Project Management MN20275 Notes

Learning Outcomes
 Demonstrate the economic importance of project management and the extensive
scope of the subject area;
 Evaluate the execution of a project by reference to established bodies of
knowledge and best practice;
 Critically reflect on the established bodies of knowledge and best practice;
 Recognise the knowledge and skills required for successful project management
in organisations.

Context
The context of project management, its structures (focusing on 4D & 7S models of the
subject) and evolution are introduced. Key topics then include project life cycles, and
alternatives; project planning and control techniques, including CPM and PERT; learning
and innovation in projects; resource planning; team management and motivation;
contracts and incentives; evaluation and returns; stakeholder management

PROJECT MANAGEMENT (MN20275)

Project management is one competitive weapon in a firm’s strategic approach. Project-
based firms that have good access to resources can develop and build major
infrastructure systems, shorten times to market and are positioned to recognize,
understand and act upon new and complex business opportunities.

Consequently, the course examines how the firm develops and utilizes project
management tools and approaches to increase its ability to compete. The unit is
designed to provide an understanding of project management and its role.
This is a quick overview of my thoughts regarding the importance of project
management to the organisation. Many of you have already had some project
management experience as project leaders and/or as team members. I welcome your
input to the class and look forward to your participation. This class is designed to
enhance that experience as a 'living lab.' Those who are new to project management will
also benefit from the collective experience within their respective groups and through
class interaction. I look forward to seeing the difference in your perspectives after these
next couple of months.

This section will provide the class administration items (e.g. course syllabus, class
information, submission). I will post the lecture notes and readings within the
respective sessions a NLT Sunday prior to the class. In addition, I will utilise the PM
Updates! Forum to communicate with the class - this will have information that you may
have regarding the project which would be valuable to the class, updates on readings,
changes in the schedule, etc.). Finally, this is an interactive class so please do not
hesitate with your input and questions.
4D Model

McKinsey 7S Framework

Evolution: first case of real use of project management techniques – US Navy’s Polaris
Missile project

CPM: Critical path method

 Technique for process planning that defines critical and non-critical tasks with
the goal of preventing time-frame problems and process bottlenecks

PERT: Program evaluation review technique

 Variation on critical path analysis
 Takes a more sceptical view of time estimates made for each project stage
Lecture 1 Week 1 The Role of PM in Modern Organisations
Why do projects fail? One of the reasons is there’s no specific goal

Mars project clip (A one way ticket to mars):

 Trip to mars Year 2020
 People stay there rest of their lives
 mars One Headquarters in Netherlands
 simpler design than previous mars projects
 more than 78000 applications to date (of video)
 total cost to send first 4 people 6 billion US dollars
 TedxDelft talk: Marketing
 Relying on everyone watching through Media
 Biggest adventure on earth: how their financing it
 Step in evolution for our species
 If you can put people on mars, it will give everyone the feeling that anything is
possible

3 core elements of project management:

Time: clear schedule, deadline for applicants, strict timeline which have been publisized
so constraints them in the public eye,
Budget: budgeting in terms of financial means
Quality: quality has to be close to perfect because lives are at stake. Project is becoming
very complex very quickly so time has an impact on budgeting and quality.

Project scope: ethics – have to work with society, stakeholders (internal and external –
companies will also want to put their label on it)
 Project is becoming so complex it goes beyond just the triangle of budget, time,
quality e.g. how many project managers are there for just this one project

Engineering started project management. Business got involved because a busniess

needs to learn how to manage a project due to profit. For projects you’re looking at the
bottom line for the business itself. The small projects can also be used as strategic use to
support the firm’s strategy itself.

Engineers have to talk to managers, managers have to talk to engineers. Problems arise
from lack of communication. You have to understand the implications of what you do on
the company.

What is a project?
 A temporary organisation with a lifecycle – projects last hours, days, weeks,
 months or many years.
 Dedicated to completing a specific goal – but should be within time, cost and to
required quality. Whether or not the project needs a goal:
 Outcome is unique, one-off or highly customised
 Based on many non-routine and complex tasks

What is project management?

 Tools and techniques for managing a project through its life cycle to successful
completion
 Origins and development of PM:
 US military and diffusion to other industries
 text books, Baumgartner (1963)

What is the role of project management in modern business?

 Organisational capability for achieving business objectives
 Developing new technology and products
 Entering new markets
 Building modern infrastructure
 Achieving organisational change

Why is project management becoming the key to managing business in the 21st
century?
 Drivers (see Pinto and PWI study)
 Indicators…UK driver of trade in services FT
 Firms e.g. Siemens, the Economist

Projects vs. Operations

 'Projects allow type 2 firms to step outside the normal stream of activities
(making cars, toys, chocolate bars) without having to fundamentally alter the
organisation itself' (Keegan and Turner 2002: 371).
 Shows the spectra of projects.
 Consumer products: not very complex, repetitive, main issue is that it gets out on
time, standardised products and services
  Industrial products: big projects, channel tunnel, anything new and different, few
of them
 Consumer and industrial products: what we will be dealing most with.
 See where you can align the triangle for each of these

Different types of projects rely on uncertainty and complexity. You can’t just get away
with just looking at the triangle but all the implications surrounding it

We will look at airport, airbus, channel tunnels

 Research and development (R&D)
 Commercial product development
 Capital goods and infrastructure projects
 Internal Corporate Venture (IVP) projects
 Organisational change projects
Projects are undertaken by diverse organisations
• public (e.g. military, universities, health services),
• private,
• internal,
• alliances,
• Partnerships
Projects take place in work as well as social life
WTO – world trade organisations
Multi-firm project network – why you have certain projects, how to best utilise the
project because it will go towards the bottom line of your company. You can see how the
projects are reaching across partners (buyers, suppliers), Figure out if the project
follows the objectives of the company,

What is project management?

TRIPLE CONSTRAINT MODEL: QUALITY, COST, TIME
You have to manage these three, and how you do that is up to the manager

Try to balance that particular triangle: that’s the job of a project manager

• Tools and techniques for managing a project during its life cycle
• Project performance based on classic ‘Triple Constraint’:
 Cost: on budget
 Time: on schedule
 Quality: to the required specifications
…a temporary endeavor undertaken to create a unique product or service….
(PMI)

History of Project Management_ where did it come from?

 Origins in the US military and aerospace in 1950s
  Diffusion to other industries since 1960s. Businesses were demanding more after
WW2
o Became a useful tool to figure out if their projects could work or not.
Projects good for developing capabilities – how to train people to
recognise market changes
 Early text book: Project management (1963), J.S Baumgartner
 Professional body: Project Management Institute (PMI) – 150,000 members in
150 countries
o Started in the States because of NBA and it was the first manufacturing
country for a while
 APM – UK institute
 Growth in University courses since 1990s

Beyond traditional PM
• Traditional Project Management (PM)
• Certainty and planning
• On time, budget and specification/quality (triple constraints)
• Level of analysis: the single project
 Triple constraints: have to modify how we look at project management – look at
the nuances
 Innovation: core competency of a company that wants to differentiate

Why worry about projects?

