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Page 1
March 2010
Volume 41, Number 1
5
Project-as-Practice: In Search of Project Management
Research That Matters
Tomas Blomquist, Markus Hällgren, Andreas Nilsson, and Anders Söderholm
17
Project Management and High-Value Superyacht
Projects: An Improvisational and Temporal Perspective
Steve Leybourne
28
Causal Inferences on the Cost Overruns and Schedule
Delays of Large-Scale U.S. Federal Defense and
Intelligence Acquisition Programs
Steven R. Meier
40
Financial Incentives and Advanced Construction
Procurement Systems
Timothy M. Rose and Karen Manley
51
Managing Risk Symptom: A Method to Identify Major
Risks of Serious Problem Projects in SI Environment
Using Cyclic Causal Model
Hiroshi Ohtaka and Yoshiaki Fukazawa
61
Information Systems Project Manager Soft
Competencies: A Project-Phase Investigation
Gregory J. Skulmoski and Francis T. Hartman
81
Categorizing Risks in Seven Large Projects—Which Risks
Do the Projects Focus On?
Hans Petter Krane, Asbjørn Rolstadås, and Nils O.E. Olsson
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Page 1
Editor
Christophe N. Bredillet, PhD, DSc, MBA,
SKEMA Business School
■
EDITORIAL REVIEW BOARD
Vittal Anantatmula, PMP, Western Carolina University
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Wanda Curlee, PMP, BearingPoint
Darren Dalcher, Middlesex University
Steven V. DelGrosso, PMP, IBM
J. Davidson Frame, University of Mgmt. & Technology
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Peter Kapsales, Belcore
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■
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MARCH 2010
Volume 41, Number 1
The Professional Research Journal of the Project Management Institute
2
From the Editor
Christophe N. Bredillet, PhD, DSc, SKEMA Business School
PAPERS
5
Project-as-Practice: In Search of Project Management Research That Matters
Tomas Blomquist, Markus Hällgren, Andreas Nilsson, and Anders Söderholm
17
Project Management and High-Value Superyacht Projects: An Improvisational and
Temporal Perspective
Steve Leybourne
28
Causal Inferences on the Cost Overruns and Schedule Delays of Large-Scale
U.S. Federal Defense and Intelligence Acquisition Programs
Steven R. Meier
40
Financial Incentives and Advanced Construction Procurement Systems
Timothy M. Rose and Karen Manley
51
Managing Risk Symptom: A Method to Identify Major Risks of Serious Problem
Projects in SI Environment Using Cyclic Causal Model
Hiroshi Ohtaka and Yoshiaki Fukazawa
61
Information Systems Project Manager Soft Competencies: A Project-Phase Investigation
Gregory J. Skulmoski and Francis T. Hartman
STUDENT PAPER
81
Categorizing Risks in Seven Large Projects—Which Risks Do the Projects Focus On?
Hans Petter Krane, Asbjørn Rolstadås, and Nils O.E. Olsson
87
Cover to Cover—Book Reviews
Kenneth H. Rose, PMP
91
Calendar of Events
93
Project Management Journal Guidelines
96
Guidelines for Project Management Journal Book Reviews
March 2010 ■ Project Management Journal
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From the Editor
Christophe N. Bredillet, PhD, DSc, SKEMA Business School
Mapping the Dynamics of the Project Management
Field: Project Management in Action (Part 5)
This is the fifth part of a Letter From the Editor series where
the results are presented of an ongoing research undertaken in order to investigate the dynamic of the evolution
of the field of project management and the key trends.
I present some general findings and the strategic diagrams generated for each of the time periods introduced
herein and discuss what we can learn from them on a general standpoint. I will develop and discuss some detailed
findings in future Letter From the Editor articles.
Documents and Descriptors
For the purpose of the study, we have grouped the data
into four periods of time: 1914–1987, 1988–1994,
1995–2004, and 2005–2010 (Bredillet, 2009) :
• From 1914 to 1987—The Genesis of Project Management
• From 1988 to 1994—The Rise of Project Management
• From 1995 to 2004—The Times of Glory
• From 2005 to 2010—Time of Maturity or Time of Inflection
Table 1 provides a first overview of the way the field
has expanded over the last 95 years.
The evolution of ratio descriptors/documents shows
the expanding nature of the field until 2004, and then a
kind of slowdown. The ratio decrease (from 91.21 in
1914–1987 to 47.29 in 1995–2004) means that the coverage of the field by given descriptors lowers and that the
field encompasses new concepts (i.e., new words). This
diagnostic is reinforced by the fact that the percent coverage (number of descriptors/number of words) remains
about the same from one period to another (around
22%).
At the same time, the centrality and density shows
that for 1914–1987 and 1988–1994, the field was compact or integrated with regard to its content, with a high
level of both centrality and density and a low number of
clusters (respectively, 12 and 10). But the decrease
of both centrality (by 8) and density (by 2) for the periods
1995–2004 and 2005–2010 and the increase in terms of
the number of clusters (respectively, 23 and 29) demonstrate the expansion around new themes. This may
indicate the premise of a recomposition, or a risk of
dilution, with regard to the period 2005–2010, where 19
clusters out of 29 are in the quadrant “peripheral and
undeveloped.” But I will investigate this in more detail
at a later stage of this research.
Strategic Diagrams
Another useful tool for plotting evolution in the project
management knowledge field is a strategic diagram. This
type of diagram—which offers a global representation of
the structure of any field (or subfield) and is used to illustrate the local and global contexts of themes—can be
created by plotting centrality and density onto a twodimensional diagram with intersecting X and Y axes.
Such a diagram contains the following four quadrants:
• Quadrant 1: high centrality, high density
• Quadrant 2: high centrality, low density
• Quadrant 3: low centrality, high density
• Quadrant 4: low centrality, low density
No. of
Descriptors/
No. of
No. of
Descriptors Document No. of
Time Period Clusters Documents (Index)
Ratio
Words
Median
Centrality
Median
Density
1914–1987
12
346
31,559
91.21
140,598
22.45%
c.m. ⫽ 0.077939 d.m. ⫽ 0.192187
1988–1994
10
438
23,880
54.52
107,518
22.21%
c.m. ⫽ 0.082205 d.m. ⫽ 0.192879
1995–2004
23
2,878
136,670
47.49
606,579
22.53%
c.m. ⫽ 0.018470 d.m. ⫽ 0.117931
2005–2010
29
3,177
205,019
64.53
965,067
21.24%
c.m. ⫽ 0.014431 d.m. ⫽ 0.092118
Table 1: Documents and descriptors per period.
Project Management Journal, Vol. 41, No. 1, 2–4
© 2010 by the Project Management Institute Published online in Wiley
InterScience (www.interscience.wiley.com). DOI: 10.1002/pmj.20161
2
Descriptors/
Words, %
Coverage
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
industry
management
school
application
group
international
model
resource
organizational
company
quadrant 1
quadrant 2
quadrant 4
0.052448
0.051324
0.042034
0.063188
0.060692
0.067081
0.088310
0.083083
0.142070
0.149475
0.076004
0.059561
0.048393
0.073918
0.063536
0.155559
0.096417
0.158313
0.101719
0.035199
0.253515
0.869992
0.247507
0.202174
general
resource
organizational
development
managing
implementation
evaluation
cost
project
management
1988–1994
0.068428
0.054505
0.066331
0.073850
0.068686
0.069913
0.061299
0.106995
0.124758
0.127284
c.m. ⴝ
0.082205
centrality
0.165009
0.150793
0.068255
0.135961
0.060827
0.057353
0.071295
0.118324
0.248982
0.851989
d.m. ⴝ
0.192879
density
quality
alternative
examine
risk
professional
control
value
application
end
structure
factor
manufacturing
effort
need
innovative
impact
based
performance
company
production
industrial
document
department
1995–2004
0.013404
0.012073
0.007476
0.012280
0.012081
0.011380
0.014706
0.009576
0.009460
0.009268
0.010313
0.013631
0.011428
0.013920
0.007684
0.013836
0.022034
0.024127
0.029292
0.032096
0.037709
0.055870
0.041161
c.m. ⴝ
0.018470
centrality
0.048507
0.025167
0.031937
0.052146
0.090106
0.043988
0.057001
0.038760
0.006204
0.047101
0.020166
0.080999
0.022490
0.040337
0.048472
0.038168
0.113261
0.083607
0.117960
0.134654
0.143375
0.736365
0.691649
d.m. ⴝ
0.117931
density
survey
collaborative
show
implement
carried
dynamic
function
alternative
review
evaluation
environment
aim
contractor
capital
strategy
knowledge
plan
program
college
technology
organizational
Based/modeling
product
financial
written
analysis
earned value
safety
risk
2005–2010
0.009238
0.007460
0.007486
0.005373
0.006456
0.008157
0.006678
0.007532
0.007880
0.013158
0.011252
0.008905
0.011391
0.007023
0.008280
0.010954
0.013286
0.008316
0.009128
0.022880
0.018118
0.034779
0.023983
0.025906
0.050758
0.043623
0.011472
0.006179
0.012836
c.m. ⴝ
0.014431
centrality
0.023342
0.027541
0.054108
0.056295
0.020209
0.023189
0.037853
0.010772
0.060815
0.031818
0.065221
0.022318
0.050753
0.047553
0.029478
0.084071
0.012584
0.082960
0.024835
0.089718
0.070605
0.139470
0.109843
0.120034
0.822152
0.237548
0.101484
0.099944
0.114916
d.m. ⴝ
0.092118
density
12:43 PM
Table 2: Strategic diagrams.
information
economic
d.m. ⴝ
0.192187
density
2/8/10
quadrant 3
c.m. ⴝ
0.077939
1914–1987 centrality
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From the Editor
Based on the aforementioned plotting of centrality
and density, I have formulated a few general comments
for the project management field that give some indication about possible future areas of interest (see Table 2):
• At an operational level—from the study of Quadrant
3— one finds specialized field themes: either internal
themes constituting an autonomous subfield or external themes “imported” from other fields or disciplines,
and representing new developments in the studied
field. Here, one notes an early interest (1914–1987) in
the information systems projects and IT support and
in the economic aspects of projects. While between
1988 and 2004, no themes are subject to special development, the safety and risks clusters (and earned
value) emerge as specialized themes for the period
2005–2010.
• At a more strategic level—from the study of Quadrant
1—one finds the “strategic heart” of the field. Here, we
find the main themes: a continuous interest over time
in the management side (human resources and
processes, governance), and for projects as a basis for
industrial development. During the last periods
(1995–2004 and 2005–2010), themes like company
(organization, project management office), financial
investments, modeling (based on various methodologies, resources, and approaches), and analysis (computational, cost, study, science, case, etc.) have seen a
strong development, with a special emphasis during
2005–2010.
• Besides these continuous trends, we note new potential areas of interest while considering Quadrant 2—we
find some central main themes, promising or past
themes, but this quadrant still remains generic. While
education and application of cost techniques were
retaining a high level of attention during 1914–1987 and
1988–1994, performance and decision support were
central themes in 1995–2004. For the period 2005–2010,
technology (performance, enterprise resource planning, quality, and success) and organization (team,
change, behavior, structure, styles, and leadership) are
the key central and generic themes.
• Quadrant 4 is to be considered carefully, as the themes
may evolve to the right, gaining centrality, and evolve
upward, gaining density. They might be at the origin of
4
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
new trends or development within the field. The case of
the cluster model (1914–1987) illustrates this, becoming
after transformation the cluster-based/modeling
(2005–2010) part of the strategic heart of the field. It is
interesting to note that from six clusters in 1914–1987
and seven in 1988–1994, we find 16 clusters in
1995–2004 and 19 in 2005–2010. This demonstrates the
dynamism of development of the field during the periods 1995–2004 and 2005–2010 and the interactions with
other disciplines (management of innovation, environment, knowledge management, strategy, and economics,
to quote a few). This might be a sign of recomposition of
the field (what I called Time of Maturity or Time of
Inflection [2005–2010] as mentioned in the paper previously cited.)
In summary, I can draw a reasonable conclusion that
the project management field is becoming more
mature—although very dynamic—and focused around
the role of projects in strategic issues, such as management, organizational issues, effective management, and
performance. The contextualization of applications
and creation of value for stakeholders seems to be another main trend. It reinforces the need to clarify the former
theme. Another trend is that the more “technical” aspects
(risk safety and earned value or cost management) of
project management are still there as well-established
subfields, even though project management becomes
more focused on the implementation of organizational
strategy. As part of the weak signal detected, the threat of
project management becoming diluted as a part of management and scientific disciplines may be considered.
In the next Letter From the Editor, I will discuss the
transformation of the strategic diagrams generated for
each of the time periods introduced herein and discuss
what we can learn from them in more detail. ■
Ordo ab chaos
Christophe N. Bredillet
Reference
Bredillet, C. N. (2009). Mapping the dynamics of the
project management field: Project management in
action (part 4). Project Management Journal, 40(4), 2–5.
PAPERS
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Project-as-Practice: In Search of
Project Management Research
That Matters
Tomas Blomquist, Umeå University, Sweden
Markus Hällgren, Umeå University, Sweden
Andreas Nilsson, Umeå University, Sweden
Anders Söderholm, Mid Sweden University, Sweden
ABSTRACT ■
Research on projects is not only an immature
field of research, but it is also insubstantial when
it comes to understanding what occurs in projects. This article contributes to making project
management research matter to the academic as
well as to the practitioner by developing a projectas-practice approach, in alignment with the
ongoing debate in social science research.
The article outlines a framework and argues that
there are two major challenges to the researcher
and also suggests how these challenges can be
met. Underlying notions of the practice approach
are outlined to ensure a development of the
project-as-practice approach that makes project
management research matter!
KEYWORDS: project-as-practice; practice
research; relevance-based research; relevance
challenges; project management research
Project Management Journal, Vol. 41, No. 1, 5–16
© 2010 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20141
INTRODUCTION ■
T
he relevance of management theories for management practice is a
topic of frequent debate in management journals and throughout conferences. Over the last couple of years, some topical contributions have
been made by authors such as Bennis and O’Toole (2005), Ghoshal
(2005), and Mintzberg (2003) with a common theme concerning the shortcomings of management models and management theories in terms of understanding (and guiding) management practice.
Ghoshal (2005), by claiming that bad management theories destroy what
otherwise would have been good practice, is perhaps the most outspoken of
these critics. Management theories are, he claims, too scientific and rational.
In addition to disregarding the importance of human interaction, they are
also based on deductive reasoning, biased assumptions, and partial analysis.
All in all, management models are claimed to be (1) irrelevant descriptions
of what is really going on in organizations and (2) not a sound and solid
foundation on which management action should be based.
Given these flaws, it is obviously a concern if management theories
become self-fulfilling, which is highly likely as people use theory to guide
practice. If self-fulfilling theories are also used in education, their nature as
bad theories becomes even more pronounced (Mintzberg, 2003). Therefore,
Ghoshal (2005) advised us to be very careful when proclaiming that we have
built theory on the very nature of a management phenomenon.
Similar problems are also apparent in project management. Traditionally,
project management as examined by researchers has resulted in a number of
bodies of knowledge trying to describe what is generally recognized as good
practice. Over the past several years, there have been calls for an alternative
approach to good practice. Cicmil and Hodgson (2006, p. 14) argued that the
iron triangle, which could be seen as the mainstream of project research,
bedevils project management research. Furthermore, Smyth and Morris
(2007) built on this when outlining weaknesses in dominant research
methodologies frequently used in project management studies. Cicmil (2006,
p. 36) asserted that project theory would be served by a qualitative approach
with a critical interpretive approach that might “generate alternative understandings of what goes on in project practice and how practitioners participate in and manage complex organizational arrangements.” Ivory and
Alderman (2005, p. 5) argued that project management theory needs to distance itself from prevalent rationalistic assumptions. In a similar vein,
Bresnen, Goussevskaia, and Swan (2005, p. 39) concluded that there is still a
lot to understand regarding project organizing and that situated events are
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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PAPERS
Project-as-Practice
important to understand organizational
change. Bredillet (2005, p. 4) highlighted
the need and wish for studies that focus
on “what we are and where we are going,”
while Cooke-Davies (2004) argued that
the underpinning theory of project
management practice is never or seldom articulated (see, e.g., Cleland &
King, 1983; Turner, 2008, for exceptions).
Following these lines of thought,
project management is not only an
immature field of research, but many of
the normative and traditional contributions are also insubstantial when it
comes to understanding what is really
occurring in projects (see Winter, Smith,
Morris, & Cicmil, 2006). At the same
time, there are numerous different
schools of thought or perspectives of
project management. Anbari (1985)
suggested five, Söderlund (2002) suggested seven, and Bredillet (2007)
(together with Anbari and Turner) suggested nine. Then again, the number of
schools of thought is less important
than the notion that project management today still has a predominantly
rational focus. Söderlund (2004) pointed out that process and real-time case
studies and project organization issues
are of particular interest. If these
issues are to be considered, we need to
go beyond project management models, A Project Management Body of
Knowledge (PMBOK® Guide), project
plans, work-breakdown structure
(WBS), program evaluation and review
technique (PERT), and Gantt schedules
(cf. Maylor, 2001) when trying to understand projects. Going deeper with analytical and mostly rational theoretical
models of project management will
only provide more make-believe statements on project management issues.
Even though the critique of project
management models is diverse and may
lead to different conclusions, it seems to
be widely agreed upon that there is no
such thing as one unified theory on
projects (Sauer & Reich, 2007; Smyth &
Morris, 2007; Turner, 2006). However, as
history of general management informs
us (cf. Cyert & March [1963], a theory of
6
the firm that never became the theory),
there never will be one theory because
projects are at the most basic level an
open-system organization with many
contextual dependencies, as well as
individual variation (see also Engwall,
2003; Turner & Keegan, 1999).
Consequently, we need to first look
at what people do within the context
of projects before we can start our quest
to understand projects themselves
(cf. Geertz, 1973). This is still research
about projects. But this is research on
what people do in projects (practice)
rather than on the confirmation of best
practice models for project management. Whereas traditional project
research starts with overall models and
concepts from which action is derived,
we argue for a practice perspective
(Schatzki, Knorr Cetina, & von Savigny,
2001) that begins with individual
actions and asks what overall models
and concepts result from those actions.
Our aim in this article is to outline
elements for project-as-practice research
and to discuss major issues that need to
be addressed within this approach. It
bears pointing out that we are not discarding the present knowledge about
projects. Rather, we are suggesting a
complementary approach. The article
has a multifold contribution. We add to
the growing understanding of projects
by identifying challenges and patterns
that need to be considered by academia.
Moreover, we outline a practice perspective for temporary organizations,
which have features different from permanent organizations (Lundin &
Söderholm, 1995). In the following, temporary organizations are primarily
referred to as projects.
The Practice Turn in Project
Management
Traditionally, a major divider exists
between engineering-focused traditional system-based research on the one
hand (hard systems theory, optimization
theory) and the social science–based,
process-oriented tradition of research of
project management on the other hand
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(Blomquist & Packendorff, 1998; Engwall,
2003; Söderlund, 2002). The divider is
one example of the “battle” between
espoused theories (“what should be
done”) and theories in use (“what is
actually done”) (cf. Argyris, 1976) or
between “being” and “becoming” (see
discussion in Winter et al., 2006). By traditional project management we refer to
structured, mechanistic, top-down, system-model-based approaches to project
management that rely on systems
design, tools, methods, and procedures.
Traditional system research thus strives
for best practice, guidelines, and forecasting of relevant behavior for practitioners. Some of its results are transferred into textbooks, guidelines, formalized norms, and expectations, such
as the various bodies of knowledge currently on the market (see also Smyth &
Morris, 2007). See also Turner and
Keegan (2000) for an elaborate discussion on the mechanistic system
approach.
The process-oriented approach
(cf. Söderlund, 2004) highlights “theories in use.” Its focus is primarily on the
relationship between past, present, and
future when analyzing a project’s
processes. Projects within this tradition
are seen as a social and organized setting on which numerous conceptual
organizational theories and organizational behavior frameworks can be
applied and developed. Over time, the
process perspective has also come to
include processes connecting projects
to a wider context, thus emphasizing
project contingencies and contextual
dependencies (Engwall, 2003).
As the tension between the mechanistic structural top-down and the
“past-present-future” perspectives has
been quite thoroughly investigated
(e.g., Blomquist & Packendorff, 1998;
Bresnen et al., 2005; Engwall, 2003;
Lindkvist, Söderlund, & Tell, 1998;
Morris & Jamieson, 2005; see also the
special issue of International Journal of
Project Management, 2006, Vol. 24, Issue
8, on rethinking project management),
we will not delve into this any further
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here. The legacy of the process perspective is, however, extensive. Above all, it
has contributed to an understanding of
projects as social processes, which take
into account the complexities of human
life (Cicmil & Hodgson, 2006, p. 10). An
example of a project process study is
Lundin and Söderholm (1995), who
identified four phases of projects, which
they label and give certain attributes
while focusing on human behavior
and actions. Another example is the
Sutterfield, Friday-Stroud, and ShiversBlackwell (2006) study of a case study
method that identified some lessons to
be learned regarding stakeholders. From
our point of view, process studies do not
go far enough in at least two ways:
1. Process studies are mostly concerned
with processes defined by the structure, which results in a focus on projects as defined by these organizational structures. As a consequence,
a more fine-grained analysis of
the microactivities upon which the
processes are built is sacrificed.
2. Following the first point, process
studies focus on people in charge,
thus sacrificing a bottom-up analysis
of what individual actors actually do
when they work on projects.
The tendency to generalize, which is
inherent in the general version of the
process perspective, has consequences
on which mechanisms are found and
how well grounded and relevant an
analysis is. This approach to process
studies runs the risk of being caught up
in the trap it typically criticizes—namely,
to provide general best practice models
(see also Cicmil & Hodgson, 2006).
The critical perspective questions
common project knowledge and
explores more details of human behavior and patterns of behavior (Cicmil,
2006; Hodgson, 2004). The perspective
thus comes close to what we claim is
significant for the practice approach.
The practice approach, however, differs
in that the approach is not necessarily
critical in the same sense. We observe a
development toward studies of projects
where both process and traditional
hard systems approaches are under
scrutiny. One way of doing this, from a
critical standpoint, is to explore the
microactivities, the real “action” within
projects. Following the words of Geertz
(1973, p. 6), transferred to our area of
research, it is necessary to first look into
what project managers do before we
can understand what project management is. Geertz’s advice can also be read
the other way around: theories built
without drawing upon the foundation
of actual work of project managers may
be irrelevant or, in the worst case,
erroneous. Thus, in order to build an
understanding that is more strongly
underpinned, research has recently
taken a more practice-oriented turn
where the focus is on the actors and
their activities rather than on models
and their application. This is not to say
that the effort so far is not important.
The traditional approach has contributed to the development tools,
methods, and generalizations used by
practitioners in different industries all
over the world. The process-oriented
approach has, on the other hand, contributed to a more human element on
projects. We therefore modestly claim
that the everyday actions of the
practitioners make a more significant
contribution to the understanding of
projects.
The turn toward practice has been
observed in various fields of research
(see Schatzki et al., 2001, for a comprehensive review on the practice approach
in social science) and it has had a great
impact on the innovative research in the
area of strategy and, more specifically,
on the development of strategizing as a
core concept for studies on strategic
processes (Jarzabkowski, 2003, 2004,
2005; Whittington, 1996, 2002a). A focus
on practice is indeed, as Bourdieu (1990)
argued “to take seriously the work and
the talk of the practitioners themselves.”
Practice-oriented research has its
roots in the much broader field of sociology and social sciences, with one notable
contribution coming from Bourdieu and
his concepts of “habitus” and “social
praxeology.” Bourdieu argued that
practice generated by habitus follows a
“practical logic,” contrasting it to the
Levi-Straussian model’s of “logical logic,”
which “reduces action directly to structure” (Lau, 2004, p. 378). Nevertheless,
Bourdieu’s (1984) development of habitus, encompassing an individual’s social
context, education, experiences, and history, is subject to a double reading. The
first reading relates to “the distribution of
materials, resources, determinant relations, and the species of capital in a field”
(Everett, 2002, p. 70). This first reading
says little about agency, which makes the
second reading necessary. The second
reading tries to come to terms with more
tacit properties of human actions—that
is, practical activities, mundane knowledge, subjective meaning, and practical
competency (Bourdieu & Wacquant,
1992, pp. 7–9). According to Everett
(2002, p. 70), the two readings are what is
referred to as Bourdieu’s “social praxeology.” It is suggested that habitus can be
investigated by its structural components—for example, by examining the
use of language, which has become quite
popular in critical studies of organizing
(e.g., Hodgson, 2004).
In regard to projects, Bredillet
(2004) expressed his concern when he
argued that the praxeology (the study of
human action) of projects has been forgotten. Even though some time has
passed since the practice research of
organizing was introduced as a comprehensive approach, only recently has
the discussion been utilized for project
management research. An important
plea for research to focus on the actuality of projects was published in 2006
(Cicmil, Williams, Thomas, & Hodgson,
2006) where theoretical and methodological considerations for a research
agenda with an emphasis on the actualities of projects were outlined. In the
context of this article, research on actualities and practice share many of the
same basic assumptions, arguments,
and concerns. We thus build our
thoughts on the following in both the
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practice turn in social science and
management research, as well as in
the recent “rethinking project management” discussions referred to earlier.
Only recently have studies that take
a practice perspective at the outset
appeared in the field of project management. Examples include the management
of deviations in an engineering project
(Hällgren & Maaninen-Olsson, 2005;
Hällgren & Wilson, 2007); the day-to-day
work of a project manager in a software
development project (Nilsson, 2008;
Nilsson & Söderholm, 2005); the use of
tools in project management (Besner &
Hobbs, 2006); the roles in temporary
organizations (Bechky, 2006); the work
of project managers and how they talk
and understand what they do
(Blackburn, 2002); projects as a tool for
rebureaucratization (Hodgson, 2004);
and Simon (2006), who studied the
“actual work” of the project managers
for creative projects.
Focus
Traditional
System
Focuses on
rational structures
and how they can
be best managed
We have so far distinguished between three main approaches: traditional
system, process, and practice (although
we recognize that, depending how one
counts, there are more approaches to
project management [Anbari, 1985;
Bredillet, 2007; Söderlund, 2002]). A
fourth perspective, the critical approach,
has been briefly referred to. However, it
operates primarily parallel to the others
and is applicable as a critical assessment
of research and practice in general, as
well as a perspective that guides the way
research questions are formulated and
researched within process- or practiceoriented research approaches.
Each one of the three approaches—
traditional system, process, and practice—
has its own prerequisites and theoretical
and empirical focus. Our discussion on
different approaches is summarized in
Table 1.
Having acknowledged the differences of the three perspectives and
their relative position, we will continue
discussing the practice perspective for
project research.
Project-as-Practice: Praxis,
Practitioner, and Practices
There are three concepts that the approach in practice, as it is known,
builds upon. They are:
1. Praxis—the situated actions taken;
2. Practitioner—the men and women
conducting the praxis; and
3. Practices—the norms, routines, traditions, and rules guiding the behavior of the practitioner (Jarzabkowski,
2003; Whittington, 2002a).
The praxis in our case refers to the
actions of a project manager or project
worker—what he or she does in a given
situation. The praxis of a project manager includes more than just the classic
tasks of a project such as budgeting,
scheduling, and control. It also includes
Empirical
Approach
Ontological
Status of
Human Action
Dominating
Methodological
Commitment
Examples of
Research
Question
Epistemology
Top-down
Determined
Objectivist
Above all quantitative
methods, to enable
Erklaren (explaining)
What are the
success factors
of planning?
Objectivist/
subjectivist
Above all qualitative
methods such as
interviews, documents,
etc., to enable Verstehen
(understanding)
How could the
process of
planning be
understood?
Andersen (2006); Dvir and Lechler (2004); Pinto and Slevin (1989)
Process
Focuses on
describing the
process and how
the process relates
to the structure
Past,
Present,
Future
Intersubjective
Legris and Collerette (2006); Lindkvist et al. (1998); Lundin and Söderholm (1995); Sutterfield et al. (2006)
Practice
Focuses on
describing the
process through
the identification
of local situated
actions
Bottom-up
Intersubjectively Subjectivist
situated
Hällgren and Wilson (2007); Hodgson (2004); Simon (2006)
Table 1: Three approaches to project management research.
8
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Above all qualitative
methods such as
ethnography, to enable
Konstruieren (construction)
What are the
actions that are
building the
activity of
planning?
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all the actions of a project manager in
relation to the different tasks in the project. The project manager’s actions, or
praxis, are believed to depend not only
on the situation or context (what
Schatzki, 2005, called the Site) where
they are acted but also on the project
manager’s “habitus,” (i.e., his or her history, previous experience, education,
and even the present and previous family situation; cf. Bourdieu, 1984). Studies
of praxis therefore include both what is
done by the project manager and
how that praxis influences and is influenced by what happens around the
practitioner.
The practitioner refers to the person
who does the actions (e.g., the project
manager). Studies of the practitioners
often start with the question of who the
project managers are in order to understand why or how they act the way they
do (cf. Whittington, 2002b). Not only are
the project managers’ actions believed
to rely on the habitus of the practitioner,
but they also depend on the practices of
the organization or industry.
Practices, which are common in all
organizations or industries, are the various traditions, norms, and rules or bodies of knowledge that state, explicitly or
implicitly, how the practitioner should
act in a certain situation. These practices
can be written in documents stating best
or preferred practice in the company or
told in stories exemplifying “how we do
things” at the company. Those practices
are the rules of action that are largely
taken for granted (cf. Jarzabkowski,
2004). Departing from these rules can
sometimes be very difficult, as the traditions are often firmly entrenched within
an organization. Practitioners’ praxis
builds not only on the practices but also
on the habitus and information from the
specific situation and context that might
demand actions other than what is “normal.” There could be different reasons
for departing from accepted or traditional practice. In project management,
the main goal is to take the project from
point (or stage) A to point B, and in order
to do so, it is important to follow the
project plan. Nevertheless, when the
reality does not conform to the plan, it is
up to the project manager to improvise
(cf. Leybourne, 2006) using his or her
habitus—which includes skills, experiences, and education—to make decisions that allow the project to move
toward point B. Because every project is
unique, the decisions might not be the
ones traditionally taken, but they may
nevertheless be beneficial for the project. Such nontraditional decisions often
evolve into best practice, or “how we do
things,” in the long run as the merits of
these decisions are recognized and
embraced. For example, when word
spreads through an organization how a
project manager solved a particularly
difficult case, the practitioner’s practice
might eventually become part of accepted practices.
The concepts praxis, practitioner,
and practices are not independent but
rather entangled, as they co-evolve in
what Hendry and Seidl (2003) called
episodes. Episodes are limited events
occurring in the organization at any
given point in time (i.e., meetings, planning sessions, or deviation management). While practices represent the
present thinking and interpretation in a
given situation, they are then converted
into praxis by practitioners through
repeated episodes. Praxis therefore
builds on the practitioner’s earlier experience and on other contextual or situation-specific information as well as on
the practices used in the company. As
long as the situation remains the same,
practices and praxis can be expected to
continue more or less unchanged. The
practitioner might, however, reinterpret
appropriate praxis and choose another
path to presumed goal fulfillment if
externally influenced. If the practitioner or other practitioners then repeat the
new praxis, the practices can be considered changed. Hence, when a practitioner departs from standard practices,
new experiences contribute to change
as they add to previous experiences and
create new traditions, which in turn
become accepted practices.
Project-as-Practice Research
According to Whittington (2002a), there
is a need for a better understanding of
practitioners, praxis, and practices.
Understanding the practitioner’s development will be helpful in developing
research as well as project management
education, which today is largely
focused on teaching project management practices. We are not in any way
arguing that the development of the
bodies of knowledge is in vain, but
rather that it must be complemented by
more research on practice. We argue
that an understanding of the practice
will reveal hidden mechanisms explaining the behavior in projects, which in
turn will contribute to a more reflexive,
mature, and contextualized understanding of project management.
The practice turn is not new. It has
existed for several years, above all within
organizational studies. However, we
assert that the temporality of projects
has implications on how the practice is
shaped, conceived, and put into action.
The temporality also has implications on
which structures are relevant and how
praxis is conceived. This idea is of course
not new either, but the combination of
these ideas has implications on how we
understand project management.
A practice approach on project management requires the study of action,
activities, and actors within projects.
Although it is a starting point, studying
everyday life is not enough, and it is
also not the limit for practice studies.
Gherardi (2006, p. xviii) proposed that
“the concept of ‘practice’ is fruitful precisely because it enables analysis of the
social connections among individuals,
collectives, organizations, institutions,
the situated contexts in which these
connections take specific form, and all
the intermediaries utilized by them—
intermediaries that may be physical
objects or artifacts, discourses or texts.”
The project studies could therefore
have a much broader aim, as Gherardi
continues to suggest that the practicebased studies of organizations should
build all the way from the individual to
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the institutional level. Nevertheless,
when doing this, the research should
focus on the individuals’ actions in
context in order to manage, in our
case, the project and also build a
temporal and spatial site where
the organization can be analyzed
(Gherardi, 2006).
When doing practice research,
there are two challenges that need to
be dealt with. The first is the relevance
challenge—doing practice research in
a context relevant for society, for
the practitioners studied, and for the
understanding of projects. The focus of
the research should be to present it so
that it not only helps academics understand project management, but that the
research also adds to the practitioners’
understanding of their jobs and of the
conditions under which they spend
most of their time at work. The second
challenge is to avoid an approach that
only produces trivial and random
observations, lacking insights, coherence, and implications. Thus, even
though a practice perspective indicates
our interest in microprocesses, the
micro level on its own is an insufficient
level of interest from an analytical
viewpoint. It might not be the most
interesting one either. Whittington
(2004) highlighted the trap of focusing
too narrowly on microprocesses. We
label this the pattern challenge, which
is concerned with lifting the analysis of
the praxis to a higher level so that not
only the individual actions are analyzed but also that the pattern resulting
from the various actions can be analyzed. Smyth and Morris (2007) discussed the tension between general
observations, which may marginalize
the particular, and observations of the
particular, which may oversee the general pattern. Addressing the relevance
and pattern challenges is thus one way
to avoid being trapped in either one of
the end points reviewed by Smyth and
Morris.
The sections that follow will further
develop the understanding of those two
challenges.
10
The Relevance Challenge
The first challenge has to do with what
the observations are about. Schatzki
(2005) described “the sites of organizations” and he argues that praxis occurs
in a setting, or “the site,” thereby placing praxis in a broader context. His
claim is that the actions of one person
also make up the context of another
person’s actions or of the physical and
social context where the actions are
taking place. Consequently, practice is a
part of a greater social interplay where
one person’s praxis can be understood
only in relation to the social and physical context where it was carried out.
Now, for project management research,
the challenge is to define and describe
relevant contexts for practice-based
studies; to define where to go for observations and how far to go once within
the context. This is the relevance challenge. Fundamentally, what we are saying is that not all observations are
equally relevant for the understanding
of projects.
In failing to meet the relevance
challenge, we will end up doing “relevance lost” research that Johnson and
Kaplan (1987) claimed occurred within
management accounting. Here, for
project-as-practice, there is a need to
search for those sites where relevant
things are happening. And this is where
we need to make informed decisions in
order to conduct research relevant for
project management and not on “coffee
table discussions” per se. Coffee table
discussions may be of interest if they
contribute to our understanding within
a wider project context, but certainly
not as an end in itself.
There are two different angles to the
relevance challenge: (1) in terms of
implications on choice of empirical setting and (2) in terms of questions to
address. Relevance, however, cannot be
based on what has been done in traditional model-based project management research only, since the limited
understanding provided through such
models is the starting point for the turn
to practice in the first place. Thus, we
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
need to look elsewhere for advice.
Wenger (1998) discussed communities
of practice, also building on the practice turn argument, and how localized
communities are to be understood. A
(relevant) community of practice is
formed around three different concepts: First, there is a need for mutual
engagement of participants. This means
that individuals are engaged and know
that they are part of a mutual undertaking. Second, there is a joint enterprise,
in which specific content is negotiated
and where there are accountability
norms in place. And, finally, Wenger
discussed a shared repertoire of concepts, models, roles, and rules used to
perform specific activities. It is important to note that all three of these components include negotiation and may
be characterized by conflict, diversity,
and heterogeneity. It is, in other words,
not necessarily a search for harmony
that underlies the forming of a community of practice.
For a practice-based research
endeavor, it is necessary to address the
community-building issue, parallel to
other more precise research issues. A
project team may form a community of
practice, in the terms put forward by
Wenger (1998), or, depending on the
situation, they may not. One question
of relevance is to what extent are communities of practice formed in alignment with project definitions or to
what extent are communities formed
based on principles other than those of
the project, as, for example, suggested
by Lindkvist (2005) for groups not as
tightly and continuously interacting
as suggested by Wenger.
A single action or task has no meaning without the social context in which it
is enacted. Instead, communities are the
first layer of embeddedness—that is,
the lowest level of context in which practice is situated. Beyond the community,
other layers may be found, such as historical, social, cultural, and institutional
layers (Schatzki, 2005; Wenger, 1998).
Brown and Duguid (1991) even suggested
that organizations may be viewed as
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“communities of communities.” Schatzki
(2005) talked about organizations as bundles of practices and material arrangements, arriving at a similar conclusion.
From a project point of view, this has to
do with the need for contextualization of
projects (Winter et al., 2006) and the
broadening of our understanding of
project scope (Atkinson, Crawford, &
Ward, 2006).
Our point is that a practice perspective calls for a different approach, and a
different definition, of relevant sites for
inquiry. Even though questions
addressed may be typical project issues
such as planning, execution, termination, knowledge transfer, contracting,
or procurement, it is necessary to start
the inquiry without assuming that
organizational units, narrowly defined
project organizations, or other “topdown” definitions of the relevant
organization are good entry points into
the empirical context. It is a plea to
make a critical assessment of the
research site and to clearly assert that
projects, project management, and
project organizations are not “found”
but “invented” (Smyth & Morris, 2007,
p. 426).
The second issue—which questions
to address—is a bit tricky. At first, it may
seem that a practice approach is only
suitable for some specified sets of
research questions—focusing on “practice issues” (whatever they may be).
However, this is not necessarily the
case. It is correct that a practice
approach requires the research design
to allow for data collection on everyday
activities, within the frame of a community of communities, to look for how
meaning is created and how the interaction between practices (models and
other “shared repertoires”) and action
are carried out (see Schatzki, 2005, for a
discussion on a social ontology for
studying organizations from a practice
perspective). It is not correct, however,
that only certain and limited sets of
questions can be phrased accordingly.
Let us take an example to clarify this
point by referring to a classic quote by
former U.S. President Dwight D.
Eisenhower: “In preparing for battle I
have always found that plans are useless, but planning is indispensable.”
Plans are a cornerstone of any project;
consequently, planning is a dominant
activity within a project context.
Applying project-as-practice would
mean that plans and planning are
researched through questions like (for
example) how the content of the plans
is used as a basis for everyday action,
how the procedure for changes in the
plans is actually carried out, or how
planning procedures are really done
and how deviations from plans are
responded to (for the last example, see
Hällgren & Maaninen-Olsson, 2005,
2009). These are just examples. All of
these questions would be answered in
terms of how a shared repertoire is
applied, what learning and power
mechanisms are at hand, and how the
interaction is organized and coordinated across organizational units.
In the same way, any traditional
project management topic can be
made suitable for a project-as-practice
research approach. The main thing to
keep in mind is to retain the focus on
how things are being worked out in real
life, how actions are designed, performed, and related to other actions,
communities, institutions, and the like.
