APM Body of Knowledge

Association for Project Management (APM)

• Publisher: Association for Project Management (APM)
• Year: 2018
• ISBN:
  9781903494752
• Topic: Business
• Subtopic: Project Management
• Index: Business

The APM Body of Knowledge 7th edition is the first version of these editions to be published since the award of chartered status. As a foundational resource, written by the profession for the profession, we hope you find the content informative and useful in guiding your endeavours to deliver beneficial change through the management of projects, programmes and portfolios.

1  Setting up for success

This chapter is written primarily for those leaders within organisations who have decisions to make about the role of projects, programmes and portfolios in implementing strategy. We assume that in most situations, there is a choice to be made about how best to structure project-based work in order to achieve unique and specific objectives for change.

The main focus of the chapter is on the available options and the strategic decisions required to underpin and enable beneficial organisational change.

Beneficial change results from the strategic intent, ambitions and needs of an organisation. Organisations operate in increasingly uncertain contexts. They identify strategic priorities and set out to bring about meaningful and beneficial change that is described and realised through a set of benefits that justify the investment. The purpose of the investment therefore is to deliver valuable returns. The investing organisation can use strategic portfolios and programmes, incorporating change activities with business-as-usual, and a variety of project mechanisms to structure and pace the investment.

The required speed of deployment, existing knowledge about the nature of the work that needs to be accomplished and the nature of the potential solution, all play a part in determining the most suitable approach to create and embed the new capabilities, systems and structures. The choice of approach determines the life cycle that will be used to realise and deploy the change. Recognising the strategic nature of change is important in fostering a longer-term approach that is cognisant of the need to adopt the proposed change and realise the intended benefits. An extended perspective as promoted throughout this work is also critical to discharging the responsibility to consider decommissioning and disposal alongside the whole-life costs of assets, and the long-term environmental and social implications of our actions.

Choices and preferences need to be scrutinised and examined. Governance and oversight mechanisms are established to deal with procedural and cultural aspects that need to be in place to improve the effectiveness of the implementation of proposed change initiatives and to underpin the realisation of the strategic investments. Projects, programmes and portfolios need to be compatible with the overarching strategy of the organisation and with the day-to-day operation charged with realising the benefits. A structured approach to change management ensures that beneficial changes are embedded within the organisation’s operational approach and closely aligned in order to ensure its long-term successful and impactful realisation.

The chapter is composed of three parts:

1.1Implementing strategy

1.2Life cycle options and choices

1.3Establishing governance and oversight

1.1 Implementing strategy

Organisations operate in a dynamic context, full of uncertainty, novelty and turbulence. Projects, programmes and portfolios are introduced in order to enhance performance, bring about change and enable organisations to adapt, improve and grow. Project-work therefore represents intentional investment in development, enhancement and improvement.

The need for investment emerges from the aspirational plans and an overarching purpose that transpire from the strategic intent of an organisation. Project-work encompasses strategic investments that enable assets, structures, systems, activities and capabilities to be formed, maintained or enhanced so that the organisational plans and ambitions can be realised. In the public sector, this strategic intent may be discussed in terms of policy and policy implementation.

Organisational change is introduced through projects, programmes and portfolios in order to deliver business value. The business value is accrued through the realisation of benefits that result from project-work. Benefits are part of ensuring that investments are made to deliver value to the organisation. This normally applies even when the project is being done by a supplier or contracting organisation, or if the work is needed to maintain current capability or in order to conform to new regulations or directives so that smooth business operations can be allowed to proceed.

The successful deployment of change, the support of new behaviours and the utilisation of new capability, resulting in the realisation of benefits, involves engaging with, promoting and working with diverse communities and groups. To ensure that value is created and sustained, organisations need to consider and address the full investment life cycle ensuring that forecasted benefits materialise.

Delivering strategy is enabled through the use of projects, programmes and portfolios. Portfolios structure investments in line with strategic objectives, whilst balancing, aligning and scrutinising capacity and resources. Programmes combine business-as-usual with projects and steady state activity dictated by strategic priorities. Projects are transient endeavours that bring about change and achieve planned objectives. Together, they combine to deliver the beneficial change required to implement, enable and satisfy the strategic intent of the organisation.

This section will be of particular interest to senior leaders and managers in organisations and to project professionals as it addresses:

1.1.1Organisational environment: Organisations in context

1.1.2Strategic implementation: Making strategy happen

1.1.3Organisational change: Enabling beneficial change

1.1.4Benefits to the organisation: Putting it all together

1.1.5Structural choices: Projects, programmes and portfolios

1.1.1 Organisational environment

Organisations in context

In many contexts, project-work engages with novelty and uncertainty extending into an unknown future. Projects and programmes therefore entail management under uncertain conditions. Yet, it is widely recognised that traditional business models, focused on efficiency, top-down control and desired predictability, only address a small proportion of a rather complex, uncertain and interconnected landscape.

Uncertainty arises from many sources (Figure 1.1.1). Leaders increasingly face new challenges, including the emergence of new markets, interconnected global competition, new sources of innovation, rising customer expectations, disruptive technologies, the gig economy and the growing diversification of the workforce. Stable and predictable contexts are hard to find and the models and approaches used for managing need to be updated to reflect a world characterised by uncertainty, turbulence, novelty, ambiguity and complexity. Moreover, the combination of economic unknowns with political, social and environmental concerns regarding the proposed actions and their longer-term implications requires new ways of engaging with uncertainty.

The US military coined the term VUCA to reflect the ‘volatility, uncertainty, complexity and ambiguity’ of general conditions and situations associated with a multilateral world following the end of the Cold War. The term has been widely adopted to represent increasingly vulnerable and unpredictable contexts. The key implication of VUCA conditions is that there is an inherent uncertainty that makes it difficult to predict and plan with great accuracy.

The rigidity that comes from expecting full and perfect knowledge is unsustainable and unattainable in turbulent contexts. Uncertainty defies anticipation and detailed planning. Enforcing detailed planning and fixed-price contracting on an uncertain future can be counterproductive and business-damaging. Change is natural and ongoing as managers learn more about the context they are operating in, enabling them to identify emerging opportunities, respond to new conditions and address shortfalls and differences in outcomes. Embracing and managing uncertainty lie at the heart of good project management and insistence on certainty may unwittingly result in mismatches between plans, models and reality, translating into poor project performance.

Addressing uncertainty entails developing organisational capabilities for dealing with change and fostering readiness to exploit new opportunities, respond and adapt. This is frequently translated into strategic flexibility, corporate resilience or organisational agility. Flexible plans, iterations (see 1.2.3), and prototyping offer vehicles for the experimentation and adaptation needed to inform, adjust and exploit uncertain contexts. These can complement open collaboration approaches and enhanced abilities to innovate and move rapidly and flexibly in order to shape opportunities, change strategic directions and build on adversity in uncertain settings. Organisations that invest in flexible planning, options evaluation and scenario planning are already better prepared to respond to emergent conditions and such preparation needs to be reflected in project-work.

Figure 1.1.1 Sources of uncertainty

Recommended reading

■Managing the Unknown: A New Approach to Managing High Uncertainty and Risk in Projects (2006) offers a way of looking at managing projects in novel and unknown environments. The authors propose a combination of trial-and-error learning, with multiple independent trials to identify the best options in novel projects.

■Managing Project Uncertainty (2016) focuses on the impacts of novelty in the uncertain world that projects inhabit, providing ways of identifying the symptoms of uncertainty and developing strategies to deal with it. The book offers senior managers ways to improve project and programme strategy by exposing new ideas and concepts tha...