 Although there is ‘projectification’ within many organisations, many projects
appear to fail
 Lack of understanding of project management tools and over reliance upon PM
software
 Communication problems and failures to adjust to dynamic activities:
communication across the board, comes from the very beginning: not outlining
goals, who’s involved, roles of those involved, when that has to be put in place.
Can be as a result of dynamic of project: market changing, IT can be a reason:
how to allocate costs

UK/US Defence Over-Spending Balloons

 took 20 years for aircraft with all technology involved to go on the market.
Overrun in budget, time, costs etc
 Aircraft customer all over the world
“The Public Accounts Committee's Major Projects Report 2010 looked at the 15 biggest-
spending equipment programmes and found the cost had risen by £3.3bn in one year
alone.
Committee chairman Margaret Hodge MP said: "Unaffordable decisions taken in the
short term lead to inevitable waste of billions of pounds over time.
"In the wake of the Defence Review, the Ministry of Defence still has to spell out
whether and how it has got its defence procurement budget under control.
"The MoD must demonstrate the same discipline in its defence procurement that our
forces demonstrate in the field."
In its report, the committee highlighted the decision-making process which surrounded
the coalition Government's decision only to take possession of one of two aircraft
carriers on order.
The two ships, one of whose fate remains to be decided, cost the Government £1.6bn
more than originally expected.
The decision to scrap nine Nimrod MRA4 spy planes after 15 years in development
wrote off some £3.6bn of taxpayers' money - more may yet be lost to compensate BAE
for the closure of the Woodford facility where they were being constructed.
The committee also discovered that, after delay costs were incurred, the contract for the
new Typhoon aircraft was only affordable after the number of Tornados was reduced
and the Harrier jump jet scrapped entirely.
Mrs Hodge said: "The MoD does recognise that it must finally tackle the problems which
have affected defence procurement for decades and on which our predecessors in the
committee have commented extensively.
"If it does not, the cycle of failure will continue, with badly-needed military capabilities
suffering delay or being crowded out of the equipment programme by predictable cost
increases or deliberate overprogramming."
Defence Secretary Liam Fox will later respond to the committee's criticism, and
announce the creation of the Major Projects Review Board.
It will be tasked with providing greater oversight of the procurement process, allowing
the public and defence industry shareholders alike to keep track.
Dr Fox will say: "It is for all these reasons that I am establishing the Major Projects
Review Board.
"This will be chaired by the Secretary of State and will receive a quarterly update on the
Ministry's major programmes to ensure that they are on time and within budget.
"This will begin with the 20 biggest projects by value and will rapidly expand to the 50
biggest projects. There must be a real sense of urgency about achieving this goal.
"Where projects are falling behind schedule or budget, we must take immediate
remedial measures. Those responsible will be brought to account in front of the project
board."
http://news.sky.com/skynews/Home/UK-News/A-Committee-Of-MPs-Finds-Defence-
Projects-Are-Over-Spending-At-Cost-Of-8-Billion-Pounds-To-
Taxpayer/Article/201102315938186?f=rss

Projects matter for innovation

• Even though companies want everyone to be thinking about innovation all the time,
the reality is that everybody’s got other roles to play. So innovation is not a
continuous activity; it’s a project-based activity.”
• “If you don’t have a process for choosing projects, starting projects, doing projects,
and ending projects, you will never get very good at innovation.”
• “Projects need some form—you call them something; you run them in a certain
way; you fund them in a certain way. That sounds simple, but, actually, a good
process for getting projects going and done is often not obvious to companies.”
(Tim Brown, CEO, IDEO, Nov. 2008)

Different from operations management: OM much more across the whole firms, how to
streamline a process to help the firm, about specific tasks to improve productivity
Lecture 2 Week 2 Understanding the Nature of Projects + The
Diamond Model I
What’s up to date…?
 Overview of Project Management (from L1)
 What is a project?
 Characteristics and history
 Uncertainty and complexity associated with projects
 Role in the organisation - The focus on projects as key activities
in an increasing number of organisations, and thus part of strategic
management
 The project’s evolving role as a support to strategic goals
 Projects serve as vehicles for innovation
 The limitations of traditional project management and its narrow
‘triangle’ (triple constraint) of measuring success; yet
 The need for a new adaptive approach: The diamond model of PM
(Shenhar & Dvir 2007)
 Project Management Institute

Today’s agenda
 Class structure admin
 12 Oct groups and Doodle (seminars)
 Student Space (Mr Keith Brown)
 Project assessment
 What is to be delivered (i.e. what is the project scope)?
 What are the objectives of this project?
 What are the priorities?
 Who is responsible for each part of the project?
 Introduction and Overview of Diamond Model
 Readings –
 Brief History of Project Management
  What Great Projects Have in Common
 Overdue and Over budget… Economist
 Heathrow T5 Infrastructure/Innovation (skim)
 Be prepared to discuss the first two articles as they:
 relate to the evolution of project management beyond the basic concepts
of cost, quality and time
 How they illustrate different approaches to project management.

What is a project?
• A temporary organisation – projects last hours, days, weeks, months or many
years
• Dedicated to completing a specific goal – but should be within time, cost and to
required quality
• Outcome is unique, one-off or highly customised
• Based on many non-routine and complex tasks

What great projects have in common

• Unique competitive advantage and/or exceptional value to stakeholders
• A highly qualified project leader supported by top management
• Maximises use of existing knowledge, in cooperation with outside organisations
(ecosystems)
• Integrated development teams with fast problem-solving capability and ability to
adapt to changes in business, market and technology
– Digital capabilities
– Knowledge management
– How to communicate technologically with different generations
• The idea is the expansion of the project’s scope beyond simply delivery or
meeting the triple constraints.
– The project must adapt to the dynamics of market changes
• the project changes over time
differences among projects
 context dependent
o goal (outcome) – objectives may change
o task (work to be done) because the goal changed
o environment (internal and external): rules and regulations, nature of
health, safety etc.
 considerable variability but also quite a number of common features among
projects

Flexible and adaptive PM approach

• Many projects fail to achieve their expected results or are not completed on time
and within budget
• But failure is not just about bad (project) management
– Failure often occurs in well-managed projects run by experienced
managers and organisations
• BUT the flaw in this lies in the fact that traditional PM assumes all projects can be
managed in the same way - ‘one-size-fits all’ which is not the case. In contrast
project managers need to adopt an approach to project management that is both
adaptive and flexible.
• Need an approach to project management which is ‘adaptive and flexible’

From traditional to adaptive PM

Project success measures
 In a sense this is a timeline
 Preparing for the future – lessons learned

