Recommended Reads | By Karl Fischer | Read time minutes
To find the answer, we also need to ask a different question, "Where is business going?" The environment in which businesses operate dictates the way in which projects are executed. As project managers, we need to focus on developing business practices that make a real and lasting difference in company performance. Understanding the issues that make up the social, cultural, and informational environment in which the company operates is essential to advancing project management practice. Let's take a look at what we know about the current environment of our corporations.
What are corporations experiencing? Major research firms are engaged in tracking and forecasting trends in today's businesses. Here are some of the trends we see when we look into the future of corporations:
- Compression of Product Life Cycle
The velocity of new product development and product turnover has increased exponentially. Fifty years ago, the life cycle of products was 15 to 20 years. Today it is three years. Hi-tech firms estimate six months. This situation drastically reduces the time-to-market window and dramatically changes the way that resources are utilised.
- Knowledge/Technology Explosion
A significant portion of U.S. products now come from new-knowledge areas. Improved knowledge and technology support innovation, and innovation results in new projects. Since technology is increasing at a rapid pace, so are projects.
- Global Competition
As of the year 2000, foreign firms employed 6.4 million U.S. workers with a payroll of $330 billion, according to the Commerce Department. Analysts at Forbes.com, predict that by 2015, more than three million white-collar jobs in the United States will be outsourced to other countries. Businesses now compete with and have access to products, labour, and new marketing techniques from all over the world.
- Customer Power
Around the globe, consumers are demanding more quality, service, customisation, convenience, speed, and competitive pricing. Global competition and new technology are providing customers with greater choice about when, how, and where they will receive goods and services. Customers are becoming the determining factor in the success or failure of most corporations.
What Is the Workforce Looking Like?
Permanent loyalty to a corporation is no longer a viable option in today's marketplace. Now, it is more effective to think of employees in terms of flexible "temporary systems," much like a sports team or a movie company. Moreover, it is not a great leap to conclude that, because of technological innovation, a work force can practically be anywhere on the globe.
What About Projects Themselves?
Cross-border, cross-cultural projects are increasing, requiring project managers to develop a global perspective. Companies will restructure to meet these global changes, requiring project managers to work with their counterparts in different countries.
Ad-hoc project teams will become more widespread. Organisations will hire individual project managers who will then recruit appropriate team members from outside the organisation to complete the project.
Again, the Question
Now that we've gazed at future business trends, how can we as project managers prepare?
- Learn the Language of the Business in which you Manage Projects
Let's start with a phrase: competitive advantage. Every business professional understands this phrase; every project manager - not necessarily. In PM Network 7/06, in an article titled "No Limits," Marcia Jedd notes,
Project managers hold themselves back by not communicating in the terminology used by executives. This is terminology that focuses on results and value. Project managers must focus on the value of the project to the business and be able to speak about the project using "business-speak."
- Pursue Broad Business Educational Goals
One of the reasons that project managers don't speak the language is because they have difficulty with the concepts behind the language. Again, in the "No Limits" article, Jedd quotes Michael Thiry:
Project managers need a broad education in management like organisational change, strategy development, marketing, finance, advanced leadership and negotiation. J. Davidson Frame, in an article in PM Network titled "Project Management 2.0," says
The best project managers are now very strong business personnel. Professionals in project management need to be able to deal effectively with individuals trained in various disciplines. Clearly, business education must be one of the top qualifications for advancement in project management.
- Learn Corporate Strategic Thinking
"Marks of Distinction," a recent white paper by Accenture, addresses the importance of connecting with the strategies of the organisations. The strategies of the corporation must be understood as being directly implemented by the effort of the project. Strategic thinking for the project manager must go beyond project thinking. For instance, a late project may result in a missed window of opportunity in the marketplace, reducing the corporate market share. Management is much more likely to listen to a request for additional resources to meet a deadline if the project manager can discuss the situation in these terms.
The project manager must incorporate this type of thinking in his/her conscious, operational decisions. It is not simply an issue of resources-versus-project-deadline-type thinking. It's how we, as project managers, see what we're doing. As project managers, we are all stone masons. Are we just cutting stone or are we building a cathedral? What do we see?
Develop Business Acumen
The project manager must see him/herself and must be seen as driving business value. Project managers need to know how the business side makes money. Corporations make their money not only on high margins but, where possible, a high return on net assets, creating a low-cost structure that can sustain innovation. The entire process of creating a corporate value, developing a strategy to implement the value and finally initiating a project to implement the strategy is a necessary part of project management training.
The direction in which business is moving requires a melding of vision, strategy, culture, and process, all of which must be expressed in project performance. Vision, strategy, culture, and process are the new ingredients of project performance that will replace the traditional within-cost-time-and-scope performance.
It is the job of the modern project manager to educate management.
When executives think of project management, they think it's a product-delivery process sitting at the bottom of the organisation, says Michel Thirty.
They do not really understand how it can contribute to actual strategy or implementation of strategy.
Advanced project management training must get out of the classroom. Advanced PM training must explore and collaborate with additional educational experiences to be fully valuable. Mentoring is the one of the keys to training in project management methodology.
Improving people skills is also paramount. Project managers must be able to deal effectively with individuals trained in various disciplines.
What the business trends are telling us is that the new project manager needs the financial and project management skills to measure project success and return on investment (ROI) as well as the leadership skills to change the way the organisation works. This applies to both the education of management and the ever-increasing support of a global perspective. No small task!
Jedd, Marcia, "No Limits" PM Network, July 2006, p.76
Fretty, Peter, "Project Management 2.0", July 2006, p.41
Accenture.com "Marks of Distinction"
Jedd, Marcia, "No Limits" PM Network, July 2006, p.74
Karl Fischer, PMP, instructs and develops project management courses for Global Knowledge. He has consulted for a number of well-known companies including Boeing, AT&T Wireless, and the City of Seattle. He welcomes your comments at firstname.lastname@example.org.
This article was originally published in Global Knowledge's Business Brief e-newsletter. Global Knowledge delivers comprehensive hands-on project management, business process, and professional skills training. Visit their online Knowledge Centre at www.globalknowledge.com for free white papers, webinars, and more.