The Performance of Projects and Project Management

Sustainable Delivery in Project Intensive Companies

Laurence Lecoeuvre

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781032837086
• eBook ISBN: 9781317021667
• Topic: Business
• Subtopic: Business General
• Index: Business

In the increasing number of heavily projectized organizations, sustainable, commercial performance depends on their ability to measure and develop the performance of project management.

This involves developing new skills and capabilities, such as a learning approach across projects. It also involves transforming established approaches such as corporate governance to match the new project-oriented context and, finally, it involves learning to use projects to enable key organizational objectives, such as sustainability, as well as the project-specific outcomes.

The Performance of Projects and Project Management offers perspectives on all of these fundamental aspects of project performance. As such, it is an important book for those concerned with project strategy, project delivery and business sustainability.

Part I

Project Risk Management and Sustainable Performance

Le véritable voyage de découverte ne consiste pas à chercher de nouveaux paysages mais à avoir de nouveaux yeux.

The real voyage of discovery consists not in seeking new landscapes but in having new eyes.

Marcel Proust (1871–1922)

Chapter 1

Vision—Implementation—Organization

The VIO Approach for Complex Projects and Programs¹

Pierre Daniel and Rodney Turner

Introduction

For 25 years, leading writers in the field of project management have been suggesting that before the project team start planning a project, they should develop a strategy for how they plan to implement it (Morris and Hough, 1987; Turner, 2009, first edition 1993). Project managers have a tendency when they have a project to plan just to start by stuffing activities into Microsoft Project, without first thinking about the key elements of the project and how they should be addressed. It is important on all projects to start by developing a basic strategy for how the project should be undertaken, but it is particularly important on complex project. On complex projects, a small change in input conditions can lead to a very large change in output conditions. So it is important to think first about what the desired end point is and work back to defining the input conditions for the project.

Rodney Turner (2009) defines project management as the process of converting vision into reality. Graham Winch (2010) defines it as the process of converting desire into memory. For all projects, we need to start with a clear vision, desire, of what we want the project to do, and then define the process of how to realize that vision, and by undertaking the process convert it into memory. That is particularly important on complex projects.

In this chapter we describe the Vision—Implementation—Organization (VIO) approach to the management of complex projects and programs. Eweje, Turner and Müller (2012) say that complex mega-projects are in fact more like programs than projects. In this chapter we are talking about the management of complex projects or programs, but for simplicity we will use the word “project” throughout, but it can mean project or program. In the next section we describe how to develop a project strategy. Then we describe the three elements of the VIO approach, Vision, Implementation and Organization.

Strategy

Turner, Huemann, Anbari and Bredillet (2010) suggest a four-step process for defining project strategy:

1 develop corporate strategy;

2 define the project requirements including the business plan;

3 identify the project success criteria and success factors;

4 design the project model.

Corporate Strategy

To develop a corporate strategy, there are three steps, each of which has three components:

1 position;

2 strategic choices;

3 implementation.

Position

To identify the organization’s current position, we need to investigate its context, its capabilities and its stakeholders. There are several tools for analyzing the position. One is PESTLE analysis. This investigates the pressures on a firm from several sources:

• political;

• economic;

• social;

• technical;

• legal;

• environmental.

Another tool is Michael Porter’s Five Forces (Porter, 1980). This investigates five forces that act on a company from within the industry it operates in. They are:

• buyers;

• suppliers;

• new entrants;

• substitutes;

• rivals.

The analysis of the position identifies opportunities and threats the firm faces. Its capability tells us what strengths and weaknesses it has to deal with those opportunities and threats. Its capabilities include:

• competence of its staff;

• technology;

• management processes;

• organization;

• supply chain.

An analysis of the context and capabilities together can be done as a SWOT analysis, looking at strengths, weaknesses, opportunities and threats.

The third element of the position is the stakeholders. A narrow view of stakeholders says there is just one important stakeholder, the owners of the business or shareholders. The wider view says there are other important stakeholders, including:

• the board, management and staff;

• customers;

• the local community;

• suppliers.

The stakeholders will have a view on what the organization should be doing and so will influence strategy.

Strategic Choices

Having identified its position, the firm is then able to make strategic choices. It makes strategic choices at three levels:

1 company;

2 business unit;

3 operations.