 Project success – long term goal

 Efficiency for example is short/medium term goal but has to be kept in mind
throughout the entire project
An adaptive approach to project management
• To address differences among projects inspiration from contingency theory
(uncertainty, complexity and speed/urgency)
• The DIAMOND MODEL
 Novelty; are you coming up with something new? low novelty .- not as
many resources needed to put in
 Technology
 Complexity
 Pace
• Framework for distinguishing between projects
• Guidelines to manage projects in different ways

The hyperloop
 700 mph in a tube
o what are the project’s objectives?
o What is the scope (boundaries) of the project?
o Who are the stakeholders?
o How would you begin planning for this project?
o Underlying issues – project has to be assessed, managed and measured
beyond the iron triangle approach
 Hyperloop: airplane on high altitudes metaphor. To connect to major cities
within 15 to 30 minutes. Reducing traffic. Humans travelling around in tubes

Diamond model, Pt 1 - leap out of the triangle

 Nuances associated with the project
Novelty
• How new is the product to customer and users (i.e. the market)?
• Uncertainty of a project’s goal & uncertainty in the marketplace
• 3 levels of novelty
– Derivative
– Platform
– Breakthrough

Example of project novelty: iPod

• Breakthrough project
• 1st iPod in 2001
• Platform project
• 1st generation iPod Nano
• Derivative projects
• improvements of the iPod Nano

Airbus A380 – Novelty

1. breakthrough
2. platform
3. derivative

• 1st to market
• Break from previous Airbus families (where progress was sequential from A300
to A340)
• Largest passenger airliner in world
(in competition with Boing 787 Dreamliner)
• Double-decker
• 50% more floor space than second largest airliner (which is the Dreamliner)
• 853 people – full economy version
Impact of product novelty levels

Product novelty and project success

Technology
• How much new technology is used? (new to the company)
• Project’s level of technological uncertainty
• 4 levels of technological uncertainty

Type A: low-tech project

• No new technology is integrated
• Examples: bridges, road building, installation of new telephone network
• Almost no technological uncertainties
 • Should be built as planned and initially designed
• Design freeze set very early, often before initiation of the project

Type B: medium-tech project

• Integration of single new technology
• Example: improvement of existing product (e.g. stretch design of an
aircraft)
• Product’s specifications are written during project’s initiation period
• Early design freeze, but some testing, evaluation and corrections in the
design or shaping of the product

Type C: high-tech project

• Integration of several new technologies (e.g. CGI)
• Examples: large development project; new product generation
specifications must remain
• flexible for a longer period of time to allow for optimal trade-offs
• Much later design freeze (than type B) and extended development period

Type D: super high-tech project

• Integration of several non-existing technologies
• Examples: Arpanet project (development of internet based on packet
switching technologies), Apollo Moon Landing
• Extensive periods to develop and prove the new, not-yet existing
technologies
• Very late design freeze planned at the start
• Many issues left open, right up to the end

Example of project technology: airbus A380

• Several new technologies integrated
• Composite materials (e.g. carbon fibre reinforced plastic)
• Integrated avionics
• Final design configuration not frozen until as late as Spring 2001
(April 2005 – First flight)
Project characteristics and technological uncertainty levels

Mega project – T5 project

• Social-technical projects
– Technological adoption
– Innovation spill overs
– Economic support
– Societal benefits
Wrap up/thoughts..?
• Articles describe the changing nature of project management
– The success of a project depends on many more factors that go beyond
cost, quality and time
– There is a need to consider the various stakeholders (e.g. customer) and
• The dynamics of the market environment
• Diamond Model Introduction, Pt 1
– Novelty
– Technology
Lecture 3 Week 3 Project scoping/establishing objectives:
Diamond Model II
Why discuss project scope?
 Developing and outlining the parameters of “project and project management”
 Helps to prepare managerial approach to plan and execute the project in the right
way
 Can identify unsuccessful projects (“level of fit”)
 Gaps between the diamond shape of the project’s required characteristics and
 The diamond shape of the actual management style used (perceived,
conceptualised)
 If the diamond shape is not symmetric, figure out why
 When doing your project, sketch out a diamond – giving a good indication where
the lack of symmetry lies

 If you plan it well, if something disrupts your plan, you can easily recover because
you know how to handle it
 Planning is complex – planning is the project scope
 Initiating – who do we have and what are we trying to do
 Closing – time of death. Have parameters to see the lessons you can get out of the
project. Tying up lose ends
 Associated with the curve of the life cycle of the project, also helps you see about
resource allocation

Project scope
• Project scope is a definition of the end result or mission of your project – a
product or service for your client. The primary purpose is to define as clearly as
possible the deliverables for the client
• ‘A project management term for the combined objectives and requirements
 necessary to complete a project. Properly defining the scope of a project allows a
manager to estimate costs and the time required to finish the project.’
(investopedia)
• ‘Project scope is a definition of the end result or mission of your project – a
product or service for your client or costumer. The primary purpose is to define
as clearly as possible the deliverable(s) for the end user and the end focus’.
(Project Management, a managerial approach).

Analyse the project, and the symmetry of the diamond and see if these might be the
causes?
• Project objectives
• Are the objectives changing, are they supposed to be evolving etc
• Deliverables
• Milestones
• Perhaps a smaller component part of a bigger component
• Have to develop a certain level of skill through training
• Reach a milestone to see whether or not to continue with the project
• Technical requirements
• Limits and exclusions
• What can you and cannot do as a company, as a team
• What are you able to do
• Reviews with client
• Early, often and always

Scope
 It tells what needs to be accomplished in a project
 It tells what the objectives and requirements of a project are
• Cost is a function of the scope of a project
 When the scope changes, so do costs and delivery times.
 One of the main objectives is to define as clearly as possible the project outcome
• 50% of all problems occur due to unclear definition of project scope
 It is also used as a benchmark
• How successful was the project?
• Did the client receive what he/she expected?

Elements of project definition

Project definition is everything about a project – work content as well as expected
outcomes.
 What is included in the project
 What is not included in the project
 Defining the boundaries of the project
 Project Manager
 Project Sponsor/Owner/Funding
 Create a Baseline
 Work content created
 Project deliverables are planned and measured
 Estimates are made
Typical contents:
 Project Objectives*
 What the project aims to achieve
 Described in measurable terms
 Project Scope Description*
 Project Boundary
 Project Requirements
 Project Deliverables
 Project Constraints
 Project Milestones*
 Project Assumptions
 Critical Success Factors*

Scoping project objectives

 Project objectives
• Define major objectives
 Who are the stakeholders associated with military hardware?
 Different countries – governments
 Training – software
 Because you have different stakeholders, each one will have
different objectives, which will delay the project, cause conflict etc.
• What is the overall objective of the project?
• What is the client looking for?
 Example
• To build a new class of air superiority aircraft in five years for less than
£100 million per airplane.