This may call for a renewed definition
of the empirical object of study—for
example, by more clearly investigating
sequences of related activities in which
people are engaged rather than defining organizational entities to research
(see discussion in Bengtsson, Müllern,
Söderholm, & Wåhlin, 2007). Cicmil
et al. (2006) provided an excellent discussion on the need for studies on project
management actualities that supports
the argument made here.
Unwittingly, Simon (2006) provided
an example of the importance of setting
and how the first angle of the relevance
challenge can be achieved. Simon studied the actions of a project manager in a
creative industry—the computer game
industry. He found that the project
manager had four roles: sense-maker,
web-weaver, game-master, and flowbalancer. Although it was still tentative,
Simon provided an example of how the
empirical setting shapes the actions of
the practitioner—the project manager.
Another example of the impact on
the choice of setting is provided by
Pitsis, Clegg, Marossezeky, and RuraPolley (2003), who studied project management meetings during the Sydney
2000 Olympic infrastructure project.
Among other insights, the researchers
found that various tactics were used to
achieve the “future perfect,” including
“strange conversations,” “playing end
games,” “workshopping,” and “projecting feelings, concerns and issues.”
Pitsis et al. provided an example of how
the notion of “future perfect” is transformed from vision to action and finally to implementation. In the meetings,
the tactics previously mentioned developed and ended up challenging the
common assumptions and behavior in
the construction industry.
Like the first goal, the second goal
of the relevance challenge is not always
an easy task to achieve, as is evidenced
by the contemporary development
of project management. The issue of
which questions to address with what
methods is closed because it all begins
with the actions of the practitioner.
Blomquist and Müller (2006) provided
an example of how quantitative
research methods are not only applied
to a project-as-practice approach but
also achieve a practice-inspired analysis.
They studied the roles and responsibilities of program and portfolio managers.
Through the use of a few interviews and
an extensive survey, they found that the
responsibilities of the program manager were planning, keeping track of time
and budget, managing stakeholder
relations, and being responsible for the
end result. The portfolio manager in
turn was responsible for various kinds
of reports as well as the profit and loss
of the portfolio. The roles of the managers were determined to be those of
integrator, coordinator, escalation point,
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and consultant. Noticeably lacking,
however, is how the program managers
act in their roles.
Another example of which question
to address and how is the study by Raz,
Shenhar, and Dvir (2002) on the use of
risk management practice. Once again,
the main research method used was a
survey among more than 100 projects in
various industries. The study found that
the proposed methods were used in only
a fraction of the projects and that the
application of risk management procedures (actions) was more likely in highrisk projects. On the other hand, the
study did not show how the tools were
actually used in a specific situation.
The Pattern Challenge
The second challenge of a practice
approach is to link data of everyday
actions to integrated and synthesized
observations that carry value beyond
independent observations of microprocesses. In other words, it is necessary to see the patterns resulting from
everyday actions and activities, and to
be able to move from the particular
to the general (Smyth & Morris, 2007).
Thus, we would like to label this the
pattern challenge. Explicitly, observations need to contribute to a greater
meaning than the single observation on
its own. Project activities have to be
placed into context in order to enable
conclusions on a more aggregate level
(Bengtsson et al., 2007; Engwall, 2003).
The first part of the challenge is that
practice is situated in a rich cultural
and social context (Schatzki, 2005). This
means that actions are influenced and
colored by the culture and the social
expectations in projects or the organization as a whole. Also, the actions
themselves will most probably influence the context too. “Situatedness”
internalizes behaviors of persons in
their situation and affects the behaviors
in and around the project. For example, in
project meetings, people normally
know from the way they interpret the
situation or from their expectations
what is the appropriate and acceptable
12
way of acting. To study the patterns, it is
consequently important to do so in the
context of how actions are situated.
The second part of the challenge is
one of commonality, implying that patterns are discovered while acting that
will construct and mediate the meaning
of the episode (Hendry & Seidl, 2003;
Whittington, 2006). This means that
individuals in a meeting try to understand what it is all about and therefore
they act before, during, and after the
meeting in ways that allow them to figure out what is going on. For example,
they might be found in the corridor discussing some of the pending issues in
the forthcoming meeting or asking
questions for clarification during the
meeting to make sure of the agenda. In
this way, all of those involved in the meeting share and create a common understanding of the situation. In all cases,
commonalities develop for those
involved and working practices spread
around the organization. It may not be
enough to create a solid community of
practice in terms of Wenger (1998) but it
may be a way to create a common base
for action (Lindkvist, 2005).
The third part of the challenge is for
patterns to be identified in the interdependencies between actions of people
(cf. Hendry & Seidl, 2003). Their engagement in action creates other project
meetings via a series of phone calls,
e-mails, and other coordinating activities.
Interests, skills, and knowledge from
single participants are not enough to
resolve issues in the project. But by calling for and utilizing other sources, the
community can respond and solve
problems far more complex than possible on an individual level. By participating in these situations, individuals learn
both by their own actions and by witnessing others acting. Both actions
strengthen the community. This is,
again, not immediately obvious when
only investigating microprocesses, but
becomes clear as part of the search for
patterns.
The last pattern challenge is that
actions are driven by mechanisms and
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
that accountability is built into the way
projects are organized (Whittington,
2006). By investigating projects in
action, the structure of a project will be
expressed in the mechanisms of management tools, techniques, and procedures, but also in outputs of accountability for the persons involved. For
example, the incentive structures in
place or the career options opening up
for participants may be elements of the
infrastructure that have a major impact
on the practice.
The point we would like to make is
that relevant research is achieved when
these pattern challenges are met in the
research agenda. Nevertheless, patterns also include a critical element of
some significance. Hodgson (2004)
studied how project management as a
method was sold within an organization with discursive tactics as a “debureaucratization” rather than the “rebureaucratization” initiative it was, and
how the employees responded to that.
Hodgson’s article carries the notion of
“situatedness.” Situatedness assumes
that patterns of action are internalized
among the practitioners as they feel
that their behavior is accepted in the
group to which they belong. The findings from Hodgson’s study show the
employees responding with, for example, barbed humor and occasionally
openly resisting the initiative. The
search for patterns can thus include critically examining issues that are behind
the official interaction or unfolding
hidden agendas (Cicmil & Hodgson,
2006).
Framing actions on an individual
level rather than an institutional or
project level, Nilsson (2005) studied a
project manager in the software business. He found that the job of project
managers, who are forced to spend a lot
of their time in meetings with people
from various levels of the organization,
is highly fragmented. This fragmentation is an example of “interdependency”; that is, the actions are dependent
on the practitioner, another person,
and/or their environment.
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Although Hodgson (2004) and
Nilsson (2005) do not explicitly state
that they have a “project-as-practice”
approach, the common denominator is
that they focus upon actions and how
these actions on the microlevel influence conditions in and around the
project. Furthermore, the previously
mentioned articles demonstrate the
need for aligning the actions with relevant findings and explanations at other
levels in order to create substance and
derive meaning from the findings.
Toward a Project-as-Practice
Approach
We started this article arguing that
there is a need for practice-based
research on project management and
have discussed some basic challenges
that have to be met in doing so. A practice approach requires research to look
more closely on what is actually being
done as people do project management—
rather than focusing on models and
implementation from a top-down perspective only. A practice approach will
add to our knowledge of projects by
delving into practice, and it will expand
our area of attention as we do so. Chia
and Holt (2006, p. 250) stated that “. . .
much of what takes place within an
organization or between organizations
[. . .] is [. . .] consequently ignored
because it does not occupy any observational space in the researcher’s world
view.”
Following their line of argument,
practice-based research will open up
new areas for observation. Praxis is
what practitioners do, but it is also the
tools they use, their interaction and
intentions, and their joint episodes of
activities. Taken together, a dynamic setting for action is created on the local
arena where knowledge and action
come together in practice. The main
underlying notions guiding research
into these dynamics, also to some extent
discussed earlier, are the following:
1. Research is organized bottom-up,
rather than top-down (Chia & Holt,
2006; Whittington, 2006). This means
that we look primarily at what is done
and build the understanding of larger
contexts (and communities) based on
these observations. The interplay
between practitioners, the episodes
they create, and the tools they use are
the basic building blocks that need to
be understood and explained. Broader
explanations must be based only on
such observations. We need to be able
to understand and conceptually
explain how work is organized, how
tools are used, and how results are
achieved (cf. Flyvbjerg, 2001). The project-as-practice approach acknowledges this by focusing on praxis, practices, and practitioners and the
episodes where they meet. Following
this approach is different from the use
of a specific data-collection method,
such as observations or interviews.
Practice research does not presuppose
a specific method (although ethnography tends to be popular); meanwhile, it
is an epistemology and an ontology of
how projects function and are viewed.
2. Research is based on practice, rather
than on (organizing or management)
principles (Czarniawska, 1993).
Praxis, as often described, is what
people do. We seek their reasons for
doing what they do, instead of seeing
how well they perform according to
corporate or model-based principles
for action (Cicmil et al., 2006). Being
able to understand how real people
solve real problems is, consequently,
of paramount interest, whereas to
evaluate or research how well project
plans are implemented is of less significance.
3. Research will look for communities,
rather than organizational units, and
look for what underlying processes or
areas of commitment that support
communities. Communities of practice (Wenger, 1998) are shared among
a number of people and are based
on a simultaneous application of
action and knowledge for a specific
area of practice. Even if a group lacks
the continuous interaction pattern
and common history defined by the
communities of practice concept, it
can still build common understanding and an action-oriented community (Bengtsson et al., 2007; Lindkvist,
2005). Understanding the creation
and upholding of communities will,
eventually, also guide us to a better
understanding of how projects (as
organizationally defined units) overlap or diverge from communities (as
defined by action and knowledge) in
a particular organization.
4. Research will account for interorganizational and extraorganizational
issues in terms of how people make
such issues present in their praxis
and how they translate them into
practice, rather than looking at the
diffusion or implementation of tools
(Czarniawska & Sevon, 1996). A practice perspective will thus combine
the “local” with the “global,” not as a
hierarchical relation where the global,
or extraorganizational, level impacts
the praxis level, but as an integrated
interplay between tools in fashion and
the translation of such tools into practice (Gherardi, 2006, pp. 230–232).
5. Research will build an understanding of the management problembased organization seen as a bundle
of communities and intertwined
practice, rather than as organizational units, levels, and layers
(Brown & Duguid, 1991; Schatzki,
2005). This follows, to some extent,
from the first and third issues
brought up in this section, the “bottom-up” perspective and the focus
on communities.
Finally, one may ask what the management applications are. Practicebased research, as with traditional
research on project management principles, cannot solve all problems that a
project manager or a general manager
may have. Nevertheless, it will add considerably to understanding the profound project management challenges
in contemporary organizations. A deeper and insightful understanding of how
people actually use their tools, how they
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react and respond to various changes in
circumstances, and how they jointly create a mutual or divergent understanding
of the task at hand will be valuable
knowledge for every manager. Project
managers we praise as being the heroes
of projects are often those who master
the various and seemingly unrelated bits
and pieces of project life, those who can
manage the unforeseen, those who
can apply principles and tools creatively,
and those who are around to promote and
offer support when needed. In short, the
art and skills of project management is
illustrated through a practice approach
that captures, conceptualizes, and highlights issues for further discussion and
reflection, thereby once again making
project research matter. ■
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Tomas Blomquist, PhD, is an associate professor
at the Umeå School of Business at Umeå University
in Sweden. He is the head of the management section at the business school and the director of the
Erasmus Mundus master’s program in strategic
project management, a joint program with HeriotWatt University and Politecnico di Milano. His
research has been on how firms organize, manage,
and control their projects in programs and in portfolios. One of his drivers has always been on what
managers and project managers do in practice. He
had been involved in work to coordinate and actively support project management research activities
and he is one of the founding members of the
research network IRNOP. His previous participation
experience includes product development and
renewal projects in both industry and the public
sector. This also includes activities to access and
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16
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Umeå School of Business. His research concerns
(1) the relevance of project management (or
how project management, taught and practiced,
may lose relevance if one is not careful); (2)
innovations in open distributed systems (meaning, observed challenges to innovation collaborations in major project undertakings); (3) climbing expeditions as temporary organizations
(specifically, what can be learned for the temporary organization from extreme context); (4)
managing the unexpected in projects (specifically, how deviations in projects are managed in
practice). The common denominator between
the areas is projects and the effect on and
from practice. He has communicated results
from his studies in the Project Management
Journal, International Journal of Project
Management, International Journal of
Managing Projects in Business, and Journal of
Workplace Learning, as well as various book
chapters and presentations at numerous conferences. He serves as a reviewer for several
journals. He can be reached at his website,
www.markushaellgren.com.
Andreas Nilsson has been teaching leadership,
project management, strategy, and organizational theory for 8 years. He earned his PhD
from the Umeå School of Business in 2008, with
a thesis on the everyday work of project managers where he uses a project-as-practice
approach.
Anders Söderholm is a professor in business
administration and management at Mid Sweden
University and is also currently serving as the
vice chancellor of the university. Research areas
include project management, temporary organizations, and general organizational and management issues related to the use of projects.
Recent publications include the coauthored
book A Grammar of Organizing (Edward Elgar).
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Project Management and High-Value
Superyacht Projects: An Improvisational
and Temporal Perspective
Steve Leybourne, Boston University, Boston, MA, USA
ABSTRACT ■
This article considers specific elements of the
project management of high-value deliverables
in an under-researched sector. Specifically, it
looks at ways in which change is accommodated
in complex projects where scope, delivery, and
cost are relatively inflexible. An emerging literature considers improvisational working within
project-based work, which dilutes the “plan,
then execute” paradigm that has shaped project
work for some time. This research contributes
to the temporal and rhythmic aspects of work in
this area, linking with extant theory on, among
other areas, punctuated equilibrium and organizational “rhythm,” and identifies parallels
between improvised project work and established academic theory.
KEYWORDS: improvisation; time; project
management; superyachts
Project Management Journal, Vol. 41, No. 1, 17–27
INTRODUCTION ■
T
he use and abuse of projects to accomplish work within organizations
is widespread, and it is an area that is attracting greater interest as the
recognition of the benefits of project-based work is becoming more
pervasive, and as research into projects is becoming more accepted
within the wider academic landscape (Cicmil & Hodgson, 2006). Projects are
supposedly used to achieve nonrepeatable and arguably unique outputs,
although it is now accepted that project-based principles are applied to
many other types of work within organizations, especially where change is
endemic (Williams, 2005). This research1 investigates one aspect of projectbased management in a fundamentally under-researched sector.
A sector where project-based techniques are used extensively is in the
construction of high-value “superyachts.”2 A number of shipyards worldwide
are involved in this expanding global market, and these yards act as “lead
suppliers” for the delivery of complex, bespoke products where a significant
network of suppliers, managed by a project manager (or, more often, a number of project managers) come together to design, build, and deliver a customized vessel for an individual customer. It is normal within such projects
to have multiple project managers representing different stakeholders (lead
contractor, owner, designer, naval architect, interior designer, etc.), with
redesign and changes to specification being managed on an ongoing basis
throughout the build schedule.
At this point, it would be useful to discuss (although not define) the
nature of the “superyacht.” The market for luxury pleasure yachts—usually,
though not exclusively, motor yachts—has been in existence for more than a
century, although the more sophisticated craft commissioned recently have
emerged from a global growth in individual and corporate wealth, with
major growth over the last decade or so shifting from Europe to North
America, and to Russia, where significant personal wealth has been generated since the relaxation of communist principles. Historically, a superyacht
was considered to be a bespoke pleasure craft of between 40 and 50 meters
in length, with larger yachts being relatively rare. Over the last decade, however, the size of such yachts has grown, with 60 meters to 80 meters having
become more common, and craft of more than 100 meters emerging, at a
unit cost estimated to be in excess of £100 million (US$160 million; although
cost tends to be a secretive issue with larger projects in this particular
marketplace). There are also limited facilities worldwide where projects
© 2009 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20140
1 This
research was funded with a small grant from the British Academy—a U.K.-based funding source for
academic research.
2 Those unfamiliar with the “superyacht” descriptor may wish to visit www.lurssen.com or www.feadship.nl to
gain an insight into the complexity and magnitude of these products.
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Project Management and High-Value Superyacht Projects
of this magnitude can be executed, so
demand for large-build “slots” is high.
This is also an industry with a large
volume of activity. It is estimated that
more than 200 new yachts are built
each year, though only about 10–15
exceed 60 meters in length. However, at
an average cost of £75–100 million
(US$120 to 160 million) and often
much more, plus the cost of maintenance, running costs, and infrastructure and other support, this is a sector
with activity measured in multiples of
billions (£ or $US). The additional
activity in smaller but still high-value
product adds many times this figure to
the total market. Historically, this sector has also been relatively resilient to
cyclical peaks and troughs in demand,
although current recessionary pressures are now starting to adversely
affect the sector.
Having broadly contextualized the
marketplace, it is now time to consider
the contracts to construct such yachts in
project terms. If we adopt the accepted
premise that projects are used to achieve
“one-off” and relatively nonrepeatable
tasks and activities (Partington, 1996;
Turner, 1999), where performance is
usually measured or assessed on the
basis of time, cost, and scope or quality
(Atkinson, 1999), then the construction
of bespoke superyachts is a useful sector
to investigate. Such projects are of high
value, where quality is paramount, and
the build contracts tend to be documented
in terms of fixed-price, fixed-deliverydate contracts that are rigorously documented and enforced. Essentially, the
contractual negotiations attempt to
resolve a “tension” where the builder is
attempting to shift risk from cost overruns onto the client, and the client is
attempting to fix both price and the
delivery date. The issue of changes is a
particular difficulty, as larger contracts
may take 6 to 7 years from conception to
launch, in an industry where some areas
of the technology are changing quickly,
and the client usually wants the most
recent technology installed at delivery. For
this reason, the “iron triangle” (Atkinson,
18
1999, p. 338) of cost, scope, and time is
specifically defined and contractually
documented, and traditional means of
managing flexibility within the project
are severely curtailed. As a result of this,
project managers often have to resort to
improvisational working practices to
accommodate required or unforeseen
changes.
Given the current thinking that the
project plan is only a starting point on
the complex journey to a completed
and delivered output (in this case, a
superyacht), this contractual structure
has the effect of negating flexibility
within the project. Given that it has
already been identified that redesign
and changes to specification are common elements of such projects, there
are difficulties implicit in the management of those unforeseen—and therefore unplanned—circumstances and
requirements. The management of the
tensions between responsiveness and
control becomes particularly important
in such circumstances, and improvisation skills are often employed. This
makes the study of the project-based
management techniques applied to the
execution and delivery of such projects
an interesting area for research. As has
been previously mentioned, this is also
a sector that is fundamentally underresearched in the academic sense.
This article therefore proposes to
use a variety of data, including individual interviews with project managers
and senior executives within the U.K.
superyacht industry, together with project data and secondary data from within and outside the sector, to consider
some of the challenges inherent in the
project management of these complex
projects. The focus will be on the way in
which project managers in this sector
attempt to circumvent the rigidities
inherent in project planning and execution to meet the shifting requirements
embedded in the delivery requirements
for a complex and bespoke high-value
product, and the temporal imperatives
that influence decision making and
action within such projects.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Literature Review
Although initially within this research
project the intention was to consider
improvisational activity within the
project management of superyacht
builds, it has become apparent that the
project-based management of such
undertakings also has significant temporal implications and is not a matter
of documenting the breakdown of
planned activity and a shift to improvised working practices. This review
will therefore address improvisational
work, and will also consider a number
of temporal theoretical perspectives
that have a bearing on the management
of project-based work within the chosen sector.
From a philosophical stance,
improvisation relates to how thoughts
develop. Ryle (1979, p. 125) suggested
that “the vast majority of things that
happen [are] unprecedented, unpredictable, and never to be repeated,” and
that “the things we say and do . . . cannot be completely pre-arranged.” To a
partly novel situation, the response is
necessarily partly novel, or else it is not
a response. Ryle’s assertion is that however much an activity is planned, there
will always be a novel set of circumstances to deal with, and that improvisation requires using resources that are
available to resolve unforeseen circumstances. This is the essence of bricolage
(Lehner, 2000), which derives from and
is defined by the work of Levi-Strauss
(1967), who describes it as the requirement to make do with those materials
that are available. As improvisation
within the project domain often
requires rapid action to meet unforeseen requirements, it is logical that in
such instances, there is little opportunity to mobilize additional resources.
Bricolage can, of course, also occur in
nonimprovisational contexts, and not
all improvisation will involve bricolage.
There is, however, evidence that successful improvisation is often more
effective if the improviser (the project
manager or project team member in
the project context) is an effective
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bricoleur (Lehner, 2000). This skill, creativity, and intuition are the first three
essential components of improvisation
(Moorman & Miner, 1998a).
Some early work alludes to improvisational styles of working, both generally (Weick, 1979) and on “immediate
action” within the project domain
(Kerzner, 1979). From the mid-1990s
onward, the literature on improvisational
work practices within organizations
began to emerge, adopting Ryle’s stance
and applying it to organizational routines and processes. Some of the outcomes from these debates apply
metaphors to explain the way improvisation is used; for example, adopting
and applying ideas from jazz performance (Barrett, 1998a, 1998b; Eisenhardt,
1997; Hatch, 1998, 1999) and from
improvisational theater (Crossan, 1997;
Kanter, 2002; Yanow, 2001). Later work
used grounded theory approaches to
consider the temporal aspects of
improvisation, and particularly pressure
to achieve complex tasks to a demanding or compressed timetable (Brown &
Eisenhardt, 1997; Moorman & Miner,
1998a, 1998b). This work is building the
foundations to allow empirical research
of a more positivist nature—for example, Akgun and Lynn’s (2002) work on the
links between improvised new product
development and speed-to-market.
Consideration has also been given to the
interactions between improvisation and
learning (Chelariu, Johnston, & Young,
2002; Miner, Bassoff, & Moorman, 2001)
and improvisation and entrepreneurial
activity (Baker, Miner, & Eesley, 2003;
Hmieleski & Corbett, 2003), and the
ways in which tacit knowledge (upon
which intuition, and therefore improvisation, may draw) is acquired (Koskinen,
Pihlanto, & Vanharanta, 2003), as well as
the role of experience in the acquisition
of tacit knowledge (Cooke-Davies, 2002).
More recently, recognition has been
given to the use of improvisation within
project-based work (Gallo & Gardiner,
2007; Kanter, 2002; Leybourne, 2002,
2006a, 2006b, 2007; Leybourne & SadlerSmith, 2006). Generally speaking, this
body of work considers improvisation in
terms of an association with urgency,
where there is a need for action and little or no time to plan, or to generate
and examine alternative courses of
action. Within this research, however,
the focus is on deviation from what is
originally agreed, but often the improvisational nature of any solution is due to
a need to meet delivery targets that are
some time away, indicating that bricolage is not always the predominant
requirement.
It has already been stated that the
design and build of the product can take
6 to 7 years, and a typical “physical”
build will take 3 years, but with the
potential for a different and possibly
uncertain end product. This generates
temporal pressure within the project.
The client will often request changes to
interior trim and materials, audiovisual
and electronic equipment, or fundamental layout requirements, according
to changing fashion. Advances in navigation and monitoring electronics may
trigger the respecifying of requirements
in these areas, involving renegotiation
with subcontractors and the renegotiation of supplier contracts. This activity
usually occurs toward the end of the
build, resulting in compression of
timescales and additional complexity,
which has to be resolved.
This leads us to the consideration of
time in organizations. A comprehensive
review of temporal issues was undertaken and documented in Bluedorn
and Denhardt (1988), which examined
time and the way it interacts with and
influences organizations from a number of different perspectives. Of particular relevance are three studies that
have linked time pressure to performance. Work by Kelly and McGrath (1985)
and Peters, O’Connor, Pooyon, and Quick
(1984) demonstrated increased performance as deadlines shortened temporally.
Andrews and Farris (1972), in an earlier
study, concurred with these findings
but found that as deadlines drew very
close, performance declined, presumably because they could not be met.
This is also a common anecdotal occurrence within projects. There is, however, evidence to suggest that time within
projects is being considered in a more
innovative vein (Rämö, 2002), in that
“clock” time is being superseded by
“economic exchange” time, or time
considered in terms of Drucker’s (1974)
division between efficiency and effectiveness. Arguably, these conceptual
appreciations of time can assist in
“extemporaneous situations that must
be handled swiftly, without relying on
running-in periods or (non-existent)
formalized decision-making processes”
(Rämö, 2002, p. 570).
There are also other temporally oriented areas of the extant literature that
resonate with project-based work,
notably Romanelli and Tushman’s (1994)
work on punctuated equilibrium. This
research suggests that organizations
evolve “through relatively long periods
of stability (equilibrium periods) in their
basic patterns of activity that are punctuated by relatively short bursts of
fundamental change (revolutionary
periods)” (Romanelli & Tushman, 1994,
p. 1141), building on the work of Gersick
(1988, 1994), which identifies a similar
phenomenon in a number of areas,
including biology, sociology, and psychology. Evidence also exists of this
broad pattern emerging at the project
level (Gersick, 1988, 1989).
Ciborra (1999) suggested that
improvisation may be seen as “an
extemporaneous process, open[ing] up
alternative approaches to cope with
time in business” (1999, p. 77). The suggestion here is that improvisational
working allows movement away from
the constraints posed by “clock” time.
Indeed, Ciborra makes the point that
“ex tempore” literally means “outside
the flow of time” (1999, p. 78). The inference here is that traditional or “clock”
time is transcended by improvisational
activity, supporting work by Crossan,
Lane, Klus, and White (1996) that suggests that plans and procedures are
more abstract, whereas improvisation
delivers in real, or possibly “economic
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exchange,” time, in that improvised
work is intended to deliver tangible
time and cost benefits.
There is also a view that organizations
adopt a “rhythmic” pattern, and that the
rhythm of an organization represents a
fundamental aspect of organizational
identity (Bunzel, 2002). Evidence is presented of “rhythmic consciousness,”
seen as creative, intentional activity
capable of integrating nonperiodic
events. In the context of organizations,
rhythms can also be construed as “calls
for action,” and as forms of discipline or
temporal triggers (Bunzel, 2002, p. 179).
The repetitive nature of rhythms within
organizational life may act as indicators of
expected actions, possibly to meet organizational expectations. An example of this
could be an annual “planning” cycle,
which triggers planned actions. Alternate
concepts of time may be more appropriate to orchestrate responses to unforeseen problems or occurrences. This
would fit well with the theoretical underpinnings of improvisational work
(Cunha, Cunha, & Kamoche, 1999).
Methodology
This is a broadly qualitative study, with
a range of data collected over approximately one year from two of the three
main recognized superyacht construction and refit facilities within the
United Kingdom. Some initial and
exploratory discussions also took place
with the third (and largest) shipyard,
but they withdrew from the study at an
early stage because of concerns over
confidentiality of their client base. This
was a perennial difficulty in this study,
as almost without exception the participants in the study were concerned
about the effect of the outcomes of the
study on their carefully and sensitively
nurtured client relationships. This
study is, however, concerned with
process, and not product, and data was
gathered on that basis and extensively
anonymized.
Three or four project managers at
each of the participating yards were
interviewed, ranging from recently
20
appointed personnel to one manager
with more than 20 years of industry
project management experience and
one who had spent his entire working
life at the same yard. Senior executives
and directors at the yards were also
interviewed, including the chief executives of two yards. These interviewees
were intimately involved in negotiating
and managing the relationships between
clients themselves as lead contractors
and subcontractors.
The interviews followed a semistructured format, resulting in more
than 200 pages of transcripts, and the
chosen schema was based on and
structured by a predetermined set of
open-ended questions. This allows flexibility to pursue and probe responses,
and for the discussion to be led at times
by respondents, while retaining a level
of structural integrity, which contributes reliability and validity to the
study. The discursive interview-based
data was recorded and transcribed professionally.
Additional data was drawn from documented project plans and other formal
documentation within the participating
organizations. Information from formal
and informal meetings and discussions
was also gathered, and this assisted in
contextualizing some of the issues and
problems that arise during complex
and high-value project-based work. In
addition, industry data was drawn from a
number of sources, including the sectorspecific technical press.
Some criticism surrounding qualitative research stems from the unstructured manner of subsequent analysis.
Computer-aided qualitative data analysis software (CAQDAS) such as Nvivo
was considered, but because of the
diversity of the discursive and other
data, manual analysis was used. In order
to add rigor to this study, the interview
and other data were analyzed following a
process based around the Huberman
and Miles (1998) interactive data analysis model, using an iterative approach
based around the cycle of data collection, data reduction, data display, and
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
conclusion drawing. The iterative element results in constant refining and
reinterpretation of the data, and the combination of discursive and documentary
data adds an element of triangulation,
ensuring that results are confirmed by
multiple data sources and types, and
adding further to the rigor and reliability
of the research outcomes.
Findings
Consideration of the various data generated by and for this study indicates a
number of novel, confirmatory, and
other findings. Some of these outcomes
engage essentially with the literature
relating to project and program management, and the management of project-based work. Other aspects of the
findings are more closely related to
the emerging improvisation and “agile
project management” literatures, and
there are also links to a number of other
pieces of extant theory, especially those
of a temporal nature.
The decision to use improvisational
working practices “purposefully” as an
intentional means of managing innovation and change is a wholly proactive
stance and an extension of the views of
Crossan et al. (1996) and Cunha et al.
(1999). There are, however, many areas of
organizational theory and practice to be
considered in adopting this stance,
including those of trust, motivation, control, and culture. Ciborra suggested that:
Improvisation has to do with
moments of vision, where a sharper
insight into the world takes place, as
well as a better understanding of ourselves-in-the-world. Such moments
of vision lead our Being to express
itself in a “project of action” that precipitates (suddenly, according to
clock time) into a “decision.” (Ciborra,
1999, p. 89)
The inference here is that during
immersion in a problematical situation
that needs resolving immediately,
employees will draw on past experiences, intuition, the resources they have
at hand, and an element of creativity,
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and will resolve the problem in the way
they feel will be most effective. This is
the essence of bricolage, which was
identified by Moorman and Miner
(1998a, 1998b) as one of the essential
constructs of organizational improvisation. It is, however, important to note
that the decision arrived at by applying
improvisational practices may not be
the “right” or the “optimized” decision,
but it is the decision that the improvising employee deemed to be the “appropriate” decision at the time it was made.
The use of this aforementioned
“library” of past experience may seem
to sit problematically with a situation
where a “bespoke” and unique outcome
is sought. It may therefore be appropriate to explain at this point that the
essence of effective superyacht builds is
encapsulated in a need to “standardize”
as many routines and design elements
as possible, while still allowing for client
freedom to express their individual and
idiosyncratic requirements. Essentially,
hulls and superstructures are built to a
common design, although size and
materials vary. Larger yachts do, however, tend toward a steel hull and steel or
aluminum superstructure, although
composite superstructures are becoming more common. Much equipment is
supplied by third-party contractors
(engines, generators, water makers, air
conditioning plants, electronics, etc.).
The way in which such equipment is
located, installed, and incorporated
into a bespoke vessel is also fairly standardized. It is therefore important from
a cost control and efficiency perspective
to follow a fundamentally standardized
build model. Indeed, most yards try to
standardize greater and greater proportions of the way in which yachts are
built, in order to more accurately control accuracy in the “bid” process.
This has led to some very prestigious builders moving (for at least a part
of their output) toward a product offering an almost standardized hull, superstructure, and equipment package that
can be cosmetically and aesthetically
customized, leading to cost and build
time savings. This “shift” in market
behavior is very effective up to about 60
meters of yacht length, after which specific and custom client requirements
appear to be more important, and client
budgets appear to be less constrained.
Over 100 meters, superyachts are completely bespoke, and this sector of the
market is growing to the extent that few
build “slots” are available in the next
few years.
Turning now to the findings from
this study, it seems logical to deal with
the two elements of the work analyzed—
new superyacht builds and refit work—
separately, as there are fundamental
differences in the way the work is
approached and in the temporal
rhythms that apply to the progress of
contracts. Commonalities can, however, be identified across these two areas,
and these are dealt with first, in order to
assist with the ongoing contextualization of the study.
Commonalities
A number of significant practices and
issues arose during this study that
impinge on both new builds and refit
work. First, and surprisingly, bearing in
mind the value of these projects, it is
apparent from the data that most of the
project managers interviewed had little
in the way of formalized project management training. This was confirmed
in interviews with senior managers and
directors. Additionally, those project
managers tended not to have been on a
career path that embraced projectbased work, but instead, in many cases
they gravitated to their positions by
virtue of a combination of experience,
time served, and a demonstrable ability
in another area. Within one of the yards,
there was an “ex-Lloyds surveyor,”
someone who had started as an
apprentice but came from furniture
design within the yard, and two project
managers that had come to the yard from
captaining client yachts. Indeed, a director of the yard suggested, “I wouldn’t say
we have one [project manager] who
has gone and done a degree in project
management” and that “one of our
more senior project managers has just
come through the ranks, you know. He
just happens to have 15 years’ experience and knowledge.”
The second area that appears to be
common to both new-build and refit
work is that change is a constant factor,
and one that is not dealt with using traditional change control processes. At
the extreme level on a new build, this
change can be as radical as a client visiting after the hull has been built and
deciding that the yacht is too small. On
one of my visits to one of the yards
within this study, they were in the
process of cutting a fundamentally
completed hull in half to add an extra
five meters to the length for this very
reason. Within the refit area, oftensignificant volumes of extra work are
exposed during scheduled remedial
work, or sometimes decisions are made
during the refit schedule to add significant extra work. Indeed, one project
manager suggested that with refit work,
“it is more about decision making with
what you find, rather than the detailed
planning involved in new build work.”
For this reason, refit project plans
attempt to compress scheduled work
into the first half of the schedule, to
allow for unforeseen and often improvised accommodation of emerging
requirements.
This entails a shift from the ideal of
“standardizing” processes to a rather
more reactive stance, where priorities
and requirements change, and project
managers are required to be flexible, and
follow a more improvisational model.
This involves a significant “trading” of
resources between projects, sometimes
on a formal and sometimes on an informal basis, with one project manager
saying that resource allocation was “all
pretty much a trade-off really; it is very
much reactive.” This pooling of labor has
a forum within the daily meetings that
project managers have in one of the
yards within the study, and there is evidence of significant trading of resources
across and between both new-build and
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refit projects to cope with unforeseen
required activity.
Another significant issue in both newbuild and refit work is the management of
subcontractors. This appears to be partly
because of the complex and bespoke
nature of the work, and partly because in
the United Kingdom many of the organizations that subcontract to the superyacht sector are small and financially
exposed. One project manager suggested that “managing subcontractors is
horrendous, absolutely soul-destroying,
dreadful” and that “you end up
absolutely micromanaging every single
subcontractor, which is hugely timeconsuming, and you never get what you
want because you are not directly in
charge of the guy because he ultimately
works for someone else.”
This level of difficulty in managing
small sets of workers undertaking complex and bespoke work inevitably adds
to the layers of complexity and uncertainty in the management of this type of
work, and tends to add to the level
of improvisational activity that is
required to meet demanding client and
quality requirements in a sector where
the complexity of the end product is
increasing significantly. One technique
being used increasingly in one yard is to
employ individual workers from subcontractors on a medium-term basis
and incorporate them into existing
teams. As one project manager argued,
“You have the quality control then,
because your own guys aren’t going to
accept the work of someone that is substandard, because they know it’s going
to be entwined with what they are
doing.” He goes on to say that in such
an instance “we effectively subcontract
labor but manage it as if it was our own
labor.”
Having considered some of the
issues that impinge on both new-build
and refit work within the sector, it is
now appropriate to consider the two
elements separately, and document
those issues that are more prevalent in
one or another type of superyacht
activity.
22
New Superyacht Builds
New superyacht builds are the type of
work that builds prestige within the
sector, as an impressive bespoke yacht
acts as a significant advertisement for
the quality of the output produced by an
individual yard. This is even more
apparent if the new owner is willing to
allow the vessel to appear in the specialist superyacht press (i.e., in a glossy
periodical such as Boat International,
which is published in editions for the
major markets of the United States,
United Kingdom, Germany, and, most
recently, Russia, among others). Bespoke
superyacht building is however a competitive sector, with a lengthy and
expensive bid process before contracts
are signed, and significant negotiation
over price, specification, and delivery.
Once the build is under way, margins
are constantly squeezed by third-party
contractors and client changes. It is
generally accepted that new-build work
is less profitable but that it is essential
to demonstrate the quality of work
achieved by an individual yard. There
have, however, been a number of welldocumented instances of yards sustaining significant losses (often in the £ millions) on complex new-build contracts,
and a rumored loss of more than £20
million (US$32 million) sustained by a
lead contractor on one fixed-price contract to build a particularly large and
radical yacht.
It is apparent from the data that the
challenges of building complex and
sophisticated products to exacting
standards cause tensions within the
design-and-build process. One project
manager articulated this, saying: “This
is a very hard business, tough, very
hard. It has massive expectations from
very wealthy and intelligent clients,
driving a very low-tech, very poor
industry. It is almost at opposite ends of
the spectrum.” There is certainly evidence in the data that although both the
yards that participated in the study have
some outstandingly skilled employees
who are fiercely loyal and committed to
their work, finding and training new
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
employees is a challenge. Additionally,
the management of subcontractors is a
serious challenge, for reasons already
stated.
However, it is evident that the
superyacht yards where this research
data was collected are dedicated to
meeting complex client demands as
well as possible. This in itself causes difficulties, as, in the words of one project
manager, “When an owner steps on
board, they expect it to work like their
house, so when they press flush on the
toilet they expect it to flush, when they
switch a light on they expect it to work,
and when they turn on a tap they
expect clean water to come out of it.
And they have no idea on God’s great
Earth how any of that got there.” He
continued with a rhetorical but entirely
reasonable client conversation: “Can I
have some ice in my drink? Sorry, there
is no ice. Why is there no ice? Because
there is no water; because the water
maker isn’t on; because the generator
isn’t on; because you didn’t want the
noise whilst you were watching the television. I don’t care. I’ve just paid millions of pounds for this, so I want some
ice in my drink!” Delivering to those
challenges requires complex and expensive systems to work in concert, and the
interfaces between such systems are
often unique. This requires that the
project management of the various personal and technical interfaces be managed in a “seamless” way, adding to the
pressures on project managers who
may not have formalized training in
this area. In addition, larger yachts may
have over a million pounds’ worth of
state-of-the-art audiovisual equipment
with miles of complex cabling, all integrated with navigational electronics. As
one project manager stated, “If the owner
comes on board and doesn’t notice anything, you have done a good job.”
There are specialist organizations
that specify, supply, and install such
equipment, but the significant cabling
requirements need to be specified well
in advance, in order that it can all be
hidden during the build, and the client
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may change its mind if new and more
desirable equipment is introduced
before the delivery date. Improvisation
tends to be utilized to assist with these
changes, in that additional activity and
unplanned work needs to be incorporated into the build without extending
delivery dates, resulting in the need for
project managers (who may or may not
have the technical capability) to deal
creatively with complexity and ambiguity in some areas of the build as
demanding owners incorporate new
and technologically advanced systems.
The temporal rhythm of improvisational work is different to that for refit
projects. Within new-build work, detailed
planning takes place as a part of the bid
process, and usually major elements
such as hull length and superstructure
design are fixed at an early stage.
Improvisational activity therefore tends
to appear during the fitting-out stage
(i.e., in the third and fourth quarters of
the build timetable, when the client can
start to see what he or she is buying,
and can consider the inclusion of new,
improved, or more modern additions
and modifications).
