Tuesday, September 26, 2006

the managing by project philosophy

Central to all that we do at mbh is the managing by project philosophy. Unfortunately, as people seem to have very short attention spans, a lot needs to be conveyed in a name. We tried to encapsulate what is an exhaustive philosophy and underpinning methodology into a name by using the term managing by project. Unfortunately, this has created two problems when first introducing the concept to a new audience. The first is that as there is such an array of definitions for what a project is, the term conjures up different images depending on the definition being used by the receiver of the term. The second issue is that many people assume managing by project means running lots of projects. Never has there been a more erroneous assumption. Business as usual, or the role of current operational functions are of immense importance to the managing by project philosophy as they reflect the current industry position of the organisation (in essence they are the outcomes of the series of projects that have been undertaken in the organisations history to get to this point in time).

I will attempt, over the next few blog entries, to articulate what the managing by project philosophy is and would welcome any comments you have as to how I have succeeded in this articulation.

Firstly, managing by project is a business management philosophy, therefore it applies to organisations only. However, it is a philosophy that we believe should be applied by all organisations. managing by project begins with two basic assumptions; 1) Any organisation's aim is to maximise the value they can create for their stakeholders and 2) Most value is created at the interstices of the array of functions that make up an organisation.

The reason managing by project works for all organisations is that all that changes from organisation to organisation is the value proposition. The philosophy and methodology used to deliver that value should not. For example, a for profit publicly listed company has a value proposition to maximise shareholder value. A non-profit charity organisation might have a value proposition to eliminate/alleviate poverty in a certain area. managing by project is in our opinion, the best philosophy and methodology available to both organisations to achieve their respective value propositions.

The first managing by project observation is that organisations are in a constant state of change. The drivers of this change are both external and internal. Management's job is to manage the change in a way that optimises the potential for the organisation to move towards a vision defined by the leaders of the organisation (the trick comes when the organisation attains its vision - more about that in a future blog).

The most effective method for managing the change is to create and amend an evolving portfolio of projects that are designed around delivering the vision for the company. This change management model involves principles represented in the managing by project triangle below:

Each principle has a plethora of information about them. Any casual browse through the business section of a bookstore would see books specialising on one of the principles of managing by project. However, without the holistic method that binds it all together, the pieces of the puzzle don't match and the cohesiveness of the organisation fails. Each principle is dependent on the effectiveness of others. A weak vision results in an underachieving strategy, poor project selection and implemented projects that offer little value add. An inspiring vision not backed by a coherent, measurable strategy leaves too many projects being delivered in the rush to reach the end goal (with still no idea as to what to do when you get there). Projects are never implemented as resourcing is limited and multi-tasking rife. If both the vision is inspiring and the strategy right but the projects are selected based on political rather than objective means then value is destroyed and the strategy is never executed (only the PMs are). And finally, if the Vision is inspiring, the strategy right, the projects prioritised on objective lines but the implementation, the hardest element of all, is poor then again, the strategy cannot be executed and the vision remains a pipe dream.

One of the keys to implementation is for projects to be delivered by heterogenous teams that focus on the stated metrics or outcomes that drive value in the project, not just on the delivery of the project. The culture of these teams is one centred on value creation and hence it is the team that is likely to kill a project that no longer adds value (obviously this requires a non-blame culture and may even include rewards for teams that spot early when to cancel a project). This type of "fall on your sword" approach to projects relies on limited machiavellian activities and an environment where adapting to change is the norm.

The main method for implementing the filtering of projects is known as the funnels and filters or stage gate approach. This is best represented by the following diagram:

One can see from the diagram that there is a certain Darwinian evolution going on with the ideas that are thought of; only the fittest survive. The funnels and filters method is so commonly preached by our business and is often implemented by organisations, but without the cultural elements described above, the method again becomes a tick a box management method

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