Prioritising project objectives

 All criteria (of the Iron Triangle) are important, but what are the most important?
o If you’re focusing mainly on quality for example, you can let cost and time
slide a little bit. The triangle has to be balanced but the quality is your
guidance

Scoping project deliverables

• Deliverables
• Figure out when the milestones will occur and when you need to deliver
 on these milestones and what will be required
• Expected outcomes over the lifetime of the project
• The time when these outcomes are expected
• Deliverables for a new aircraft:
• an early design
• the final design
• the construction of the fuselage
• installation of weaponry
• testing, etc.
• Deliverables for a new software:
• an early design of the software,
• a prototype,
• a beta version, testing, etc.

Scoping limits and exclusions

 Limits and exclusions
• What is NOT included in the project: e.g. might not have the right technology,
maybe don’t know how to put tires on the plane, don’t have the software
expertise etc.
 Almost as important as defining what is included in the project.
 Avoid disappointment and misunderstanding
 Managing expectations
 Expectations of your clients
 Don’t promise them something and then don’t deliver
 Open communication with clients is key throughout
 Safeguard against claims

Scoping project milestones

 Milestones
• Significant events that occurs at one point in time
• Sometimes contractors are paid at milestones
• Normally, there is more than one milestone
• Key points in the project
• Contractors are sometimes paid at the milestones
• Normally projects have more than one milestone

Scoping technical requirements

• Aim is to ensure appropriate performance levels
Essentially what this project needs to be able to do/deliver at the end of it
NPD project – Engine
R&D – malaria vaccine
NS/change project – MBA redesign
 Finding the cure of Malaria?
• New technology
• Very difficult to scope
• How would you scope that?
• How would you define the technical requirements?
Do you manage work or deliverables?
• Do you manage work?
• Work Breakdown Structure (WBS) vs. Product Breakdown Structure
(PBS)
• Organisational Breakdown Structure (OBS)
• Developing the Linear Responsibility Chart (LRC) - PBS x OBS = WBS

This visual show the general approach many new product / service development
projects. Whilst much of the overall cost of the product/service/project is determined
very early on (i.e. in the project definition stage) too much attention happens later in the
process rather than earlier when it can make a real difference

In groups, create a scoping document for a new product development project

  Client: High-end supermarket wanting you to develop a new Japanese-style take-
away lunch menu
 Project budget: €250,000
Elements in the project scope
• Project objectives
• Deliverables
• Milestones
• Technical requirements
• Limits and exclusions
• Reviews with client

Planning is a key element of project management success

Work breakdown structure (WBS)

• A WBS identifies the total scope of the project broken down into manageable
work packages and tasks
• WBS is a process that sets a project’s scope by breaking down its overall
mission into a cohesive set of synchronous, increasingly specific tasks.
• Echoes project objectives
• Offers a logical structure
• Establishes a method of control
• Communicates project status
• Improves communication
• Demonstrates control structure
• Progress of each activity can be monitored and charted
• Can be used to curb any unrealistic expectation that the sponsor may have
• Can also be used for cost accounting
• Allows for development of project schedules

 WBS is a map of the project

  The central idea is to:
• Start with the project
• Then the deliverables of the project
• Sub-deliverables
• and work packages
 Work packages are the lowest level of the WBS

 Small parcels of work

 Control point
o The activities are defined
o The schedule is formed
o Cost estimates are made
o Resources are assigned
 Work package manager (WPM)
o Responsibility for the work package
 Only when work packages are complete can deliverables be realised

 The total cost of a project is the sum of the costs of all WPs
 Work packages are short duration tasks
• Have a definitive start and stop point
• The costs should be accounted at the WP level
• Estimations can be carried out :
 Using information available in the organization
 Collected from those performing the tasks in the project
This is perhaps better explained with an example
WBS example

Creating WBS
• Work packages (the most detailed part of a WBS):
• Should not exceed 10 days
• Should be independent from each other
• Should belong to one sub-deliverable only
• Should constantly be monitored
• Each work package should define:
• the work (what needs to be done?)
• the time to complete the WP (how long?)
• the budget to complete the WP (how much?)
• the resources needed (how much?)
• who is responsible (who?)
• the monitoring points (how well?)

Assigning responsibility
Project responsibility matrix
• Identify personnel responsible for the activity or work package
• The person/team/organisation responsible for executing the work element
• The person responsible for authorising the work element.
• The person accountable for delivering the work element.
• Any supporting personnel or assistances required to manage the work activity
• The person responsible for signing off the work element and formally confirming
completion of the work package.
Integrating work breakdown structures (WBS) with the organisation breakdown
structures (OBS)
 In this step, one needs to define which part of the organization will perform each
task
 The objective is to define the organization breakdown structure (OBS)
Complexity
• How complex is the system and its subsystems?
• Measures the complexity of the project (not the product/service)
• 3 levels of complexity
Levels of project complexity

Pace
• How critical is the time frame?
• The urgency of the project or how much time there is to complete the project
• 4 levels of pace

Pace affects (impact on PM style):

• The planning and reviews
• The autonomy of the project team
• Involvement of top management (particularly on urgent projects)
Lecture 4 Week 4 Stakeholders
From Lecture 3
 Continue with project scoping and establishing project objectives
o Work Breakdown (Seminar 1)
 Will work with identifying stakeholders
 Read articles for L4
o Agile Management Project
o One Size Does not fit all projects
 These readings address project scoping/identifying the
characteristics, parameters and objectives of the project
 The idea is to increase understanding about projects and how to
approach each with a high degree of flexibility in defining and
evaluating their fit to strategic objectives
 Check Ackerman and Eden’s (2011) stakeholder power-interest
grid
One Size Does Not Fit All Projects (Shenhar 2001)
 Contingency theory – different external conditions have an influence on the
organisation’s characteristics – hence, the effectiveness of the organisation
depends upon its ‘fit’ to the environment (Lawrence and Lorsch 1967)
o Organic organisations (informal, decentralised) would have a better fit
with uncertain and complex environment (e.g. Google)
 Innovation is more apparent
o Mechanistic organisations (formal, centralised, specialised) would fit
better in stable, simple, more certain environments (e.g. WalMart)
 Development of more routinized products
 How would this apply to projects (organisations within
organisations?)
o Explores uncertainty and complexity
 Technology dimension (uncertainty)
o Low-tech, medium-tech, high-tech, super high-tech
o Uncertainty is always associated with stakeholders because you never
know what they’ll do
 Complexity dimension (scope)
o Assembly, System, Array
o Qualitative and Quantitative Analysis
o Diamond is very useful for understanding the complexity of the project
but it is just one tool, so may not be applicable for all projects
 Conclusions?
o Using contingency theory to examine the nature of projects
o Study reflects the concepts of uncertainty (technology) and scope
(complexity)
o Project managers need to maintain balance between inward and outward
influences, planning and attention, differentiation and integration and
formal/informal conduct
o Development of the Diamond Model
 Organisations using a framework to help better determine the
balance of risk and opportunity for one project as well as for a
portfolio of projects
SCRUM – Agile Project Management
 Agile Project Management
o Continuous review and short-design (cycle) management approach
developed to adapt to dynamic environments
o Exhaustive planning and resource requirements are depleted before
actual development work
o Requirements definitions and labour intensity have changed the project
before development work (a contributing factor is the number of
stakeholders)
 Principles
o Individuals and interactions over processes and tools
 if people don’t know how to use a tool the information doesn’t get
assimilated
o Working software over comprehensive documentation
o Customer collaboration over contract negotiation
 When you’re going to talk to your customer, what the customer
needs, who is the customer
o Responding to change over following a plan
 Objectives
o Risk is minimised by focusing on short iterations of clearly defined
deliverables
o Direct communication with partners in the development process is
emphasised over extensive project documentation
Scrum – Agile Project Management – Process (Cervone 2011)
 Scrum based on three major areas
o Roles
 Leader oversees the project’s values, coordinates practices and
people, helps reduce barriers to project efficiency and effectiveness
 Self-organising, cross-functional team
 Product owner ensures the final product meets specifications
o Process
 Planning
 ‘Sprints’ limited to a month of product development (no outside
influence)
 quick working deadlines because everything is still fresh in
your mind
 Daily meetings (short to check progress – not solve problems)
 Review meeting (progress reported to product owner)
 Internal
o Artefacts
 Product backlog – project requirements in priority of backlog items
(responsibility of product owner)
 Used to determine the amount of effort and resources
during each ‘sprint’
 Sprint backlog – subtasks associated with the project
(responsibility of the team members)
 Burn down charts – documentation of the project’s progress (in
backlog hours) for sprint and product (time to release of product)
Scrum – Agile Project Management – Summary
  Simple approach to project management
o Roles of team members clearly defined
 Ownership and responsibility for the project
is broad
o Operates in short iteration cycles
o Forces high degree of communication
 However,
o Must have some documentation
o Project leaders must have good oversight
o Requires experienced project management leaders

