Performance Measurement
December 29, 2014

Turning complexity into dexterity

All governments, including Canada’s, strive to manage taxpayers’ dollars more efficiently. One challenge to that goal is complexity, embodied by projects involving multiple stakeholders that often take years to complete. For governments around the world facing increasing scrutiny from an increasingly frustrated public, taking appropriate steps to turn complexity into dexterity has become more important than ever.

One example of dealing with complexity is the Canadian government’s new strategy for the procurement of military equipment and the creation of a defence procurement secretariat. Following a series of delays and over-budget military procurements, the new strategy looks to simplify and improve defence procurement with respect to policy, process and management.

A possible byproduct of complexity is an increased level of budgetary risk. PMI’s Pulse of the Profession study reveals that companies waste approximately US$109 million for every US$1 billion spent on a project, due to poor project performance. PMI’s Pulse of the Profession In-Depth Report: Navigating Complexity indicates that average budgets for projects that are deemed highly complex are nearly twice as large as those with lower levels of complexity – using significantly more resources and putting even more dollars at risk for the organizations managing them.

Navigating Complexity: No new skill set required
While there may be a perception that managing complex projects requires a different set of skills or capabilities, PMI’s research proves otherwise. Regardless of the number of highly complex projects, when organizations use techniques at the same frequency and have the same level of project management maturity, they have similar project success rates. Equally important, PMI’s research confirms that a project’s success or failure is not determined by the degree of complexity, but rather by the mix of capabilities applied.

High Performers versus Low Performers: Where do you fit?
High-performing organizations achieve an average project success rate of 89 percent (versus a 36 percent project success rate for low performers), and risk 12 times fewer dollars than low performers. Considering the larger budgets for highly complex projects, successful project management translates into a big boost that goes right to an organization’s bottom line.

PMI’s research found that high-performing organizations focus on the development of three strategic competencies that enable them to manage complex projects more successfully:

Create a culture of project and program management with engaged project sponsors. The reality is that adherence to a culture of project management with mature project management practices can significantly increase an organization’s ability to meet project goals compared to organizations with less mature practices. PMI’s Pulse research reveals that 81 percent of projects undertaken by high performers have active project sponsors, compared to less than half (45 percent) within low-performing organizations.
Assess and develop talent with a focus on fostering leadership skills. When budgets need to be cut, whether it be in the public or private sector, professional development and employee training is usually the first place to cut. Among successful organizations, leadership development is most aligned to organizational strategy. PMI’s Pulse research finds that high performers focus on developing their talent, effective knowledge transfer and managing their employees through organizational change.
Communicate effectively with all stakeholder groups. We often hear – communicate, communicate, communicate! It’s obviously so important that we often hear that magic word stated three times together. The time has come for organizations to practice what they preach. PMI’s research on complexity finds that high performers report that effective communications to all stakeholders – more than any other factor – has the greatest impact on the success of complex projects.

The time has come for organizations to make project success the norm rather than a hope, particularly governments that must be more transparent and accountable. It’s not about doing more with less; it’s about doing better with less. While the success of certain complex projects are inevitably impacted by external factors such as land acquisition, regulatory approvals, currency exchange fluctuation, environmental concerns, etc., complex projects can be controlled at the project level through proper planning and project management.

Consistent success of projects, regardless of the level of complexity, stems from mature project management practice that is rooted in sound fundamentals, including effective stakeholder management, transparent communications, engaged project sponsors, and strong alignment of projects and talent development to an organization’s strategic objectives.

Complexity in project management means different things to different people and organizations, but the bottom line is how well organizations adapt to, address and manage the myriad of factors that contribute to project complexity.

 

Start navigating your way through complex projects and programs by visiting www.PMI.org/complexity. Here you will find links to the research report and Navigating Complexity: A Practice Guide.

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