Refit Work
At the level that superyacht yards are
operating, almost all the yachts worked
on are “certificated” at some level, usually by an accrediting and certificating
body like Lloyds of London or the
Maritime and Coastguard Agency
(MCA). This level of certification
requires a major inspection and remedial maintenance/refit every 5 years,
and given the number of major new
yachts launched every year (somewhere over 200), refit capacity is tight.
Yards are therefore turning over more
resources to the steady stream of available refit work, often at the expense of
new builds. Indeed, for some yards,
refit work may be up to 70 to 80% of
their work by value, and many yards
worldwide are not equipped to undertake “new-build” work.
For many yards, the rationale for
this is that refit work is less competitive,
more plentiful, and easier to cost. The
relative risk of fixed-price, fixed-delivery
new-build contracts is reduced, and
more work is priced on a time
and materials basis. It is, however, evident from the data and from wider
industry knowledge that a reputation
for quality is built on the back of the
delivery of new yachts, and certainly
the CEO of one of the yards within this
study considers that its refit order book
would not look as healthy without the
prestigious floating advertisements of
quality that have come from its (often
very innovative) new-build work.
Evidence from the data does, however, suggest that refit work is more “uncertain” than new build, with one project
manager stating: “The boats usually turn
up without notice or weeks earlier than
they said. There is no job list, or there are
five items in a contract . . . and you plan
from there.” There is also a tendency for
requirements to escalate once work
commences, as the yacht is “opened up”
to investigate problems. For example,
during refit, almost all yachts are repainted, and once preparation starts, areas of
hull corrosion need to be remedied on an
ongoing basis. At this early stage, one
manager suggested that work was “90%
reactive, 10% off the plan.”
This indicates that the temporal
rhythm of refit work is more improvisational at the early stage of a project, with
one manager suggesting, “By the first
quarter you would have taken out a lot
of the anomalies.” The inference is that
by the end of the first quarter of the time
period, a more accurate estimate of the
required activity (and the resourcing to
meet the requirements) is able to be
made, and the remainder of the project
follows a more “planned” model.
Having said that, one experienced
project manager who was used to working
on the major rebuild of historic (i.e., older,
predominantly wooden) yachts articulated his views on improvisational working
within his role in the following terms:
How often do I improvise? Daily,
hourly. Nothing goes to plan.
Nothing comes in through the stores
that is in exactly the right quantities:
the right quality, the right color, the
right anything that you ordered it.
No drawing comes from a designer
exactly how you imagined it. No
workman works as quickly as you
imagine he should or to the quality
we think he can. No subcontractor
does what you thought they were
going to do on the day that you
thought they were going to do it,
with the materials you thought they
were going to do it with. So, the mystery, magic plan has all this “Shangri
La” of hope attached [laughs], and you
have to fudge it together and improvise and fill in the blanks when it all
doesn’t go to . . . as you imagined. So,
yes, improvisation is daily, hourly,
constantly.
Interestingly, however, the same
project manager also confirmed later in
the same interview, “I’m maybe a bit
more formal in some of my documentation” and “maybe I am a bit less ‘seat
of the pants’ than anyone else here.”
This indicates a significant tension
between the need to plan to have a
baseline to measure performance and
achievement against, and the need to
get things done to achieve against
demanding physical and temporal
requirements. This is a classic dilemma
within improvisational work and
requires a significant element of trust
as well as some element of “framework”
within which qualified and trusted
workers can improvise. It is, however,
evident that both yards have a committed and skilled workforce with a vested
interest in the production of beautifully
crafted and bespoke outputs. One project manager confirmed that “[we] have
a relatively self-motivated workforce”
and that usually those workers with
many years of experience could be
trusted to resolve most difficulties without supervision or intervention.
Discussion
It is apparent from the various data
collected and considered within this
study that there are a number of
improvisational and temporal patterns
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Project Management and High-Value Superyacht Projects
that apply to work within the U.K.
superyacht sector. The dismantling of
rigidities within the traditional “plan,
then execute” project management
model is becoming a common theme
within project management research,
and there is also a growing awareness
of the temporal rhythms that prevail
within this type of work. A summary of
the issues that have emerged from this
study is encapsulated in Table 1, and the
issues are expanded next. The data that
underpins this figure is documented in
the Findings section. Issues that appear
to be common to both areas of superyacht activity will be dealt with first,
and attention will then be focused on
issues relating to new builds and refit
work.
A surprising finding is the limited
amount of formalized training for project managers in a sector where the output is so complex and bespoke. This
finding can be to some extent moderated
by the level of apparent standardization
in hull and superstructure construction,
and the need for equipment that can be
treated in a fairly standardized fashion
(i.e., engines, air conditioning plant,
water makers, etc.). It is still evident
that, in this sector, experience takes
precedence over formalized knowledge of project management techniques. This experiential imperative
also extends to the wider workforce,
indicating the dependence on traditional craft skills in what purports to
be a mature and increasingly hightech sector.
Project Management of “Superyacht” Activity
Commonalities
Improvisational
Issues:
New-Build Projects
Refit Projects
Project manager training is
significantly lacking, and
project managers tend to
emerge by virtue of
experience and tacitly
gained experience of the
key issues within the sector
Tensions between informed clients
with demanding requirements and
relatively unsophisticated “craft-based”
shipyards endeavoring to deliver
bespoke innovative products
Often resolved by compromise and
experimentation/improvisation
Uncertainty in the “specification” of
works required, and management
of escalating requirements
Resolved through allowances of
“slack” within project planning, and
replanning after agreement of
requirements
Managing change requirements
instigated by client desire for
newer, different, or improved
specifications
Often achieved with
improvisational practices,
which disrupt prior project
planning and lead to
uncertainty in delivery
Integration of complex systems by
specialist third-party contractors—
interfacing of complex systems from
different suppliers
Achieved with great difficulty through
negotiation and improvisation to deal
with poor specification issues
Difficulties in predicting human and
physical resources required for an
ambiguous program of complex work
Resolved by “trading” resources
between projects on a formal and
informal basis
Temporal uncertainty in the third
and fourth quarters of the project,
generated by client desires to
include new and fashionable
equipment and features
Usually resolved by improvisational
activity and—as a last resort—the
extension of the project or late
delivery
Temporal uncertainty in the first
quarter of a project, because of
uncertainty on scope
Usually resolved by creating slack in
project plans in quarters three and
four to allow for additional activity
Management of subcontractors
is problematic, leading to
increased improvisational
activity in order to solve many
scheduling and compatibility
problems
Temporal
Issues:
Problematic or late delivery
of key items or components,
disrupting or stalling planned
activity
Usually resolved with
improvisational activity to
vary previously planned
and scheduled work
Table 1: Summary table of outcomes.
24
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It is also evident from the data that
managing change requirements is challenging in all projects, but within the
high value and personalized product
arena researched here, expectations are
high. It is therefore incumbent upon
the project manager to deliver heightened and amended requirements as a
matter of course, without recourse to
replanning and temporal adjustments.
This situation is a classic trigger point
for improvisational activity (Leybourne,
2002, 2006a, 2006b), and it is evident
that project managers are drawing on a
personal library of previously tested
and amendable scenarios to resolve
difficulties generated by unplanned
change requirements.
Network theory comes into play in
the management of subcontractors,
some of whom are regular participants
in networks where the yards are the
central network coordinators, and
some of whom are new to the network
or to the sector. These network participants fall into two distinct categories:
expert (i.e., navigational electronics
and audiovisual specialists) and generalist (i.e., fabricators). Such networks
exist and require managing at both the
social and the operational levels. Both
horizontal and vertical linkages and relationships require nurturing and managing (Miles & Snow, 1992), and the data
from this study suggests that there are
many challenges for the project manager in maintaining and managing such
networks, only some of which are being
resolved satisfactorily.
This improvisational activity spills
over into the issues surrounding late
delivery of components and the significant disruption that this can cause in a
temporally demanding build schedule.
Often, bricolage comes into play
(Lehner, 2000) to resolve issues quickly,
particularly as new-build projects are
reaching relative completion.
Moving now to issues impinging on
new-build projects, there are particular
difficulties that surround changing
requirements, and the skills to respond
to such requirements, in a sector where
traditional skills in bespoke craftsmanship
are so central to delivery. Compromise and
experimentation are key here, and issues
surrounding such difficulties have already
been discussed. The integration of complex interfacing systems has also been
highlighted previously, within the area discussing network management.
Refit work has its own set of issues,
notably those relating to the uncertainty surrounding the scope of work to be
carried out, and the difficulties in
scheduling amidst ambiguous contracts and escalating scope. Project
managers have, however, become
adept at creating temporal space within
the latter part of the project to allow for
such escalations, creating a temporal
rhythm that is remarkably consistent
across a number of analyzed refit projects. This clearly resonates with the
findings of Bunzel (2002, p. 180), albeit
in a different business sector, which
recognize that “rhythmic consciousness as creative, intentional activity is
perfectly capable of integrating nonperiodic events.” Bunzel (p. 181) goes
on to suggest that as “rhythmic performance is only partially ordered, it
allows for ‘spontaneity’ and ‘creativity’
(original emphasis).”
Rather naturally, such uncertainty
and ambiguity relating to scope of
required activity can result in difficulties
in predicting the human (and indeed
other) resources required to meet eventual project requirements. This is often
resolved by formal or informal “trading”
of resources between project managers
and project teams, although there are
often resourcing “bottlenecks” caused
by demand for specific skill sets that are
in short supply.
Conclusions
This article has considered a number of
issues relating to the project management of high-value bespoke superyachts. It is evident from the data that
the changing scope of such products
across the range of work carried out by
the specialist shipyards results in
a need to negate planning and shift to a
more improvisational style of work
scheduling and execution on a regular
basis. Furthermore, the pattern of such
shifts from planned to relatively
unplanned work is shown to follow a
pattern, or “rhythmic performance”
(Bunzel, 2002). In essence, this demonstrates a “commodification” of time, in
that within the project domain, “the
quantitative, divisible time of the clock
is translatable into money” (Adam,
Whipp, & Sabelis, 2002, p. 16). This is
seen as particularly apposite within the
project domain, with its relatively
inflexible delivery deadlines. It follows
that, as a result of its apparent commodification, time has become a scarce
resource in the context investigated in
this research, and its control is therefore a central task for project managers.
Improvisational working assists with
this (Crossan, Cunha, Vera, & Cunha,
2005), notwithstanding the apparent
and documented (Leybourne, 2002,
2007) contradictions between control
and improvisation. Ciborra (1999, p. 77)
reinforced this, suggesting, “Improvisation, seen as an extemporaneous
process, opens up alternative approaches
to cope with time in business.” There
are also links with the work of Rämö
(2002) here, particularly in the “particular focus on chronos (clock time) and
kairos (timing) in project organisations” (2002, p. 571).
It is also evident that project managers within this highly specialized
sector (notwithstanding an apparent
lack of formalized training) are adept at
reconciling diverse and potentially
damaging tensions between control
and improvisation within their
domains of responsibility. There is evidence of a reliance on experience, and
the ability to draw on a pre-experiential library of previously successful
improvisational interventions, which
can be adapted and adjusted to meet a
specific requirement to resolve a project-based problem. Project managers
are using such interventions increasingly, mainly to resolve areas of ambiguity
and uncertainty within what are often
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Project Management and High-Value Superyacht Projects
poorly defined elements of project
scope.
Arguably, this is a shift away from
the traditional project-based paradigm
of “plan, then execute,” but in the
increasingly complex domain investigated here, where acceptance of the
complex adaptive system model
(Stacey, 1996) is becoming more widespread in project-oriented organizations, it is not a surprising finding. It is
also likely that as superyacht projects
grow ever larger and more complex,
this trend will continue. The question
for the sector is: Can project managers
within the sector grow their expertise as
quickly as superyacht clients increase
their demands for these unique and
bespoke products? ■
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Steve Leybourne is a full-time member of the
faculty at Boston University, having moved from
the United Kingdom in January 2009 after discussions instigated at the Project Management
Institute (PMI) Research Conference 2008 in
Warsaw. He has a PhD from Cardiff Business
School; has published papers on project management, change management, and improvised
working practices; and has presented at many
national and international peer-reviewed conferences, including the last six U.S. Academy of
Management Conferences and the last four PMI
Research Conferences. His research interests
include organizational improvisation, innovation,
and the implementation of change using projects. He is a member of the editorial board of
the Project Management Journal and was a
member of the U.K.-based and Engineering and
Physical Sciences Research Council (EPSRC)funded “Rethinking Project Management” network, and is also a member of numerous professional and academic associations, including PMI.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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Causal Inferences on the Cost
Overruns and Schedule Delays of
Large-Scale U.S. Federal Defense and
Intelligence Acquisition Programs
Steven R. Meier, National Reconnaissance Office, Chantilly, VA, USA
ABSTRACT ■
A study was undertaken to understand why cost
overruns and schedule delays have occurred
and continue to occur on large-scale U.S.
Department of Defense and intelligence community programs. Analysis of data from this study
infers the causes of cost overruns and schedule
slips on large-scale U.S. federal defense and
intelligence acquisition programs to ineffective
human resources policies and practices, consolidation of the aerospace industry, and too many
stakeholders. In this article, each inferred cause
and the resulting systematic effects are discussed in detail. Moreover, block diagrams have
been developed for each cause and illustrate the
sequential flow from inferred cause to systematic
effects and reveal key interrelationships among
each cause.
KEYWORDS: acquisition management;
aerospace industry; human resources; stakeholders; federal government
Project Management Journal, Vol. 41, No. 1, 28–39
© 2009 by the Project Management Institute
This article is a US Government work and, as
such, is in the public domain in the United States
of America.
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20142
28
INTRODUCTION ■
T
he purpose of this study was to understand why cost overruns and
schedule delays continue to occur in large-scale U.S. Department of
Defense (DOD) and intelligence community (IC) acquisition programs. Based on the study data, we determined that ineffective
human resources policies and practices, the consolidation of the aerospace
industry, and too many stakeholders involved in monitoring programs continue to create cost overruns and schedule slips on major acquisition programs (see Figure 1).
The study data show that these causes have had a devastating impact on
large-scale federal acquisition programs. This article utilizes the data
detailed in Meier (2008) to show how each effect is directly traceable to one
of the three inferred causes. The effects discussed in Meier (2008) include
overzealous advocacy, immature technology, requirements instability, ineffective acquisition strategy, unrealistic program baselines, inadequate systems engineering, and workforce issues.
The burgeoning cost overruns and schedule delays from initial estimates
on large weapons systems significantly impact national security. First, the
warfighters suffer because they are not equipped with the latest technology to
fight continuing and emerging threats and must continue to rely on outdated
legacy systems. Second, the taxpayers must pay these overruns with funds
that could be used for other promising programs. Even though many of the
programs listed in Meier (2008) and this article have been under public
scrutiny for many years, the programs continue to experience unprecedented overruns. For example, statistical data from a recent Government
Accountability Office (GAO) report (2008a) on 95 weapons systems found that
the total cost growth on these programs was $295 billion, and the average
schedule delay was 21 months. These large numbers represent a growing
trend in cost overruns and schedule delays since the GAO began tracking
these metrics in 2000. For comparison, the estimated total cost growth in the
year 2000 of 75 DOD programs was $42 billion, normalized to fiscal-year
2008 dollars. Even though the 2008 data accounted for 20 additional programs compared to the 2000 data, this represents, in absolute terms, a
702% cost growth increase over the course of 7 years. Equally important, the
report found the average schedule delay in delivering initial capabilities was
16 months in 2000 compared to 21 months in 2007, representing a 31%
increase in schedule delays over a 7-year period. And finally, one metric
that measures the value that DOD receives per unit for the acquisition dollars invested in a program is the cost growth per unit. In 2007, 44% of DOD
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St
To
ak o M
In eho any
vo ld
lve er
d s
n
uma
ve H licies
i
t
c
o
fe
Inef urce P ices
o
t
Res d Prac
an
C
Ov ost
err
a uns
Sch nd
ed
De ule
lay
s
Aer
osp
ace
In
Con dustry
soli
dati
on
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Figure 1: Three inferred causes of cost overruns and schedule delays on large-scale defense and
intelligence acquisition programs.
acquisition programs were paying at
least 25% more per unit compared to
37% of programs in 2000, roughly a
7% increase in the number of programs
paying more than 25% per unit. All of
these trends unambiguously show that
DOD is paying more money for delayed
and, in some cases, less capability. The
programs assessed in the GAO reports
were considered large acquisitions by
DOD and were selected based on the
following factors: high dollar value,
acquisition stage, and congressional
interest.
Methodology
The study data was obtained from:
(1) responses from six requests for
information (RFIs) from the aerospace
industry; (2) more than 30 acquisition
reports, documents, and studies;
(3) interviews with 42 DOD and IC government and industry senior executives
and program managers, each with
more than 20 years of experience in the
DOD and IC; and (4) interviews with
three national laboratories and
two think-tank organizations. A block
diagram is presented in Figure 2 that
details the process. Once the complete
set of data was assembled, it was organized, assimilated, and reviewed for
common themes that led to cost overruns and schedule slips on large-scale
U.S. DOD and IC acquisition programs,
which are detailed in Meier (2008).
Further analysis of the study data to
derive the root causes revealed that the
effects detailed in Meier (2008) were
related to three causes that could independently or in conjunction lead to
cost overruns and schedule delays.
The industry RFI responses were
collected from several corporate partners with deep understanding and
expertise in the DOD and IC acquisition
arena. The RFI responses were confidential, proprietary, and, in some cases,
classified and were treated as such.
Many of the reports, studies, and documents, such as GAO reports, are open to
public dissemination. The government
and industry executive interviews, as
well as the interviews with think tanks
and laboratories, were handled as confidential and proprietary. In general, the
questions in the RFIs and interviews
covered topics such as complexity,
acquisition practices, leadership, management processes, technology development, contractual practices, incentives,
and commercial practices.
Inferred Causes
Ineffective Human Resources Policies
and Practices
Although best practices and streamlined processes position a program for
success, the study data indicate that the
Industry
RFIs
Labs and
Think Tanks
Assimilation
of Data
Systematic
Effects
Inferred
Causes
Executive
Interviews
Reports
Studies
Documents
Figure 2: Process flow for this study.
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Causal Inferences on the Cost Overruns and Schedule Delays
key to success comes down to people
making good decisions on a daily basis.
As one interview from the study states,
“Standards and processes are key, but
we need to rely on people, not processes.” Similar sentiments that bolster this
viewpoint are expressed with “It’s about
the people. If you can attract good people, you are doing it right.”
Results from the study data indicate
that the current DOD and IC human
resources policies and practices contribute to cost overruns and schedule
slips because they place inexperienced
personnel in decision-making positions and value-assignment rotations.
First, in many cases, the study data
show that inexperienced or newly
assigned program managers have difficulty judging contractor proposals,
understanding the technical underpinnings of a system, or having the systems
engineering experience to decompose
customer needs into specific capabilities. And second, the current DOD personnel policies mandate rotations
every 4 years, while the current IC policies encourage rotations every 3 years.
Moreover, the study also found that the
absence of formal succession management planning and mentoring programs in many of the federal acquisition
organizations contribute to the inability
of government acquisition agencies to
train and retain personnel. The nonexistence of succession planning has
resulted in a culture that does not
encourage mentoring of inexperienced
or newly assigned individuals to help
accelerate their learning.
A block diagram has been created that
shows that the inferred cause—ineffective
federal DOD and IC human resource
policies and practices—has placed inexperienced personnel in decision-making
positions, values frequent rotations, and
does not support succession planning
(see Figure 3). These three factors lead
to: (1) a strong reliance on internal support contractors, who in turn create a
complex decision-making environment
Unrealistic
Program
Baselines
Ineffective
HR Policies
and Practices
Places
Inexperienced
Junior Personnel
to Lead Programs
Proposals
Reviewed by
Inexperienced or
Newly Assigned
Personnel
Advocates
Frequent
Rotations
Overreliance
on Support
Contractors
Overzealous
Advocacy
Ineffective
Contract
Strategy
Cost Overruns/
Schedule Delays
Immature
Technology
Inexistence of
Internal
Succession
Planning
No Emphasis
on Mentoring
Inadequate
Systems
Engineering
Inability to
Grow
Govt. PM
Complex
Decision
Environment
Slow or Bad
Decisions
Figure 3: This block diagram shows how the inferred cause—ineffective federal DOD and IC human resource policies and practices—leads to cost
overruns and schedule delays.
30
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Immature
Technology
External
Stakeholders
Competing
or Divergent
Needs
Modify System
Requirements
Modify
Program
Baseline
Too Many
Stakeholders
Involved
Internal
Stakeholders
Addition of
Nonmission
Work
Add Support
Contractor
Staff
Overreliance
on Support
Contractors
Inability to
Grow Govt.
PM's
Cost Overruns/
Schedule
Delays
Complex
Decision
Environment
Distance PM
from Mission
Figure 4: This flow diagram shows how the inferred cause—too many stakeholders—leads to cost overruns and schedule delays.
and inhibit the government’s ability to
grow future program managers, and (2)
ineffective government-led sourceselection teams that review contractor
proposals and do not have the ability to
generate a credible program baseline;
obtain a realistic understanding of the
program’s proposed cost, schedule, and
performance; translate customer needs
into a specific capability through the
appropriate systems engineering processes; develop a contract vehicle with the
appropriate incentives to motivate a
contractor; or assess technologies to
determine their state of maturity. The
blocks with the dashed ovals indicate
the areas where two inferred causes
overlap with the inferred causes of consolidation of the aerospace industry and
too many stakeholders.
This inferred cause and the resulting
effects can lead to cost overruns and
schedule delays on large-scale programs
and will be discussed in further detail in
the sections to follow. The blocks with the
dashed ovals indicate the areas where
two inferred causes overlap and lead to
the same effects. Specifically, Proposals
Reviewed by Inexperienced or Newly
Assigned Personnel overlaps with the
Aerospace Industry Consolidation
inferred cause, and Overreliance on
Support Contractors overlaps with the
Too Many Stakeholders inferred cause
(see Figures 4 and 5).
Inexperienced Personnel
The study data indicate that placing
inexperienced personnel—that is, either
junior personnel or newly assigned
personnel—into program leadership
positions that entail decision making
can lead to cost overruns and schedule
delays. The result can be bad decisions
or slow decisions. It is obvious that a bad
decision—which can lead to major
redesign efforts, failed tests, or an inability to meet specifications—can result in
schedule slips, cost overruns, or both.
Similarly, slow decisions can have a similar impact to cost and schedule baseline
as hundreds or thousands of contractors
are billing a contract while a decision is
pending.
The study data highlight the fact
that an experienced program manager
and program office team can make
good decisions and timely decisions. As
one study source quotes, “There is a big
difference between the A team and the
A⫹ team. Experienced people have a
set of things to watch for. They can give
you a set of risks that are 90% accurate
without a special process.” Conversely,
other data from the study state that
“inexperienced people have difficulty
judging what’s important vs. nonimportant.” Additional study data regarding decision making cites that the
“process in the DOD is designed to
avoid decisions . . . we don’t need
process—we need decision makers
who know what they are doing.” For
example, on one program that suffered
a cost overrun of approximately $130
million, the main culprit was that
the “program continued to force fit a
commercial-off-the-shelf (COTS) solution without re-examining the plan and
realizing that the COTS products were
not completely documented nor
understood, and not maintained by
commercial suppliers for intended program life cycle.” The lesson learned
provided by the contractor RFI was that
“decision makers must interpret early
warning signs of a pending major problem and expeditiously address the
problem.”
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Causal Inferences on the Cost Overruns and Schedule Delays
Unrealistic
Program
Baselines
Aerospace
Industry
Consolidation
Industry
Submits
Optimistic
Proposals
Proposals
Reviewed by
Inexperienced or
Newly Assigned
Personnel
Reduction in
Discretionary
Internal R&D
Overzealous
Advocacy
Ineffective
Contract
Strategy
Cost Overruns/
Schedule Delays
Immature
Technology
Inadequate
Systems
Engineering
Note. The block with the dashed oval indicates this inferred cause overlaps with ineffective human resources
policies and practices and leads to the same effects.
Figure 5: This block diagram shows how the inferred cause—consolidation of the aerospace industry—leads to cost overruns and schedule delays.
Other study data reiterates these
viewpoints. For instance, data obtained
in the study recount how a large system
acquisition was “first managed by junior
officers who had little domain knowledge
or acquisition experience.” Subsequently,
the initial development work was conducted for several years with inexperienced managers, and, consequently,
component and subassembly tests
failed; these failures ultimately revealed
major weaknesses in designs. A major
redesign effort was required, resulting
in substantial schedule slips and large
cost overruns. This well-known program suffered billions of dollars in cost
overruns. The major lesson learned was
that it is “important to select managers
who have the experience to match the
nature and degree of the end-term
development challenge.” In summary,
these examples clearly show that inexperience has led to significant cost overruns and schedule delays on large-scale
acquisition programs.
32
Two reports cite similar issues
regarding the significance of an experienced and competent program manager.
The Report of the Defense Science Board
(DSB) Task Forces on the Acquisition of
National Security Space Programs (DOD,
2003) found “that the acquisition workforce has significant deficiencies: some
program managers have inadequate
authority; systems engineering has
almost been eliminated; and some program problems are not reported in a
timely and thorough fashion” (p. 23). The
DSB (DOD, 2003) concludes that these
deficiencies, coupled with a lack of
incentives, have resulted in “widespread shortfalls in the experience level
of government acquisition managers,
with too many inexperienced individuals and too few seasoned professionals”
(p. 3). In order to succeed, the same
report states the government workforce
should be “highly competent, and
properly staffed, with commensurate
authority.” The Booz Allen Hamilton
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(BAH) study (2002) on the U.S. Air
Force Space and Missile Command
(SMC) found acquisition workforce
problems related to a “lack of program
management continuity and gaps in
relevant experience” (p. 33).
A study by Thurman (2006) on the
U.S. Air Force’s Space Missile Command, which acquires complex satellite
systems, on personnel trends found that
there has been a shift to younger, less
experienced staff, such as lieutenants.
Although the younger, less experienced
personnel are highly capable and armed
with the latest educational tools, they
may not have the years of experience to
manage a complex, expensive acquisition. Moreover, Thurman found there
has been a marked personnel shift from
engineering officers to program manager officers between the years of 1994 to
2005, which may indicate more program management oversight but less
technical expertise to manage complex
SMS satellite developments.
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The DSB (DOD, 2003) found very
similar statistics. The report states that
in 1992 the SMC authorized 1,428 officers in the engineering and management career fields, with ranks from
lieutenant to colonel. However, by
2003, that authorization had been
reduced to a total of 856 across all
ranks. Furthermore, there had been an
overall reduction of 62% in the colonel
and lieutenant colonel ranks and an
increase of 414% in lieutenants, with
the majority of lieutenants being
assigned to the program management
field. Both of these reports clearly
point toward a shift to less experienced
personnel managing large, complex
systems.
Slow decisions can also cause significant cost overruns for a program. For
example, a large acquisition may average approximately 1,500 full-time equivalent (FTE) persons who may charge the
government a rate of approximately
$400,000 per year. The $400,000 value
includes salary, benefits, company overhead, and company facility costs, and
corresponds to roughly $12 million per
week. Clearly, the math shows that if a
decision is pending for 2 to 3 weeks, it
can cost the program up to $36 million
of potential lost productivity while a
decision is pending.
A portion of the technical decline in
the acquisition community may be
attributed to DOD’s 1990s Total System
Performance Responsibility (TSPR)
management paradigm. TSPR relegated
all decisions to the prime contractor
and, accordingly, the government to an
observer versus active participant in the
system
acquisition
management
process. Consequently, the government
program manager’s role in the TSPR paradigm was to observe the contractor
from the sidelines. These generations of
acquisition program managers—who
are now senior program managers—are
not cognizant of best practices and
cannot mentor junior acquisition personnel. Comments in the study reflect
issues with the TSPR paradigm, such as
“senior level people who have grown
into those jobs were inexperienced junior level people that never got the fact
finding skills.”
Remnants of the TSPR system are
still relevant in one of today’s largescale acquisition programs. The Army’s
Future Combat System (FCS) program
(discussed in GAO, 2008a) is managed
by a lead system integrator who assumes
all responsibility for developing requirements, selecting major subcontractors,
and performing trade studies among
cost, schedule, and performance. The
GAO report (2008a) shows FCS has suffered a total program cost growth of
45.5% and schedule growth of 59.3%. In
this particular program, the government assumes a level of risk and
assumes that the contractor is working
in the best interests of the government.
Frequent Program-Manager Rotations
The current DOD and IC human
resource policies advocate frequent
personnel rotations in order to be promoted to senior levels. These policies
result in short program-manager
tenures and certainly contribute to the
cost overruns and schedule delays on
many large DOD and IC programs. For
example, the current policy issued by
the director of national intelligence
(DNI) on joint duty requires all IC government civilians to spend at least 12
months in another intelligence agency
as a prerequisite to qualify for promotion to senior levels. Furthermore,
many IC organizations now require
internal rotations within the agency in
order to be promoted to the GS-15 level.
On the DOD side, the United States Air
Force (USAF) has rotation guidelines of
3 to 4 years for its officers.
Much of the study data focused on
the fact that building a large-scale
system that is technically complex
and acquisition-intensive is not a “tour”
and that frequent turnover hurts
accountability. For example, a recent
GAO study (2008a) on 39 major weapons
programs found the average programmanager tenure on a major weapons
systems program was 17.2 months.
This startling number is in contrast to
current DOD policy that prescribes
tenures of 4 years as practicable for
program managers of defense acquisition programs. Such inconsistency
between policy and practice hinders
program-manager accountability. More
evidence is provided by the DSB (DOD,
2003) report that found the average
tenure of a space program manager to
be 2 years.
Study data supports these statistics
with statements like “the community
must recognize that acquisition and
development is not a tour” but that
acquisition programs require long-term
experience and expertise. Additional
study data found that “turnover in people hurts accountability.” The BAH
(2002) report cites acquisition workforce problems in “program director
continuity and long-term acquisition
personnel experience challenges in
retaining the acquisition workforce”
(p. 49). As stated in Meier (2008), much
of the study data suggested programmanager tours of 5 to 6 years to hold
them accountable for mission success
and to stem overzealous advocacy. The
BAH (2002) study recommends that
“program directors be in place at least
two years prior to any milestone event
and remain in place through milestone
completion” (p. 49). The DSB (DOD,
2003) study recommends tenures for
space program managers to be at least
4 years. And finally, a report by the
Institute for Defense Analysis (IDA) to
Congress on Leadership, Management,
and Organization for National Security
Space (2008) has a key recommendation
to establish a norm that “space project
management personnel be in a given
position for sufficient time to maximize
project success—four years or more—
without adverse effect upon an individual’s career” (p. 24).
Finally, in addition to the issues
previously cited, inexperienced personnel also add to the bottom-line program cost because the development
contractors are burdened by the inexperienced government team. One RFI
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quotes that “the contractor must train
government staff to be acquisition people.” This training detracts from the
contractor’s primary role as the system
developer. In summary, the study data
clearly indicate that program personnel
turnover can contribute to cost overruns and schedule delays.
Nonexistence of Succession Planning
and Mentoring
Succession planning is vital to the longterm health of an organization; yet, the
study responses indicate that succession planning is virtually nonexistent in
many federal acquisition organizations.
This is surprising because the business
and organizational literature is stacked
with evidence that succession planning
and active mentoring can help accelerate the learning of less experienced or
newly assigned personnel (Conger &
Fuller, 2003; Leonard & Swap, 2004).
This lack of any succession planning at
many federal acquisition agencies has
eliminated a culture that mentors inexperienced or newly assigned personnel
and may contribute to cost overruns
and schedule delays.
Much of the study data discusses
how succession planning helps organizations to grow and retain personnel
and may aid in preventing cost overruns and schedule delays on future
acquisition programs. For example,
one participant in the study states that
“in the past we spent 3 days offsite
examining contenders for each job
down to the division chief level, then
went through each person not on the
list to identify what they needed to do
to get on the list. The commitment was
to develop people.” Another study participant states that “we are not proactive
in grooming people and developing
careers.” This view is reiterated in the
study with the following: “In the past,
all the senior managers got together
and talked about everyone annually.
Who can do the job now? Who has
promise? We used to directly assign
people to move around to further their
careers. Now, feedback is not there for
34
future development.” In their article on
succession management, Conger and
Fuller (2003) recommend a twopronged approach that involves both
succession planning and leadership
development to create a system that
manages the current and future talent
pools for an organization. They also cite
examples from private industry where
divisional vice presidents and their area
managers meet offsite for an entire day.
This information illustrates the strong
emphasis and importance of succession planning in maintaining a vibrant
organization.
When an organization does not
develop a succession management
plan, it ends up rendering mentoring—
either formal or informal—nonexistent.
The study pointed out that the most
effective mentoring took place between
highly educated and motivated personnel just out of school with little acquisition experience and seasoned senior
government personnel. For example,
one interviewee states, “In the past,
high-caliber junior people would be
sought and mentored by senior people.
Mentors were personally engaged.”
Additional study data support this
viewpoint with “the government needs
active mentoring—assign juniors to
seniors and put mentoring in performance assessments.” Another response
bolsters this view adding, “In the early
days, there was an unofficial but
nonetheless rigorous process for the
career development of our people.” And
finally, another input quotes, “Mentoring was on-the-job training—not a
class—a supervisor or more senior colleague would see firsthand a person’s
work skills then broaden them.” Many
of these practices are consistent with
best practices found in the literature. In
their Harvard Business Review article,
Leonard and Swap (2004) state that the
deepest knowledge—what they call
“deep smarts”—”can’t be transferred
onto a series of PowerPoint slides or
downloaded into a data repository. It has
to be passed in person—slowly, patiently, and systematically” (p. 93). Knowledge
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
and transfer of it is paramount in the
intelligence and defense communities
because these organizations are
entrusted to protect American lives.
Leonard and Swap (2004) acknowledge
that passing knowledge takes time and
money. However, as they state in their
article, where knowledge is vital, they
ask, “How can companies afford not to
invest?” Based on the data previously
presented, DOD and the IC should consider devoting more time and effort to
succession planning and mentoring
programs.
Inexperienced Government SourceSelection Teams
Inexperience, frequent rotations, and a
lack of succession planning and mentoring resulting from ineffective government human resource policies and
practices, coupled with the aerospace
industry consolidation, have led to
aggressive bids by industry on government proposals. The study data provides evidence that another factor that
can lead to cost overruns and schedule
delays is when the government sourceselection team is inexperienced, newly
assigned, or does not have appropriate
subject-matter expertise. In these
cases, the government team provides
an inadequate review of an overly optimistic proposal and renders a faulty
decision at the end of a sourceselection activity. The study data
recounted several cases where “the
inexperienced government team during
source selection got the program off on
rocky footing that caused catastrophic
consequences,” which then feeds into
other areas such as overzealous advocacy, immature technology, ineffective
acquisition strategy, unrealistic program baselines, and inadequate systems engineering (see Figure 2). One
compelling quote on a program that
experienced cost overruns and schedule delays is: “The source-selection
team was inexperienced. The agency
must put its best people on its most
critical functions, such as source selections. Experienced people know when
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to trust their instincts.” Another source
cites that the government must ensure
a “highly experienced government program office to make wise source-selection and programmatic decisions with
speed and insight.” In summary, the
data show that if a program is initiated
with an unrealistic baseline, the risk of
cost and schedule overruns is high.
Overreliance on Contractors
Inexperience, frequent rotations, and a
lack of succession planning and mentoring driven by ineffective human
resource policies and practices have
also led federal acquisition organizations to develop a strong reliance on
internal support contractors. The study
data indicate that this additional staff
adds extra cost and leads to a complex
decision-making environment, ultimately resulting in cost overruns and
schedule delays. On many programs,
the data point out that the corporate
memory and expertise of many programs is usually not found within the
government ranks but with the contractor staff. According to the study
data, this overreliance manifests itself
in several ways: (1) it has created a
complex decision-making environment; (2) it undercuts the ability of the
organization to grow program managers; and (3) it blurs the lines of
authority in the eyes of the development contractor when internal support
contractors guide program decisions
while not being held accountable for
mission success.
Today, most acquisition program
offices consist of more nongovernment
than government personnel. The study
details how the technical and programmatic expertise in many government
program offices resides in the internal
Systems Engineering and Technical
Assistance (SETA) contractors support,
Federally Funded Research and
Development Centers (FFRDC) support, or consultants. The effects of large
staffs of SETA, FFRDC, and consultants
results in additional staffing and training
costs; program control that may not be
in line with the government program
manager; a complex decision-making
environment; and blurred accountability lines inside and outside an organization, as many support staff have taken
roles that in the past have been inherently for government personnel. For
example, the data state that “the government has relinquished too much of its
role to support contractors.” Another
interviewee states, “SETAs are not necessary for the mission; the prime contractor is necessary for the mission.”
Moreover, one response to the RFI states
that “this large staff creates interference
that government and contractors must
overcome.” As one interview states,
“SETAs are self-fulfilling prophecy.
Formats, chart editing, etc. are all decisions made by SETAs.” Moreover, the
study data note that the “expanded program management team becomes part
of a collaborative decision process that
is driven by inexperience in the front
line management team and can easily
encumber timely trades between program cost, schedule, and mission capability.” In addition, the prime contractor
has to “orient and train the inexperienced team.” Another piece of study
data states, “Too many SETAs intermingled with government staff blurs
accountability.” Furthermore, secondary effects from the study cite that the
“reliance on support contractors perpetuates the inability to develop future
program managers and acquisition
experts and delays decision processes.”
A GAO report (2008b) details the
government’s strong reliance on contractors, which creates a complex environment where clear lines of authority
are not delineated. The report, along
with the study data, show that while
hiring contractors offers many benefits,
such as filling expertise gaps in the government workforce or fulfilling emergency needs, most acquisition agencies
are highly staffed with contractors,
FFRDCs, and consultants and the lines of
authority become blurred in the eyes
of the prime contractor. Basically, the
GAO (2008b) report also found that
many contractors work in acquisition
areas as support and perform activities
historically performed by government
specialists, so when prime contractors
are looking for direction, in many cases
they may interact with a support contractor instead of government personnel, which can lead to inefficiencies or
poor guidance.
In order to monitor and control the
current strong reliance on internal support contractors, the study data recommend that efficiencies could be gained
with “dramatic reductions in the staff
functions and SETA teams, limiting
participants to those who are knowledgeable and capable of developing
solutions rather than identifying potential problems.” One suggestion to
review and improve CAAS and SETA
government support is to “establish
SETA work packages based on deliverable items such as reports, trade studies, or assessments instead of contracts
based on level of effort work packages
that do not require deliverables.” In
summary, the study data provided
ample evidence that internal support
contractors add additional cost, guide
program decisions, are not accountable, and create a complex decisionmaking environment.
Consolidation of the Aerospace
Industry
The study data provide evidence that
the dramatic consolidation of the aerospace industry over the past decade
has led to aggressive, overly optimistic
bids by industry to win government
contracts, which has led to program
cost overruns and schedule delays.
These overly optimistic bids are then
evaluated by an inexperienced sourceselection team that does not have the
appropriate backgrounds or experience and ends up performing an inadequate review of the proposal. In many
instances, the study data point out that
the inexperienced government team
does not make wise source-selection
decisions, which leads to a program being
initiated with overzealous advocacy,
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Causal Inferences on the Cost Overruns and Schedule Delays
immature technology, ineffective acquisition strategy, unrealistic program
baselines, and inadequate systems
engineering.