Stockholders
 Who is a stockholder (shareholder)?
• The ‘owner’ of the project
• The one financing the project
• Private and nationalized companies are examples of stockholders
• Project context: Anyone who has influence or power over a project, or has
an interest in its successful or unsuccessful conclusion.
• Interest in the success only?
 A stakeholder may also be interested in the failure of the project
 Those living nearby Heathrow airport oppose its expansion.
 Shale gas, etc.
Types of stakeholder management
 Descriptive: Use stakeholder thinking to map stakeholders and provide a picture
of what they want
 Normative: Go beyond describing stakeholders and their demands to argue that
there’s a moral imperative to give a hearing to the demands of all stakeholders
 Instrumental: Stakeholders are important insofar as they shape an
organisation’s survival and success; firms should develop good stakeholder
relations in order to further these ends
What/who is a stakeholder?
A stakeholder is not….
 An agent necessary for the survival of the firm
 An agent that can affect, or is affected by, the achievement of an organisation’s
objectives
 An agent that bears some form of risk through an investment in an organisation
Mapping Stakeholders

Internal stakeholders:
The Client Commissioned the project, The Project Sponsor, Project Champion, Owner,
Person within organisation driving the project, The Project Team, Project Manager,
Functional Managers, Responsible for assigning resources to the project, Contactors,
External organisations employed on the project, Project Support, Administrative
External stakeholders
End users, Operate / use project, Suppliers-Provide materials for the project,
Competitors -Affected by project outcome, Lobby Groups, External groups – for or
against project, Shareholders, Investment, Employees, Work within client organisation,
Government Agencies, Regulatory Bodies

Identifying stakeholders
1. Focus on an issue
2. List all stakeholders
3. Agree the importance or influence of each stakeholder or stakeholder group
4. Agree an estimate of the knowledge that each stakeholder or stakeholder group
has
5. Agree an estimate of each stakeholder support
6. Estimate your degree of confidence in your valuations
Key questions to help understand stakeholders
 What financial or emotional interest do they have in the outcome of your work?
 What motivates them most of all?
 What information do they want from you?
 What is the best way of communicating your message to them?
 What is their current opinion of your work? Is it based on good information?
 Who influences their opinions generally, and who influences their opinion of
you? Do some of these influencers therefore become important stakeholders in
their own right?
 If they are not likely to be positive, what will win them around to support your
project?
 If you don't think you will be able to win them around, how will you manage their
opposition?

Consultation
 valuable insights and experiences
 the value of consultation for improving legitimacy and buy-in for decisions
 some groups act a bridge between the decision makers and citizens
 consultation as a way of supporting the relationships
…..how could we consult Eden stakeholders?

Types of consultations
 web-based forums
 written consultation (paper and online)
 surveys
 focus group
 blogs and online forums
 informal conversation
 stakeholder panels
 stakeholder advisory and expert groups
 deliberative workshops and conferences

Consultation criteria
 Criterion 1: When to consult
 Criterion 2: Duration of consultation exercises
 Criterion 3: Clarity of scope and impact
 Criterion 4: Accessibility of consultation exercises
 Criterion 5: The burden of consultation
 Criterion 6: Responsiveness of consultation exercise
 Criterion 7: Capacity to consult

 Consultation – regular and early

 Give stakeholders enough time to respond and be clear about their purpose.
  Write documents in simple language and be clear about their purpose.
 Explain where decisions have already been made – make clear what you can and
what you can’t change
 Use more than one method of consultation
 Be flexible and sensitive to the needs of those you wish to consult
 Encourage those consulted to give honest views, for example by assuring
confidentiality when it is requested.
 Publicise the consultation and encourage participation
 Analyse carefully the results of the consultation and report back on the views
were received and what you have done as a result.
 Evaluate carefully after consulting, and learn lessons for next time.

A socio-dynamic perspective to stakeholders

 Fauvet’s theory of socio-dynamics can be used to anticipate a player’s role in
change

 Jean-Christian Fauvet 1920-2010

 An English interpretation of this work can be read in chapter 3 ‘measuring the
payer sociodynamics (p23-p38) of Oliver D’Herbemont and Bruno César
‘Managing sensitive projects’ A lateral approach (English version adapted by Tom
Curtin and Pascal Etcheber
http://books.google.co.uk/books?id=0SNlapIIHeUC&pg=PA23&lpg=PA23&dq=SocioDy
namic+Jean+Christian+Fauvet&source=bl&ots=3auTOQ72y2&sig=89OVhMC6nN2t8_lTf
YOJDgAsNmo&hl=en&sa=X&ei=xeA2VIrVJ-
aV7AaLroDwDw&ved=0CCUQ6AEwAQ#v=onepage&q=SocioDynamic%20Jean%20Chri
stian%20Fauvet&f=false
Synergy -
Antagonism -
  Often these are players who are totally in favour of a project but they believe it is
not being progressed in the correct manner. A great example is an entrepreneur
who built up a company but has now retired.

Project stakeholders – who and what matters?

