Navigating Complexity

A Practice Guide

Project Management Institute

• Publisher: Project Management Institute
• Year: 2014
• Print ISBN: 9781628250367
• eBook ISBN: 9781628250718
• Topic: Business
• Subtopic: Project Management
• Index: Business

With greater organizational complexities looming on the horizon, PMI has introduced Navigating Complexity: A Practice Guide. The definitive guide expands upon the principles, tools, and techniques presented in the PMBOK® Guide and other foundational standards, providing a streamlined approach to understanding and navigating complexity. This groundbreaking guide fills a void, providing the first published reference to help project management professionals successfully mitigate complexities and accomplish their organizational goals.

1

INTRODUCTION

Since the advent of Project Management Institute's (PMI) A Guide to the Project Management Body of Knowledge” (PMBOK® Guide) [1]¹ in early 1983, the number of practitioners² has increased significantly as well as the range and level of complexities of programs and projects. For the purpose of this practice guide, complexity is a characteristic of a program or project or its environment that is difficult to manage due to human behavior, system behavior, and ambiguity. Complexity is not directly proportional to the size of a program or project; small programs and projects may contain substantial complexity. In any program and project with complexity, there are inherent risks and uncertainties that need to be addressed.

Complexity in programs and projects has always existed (e.g., building of the pyramids, geographical infrastructure development, government or military procurement projects, and various national or international space programs). However, globalization, new technologies, and fragmented supply chains have significantly increased and compounded the complexity of what practitioners are being asked to manage. Because organizational leaders are expecting more complexity in the years to come and because there are more budgets at risk for programs and projects with complexity [2], there is an urgent need for successful delivery of such programs and projects, especially those with elements of complexity. As a result, there have been a variety of studies and publications on complexity; but few focus on providing practitioners and organizations with practical approaches to navigate complexity.

This practice guide is intended to provide practitioners and organizations with practical ways to recognize and navigate complexity. The presence of complexity does not change the foundational program or project management methodology. For example, the method for calculating earned value would be the same. The presence of complexity requires practitioners to focus more on emergent issues, to apply critical thinking, and to know when to give special importance to a specific program or project management processes and Knowledge Areas. While the ability to demonstrate leadership, to effectively communicate, or to tailor a process or select an appropriate tool or approach may need to be cultivated and honed, focus on and awareness of complexity will enhance the likelihood of success in navigating complexity.

This practice guide has been developed for program and project managers at all levels of experience, senior management, and organizations. It is an expansion of and companion to information provided in PMI's four foundational standards including the latest edition of A Guide to the Project Management Body of Knowledge (PMBOK® Guide), The Standard for Program Management [3], The Standard for Portfolio Management [4], and Organizational Project Management Maturity Model (OPM3®) [5], in addition to the PMI Lexicon of Project Management Terms [6].

1.1 Purpose and Structure of this Complexity Practice Guide

The purpose of this practice guide is to help practitioners and organizations navigate complexity by providing the following:

• Essential organizational considerations when dealing with complexity to realize portfolio strategic initiatives,
• A practical view of how complexity can be categorized and causes of complexity understood,
• An easy to use complexity assessment, and
• Useful practices, complexity scenarios, and guidance to transform insights into actions and manage the effects of complexity through an action plan.

Drawing on both relevant literature and views of experienced practitioners, this practice guide provides a means to assess and navigate complexity in programs and projects through content presented in the six subsequent sections:

• Section 2 Organizational Considerations. Proposes the need for organizational support structures to align people, programs, and projects.
• Section 3 Encountering Complexity. Presents the three main categories of complexity: human behavior, system behavior, and ambiguity and their underlying conditions, which represent causes of complexity that contribute to difficulty in managing a program or project.
• Section 4 PMI Foundational Standards and Useful Practices. Identifies the four areas (scope, communications, stakeholders, and risk), which present the most challenges when faced with complexity on a program or project, and provides suggested practices that can be employed to address these challenges.
• Section 5 Navigating Complexity: The Assessment Questionnaire. Offers a questionnaire to assess and determine potential contributors to complexity in programs and projects.
• Section 6 Complexity Scenarios and Possible Actions. Provides situational examples in the form of scenarios that demonstrate complexity associated with a program or project. Possible actions are suggested to help navigate complexity in those situations.
• Section 7 Developing the Action Plan. Presents considerations for creating a plan based on actions selected, and the need to monitor and reassess complexity on a program or project on a periodic basis.

While there are numerous elements associated with complexity, this practice guide addresses those elements that are commonly associated with programs and projects.

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¹ The numbers in brackets refer to the list of references at the end of this practice guide.

² Throughout this practice guide, the term “practitioner” refers to both program and project manager.

2

ORGANIZATIONAL CONSIDERATIONS

In today's complex world, organizational preparation is necessary to facilitate the successful execution of programs and projects. This section provides senior management with information on how to enable successful outcomes for programs and projects with complexity, which is important to meeting organizational goals and objectives. Practitioners may also find this section helpful as organizational preparedness will have a significant impact on the execution of their programs and projects regardless of the level of complexity.