A block diagram has been created and
shows the inferred cause—consolidation
of the aerospace industry—has resulted
in aggressive bids by industry to win
government contracts (see Figure 4). As
shown in Figure 4, these overly optimistic proposals are then reviewed by
an inexperienced government sourceselection team that does not have the
ability to generate a credible program
baseline; obtain a realistic understanding of the program’s proposed cost,
schedule, and performance; translate
customer needs into a specific capability through the appropriate systems
engineering processes; develop a contract vehicle with the appropriate
incentives to motivate a contractor; or
assess technologies to determine their
state of maturity. These factors taken
individually or together can lead to cost
overruns and schedule delays on complex large-scale federal programs. The
block with the dashed oval indicates
the area where another inferred cause
overlaps and leads to the same effects.
Specifically, in Figure 3, the dashed oval
within the Proposals Reviewed by
Inexperienced or Newly Assigned
Personnel Box overlaps with Ineffective
HR Policies and Practices.
The consolidation of the aerospace
industry has been swift. For example,
one industry RFI states that “the aerospace industry has suffered a reduction
from 86 first- and second-tier companies to five major prime contractors.” A
study by the GAO (2006) that addresses
improvements in space systems acquisitions reports that in 1985 there were
ten competent prime contractors competing for space programs and that
today there are only two that could
handle DOD’s most complex space systems. Another study by Thurman (2006)
on the national security space industrial base concludes that the space industrial base has consolidated from 53
space contractors in 1990 to four space
36
contractors in 2006. These four now
comprise all the combined engineering, production personnel, and facilities of more than 50 firms that were in
existence in the mid-1990s.
The aerospace industry has found
itself—with the help of the government
acquisition reform policies of the
1990s—with too much consolidation.
This state of affairs has led to quasimonopolies where each contractor is
vying to become the sole provider in a
particular defense sector. This behavior
has led these participants to engage in
“winner-takes-all” competitions for
large programs. The DSB (DOD, 2003)
report concludes that unrealistic estimates related to “proposals from competing contractors typically reflect the
minimum program content and a price
to win” (p. 2) contribute to acquisition
problems on major space systems. The
“Inexperienced Government SourceSelection Teams” subsection in this
article also provides additional study
data on the importance of experienced
source-selection teams and the consequences of having an inexperienced
source-selection team. For example, on
one program that suffered cost overruns and schedule delays, “the inexperienced government team during
source selection got the program off on
rocky footing that caused catastrophic
consequences.” And finally, one RFI
states that “without a doubt the major
problem in all of these troubled acquisitions can be traced to unrealistic cost
and schedule expectations made during the proposal period.”
Interestingly, the DSB (DOD, 2003)
report found that the incumbent contractor loses more than 90% of the
time. This statistic is consistent with
one contractor RFI that provided data
that the probability of the incumbent
contractor retaining incumbency was 1
in 8, which translates to an incumbent
contractor losing 87.5% of the time
during a recompete. The same RFI
states “that in an effort to close consolidation business cases, non-incumbent
firms offered aggressive bids.” Because
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
an incoming competitor is not “burdened” by the actual cost of an ongoing
program, it can be more optimistic with
its bid. Subsequently, in many cases,
the government program office budget
is reduced to match the winning proposal’s unrealistically low estimate.
Changing contractors on a large
system development can result in considerable costs for the government,
since expertise is lost and retraining
must occur. Equally important, factories and facilities will be liquidated only
to be built elsewhere. One of the key
recommendations of the DSB (DOD,
2003) report was that space system
acquisitions should only be competed
when it is in the best interest of the government, such as a new capability, new
technology, or poor incumbent performance. While competition is advocated in order to provide the best value
to the government, a careful analysis
should take into account factors such
as expertise loss, facility loss, and infrastructure additions.
The roots of the consolidation of
the aerospace industry were spawned
in the 1990s’ DOD acquisition reform
policies to address the DOD reduction
in expenditures in the post-Cold War
era. During this time period, DOD
expenditure reductions of approximately 40% in the areas of procurement, research and development, and
construction budgets caused the senior DOD leadership to create policies
to balance lower budgets while maintaining a viable industrial infrastructure (Deutch, 2001). The original purpose of the consolidation policy was
to encourage mergers to reduce the
level of assets and promote cost-sharing efficiencies. From a policy and
economic viewpoint, if assets were
not reduced, smaller budgets would
result in higher unit costs, ultimately
resulting in lower profit margins
for the defense industry. Even though
the consolidation policy was aimed
at encouraging mergers to reduce
asset levels, many aerospace industry
consolidations took the form of
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acquisitions instead of mergers or
partnerships.
Secondary effects from this consolidation may result in a reduction in
internal research and development
(IR&D) activities, formation of monopolies, and unhealthy competition. One
study (Linster, Slate, & Waller, 2002)
implied that as defense contractors rely
more on partnerships and alliances,
fewer resources will be devoted to
research. R&D is critical to the longterm viability of the defense industry by
providing new technologies to the
warfighter. Too much consolidation
without vibrant competition may not
encourage new ideas or lower cost.
Deutch (2001) also points out that with
profits and equity prices falling, companies have moved to reduce capital
investment and cut discretionary R&D.
In summary, the consolidation of the
aerospace industry has led to overly
aggressive low bids by industry on
large-scale government programs,
which has contributed to cost and
schedule overruns.
Too Many Stakeholders Involved in
Monitoring Programs
Most large-scale federal acquisition
programs involve large constituencies.
These constituencies consist of external agencies that may serve as mission
partners or interested parties and internal stakeholders that can subject a program to reporting requirements and
internal management control processes. Therefore, a large part of a program
manager’s responsibility is devoted to
responding to and interacting with a
large constituency of stakeholders.
The study data provide evidence
that if too many stakeholders interject
themselves into large acquisition developments, two primary impacts can
occur: (1) system requirements may
change, which can significantly impact
the system under development, and
(2) additional work that does not directly support the acquisition is levied
upon the program office. Both of these
impacts may add considerable cost to
the system under development. This
“nonmission” work takes the form of
action items, external and internal
process reporting, briefing requests,
tours, and nonessential contract deliverables.
A block diagram has been created
and shows the inferred cause—Too
Many Stakeholders—has resulted in
modifications to system requirements
and additional nonmission work that
does not directly support the acquisition program (see Figure 5). As shown in
Figure 5, requirements changes can lead
to technology changes and modifications to the program baseline, both of
which contribute to cost overruns and
schedule delays. Technology changes
may render the technology baseline
immature and extend the technology
development phase into the acquisition
execution phase, ultimately leading to
cost growth or schedule slips. The study
data details how nonmission work can
detract the program manager from the
core mission; add additional staff,
which leads to additional program cost;
and lead to an overreliance on internal
support contractors, which can lead to a
complex decision-making environment
and poor decisions, ultimately leading
to program cost overruns and schedule
delays. Both requirements changes and
nonmission work will be discussed individually in the next two sections. In
Figure 3, the block with the dashed oval
indicates the area where another
inferred cause overlaps and leads to the
same effects. Specifically, the dashed oval
within the Overreliance on Support
Contractors box overlaps with Ineffective
HR Policies and Practices.
Requirements Changes
Requirements changes may occur
because external stakeholders with
divergent needs and wants advocate
modifications to meet their specific
needs without fully understanding the
systematic impacts to the program
being developed. One study source
noted that the “larger user community
involvement in defining interfaces and
requirements drive us to new technologies and use of large systems of systems.” Several examples of programs
that suffered requirements growth
close to $1 billion, such as the SpaceBased Infrared System High (SBIRS)
satellite and Advanced Extremely High
Frequency (AEHF) communications
satellite, can be found in Meier (2008).
The financial impact of changing
requirements can be seen in Figure 6.
Data from the GAO (2008c) provides
statistical data on 46 DOD programs
that changed requirements and clearly
show that initial cost increased on average by 11% for programs that did not
change requirements, compared to
72% for programs that changed
requirements, roughly a factor of seven.
This data obviously shows that requirements changes lead to cost growth.
Many other examples of programs that
suffered requirements changes can be
found in GAO (2008a).
Nonmission Work
The involvement of both internal and
external stakeholders has created significant nonmission-related work for many
large system program offices. First,
external stakeholders tax the program
office with nonmission added work,
such as interagency taskings, tours, and
briefings, that requires considerable
time and additional staff to complete—
and distract the program office from its
focus on program execution. Second,
internal stakeholders tax the development by requiring periodic briefings and
internal action items and subjecting the
program office to bureaucratic management control processes. With so many
stakeholders involved in an acquisition,
the program office finds itself devoting
significant resources and time to work
that does not directly contribute to the
program mission. All of these additional
resources slow program progress, distract the program manager from the
mission, and add cost.
For example, one program manager
who tries to insulate her technical staff
from nonmission work estimated that
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Causal Inferences on the Cost Overruns and Schedule Delays
80
72
60
Percent
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0
Programs
without
requirements
changes
Programs
with
requirements
changes
there is no longer a distinction between
important paper and documentation”
(p. 44). All of this generated paper has
to be reviewed by SETAs, FFRDCs, committees, and any person who thinks he
or she is interested. According to these
authors, this type of situation establishes a counterproductive environment
“where many people can say no and
nobody can say yes” (p. 44).
This current environment of too
many stakeholders will continue until
federal agencies minimize the number
of stakeholders involved in procurement and relieve program managers of
external and internal management
processes that do not support mission
success. To make matters even worse,
most new program budgets are built on
historical program costs based on costplus award fee programs. This will perpetuate new program cost estimates to
include these additional staff and nonmission work.
Figure 6: Cost growth due to requirements changes (GAO-08-674T).
Summary
“75% of her time is dedicated to nonmission work,” responding to both
internal and external actions, and comments that these requests for data
“impede program execution” and that
“anyone can ask for anything.”
Moreover, another program manager
comments that “even our contractors
are overwhelmed by requests for data.”
This program manager created an
“action staff of SETAs to do non-valueadded work.” One interviewee from the
study also discusses the frustration of
nonmission work, stating, “The job
description of all action staffs at all levels within the organization should be
redefined to include completing actions
at the highest-possible level within the
organization and insulating the program offices from non-value-added
work that will distract them from their
primary mission responsibilities.”
Another interviewee states, “Too many
people are doing duplicate work. There
are overlapping functions between
38
organizational directorates. Internal
processes also add an additional layer
of reporting, for as one response states,
“A lot of corporate system engineering
activities are not value-added.”
As discussed in the section on ineffective HR policies and practices, the
study data show that these internal and
external requests have spawned the creation of action staffs—mainly SETAs and
FFRDCs—within the program office to
manage the workload. As one interviewee states, “These SETA teams are too
large and conservative; they guide engineering, change designs and tests, but
never reduce costs.” These action staffs
add program cost and create a complex
decision-making environment.
The literature also supports the
overemphasis on process and documentation. For example, Nowinski and
Kohler (2006) discussed the overemphasis of paper as the driving requirement on large programs. They believe
that “paper has become king and that
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
In this article, the three inferred causes
of cost overruns and schedule delays on
large-scale DOD and IC acquisition
programs have been traced to ineffective human resource policies and
practices, the consolidation of the aerospace industry, and too much stakeholder involvement. In addition, thorough
flow diagrams have been developed to
show the inferred causes, subsequent
effects, and interrelationships among
the causes.
In order to change the current acquisition environment, there must be an
overall commitment from senior leadership within DOD and the IC. Unless significant shifts in policies occur and the
policies are rigorously adopted, these
three causes will continue to undermine
the ability of the federal defense
and intelligence communities to deliver
large acquisition programs within
their proposed cost, schedule, and performance estimates. All players in the
acquisition community involved in acquisitions—Congress, the DNI/Acquisition,
DOD/Undersecretary for Acquisition
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Technology & Logistics, senior
comptrollers—must be unified in
improving the federal acquisition environment to change the continuing cost
overruns and schedule delays on
large-scale acquisitions. ■
References
Booz Allen Hamilton (BAH). (2002).
Space systems development growth
analysis report. McLean, VA: Author.
Conger, J. A., & Fuller, R. M. (2003).
Developing your leadership pipeline.
Harvard Business Review, 81(12),
77–84.
Department of Defense (DOD). (2003).
Report of the Defense Science Board
Task Forces on the Acquisition of
National Security Space Programs.
United States Department of Defense,
Office of the Deputy Undersecretary of
Defense for Acquisition, Technology,
and Logistics. Retrieved August 31,
2009, from http://www.acq.osd.mil/
dsb/reports/space.pdf
Deutch, J. (2001, Fall). Consolidation
of the U.S. Defense Industrial Base.
Defense Acquisition University
Acquisition Quarterly Review, pp. 137–150.
Retrieved August 31, 2009, from
http://www.dau.mil/pubs/arq/
2001arq/Deutch.pdf
Government Accountability Office
(GAO). (2006). Improvements needed in
space acquisitions and keys to achieving them (GAO-06–626T). Washington,
DC: Author.
Government Accountability Office
(GAO). (2008a). Assessment of major
weapons programs (GAO-08- 467SP).
Washington, DC: Author.
Government Accountability Office
(GAO). (2008b). DOD needs to reexamine its reliance on contractors and continue to improve management and
oversight (GAO-08-572T). Washington,
DC: Author.
Government Accountability Office
(GAO). (2008c). Results of annual
assessment of DOD weapons systems
(GAO-08–674T). Washington, DC:
Author.
Institute for Defense Analysis (IDA).
(2008). Leadership, management, and
organization for National Security Space:
A report to Congress of the Independent
Assessment Panel on the Organization
and Management of National Security
Space (IDA Group Report GG-69).
Washington, DC: Author.
Leonard, D., & Swap, W. (2004). Deep
smarts. Harvard Business Review, 81(9),
88–97.
Linster, B. G., Slate, S., & Waller, R. L.
(2002, Spring). Consolidation of the
U.S. Defense Industrial Base: Impact
on research and expenditures. Defense
Acquisition University Acquisition
Quarterly Review, pp. 143–150.
Retrieved August 31, 2009, from
http://www.dau.mil/pubs/arq/2002arq/
SlateSP2.pdf
Meier, S. R. (2008). Best project management and systems engineering
practices in the preacquisition phase
federal defense and intelligence agencies. Project Management Journal,
39(1), 59–71.
Nowinski, E. H., & Kohler, R. J. (2006).
The lost art of program management
in the intelligence community.
Journal of Intelligence Studies, 50(2),
33–46.
Thurman, J. L. (2006). National
Security Space Industrial Base Study.
Office of the Secretary of Defense Cost
Analysis Improvement Group.
Retrieved August 31, 2009, from
http://www.ra.pae.osd.mil/adodcas/
dodCAS2007presentations/Track3/
Session5Miller.pdf
Steven R. Meier, PhD, PMP, is currently a group
deputy director at the National Reconnaissance
Office. He held former positions as a lead technical program manager in the Innovision
Directorate at the National GeospatialIntelligence Agency and as a program manager
in the Optical Sciences Division at the U.S. Naval
Research Laboratory. He has held positions in
private industry at Raytheon, SAIC, and the
Aerospace Corp. He has also provided thought
leadership with more than 30 peer-reviewed
publications and presentations in the areas of
acquisition strategy, project management, and
technology. He has spoken at the Project
Management Institute, the International Council
on Systems Engineering, and the Defense
Acquisition University and is an adjunct faculty
in the project management curriculum at
Georgetown University. He has a BS and MS in
physics and received his PhD degree in electrical engineering from Johns Hopkins University.
He is the founder of SRM Consulting, LLC, a consulting firm that specializes in system acquisition lifecycle management. He can be contacted
at [email protected]
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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Financial Incentives and Advanced
Construction Procurement Systems
Timothy M. Rose, Project Management Academy, Queensland University of Technology,
Brisbane, Queensland, Australia
Karen Manley, Project Management Academy, Queensland University of Technology,
Brisbane, Queensland, Australia
ABSTRACT ■
Construction clients often use financial incentives to encourage stakeholder motivation and
commitment to voluntary higher-order project
goals. Despite the increased use of financial
incentives, there is little literature addressing
means of optimizing outcomes. Using a casestudy methodology, the examination of a
successful Australian construction project
demonstrates the features of a positively
geared procurement approach that promotes
the effectiveness of financial incentives. The
research results show that if the incentive
system is perceived to be fair and is applied
to reward exceptional performance, and not to
manipulate, then contractors are more likely to
be positively motivated.
KEYWORDS: goal commitment; financial
incentives; contracts; motivation; construction
projects; built environment
INTRODUCTION ■
T
he use of advanced contracting options such as financial incentives
has been identified as a way to promote increased motivation and
commitment in construction projects (Bresnen & Marshall, 2000). A
financial incentive built into a contract can act as a reward system
based on a contractor’s ability to satisfy specific cost or performance objectives (Washington, 1997). Similarly, according to Bower, Ashby, Gerald, and
Smyk (2002, p. 43), financial incentives aim to “simply take advantage of a
contractor’s general objective to maximize their profits by giving them the
opportunity to earn a greater profit if they perform the contract efficiently.”
This can potentially be achieved by having contract agents (including project consultants) share in the client’s success from the project. It is generally
accepted within the incentive literature that, to ensure that an adversarial
relationship does not occur between the contracting parties, the incentive
systems should focus on positive incentives, rather than on penalties
(Lahdenpera & Koppinen, 2003).
Nevertheless, there has been very little analysis of the means to promote
financial incentive effectiveness in a construction project environment. The
limited literature that exists is dominated by Bresnen and Marshall (2000),
who argue that there are limitations to the use of incentives. They point out
that financial incentives will not automatically result in high levels of motivation and commitment. They suggest instead that the overall procurement
approach needs to be complementary, although little detail is provided in
terms of how this might be achieved. This article responds to this gap in the
literature by exploring the research question “What are the specific project
drivers that enhance financial incentive mechanism (FIM) effectiveness?”
This article examines a very successful large Australian infrastructure
project completed in 2005, to identify the positive motivation drivers that
encouraged stakeholders to achieve above “business-as-usual” (BAU) goals.
These are voluntary higher-order goals that exceed base contract commitments. On this project, the above-BAU goals equated with the FIM goals, and
as these were achieved, stakeholders were allocated the full incentive pool.
The first section of this article provides background information on the
range of financial incentive design options in construction contracts and
discusses the complexities associated with implementing incentives into a
highly interdependent project environment. This theoretical background
will inform the subsequent case-study discussion.
Project Management Journal, Vol. 41, No. 1, 40–50
© 2009 by the Project Management Institute
Financial Incentives and Construction Contracts
Published online in Wiley InterScience
Financial incentives as part of construction contracts are typically either
cost-plus incentives or performance incentives (Bubshait, 2003). They aim
to promote motivation by offering either a profit-sharing arrangement or a
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20145
40
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performance bonus, respectively, to the
contract agent for above-minimum
performance standards.
Cost-Plus Incentives
In cost-plus incentive contracts, the
client’s target cost is introduced into a
reimbursable contract and acts as
the fulcrum around which the incentive
mechanism is driven. As this incentive
type aims to promote favorable project
cost outcomes, savings achieved below
the target cost are split between the
contractor and client based on a predetermined share profile (Broome &
Perry, 2002). The aim of this arrangement is to motivate the contractor and
client to work together to minimize
actual costs, as the contractor is able to
maximize their profit margin by sharing
the benefits of reduced project cost,
and the client is motivated to minimize
the total cost paid out (Broome & Perry,
2002).
Performance Bonus Incentives
The second type of financial incentive
used in construction contracts is the
performance bonus incentive. These
can be used in fixed-price and cost-plus
contract types but, depending on the
project goals, have been argued to work
best when used in cost-plus contracts
(Berends, 2000). The main objective of
performance bonus incentives is to
motivate the contract agent by providing them with a financial bonus in
addition to their prescribed fee for
exceeding minimum acceptable levels
of performance, and distribution is
generally based on evaluations undertaken after performance has been
achieved (Washington, 1997). Performance bonus incentives can be used to
motivate the contract agents in many
areas other than cost, which is usually
more simply managed by the cost-plus
incentive contract mechanism. Performance bonus incentives are applied
to a wide variety of areas, such as
schedule (e.g., project completion prior
to target dates) and technical performance (e.g., achievement of safety and
quality assessment targets).
Specifically, schedule incentives
offer stakeholders a bonus for project
completion earlier than the target dates
and are usually based on a predetermined amount paid for each day of
early completion, and are closely linked
to project costs, since time delays usually increase costs (Arditi & Yasamis,
1998). Therefore, schedule incentives
should be negotiated concurrently with
cost incentives, as incentives encouraging early completion will reduce construction costs. Scheduling risks can be
high if the scope is likely to change during the project and if the impact of
these changes cannot be predicted with
reasonable accuracy. Thus, the level of
stakeholder risk in committing to the
schedule objectives should be consistent with the reward offered (Defense
Acquisition University, 2001).
Financial incentives can also be
used to influence the quality of project
outcomes in construction. A quality
performance bonus works on the premise that contractors are offered additional
profit if they are able to achieve predetermined quality performance levels.
When assessing quality, standardized
systems should be used and should be
applied selectively to the most important aspects of the work (Lahdenpera &
Koppinen, 2003). However, a major
problem with quality assessment is that
it can be subjective and difficult to
measure (Washington, 1997).
Quality performance measurement
tools have been developed by public
clients with a high level of repeat construction, such as those used by
Singapore’s Construction Quality Assessment System (CONQAS) and Hong
Kong’s Performance Assessment Scoring
System (PASS) for public housing (Tam,
Deng, Zeng, & Ho, 2000). Criteria may
include quality of workmanship, flaws
and defect rectification, functioning of
design and implementation, and
amount of rework. Measuring standards
should be based on objective measurements rather than relying on subjective
assessments (Tam et al., 2000) to ensure
that there is a clear definition of
performance requirements and units of
measurement.
Multiple Incentive Arrangements
Occasionally, clients offer a multiple
incentive arrangement, which combines cost-plus and performance incentive arrangements (Table 1). Generally,
performance is measured on the cost
savings made below a target cost combined with the achievement of set performance goals (single or incremental
goals). This arrangement maximizes the
opportunities to incentivize all areas of
performance and should be balanced to
reflect client project priorities.
Financial incentives can be applied
at the organizational and/or individual
levels. A major problem in selecting an
appropriate incentive system to motivate at either level is that, in environments where team members’ tasks are
highly interdependent (such as in a construction project), individual output
may be almost indistinguishable from
group output (Howard, Turban, &
Hurley, 2002). Organizational incentives
are thus used more often than individual
incentives in the construction context.
One unfortunate drawback to organizational incentives is the potential to
induce what economists call free-riding
behavior—or the reduction of effort due
to the reduced accountability in group
performance. For tasks that require very
little cooperative behavior, group-based
rewards will produce lower levels of performance than with highly interdependent tasks, due to the potential for
free-riding behavior (Wageman &
Baker, 1997). On the other hand, in a
highly interdependent context such as
a construction project, free-riding
behavior is more difficult. Team-member contribution is very interdependent
and therefore highly visible to the entire
team, potentially making cheating difficult. Further, organizational incentives
can help unify the focus on multiple
goals among team members, encouraging mutual cooperation and increasing
the level of commitment to their individual goals.
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Financial Incentives and Advanced Construction Procurement Systems
Profit-Sharing Incentives
Performance Incentives
Multiple Incentive Mix
Performance
measurement
Incentive measurement is based on
construction cost savings around a
target construction sum—i.e., if the
actual construction sum (ACS) comes
in below the target construction sum
(TCS), savings are distributed among
participants. Usually the share of
savings is capped.
Incentive measurement is based
on achievement of set performance
criteria (key performance goals).
Performance can be assessed
throughout the project or at
completion.
Incentive measurement can be
based on: (1) cost savings made
below a TCS and (2) achievement of
set performance targets that
determine the allocation of the
incentive pool.
Reward
allocation
Share ratio determined by straight
percentage (%) agreement or
distribution function—e.g., the
greater the savings, the greater
the percentage share on offer.
Incentive allocation sourced from
a separate bonus pool (usually built
into the project budget). It can be
allocated based on a single goal or
on incremental goals.
Incentive allocation is usually based
on a share of cost savings and an
incentive pool amount for the
achievement of set performance
goals (single or incremental goals).
Incentive
options
Profit sharing is based on a wide
range of share profiles (e.g., 50/50
percentage capped) aligned with
project risks and opportunities.
Performance incentives can include
benchmarks in areas such as:
• schedule performance
• operation
• nondisturbance
• safety
• design integrity
• quality
Many variations in the combination
of both profit-sharing (cost-outcome)
incentives and performance
incentives. However, the client
should ensure that goals do not
conflict.
There are many variations in the
application of this incentive type.
Positives
Provides motivation for the client
and contractor to work together
and minimize actual project costs.
Can be relatively easy to manage
due to an objective measurement
system and distribution at the
conclusion of the project.
A wide range of incentive goals
can be used to align project
priorities and improve contractor
performance. Argued to be best
used in cost-plus incentive
contracts.
Maximizes the opportunities to
incentivize all areas of performance
based on project priorities. Multiple
incentive goals should be balanced
to reflect project priorities.
Negatives
Potential for “moral hazard”
problems in other project
performance areas (i.e.,
contractors prioritizing cost
savings to the potential detriment
of other areas such as quality
and safety).
Requires ongoing management
and potentially high up-front costs
to develop and measure incentive
performance. Care must be taken
not to overemphasize a particular
goal to prevent imbalances in
contractor priorities.
Can be complicated to administer.
Requires ongoing management and
up-front costs to develop and
measure the performance
incentives.
Table 1: Key financial incentive designs.
In summary, there are a wide range
of FIM options that can be applied to a
construction contract. These include
profit-sharing arrangements in cost-plus
incentive contracts, built-in bonus performance provisions, and financial
incentive mixes. Also, there is the
option of individual- and/or team-based
incentives to consider based on the
42
level of task interdependence and individual impact on organizational and
interorganizational performance. The
suitability of a specific option is clearly
context-dependent.
Method
This article addresses the research problem that project managers have little
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
information available to them on how to
incorporate incentives in their projects
(as a part of an overall procurement
strategy) nor do they fully understand
the impact of incentives on project
motivation (Rose, 2008). In response to
this, a case study is employed to identify
the positive motivation drivers that can
underpin the successful achievement of
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the above-BAU incentive goals. By identifying the positive motivation drivers,
conclusions can be drawn about the
impact of FIMs on motivation and about
procurement initiatives that can promote their effectiveness.
A case-study methodology was chosen to explore the research question
“What are the specific project drivers
that enhance FIM effectiveness?” This
was seen as the best method given the
complexity of project environments,
and the need for in-depth understanding of the dynamics surrounding
project-based motivation in order to
effectively scope and identify drivers.
This case-study method promised to
result in more valid and reliable findings than a broader quantitative
approach. Although there are acknowledged shortcomings with case studies
in terms of external validity due to the
small and selective samples, the aim of
the current research was to derive analytical generalization and not statistical
generalization of the motivation drivers
impacting on incentive goal performance (Yin, 2003). The general themes
and patterns identified form the background for future statistical research.
Case-study findings were triangulated across the following data sources:
semistructured face-to-face interviews,
project and contractual documentation
(including project briefs and minutes
from meetings), industry publications,
and a site visit. Extensive preliminary
data were collected, which helped
shape the interviews. The interviews
were semistructured, with questions
based on a set of four motivation indicators derived from organizational
management and motivational theory
literature. The indicators comprised:
• Goal Commitment (Hollenbeck &
Klein, 1987). Commitment implies
extension of effort over time toward
the achievement of a difficult goal,
culminating in its attainment. Goal
commitment refers to the determination and motivation to try for a goal—
in the case of this research, the performance goal associated with the
financial reward. To clearly define
this indicator and its elements,
Hollenbeck and Klein’s (1987) model
of goal commitment was used. They
applied an expectancy theory framework first developed by Vroom (1964),
and expanded by Porter and Lawler
(1968), to study goal commitment and
determined a set of antecedents and
consequences of commitment to difficult goals.
• Distributive Justice (Colquitt, 2001;
Leventhal, 1976). A financial incentive
system should be set at an appropriate intensity to fairly compensate for
the agent’s risk and to promote effort.
Incentive intensity, according to economic motivation theories, is a major
determinant of an agent’s level of
effort in an incentive contract. This is
because higher intensity increases the
agent’s margin in response to their
increased effort (Zenger & Marshall,
2000). Therefore, the reward must be
great enough to motivate the agent
(based on the effort/cost to achieve)
but should not exceed the value of the
benefits to the principal. This is also
supported by distributive justice and
equity theory, where, if the size of the
financial reward does not fairly equate
with the desired level of performance,
it can fail to motivate.
• Process Fairness (Colquitt, 2001;
Thibaut & Walker, 1975). According to
justice theory, based on Adams’ (1963)
equity theory, process fairness focuses
on the fairness of the procedures that
are used to make distribution decisions. In the context of this research,
process fairness refers to the fairness
of the performance measurement
process that determines the distribution of the financial reward.
Procedural fairness perceptions in
groups need to be stronger as task
interdependence increases (Colquitt,
2004). Therefore, as task interdependence between project stakeholders is
high in complex construction projects, it is predicted that procedural
justice may be a very important
requirement for maintaining motiva-
tion and commitment toward project
goals.
• Interactional Justice and Reciprocity
(Bies & Moag, 1986; Fehr & Falk, 2002).
Interactional justice relates to the
aspects of the communication
process between decision makers
and recipients, such as honesty and
respect. This can relate to treatment
from a supervisor or source of justice
such as a client representative. In this
research, it is argued that interactional justice predicts a negative reaction
to poor treatment by a client/contractor representative. Interactional justice principles are closely supported
by economic reciprocity theory (see
Fehr & Falk, 2002), which states that
the agent prefers an environment
of fairness, where the principal’s
(client’s) reward intention is perceived
to be honorable. Where creativity and
agent discretion are important, structuring financial reward systems as a
symbolic gesture of trust can promote
reciprocal behavior and restriction of
opportunistic instincts (Kreps, 1997).
Rose (2008) provides further information on the theoretical development
of these motivation indicators, which
were used to structure interview questions. The interviewees comprised
eight senior managers; two from each
of four key stakeholder types (client,
head contractor, consultants, and subcontractors), who were heavily involved
in the procurement and delivery of the
case project. All interviews were in-person, ranged from 60 to 90 minutes in
duration, and were based on structured
and unstructured questions. Interview
data were captured by note taking and
digital recording and transcribed verbatim in order to develop an accurate
and comprehensive database. Informal
field notes were also taken during site
visits and the interviews.
Raw interview data were reviewed
using content analysis. This involved
manually aggregating and categorizing
responses from the interview transcripts and the secondary data to
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Financial Incentives and Advanced Construction Procurement Systems
identify the key motivation drivers. The
identification and refinement of driver
categories was achieved by inductive
coding. The primary data amounted to
approximately 8,000 words contained
in interview transcripts. The coding
process involved interpretation of each
interviewee’s transcript, organized
around the four motivation indicators.
Each coding category was revised and
refined until clear lines could be drawn
between the motivation drivers. Care
was taken to identify driver categories
that covered all instances, were limited
in number, and were mutually exclusive. Due to the subjective nature of
content analysis, an expert panel was
formed to test content-analysis accuracy and ensure inadvertent bias was
minimized. The category allocations of
the three expert panel members reflected over 80% accuracy, providing evidence of the reliability of the coding.
The case study presented in this article
was selected in a purposive manner, as
it represents an example of the successful design and implementation of a
financial incentive system as part of the
overall project procurement approach.
Case Project Background
The project was a large Australian government acute care hospital redevelopment with a design and construction
cost of AU $91.2 million, completed
in 2005. This redevelopment was in
response to a review of the existing
facilities that were identified as not
meeting their operational requirements
and health service delivery models.
This project included the demolition of
much of the outdated infrastructure
and replacement of all hospital wards.
The hospital was designed to accommodate future growth.
The hospital was operational
throughout the construction stage, and
the project required the flexibility to
meet changes in operational requirements and ongoing commissioning of
new wards. The project was completed
in two major phases, with a minor completion stage for finishing off the build44
ings. A unique aspect of the delivery
approach was that furniture, fixtures,
and equipment (FFE) procurement was
assigned to the managing contractor as
well as construction management; traditionally, FFE would be outsourced to
a specialist contractor.
At the master planning stage, the
project had been classed as a standard
“lump-sum” arrangement. A team of
consultants including the architect
(primary consultant), mechanical and
civil engineers (secondary consultants),
and a cost planner had been appointed
under a lump-sum arrangement to do
master planning work. Under a traditional “lump-sum” contract, the client
appoints design consultants for the full
extent of design and documentation.
Once documentation is complete, a
contractor is engaged by the government client under a lump-sum contract
and through a competitive tender
process, to construct the building based
on the completed design. Thus, the
contractor is responsible for, and carries the risk for, construction cost
(based on the agreed-upon contract
sum) and construction schedule.
After several months, the client
representatives identified the project
as high risk, and it was decided that
a “relationship-based” procurement
approach would be more suitable. Also,
due to its large size and complexity, the
project was identified as a possible
exemplar project, with an objective to
showcase innovative procurement initiatives.
Two key components defined the
“relationship-based” approach in this
project. They comprised a managing
contractor (construction management)
contract and an innovative stakeholder
management arrangement.
First, the contractual conditions
agreed to between the government
client and contractor significantly influenced the project relationship. Under a
managing contractor (construction
management) form of contract, the contractor is generally appointed under a
competitive two-stage tender arrange-
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
ment (via price- and nonprice-selection
criteria), to provide input into design
and documentation and is contracted
to manage the construction process.
They do not take on the risks associated
with construction documentation
changes but still provide input into the
design process as a consultancy service.
It was anticipated that their input would
improve design constructability, thereby decreasing construction risks.
In Australia, this is sometimes
called a “junior” managing contractor
role, as the government client appoints
the design consultants for the full
extent of their services, but they are not
put under the responsibility of the contractor prior to construction. Under
this contract, the managing contractor
is responsible for the construction
trade packages, which are managed
through an open-book tender process.
Generally, the managing contractor is
appointed under a cost-plus arrangement that includes a construction
management fee arrangement (CM
professional fee), where actual costoverrun risks are jointly managed by
the project team on behalf of the client.
Under the contract conditions, the contractor was required to act “in good
faith” in maintaining actual costs within the client’s budget. The government
client believed that this arrangement
would provide better value for money
than under a lump-sum contract
(where the contractor is solely responsible for the construction of completed
design). Generally, the project stakeholders agreed that the use of a financial incentive was suited to this form of
contract because of the requirement to
motivate the contractor and consultants to deliver performance beyond
their professional management fee and
minimize project costs below a target
construction sum (TCS), through a
value engineering process.
The managing contractor contract
conditions set the foundation for
improved stakeholder relationships
through a willingness of the client to
jointly manage project time, cost, and
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quality risks. However, a key factor in
the success of the chosen “relationshipbased” procurement approach in the
case study was the innovative stakeholder management strategy that operationalized the joint approach to
managing the project.
The stakeholder management strategy developed for the project aimed to
align the project parties’ commercial
objectives with the project objectives,
further mitigate the client’s design and
construction risks (through closer integration of the project team), and
improve decision making and problem
resolution. This innovative strategy was
first proposed by the government client
representatives in response to several
failed projects, where failure was partly
attributed to adversarial relationships
and a lack of teamwork and stakeholder cohesion. Although a management
framework was in place that defined
organizational responsibilities, many
details of how the project would be
managed were developed in the initial
project-relationship workshops. All of
the major project parties, including the
key subcontractors, attended the initial
workshops, which aimed to define
stakeholders and their expectations
and help develop common goals for the
team.
A key feature of the stakeholder
management strategy was the abolition
of the traditional hierarchical structure
in favor of a “roundtable” approach.
The consultants, managing contractor,
and key subcontractors were engaged
directly with the government agency
responsible for the project. This was
intended to promote honesty and
openness in project meetings between
the major parties. The project was managed by two primary teams, comprising
an executive leadership team (ELT) and
an integrated management team
(IMT). These teams involved all of the
major stakeholders and their leaders.
The IMT included the individuals from
the major parties who were in charge
of the day-to-day management of
the project, while the ELT involved the
higher-level management personnel
who were responsible for the holistic
direction of the project, much like a
steering committee. It was intended
that if project issues could not be
resolved at the IMT, they would be delegated to the ELT. Workgroups were
formed within the IMT to identify
above-BAU benchmarks and to measure and reward performance in the key
project priority areas. These workgroups were formally established
during the design development and
documentation stages. The end-users
were involved in the ELT and IMT, to
provide their input to the building’s
functionality requirements.
In summary, the consultant team
was appointed during the conceptual
design stage, to take the project to the
design development stage. The managing contractor was appointed during
design development to provide input to
the consultants on the design, particularly concerning constructability. The
key subcontractors were appointed
during design documentation to further
enhance the design and negotiate their
subcontract tender price. A relationship
consultant was appointed during the
project’s conceptual stage to establish
and formalize the management structure, facilitate relationship workshops,
and provide relationship coaching. The
management structure and the stages of
appointment are illustrated in Figure 1.
The managing contractor tender
process was managed by all members of
the initial project team (client representatives and consultant team, including the relationship consultant and cost
planner) with equal input in selection.
It involved a two-stage tender process:
(1) to assess tendered construction
estimates and (2) to assess nonprice
criteria.
As with the managing contractor,
the consultants were employed directly
by the client under a professional fee
arrangement. Notably, the cost planner
was assigned directly to the client’s risk
manager to ensure that the client had
an independent third party to review all
cost claims and monitor budget performance. The key subcontractors
(mechanical, electrical, and intelligence/communication systems) were
selected under a two-stage tender.
First-stage selection was based on nonprice and price criteria. These subcontractors assisted the consultants in the
design documentation and in developing shop drawings. This gave them significant input to the design and the
value engineering process. In the second stage, they were appointed to
complete the trade package for the
negotiated tender price. The remaining
subcontractors were appointed to the
managing contractor under a lumpsum price arrangement.
A key component of the procurement approach was the use of a performance-based financial incentive.
The FIM was developed by the ELT
members, who delegated the responsibility of its implementation to the IMT
through the project workgroups. A
capped financial incentive pool of AU
$1.5 million was offered by the client
and financed through the preservation
of contingency amounts, which linked
the client’s objectives to the cost outcomes on the project.
The two contingency sums were the
principal’s contingency and the design
and construction contingency. The
client representatives could spend
the principal’s contingency on discretionary items outside the scope of the
works, as they saw fit. The construction
and design contingency could be used
for project initiatives and for extra
works as determined by the construction and design teams. If the team was
able to preserve the design and construction contingency (cost performance), the FIM would be allocated at
the conclusion of the project according
to performance in ecological sustainable development (ESD), community
relations, training, and program performance. The IMT decided that the
financial incentive reward would be
distributed to each team member
based on their fee proportion.
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Financial Incentives and Advanced Construction Procurement Systems
Phase Two (b)
Construction and
Commissioning
Phase Two (a)
Design Development
and Documentation
Phase One
Initial Design
Client and Client Representatives
Design Consultant Team
Managing Contractor and
Consultants (IMT, ELT)
Managing
Contractor
engaged
Managing Contractor and
Consultants (IMT, ELT)
Key Subs
Key Subcontractors
Other Subcontractors
Concept
and
Master
Planning
DD
Project
Approval
Schematic
Design
Design
Design
Documentation
Development
(DD)
Construction
Project
Completion
PROJECT STAGES (not to scale)
Figure 1: Project management structure and engagement stages.