 Why is it important to manage stakeholders?
 Do you manage a project to satisfy stockholders or stakeholders?
 If you are a project manager for an oil and gas company, should you manage
the project with only the interests of your employer, e.g. BP and Shell, in
mind?
 Should you care about others that may be affected by the project you are paid
to manage? E.g. local population?
Project stakeholders
 Why is it important to manage stakeholders?
 There are two views:
 View 1: Stakeholders are fundamental to the success of a project, and should,
therefore, be managed. But only when they affect the final outcome of the project
 However success is defined, it is vital to manage stakeholders.
 Stakeholders such as government, NGOs, the general public are crucial to the
success of certain projects
 Externalities
 View 2: It has been argued that projects should be managed to satisfy not only
the need of stockholders, but also those of stakeholders.
 Stakeholders are seen as having ‘ownership’ of the project
 Maximizing their welfare is a goal in itself
 Stakeholder’s and stockholder’s goals need to be considered

Why worry about stakeholder management?

1. Using opinions of stakeholders to shape projects at early stage makes support
more likely
 2. Input can also improve quality of project
3. Gaining support from powerful stakeholders can help you to win more resources
4. Communicating with stakeholders early and frequently helps understand what
you are doing and benefits of project
5. Can anticipate what people's reaction to your project may be, and build into your
plan the actions that will win people's support.

Why should PMs pay attention to stakeholders?

 A project can have too many stakeholders
 There are numerous theories/frameworks to help you to decide how much
attention a given stakeholder should receive
 What criteria would you use to decide whether a stakeholder is worth being
listened?
 In other words, whose needs should a project manager pay attention to?

Managing stakeholders
 Organisations face unlimited demands from stakeholders, but have limited
resources
 Organisations have to prioritise which stakeholder demands to satisfy
 How do you decide who to satisfy and who not to?

 In 2007, there was criticism of the Eden Project in the press, saying that the
project received too much public funding, £130 million from various sources, and
that the project should be more self-supporting.[8][9][10][11] But this criticism
ignores the fact that some £800m has been pumped into the local economy to
date, to the considerable benefit of B&B owners, cafe owners, people who are
employed by Eden and others.
 Eden Project's carbon footprint has also been criticised[who?] for drawing over
one million fossil-fuelled visitors a year to Cornwall, mostly by car or airplane,
and for staging rock concerts.

Power-interest Matrix
 The power-interest matrix is a very simplified framework that helps project
managers to decide how relevant stakeholders are to their projects
 It basically ranks stakeholders according to their interest and power in the
project
Stakeholder map
Using Fauvet to deal with stakeholders
 “It is these that assassinate presidents, vandalise machinery during strikes, start
fights at public meetings, or write hate mail” (p37)
 “Whilst you can respect opponents for the legitimacy of their opposition,
mutineers must be treated as a danger that they are to society”
  Schismatics are pathological (academics!). The only upside is they are a nuisance
for both you and your opponents!

Take away
 Contingency Theory – A major driver of the adaptive approach to project
management
o Shenhar (2001) article provides background for uncertainty (technology)
and scope (complexity)
 o Cervone (2011) explores the issues of agile project management and
highlights an approach that is adaptive to dynamic markets (recognition
of self-empowering teams and stakeholder management).
o Understand the concepts and reasons associated with managing
stakeholders
 Fauvet’s theory of socio-dynamics (synergy – antagonism)
 Power-Interest Matrix
 The role of stakeholders and their influence on the project
o Review Stakeholder theory (Milner 1997) for L5
 Power, Legitimacy, Urgency

Appendix
Key learning points
• A stakeholder can affect, or is affected by, the achievement of an organisation’s
objectives
• Consultation needs to start early, involves a variety of methods, and should be
learnt from
• Fauvet’s theory can help identify levels of synergy and antagonism amongst
different stakeholders
• There are a variety of tools to assist in stakeholder identification, consultation
and management
• Managing stakeholders involves trade-offs and is a dynamic process

 This should remind you of the OM perspective on market requirement (right)

versus operational resources (left) and the key of reconciliation
Critique of stakeholder theory
 Stakeholder management, and the changes to the corporate objective function
that accompany its practice, unhelpfully and unnecessarily complicate
managerial practice
 Stakeholder theory lacks specific predictive content. Because almost any
managerial decision can be presented as a response to stakeholder wants, this
gives management a means to legitimate almost any decision they take, whether
thus motivated or in the corporate interest or not
Mitchel (1997) – Towards a theory of stakeholder identification and salience
 Michel (1997) proposes another theory for stakeholder management
 “The principles of WHO and WHAT really counts”
 The framework is a little more elaborated than the power-interest matrix.

 Broadly, it classifies stakeholders based on the following constructs:

 Power
 Legitimacy
 Urgency

Mitchel (1997) – stakeholder typology

Lecture 7 Week 7 managing the quality of projects

Agenda
 Understanding the role of quality in projects
 What is quality?
 Project quality from a gap perspective
 Project quality from a process perspective
 Review approaches to quality management
Nature of projects (reminder)
 Uniqueness
 Uncertainty
 Dynamic
 Characterised by change
 Intangible

Defining quality
Product based: a precise and measurable set of characteristics
Attributes: perceived quality and aesthetics – reliability, responsiveness, security

Major contributions to the debate on quality

 Quality as excellence
 Quality as value
 Quality as conformance to specification

Quality as excellence

Issue: trade-offs between excellence and other priorities, conflicting perception of

excellence

Quality as value

Issue: lack of clarity on project value, benefit or cost

Quality as conformance to specification

issue: changes to specification, uncertainty about specification

Quality as meeting or exceeding customer needs

Issue: difference between expected and perceived needs

Quality as service

Issue: current models based on repeatability, consistency and standardisation of

customer experience

Project quality from a gap perspective

Project quality from a process perspective
Approaches to quality management
 Since the 1950s quality conformance planning – otherwise referred to as quality
assurance – has been used to ensure that minimum standards are maintained in a
wide array of activities.
 Project manual:
o Introduction, Planning, Execution, Records, Miscellaneous Info
Key points
Questions?
What is the role of quality in projects?
Why is quality hard to define in projects (i.e. the nature of the project impacting on the
ability to define quality)?
Do you understand the gap perspective and how Gaps 1-4 contribute to Gap 5?

Week 9 Lecture 9 Managing Costs

Agenda
 What is cost estimation?
 Why is cost estimation important?
 Top-down approach to cost estimation
 Bottom-up approach to cost estimation
 Cost estimation: theory vs. practice
 Random versus systematic error
 Project selection based on cost models

What is cost estimation?