In some organizations, senior management may serve in the role of sponsor for programs and projects that contain complexity. Senior management may also be part of the organization's portfolio, program, or project management office (PMO).

According to PMI's Pulse of the Profession™ In Depth Report: Navigating Complexity [2], high-performing organizations recognize that, regardless of the degree of complexity, standardized project management practices, effective communications, and a strong talent base are necessary for program and project success. In addition, executives with strong leadership skills play a key role in enabling successful program and project outcomes.

This section addresses some key organizational enablers that can impact the outcome of programs and projects with complexity. Specifically, the following considerations will be addressed:

• Leadership,
• Portfolio management,
• Collaboration for successful outcomes,
• Performance metrics,
• Impact of organizational structures,
• Resource gap analysis, and
• Senior management, practitioner, and team competency.

2.1 Leadership

One of the most important ingredients for the successful navigation of complexity in programs and projects is leadership. Leadership of programs and projects with complexity may require, but is not limited to, the following practices:

• Provide active executive sponsorship and commitment.
• Highlight the critical success of key programs and projects to the organization.
• Empower the program and project manager and provide the program or project team with the organizational support to facilitate successful delivery of results and benefits.
• Be aware of early warning signs of problems and put action plans in place to address, as needed.
• Use a flexible leadership style, which implies that the style changes with the situation and the program or project team or individuals.

For programs and projects with complexity, it is recommended that senior management communicate the importance of critical programs and projects to the entire enterprise so as to reinforce the organization's commitment to a program or project. One effective method employed by senior management is to prioritize programs and projects and communicate that prioritization to the impacted organizations. When senior management highlights that a certain program or project is of a higher priority for meeting organizational goals and objectives, then the team is more likely to receive the necessary support from other operational functions.

Flexible leadership is about being able to adapt leadership style to changing situations and stakeholders. Depending on the situation, a flexible leader may use various approaches tailored to the situation.

2.2 Portfolio Management

One element of complexity that can impact an approved or selected program or project is a shift in organizational strategy, which may require portfolio management realignment. In some cases, the organization (a) may decide that the program or project is no longer of strategic value and may cancel the program or project; or (b) may request that the scope and objectives of the program or project be revised to align with new organizational strategy. Portfolio management provides an organization with the means to successfully manage change in strategy. Additional information on this topic can be found in Managing Change in Organizations: A Practice Guide [7].

According to The Standard for Portfolio Management, portfolio management enables the organization to leverage program or project selection and facilitate successful execution. In addition, portfolio management supports a strong and profitable organization within a competitive and rapidly changing environment. The portfolio should be monitored closely so as to determine precise statuses and trends.

Portfolio management is a key driver for navigating complexity. The PMI Pulse of Profession™ In-Depth Report: Portfolio Management [8] reports the following essential practices used by organizations that are highly effective in portfolio management:

• Elevate portfolio management to a strategic level. Senior management understands and supports the practice of portfolio management.
• Create a portfolio-minded culture. Senior management is willing to show their support of portfolio management through communication, investment, dedicated resources, and education.
• Implement appropriate tools and practices. Senior management understands the need to implement appropriate formal portfolio management tools and practices and to standardize portfolio management.

2.3 Collaboration for Successful Outcomes

Collaboration between senior management and the program or project manager is an important enabler for the successful outcome of programs or projects with a high degree of complexity.

Some collaborative factors that provide successful outcomes for programs or projects with complexity include:

• Ongoing communication between the program or project sponsor and the program or project manager;
• Intrinsic and extrinsic rewards that are tailored to individual and group motivations;
• Utilization of change management practices to better adapt to new emerging situations and conditions;
• Easy and prompt accessibility of senior management to the program or project manager; and
• Investment and support of interdepartmental, cross-professional collaboration and multidisciplinary project team integration.

The collaboration between the sponsor and the program or project manager provides for transparency, increased communication, and effective decision making. The need for this collaboration becomes apparent during the program or project when encountering such items as emerging requirements, impediments, issues, and risks. These items encountered during the program or project can negatively impact the program or project's progress when collaboration is absent.

2.4 Performance Metrics

Organizations need information throughout the program or project life cycle in order to understand its current health and to be able to predict success. Metrics can support the effective communication and reinforce awareness of the project or program purpose with stakeholders. Metrics vary across industries and types of programs and projects. Successful organizations tend to have multiple key performance indicators (KPIs) perspectives on a program or project throughout its life cycle. Some organizations have both preproject KPIs, multiple perspectives during implementation, and measurements of success after the program or project finishes. Successful organizations also include portfolio-level KPIs across programs and projects.

Organizations may look at metrics that are not specific to...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Table of Contents
• Preface
• 1. Introduction
• 2. Organizational Considerations
• 3. Encountering Complexity
• 4. PMI Foundational Standards and Useful Practices
• 5. Navigating Complexity: The Assessment Questionnaire
• 6. Complexity Scenarios and Possible Actions
• 7. Developing an Action Plan
• References
• Appendix X1. Contributors and Reviewers of Navigating Complexity: A Practice Guide
• Appendix X2. Annotated Bibliography—A Literature Review
• Appendix X3. Mapping Template for Navigating Complexity
• Glossary