The IMT went through a workshop
process to determine (1) how they
could maximize project savings without impacting on functionality and
develop the incentive pool and (2) how
the FIM performance would be benchmarked and measured. They decided
that 40% of the incentive pool would
be based on project outcomes, and
60% on cost outcomes. Therefore, if
the team managed to secure an incentive pool from contingency savings
while meeting all project objectives,
60% would be automatically distributed. The remaining 40% was made
available if the project team achieved
three out of the four project performance benchmarks. The ELT decided
46
that there would only be positive
financial incentives on the project.
Thus, there were no negative incentives such as liquidated damages
clauses in the contract.
The client, managing contractor,
and consultant representatives all recognized that there would be significant
pressure on the initial budget if the
objectives of the project were to be met,
especially for FFE. There had been miscalculations in the estimate of how
much of the existing equipment could
be reused and of expected market
prices at the time of purchase for new
equipment. The original budget estimate for FFE was 6 percent of the total
project cost (approximately AU $4.2
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
million), but ultimately cost approximately AU $12 million. This budget
shortfall placed pressure on the project
team to recoup the required funds in
project savings. In the end, the budget
shortfall was met by extra funds from
the client, but also through the savings
made by the project team (value engineering recouped approximately AU
$1.8 million) and an agreed redistribution of half of the incentive pool.
Approximately halfway through the
project, the incentive-capped amount
on offer was halved through negotiation
between the stakeholders. This occurred
when the client predicted that the project team would most probably achieve
the AU $1.5 million in contingency
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savings, although at that stage, their
final performance in the benchmarks
had not been determined. As there were
identified major shortfalls in the FFE
budget, the client asked the project team
to forgo half of their share (AU $750,000)
of the FIM pool and redistribute it to the
FFE budget. Although the client had a
contractual obligation to pay the full
incentive pool, the managing contractor
and consultants agreed to the redistribution because of their commitment to
the FFE outcomes. As a compromise, the
client agreed to extensions of time, giving the team a greater chance to meet
the program.
By the conclusion of the project in
May 2005, the project participants had
achieved all of the budget and revised
program, the ESD (recycling, water
usage, and energy), community relations, and training benchmarks.
Participants were paid the full AU
$750,000 incentive according to their
fee proportion. Another positive element for the major project parties was
their automatic reappointment for
Stage B of the hospital redevelopment.
This was intended by the client as a
reward for successfully meeting all
project goals. This strategic reappointment was thought to be unprecedented
in large government building projects
in Australia.
Positive Motivation Drivers
Figure 2 illustrates the motivation drivers that were nominated by the majority of interviewees as contributing to the
successful achievement of incentive
goals on the project. The discussion of
these drivers provides guidance for
client project managers wishing to
optimize the impact of financial incentives within an advanced procurement
approach.
Management Structure
The “roundtable” project management
structure (facilitated through the
monthly IMT and ELT project meetings) positively impacted on the project
stakeholder commitment to the FIM
goals. The meetings promoted the
Early
Involvement
Management
Structure
(IMT and ELT)
Relationship
Workshops
Value-Based
Tender
Future Work
FIM Goal
Motivation
FIM
Performance
Achievement of
cost, revised
program, ESD,
community
relations, and
training goals.
Monthly FIM
Workshops
Equitable
Risk
Multiple FIM
Goals
Figure 2: Positive motivation drivers.
expectancy that the team could achieve
the FIM goals, as each team member
had an equal influence in the decisions
that were made. The project team’s control of performance was also increased
because the managing contractor and
key subcontractors were involved in the
design stages.
Early Involvement
Having the managing contractor and
key subcontractors involved in the
design development and documentation stages improved the project stakeholders’ ability to manage design and
construction integration and to control
construction costs (particularly for the
managing contractor). This promoted
goal commitment. This was particularly
relevant in the value engineering exercises, where cost-saving design solutions
were required to minimize contingency
spending, in order to build the financial
incentive pool and recoup FFE budget
shortfalls.
Relationship Workshops
The relationship workshops (including
the initial breakthrough workshop
and the ongoing relationship reviews)
positively supported project relationships and promoted a “best for project”
culture. This motivation driver, in combination with the project management
structure, induced personal commitment to the deliverables on the project,
beyond the organizational commitment, thereby increasing the attractiveness of FIM goal attainment. This personal commitment intensified the level
of motivation induced through the FIM
reward. Interviewees also expressed
that the strong relational quality (i.e.,
the extent that the stakeholders feel
confident and have trust in dealing with
one another) formed on the project
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improved the perception that their
client’s intentions were honorable.
Value-Based Tender
The selection of the managing contractor and subcontractors on nonprice
criteria was a positive driver that promoted motivation toward the FIM goals.
According to the managing contractor
representatives, this value-based tender
approach gave them a sense of commitment to their client. They hoped to
show that they had been rightly selected
and to uphold their reputation, thus
improving the attractiveness of FIM
goal attainment. They also stated that
the open-book tender assessment,
which involved the examination of
profit-and-loss statements from their
previous projects, broke down client
misapprehension and helped develop
trust. The subcontractor representatives
also said that their selection, based on a
tentative subcontract price and ability to
contribute to the design, improved
the project team’s ability to manage the
budget and identify cost-saving design
options, promoting goal commitment.
Future Work
The project participants were strongly
motivated by the potential for future
work with the client. Therefore, they
were driven to promote their reputation and achieve successful project
delivery, increasing the attractiveness
of FIM goal attainment. This driver was
also related to the project participants’
perception that the client representatives valued their performance by recommending them for future projects.
This potential reappointment for Stage
B of the project was highly valued as a
reward by the managing contractor and
consultants.
Monthly FIM Workshops
The involvement of the contractors and
consultants in the FIM development
and performance measurement process
(through the monthly FIM performance
workshops) improved their motivation
to achieve FIM goals. They had input
with regard to what the FIM goals were,
48
how performance was to be measured,
and how rewards would be distributed,
and their involvement was perceived to
increase the expectancy that the FIM
goals could be attained. These results
suggest that the clarity and consistency
in the measurement process are important in upholding the perception of
fairness. Also, the contractors and consultants felt that their motivation was
promoted by the democratic team decision-making process at the workshops
to distribute the incentive reward based
on fee proportions. The workshops gave
them a sense of ownership of the FIM
goals and the measurement process, as
they had actively participated in their
development.
Equitable Risk
The modified managing contractor
contract established the framework for
an equitable allocation of risk that gave
the managing contractor the financial
flexibility to commit to the FIM goals.
Also, the open-book cost-negotiation
process allowed the client and the managing contractor to establish accurate
construction costs, which assisted
them in managing the project risks—
thereby decreasing the potential for
construction cost overruns.
The client and managing contractor
believed that this driver improved the
managing contractor’s chance of conserving the contingency sum and allocating adequate resources to the project
initiatives. This improved the expectancy
that the FIM goals could be achieved.
The client also felt that by not forcing all
of the construction risk onto the managing contractor, a less adversarial project
environment was achieved. This supported the “best for project” culture they
were seeking to promote.
Multiple FIM Goals
Having multiple FIM performance
goals provided the reward participants
greater control over their performance,
as there was a wide range of opportunities to secure the FIM reward. This
increased goal attainment expectancy.
The managing contractor felt that the
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
multiple goal system allowed them to
focus their effort on achieving the relevant goals according to changing project priorities while still having the
opportunity to secure at least a proportion of the FIM reward amount on offer,
which was perceived to be fair.
Conclusions
A range of positive motivation drivers
within advanced procurement approaches has been identified. These
drivers promoted motivation toward
above-BAU goals set by the project
team. According to the key project participants interviewed, the successful
achievement of these goals was attributed to:
• “roundtable” design and construction
management structure in the IMT and
ELT,
• early involvement of the managing
contractor and key subcontractors in
design stages,
• relationship management workshops
and ongoing relationship workgroup
initiatives,
• value-based criteria tender selection
process,
• potential for future work opportunities for high-performance delivery,
• FIM design that involved the participants in the development and performance measurement process
(through the monthly FIM performance workgroups), and
• application of a multiple-FIM performance goal system.
These drivers were perceived to
increase the level of commitment to the
FIM goals through improved expectancy
that the team would be able to achieve
them. The drivers also impacted on the
project participants’ perception that the
client was fair in how (1) the incentive
was distributed across the team, (2) the
FIM goals were developed, and (3) performance was measured.
Although there were drivers identified that related to the incentive measurement and distribution design, a
significant finding was that the project
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participants’ motivation toward the
FIM goals was not heavily influenced by
the actual amount of financial incentive rewards offered. Although the
interviewees valued the opportunity to
increase their profit margin through the
FIM reward, their motivation and commitment was more strongly promoted
through the development of good project relationships and the offer of future
work opportunities. In summary, the
findings suggest that the success of an
FIM is dependent on its application
within a complementary range of positively geared procurement initiatives.
Without such positive initiatives, the
effectiveness of an FIM in promoting
motivation may be compromised.
Finally, the case study identified
that incorporating FIMs into a positively geared procurement approach can
advocate a positive perception of the
FIM’s intention, increasing its effectiveness. This finding suggests that construction clients need to promote
financial incentives as a supporting
tool in the development of the project
relationship and not use incentives as a
mechanism of manipulation.
This article provides a basis for
future exploration of the motivation
drivers influencing the effectiveness of
FIMs. Although the research findings
are framed within the context of a specific case study, it is expected that the
results will apply to a wider range of
project environments than those presented here. This could include the use
of financial incentives under a similar
contract and stakeholder management
approach for private sector–funded
projects, as client-sector did not emerge
as an important variable in the casestudy analysis. Nevertheless, future
quantitative work is recommended to
extend the generalizability and validity
of findings.
References
Acknowledgment
Colquitt, J. A. (2004). Does the justice
of the one interact with the justice of
the many? Reactions to procedural
justice in teams. Journal of Applied
Psychology, 89, 633–646.
The authors would like to acknowledge
the financial support of the Cooperative
Research Centre for Construction
Innovation in Australia. ■
Adams, J. S. (1963). Toward an
understanding of inequity. Journal of
Abnormal and Social Psychology, 67,
422–436.
Arditi, D., & Yasamis, F. (1998).
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Journal of Construction Engineering
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sity in group-based rewards. Academy
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Timothy M. Rose joined the Queensland
University of Technology (QUT) Project
Management Academy in September 2008,
having previously worked as a senior project
manager on major construction projects in
Australia. He holds a PhD (built environment
and engineering) from QUT and an honors
degree in construction management from
Newcastle University in Australia. His research
interests focus on understanding interorganizational relationships, motivation and commitment, knowledge management, and managerial leadership. He has published internationally
on the topic of advanced procurement
approaches in construction projects.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Karen Manley is currently a senior research
fellow in the School of Urban Development at
the Queensland University of Technology and
deputy director of research in the QUT
Project Management Academy. She has
many years of experience as an academic
and private consultant, specializing in the
application of post-neoclassical approaches
to the analysis of innovation and industry
growth. She investigates knowledge flows,
networking, and innovation systems, to
shed light on the perfor-mance of a number
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industry. Her work has been published
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has informed the development of government policy across Australia in the area of
innovation capacity.
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Managing Risk Symptom: A Method to
Identify Major Risks of Serious
Problem Projects in SI Environment
Using Cyclic Causal Model
Hiroshi Ohtaka, Software Engineering Center, Information-Technology Promotion Agency,
Tokyo, Japan
Yoshiaki Fukazawa, School of Fundamental Science and Engineering, Waseda University,
Tokyo, Japan
ABSTRACT ■
INTRODUCTION ■
Serious problem projects (SPPs) often occur,
particularly in a system integration environment, and it is difficult to prevent them, since
the relationships among phenomena that occur
throughout the project life cycle are extremely
complicated. Our goal is to make it easier to
identify major risks by distinguishing phenomena that are sources of future SPPs from phenomena observed in actual field projects. By
choosing several events whose causal relation
is known to be cyclic, we constructed a causal
model and clarified that it can contribute to the
easier recognition of SPPs empirically, by analyzing actual SPP cases.
he “death spiral,” also called the “devil spiral,” which is a phenomenon
caused by defective quality, delays in progress, and lack of manpower, is
most often observed in the lower development process of a system integration (SI) business environment, despite the popularity of A Guide to
the Project Management Body of Knowledge (PMBOK® Guide)—Third Edition
(Project Management Institute, 2004). Although it is reported (Haihara, 2005)
that serious problem projects (SPPs) accompanied by the devil spiral occurred
more than 20 years ago, the same problem projects still occur today.
Adverse effects caused by SPPs include the following:
• Customer companies: opportunity loss due to service delay, degradation of
social reliability due to defects in service.
• SI companies: experiencing a loss or a considerable decrease in profit, opportunity loss due to resources allocated to recovering the troubled project.
KEYWORDS: risk identification; problem
project; causal model; managing risk; information technology
Project Management Journal, Vol. 41, No. 1, 51–60
© 2009 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20144
T
It is important to detect symptoms of the SPPs to prevent such adverse
effects. Thus, in this article, our goal is to make it easier to identify major
risks by distinguishing phenomena that are sources of future SPPs from phenomena observed in actual field projects.
However, SPPs are seldom due to a single causal phenomenon. Most
SPPs are caused by multiple phenomena that occur throughout the upper
development process and spread to the lower process, and the relationships
between the phenomena are extremely complicated. In such a situation, it is
difficult to obtain a bird’s-eye view that indicates the origin of a phenomenon that is occurring in a current project, and what problems the phenomenon may cause in future project phases.
For example, in the middle development phase shown in Figure 1, when
senior managers discover that a customer requires many explanatory documents from a project manager, it is difficult for them to determine the background to the phenomenon and the problems involved, even if they suspect
that something unusual is occurring. Consequently, it is possible for them to
underevaluate the risk of future SPPs and to fail to prevent SPPs from occurring, because the countermeasures taken in the lower development phase
are too late.
Thus, it is important to construct a model that offers a bird’s-eye view of
the causes and effects of phenomena in the earlier phases shown in Figure 1.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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Managing Risk Symptom
Customer
company
Functional organization
of SI company
Development process and phenomena in project
Viewpoint of
customer
Contract
Upper phase
Determining scope
Entrusting
project to
PM.
Approval of proposal
and contract.
Proposal
Viewpoint of
senior manager
Entrusting
project
PM after
approval.
*SI company gives top
priority to increasing orders.
*Order is estranged from
end user.
*Less initiative taken by PM.
Middle phase
Waiting and
seeing for a
little longer.
*Customer requires many
explanatory documents.
*Less negotiating power of PM.
*Sales dept focusing on other
customer orders.
Scope change
Lower phase
Problem of quality,
cost, or delivery
Unpleasant
surprise.
Due for delivery
Frequent
rescheduling
*Leader leaves project.
*Many scope changes.
*Many bugs in software
package.
*Unable to meet delivery date.
*Project staff are
overworked.
Being certain of
problem at last.
However, the
countermeasures
are too late.
Figure 1: Sample phenomena that occur in SPPs of SI firm.
Regarding the issue of Risk Identification and Risk Analysis, Chapter 11
of the PMBOK ® Guide—Fourth Edition
(Project Management Institute, 2008)
describes methods such as informationgathering techniques including interviewing and risk probability and impact
assessment. However, no detailed
methods are given except that of asking
for the support of knowledgeable persons or for expert judgment.
Since the third edition was published, there have been studies on more
detailed methods that enable the construction of models of the causes and
effects of phenomena. In particular,
modeling studies using Bayesian networks (BNs) (Jensen & Nielsen, 2007)
have been conducted. However, the
types of causal relation considered in
52
the models include only the noncyclic
type (Khodakarami, Fenton, & Neil,
2007; Gongyi & Yokoyama, 2007), and
cyclic types such as the devil spiral have
not been discussed.
Looking at more basic research,
there are general problem-solving
methods including Apollo root-cause
analysis using a “caused-by” tree (Gano,
1999), a method proposed by Kepner
and Tregoe (1997), and a method using
fishbone diagrams (Robson, 1995).
However, similar to the BN methods,
they have not discussed the cyclic
causal phenomena like the devil spiral
in SI environment.
Regarding recent research on project failures in SI environment,
McManus and Wood-Harper (2007)
categorized critical causal factors
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
(CCFs) of failed projects into either
management or technology, and they
report that the management issues
accounted for 65%. The results are
nearly equal to our experiences, and
we believe that their efforts should
be evaluated high. Kappelman,
McKeeman, and Zhang (2006) chose 17
of the most important early warning
signs (EWSs) from among original 53
EWSs by scoring the importance of
each EWS through interviewing
experts, and arrived at a final list of 12
EWSs by combining several of these 17
EWSs. They also assigned the 12 EWSs
to three categories (technology, people,
and process) but found no technology
risk. This excellent result is quite the
same idea that we have. There has been
other research on project failures in
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information systems, such as Taylor
(2006) and Reich (2007).
However, this research had the following two problems:
1. First, none of the research could
clarify quantitative relationships
between each individual event
(which includes phenomenon of
CCFs or EWSs) and actual SPPs. This
made it difficult for one in an actual
field project to be sure whether there
was any major risk or not. There are
many cases in which SPPs do not
occur even if a single CCF or EWS
occurs. For example, even if an
EWS of “lack of top management
support” occurs, SPPs are seldom
observed to result, particularly in situations where the project has excellent customer trust and sufficient
development capacity. This might be
a reason why the research could not
clarify the quantitative relationships.
2. Second, there has been less research
that focuses on bad influences caused
by the chain of plural events. It is very
probable that SPPs occur when the
chain of plural events forms a cyclic
chain, since impacts of the chain’s risk
often become huge. Nevertheless, less
research has moved forward to focus
on such a chain of plural events, since
events including a CCF or an EWS are
viewed independent of each other.
Robertson and Williams (2006)
reported that they found causal chains
of plural events (loops) in a failed SI
project in their article. The objective of
their article was to obtain lessons
learned by analyzing causes of the troubled project using a method known as
cognitive mapping. In this article,
causal relations among events are
described by categorizing events into
four types: (1) main outcomes, (2)
external events, (3) management decisions, and (4) others. They tried to
detect the root causes of the failure by
describing the cognitive mappings
(detailed relations of the causal chains
based on such categorized events),
after the failed project was completed.
However, there can be observed no
attempt to expand their objective of
introducing the cognitive mappings
from acquiring lessons learned to identifying major risks. The reasons are
believed to be as follows. It is possible to
execute the detailed and complicated
analysis of a single failure project based
on the event categorization mentioned
earlier, after the project completion, if
the objective is only to acquire lessons
learned. However, if the goal is to identify major risks, then much more is
required to achieve simplicity and clarity of the method, so that the method
can be widely introduced to many general projects. Thus, it is believed to be
difficult to introduce cognitive mapping to ongoing projects, where quick
decisions of identifying major risks are
required within limited times.
Moreover, the findings of Roberts
and Williams including the detected
loops are extracted from just a single
failure project, and there is no attempt
to use the lessons learned as universal
models to identify major risks of general SI projects.
It is difficult to conclude that legacy
methods offer a model for identifying
the phenomena of SPPs in earlier development phases and for taking countermeasures before the occurrence of
SPPs. The reasons for this are as follows:
1. The existence of some cyclic causal
phenomena was pointed out by
Haihara (2005) and Robertson and
Williams (2006). However, the scope
is restricted to the lower phase, or at
least no attempt to use the phenomena as a tool to identify major risks
was observed.
2. In previous studies applying BNs,
there is a discrepancy between the
model and the actual causal relations
including the cyclic type, because the
studies have focused on noncyclic
relations, even if there are no restrictions such as that in #1.
3. Even when an SI company produced
a model that appeared to closely
reflect actual causal relations, it has
been difficult to prove the sufficient
universality of the model for its
application in general cases because
of the difficulty in obtaining actual
data from other SI companies.
From the above consideration, it is
possible to conclude that no practical
and universal model has yet been
acknowledged.
Therefore, many SI companies, even
when phenomena indicative of future
SPPs occur, can only take countermeasures within the scope of the present.
This is thought to be one reason why
SPPs including the devil spiral still occur.
Also, even after surveying the most
recent edition of the PMBOK ® Guide
(i.e., the fourth edition; Project Management Institute, 2008), we can observe
no new method to address this issue.
With the above background, we
have to develop a model to identify
major risks with the following three features:
1. The scope of the model covers not
only the lower phase, but also the
whole project life cycle, including
the middle and upper phases.
2. The model includes events that have
a strong relation with SPPs and does
not exclude events whose relationship is cyclic.
3. The model is not only proposed, but,
owing to its sufficient universality for
application in general cases, is
proved using data of actual SPPs.
Using the model, we attempt to
identify major risks by systematically
visualizing a bird’s-eye view of relationships among events whose phenomena
have been difficult to understand.
Specifically, we construct a causal
model in the next section and clarify its
universality by investigating the correlation of the model with cases of actual
SPPs in the successive section (“Actual
SPP Cases and Proof of Model”).
Bird’s-Eye-View Model of the
Causes and Effects of SPPs
We decided that it is necessary for
the model to satisfy the following two
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Managing Risk Symptom
conditions for it to have universality
and practicality:
1. The model should be constructed to
include events that have a cyclic relationship and have actually occurred
at least once.
2. The model can be applied to explain
many cases of SPPs.
We will discuss the proof of condition 2 in the next section (“Actual SPP
Cases and Proof of Model”).
To satisfy condition 1, we constructed the following cyclic model based on
events experienced by the author, with
the idea that a group of events with a
cyclic relationship in an earlier phase of
an SPP changes its nature when the
project proceeds to the next phase.
Phenomenon of “Devil Spiral”
In the lower phase of system development, which includes testing, one of
the three problems—namely, defective
quality, resource shortages, and delays,
shown in Figure 2a—often occurs first.
The three problems occur one after
another, so that after this first problem
occurs, the other two problems occur
one after another, and the vicious cycle
continues. This spiral repeats itself, and
the problems eventually spread to the
entire system. This vicious cycle is what
is known as “the devil spiral.”
Middle Development Phase
The event of defective quality shown in
Figure 2a can be fixed earlier and may
not cause a major problem if bugs originate from programming. However, if
the origin of the problems is from the
product design, we should redesign
and remake the product and test it
again. This requires a great deal of time
and causes significant cost overruns. In
many cases, the cause of major problems is insufficient design capacity in
the middle development phase.
One factor that often prevents the
project manager from immediately reporting to the customer and taking
countermeasures against the delays is
customer distrust of the project manager.
54
Defective
quality
Resource
shortages
Delays
(a) Devil spiral in lower development phase
Customer distrust
Insufficent
development
capacity
Negligence by
senior managers
and salespersons
(b) Death spiral in middle development phase
(including detail design)
Customer trust is seemingly
maintained by accepting
exacting demands
Organizational
issues
Cultural difference
between customer
and Seller
Insufficient project
planning refinement
Unreasonable requirements
of customer
Problem of PM's
customer relation
management
(c) Death spiral in upper development phase
(including proposal phase)
Figure 2: A bird’s-eye-view model of the causes and effects of SPPs.
Moreover, even if the insufficient
design capacity or the customer distrust is reported to senior managers
and salespersons, they sometimes do
not react sufficiently. Particularly in a
growing market with continuous good
sales performance, where salespersons
tend to take more initiatives in the
organization than project managers do,
the report is often neglected, because
taking a new order tends to be more
attractive than dealing with events in a
current project in such a market.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
If the negligence by the senior
managers and salespersons continues,
the customer distrust increases and the
customer becomes doubtful about the
successful completion of the project.
The concerned customer requests
the project manager or designers to
submit additional documents such as
more detailed design documents or
progress reports. However, this imposes
an extra workload on the project manager and the designers, and worsens the
problem of insufficient design capacity.
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Because the project manager and
the designers are eager to honestly
respond to customer requests, they
become too busy to ask senior managers
or salespersons for help. As a result, their
negligence continues. In the end, a less
skilled project manager spends his or
her work time tackling problems. This
situation once again increases customer
distrust.
When the project proceeds to the
lower phase through the devil spiral
shown in Figure 2, problems of quality,
resource shortages, and delays arise. In
other words, the spiral described in
Figure 2b is believed to be one of the
causes of the devil spiral in the lower
phase.
Proposal Phase
Customer distrust, illustrated in Figure
2b, rarely occurs when mutual understanding between the customer and
project manager is maintained. In contrast, the customer distrust is likely to
result when there are cultural differences between the customer and the
system integrator due to insufficient
mutual understanding. Cultural difference is defined as a situation where
shared project risks or business values
are lacking (Information-Technology
Promotion Agency Software Engineering Center [IPA SEC], 2008b).
The project manager has a huge regular workload, including coping with
the customer’s various demands and
negotiating the required scope. In addition, in a multicultural environment
where understanding the customer’s
sometimes unreasonable demands is
itself difficult, greater project management capability is needed. If the project
manager’s capability of managing customer relations is not sufficient, the
project scope cannot be fully defined or
negotiated. This results in an unclear
project plan with insufficient refinement of the cost and schedule baselines.
Under the management of the system integrator, in which acquiring
orders takes priority over other issues,
sales departments tend to take the initiative and accept the customer’s exacting demands, which forces the project
manager to draw unreasonable cost
and schedule baselines, and to agree to
a fixed-price contract. This is an organizational issue.
In this case, problems raised by the
project manager are often neglected,
because the project seems to maintain
customer trust by accepting all of the
customer’s demands. However, the fundamental issue of cultural difference
remains unresolved.
This cycle in Figure 2c continues
until the phase proceeds to the middle
development phase. As mentioned
above, if no countermeasures are
applied, this spiral shifts to the cycle in
Figure 2b and ultimately to that in
Figure 2a. This transition sometimes
leads to major problems. In a sense, this
transition from c to a in Figure 2 is the
growth model of the devil spiral, and we
call Figure 2 a bird’s-eye-view model of
the causes and effects of SPPs.
Actual SPP Cases and Proof
of Model
The above causal model is based on
over 20 years of experience in the
author’s field of development management, including large-scale information systems and operating systems.
However, it is not clear whether the
model is universal enough to apply to
the general field projects.
The following discussions are to
verify the universality of the model.
Method of Specifying SPP Cases
We obtained information regarding
troubled projects from a sectional
meeting named Project MIERUKA held
at the Software Engineering Center of
the Information-Technology Promotion Agency in Japan. The attendees (20
persons) of the meeting were from different Japanese IT companies and were
either veterans of the project management of large-scale systems or key persons of the project management office
(PMO), some of whom have led the
recovery of many troubled projects.
Cases of troubled projects were
recorded by the attendees as a series of
facts, including how the projects
became troubled, what countermeasures the project managers took, and
the outcome of the projects (Figure 3
shows a sample case). One hundred
and ninety-three cases were summarized and disclosed (IPA SEC, 2006,
2007, 2008a, 2008b).
Although the cases include projects
with minor problems, we considered
only SPPs from cases with a major
impact. Specifically, we defined the criteria of SPPs to be cases that either
caused the delay of the customer service starting plan, resulting in enormous problems broadcasted by the
news media, or caused a financial loss
of more than ¥100 million. The members who described the cases specified
the SPPs, and all of the final results were
accepted after all attendees of the sectional meeting reviewed them. Through
this process, 107 SPPs were specified by
summarizing all cases as problems
occurring in the upper, middle, and
lower phases.
Method of Analyzing SPP Cases
We investigated the relationship
between the SPP cases of each phase
(upper, middle, and lower) and the
events included in the death spiral of
the causal model.
Cases that are related to the model
are categorized into either of the following two types depending on the
causal relation with the death spiral:
1. Derivative event: a case that is
derived from a death spiral.
2. Accelerating event: a case that accelerates the speed of the death spiral.
As information regarding such relationships is not included in the summary of troubled projects, as shown in
Figure 3, we asked the members who provided the cases of SPPs to investigate the
relationships between the cases and the
death spirals. Final results were accepted
by all of the members after reviewing all
of the results in the sectional meeting,
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Managing Risk Symptom
Case number
1 Urgent Request for Scope Change
After the scope of an online nationwide core enterprise system had been agreed upon by a customer,
the customer required a major scope change. The customer explained that the scope change was
necessary to compete with the new service provided by the rival company, and implicitly told the PM
that there would be no assurance of continuous orders if the requirement was not accepted. The PM
discussed this issue with a senior manager. However, the senior manager said that there were no
extra resources but that thay must fulfill the requirement, because there seemed to be no way of
keeping the business except by getting continuous orders from the customer. The PM tackled the
problem alone, but serious troubles occurred including frequent system shutdowns after cutting off
the system.
Why was the project hastily started?
What should the judgement have been?
The PM judged that it is most important to make
a quick response to the customer's strong
request. Also the PM underestimated the
impact of the requested urgent change to the
project.
The PM should have thought that the project
risks could not be understood and shared, unless
the same precision of estimating the initial
baselines of the project was kept even when the
scope change occurred.
Examples of countermeasures
SI vendor side
1) The PM should negotiate with the customer
regarding ways to reduce the project workload
including the postponement of the existing
delivery plan of some functions or a proposal of
the step-by-step release of the additionally
requested functions.
2) If the project is still risky, the senior manager
of the PM should explain the risk to the
customer or the senior manager of the customer
and negotiate with them himself/herself.
Customer side
If the customer decides to carry out the scope
change even after the risk is explained,
a contingency plan should be prepared
including a quick system recovery scheme.
useful in identifying major risks of SPPs
by clarifying the relationship between
occurring phenomena and the causal
model.
Method for Identifying Major
Risks
Method
From “Results of Analysis of SPP Cases,”
a derived method to identify events that
involves major risks of future SPPs in
ongoing projects, is described as follows:
1. Analyze the relationship between the
causal model and a phenomenon
that occurs in a project, and clarify
whether the event is a derivative phenomenon or an accelerating phenomenon.
2. If the event is either a derivative phenomenon or an accelerating phenomenon, then identify it as an event
that involves major risks of a future
SPP.
3. If there is no relationship, then go
back to step 1 and continue watching
and analyzing events, until the project is completed.
Figure 3: Sample SPP (IPA SEC, 2008a).
so that there can be no room for intentional data operations.
For example, Figure 4b shows the
results of the investigated relationships
between some SPP events and the
death spiral in the middle development
phase. In this diagram, a case of an
urgent request for a scope change (No.
1 case in the middle development
phase, hereafter described as Middle-1)
was identified as an accelerating event,
because it accelerated the seriousness
of the insufficient development capacity in the death spiral. In contrast,
accepting a scope change due to the
project manager’s lack of power in
negotiation (Middle-8) was identified
as a derivative event, since it originated
from the insufficient development
capacity in a similar investigation.
Similar results can be obtained for the
upper and lower development phases
56
by applying the same process. The
investigated results for these two phases
are also shown in Figures 4a and 4c.
Results of Analysis of SPP Cases
The results of analyzing all of the SPP
cases from the upper phase to the lower
phase are shown in Figure 5.
About 81% of the SPPs were related
to the death spiral. About 47% of the
SPPs were derived from the death spiral. It is believed that the occurrence of
problems can be markedly reduced if
one can reduce the speed of the death
spiral.
It is also thought that if the death
spiral is slowed, the growth of adverse
effects caused by about 35% of the SPPs
can be decreased even after the (accelerating) events occurred.
From the above results, the proposed causal model is believed to be
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Practical Examples of Applying
the Method
Given the methodology mentioned
above, it is expected that the probability of successfully avoiding SPPs can be
increased by analyzing the relationship
between the causal model and phenomena that may occur or have actually occurred, and by taking the following
countermeasures:
1. If an event that accelerates the death
spiral can be predicted, try to prevent
the event from occurring. If the event
still occurs, you should not only take
steps to mitigate the effect of the
immediate event, but also take countermeasures to prevent the death spiral from accelerating as a result of the
event (the risk-mitigation process is
shown in Figure 6). For example,
in the middle development phase in
Figure 6, if the problem of the project
manager’s being less honest in
requests for a change in scope is
continuing uncorrected, the senior
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The orderer does not
understand the needs of
the end user (Upper-2)
Prepared resources
cause cost overrun
(Upper-6)
Less initiative taken by
PM to satisfy customer
(Upper-38)
Cultural difference
between customer
and seller
Less profit due to
unachievable budget
(Upper-21)
Problem of PM's
customer relation
management
Organizational
issues
Major rework due to
fabrication starting without
customer approval
(Upper-23)
SI company giving
top priority to increasing
orders (Upper-29)
(a) Upper development phase
Less honesty of PM to
request of scope change
(Middle-11)
Salesperson only
seeking new orders
(Middle-5)
Customer's request
of many documents
(Middle-10)
Urgent request
for scope change
(Middle-1)
Customer distrust
Insufficient
development
capacity
Negligence by
senior managers
and salespersons
Accepting
scope change due to PM's
lack of power in negotiation
(Middle-8)
Boss is not tolerant
of problem escalation
reported by PM
(Middle-9)
(b) Middle development phase
Many bugs in
software package
(Lower-29)
Unable to comply
with delivery time
(Lower-13)
Lack of functionality
of existing system detected
in test (Lower-8)
Leader leaves
project
(Lower-41)
Defective
quality
Delays
Resource
shortages
(Note)
Derivative
event
Delay of fixing
scope (Lower-2)
(c) Lower development phase
Serious cost
overrun of manpower
(Lower-12)
Accelerating
event
Upper-n: number of case in (IPA, 2007)
Middle-n: number of case in (IPA, 2008a)
Lower-n: number of case in (IPA, 2006)
Figure 4: Example of relationships between death spiral and SPP events.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
57
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Managing Risk Symptom
Phase of
troubled
projects
Upper phase
Middle phase
Lower phase
Number 1) Number of
2) Number of
Number of events
of SPPs
derivative events
accelerating events with no relationship
(percentage)
(percentage)
(percentage)
39
39
29
27
5
18
69.2%
12.8%
62.1%
10
17
10
1) Derivative events
46.7%
Total
107
Relationship
[ 1)⫹2) ]
⫽ 81.3%
2
17
1
25.6%
43.6%
34.5%
5.1%
43.6%
3.4%
No relationship
18.7%
2) Accelerating events
34.6%
Figure 5: Analysis of causal relations between SPP cases and the bird’s-eye-view model.
manager should prevent the acceleration of the death spiral by ensuring
that the phenomenon does not cause
customer distrust. A change in the
project manager can be considered
as one of the options.
2. If an event occurs that may be
derived from a death spiral, you
should not only take countermeasures to reduce damage caused by
the event, but also suspect the existence of a death spiral. If the spiral
exists, it is necessary to take additional countermeasures to prevent
its acceleration and to try to terminate it (the risk-mitigation process is
shown in Figure 7). For example, in
the middle development phase
shown in Figure 7, if the phenomenon of the customer requesting
many documents is recognized,
rather than thinking only of immediate countermeasures such as supplying additional resources to documenters, you should also consider
the wider issues of customer distrust, insufficient development
capacity, or negligence by senior
managers and salespersons to
resolve the problem.
Conclusion
We have clarified that approximately
81% of actual SPP events occurring in
cases of trouble projects summarized
58
by the IPA had a cyclic relationship and
were involved in the causal model of
SPPs. From this result, we conclude
that our model can be used for identifying the major risks with more certainty.
As stated previously, it is difficult to
obtain a bird’s-eye view of problems or
to determine where a phenomenon
occurring in a current project originates and what problems it may cause
in future project phases. In contrast, as
shown in Figure 4, it has become easier
to understand the causal chain from
a point before the phenomenon to a
point after the phenomenon for most of
the SPPs summarized by the IPA. In this
sense, we believe that it has become
easier to obtain a bird’s-eye view.
We move forward our future
research as follows:
• We try to apply our method to as many
projects as possible by introducing the
method at our seminars, particularly
for project managers, senior managers, and customers. We also obtain
the SPP occurrence rate (the number
of SPP cases divided by all the cases)
when the method is applied and the
SPP occurrence rate when it is not
applied, and clarify the difference.
• The proposed method is expected to
identify major risks of about 81% of
SPP cases. However, there still
Occurring event
(ex. The PM being less honest
for a change scope)
Customer distrust
Negligence by
senior managers
and salespersons
Insufficient
development
capacity
⬍Process⬎
1) Identify major risks of SPP using the proposed model (check each occurring event to see
whether it accelerates the spiral of the model or not).
2) If the event accelerates the spiral of the model, then not only take a countermeasure for
the immediate event, but also mitigate growth of the spiral.
Figure 6: A process to mitigate impact of accelerating event (an example of the middle development
phase).
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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Information-Technology Promotion
Agency Software Engineering Center
(IPA SEC). (2008a). MIERUKA of IT
project (about middle development
phase) (in Japanese). Minato-ku,
Tokyo, Japan: Nikkei BP.
Occurring event
(ex. Customer's request
of many documents)
Information-Technology Promotion
Agency Software Engineering Center
(IPA SEC). (2008b). MIERUKA of IT
project (summary) (in Japanese).
Minato-ku, Tokyo, Japan: Nikkei BP.
Customer distrust
Negligence by
senior managers
and salespersons
Jensen, F. V., & Nielsen, T. D. (2007).
Bayesian networks and decision graphs.
New York: Springer.
Insufficient
development
capacity
Kappelman, L. A., McKeeman, R., &
Zhang, L. (2006). Early warning signs
of IT project failure: The dominant
dozen. Information Systems
Management, 23(4), 31–36.
⬍Process⬎
1) Identify major risks of SPP using the proposed model (check each occurring event to see
whether it is derived from the model or not).
2) If the event is derived from the model, then suspect the existence of the spiral in the model. If
the spiral exists, then not only take a countermeasure for the immediate event, but also mitigate
growth risks of the spiral.
Figure 7: A process to mitigate impact of the spiral by derivative event (an example of the middle
development phase).
remain cases where it cannot identify major risks (about 19% of SPP
cases are expected not to be identified). For such unidentified major
risks, we intend to improve the precision of the model by using tools
like the cognitive mapping to
acquire findings to improve the
accuracy of the success rate of identifying the major risks.
• Cumulating such improvements, we
move forward to propose standards
for identifying major risks to prevent
SPPs in the future.
Acknowledgments
The authors wish to thank Dr. Seishiro
Tsuruho, former president of IPA SEC;
Dr. Kouichi Matsuda, president of IPA
SEC; the committee members (Project
MIERUKA) of IPA SEC; Dr. Yoshiki
Mitani, a researcher of IPA SEC; Dr.
Tsuneo Furuyama, professor of Tokai
University; and Yasutaka Akabane,
president of DTS Corporation, for their
cooperation with this article. ■
References
Gano, L. (1999). Apollo root cause
analysis. Yakima, WA: Apollonian
Publications.
Gongyi, L., & Yokoyama, S. (2007).
Proposal of updating method for project risk evaluation. Journal of the
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27–33.
Haihara, M. (2005, January). Puromane
shippai-gaku (in Japanese). Minato-ku,
Tokyo, Japan: Nikkei IT Professionals;
pp. 136–141.
Information-Technology Promotion
Agency Software Engineering Center
(IPA SEC). (2006). MIERUKA of IT project (about lower development phase)
(in Japanese). Minato-ku, Tokyo, Japan:
Nikkei BP.
Information-Technology Promotion
Agency Software Engineering Center
(IPA SEC). (2007). MIERUKA (visualization) of IT project (about upper development phase) (in Japanese). Minatoku, Tokyo, Japan: Nikkei BP.
Kepner, H., & Tregoe, B. (1997). The
new rational manager. Princeton, NJ:
Princeton Research Press.
Khodakarami V., Fenton, N., & Neil, M.