 “Estimating is the process of forecasting or approximating the time and cost of
completing project deliverables.” (source: Larson and Gray, Project Management:
The Managerial Process).
 “Project estimation is indeed a yardstick for project cost control. And if the
yardstick is faulty, you start with the “wrong foot” … we exhort you not to
underestimate the estimate” (source: Kharbanda & Pinto, What Made Gertie
Gallop: Learning from Project Failures).
Why is cost estimation important?
 Estimates are important to support good decisions.
 Estimates are needed to determine whether a project is worth doing
 Estimates are important to develop time-phased budgets and cash-flow needs
(cont.).
 Cash flow

Time

Appraisal Construction Operation and Maintenance

-ve

 Estimate the costs by estimating the cost of each task to estimate a budget

Top-down approach
 Know the previous costs or cost allocations so derive from then
 Top-down estimates look at a project as a whole.
 Top-down estimates are normally derived from someone who uses experience to
determine the project cost.
 There are different ways to carry out a top-down estimate.
 Some of the methods used are:
• Analogy.
• Ratio Methods (sometimes called parametric)
• Consensus Method
Top –down approach – analogy method
 Example 1: Costing the Tokyo games using analogy
 How much will be the next summer Olympic games in Tokyo cost?
 Look at the previous costs – use as a cost basis, factor in things such as inflation
Top-down approach – ratio method
 Example 2: costing a house using the ratio method.
Top-down approach – consensus method
• This method uses pooled experience of senior management to estimate the total
costs of a house.
Top-down issues?
 Translating long-term budgets into short-term budgeting
 Competition for funding from lower-level managers (know your stakeholders!)
o Competition can be unhealthy
o Insufficient budget to complete objectives
 Can be a zero-sum game
Bottom-up approach
 Bottom-up estimates are more detailed and normally more accurate than top-
down estimations. They are also not perfect.
 The main idea of bottom up estimate is to “break down” the project into smaller
parts – the work package
 • We have discussed WPs in the lecture on project definition
• In many cases, the less accurate estimate provided by the top-down approach is
refined by a bottom-up estimate.
• E.g. bottom up estimates are almost invariably carried out after top-down
estimations for medium and large projects
• At the end of the bottom-up estimation, it is common to compare it with the
results of the top-down estimation.
• Today we will focus Engineering Built Up, which is based on the Work
Breakdown Structure (WBS).

Bottom-up approach WBS method

 One key element in a bottom-up estimation is the Work Breakdown Structure
(WBS).
 The overall idea is that the cost of the project equals the sum of the costs of the
WPs.

 This all seems very simple…

 Garbage in, garbage out.

Estimating costs of work pages

 There are numerous ways to estimate the cost of a WP.
 Some of them are similar to calculating the cost of a project, but applied to
specific tasks.

Detailed estimates of costs

 Using detailed estimates for the WBS work packages.
 Ask people involved in the manufacturing of the engine.
 Ask those involved in the purchasing of engines.

Parametric estimates of costs

 You can also use parametric procedures.
 Parameters – measurable factors that can be used in an equation to
calculate results
 Multiply measured parameters by cost/unit values (parametric estimates)
 Using parametric procedures applied to specific tasks.
The conditions for preferring top-down or bottom-up cost estimates

Cost estimation: theory vs. practice

 Cost estimation is a highly complex and difficult task.
• Organisations can sometimes spend months on costing exercises.
• This is particularly true for projects involving untested technology.
 Example, the construction industry.
 Predictability of cost of construction
• % on target or better has risen from 37% in 1999 to 46% in 2009 (was 52% in
2003)
 Predictability of time for construction
• % on target or better has risen from 34% in 1999 to 59% in 2009 (was 62% in
2000 and 2005)

What factors complicate cost estimation and cause cost escalation in practice?
• Planning horizon (project planning)
• People (know your stakeholders)
• Organisation culture – a lot of turnover, culture changes, different
dynamics, who is there, who has capabilities, promotions
• Technology.
• Legislation/political change

What causes cost escalation?

• Low initial estimates. Due to poor perception of the task, considering the
task in isolation and assuming everything will go as planned
• Unforeseen technical difficulties. Possibly due to incompetence but may
occur at the extremes of performance that could not have been predicted
in advance.
• Lack of task definition at the start. This is due either to an unclear view of
the task or from insufficient attention to planning
• Changes in scope and specification. Often due to external stimulus such as
market trends, product legislation or clients requirements
• Economic and other external factors. This includes inflation, public
enquiries and protests, national politics and exchange rate fluctuations.

Cost estimation – random error?

project real costs estimated costs overrun (real-estimated)
1 10 12 -2
2 13 20 -7
3 20 10 10
4 8 8 0
5 2 10 -8
6 20 10 10
7 10 10 0
8 5 10 -5
9 3 2 1
10 20 10 10
11 10 17 -7
Total 2

% error 1.7%
  If the error is not systematic (i.e. random error), the % will approach zero
(0) when the number of projects increases.

Cost estimation – systematic error?

project real costs estimated costs
overrun (real-estimated)
1 20 5 15
2 22 20 2
3 21 10 11
4 10 8 2
5 15 10 5
6 12 10 2
7 12 10 2
8 11 10 1
9 5 2 3
10 20 10 10
11 18 17 1
Total 54

% error 32.5%

Estimation error – systematic

 Errors empirically observed in practice in a number of projects do not
even out (i.e. are not random)
 Research has shown that, for certain projects (Flyvbjerg, 2003)
 Error of underestimating cost more frequent than error of overestimating
cost

Selecting projects based on costing models

 Payback period
 Accounting rate of return
 Net present value

Key learning points

 Can you answer the following questions?
  What is cost estimation?
 Why is cost estimation important?
 Do you understand how the top-down and bottom-up approaches to cost
estimation works?
 Do you understand the difference between theory and practice in cost
estimation?
 Do you understand the difference between systematic and random error?
 Do you understand how different costing methods can be used in project
selection?

Lecture 10 Week 10 Monitoring and control

 Focus on a particular issue and go in depth

Today’s agenda
 Explore the role of project monitoring and control
 Conceptual framework
o Characteristics
o Limits
o System measurement
o Visibility
o Performance feed back
o Initiating corrective action
 Earned value analysis (EXTRA)
 Defining risk – 13 Dec
o Failure detection and analysis
o Failure prevention
o Failure mitigation

Monitoring
 Comparison of actual costs and schedule with planned cost and schedule
Control
 Setting control limits
 Monitor for deviation outside limits
 Take corrective action
o Very important
o Is it needed? Not needed?
 Project manager add value in the planning section and when making decisions as
the project goes underway and you have to make decisions according to the
changes to the parameters set
The role of monitoring and control

Challenges to monitoring and control

Measurement (Monitor)
 Build parameters around measures
 What do we measure?
o If you have cost driving objectives then measures of cost need to be put in
place
 How do we measure?
o Ideal data vs available data
 How do we share data?
 Who measures?
Control (response to measurement)
 Interpretation of data
 Who “controls”?