The cascade is usually down: company to business unit to operations. This corresponds with the cascade portfolio to program to project, Figure 1.1. However, you must be careful, a project may sometimes influence corporate strategy under emergent strategy. A product development project may for instance show which new products will be both feasible and profitable, and so influence what business units the firm needs and its future strategic direction.

Figure 1.1 Cascade from Corporate Strategy to Project Strategy

Implementation

The strategic choices will identify the need for projects, programs and projects, Figure 1.1, and so we are now ready to start defining the requirements of projects.

Requirements

The requirements can exist in several dimensions. We need to define the results or objectives we want the project to deliver, the specification of one of those results, the output, and we need to develop the business plan.

Results

First we need to define the objectives of the project, the results we expect it to deliver. Figure 1.2 illustrates that there are (at least) three levels of results on projects. The result that is traditionally focused on is the project output. This is the project deliverable, the new asset it is expected to deliver. Success is judged by whether the new asset performs as expected and is delivered to cost and time. This judgement is made on the last day of the project, and is associated with the project and the operational level.

Figure 1.2 Project Results

However, we do not want the project’s output for its own sake. We undertake the project to solve some problem or exploit some opportunity to obtain benefit. In order to do that we need new competencies, we need to be able to do new things, and the operation of the new asset provides those new competencies. We call this the project’s outcome. The operation of the outcome solves the problem or exploits the opportunity and provides the benefit. We judge success by whether we are able to solve the problem or exploit the opportunity, and whether we obtain the desired benefit. We are able to judge this in the months following the project and it is associated with the program and the business unit.

With time, the project’s output will enable us to achieve higher levels of performance improvement, which we call the impact. Success is judged by whether we achieve the higher levels of performance improvement. It is judged in the years following the project, and is associated with the portfolio and the company.

As an example, the Chinese government built a bridge across the Yangtze river just north of Shanghai. Why did they want the bridge? The reason was that whereas the area around Shanghai is the most economically developed part of mainland China, the area on the north side of the river was less developed. The reason why people were not building their factories on the north side of the river was because transport across the river was poor, so it was difficult to get their products to Shanghai for them to be shipped out. So the desired impact was economic development on the north side of the river, and the required new competencies, the project outcome, was better traffic flows across the river. The project output to achieve this was a bridge.

Again, the normal cascade is the desired impact defines the desired project outcome and that defines the required output. However, sometimes a project will result in unexpected but beneficial outcomes that will define new businesses for the organization, which with time will lead to new impacts and changes to the organization itself.

Above we define three levels of results. Later we define a fourth level, intermediary deliverables, produced during the project to deliver components of the project output. The intermediary deliverables are associated with packages of work undertaken during the project.

Specification

The second dimension of requirements is the specification of the project’s output, the definition of the performance it is required to deliver, and the functionality we desire of it in order to produce the outcome (Dalcher, 2013). Additional elements include the scope of work to be done, the technology to be used and the required resources.

Business Plans

Another necessary element not created in the strategy for many projects is the business plan. Every project should have a business plan, detailing in particular how much the project is expected to cost and what the expected benefits are, and performing an investment appraisal to justify the project. The contents of a business plan should include:

• strategic objectives reflecting vision statement;

• expected benefits;

• overall risk profile;

• assumptions;

• estimated costs and timescales;

• investment appraisal.

The timescale is necessary to perform the investment appraisal. The time at which the benefits are obtained will affect the profitability of the project.

Success

The next step is to identify the success criteria and success factors for the project. The success criteria are the measures against which we will judge the success of the project. They will be defined by the strategic choices of the parent organization, the requirements and the business plan for the project. The success criteria are those elements of the project we can influence to increase the chance of achieving the success criteria. Well-known lists of success factors are published (Pinto and Slevin, 1987). However, every project is different and so will have different success factors, (Turner, Huemann, Anbari and Bredillet, 2010). In fact the success criteria will suggest what the success factors might be (Khan, Turner and Maqsood, 2013; Wateridge, 1995, 1998). If acceptance by ...

Table of contents

• Cover Page
• The Performance of Projects and Project Management
• Title
• Copyright
• Praise
• Contents
• Figures
• Tables
• Contributors
• Foreword
• Preface
• PART I Project Risk Management and Sustainable Performance
• PART II Project Governance and Sustainable Performance
• PART III Project Teams and Sustainable Performance
• PART IV Project Standards and Sustainable Performance
• Index