(2007). Project scheduling: Improved
approach to incorporate uncertainty
using Bayesian networks. Project
Management Journal, 38(2), 37–49.
McManus, J., & Wood-Harper, T.
(2007, Autumn). Understanding
the sources of information systems
project failure. Management Services,
pp. 38–43.
Project Management Institute. (2004).
A guide to the project management
body of knowledge (PMBOK ® Guide)—
Third edition. Newtown Square, PA:
Author.
Project Management Institute. (2008).
A guide to the project management
body of knowledge (PMBOK ® Guide)—
Fourth edition. Newtown Square, PA:
Author.
Reich, B. H. (2007). Managing knowledge and learning in IT Projects: A
conceptual framework and guidelines
for practice. Project Management
Journal, 38(2), 5–17.
Robertson, S., & Williams, T. (2006).
Understanding project failure: Using
cognitive mapping in an insurance
project. Project Management Journal,
37(4), 55–71.
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Managing Risk Symptom
Robson, M. (1995). Problem solving in
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Taylor, H. (2006). Risk management
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IT projects: Prescription and practice.
Project Management Journal, 37(5),
49–63.
Hiroshi Ohtaka, PMP, is a research fellow of the
Software Engineering Center in the InformationTechnology Promotion Agency in Japan. He
received BE and ME degrees from Waseda
University in Tokyo in 1975 and 1977, respectively. He has over 20 years’ experience
regarding research and development of operating systems or project management of
60
large scale information system integration at
NTT and NTT Data and 4 years’ experience as
an executive officer at DTS Corporation. His current researches are for avoiding serious problem projects and improving dependability of
information systems for social and economic
infrastructures. He is a representative member
of the Project Management Society and also a
member of the Information Processing Society
Japan.
Yoshiaki Fukazawa received BE, ME, and DE
degrees in electrical engineering from Waseda
University in Tokyo in 1976, 1978, and 1986,
respectively. He joined the Department of
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Computer Science of the Sagami Institute of
Technology as a lecturer in 1983 and the
Department of Electrical Engineering at
Waseda University as an associate professor in
1978. He is now a professor in the Department
of Information and Computer Science at
Waseda University. His research interests
include software engineering, especially software reuse of object-oriented programs, agentbased software, and software optimization. He
is a member of the Information Processing
Society Japan, Japan Society for Software
Science and Technology, Institute of
Electronics, Information Communication and
Engineers, Association for Computing
Machinery, and Institute of Electrical and
Electronics Engineers.
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Information Systems Project Manager
Soft Competencies: A Project-Phase
Investigation
Gregory J. Skulmoski, Zayed University, Abu Dhabi, United Arab Emirates
Francis T. Hartman, University of Calgary, Calgary, Alberta, Canada
ABSTRACT ■
This article investigates the soft competencies
by project phase that information systems (IS)
project managers require for project success. The
authors conducted 33 qualitative interviews to
collect data from a sample of 22 IS project managers and business leaders located in Calgary,
Alberta, Canada. The authors identified the key
competencies for each of the IS project phases
(initiation, planning, implementation, and closeout). The competencies were sorted into competency categories: personal attributes (e.g., eye
for details), communication (e.g., effective questioning), leadership (e.g., create an effective
project environment), negotiations (e.g., consensus building), professionalism (e.g., lifelong
learning), social skills (e.g., charisma), and project management competencies (e.g., manage
expectations). Each of the most important competencies is discussed and interconnections
among competencies identified. How this
research can be used by the practitioner and academic communities and the broader implications
of this research are examined.
KEYWORDS: project manager; competence; skill, project life cycle; information
systems
Project Management Journal, Vol. 41, No. 1, 61–80
© 2009 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20146
INTRODUCTION ■
M
ore and more work is conducted in projects led by project managers; we have become a project-oriented society (Gareis &
Huemann, 1999; Huemann, Turner, & Keegan, 2004). Project management is an evolving discipline where its participants are
increasingly interested in the competency of its project managers
(Leybourne, 2007; Loo, 2002; Morris, Jones, & Wearne, 1998). Understanding
competency is important. As Frame (1999, p. 23) noted, “Today’s focus on
competence is driven largely by economics: the fact is it pays to be competent.” Some have related project management competence to project management effectiveness (Crawford, 2005) and project success (J. Jiang, Klein, &
Balloun, 1996; Lechler, 1998; Pinto & Kharbanda, 1995). Project success has
also been related to the project manager’s leadership competencies (Cheng,
Dainty, & Moore, 2005). Crawford (2001) linked project management competence, project performance, and organizational performance. Thus, there
is a strong case for understanding and improving the competencies of project managers. This is especially important in the information technology
and information systems (IS) fields, where repeatable project success can be
elusive (“CHAOS Chronicles,” 2004).
Background
Competence is a widely used but problematic term; it means many different
things to many different people (Crawford, 1998). Competence has also been
used as an umbrella term covering almost everything that might affect performance (Bassellier, Reich, & Benbasat, 2001). There are no generally agreedupon definitions or theories of competence (Seppanen, 2002). Competency
definitions are often poor and contradictory (Robertson, Gibbons, Baron,
MacIver, & Nyfield, 1999) and too restrictive (Rolstadas, 2000). In this research,
we have taken a broad view of competence, as have others (Athey & Orth, 1999;
Boyatzis, 1982; Crawford, 2001; Spencer & Spencer, 1993): it is performancebased and includes knowledge, skills, attitudes, and personal characteristics
that can be improved with experience and/or training. However, it is not our
definition that is critical in this research; rather, it is the definition and understanding of competence of the research participants that is important.
While much of the practitioner literature surrounding project management competence is simplistic, anecdotal, or theoretical, there is a large
body of empirical research that has been focused on the technical skills of
the project manager (Brown, 2000; Gale, 1999; Lei, Hitt, & Bettis, 1996; Pinto
& Kharbanda, 1995; Thamhain, 1991). However, competency research is
shifting—as has the general body of project management research
(Leybourne, 2007)—reflecting a movement away from a technical bias to more
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Information Systems Project Manager Soft Competencies
emphasis on behavioral approaches
(Cheng et al., 2005). For example,
Posner (1987) examined project management skills, traits, and characteristics
and ranked as important: interpersonal
skills; management skills; team-building
skills; leadership skills; coping skills,
such as flexibility and creativity; and
technological skills. Posner concluded
that the challenge for project managers
is to develop interpersonal skills, which
are more important than technical
skills. Interpersonal skills are also commonly referred to as “soft” skills and
discipline-specific technical skills as
“hard” skills. A behavioral approach to
competency includes knowledge, qualifications, skills, and personality characteristics (e.g., motives, traits, and selfconcept; Crawford, 2001). The behavioral
approach may also predict project
management performance based on
measurable competencies and traits
(Cheng et al., 2005). Myers-Briggs leadership styles were correlated with project leadership styles, with INTJ, ENTJ,
and ESTJ being the personality types
containing the most traits that enable
project leadership (Gehring, 2007). The
project manager’s leadership style has
also been related to project type (Muller
& Turner, 2007). The most important
leadership and managerial behaviors of
female project managers have also
been identified (Neuhauser, 2007).
Lechler (1998) argued that soft
competencies contribute more to project success than technical activities like
planning and control. Soft competencies, like personality traits and attitudes, have received little attention.
Traditional project management skills
are entry-level skills but in and of themselves do not lead to superior performance as soft skills do (B. Jiang, 2002;
Turner & Muller, 2003). Personal competence may be a better predictor of a
person’s potential to perform than one’s
functional competence (Cheetham &
Chivers, 1998). Skulmoski, Hartman,
and DeMaere (2000) investigated the
threshold and superior competencies
of both project participants and project
62
managers. Threshold competencies are
those that a person requires to be
regarded as minimally competent;
the person is just competent enough to
be able to keep his job. Another empirical investigation into project manager
competencies was conducted by ElSabaa (2001). The results indicate that
human skills (e.g., personal characteristics, traits, and skills) of the best project
manager have the greatest influence
on project management practices.
Technical skills, on the other hand,
had the least influence. El-Sabaa’s contribution supports Lechler’s (1998)
conclusion that soft or personal skills
contribute greatly to project performance and success—more so than
technical skills like scheduling. Dainty,
Cheng, and Moore (2005) examined the
competencies construction managers
require and concluded that they require
team building, leadership, decision
making, mutuality and approachability,
honesty and integrity, communication,
ability to learn, self-efficacy, and an
external focus. One has to conclude
that competence is important in projects; however, while we have lists of soft
competencies that contribute to project
success, we do not know which competencies by project phase are important
for the project manager. For example, in
which phase does the project manager
most require negotiation skills?
Persuasion? Eye for details? Sensitivity?
Charisma? Strategic perspective? We do
not know. An obvious gap in the literature is the temporal element of competence.
The IS literature is also silent in this
regard. Much of the research in IS in the
last several decades has focused on
identifying the technical skills required
for improving the performance of IS
professionals (Bassellier et al., 2001).
The required software development
skills are detailed in The Guide to the
Software Engineering Body of Knowledge
(Bourque, Dupuis, Abran, Moore, &
Tripp, 1999). The knowledge and skill
requirements have been reviewed from
1970 to 1990 for programmers, systems
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
analysts, and IS managers (Todd,
McKeen, & Gallupe, 1995). The skill and
knowledge requirements of systems
analysts have also been studied (Lee,
Trauth, & Farwell, 1995; Nord & Nord,
1995), cross-cultural comparisons
established (Braguglia, 1994), and their
relationship with the maturity of the
organization studied (Benbasat, Dexter, &
Mantha, 1980). Specific skills of IS staff,
such as business process reengineering
(Lewis & Grimes, 1999), and trustworthiness and credibility (Bashein &
Markus, 1997) are other areas of research
interest. The perceptions of systems analysts’ skills and project failure have also
been investigated (Klein, Jiang, Shelor, &
Balloun, 1999). Research has also been
completed on the perceptions, preferences, age, and gender of systems analysts (Lerouge, Newton, & Blanton,
2005). The most important behavioral
skills of IS project managers were shown
to be interviewing, directing, and managing (J. Jiang & Klein, 1998). Systems
analysts’ orientation to work (user-oriented, technically oriented, and politically oriented) and their perceived skills
have also been studied (J. Jiang, Klein, &
Means, 1999). The skills necessary for
successful outsourced software development projects are another competency research area (Seppanen, 2002).
Understanding and measuring enduser competence in IS has been an
enduring stream of research efforts
(Igbaria & Iivaria, 1995; Igbaria,
Kassicieh, & Silver, 1999; Marcolin,
Compeau, Munro, & Huff, 2000;
Marcolin, Munro, & Campbell, 1997;
Munro, Huff, Marcolin, & Compeau,
1997). Most of the IS competency literature has been focused on the operations
phase after the project has been completed, or on the technical skills of staff
(e.g., programmer). The IS body of
knowledge has not illuminated the
competencies the project manager
requires in each phase of a project. With
this in mind, our research question is:
“What soft competencies are required
of IS project managers by project phase
that lead to successful IS projects?”
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Research Method
We used qualitative interviewing to
answer our research question. We conducted two rounds of interviews, which
included a ranking-style questionnaire
(Appendix A), followed by verification
and generalization interviews with a
different sample. The qualitative interview method that we followed was primarily based on the methodology and
methods described by Mason (1996)
and Rubin and Rubin (1995). We used a
semistructured interview method and
deviated from the standardized questions (see the Results section) when
they needed to be modified for either
clarity or to probe new and emerging
ideas.
The first round of interviews had
four purposes: (1) to introduce the
research and the project leader so as to
build trust, (2) to collect demographic
information and general data about
competency and success, (3) to explain
the survey instrument, and (4) to create
a list of competencies the research participants perceived to be important for
the project manager. We have used the
term “soft” rather than behavioral competencies in this research because the
term “soft” is commonly used in
the practitioner community from which
our sample was derived. In the second
round, we sought to confirm and narrow the results of the first round of
interviews, understand the rationale
of their ranking, further explore emerging trends and ideas, and understand the
limitations of the research and where
the results could be extended. On average, Round 1 interviews lasted between
50 and 70 minutes. Round 2 interviews
lasted between 90 and 130 minutes.
During the pilot testing of the interview questions, the research participants
had some difficulty discussing competence broadly and deeply. They recommended that we use a survey to facilitate
the interview. Acting on this advice, we
developed a survey based on the competencies identified in the first round of
interviews. Then the interviewees were
provided with a list of competencies by
Round 1
Round 2
Generalization
Validation
Total Interviews ⫽ 33 ⫽ 14 ⫹ 15 ⫹ 4
14
15
4
Total Participants ⫽ 21 ⫽ 14 ⫹ 3 ⫹ 4
14
12 ⫹ 3
4
Participation
Table 1: Sample participation.
project phase (initiation, planning,
implementation, and closeout) to rank.
They were given 25 points to use to rank
and weight the competencies within the
list. They could distribute their 25 points
within each category in any way they felt
appropriate. An advantage of this type of
ranking method is that it provides
research participants great flexibility
regarding choice.
Much of the sample (Tables 1 and
2) was generated through referrals also
known as the “snowball technique”
(Mason, 1996). Twenty-one people
were interviewed over two rounds of
interviews for 33 total interviews.
Fourteen people participated in the
first round. From this group, two could
not participate in the second round.
Theoretical saturation began to occur
in round one after 11 interviews. To
ensure saturation occurred, we invited
three new participants to interviews in
the second round. During these two
rounds, one of the participants was
from outside the IS discipline for the
purposes of immediate scrutiny and
generalization of emerging results. A
further four non-IS discipline participants were interviewed at the end of
the data-collection phase to test validity and for generalization purposes. All
of the participants work primarily in
the private sector, and there was an
equal mix between owner and contractor research participants.
Our sample included very senior
people in organizations from Calgary,
Alberta, Canada, with approximately
21 years of experience (Table 2). They
represented primarily senior management, but technical and supervisory
project team members also participated.
They were well qualified, and most had
international experience.
Results
The first-round results were primarily
the solicitation of the definitions of
competence and project success (which
are not detailed here) and the generation of a list of project participant competencies. The key data-collection focus
of the first interview was to develop a
list of competencies important for IS
project success. From the transcripts and
literature, we developed a list of competencies and sorted them into competency categories: personal attributes
(e.g., eye for details), communication (e.g.,
effective questioning), leadership (e.g.,
create an effective project environment), negotiations (e.g., consensus
building), professionalism (e.g., lifelong
learning), social skills (e.g., charisma),
and project management competencies
(e.g., manage expectations). Some competencies easily fit into competency
categories, such as writing skills belonging to communication competencies.
Other competencies were not as
straightforward, such as charisma. We
placed charisma in the social competency category rather than the personal
competency category because charisma
is displayed when in the presence of
others. The project management category includes competencies that are
primarily performed by the project
manager; however, the other categories
contain competencies that may be
required of all participants (e.g., listening skills, tact, compromise, problem
solving, results-oriented, etc.). The
importance of categorization cannot
be overstated when used in large-scale
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Information Systems Project Manager Soft Competencies
Interview Sample Demographics
Total
Snowball Sample
Researcher Selected
13
8
Male
Female
18
3
Role ⫽ Managerial
Role ⫽ Supervisory and Technical
Role ⫽ Technical
12
5
4
Bachelor’s Degree
Graduate Degree
Project Management Professional (PMP)®
Other Professional Qualifications
18
7
4
12
International Experience
Experience
Business (Total sample)
Mean
Median
Standard Deviation
Maximum
Minimum
IT (Four generalization participants are excluded)
Mean
Median
Standard Deviation
Maximum
Minimum
17
Years of
Experience
21.1
22.0
6.47
38
4
9.41
8.00
4.73
21
2
Table 2: Demographics.
surveys, but in this research, the surveys
played only a minor role: to generate
discussion. Thus, these competencies
formed the basis of a discussion to better understand the competencies IS
project managers required throughout
the project life cycle.
The results from the second round
of interviews are drawn primarily from
the interviews. The purpose of the survey was to help guide the discussion
about competencies. With such a small
sample of 19 survey participants (two
interviewees did not fully complete the
surveys), statistical treatments would
not be appropriate due to low confidence, high variability, and sampling
errors (Fowler Jr., 1993), and therefore
were not applied in this research.
Instead, we used the surveys as a point
64
of reference; for example, we asked
questions like: “Which competencies
are most/least important in this phase?”
“Why did you vote this way?” “Why did
your answers change in this phase from
the previous one?” “What has triggered
these changes?” “Why are the competencies ranked consistently across all the
phases? What is going on here?” and so
on. We discussed the survey results with
each of the participants and continued
until we were no longer uncovering new
information about project manager
competency. Theoretical saturation
occurred after 10 to 12 interviews. We
continued interviewing and completed
15 interviews before we stopped with
this sample.
In the next section, we will present
the interview results. Generally, the
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
results of the main IS sample were mirrored by the generalization sample of
four additional non-IS discipline participants. (Nomenclature: 1 or 2 interview—
Participant number—G if participant
was outside of IS and the purpose of
the interview was for generalization
purposes. For example, 2I15: survey
participant number 15 in the second
interview.)
Communication: By Project Phase
The participants believed the most
important communication competencies during initiation are effective
questioning/generating feedback and
listening skills (Table 3). The other
communication competencies were
less important during initiation. The
ability to effectively question and generate feedback is very important in the
early phase of the project because you
are gathering information and the
client may not be able to articulate
what is required. However, this effort is
muted if you do not have the ability to
really listen (2I5, 2I6, 2I8, 2I13) but
enhanced if you understand the business (2I8). During initiation, one tries
to understand the business problem
before thinking about technical solutions (2I13). These skills also help to
expose any hidden agendas sooner
rather than later so that you can effectively address their issues (2I6).
Verbal communication is important
early in the project, because the project
is just being formalized, and more formal forms of communication such as
writing and presentations may not be
appropriate (2I12). However, to get
approval to proceed, you usually require
more formal communication skills like
writing and presentation skills (2I13,
IG21). Thus, the main task in initiation
is getting the project launched—that is,
getting permission. Therefore, those
competencies that help you get permission are important. For example, communication and collaboration skills
help you launch a project (IG19).
Effective questioning/generating
feedback and listening skills continue to
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Initiation Planning Implementation Closeout
Effective Questioning/
Generating Feedback
30
23
15
15
Listening Skills
26
20
14
8
Verbal Skills
14
10
13
15
Open Communication
9
9
24
14
Collaborate
8
12
17
10
Writing Skills
7
12
10
29
Presentation Skills
6
14
7
9
Other
0
0
0
0
100%
100%
100%
100%
Total Votes for This Category
Table 3: Communication competencies by project phase.
be critical in the planning phase. You are
still communicating with the client but
are now more focused on the project
details (2I7). To get an understanding of
the details and to plan the project, one
needs collaboration skills (2I15). To facilitate planning, the team needs to document their plans; therefore, writing skills
are important (2I12, 2I13). To get the
plan approved and move to the implementation phase, one usually needs
solid presentation skills (2I5, 2I12).
The research participants emphasized open communication as a critical
competency during the implementation phase, followed by collaboration.
The logic of this pairing is that you need
someone to openly communicate with.
The purpose and content of communication changes now that the project is
being implemented: there is less need
to sell now that you have approval to
proceed and you are implementing the
project (2I11), instead you are documenting your technical progress (2I8,
2I12). What becomes very important is
open communication and collaborating because now you are communicating more with your team (rather than
the sponsor) to implement the project
and technical plans (2I7). Open communication is facilitated by many means,
such as activity reviews, status reports,
meetings, and one-on-one discussions
(2I13, 2I15). Now that you have many
more people working on the project,
you have to communicate those plans
to them (IG19), and the team needs to
have collaboration skills (2I13, 2I15).
When there is open communication,
the team is more likely to share problems with each other and their supervisor (2I5, 2I12). Some go so far as to say
that project success is directly related to
the degree of open communication in
this phase (2I12). You are more likely to
communicate verbally and less formally when you are in close proximity to
your team because of the efficiency
of this method (2I8, 2I12). Effective
questioning/generating feedback and
listening skills dropped in the ranking
in the implementation phase because
the project manager is now helping the
team implement the plan rather than
developing the plan.
During the closeout phase, the
research participants felt the ability to
write was the most important communication skill, followed by effective
questioning/generating feedback. When
the project shifts to the closeout phase,
the required communication competencies change. Writing skills become the
most important communication skill
because the team is now completing the
project closeout report (2I5). The better
these skills, the better the likelihood that
the sponsor will sign the closeout report
(2I13). This is because you are putting
forward your case that you have completed the project and have delivered
what you have been contracted to deliver (2I15, IG19). Effective questioning and
listening continue to be important
because you are determining if the project met their needs, if they will use the
product, and, for the consultant, if there
is a possibility of future work (2I15).
Leadership: By Project Phase
The central leadership competency
during the initiation phase was the
ability to articulate the business problem (Table 4). Being vision-oriented,
articulating the business problem,
political awareness, agility and tact, and
decisiveness are key competencies
required during the initiation phase. It
is necessary for leaders to articulate the
business problem for project success
(2I15, IG19) by taking the sponsor’s
vague idea and articulating it in such a
way so that you can develop a project
plan (2I12). This vision must be continually communicated to the rest of the
team or you run the risk of scope shift
(2I7). Political awareness/tact is necessary all the way through the project, and
especially during initiation, because
human interaction can be highly political. Political awareness is especially critical in the beginning of the project
because you are attempting to get
approval to proceed (I19). Sometimes
this awareness needs to be about
money and resources (2I7), or even justifying the project and articulating the
business problem (2I13).
Many projects are terminated in the
early stages because of politics; one
needs to know how to get the right support because it is rare that a project has
universal support throughout the
organization. The project manager
needs to know whom to talk to and how
to talk to them to get their support (2I8,
1I12). He needs to understand what will
and will not sell in the prospective
client’s environment (2I12). You need to
be politically savvy not only with the
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Information Systems Project Manager Soft Competencies
Leadership
Initiation Planning Implementation Closeout
Vision-Oriented/Articulate
the Business Problem
27
13
7
5
Political Awareness/
Agility/Tact
16
13
7
12
Decisiveness
15
26
23
12
Create an Effective
Environment
14
13
15
10
Motivate Self and Others
12
7
17
7
Objectivity
7
11
5
14
Share—Information and
Credit
6
7
9
29
Ownership of Tasks
3
7
11
5
Protect the Team
2
3
6
6
Other
0
0
0
0
100%
100%
100%
100%
Total Votes for This Category
Table 4: Leaders’ competencies by project phase.
sponsor, but also with the user groups
(2I15). Finally, the leader begins to
develop an effective environment for
the project in the initiation phase (2I8).
The research participants believed
leadership and decisiveness were the
most important competencies when
the project moves into the planning
phase. When you have approval to proceed with planning, the leader needs to
be decisive and make decisions that
can move the project from a planning
to a performing phase: “You have to
make some fairly big decisions and you
have to have the leadership skills to
push that decision through” (2I5).
While planning, you must rely on your
vision to guide you (2I8) and your team
(2I12) so that you deliver what you said
you would deliver. Political awareness
continues to be important during planning because you are determining what
will be in and out of scope (2I12). Now
that you are bringing in other people to
help you plan the project, encouraging
ownership of tasks begins to be important, which is facilitated by motivation
(2I15). Ownership of tasks becomes
66
steadily more significant when you
move from planning to implementing
the project (IG19).
Leadership and decisiveness continue to be the most essential competencies as the project team moves from the
planning to the implementation phase.
Leadership is very important now
because this is when the masses of people arrive. You need to delegate and align
them to the plan; this is done through
communication (2I13) and by creating
an effective environment (2I15). In IS
projects, problems will arise during
implementation (2I5, 2I12), so the leader
needs to be decisive and move forward
(2I12). When the team is assigned its
work, they need to take ownership for
their tasks and clearly understand what
they are delivering and when it is to be
delivered (2I13). During implementation, you need to motivate your team
because it is easy to lose momentum
for a number of reasons, including:
(1) problems arise; (2) it is easy to lose
focus; (3) team members sometimes are
lured away by other requests; or (4) team
members pass their responsibilities to
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
someone else (2I5). This can lead to
project failure (2I11).
The research participants thought
that there was a shift away from leadership and decisiveness competencies
during implementation, toward sharing
credit with the team during the closeout phase. The leader needs to share
credit for project success with the team
who delivered the results (1I13, 2I5,
2I12, 2I13). The business vision is
something that needs to be kept in
mind at the end of the project too
because that was what triggered the
project. You need to compare the result
with the plan (2I11). Political awareness
of the sponsor’s interests helps to get
signoff on the project (1I13, 2I13). Even
in closeout, you need to protect the
team members and motivate them so
that they can finish the project (2I15).
When you close out a project, you need
to create an effective environment for
the operations phase. You need to
address standards, processes, and culture. This is part of change management (IG19). Finally, not only do team
members need to take ownership for
their tasks, but they also need to take
ownership for their careers (2I6).
Negotiation: By Project Phase
During the initiation phase, the
research participants thought the most
important competencies required from
the negotiation group of competencies
were the ability to sell and persuasiveness, followed by consensus building
(Table 5). At the start of the project, it is
important to be able to sell the project
to the stakeholders (1I12, 2I11), “up and
down the ladder” (2I15): “Anytime I’ve
ever wanted to get a project done,
you’ve got to sell, sell, sell. You’ve got no
choice and you just, if it’s important to
you, you’ve got to go get it done” (IG19).
The selling efforts intensify at the start
of the project, rather than at the end; if
you are selling at the end, you are in a
losing battle. The more buy-in you have
at the beginning, the less selling you
need to do at the end (2I12). One of
the features you are trying to sell is that
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Initiation Planning Implementation Closeout
Persuasiveness/Marketing/
Selling
29
17
13
14
Consensus Building
26
29
21
24
Negotiation/Facilitation Skills
15
15
19
15
Conflict/Dispute Resolution
13
15
21
22
Compromise
11
18
13
13
Mediation/“Umpire” Skills
6
6
13
10
Other: Noncompromise on
the Facts
0
0
0
2
100%
100%
100%
100%
Total Votes for This Category
Table 5: Negotiation competencies by project phase.
the new environment will be better for
the affected stakeholders (2I15). You are
also persuading people during initiation that you are confident you can successfully complete the work (2I13).
Often during initiation you may be
asked to do things you may not be able
to do. You need persuasiveness skills to
get people to back off from some of the
things they may want (2I13). Sometimes you require selling skills to get the
project funded that is facilitated with
political awareness and communication skills (2I6). You also need to sell the
team on the project in order to get them
to participate in the project (1I12).
Thus, there is a tremendous amount of
selling that is required on projects during initiation.
Negotiation skills are important
throughout the project, but especially
at the beginning, because you are trying to get people to agree or to come to
a consensus: “rarely do you get a room
full of people who can agree on the
project specifications” (IG19). While
you may need to negotiate what is in
and out of scope (2I6), you also have to
negotiate a consensus among the
stakeholders who may not see eye-toeye (2I7). Consensus is critical in this
first phase, because without agreement
about what the project is about, you
will never be able to plan it (2I5).
Projects are terminated in this initial
phase if you cannot get consensus, which
is made easier if there is some compromise (2I7). When you have consensus
regarding the plan, the team can more
readily commit to and implement it (2I6).
Selling is important: “I think in the current environment that persuasiveness
and the selling are necessary. Selling is
probably higher than it used to be especially in terms of selling your project, selling what you’re doing, getting sign off
from senior management and other
parts of the organization” (2I16).
When the project moves into the
planning phase, there is less need for
persuasion and selling and more need
for consensus building and compromise according to the research participants’ ranking of the negotiation group
of competencies. Compromise, consensus, negotiation, and persuasion are
interrelated and may not be practical to
separate them (2I13). During planning,
much of the work you are doing is facilitating compromise among the stakeholders because they often have competing
interests or unrealistic demands (2I12,
2I13). Stakeholders usually cannot get
everything they want, so if they are not
ready to compromise, then the project
is doomed for failure (2I11). To get a
successful plan, you need consensus:
all the stakeholders need to look at the
plan and say that they can live with it
(2I13). Then you need to be able to sell
it to the sponsor to get approval
to proceed to implementation (2I5,
2I8). During planning and implementation, you have to be willing to compromise: “You may have sold the sponsor a
certain set of requirements that you
may not be able to exactly deliver upon.
What you do is deliver less here, but
more over there. If you can compromise, then the project can move ahead”
(IG19). Thus, the negotiation group of
competencies is very interrelated.
The main negotiation group of
competencies during implementation is
conflict/dispute resolution, consensus
building, and negotiation/facilitation
skills. Negotiation skills are important
due to the frequency of problems and
disputes in IS projects (1I19, 2I4, 2I5,
2I6, 2I9, 2I11, 2I12, 2I13, 2I15, 2I16). If
you do not properly plan the project up
front and do not have buy-in, you will
have to do more selling and dispute resolution later in the project (2I12). One
of the reasons that disputes arise is that
some of the stakeholders now have a
better understanding of the impacts
(2I7). When problems arise, so does the
need to reduce disputes through consensus, compromise, and negotiation
(2I11, 2I12). If you do not compromise,
then the project will fail (2I11). One
participant recommended win-win
solutions and not compromises
because compromises are not good for
alignment. He only looks for compromise as a last resort and when everything else has failed (2I6). One interview
participant believed that there is no
need for the team to resolve problems
through consensus during implementation and closeout: “If you have a
problem you cannot sit around a table
until everyone is happy with the solution. If you do this, the project will be
late and go over budget. Instead you
need decisive action” (2I6). However,
such an autocratic style of leadership
may not be appropriate for knowledge
workers and IS projects (IG19). Finally,
one of the duties a project manager has
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is to protect the team and to ensure that
the work is evenly or fairly distributed
(2I13).
During implementation you continue to sell the project to the team so it
completes project tasks according to
the schedule (2I5). You are also selling
the project to the end-user community
to get buy-in for the project (1I19).
Selling is especially important during
rollout because you cannot always
make everyone happy (2I7). Persuasion
is still important for different reasons;
you sometimes have to persuade the
team members to do things they do not
want to do, like working overtime
(2I13). Thus, the key negotiation group
of competencies during the implementation phase of the project are those
that help the team manage conflict and
problems.
Again, consensus building and
conflict resolution are critical competencies from the negotiation group of
Personal Attributes
competencies as we move into the final
phase of the project. Dispute resolution
will likely be required at closeout
because there will be some people who
are disappointed in not getting something they thought they would get (2I12,
2I15). This becomes a big issue when it
is related to payment (2I12). If you can
get them to accept the system, then it
helps reduce problems during operations (2I15) and may require that you
need to sell what you have implemented so that the end-user understands
what it will do for them and why it is
good for the organization (IG19). You
need to continue to sell the project to
the stakeholders because you want
them to use the product. There may be
some implementation problems, and it
is too easy for some just to give up
(2I11). When you close out a project,
consensus again is important because
it is common for the stakeholders to
have different opinions about how their
Personal Attributes: By Project Phase
The research participants believed creativity/innovation/resourcefulness and
concern for impact are the most important personal attributes in the initiation
phase (Table 6). IS projects usually
begin in a state of ambiguity: the business problem may not be clear, and the
corresponding IS requirements are
vague (2I5, 2I7). In many organizations,
clients struggle with clarity and turn to
the project manager to bring clarity
to the project (2I7). The project manager and team need to have the competencies to deal with ambiguity (2I5, 2I7).
When you are defining the project, the
team needs to be solutions-oriented
(2I12), realistic, and creative, and use
Initiation
Planning
Implementation
Closeout
Creativity/Innovation/Resourcefulness
20
9
7
5
Concern for Impact
16
8
7
5
Problem Solving/Solution-Oriented
10
12
11
8
Confident/Realistic
10
10
9
11
High-Level Perspective
8
4
2
8
Flexibility/Deal With Ambiguity
8
11
8
4
Judgment
6
5
5
5
Analytical/Eye for Details
5
13
13
5
80/20 Perspective/Pareto Principle
3
14
10
9
Mental Capability
3
2
3
1
Ability to Learn/Self-Evaluation
3
2
2
23
Energetic/Committed/Focused
2
2
6
6
Risk-Aware/Risk Taking
2
2
6
1
Self-Organization/Self-Directed
2
4
5
6
Initiative/Proactive
1
1
3
2
Sense of Humor/Happy
1
1
3
1
Other
0
0
0
0
100%
100%
100%
100%
Total Votes for This Category
Table 6: Personal attributes by project phase.
68
parts of the project have gone (2I5).
Consensus building is an important
skill for the consultant because you will
want to be able to direct prospective
clients to satisfied clients (2I7).
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judgment to develop implementable
requirements while being concerned
for the impact the solutions will have
on the organization (IG19). In this
phase, the team is trying to clarify what
is needed by gathering and processing
information. Problem-solving and analytical skills, being objective, and having a solutions-oriented perspective all
help to articulate the business problem
and identify the project requirements
(2I12, 2I15, IG19). It is critical in this
phase to carefully consider the impact
the project will have on the organization (2I6, 2I11, 2I13, IG19). When the
team is confident, realistic, and concerned for the impact of the project
during initiation, it helps to enhance
their reputation (2I13).
The research participants considered the 80/20 perspective, analytical/eye for details, and problem solving
as the most important personal attributes during the planning phase.
However, the research participants
thought that many of these personal
competencies were also important. The
most important competency was the
80/20 perspective. The 80/20 rule may
be one of the most important skills in
this phase because you can overplan a
project. You need to plan just enough to
successfully progress to the next stage
(2I5). Many people are perfectionists in
planning, which can take a very long
time to complete. It is important that
you do not overplan and get into
“analysis paralysis”; the 80/20 rule is
critical for planners (2I12, 2I13, IG19).
Having a big-picture perspective
needs to be reconciled with having an
eye for details competency; when you
have an eye for details, you get a better
product (2I11, 2I13, IG19). With all of
this, you need to be flexible in the planning phase so that you do not have a
solution in mind; rather, you fully
understand the business problem, and
then develop a solution (2I8, 2I11).
Creativity and dealing with ambiguity
help here. If you can negotiate and compromise on things like functionality,
then you can usually get better solutions
(2I8). Finally, the team needs to be concerned with the impact the project will
have on the organization (IG19).
During the implementation phase,
the most critical personal attributes
were having an eye for details/analytical,
problem solving/solutions-oriented, and
having an 80/20 perspective. Again, the
team will likely face problems during
the implementation of IS projects (1I2,
2I5, 2I8, 2I9, 2I12, 2I13, IG19). These
problems can be dealt with by competent teams. For example, the 80/20 perspective is critical when dealing with
problems during implementation; you
need to focus on the problems that will
cripple the project and the ones that
will yield the largest returns for your
efforts (2I13).
If you strive for a 100% bug-free
implementation, you will never finish
the project; therefore, you need to have
an 80/20 perspective and negotiate
which bugs you will fix and which ones
you will live with when moving to operations (2I8). People who have a positive
attitude seem to do better when there
are problems (1I2). To fix these technical problems, you need to be concerned
with the impact to the technical plan,
and to the organization (IG19). You can
reduce problems during implementation by being proactive (2I12), being
risk-aware (2I5), having an eye for
Professionalism
details (1I4, 2I12), and being creative
(2I12). Thus, the most important personal attributes during project implementation were those that help the
team member deal with problems.
The most important personal
attribute changes in the closeout phase,
with the ability to learn/self-evaluation
being central to success in this phase
according to the research participants.
During closeout, team members need
to evaluate and learn from your performance (2I5, 2I13). One competency
that was discussed by some of the interview participants was the need to be
creative in the closeout phase. This
competency can help you complete
outstanding tasks and solve any
remaining problems in the project
(2I11, 2I13). Sometimes tough issues
remain and will not go away; therefore,
these have to be addressed through creative means to officially close out a
project (2I13).
Professionalism: By Project Phase
The most essential professionalism
competencies in the initiation phase by
the research participants were participate and contribute fully, results-oriented, and professional conduct (Table 7).
It is at the start of the project when you
are building your reputation that professional conduct is most important.
Initiation Planning Implementation Closeout
Participate and Contribute
Fully
23
12
12
9
Results-Oriented
21
25
26
18
Ethical Conduct
21
15
16
24
Technical Skills/Theoretical
Knowledge
16
28
23
8
Pride in Workmanship/
Quality
12
15
19
28
Lifelong Learning
7
5
4
13
Other
0
0
0
0
100%
100%
100%
100%
Total Votes for This Category
Table 7: Professionalism competencies by project phase.
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It is important in all of the phases, but
you really need to establish yourself as
a professional at the start of the project.
Your credibility is at stake (2I13). When
you are trying to sell something at the
beginning, sometimes credentials
mean a lot because they are a proxy for
competency. However, once you start
into the project, credentials do not
mean very much (IG19). Technical skills
are required to develop the technical
plan—particularly analysis, design, and
documentation (1I12).
The research participants believed
technical skills/theoretical knowledge
and results-oriented are the most
important professionalism competencies in the planning phase. During the
planning phase, the team draws heavily
upon their technical skills and theoretical knowledge (2I13). The team needs
to participate fully in the planning
process so that you can capture their
expertise in the plan (2I6, 2I9, GI19). If
you have consensus for the plan, then
team members can more readily
become results-oriented for their
assigned tasks and deliver them to the
appropriate levels of quality (2I11,
IG19). Once you have your team
formed and you are in the planning
process, you need to focus on helping
them be results-oriented because you
need to deliver according to the schedule (2I15).
When you move into the implementation phase, technical skills/theoretical knowledge and results-oriented
continue to be the essential competencies, followed by pride in workmanship/quality/craftsmanship, according
to the research participants. The
results-oriented perspective aligned
with the project schedule effectively
drives the work during implementation
(2I13): “Results orientation is critical
because there’s no credit for initiation,
there’s no credit for planning, there’s
credit for delivery so that’s where you
really need to push that side of things”
(2I6). The technical skills of the project
manager are not as important now as
they are at the start of the project when
70
you are trying to understand the project
and help develop solutions. Instead, the
project manager’s human resource
skills become important. However, the
technical skills of the team are important during implementation because
they are implementing the technical
plans (1I4, 2I15).
Pride in workmanship/quality/
craftsmanship and professional conduct were important to the research
participants for the closeout phase.
When the team has pride in the product
and takes ownership for tasks, “they
may work 96 hours straight to finish the
project because you are under the gun
to finish” (1I7). There has to be people at
the end of the project who take ownership to close out the project because
there are always loose ends to tie up.
This is related to taking pride in your
work (2I6) and attention to detail (1I2).
The project is not complete until the
product is turned over to the organization: “A clean handoff is an important
part of closeout because I want to make
sure that the product integrates well
with the organization before I consider
the project successful and complete. The
handoff is made easier if there is documentation in place and there is consensus by future users that the system is
acceptable” (2I7). You need to demonstrate to the stakeholders that you have
pride in the product you delivered. This
helps with their confidence in using the
system (2I5). There are often lifelong
learning opportunities that occur in the
closeout phase (2I11) but you need to be
professional and avoid pointing fingers
(2I6). If you are a consultant, then during the closeout phase, you need to be
on your best professional behavior
because you want new business to
come to you (2I13).
Project Management Competencies:
By Project Phase
The research participants perceived the
central project management competencies during initiation to be team building, business knowledge, project management skills, aligning the solution
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
with the goals of the organization, and
managing the expectations of the sponsor (Table 8). Issue formulation is critical at the start of the project because
you need to understand the issues
related to the business problem before
you can suggest solutions (2I8). For a
consultant, you may also be looking for
opportunities, which are more evident
when you have business know-how
(2I13). Project management skills are
critical in the early phases of the project
to get the project launched and
planned; however, these skills become
slightly less important once you are
into implementation and closeout,
while human resource management
and problem-solving skills become
more important (2I15). You need to
have a very good idea of the issues you
are trying to address with the project.
