tracking and evaluation of project scope, schedule, cost and project scope, schedule, cost and risk.risk.

Allow integration of PM processes Allow integration of PM processes with all other business systems.with all other business systems.


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Using the Internet to Using the Internet to Respond to Its Challenges Respond to Its Challenges

(cont’d)(cont’d)

Use the many, varied Internet sources to:Use the many, varied Internet sources to:• Improve PM capabilities,Improve PM capabilities,• Keep abreast of the competition.Keep abreast of the competition.

Includes e-zines, associations, newsletters, Includes e-zines, associations, newsletters, consultants, trainers, software vendors consultants, trainers, software vendors and others.and others.

See Table 5, for example: many PM sites.See Table 5, for example: many PM sites.


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31. A Web-enabled PM 31. A Web-enabled PM system be selected and system be selected and implemented at the implemented at the project portfolio or total project portfolio or total enterprise level.enterprise level.


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Presentation Presentation Objectives:Objectives:

To provide a road map to CEOs and To provide a road map to CEOs and senior executives for achieving the senior executives for achieving the full power of project management.full power of project management.

To help PM professionals show their To help PM professionals show their senior managers where the senior managers where the development of project development of project management should be going.management should be going.

Questions?Questions?

[email protected]@unisono.net.mx

Download this paper at:Download this paper at:

www.maxwideman.com/guests/ceo/www.maxwideman.com/guests/ceo/intro/intro/


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ConclusionConclusion

If the CEO demands that If the CEO demands that these 31 actions be carried out, these 31 actions be carried out,

andand

if the managers comply with these if the managers comply with these demands,demands,

thenthen

the organization will compete and the organization will compete and collaborate as needed to prosper in collaborate as needed to prosper in

the Internet Age.the Internet Age.


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IfIfthe right strategiesthe right strategies

are being followed!!are being followed!!

Thanks for Listening!Thanks for Listening!

Documents

What CEOs Must Demand To Compete and Collaborate in 2005