Strong project management framework leads to organizational success – Canadian Government Executive

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March 31, 2015

Strong project management framework leads to organizational success

The economy is sluggish…oil prices are down…stock markets are up but continually volatile. Are we undergoing a New Year’s hangover in 2015?

This sort of environment means organizations and government agencies should put additional emphasis on how well they execute their strategic initiatives. And why is PMI, the global thought leader in project management, talking about strategic initiatives? What do strategic initiatives have to do with project management? Everything!

Organizations want to know ways to help insure that their highest priorities — strategic initiatives — meet their goals. PMI’s Pulse of the Profession study, an outreach to 2,800 in the project management world (approximately 10 percent from Canada), shows that organizations that fully understand the value of project management focus on the fundamental aspects of culture, talent and process that support excellence in project, program and portfolio management. As a result of this focus, significantly more of these organizations’ strategic initiatives are indeed meeting their goals.

Aligning projects to organizational strategy: A recipe for success
The numbers speak for themselves: Organizations that have high alignment of their projects to organizational strategy average 71 percent successful projects. On the other hand, organizations that have low alignment of their projects to organizational strategy average 46 percent successful projects.

A 2013 Economist Intelligence Unit (EIU) survey sponsored by PMI found that 88 percent of executive respondents stated that executing strategic initiatives would be “essential” for their organization’s competitive advantage (makes one wonder what the other 12 percent were thinking). Yet 61 percent admitted they struggle with executing on those strategies. These same executives say that on average, only 56 percent of strategic initiatives have been successfully implemented in the last three years. This means it’s time to revisit the fundamentals of project management and get back to the basics.

A necessary project management refresher
Why might a project management “refresher” be necessary? PMI research has shown that high-performing organizations — those achieving 80 percent or more of projects on time, on budget and meeting original goals — fully understand the value of project management and create a culture that encourages effective project management. Low performers are those organizations for which 60 percent or less of their projects are on time, on budget and meet original goals.

PMI’s research has also shown the key importance of talent management. This includes training and effective knowledge transfer. The best-performing companies have learned that a great project manager does not merely have technical skills — he or she has leadership skills as well as business and strategic management capabilities.

Canada’s Department of Defence, Materiel Group knows the importance of talent and project management, as shown by the establishment of its Project Management Competency Development Program that aligns the competencies of its project managers with the complexity of the projects being managed.

This competency framework will become a critical plank and necessary for the successful delivery of the Canada First Defence Strategy.

Foundational project management practices
Agencies have the opportunity to pay greater attention to a number of foundational project management practices. PMI’s 2015 Pulse research shows high performers, compared to lower-performing organizations, are more likely to focus on:

• Greater knowledge transfer effectiveness: The number of organizations that have high effectiveness in this critical competency has increased by 20 percent since last year.
• More rigorous risk management: This year, 83 percent of high performers report frequent use of risk management practices, compared to only 49 percent of low performers.
• More frequent use of agile/incremental/iterative practices in project management: The use of these practices continues to rise, with 38 percent of organizations reporting frequent use, up 8 percentage points since 2013.
• Higher benefits realization maturity: Though only one in five organizations reports having a high level of benefits realization maturity, we’ve seen an increase of 63 percent compared to the level in 2013.

Canadian success stories in project management
More and more Canadian organizations are recognizing the value and importance of establishing consistent project management standards and practices. This is evidenced best by the fact that the 2013 PMI Project Management Office (PMO) of the Year award went to Canada Health-Infoway (a government organization) and the 2014 PMI Project of the Year was awarded to the AP60 Project from Montreal, a Rio Tinto Alcan (RTA) project involving two Canadian engineering firms, SNC-Lavalin and Hatch. RTA’s development of its AP60 aluminum smelting technology, which went into operation in 2014, promised to deliver 40 percent more product at lower costs and with fewer emissions than any smelter on the market.

“PMI standards are essential for project success because they provide a common framework for how to do projects,” states André Noël, project manager, Hatch, Montreal, Quebec. “What’s good about A Guide to the Project Management Body of Knowledge (PMBOK® Guide) is, it’s a language that is shared by people from different perspectives. By working together to leverage lessons learned from the initial scope of the project, the team improved its performance by up to 40 percent for some activities,” adds Mr. Noël.

Hatch also credits its risk management approach, enabling the project to finish with an injury rate 99 percent lower than the local average.

A risk management competency helps organizations assess and identify project risks, mitigate threats and capitalize on opportunities. In fact, organizations that report consistent use of risk management practices have significantly better project outcomes compared to organizations that do not.

Agility is key
It is becoming increasingly necessary to be flexible when managing projects. Agility is the ability to react to changing circumstances, which are inevitable, and utilize agile processes to manage fluctuating project parameters. Organizations that complete more projects on time, on budget and achieve business objectives and forecasted ROI also report a higher level of organizational agility. Managing change, mastering risk and standardizing project management practices leads to the payoff.

Those organizations that are successful report higher levels of organizational agility – giving them a powerful edge on the competition. The research shows 60 percent of companies with high agility see increased success, compared to only 27 percent with low agility.

More project success, less waste
High-performing organizations are demonstrating that adhering to proven project, program and portfolio management practices reduces risks, cuts costs and improves success rates of projects and programs. They drive project management and deploy related competencies with a goal of maximizing organizational value.

PMI’s Pulse study shows that projects within these organizations meet original goals and business intent two-anda- half times more often than those in low-performing organizations (90 percent vs. 36 percent). High-performing organizations also waste about 13 times less money than low performers.

What helps an organization build and sustain its growth capacity and become a high performer? PMI’s Pulse research shows a number of factors contribute to this success, including a focus on these basics:

• Fully understanding the value of project management
• Having actively engaged executive sponsors
• Aligning projects to strategy
• Developing and maintaining project management talent
• Establishing a well-aligned and effective PMO (project management office)
• Using standardized project management practices throughout the organization

New Year’s resolution
It’s time to kick that New Year’s resolution into gear – shake off the economic blahs and soar to success through improved project, program and portfolio management. Returning to the basics is a great way to ensure success in the future management of an organization’s projects and programs, and an even better way to ensure that one’s strategic initiatives are achieving success.

 

Visit www.PMI.org/Pulse to download the reports.

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