Design of control system – requirements

1. Characteristics
2. Limits
3. System of measurement
4. Visibility
5. Feedback of performance
6. Instituting corrective action

1. Defining system characteristics of importance

a. Prioritise important characteristics of control
b. Link to strategy
c. e.g. TCQ (Time, Cost & Quality)
 Scope (Features, functionality)

Time (Schedule, CP) Cost (Budget, resources)

Deciding measures and setting standards

• Objective or subjective?
• Depends, ideally have boths
• Measures will drive beaviour
• Internal or external?
• Bottom up structure: internal.
• Organizational driving project: external or also external stakeholders
• Complaints or compliments?
• Absolute or relative: absolute get standards from common projects. Relative:
moving target, new technology being developed

 Measures are set in place to change behaviour: performance can be measures

against historical standards, improvement goal or benchmarks – which one you
choose effects the outcome
 Limits: how to vary performance. What variations do we want? Transformation
process system
 You want to investigate early so you don’t get extra costs later on

Different standards of comparison = different messages

Setting standards: what the project entails: customer-oriented project then customers
set the standards

2. Define limits to variation

a. Negative deviation triggers;
i. Monitoring
ii. Planning
iii. Action
  Budgeting – support with data to align with objectives
 People
 Process
 System

 Set parameters early then provide support for decisions you make

 Project office: everyone involved gather info and inputs to the project
Radar
 Objectives – ensure 95% of aircraft are flying
 Problems – radar is only fully function at 80%
 Radar is needed to fly
 Inventory is increasing, which means costs are high
 Time to fix radar is increasing
 Using previous design requirements –
 Develop a control system that addresses 1) characteristics, 2) Limits, 3) system of
measurements, 4) feedback, 5) corrective action

Feedback loops:


Earned Value analysis (EVA)

• How are we doing?
• Time, Cost
• When might we finish?
• How much will it cost us to finish?
• Actual cost (AC)
• AC = 36,000
• Planned value (PV)
• Earned value (EV)
Calculations: cost performance
• Cost variance (CV)
• Cost performance index (CPI

Use of cost performance index (CPI)

• Predictive … i.e. the CPI will help estimate the likely cost of the project
• Estimate at completion (EAC)
• EAC = Budget at completion / CPI

Calculations: Time performance

• Schedule variance (SV)
• Schedule performance index (SPI)

Use of schedule performance index (SPI)

• Estimated time to complete (ETC)
• ETC = Original time estimate / Schedule Perf Index …in this example, 10 weeks
= 10 weeks / 0.696
Key learning points
What is the role of monitoring and control in project management
What are the elements of a project monitoring and control ‘system’?
Characteristics, limits, measurement, visibility, feedback, and correction
What is the purpose of earned value analysis (EVA)?
Can you calculate actual cost (AC)?
Can you calculate estimate value (EV) and planned value (PV)?
Can you calculate cost variance (CV), cost performance index (CPI) and estimated actual
cost (EAC)?
Can you calculate schedule variance (SV), schedule performance index (SPI) and
estimated time to complete (ETC) ?

Lecture 11 Week 11 Project completion and lesson learned

Today’s agenda
 Understanding Project failure and recovery
 Completing projects
 Learning from projects

Project recovery
• If a failure has occurred, and a negative impact has occurred, we need to recover
effectively
• Failure recovery is the set of actions that are taken to restore the state before the
failure occurred
• …Failure also allows us to LEARN for future projects
HMS Thetis – Royla Commission Report
Named the following as primary reasons for the disaster:
 rear door of the torpedo tube was opened to the sea
 test cock painted over
 crew failed to close the bulkhead door
 crew failed to pump out the flooded compartment
 those on surface gave no effective help
 crew failed to save themselves (using the Davis apparatus)
What the organisation still vulnerable?
 as systems become more complex, accidents may be inevitable, however, there
remains the potential to reduce the probability of such accidents
 however, in the Thetis case the investigators were mainly concerned with
financial responsibility - hence report was strongly biased
 while individual blame was conveniently apportioned primarily to the dead, few
of the Navy’s systemic problems were addressed by the Commission. Lessons
learned were thus minimal, and focussed primarily on people (individuals chose
not to save themselves) and technology (bulkhead door re-design, more careful
painters)
Lessons for managing failure
Develop a designated organisation to manage crises in advance of their occurrence:
 designate responsibility
 essential personnel contactable
 designate locus of activity
 equip it adequately

Arrange frequent drills. They:

 allow observation of flaws in the crisis management processes
 develop automatic behaviour that can speed recovery
 remind the operation of the on-going possibility of a crisis
 inculcate principles for the solution of technical problems, which may find
application in unknown and unfamiliar situations

Institute crisis training:

 should draw on experience from other operations and past internal crises
 should address common crisis management mistakes (such as “initial
hypothesis” problem)
 should focus on general processes as well as specific plans for specific
occurrences
Anticipate extraordinary circumstances and periods of transition:
 the overwhelming majority of safety problems, chemical spills, and systemic
technical failures occur in periods of transition or “unusual” circumstances - e.g.
installation of new equipment, product changes, sudden increase in no. of
temporary staff, software / hardware updates … i.e., your average project
environment
Completing projects and learning from them

5 step process to completion and learning

1. Incentive to finish project
2. Documentation completed
3. Closing down project systems
4. Review of activities
5. Project-to-project knowledge transfer

1. Incentive to finish
a. Avoid the 90/90 - The situation the project manager needs to avoid is
when a project spends 90 per cent of its life 90 per cent complete.
b. Disincentives (contractors)
c. Completion bonus
2. Documentation
a. Evidence that project has been completed
b. Customer guidance on operation and maintenance
c. Allow future work on similar projects to have a good starting point
3. Closing project system down
a. Close accounting system
b. Sign-offs – legal termination
c. Handover
4. Project review
a. Immediate review
b. Immediate remedial and improvements
c. Long term audit/review
d. Strategic and procedural

5.
Phase 1: Vanguard Project
 Established at the front of the organisation to explore new technology or market
opportunity
 Often separate from mainstream business
 Phase of ‘within project’ learning – exploration and experimentation
 Established project capabilities and routines not sufficient
 Need to invent new routines
Phase 2: Project-to-Project learning
• Capture and transfer the experience and insights from vanguard to subsequent
projects
• Key members of vanguard may join new projects
• ‘Project-to-project’ learning
• Project accounts, war stories, team learning, etc.
• Formal learning mechanisms (intranets, web-based tools, project guides,
etc.) produced to codify the experience and make it available to other
teams

Phase 3: project-to-organisation learning

• Occurs after a sufficient number of new projects
• Consolidate initial learning and systematically spread accumulated knowledge
across the organisation responsible for delivering new projects
• Institutionalise new project routines and processes
• New standardised and repeatable processes

Project capability building (PCB) model

Organisational learning across project types

Key learning points?

Can you answer the following questions?
 What are the analytical steps in examining failure recovery?
 Primary causes, contributing factors, response, and on-going vulnerability
 What are the key ways to successfully recover from project failures?
 What steps are involved in project completion and learning?
 How can projects learn from previous projects?
 How can organisations learn from previous projects?