Business know-how and problem solving help you understand the issues.
Solutions need to be aligned to support the direction of the organization.
You need to understand the impact the
project will have on the organization or
else you should not initiate the project
(IG19). Very little mentoring or training
occurs at the start of the project
because the team is small and you do
not yet have approval to proceed (2I6).
However, you may need to train your
team or project sponsor if they have
weak project management skills or
project management processes. Finally,
in this phase you need to manage
expectations because this is where you
promise what will be delivered. It is
during this phase that projects start
going wrong—not at the end of the
project. In the next phase, you put
those promises into your plan (2I13).
Project management skills and
knowledge and managing expectations
were crucial competencies in the planning phase according to the research
participants. Now that you are planning
the project, expectations management
is critical, because you need to deliver
what you have agreed to do (2I13).
Delegation becomes important because
this is where duties and roles are
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Project Management Competencies
Initiation
Planning
Implementation
Closeout
19
16
15
14
12
11
7
3
3
0
100%
11
14
30
6
19
9
3
2
6
0
100%
16
16
19
4
16
7
4
6
12
0
100%
8
15
16
7
25
6
6
9
8
0
100%
Team Building/Delegation
Business Know-how/Change Management
Project Management Skills and Knowledge
Alignment
Manage Expectations
Issue Formulation
Scout
Training/Mentoring
Human Resource Management
Other
Total Votes for This Category (25)
Table 8: Project management competencies by project phase.
assigned to the team; the project manager cannot do it all. If you do not define
roles clearly, then people drift (2I11).
Now that you have approval to proceed,
you are planning the project, managing
expectations, delegating tasks, and
meeting deadlines. You need to manage
the expectations of your stakeholders
during planning because they may not
fully understand the technical complexities of the project and may be asking for
something extremely difficult. You need
to make sure they understand what they
will and will not get in the project (2I11).
To do this effectively, you need project
management skills (1I2, IG19). During
planning, you improve your understanding of the project and you may
uncover issues that need to be
addressed that you were unaware of.
You need to be able to formulate the
issues in order to address them effectively (2I13). Finally, one interview
participant commented that if you are
hiring the right people, you will not
have to do any training (2I15).
During the implementation phase,
the research participants believed that
project management skills and knowledge were the most important competencies, followed by team building,
business know-how, and managing
expectations. The project manager uses
project management skills (e.g., scheduling) to monitor and control the project. Business know-how is important
because you are delivering IS solutions
to business problems; when you understand the business, you can deliver better solutions. We saw earlier that it is in
this phase more than any other phase
that problems occur (1I2, 1I12, 2I4, 2I5,
2I7, 2I8, 2I9, 2I12, 2I13, 2I14, 2I16,
IG19). When people have a scouting
perspective, they identify problems
early, allowing more time to solve or
avoid the problem (2I11). Some common problems in this phase are that
you discover that you cannot deliver the
solution as exactly as planned (2I6) and
may be running out of time (2I8). Here,
you need to communicate these problems to your sponsor so as to manage
expectations (2I6, 2I8). As the sponsor
and team get a better understanding of
the project, they sometimes make recommendations to increase the scope of
the project. Change management skills
help to control these requests for
changes (2I8, 2I11).
Human resource management
becomes very important during project
implementation (2I13, IG19), because
at the start of the project, you seem to
have ample time and resources, but
near the end of the project, there seems
to be a shortage of time and resources
(2I8). You also need to make sure that
your team is working on the project
(2I11) and empower them to complete
their tasks (2I9). Personality issues (e.g.,
severe breakdown in communications)
tend to arise during the latter phases of
the project, so having the competencies
to deal with personality issues is critical. These personality issues arise for
many reasons, such as encroaching on
another’s boundaries, inflated egos,
vague rules of engagement, and different approaches to communication
(1I7). An important part of human
resource management is making sure
people are not getting burned out (2I6).
This can easily occur when people
become more schedule-driven later in
the project (1I2, 1I12).
The leading skill required from the
project management competency area
during project closeout, according to the
research participants, is to manage
expectations. Now that you are closing
out the project, expectations management becomes very important again
because you need to get people to agree
that the project you delivered was what
was agreed to, rather than what they
might have wanted today (2I7, 2I11,
2I13). During closeout, you need to complete the final team-building activity by
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Information Systems Project Manager Soft Competencies
Social Skills
Initiation Planning Implementation Closeout
Ability to Get Along/Team
Player
21
26
31
15
Respectful/Punctual/Polite
19
17
11
12
Charisma
18
11
6
12
Truthful/Honest
16
15
24
26
Trust/Trusting
14
14
14
21
Empathy
8
12
10
9
Sensitivity
4
5
4
5
Other
0
0
0
0
100%
100%
100%
100%
Total Votes for This
Category (25)
Table 9: Social skills by project phase.
celebrating project completion (IG19). If
you are a consultant, you are looking for
your next project opportunities such as a
phase 2 project (2I11).
Social Skills: By Project Phase
The research participants considered
the ability to get along and being a team
player as the most important social
competencies in the initiation phase
(Table 9). It is not surprising that ability
to get along was ranked as the most
important competency, because IS
project work is teamwork. If you are
respectful, punctual, polite, trusting,
and honest, then you will more likely be
able to get along with your other team
members (2I15). These competencies
are important right at the start of the
project, because it is in the early stages
of the project that you begin to develop
the project culture (2I15). Trust is
important; if you are truthful and honest with the client at the start of the
project when you are trying to sell your
services, he or she will trust you (IG19):
“Truth and honesty and trust; that’s
something you should be learning in
kindergarten, and by the time you’re an
adult if you can’t convey that sense of
trust or truth then you’re not going to
be an effective leader, you’re not going
to be an effective team player” (I26).
72
Finally, charisma is important at the
start of the project because you are
working to get approval to proceed (2I5,
2I8, 2I13). Charisma is the ability to
charm, lead, and build confidence in
people. Creating and persuading
in projects are made easier when you
have charisma (2I13). Selling and
charisma are even more important
when you do not have universal support for the project (2I8). Charisma
helps you establish a presence and
make an impact in the project early on
(2I7). It helps you get people’s attention
about a potential project (2I12).
Again, the ability to get along and
being a team player were the most
important competencies for the planning phase. The key reason for the high
ranking of ability to get along is planning, which is more effective if it is done
with others; therefore, the ability to get
along is important during the planning
phase. This is enhanced by being punctual, which shows respect for your
team; it provides an important norm for
your team (2I5). During planning, you
need to be sensitive to any cultural or
organizational differences in the organization (2I13). Charisma may not be as
important in planning as it is in other
phases, because planning is more of a
technical task.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
The research participants continued
to perceive the ability to get along was
the most important social competency
for the implementation phase, followed
by being truthful and honest, and trust
and trusting. Ability to get along continues to be extremely important because
you are working with others to implement the project (2I13). This is made
easier if there is respect among the
team (2I13). Charisma can facilitate team
interaction (IG19). You want your team to
be truthful because it is in this phase
you are likely to experience the most
problems and you do not want them to
hide problems (2I5). You need more
empathy now because people realize
that they are not getting everything they
desired. In fact, they may not be getting
some of their problems solved, and you
need to show empathy at this point.
You also need to reassure users that
everything will be okay (1I15) and manage their expectations, or else they will
be very disappointed even if the project
is successful (2I12).
The ability to get along during
closeout is now superseded by being
truthful, honest, trusting, and trustworthy, according to the research participants. Being honest so that you are
trustworthy is important so the client
believes that you have delivered
what you have agreed to deliver.
Otherwise, you may have difficulty
getting signoff (2I13). Sponsors respect
a project manager who is truthful about
the degree of project success (IG19).
Competencies By Phase: All Phases
Some interview participants thought
that certain competencies were required in all project phases. First, project
participants need to act professionally
throughout the project. This includes
having the required technical and project management skills, taking ownership for your tasks, providing a quality
product by taking pride in your work,
being self-directed and organized, and
participating fully (2I6, 2I7, 2I8, 2I11). In
addition to acting professionally, team
members need to be trustworthy
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throughout the project (2I6, 2I7, 2I13)
and if a team member is not trustworthy, then that person should be
removed from the project (2I7).
IS projects are most often completed by teams; therefore, the ability to get
along with others is a necessary competency throughout the project (2I6): “You
will fail every time if you are not a team
player” (2I11). Because you are working
with others to complete a project, all
team members need effective communication skills, and in particular verbal
(2I6), generating feedback, and listening skills (2I11). They need to document
what they plan to do and what they
have done (2I7). One of the purposes of
communication is that you need to
manage the expectations of the sponsor
and the team throughout the project.
Sponsors sometimes have unrealistic
expectations of what can be done, and
technical team members sometimes
want to implement perfect or cuttingedge solutions (2I7, 2I8).
An important characteristic of IS
projects is that the team can expect
problems throughout the project (1I2,
1I12, 2I4, 2I5, 2I7, 2I8, 2I9, 2I12, 2I13,
2I14, 2I16, IG19). Teams need to understand the business problem and have an
understanding of the business to provide effective IS solutions (2I7). They
also have to be solutions-oriented (2I8),
innovative and creative, (2I6), and realistic when problem solving and developing potential solutions (2I11). When
problem solving, the team needs negotiation skills to help them get consensus
regarding the solutions (2I8). The team
also needs to have a scouting mentality
to identify problems sooner rather than
later; this simple behavior can save
projects (2I7). Finally, a desirable quality to have is for team members to be
charismatic throughout the project
(2I11, 2I13). These competencies were
thought to be important throughout the
project, regardless of project phase.
Conclusion
When one examines the results, one can
identify the most important competencies
Phase
Initiation
Planning
Implementation
Closeout
Competency
Votes (%)
Effective Questioning/Generating Feedback
Persuasiveness/Marketing/Selling
Listening Skills
Vision-Oriented/Articulate the Business Problem
Consensus Building
Project Management Skills and Knowledge
Consensus Building
Technical Skills/Theoretical Knowledge
Ability to Get Along/Team Player
30
28
26
26
26
29
29
28
31
Results-Oriented
Truthful/Honest
Writing Skills
Share—Information and Credit
Pride in Workmanship/Quality
Truthful/Honest
28
24
29
29
28
27
Table 10: Project manager competencies by project phase.
in each project phase (Table 10). In each
phase, different competencies are
emphasized, because in each phase,
different tasks need to be completed.
For example, effective questioning and
listening skills are critical at the start of
a project in order to understand the
business problem and preliminary
requirements. These skills’ importance
diminishes slightly in both the planning
and implementation phases. Their
importance declines again in the closeout phase in favor of writing skills
because the team is involved with writing the closeout report and completing
technical documentation. Similar patterns are also seen in the other competency groups. Thus, the important finding
in this research is that as the required
tasks change in each phase, so do the
required competencies. Until now, the
extant research treated the required
project manager competencies as
static rather than dynamic. Accepting
that project manager competencies
are dynamic has important implications for both the practitioner and
academic.
Contribution of Research
These results should be of interest to
the practitioner community. Project
manager candidates can use this
research to highlight their soft competencies in their résumés. Upon selfreflection, should they be lacking in any
area, they can then strive to develop
these critical competencies. We better
understand which competencies are
important for project managers to have
and when they need to apply those
competencies. This can help to recruit,
select, and develop project managers.
For example, human resource professionals can use these results to assess
project manager candidates during
the résumé screening, interview, and
reference-checking processes. Human
resource professionals can assess
résumés to see if these competencies
are evident in a candidate’s CV. During
the interview process, the interviewer
can ask behavioral-type questions to
more fully understand the nature and
degree of a candidate’s soft competencies and whether the candidate understands that different competencies are
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Information Systems Project Manager Soft Competencies
required for different phases. Finally,
the competence of the candidate can
be established by speaking with their
references. Once in the IT project manager position, he or she can strive to use
the necessary soft competencies in
each phase of the project.
Generalization of Results
We used the generalization rubric of
“applicable to most projects, most
of the time.” The consensus of the interview participants was that these results
apply to most IS projects most of the
time (2I9, 2I12, 2I13). The results are
particularly applicable to large or complex projects (2I16, 2I19) but less applicable to simple or small projects (2I11,
2I16):
I would say that my answers apply
to 80% of IT projects. They will not
apply to 20% of IT projects that are
small and simple projects. (2I11)
Most of my experience has been
with large IS projects that affect the
entire organization (e.g., ERP projects). My answers would be most
appropriate for those types of projects. I am not sure if my answers
would be applicable to very specific
types of IT projects like implementing robotics into a manufacturing
company. (IG19)
Thus, the interview participants felt
strongly that these results are applicable to most IS projects most of the time.
The interviewees also believed that
these results were widely applicable
to most projects outside the IS discipline most of the time (2I9). The wide
applicability of these results may be due
to the very nature of managing projects:
“My answers also apply to most other
projects because project management is
process based. You may find an exceptional project where these skills may not
apply but this will be rare” (2I15). And,
“The processes may vary with different
projects, but the skills required are the
same; it is just a matter of scaling. These
results can be applied to most projects
most of the time” (2I15).
74
The interview participants specifically believed the results could be
applicable to construction (IG19),
home building (2I5), engineering (2I8,
2I9), oil and gas (2I11), mergers and
acquisitions (IG19), knowledge work
(2I6), and publishing projects (IG21).
One interview participant could not see
how his answers would not have wide
applicability:
My answers also apply to non-IS
projects like engineering, construction, and manufacturing. It’s hard to
see why not. Let’s pretend I was a
construction project manager; how
would these answers not apply? I
mean communication is important.
Leadership is important. (2I13)
One interview participant even
thought his answers were applicable to
personal relationships:
My answers are widely applicable;
they even apply to personal relationships. I’m a little hard pressed to
come up with exceptions to my
answers; even with my dog I have to
use these skills: I have to be honest
with the little fellow. (IG21)
According to the IS and non-IS samples, these competency results are
believed to be widely generalizable, with
the exception of very small and/or simple IS projects. They are also thought to
be applicable to extremely large or
megaprojects if they are managed as a
program of smaller projects. These competency results may not be as applicable
to the public sector (1I7). This is due to
other environmental factors such as
political party sensitivity and the need
to be reelected, which may affect projects and the required competencies.
Limitations
This research, like most other research,
is subject to limitations regarding literature review, sample, and results. The
literature review only covered extant literature in English; we did not review
non-English publications. We used a
purposive sample in the interview
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
phase, rather than a random sample.
The key limitation with purposive samples is that they may not represent the
entire population, which lessens the
ability to generalize the results to
the wider population. All the participants are located in Calgary, Alberta,
Canada, so we need to be careful about
generalizing this research outside of this
Western context. We recognized these
limitations at the onset of this research
and caution the reader that although
the research participants believed the
results were widely generalizable based
on their international experience, this
has not been tested. The advantage of
purposive sampling is that the sample
can be chosen to collect different perspectives on the research topic.
Finally, the data have some limitations. The competency survey rankings
during the interview phase are to be
viewed as an approximate ranking of
competencies because the sample was
too small to apply statistical means to
improve the confidence of the rankings.
The purpose of the survey was to stimulate a conversation about competence
with the interview participants. It
allowed us to ask questions like: “Why
did you rank ownership of tasks so
highly?” Therefore, the ranking survey
results are not the principal output of
the competency results; rather, the discussions that were triggered by completing the survey should be seen as the
principal output of the interviews.
Thus, the literature review, sample,
method, and results have some limitations. These were considered and
determined to be minimal. They did
not affect the outcome of this research:
we more fully understand the project
manager soft competencies by project
phase for IS projects.
Further Research
This research may be seen as a platform
for other research. For example, this
study could be replicated to verify and
extend the results. These studies could
also focus on IS samples from outside
Canada to determine the extent the
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results can be generalized. As well, nonIS samples might be used, such as construction, engineering, and the like, to
verify both the competency and classification results. Currently, a research
project is underway with an IS sample
from Abu Dhabi, United Arab Emirates,
and the preliminary results (Skulmoski &
Hartman, 2008) are very close to these
Canadian results. While no detailed
cross-study analysis has yet to be completed, the key differences between
these two surveys appear to be that
when there is a multicultural workforce, one needs multicultural competencies to understand and respect the
other culture, and the ability to clearly
communicate (e.g., without idioms).
Additionally, the cultural dimensions
(as per Hofstede, 2001) of competence
might also be investigated.
The competency ranking survey
might be given to a larger, random sample to determine the ranking and
importance of the competencies both
within and outside the IS community.
The interview participants had some
insights into the nature of competencies regarding whether they are innate
or acquired. This area of investigation
was out of scope in this research, and
we did not pursue it deeply. However,
understanding which competencies
can be readily developed and which
ones are innate may provide direction
for those interested in developing
project participant soft competencies.
Therefore, further research into identifying innate and developable competencies may be fruitful.
Researching the temporal dimension of competence might also be
extended to other project management
functions (e.g., technical team member
and sponsor). Researchers might also
investigate, by project phase, the necessary soft competencies of a technical
team. The temporal nature of competence could also be examined by project type. However, the consensus of the
research participants thought that their
answers were applicable to most projects
most of the time, and not as applicable
to very small projects. Also, these
research results are generally applicable
to mission-critical projects, but the
research participants thought that
more work needed to be completed in
these unique types of projects.
Examining the temporal dimension of
projects may also open other areas of
research (e.g., does the phase of a project influence how we manage risk,
quality, or communications?) Thus, this
research has value to both the practitioner and the researcher. ■
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Gregory J. Skulmoski, PhD, MBA, BEd, CITP,
FBCS, teaches project management in the
College of Information Technology at Zayed
University in Abu Dhabi, United Arab Emirates.
His research and consulting interests include
team member competence, organizational competence, quality and performance management,
project selection, risk management, and project
management sustainability. He has contributed
to many PMI standards and was one of the core
team members of the 2000 PMBOK® Guide. He is
a referee and editorial board member for several
journals in the project management and information technology disciplines.
Francis T. Hartman, PhD, MSc, FEIC, FICE, FCAE,
PEng, CEng, is a professor of project and program managment in the Schulich School of
Engineering, and an adjunct professor in the
Haskayne School of Business, at the University
of Calgary in Calgary, Canada. He has over 30
years of experience in industry and government projects and programs valued at over $80
billion. He is the author or editor of four books
and has published over 200 papers and technical articles over the past 15 years. During that
period, he has held positions as director of the
Project Management Program at the University
of Calgary as well as the prestigious NSERC/
SSHRC/Industry Research Chair in Project
Management. He serves on the editorial boards
of several journals in project management and
engineering.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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Information Systems Project Manager Soft Competencies
APPENDIX: Survey Instrument
From the list, vote for the competency
categories you believe are most critical
for project success in each project
phase. The first column is the list of
competencies. The second column is
reserved for your opinion regarding the
competencies that are most important
for IS project success during the initiation phase. The third column is for the
planning phase, the fourth column for
the implementation phase, and the fifth
Competencies Important for IS Project
Success by Project Phase
column for the project closeout phase.
You have 25 votes with which to vote for
the most critical competencies for project success in the initiation phase,
another 25 votes for the planning
phase, and so forth.
Initiation
Phase
Planning
Phase
Implementation
Phase
Closeout
Phase
25
25
25
25
25
25
25
25
25
25
25
25
COMMUNICATION
Collaborate
Effective Questioning/Generating Feedback
Listening Skills
Open Communication
Presentation Skills
Writing Skills
Verbal Skills
Other
Total Votes for This Category (25)
LEADERSHIP
Create an Effective Environment
Decisiveness
Motivate Self and Others
Objectivity
Ownership of Tasks
Political Awareness/Agility/Tact
Protect the Team
Share—Information and Credit
Vision-Oriented/Articulate the Business Problem
Other
Total Votes for This Category (25)
NEGOTIATION SKILLS
Compromise
Conflict/Dispute Resolution
Consensus Building
Mediation/“Umpire” Skills
Negotiation/Facilitation Skills
Persuasiveness/Marketing/Selling
Other
Total Votes for This Category (25)
78
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PERSONAL ATTRIBUTES
80/20 Perspective/Pareto Principle
Ability to Learn/Self-Evaluation
Analytical/Eye for Details
Concern for Impact
Confident/Realistic
Creativity/Innovation/Resourcefulness
Flexibility/Deal With Ambiguity
High-Level Perspective
Judgment
Mental Capability
Energetic/Committed/Focused
Initiative/Proactive
Problem Solving/Solution-Oriented
Risk-Aware/Risk Taking
Sense of Humor/Happy
Self-Organization/Self-Directed
Other
Total Votes for This Category (25)
25
25
25
25
25
25
25
25
25
25
25
25
PROFESSIONALISM
Lifelong Learning
Ownership of Tasks/Results-Oriented
Pride in Workmanship/Quality
Ethical Conduct
Participate and Contribute Fully
Results-Oriented
Technical Skills/Theoretical Knowledge
Other
Total Votes for This Category (25)
SOCIAL SKILLS
Ability to Get Along/Team Player
Charisma
Empathy
Respectful/Punctual/Polite
Sensitivity
Trust/Trusting
Truthful/Honest
Other
Total Votes for This Category (25)
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Information Systems Project Manager Soft Competencies
GENERAL/PROJECT MANAGEMENT SKILLS
Alignment
Business Know-how/Change Management
Human Resource Management
Issue Formulation
Manage Expectations
Project Management Skills and Knowledge
Scout
Team Building/Delegation
Training/Mentoring
Other
Total Votes for This Category (25)
80
25
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
25
25
25
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Categorizing Risks in Seven Large
Projects—Which Risks Do the
Projects Focus On?
Hans Petter Krane, Norwegian University of Science and Technology, Trondheim, Norway
Asbjørn Rolstadås, Norwegian University of Science and Technology, Trondheim, Norway
Nils O. E. Olsson, Norwegian University of Science and Technology, Trondheim, Norway
ABSTRACT ■
INTRODUCTION ■
In a hierarchy of project objectives, strategic
objectives will often be principally different
from the operational ones. Operational objectives concern the project outputs/results, and
strategic objectives concern the project goal
and purpose. In this study, risks are categorized as risks to operational, long-term, or shortterm strategic objectives, and, by studying a
dataset of some 1,450 risk elements that make
up the risk registers of seven large projects, we
examine how operational and strategic risks
are distributed in the projects. The study
strongly indicates that risks to a project’s
strategic objectives rarely occur in the project’s
risk registers, though project success and failure stories indicate their importance.
here are numerous publications that show that projects often fail to
meet their cost or schedule target or provide intended benefits, and
there are numerous solutions to solve that problem. One of the early
approaches to improve this was to focus on success factors. Pinto and
Slevin (1987) were among the first to publish success factors. Their ten success factors include project mission, management support, schedule/plan,
client consultation, client acceptance, personnel, technical aspects, monitoring, communication, and feedback. A couple of years later, Duffy and
Thomas (1989) published a study giving the main causes of unsuccessful
projects. The most important were part-time project management, inappropriate organization, inadequate definition of scope, poor planning and
change order control, and risk not identified. It is interesting to note that the
study by Duffy and Thomas has risk as an important factor, whereas Pinto
and Slevin do not mention this in their list. Recent thinking focuses significantly on risk (Maytorena, Winch, Freeman, & Kiely, 2007; Miller & Lessard,
2001; Moynihan, 1997; Simister, 2004). Risk management is considered by
many to be the essence of project management.
Hetland, Sandberg, and Torsøy (2005) have studied 44 capital projects
and suggest a new understanding of project-specific uncertainties and offer
a proactive communication strategy that will outwit attackers’ attempts to
escalate cost deviations. A recent study of mega-oil sand projects in Canada
(Jergeas, 2008) points in the same direction as it highlights overly optimistic
original cost estimates and schedules. Some practitioners have started to
look at volatility as an expression of uncertainty in projects (Costa Lima &
Suslick, 2006).
Today, risk is considered to be a major factor influencing project success,
and Project Risk Management is an important activity in any capital project.
Project Risk Management is also one of the nine Knowledge Areas in
the Project Management Institute’s (PMI’s) standard A Guide to the Project
Management Body of Knowledge (PMBOK® Guide; 4th ed.; 2008a). It is also
part of most maturity models including PMI’s Organizational Project
Management Maturity Model (OPM3®; 2008b). In 2009, PMI published the
Practice Standard for Project Risk Management. Several authors have published Project Risk Management approaches (Chapman & Ward, 2003; Gareis,
2005; Hartman, 2000; Kerzner, 2006; Morris & Pinto, 2004). The classical
approach to Project Risk Management normally contains four to six steps.
The underpinning idea is to identify risk factors, evaluate and analyze them,
and finally try to manage them. The analysis may be purely qualitative or
quite sophisticated quantitatively.
KEYWORDS: risk management; uncertainties; strategic and operational risks; risk categories
This student paper was presented at the PMI
Global Congress 2009—EMEA, held 18–20 May
2009, in Amsterdam, Netherlands.
Project Management Journal, Vol. 41, No. 1, 81–86
© 2010 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20154
T
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Categorizing Risks in Seven Large Projects
Some authors—for example, Westney
and Dodson (2006)—use the term
strategic risk. Focusing on negative risk,
they regard strategic risk as the prospective impact on earnings or capital from
adverse business decisions, improper
implementation of decisions, or lack of
responsiveness to industry changes. It
is beyond the control of the project
team but may be controlled by the project owner or sponsor. It is a function of
the compatibility of an organization’s
strategic goals, the business strategies
that are developed, the resources that
are deployed, and the quality of the
implementation.
In addition to operational and strategic risk, Rolstadås and Johansen (2008)
define contextual risk. This is risk that is
connected to circumstances outside of
the project that may influence the scope
of work and the performance of the
organization. Examples are competing
projects, change in ownership and management, legislation and governmental
directives, media attention, extreme
market conditions, and accidents.
Contextual risk may be difficult to
predict and may have a significant
impact. Taleb (2007) calls such risk
“black swans.” The black swan logic
makes “what you do not know” more
important than “what you do know.”
It may seem trivial to state that both
in the academic and practical discipline
of management there has, for a long
time, been an acceptance that uncertainty plays a major role—not all factors
of importance may be regarded as well
defined or static. When speaking of project management in particular, the focus
has shifted—from a view of the ideal
well-managed project having fixed and
firm plans based on a thorough analysis
of needs and detailed specifications of
the solution, to a greater attention to the
impact of uncertainty.
If it is accepted that uncertainty
may have a substantial impact on projects and how they achieve their goals,
then risk/uncertainty management
becomes an important issue. And it
becomes important to find out more on
82
how Project Risk Management contributes to achieving objectives. A case
study has therefore been undertaken to
see how Project Risk Management can
address project objectives and to see
whether strategic risks are addressed at
all or not.
In this article, we will do the following:
• Define the research questions, discuss
some of the terms commonly used,
establish the terminology that will be
used in this article, and then discuss
the classification of risks.
• Describe the method and present the
projects that have been studied.
• Present results of the study. Relate the
results to some common hypotheses
from the literature and discuss their
implications.
• Finally, provide some conclusions and
point out necessary further work.
Research Questions
In this article, a simple categorization of
risks/uncertainties is used, where a distinction is made among operational,
short-term, and long-term strategic
risks—being risks to project objectives
at different levels. Within such a categorization, many authors have claimed
that the uncertainty is at its largest in
early project stages and that the strategic risks are of greater importance
in the earlier phases of the projects, and
the operational risks in the later phases
(Christensen & Kreiner, 1991; Jaafari,
2001; Samset, 1998). However, Miller
and Lessard have given indications
(2000) that in large engineering projects
that were studied, there was also typically a greater impact from strategic
risks in longer periods of the later stages
of the projects.
So what is the case with the projects
that may be observed today? Do we find
that the projects are struggling with
strategic risks even in the late implementation phase, or are only operational risks found in this phase? Are
there other factors influencing the
dominance of operational risks than
just the project phase? And how are the
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
different risk categories handled with
regard to risk reduction, closing, number of actions, etc. No studies have
been found on how Project Risk
Management is performed with regard
to these aspects. Therefore the authors
conducted an investigation on how risk
management was performed in seven
projects in a large oil and gas company.
The purpose of this study was to find
out which risks were actually being
handled/managed by means of their
risk registers, and how these risks were
assessed and treated. For each of the
projects (through interviews), information was collected on the assessments
of the project owners, the project teams
and other key stakeholders of the projects, and the means in which the evolving risk scenarios of the projects were
assessed.
More precisely the data collected in
this study has been used to provide
answers to the following questions:
Q1: When risks are identified, how
are they then distributed among the
risk categories?
Q2: Are there any significant differences between the projects regarding
this (for example, differences related
to project size, the project phase, or
other project characteristics)?
A Brief Discussion of Terms
Risk and Uncertainty
A risk is defined herein as “an uncertain
event or condition that, if it occurs, has
a positive or negative effect on a project’s objectives” (PMI, 2008a, p. 373). It
must be emphasized that a risk is characterized by having both a consequence and a probability.
An uncertainty is defined as “the
difference between the amount of
information required to perform the
task and the amount of information
already possessed by the organization”
(Galbraith, 1977, pp. 36–37).
Therefore, a risk is categorized as
having an impact, while an uncertainty
may or may not have a known impact.
An uncertainty is therefore the most
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comprehensive term. Both terms do
here include both positive and negative
possibilities.
To investigate closer the relation
between risk and uncertainty for projects, there is a need to look at the use of
the terms risk and uncertainty seen
from two perspectives:
1. The term used for risk/uncertainty as
a situation:
This approach is based on a view of
the entire situation—where it will be
considered to have more or less of
uncertainty. This is closely related to
the concept of environmental uncertainty, as described by Karlsen
(2001). Karlsen’s environmental
uncertainty must be regarded as usually forming/making up a substantial
part of (what is here defined as) the
uncertainty of the given situation.
This will be a relevant approach to a
situation where there is a significant
difference between the knowledge
available and the knowledge needed
for making necessary decisions in the
actual situation.
2. The term used for a specific risk/
uncertainty element:
This approach, which might be considered as more pragmatic, selects the
factors/elements most likely to cause
risk (in this case, risk to the objectives
of a project) and defines these as the
main risks (of the project). This
approach is highly relevant in situations with many possible outcomes,
and where some of those outcomes
will have a major impact on the project or the results of the project. In
such a situation it should (in some
way) be possible to make assessments of the probable impact of
those outcomes.
Depending upon the actual situation, these two approaches may be
more or less suitable for preparing a
basis for successful risk/uncertainty
management in a given situation.
There is a need for common terms.
Logically there is a need for a term that
can include both risk and uncertainty
management. One could either select
one of the two (that is, risk or uncertainty) to also act as a superior term, or
one could try to avoid confusion by
introducing a new term as the superior
one. We choose not to introduce a new
term for this, but rather use one that
already exists. Of the two terms, uncertainty would—with the specific definitions given here—be the most logical
choice for a term spanning the two elements. This will be because the term
risk—with its direct link to the effects
from risks—cannot include uncertainties, where the effects may be unknown.
We will therefore here use uncertainty
as the common term for risks and
uncertainties. Therefore, when the term
risk is used in this article, it will have the
meaning of a risk element that is considered to have an impact.
Risk Categories
It is possible to construct an abundance
of different risk categorizations—and it
has been done. The obvious, pragmatic
approach is to sort the risks in groups
based on common features. For example, risks are sorted by organizational
areas, technical areas, or contract areas.
So-called risk-breakdown structures
(Hillson, 2004; PMI, 2008a) may also be
used as frameworks for such classifications. Our assertion to the majority of
such classifications is the following:
The selection of categories often seems
to be based on a tradition (e.g., the
organization or professional area) of
how to organize one’s world. Or they
may have a more operational purpose
for the risk reduction in a given project,
as discussed by Hillson (2004, pp. 130 ff).
Therefore it will implicitly be organized
according to what in our close surroundings we regard the risk to be a risk
against. Or it will be organized according
to who or which area is the most affected. However, for our study, this pragmatic view of risks should be replaced by a
more generic view, requesting a more
generic categorization.
The purpose of this study is to investigate the contribution from Project Risk
Management to the achievement of
project objectives. Therefore, there is a
need for a risk classification starting out
from the objectives of the project, including the higher/more superior objectives
for the project organization (Hillson,
2004). Hence, the categorization proposed here will be based on the levels in
a hierarchy of management objectives,
as shown by, for instance, Mintzberg
(1994). As stated previously, categories
should directly relate to the level of
objectives they affect.
Establishing Operational Criteria
for the Risk Categories
In order to relate the risk categories to
the levels of project objectives, the
three categories are defined as:
1. Operational Risks—Risks related to
operational objectives of the project.
This means risks constricted to the
direct results from the project: its
products.
2. Short-Term Strategic Risks—Risks
related to short-term strategic objectives of the project. The project owner
will have a set of objectives related to
his use of the project results. The
short-term strategic risks are the risks
related to those objectives, or the risks
for first-order effects of the project—
that is, risks for the effects that should
be achieved for the target group or
users.
3. Long-Term Strategic Risks—Risks
related to the long-term strategic
objectives of the project. This means
those risks related to the project
purpose—the long-term objective that
the project is meant to contribute to.
Operational Criteria Used to Evaluate
Whether a Given Risk Element Is
Long-Term Strategic, Short-Term
Strategic, or Operational
1. The risk element is an operational risk
when the risk element is a risk to the
project output (which should be
specified in a project definition/
delivery contract)—that is, a risk to
the project’s ability to deliver.
2. The risk element is a short-term
strategic risk when the risk element is
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Categorizing Risks in Seven Large Projects
a risk to a functionality not clearly
specified in project definition/delivery contract, but necessary in order
to achieve the effects of the project
(restricted to the first-order effects
for the target group/users).
3. The risk element is a long-term
strategic risk when the risk element is
a risk to achieve the long-term objectives of the project but not a risk of
the two categories mentioned previously (i.e., operational or short-term
strategic risk).
The Study
Method and Subject of Study
For this study, a combined approach
was chosen, using both qualitative and
quantitative data-collection methods
(Creswell, 2003; Flyvbjerg, 2006). An
introductory interview for each project
provided insight into their differences
and similarities. Data were collected
from the risk registers in the projects
over a period of six months. Follow-up
interviews were conducted with selected persons in order to give better
insight into specific aspects brought to
light through the data analysis.
The main data source for this article
was the reports with data extracted
from the project risk registers. This has
been supplemented (to some extent)
with information from the interviews.
The projects studied may all be characterized as engineering and construction
projects, and they are all large projects
(i.e., projects with total costs of 100 million euros [M€] or more).
The projects studied are in different
project phases, varying from one that
has not yet made all decisions on conceptual choices to one that is close to
takeover and start-up of production.
For the study, all identified risks
were categorized according to their
possible impact to the project’s or the
organization’s objective levels: operational, short-term strategic, and longterm strategic. A set of criteria was
established, making it possible to categorize the risks based on the information in the risk register.
84
Results
The study was based on an extract of all
the seven projects’ risk elements, both
open and closed, as they occurred in
their risk registers at the end of
September 2008. Based on the descriptions given in these registers and the
criteria for the categories given in previous sections of this article, the risk elements were categorized. A summary of
the results is presented in Table 1.
Table 1 is based on a total of 1,313
risk elements registered in the seven
projects from April 2005 until September
2008. In all projects, the operational risks
are dominating the totals. This is particularly true in Projects B, D, and G
(96–98%). In all projects, the long-term
strategic risks are making up a negligible
fraction (0–2%, overall ⬍ 0.5%).
Discussion
There are a number of possible
explanations as to why so few strategic
risks are identified, and in some projects almost none:
• Strategic risks do not occur at this
stage.
• Long-term strategic risks are not the
projects’ responsibility.
• Strategic risks are mainly the asset
owner’s responsibility.
Strategic Risks Do Not Occur at This
Stage
Many issues have been resolved at earlier project stages. Most of the strategic
decisions have already been made, and
since many of the projects are developed as fast as possible, this has been
done quite recently. Or it may be
because the project context may simply
have a low complexity.
The results seem to correlate with
the assumption that “strategic risks are
basically identified and dealt with at
earlier stages of the project.” If this
assumption were true, then there
would be mainly operational risks
remaining to handle at later project
stages.
Long-Term Strategic Risks Are Not the
Projects’ Responsibility
Strategic risks may not have been perceived as the project’s responsibility.
This may either have been communicated more or less explicitly by the project management (and/or risk management) function, or it may have been a
“generally accepted view” in the project. For some projects, ensuring project
efficiency, not effectiveness, may be the
main responsibility (Samset, 2003).
This is a matter regarding the focus of
the project team.
But if such risks should occur, they
should be identified as part of the
Project Risk Management process. This
should be done, even if it will not eventually be the project team’s responsibility to take all actions necessary to close
the risk.
Type of Risk
Project
Operational
Short-Term Strategic
Long-Term Strategic
A
81%
19%
0%
B
98%
2%
0%
C
89%
9%
2%
D
96%
4%
0%
E
86%
14%
0%
F
88%
11%
1%
G
97%
3%
0%
Sum
90%
10%
0%
Table 1: Distribution of the 1,313 risks among risk categories.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
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Strategic Risks Are Mainly the Asset
Owner’s Responsibility
Many consider strategic risks to be mainly
a management concern (Mintzberg,
1994), and that the project team should
not be responsible for managing/
handling such risks. However, the project
team’s unique position and usually deep
involvement in the project-development
process will often enable them to identify strategic risks earlier and more reliably
than most other actors.
Regarding the time aspect of risk
identification/management of the projects, time has not yet permitted any
deeper studies of the time aspect of risk
identification/management—that is, to
study in detail different categories of
risks with regard to the project phase
when they are identified. For example,
further studies are needed to determine
whether more strategic risks really are
identified earlier in the projects. This
will be studied in further detail later on
in this study, and will be the main
theme of a subsequent article.
Strategic Risks May Have a Serious
Impact on the Project
There is much experience and many
examples indicating that strategic risks
may have a significant impact on the
success of projects (Miller & Lessard,
2000; Rolstadås & Johansen, 2008;
Westney & Dodson, 2006). Strategic
risks may mean important changes
to project assumptions, introduce new
project assumptions, or introduce new
or changed conditions.
The results indicate that projects
should emphasize the identification of
more short- and long-term strategic
risks at all stages of projects. It may
be assumed that further handling/
management of some or all strategic
risks should not be the responsibility of
the project team (Cooke-Davies, 2002).
If so, the project must have efficient
procedures for identifying and forwarding these risk elements to the appropriate entity. This also implies that identifying these risks may be more important to project success than the identification of many operational risks.
Conclusions
For this study, all identified risks were
categorized according to their possible
impact to the project’s objectives. An
operational set of criteria was established, making it possible to categorize
the risks based on the information
in the risk register.
In a study of 1,313 risk elements
identified in seven large projects, operational risks were making up a dominating part of the total number (90%).
Some possible reasons for this have been
discussed, and will be further explored in
forthcoming studies. Though strategic
risks are not commonly regarded as the
project’s responsibility to manage, it is
in the asset owner’s interest that projects contribute in identifying strategic
risks. This is brought about by the fact
that such risks may present major
threats or opportunities for project success.
Further Work
Further studies based on the data gathered in this study should be focused on
how risks of different categories are
handled in the different projects studied, and at different stages of the projects. Further studies will also be made
regarding the involvement of actors
outside the project team, in particular
representatives from the project owner
(and company management).
Other investigations should be
made on the relation to project (budget)
size—a “number of risks per million
spent” factor may give some insight
into the risk management in the different projects. Number and type of risks
identified should also be related to the
duration of the projects.
All projects in the organization studied here are performed according to a
structured decision process model. In
this model, the projects at certain welldefined “decision points” are evaluated
to determine whether they should be
further developed or whether all further
development should be stopped. A further study focusing on number and type
of risks identified, relating this to the
project’s decision points, is also a candidate for further studies. ■
References
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Hans Petter Krane holds an MS in roads planning (civil engineering) and is currently a PhD
student at the Norwegian University of Science
and Technology (NTNU). His MS is from the
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Department of Civil and Transport Engineering
at NTNU. He has more than 20 years’ experience
in Norwegian railway management, within a
variety of areas, such as rail infrastructure planning, train operations planning, and systems
development, among others. His academic interests include quality management, performance
management, and organizational and cultural
issues with a large impact on project results.
Asbjørn Rolstadås is a professor of production
and quality engineering and vice dean for
research at the Faculty of Engineering Science
and Technology at the Norwegian University of
Science and Technology. He is a former member
of PMI Standards MAG and president of the
Norwegian Academy of Technical Sciences. He
has worked with project management for more
than 25 years and has made several studies on
project performance in large projects. He has
been managing two large national projects
involving cooperation between industry and
academia, and has extensive experience in consulting and training in industry. His main fields
are project performance and risk management.
He is president of the Norwegian Academy of
Technical Sciences. He serves on the editorial
board of a number of journals (including Project
Management Journal and the International
Journal of Project Management) and is the
founding editor of the International Journal of
Production Planning and Control. He is past
president of the International Federation for
Information Processing.
Nils O.E. Olsson is a senior research scientist,
specializing in project and performance management. He is also an adjunct professor in
project management at the Norwegian
University of Science and Technology. He has a
PhD from NTNU and an MSc from Chalmers in
Sweden. Recently, his main research focus has
been on project ownership and project flexibility. He has extensive experience as a consultant, research scientist, and manager. The consulting experience includes Ernst & Young
Management Consulting and Det Norske Veritas
(DNV). He has also coordinated major research
programs.
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Cover to Cover
Kenneth H. Rose, PMP, Book Review Editor
Managing Risk in Projects
by David Hillson
T
hose curious about the state of project
own biases, but collectively groups exert influrisk management will find Hillson’s
ence, too. Hillson helps the reader understand
compact treatment of the topic
the influence of attitudes in the risk manageinformative. He reaffirms the disciment process. He notes that practice in overall
pline’s foundation, reviews current “best pracproject risk management is weak, particularly
tice,” and identifies new developments. Yet, he
in risk response execution. Analysis to action is
pulls no punches that organizations struggle
often the missing link; people do not follow
with risk management. He describes the facthrough, which tends to reflect attitudes
tors he believes are necessary to be successful.
toward the value of risk management.
Hillson notes that risk is rooted in the conHillson laments the tendency to separate
cept of uncertainty. His explanation gives the
risk management and project management. He
reader a way of understanding the sources and
contends risk management needs to be “builtcontext of risk from an individual viewpoint,
in not bolt-on,” and woven into the complete
broadened to the global view. He expresses the
project life cycle to realize full benefits. Because
relationship of uncertainty to risk as “uncerenergy for risk management tends to wane after
tainty that matters.” Yet, he is quick to note Gower Publishing Limited, 2009, ISBN: identification, project managers need to sus9780566088674, paperback, 126 pp., tain appropriate levels of energy end-to-end in
that uncertainties are not equal. The challenge
$47.45 Member, $49.95 Nonmember.
is to identify what is important to the project
order to do risk management well, especially to
and design appropriate responses. This is
activate risk responses effectively.
becoming harder to do, as project managers are falling behind in
He goes on to address integration beyond the project,
their ability to grasp and apply knowledge timely in the “new world
between the project and the organization’s vision. This relationorder” of information and change.
ship creates a hierarchy of risks that require attention, or enterRisk management has a special, if underappreciated, imporprise risk management. It needs to be coordinated actively, not
tance to project management because projects are particularly
just done in isolated areas. From the project perspective, the
risky. Common characteristics, such as complexity, assumptions,
natural interface upward is in the program structure that has its
and constraints, introduce uncertainty into projects. But with no
own Program Risk Management.
lack of theory for doing project management, projects continue
To make risk management work, Hillson offers critical sucto fail at significant rates. Hillson maintains that a major reason
cess factors that have two characteristics: their presence prois unforeseen events—risks.
motes effectiveness and their absence hinders it. He identifies
Risks, both threat and opportunity, apply whenever there are
factors internal and external to the project. For example, a userobjectives. In general, there are project-level risks and overall
friendly risk management process tends to support success for
project risks. The latter is greater than the sum of individual risks
which he offers pragmatic suggestions for implementing.
on projects. Project managers represent the project view while
Similar treatments are there for factors external to the project,
sponsors must interface with the overall project risk arising from
such as management support.
outside the project.
Hillson gets at four primary motives for doing risk manageHillson provides a pragmatic approach to risk management
ment and notes that only one really counts. Organizations do risk
within formal processes identified typically in standards and
management reluctantly because of a contract or regulation. It’s
methodologies. There are good descriptions of how to go about
done out of a fear of failure or blame. It is done to copy someone
preparing a risk management plan. For example, he addresses
else. The one motive that counts, however, is demonstrating benhow to separate risks from issues and problems using a threeefits, and he describes a good approach to marshalling them.
part structured risk statement to drive clarity.
Whether you are developing your own competency or trying
On the people side, he emphasizes being aware of the attito jump-start better risk management in your organization, this
tudes toward risk management. Not only do individuals carry their
book is a solid resource.
Project Management Journal, Vol. 41, No. 1, 87
© 2010 by the Project Management Institute
Published online in Wiley InterScience (www.interscience.wiley.com)
DOI: 10.1002/pmj.20156
Reviewed by Paul E. Shaltry, PMP, a partner in Catalyst Management
Consulting LLC, Worthington, OH, USA, and member of the PMI Standards
Program Member Advisory Group.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
87
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The 77 Deadly Sins of Project Management
published by Management Concepts
G
luttony, greed, sloth . . . . The seven
to the traditional seven, it is by no empirical
deadly sins of Western tradition are
evidence exhaustive or complete. But it gives
familiar to many. But the path to
readers a lot to chew on. The usual suspects
project perdition is paved by more
are all here: bureaucracy, consensus, misthan a simple seven sins. Management
management, tunnel vision, and others. The
Concepts, a publisher specializing in project
collection also offers insights on things not
management literature, confronts this issue
usually considered and broadens avenues of
head on in The 77 Deadly Sins of Project
improvement toward project success.
Management.
The first sin, acquiescence, is a good
The book comprises 77 chapters, each
example. Project teams must get something
addressing an individual, potentially disrupdone. They can’t fritter away their time with
tive aspect of project performance—a “sin”—
nattering nit-picking over every trivial detail.
that can hinder or prevent project success.
Neither can they ignore those details in the
Many of the vignettes are written in the first
name of schedule, loyalty, or not creating
person, which in larger texts tends to grate on
offense. An unresolved issue may give the
the reader’s eye by focusing more on the
appearance of progress today and sink
author than the substance of the text. Here,
the project ship tomorrow. Acquiescence can
first-person accounts are helpful because Management Concepts, 2009, ISBN:
be difficult to identify and resolve. Readers
9781567262469, paperback, 357 pp.,
they give a sense of personal involvement
are warned to watch out for too-quick agree$27.55 Member, $29.00 Nonmember.
and present matters in a way that relates
ment in meetings followed by furtive, private
more directly to the reader’s own experience.
conversations outside the meeting.
The text is carefully crafted to encourage candor among
The chapter on hope provides an interesting view of a term
authors by affording a degree of anonymity. Authors are identiwith often-noble connotations. Hope is not rational, but projfied generally in an appendix, but not individually in each chapects are highly rational environments. The author describes
ter. They are, therefore, able to describe the sins of projects for
“hope creep” that can lead to misrepresentation in reports or
the benefit of readers without fear of retributions when those
unrealistic expectations in plans. Hope can be difficult to recogsins may arise from experience in their own organizations.
nize, as it may be cloaked in healthy optimism. To keep destrucEach chapter follows a common format. A brief description
tive hope at bay, review project plans, validate requirements,
of the sin is followed by a more extensive description that proand analyze risk.
vides context. This is followed by a specific example. Authors
Whining is one of the more emotional sins that can affect
then provide danger signs to watch for, potential solutions if the
project performance. It is defined as “complaining in a peevish,
sin is encountered, and, perhaps most useful, a number of tips
self-pitying way.” While complaining is not necessarily bad,
for avoiding the sin or mitigating its effect on the project.
whining is different. It is not productive and can lead to the
Sins appear in alphabetic order. This arrangement is probaother sins of blame, avoidance, and powerlessness. The author
bly as good as any. Attempting a logical grouping of sins might be
suggests a team charter that emphasizes commitment to each
a severe challenge and yield only arguable results, as sins are
other, and focusing on team-based recognition and rewards as a
probably interrelated in complex ways. A subset of the 77 will
means of overcoming the sin of whining.
likely be relevant to each reader. Readers should scan the entire
This is not the first book of its kind, but it may be the best.
set and then select the sins that seem to best fit their situation.
Its organized approach, breadth of content, and application
Two helpful assessment tools appear at the end of the text to
focus make it a tool for use, while others just tell stories.
assist readers in doing this.
Everyone will take something away from this book . . . someThe content is comprehensive. While the number of sins—
thing that may make their projects just a little better.
77—was probably selected for alliterative effect and its relation
Project Management Journal, Vol. 41, No. 1, 88
© 2010 by the Project Management Institute
Published online in Wiley InterScience (www.interscience.wiley.com)
DOI: 10.1002/pmj.20157
88
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Reviewed by Kenneth H. Rose, PMP, Director, Peninsula Center for Project
Management in Hampton, VA, USA, and winner of the 2006 PMI David I. Cleland
Project Management Literature Award.
Cover to Cover
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How to Save a Failing Project: Chaos to Control
by Ralph R. Young, Steven M. Brady, and Dennis C. Nagle Jr.
The values of a plan are presented clearot everyone is a certified project
ly and precisely: to provide direction, instill
manager who has led many
confidence, enable corrective action, and
varied projects and has deep expecontrol deviations. The authors explain that a
riences from which to draw. Many
plan enables fact-based rather than emoproject managers are general managers,
tional management. The process for develsupervisors, or subject matter experts who
oping a project plan (and eventually a project
have been handed a project to be performed
schedule), including the various breakdown
along with their “day job.” If you are part of this
structures and organizational and process
group, this book is for you. It could save you a
models, are contrasted with the value of each
lot of pain and fast-track the development of
discussed. A unique idea of “inch-stones” is
your professional skills as a project manager.
presented to enable smaller, more manageFailing to address the basics of planning,
able parts to be detailed and planned.
execution, and control can lead to chaos. To
Through all of this, the team is not forshow this, the authors begin their exploration
gotten. Coaching is provided on choosing
with a list of why projects fail and a list of
team members based on role and expertise
indicators that a project is out of control.
Management Concepts, 2009,
as well as skills and ability. Readers are urged
These are countered by a list of the traits of a ISBN: 9781567262391, paperback,
to allow cost to be a secondary or tertiary facsuccessful project and several critical prac- 234 pages, $42.75 Member,
tor. Team development must involve sharing
tices and processes for successful projects. As $45.00 Nonmember.
a clear vision for the project and making the
it turns out, “the characteristics of successful
stakeholders’ expectations known.
projects are components of the strategy that can be used to save
The remaining text covers execution. The information prea failing project.” Such an overview suggests valuable questions
sented is valuable after the fact for a troubled project. It could
such as, Are we getting estimates or commitments from our softalso keep the reader’s project from needing to be saved in the
ware developers? and Are our metrics predictive or retrospective?
first place. Readers are reminded that there are many sources of
Project awareness—being alert to the true state of a project and
project expectation, demanding a central role for communicadetermining ahead of time to respond appropriately—is a key
tions. Documenting truly good requirements is the first and most
trait of a successful project manager.
effective step to initiating sound communications and controlReading such information, the question quickly arises, Is my
ling scope creep. The authors note that quality must be planned
project, or are any of the projects in my portfolio, out of control?
in from the point of initiation. The project manager must impleA second chapter addresses concern for measuring the health of
ment effective processes to surface and correct issues early and
our projects, looking at the right metrics, and using metrics that
often, being a champion for quality and “providing a thorough
lead to sound and intentional decision making. It also deals with
approach to quality.”
defining success in terms that match that of key stakeholders.
The book concludes with useful tools, such as a list of the
How then, does one begin to go about saving a failing projcharacteristics of a strong project manager and a one-page chart
ect? How is control regained? The answer is through analysis
outlining the project-saving process.
and making necessary corrections. Success is most assured
Imagine what expert skills at spotting and rescuing a trouthrough clearly documented and communicated project goals,
bled project could bring to your project portfolio. Industry data
objectives, and requirements. If any of these are missing, state
declares that many projects need saving. This book provides a
the authors, stop execution and go back to planning. Analyze the
comprehensive foundation for project managers and organizaproject culture. Create an environment that encourages proactional leaders to hone their skills so that they can confidently
tive commitment to peer review, management involvement, and
step into the gap and efficiently and effectively recover the value
defect prevention.
they are expected to deliver.
N
Project Management Journal, Vol. 41, No. 1, 89
© 2010 by the Project Management Institute
Published online in Wiley InterScience (www.interscience.wiley.com)
DOI: 10.1002/pmj.20158
Reviewed by David J. Marsh, PMP, Senior Project Manager, Covance Central
Laboratory Services, Indianapolis, IN, USA.
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
89
Cover to Cover
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Page 90
Governance Frameworks for Public Project
Development and Estimation
by Ole Jonny Klakegg, Terry Williams, and Ole Morten Magnussen
P
rojects are a problem. New and betdomains. They quickly discovered that, in the
ter ways continually appear, but old
United Kingdom, governance frameworks fall
and nagging failures do not disapinto two camps: the Ministry of Defense
pear. Perhaps the traditional focus
(MoD) and everyone else. So they studied the
on methods is inadequate to the improveMoD Acquisition Operating Framework and
ment challenge. Ole Jonny Klakegg, Terry
the Office of Government Commerce (OGC)
Williams, and Ole Morten Magnussen invesGateway Process used by, in this case, the OGC.
tigate a different approach in Governance
In Norway, the authors describe the Quality
Frameworks for Public Project Development
Assurance Scheme used by the Ministry of
and Estimation.
Finance.
The authors suggest that what happens
The format for discussion is friendly to
very early in the project is far more influential
readers. The authors address four aspects of
on project results than currently assumed.
the framework: the development process, govTheir hypothesis in this research report is
ernance principles, structure, and details
that the “governance framework” has a signifaddressing cost and time. Within each aspect,
icant effect on cost estimation and schedule
they present a brief introduction, discuss the
planning, which, in turn, significantly affects Project Management Institute, 2009,
three frameworks, and summarize. This makes
ISBN: 9781933890784, paperback,
project success.
for very easy reading and analysis of what
274 pp., $31.95 Member, $39.95
While the term “governance” has seen
could be rather convoluted concepts. The
Nonmember.
much light of late, it is still not universally or
authors close the chapter with two sections
even well understood. To set some common
that discuss recent developments and comground, the authors define a governance framework as an organpare frameworks in a practical view.
ized structure established as authoritative within the institution,
Chapter 6 follows logically with case studies that show how
comprising processes and rules established to ensure projects
the frameworks apply in the real world. Readers will see what the
meet their purpose. This definition didn’t just fall out of the sky. It
various frameworks mean in practice and, more usefully, what
arises from 60 pages of literature review and discussion presented
the frameworks could mean to them. The authors tie things
in the report’s first two chapters, “Introduction” and “Governance.”
together at the end of this chapter with a summary and crossReaders should not skip over these chapters in an attempt to “cut to
analysis of the cases.
the chase.” A good understanding of this foundation information
The book finishes with an overview theoretical analysis that
will serve well in understanding and making use of what follows.
links theory to practice. Again, a good understanding of
Chapters 3 and 4 are brief, but also essential. The authors did
Chapters 1 and 2 will aid readers in extracting benefit here.
not seek a result that would be all things to all people. They
A table lists 32 aspects of theory and how they influence the
entered a well-bounded effort intended to gather and analyze
frameworks on a strong-moderate-weak scale. This table, along
data on general similarities and differences between governance
with the details of the report, could be used in designing a govframeworks. They chose public-sector projects in the United
ernance framework to meet individual needs.
Kingdom and Norway for good reasons. Readers should underThis report does not offer cookbook solutions to project
stand the authors’ methodology (Chapter 3) and framework
problems. It presents a new view as to how governance framecharacteristics (Chapter 4) so that they are on the same path to
works may affect project planning and, downstream, project
the same goal as the authors. Otherwise, readers may find disapresults. It is a useful and needed contribution to project manpointment in assumed and unmet expectations.
agement research and a possible foundation for improved projThe real substance of the report begins in Chapter 5. The
ect management implementation.
authors describe in detail governance frameworks in three different
Project Management Journal, Vol. 41, No. 1, 90
© 2010 by the Project Management Institute
Published online in Wiley InterScience (www.interscience.wiley.com)
DOI: 10.1002/pmj.20155
90
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
Reviewed by Kenneth H. Rose, PMP, Director, Peninsula Center for Project
Management in Hampton, VA, USA, and winner of the 2006 PMI David I. Cleland
Project Management Literature Award.
Spring 2010
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Calendar of Events
MARCH 2010
3 March
Sixth Sense Buy-In. Cincinnati, Ohio,
USA. Full-day workshop taught by Tres
Roeder and co-sponsored by the PMI
Southwest Ohio Chapter. For project
managers and others who facilitate
change, gaining real buy-in from team
members can be challenging. Getting
team members emotionally committed
and mentally focused on the initiative is
critical to project success. This seminar
will help develop these buy-in skills and
give participants the key “take away”
skills. For more information, please visit
www.roederconsulting.com/BuyInOver
view.php.
8–11 March
SeminarsWorld 2010. Anaheim, California, USA. For more information on
PMI SeminarsWorld® or to register, go
to www.pmi.org/CareerDevelopment/
Pages/SeminarsWorld.aspx.
10 March
Sixth Sense Buy In. San Francisco,
California, USA. PMI San Francisco Bay
Area Chapter presents Tres Roeder,
PMP, on “Charting Your Course to
Project Success: A Sixth Sense Seminar
Series (First of Six Courses).” Project
leaders can use specific skills to ensure
meaningful interactions with team
members. Meaningful interactions are
the foundation for developing team
buy-in. This seminar will help develop
these skills and give participants the key
“take away” skills to bring to your projects tomorrow. For more information,
please visit Registration URL: www.pmisfbac.org/cde.cfm?event⫽291088.
15–17 March
2010 Biopharmaceutical Project
Management Conference. Philadelphia,
Pennsylvania, USA. “Innovative Project
Management to Succeed in the Dynamic
Biopharmaceutical Environment.” For
more information, please e-mail chair@
pharmasig.org or firstvicechair@phar
masig.org.
22 March
5th Annual Professional Development
Day. Colonie, New York, USA. The PMI
Upstate New York Chapter presents its 5th
Annual Professional Development Day,
featuring a presentation by Neal Whitten,
PMP, called “Let’s Talk—Leadership,
Accountability and Professional Maturity.”
For more information, please visit
www.pmi-uny.org.
22–25 March
SeminarsWorld 2010. Naples, Florida,
USA. For more information on PMI
SeminarsWorld® or to register, go to
www.pmi.org/CareerDevelopment/Pages/
SeminarsWorld.aspx.
25–29 March
PMI Seminar @ Sea V. Galveston, Texas,
USA. “Navigating the Seas of Change!”
is the theme of the 5th Annual Seminar
at Sea. The 4-day Carnival Cruise, cosponsored by the PMI Clearlake/
Galveston (PMI-CLG) Chapter and the
PMI Houston Chapter, is destined for a
fun-filled day in sunny Cozumel,
Mexico. During your 4 days at sea, the
chapters and the PMI Oil, Gas,
Petrochemical Specific Interest Group
will offer attendees a full schedule of
engaging speakers. www.pmiclg.org/
upload/SAS_V_Cruise_2010.pdf.
APRIL 2010
Project Management Journal, Vol. 41, No. 1, 91–92
© 2010 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20166
9 April
PMI Birmingham, PMI Montgomery,
AL, PMI Northern Alabama Present the
2nd Annual Alabama PMI Symposium,
“Get in the Game.” Birmingham,
Alabama, USA. There will be a variety of
skills-enhancing presentations and
breakout sessions by local and national
speakers to strengthen your project
manager tool box and to provide the
expertise to “Get in the Game.” For
more information on the symposium,
please review our blog at al2010sympo
sium.blogspot.com.
13–16 April
SeminarsWorld 2010. Scottsdale,
Arizona, USA. For more information on
PMI SeminarsWorld® or to register, go
to www.pmi.org/CareerDevelopment/
Pages/SeminarsWorld.aspx.
19–20 April
PMI Phoenix Chapter Symposium.
Phoenix, Arizona, USA. “Reach the Peak
with Project Management” featuring
Lee R. Lambert, 2009 PMI Fellow. Two
days of symposium value, with added
workshops by Lee R. Lambert and Neal
Whitten. For more information, please
visit Registration URL: www.phx-pmi.org.
21 April
Sixth Sense Communication. Lexington
Park, Maryland, USA. PMI Southern
Maryland Chapter presents Christine
Zust, MA, on understanding how to
communicate in a project setting, a vital
skill for project managers and those
who facilitate change. Results define
project success and communicating an
effective vision is a critical component
needed to gain results. In this training
event, accomplished, dynamic speakertrainers will guide participants to a clear
understanding of how to more effectively communicate in project settings,
leading to more successful change initiatives. For more information, please
visit www.roederconsulting.com.
27–28 April
PMI Manitoba Chapter 11th Annual
Project
Management Workshop
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
91
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Conference. Winnipeg, Manitoba,
Canada. Theme: “Excellence through
Education.” Two full days of keynote
speakers and workshops. For more
information, please visit www.pmimanitoba.org.
29–30 April
PMI Southern New England Chapter
Professional Development Day. Hartford,
Connecticut, USA. Half day of intensive
seminars with five offerings, then full day
of keynotes and select presentations. The
conference theme is “The Passion and
the Power of Project Management.” For
more information, please visit www.
snec-pmi.org/conference.
30 April
Sixth Sense Communication. Grand
Rapids, Michigan, USA. PMI Western
Michigan Chapter presents Christine
Zust, MA, on understanding how to
communicate in a project setting, a
vital skill for project managers and
those who facilitate change. Results
define project success, and communicating an effective vision is a critical
component needed to gain results. In
this training event, accomplished,
dynamic speaker-trainers will guide
participants to a clear understanding of
how to more effectively communicate
in project settings, leading to more successful change initiatives. For more
information, please visit wmpmi.org/
index.php.
MAY 2010
1 May
PMI Atlanta’s 2010 Professional
Development Day. Atlanta, Georgia,
USA. Full day of seminars, workshops,
and other educational events designed
to sharpen your project management
skills. For more information, please
visit www.pmiatlanta-pdd.org/.
3–6 May
SeminarsWorld 2010. Philadelphia,
Pennsylvania, USA. For more information on PMI SeminarsWorld® or to
register, go to www.pmi.org/Career
Development/Pages/SeminarsWorld.
aspx.
92
10–12 May
PMI Global Congress 2010—EMEA.
Milan, Italy. For more information,
please visit http://congresses.pmi.org.
22 May
Project Management—The Tie That
Binds. Petaluma, California, USA. The
PMI Wine Country Chapter is excited to
announce its Professional Development Day Event. This will include
hands-on workshops and dynamic
speakers discussing the common
thread all project management activities add to business value. For more
information, please visit www.pmiwcc.org.
JUNE 2010
2–4 June
EVM World 2010. Naples, Florida, USA.
Sponsored by the PMI College of
Performance Management. For more
information, please visit www.pmicpm.org.
14–16 June
2010 PMI Houston Conference and
Expo. Houston, Texas, USA. More than
90 breakout sessions with tracks on
agile project management, professional development, program management
and project management. Eleven workshops on the first day; 3-day vendor
expo and annual job fair on the last day.
Earn up to 21 PDUs. For more information, please visit www.pmihouston.org.
21–24 June
Mega SeminarsWorld 2010. Orlando,
Florida, USA. For more information
on PMI Mega SeminarsWorld® or to
register, go to www.pmi.org/Career
Development/Pages/SeminarsWorld.
aspx.
27–30 June
ISSIG/Puget Sound Chapter Professional Development Symposium.
Bellevue, Washington, USA. All organizations are tapping into their techsavvy communities to offer dynamic
and captivating sessions on emerging
trends in IT. The agenda will feature a
balanced mix of keynote speakers,
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
workshops, breakout sessions and networking events from both a local and a
national selection over the course of 4
days. For more information, please visit
www.pds.pmi-issig.org.
JULY 2010
11–14 July
PMI
Research
and
Education
Conference. Washington, DC, USA. For
more information, please visit
www.pmi.org/Resources/Pages/Resear
ch-Conference.aspx.
OCTOBER 2010
9–12 October
PMI Global Congress 2010—North
America. Washington, DC, USA. For
more information, please visit
http://congresses.pmi.org.
eSeminarsWorld SM Offerings
ESeminarsWorld is a series of instructor-led, web-based professional development courses. The eSeminarsWorld
topics are as diverse as the traditional
SeminarsWorld face-to-face offerings,
yet offer the convenience of attending
and earning valuable PDUs from your
computer. Courses are offered over 2and 5-week periods, and require
approximately one hour each day to
complete. You choose what time of day
to log in and complete lessons and
assignments. Please visit www.pmi.org/
CareerDevelopment/Pages/e-learning.
aspx for more information.
4–18 March Building Teams, Commitment and Control for Virtual Teams
(14 PDUs)
4–18 March Project Integration
Management—Simulation (14 PDUs)
11–25 March Delivering Business
Strategies Through Programs (14 PDUs)
11–25 March Effective Project Communications and Control for Virtual
Teams (14 PDUs)
25 March–8 April Essential Skills for
Managing Projects (14 PDUs)
1–15 April Delivering Business Strategies Through Programs (14 PDUs)
PAPERS
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Project Management Journal
Guidelines
The Project Management Journal® publishes research
relevant to researchers, advanced practitioners, and
organizations from the project, program, and portfolio management field. Due to the integrative and
interdisciplinary nature of these fields, the Journal
publishes the best papers from a number of other disciplines, including, but not limited to, organizational
behavior and theory, strategic management, sociology, economics, political science, history, information
science, systems theory, communication theory, and
psychology. We look for papers that are of interest to a
broad audience. The Journal publishes qualitative
papers as well as quantitative works and purely conceptual or theoretical papers, including diverse
research methods and approaches. Our aim is to integrate the various types of project, program, and portfolio management research.
The Journal neither approves nor disapproves, nor
does it guarantee the validity or accuracy of any data,
claim, opinion, or conclusion presented in either editorial
content, articles, letters to the editor, or advertisements.
Authors’ Guidelines
Each paper should contain one key point, which the
author should be able to state in one sentence.
Authors are expected to describe the knowledge
and foundations underlying their research approach, and
theoretical concepts that give meaning to data, and to
demonstrate how they are relevant to organizations.
Papers that speculate beyond current thinking are more
desirable than papers that use tried-and-true methods
to study routine problems, or papers motivated strictly
by data collection and analysis.
Authors should strive to be original, insightful, and theoretically bold; demonstration of a significant value-added
advance to the field’s understanding of an issue or topic is
crucial to acceptance for publication. Multiple-study
papers that feature diverse methodological approaches
may be more likely to make such contributions.
Authors should make contributions of specialized
research to project, program, and portfolio management
theory and define any specialized terms and analytic techniques used. Papers should be well argued and well written, avoiding jargon at all times. The Journal has no preference for subjects of study, nor do we attach a greater significance to one methodological style than another.
Editing Your Paper
Make sure papers adhere to the theme or question to be
answered. Writing should be clear and concise. Fulllength research articles should not exceed 30 double-
spaced manuscript pages, including references, appendixes, tables, and figures.
Manuscript Format/Style
All manuscripts submitted for consideration should
meet the following guidelines:
• All papers must be written in the English language
(American spelling).
• Title page of the manuscript should include the title of
the paper, author name(s) and affiliation(s), and the
name, mailing address, and phone and fax numbers of
the author to whom correspondence should be directed.
To permit objective reviews by two referees, the
abstract and first page of the text must not reveal the
author(s) and/or affiliation(s), but only the manuscript
title.
Formatting the Paper
Papers must be formatted in electronic format using
Microsoft Word 2003 or earlier versions (no .docx versions, please). For Mac users, convert the file to a
Windows format. If the conversion does not work, Mac
users should save files as Word (.doc) files.
Fonts
Use a 10- or 12-point Times or Times New Roman font
for the text. You may use bold and italics in the text, but
do not underline. Use 10-point Helvetica or Arial font for
text within tables and graphics.
Margins
Papers should be double-spaced and in a single-column
format. All margins should be 1 inch.
Headings
Use 1st, 2nd, and 3rd-level headings only.
References, Footnotes, Tables, Figures,
and Appendices
Always acknowledge the work of others used to advance
a point in your paper. For questions regarding reference
format, refer to the current edition of Publication
Manual of the American Psychological Association.
Identify text citations with the author name and publication date in parentheses, (e.g., Cleland & King, 1983), and
list in alphabetical order as references at the end of the
manuscript. Include page numbers for all quotations.
Follow the format in the examples shown below:
Baker, B. (1993). The project manager and the
media: Some lessons from the stealth bomber program. Project Management Journal, 24(3), 11–14.
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Cleland, D. I., & King, W. R. (1983). Systems analysis
and project management. New York: McGraw-Hill.
Hartley, J. R. (1992). Concurrent engineering.
Cambridge, MA: Productivity Press.
It is the author’s responsibility to obtain permission to
include (or quote) copyrighted material, unless the
author owns the copyright. Use the Wiley permission
form, which is available at the Manuscript Central site
(http://mc.manuscriptcentral.com/pmj).
Graphics and Illustrations
Be sure to number tables and figures with Arabic
numerals, include titles for each, and group at the end
of the manuscript. Indicate their preferred location
within the body of the text. In addition, provide artwork
in 300-dpi jpg, tiff, or Powerpoint formats.
Tips for creating graphics:
• Provide only the essential details (too much information can be difficult to display).
• Color graphics are acceptable for submission,
although the Journal is published in grayscale.
• Helvetica or Arial font should be used for text within
the graphics and tables.
• Figure numbers and titles are centered and appear in
boldface type below the figure.
• Table numbers and titles are centered and appear in
boldface type above the table.
• Figures and tables should be cited and numbered consecutively in the order in which they appear in the text.
• Tables with lines separating columns and rows are
acceptable.
Use an appendix to provide more detailed information, when necessary.
Submission Policy
Submit manuscripts electronically using the journal’s
Manuscript Central site (http://mc.manuscriptcentral.
com/pmj). Manuscript Central is a web-based peer
review system (a product of ScholarOne). Authors will
be asked to create an account (unless one already exists)
prior to submitting a paper. Step-by-step instructions
are provided online. The progress of the review process
can be obtained via Manuscript Central. Other questions regarding publication may be sent to natasha.
[email protected].
Manuscripts should include the following in the
order listed:
• Title page that includes the title of the manuscript and
each author’s name, affiliation, mailing address, phone
and fax numbers, and e-mail address. Correspondence will be directed only to the first author listed.
• Abstract of 100 words or less that outlines the purpose,
scope, and conclusions of the manuscript.
94
March 2010 ■ Project Management Journal ■ DOI: 10.1002/pmj
• Keywords. Select 4 to 8 keywords.
• Text (use headings and no more than two levels of subheadings). To permit objective reviews by two referees,
the abstract and first page of the text should not reveal the
authors and/or affiliations, but only the manuscript
title.
• References.
• Illustrations and tables. These should be titled, numbered (in Arabic numerals), and placed on a separate
sheet, with the preferred location indicated within the
body of the text.
• Biographical details for each author. Upon manuscript acceptance, authors must also provide a signed
copyright agreement.
By submitting a manuscript, the author certifies that
it is not under consideration by any other publication;
that neither the manuscript nor any portion of it is
copyrighted; and that it has not been published elsewhere. Exceptions must be noted at the time of submission. Accepted manuscripts become the property of
PMI, which holds the copyright for materials that it publishes. Material published in the Journal may not be
reprinted or published elsewhere, in whole or part,
without the written permission of PMI.
Accepted manuscripts may be subject to editorial
changes made by the Editor. The author is solely responsible for all statements made in his or her work, including changes made by the editor. Submitted manuscripts
are not returned to the author; however, reviewer comments will be furnished.
Review Process
The reputation of the Journal and contribution to
the field depend upon our attracting and publishing the
best research. The Journal competes for the best available manuscripts by having the largest and widest readership among all project management journals. Equally
important, we also compete by offering high-quality
feedback. The timeliness and quality of our review
process reflect well upon all who participate in it.
Developmental Reviews
It is important that authors learn from the reviews and
feel that they have benefited from the Journal review
process. Therefore, reviewers will strive to:
• Be Specific. Reviewers point out the positives about
the paper, possible problems, and how any problems
can be addressed. Specific comments, reactions, and
suggestions are required.
• Be Constructive. In the event that problems cannot be
fixed in the current study, suggestions are made to
authors on how to improve the paper on their next
attempt. Reviewers document as to whether the issue is
with the underlying research, the research conclusions,
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or the way the information is being communicated in
the submission.
• Identify Strengths. One of the most important tasks
for a reviewer is to identify the portions of the paper
that can be improved in a revision. Reviewers strive to
help an author shape a mediocre manuscript into an
insightful contribution.
• Consider the Contribution of the Manuscript. Technical
correctness and theoretical coherence are obvious
issues for a review, but the overall contribution that the
paper offers is also considered. Papers will not be
accepted if the contribution it offers is not meaningful
or interesting. Reviewers will address uncertainties in
the paper by checking facts; therefore, review comments will be as accurate as possible.
• Consider Submissions From Authors Whose Native
Language Is not English. Reviewers will distinguish
between the quality of the writing, which may be fixable,
and the quality of the ideas that the writing conveys.
Respectful Reviews
PMI recognizes that authors have spent a great deal of
time and effort on every submission. Reviewers will always
treat an author’s work with respect, even if the reviewer
disagrees or finds fault with what has been written.
Double-Blind Reviews
Submissions are subjected to a double-blind review, whereby the identity of the reviewer and the author are not disclosed. In the event that a reviewer is unable to be objective
about a specific paper, another reviewer will be selected
for that paper. Reviewers will not discuss any manuscript
with anyone (other than the Journal Editor) at any time.
Pointers on the Substance of the Review Theory
• Does the paper have a well-articulated theory that provides conceptual insight and guides hypotheses formulation?
• Does the study inform or improve our understanding
of that theory?
• Are the concepts clearly defined?
• Does the paper cite appropriate literature and provide
proper credit to existing work on the topic? Has the
author offered critical references? Does the paper contain an appropriate number of references?
• Do the sample, measures, methods, observations, procedures, and statistical analyses ensure internal and
external validity? Are the statistical procedures used
correctly and appropriately? Are the author’s major
assumptions reasonable?
• Does the empirical study provide a good test of the theory and hypotheses? Is the method chosen (qualitative
or quantitative) appropriate for the research question
and theory?
• Does the paper make a new and meaningful contribution to the management literature in terms of theory,
empirical knowledge, and management practice?
• Has the author given proper citation to the original
source of all information given in his or her work or in
others’ work that was cited?
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Guidelines for Project Management
Journal Book Reviews
Selecting Books for Review
Project Management Journal welcomes recommendations from project managers and others regarding books
that may be of professional value to fellow PMI associates. Areas of potential interest include: new ideas about
the theory, concepts, and techniques of project management; new approaches to technology and management;
getting business results; competing in today’s complex
workplace; and global changes. Recommendations
should include the title, author, and publisher, and a
brief statement as to why the book should be considered
for review. The Journal will select books for review and
identify a reviewer. Individuals recommending books for
review may also volunteer to write the review. However,
individuals should not submit a review before the
Journal has selected the book. The Journal receives many
books from publishers and authors and cannot review
them all.
Guidelines for Writers
Reviews should begin with a strong, brief opening paragraph that identifies the book and author, and tells the
reader why the book is important. The review should
not only describe the content of the book, but also what
the content means; that is, why it is a contribution to the
project management body of knowledge.
Reviewers may include the following elements:
• A Summary of key or unique concepts
• Favorite quote, graphic, chart, etc.
• Important tips or guidelines
• New terms or phrases in the PM lingo
• Message from the book that should be remembered for future use, or should have been
disclosed years ago
Reviews should include the book’s strong points and
any weak points if this information will be useful to the
reader. Reviews should be written in a conversational
style that maintains academic rigor. Reviewers should
avoid use of the first person (“I”) and focus on the book
and its contents. Reviewers should also avoid use of
numbered or bulleted lists. Reviews should be no longer
than 700 words (please use your computer word count to
verify length of the review).
Reviews should include complete publishing information, if possible: title, author(s), publisher (city and
state), year published, ISBN number, total pages, and
price in U.S. dollars. The Journal will add any information that is not available to reviewers. Reviews should be
prepared using MSWord and should be submitted by
e-mail. Submissions should include the name, title,
company, location, and one-line biosketch of the
reviewer.
Reviews should be submitted to the PMI Book Review
Editor. Any additional questions about book reviews for
the Journal may be directed to [email protected].
PMI reserves the right to edit all material submitted for
publication.
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PMI Research
and Education
Conference 2010
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What:
Who:
Where:
When:
Why Attend?
Premier biennial international project management research and education event. The conference
provides the opportunity to discuss new project management research findings and teaching methods.
Scholars, senior practitioners and students of project management and allied disciplines.
Gaylord National Hotel and Conference Center, Washington, D.C., USA
11-14 July 2010. Registration opens in January 2010.
The full program for the 2010 Research and Education Conference will be available in February 2010.
• Hear world-class visionary speakers esteemed by the academic PM community deliver plenary
addresses
• Participate in any of the 60 conference sessions and receive access to full papers and posters
• Learn about new ideas supported by current research
• Network with international project management scholars and practitioners who are defining the future
of the profession
What’s new for 2010?
New interactive sessions (in addition to traditional paper presentations):
• Symposia (multiple points of view brought to bear on a single topic within a broad thematic area)
• Poster sessions (new ideas presented in a concise and visual way)
New research and education events preceding the conference proper:
• Global Accreditation Center (GAC) Academic Forum (open to all attendees), 11 July 2010
• R.E.P. Forum (open only to PMI Registered Education Providers), 11 July 2010
WHAT CAN I DO NOW?
Save hundreds of dollars on your registration fees by registering before 9 April 2010.
Registration is limited to 500 attendees. Register early.
Learn more about the event as well as the conference sponsorship opportunities at
www.pmi.org/REC2010PMJ
To receive timely conference updates, follow PMI on Twitter http://TWITTER.COM/PMInstitute
When discussing the conference on Twitter, please use #RC2010.
Making project management indispensable for business results.®
© 2010 Project Management Institute, Inc. All rights reserved. “PMI”, the PMI logo, and “Making project management indispensable for business results” are registered marks of Project Management Institute, Inc.
For the full list of PMI’s legal marks, please contact PMI’s legal department.
048-030-2010(1-2010)
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