Chapter 17 Improving project performance

1. Chapter 17 Improving project performance • 92% of CEOs say • “We are world class at project management” • 2% of CEOs are told • “By our assessment, you are world class at project management” • Introduction • Maturity • Lean and agile • Securing improvement • Summary • Project management in practice: New product development at Toyota Forklift Trucks – the X300 project

2. Introduction • Phenomenal successes in projects yet widespread failure • Enormous potential financial benefit by improving programme and project management • Some changes are enduring • The ‘lean’ approach to management • ‘Agile’ project management • Search for improvement is not universal • Making change stick is the real challenge • Truly world class organisations are best at making change stick

3. 17.1 Maturity • Some organisations have well-developed project processes, • Others are in chaos • All desire success • Characterising project organisations • Group 1 – the flatliners • Make little progress in project performance • Group 2 – the improvers • Some improvement actions, some performance increase • Group 3 – the wannabes • Follows every initiative endeavouring to catch up with the best • Group 4 – the world-class performers • Small number of organisations, set ever-increasing standards

4. 17.1 Maturity (Continued) Figure 17.1 Performance groups • Features of performance • Performance gap between the best and the rest is large • Performance gap doesn’t narrow over time – ‘the best are better at getting better’

5. 17.1 Maturity (Continued) Table 17.1 Project management maturity stages

6. 17.1 Maturity (Continued) • Moving between groups needs fundamental change in approach • Many organisations have moved from group 1 to 2 • Application of some systems to project management • Moving to group 3 • Need to impose discipline • Through rules, well-defined structures and documentation • Real improvement takes place when • Procedures are eventually discarded • Standard systems are tailored to each project and project team • Usual to move through stages in sequence • Disciplines learnt at each stage are required later

7. 17.1 Maturity (Continued) Commercial maturity models • CMMI – Capability Maturity Model • Common to IT industry • Level 1 ‘initial’ • Level 2 ‘repeatable’: basic processes for projects • Level 3 ‘defined’: proactive management of projects, project management processes ingrained • Level 4 ‘quantitatively managed’: objective reporting and quantification of key measures • Level 5 ‘optimising’: continuing and on-going improvement • Obtaining level 3 provides evidence of competence • Obtaining level 5 gives competitive advantage

8. 17.1 Maturity (Continued) Commercial maturity models • OPM3 – Organisational Project Management Maturity Model • Common to US-based or large international organisations • Product of PMI • Audit of the application of standards for project, programme and portfolio management • Broad scope • Recognises project failures caused by failures elsewhere in the organisation • P3M3 – Portfolio, Programme and Project Management Maturity Model • Developed by UK’s Office of Government Commerce • Includes PRINCE 2 (2009) and MSP for programmes • Available at OGC website

9. 17.1 Maturity (Continued) Benchmarking • “How can you be certain you are as good as you say you are unless you compare your performance with that of others?” • A benchmark is a reference point, temporarily fixed • Benchmarking activities began with Rank Xerox in 1979 • American managers encouraged to view Japanese operations • When performance was different, methods were noted • Adapting methods were explored • KPIs have been adopted by project management • Key Performance Indicators • On time, conforming to budget, customer satisfaction indices • Usual to consider basic data such as financial ratios • Crucial to know meaning of data collected • Crucial to compare apples with apples not oranges

10. 17.1 Maturity (Continued) Benchmarking • Mapping processes more beneficial to project management • How are constraints handled? • How are obstacles overcome? • How are problems solved? • Informal through benchmarking clubs or networking • Compare • Functional projects • Internal projects • Generic projects with similar processes • Competitor benchmarking • The objective • How are the best performers doing? • How are their results achieved?

11. 17.1 Maturity (Continued) Benchmarking • A key measure is productivity (output per unit input) • Not useful for one-off activities • focus is on speed, not quality or completeness • Right first time a better goal • measures the number of changes or problems encountered

12. Scorecard containing measures of process and performance can be beneficial [Kaplan and Norton] Construct goals and measures Financial perspectives (how do we look to shareholders?) Customer perspectives (how do customers see us?) Internal business perspectives (what must we excel at?) Innovation and learning perspectives (can we continue to improve and create value?) The organisation seeks to improve on scores Measures of performance include percentage improvement 17.1 Maturity (Continued)

13. 17.2 Lean and agile Lean • Output of benchmarking can establish ‘best-in-class’ or ‘world-class’ • Toyota considered ‘world-class’ • Superiority in lean practices • Also leads to superior project performance (development of new vehicles) • Can this be adopted to project management?

14. 17.2 Lean and agile (Continued) Characteristics for being progressive Flexible organisation structures accommodate customer requirements Focus on optimisation of flow of projects Open communication from flat organisational structure Agreement between parties (including suppliers) based on trust Broad skills base of team allows flexibility Education and training are significant parts of work activity

15. 17.2 Lean and agile (Continued) Table 17.2 Lean principles applied to project management

16. 17.2 Lean and agile (Continued) Lean • The concept of waste • “If it doesn’t add value, it’s waste” [Henry Ford] • Simplification of information flow • Heightens visibility of problems or hold-ups • If no inventories • Periodically a person completes their tasks with no further work to be done • Rather than creating inventory for down-stream tasks, if they are multi-skilled they may engage in other work • Faster at processing information • Leads to improved responsiveness

17. 17.2 Lean and agile (Continued) Figure 17.2 Complex information flow around systems Figure 17.3 Simplified information flow through system

18. 17.2 Lean and agile (Continued) Lean • The ‘Seven Wastes’ • Activity (quality or quantity) beyond what the customer requires • Waiting (time) for people or information • Non-value adding movement of information, people or materials • Processes that generate rework • Building an inventory • Motion, having to find materials and information when needed • Defects and mistakes • Tasks should be simplified • Tasks should be combined • Non-value adding tasks should be eliminated • Improvement through common sense, not technological solutions

19. 17.2 Lean and agile (Continued) Lean • Focus improvement activities on entire value-chain or value-network • Important to include external suppliers • Purchasing in bulk to stock requires storing, checking, and guarding (all costly) • Negotiate staged deliveries • Benefits all parties • Better use of suppliers expertise • Rough/top-level specification given to suppliers • Detailed design by suppliers • Better design likely as it will include knowledge of manufacturing processes

20. 17.2 Lean and agile (Continued) Agile • Prevalent in the software sector • The agile manifesto • We value • Individuals and interactions over processes and tools • Working software over comprehensive documentation • Customer collaboration over contract negotiation • Responding to change over following a plan • Key • Balance of disciplines • Ability to respond to change (users and capability of software)

21. 17.2 Lean and agile (Continued) Agile • Features • Sprints • work broken into time boxes, short and visible work packages • Working software release (the output of a sprint) • seen and testable, engages users and developers with purpose • Scrums (daily meetings that maintain intensity) • short (standing up) and focused on removing barriers to progress • Pairing (programming in pairs dramatically reduces errors) • coder and watcher, swapping regularly • Testing protocols written before software • Iteration can be viewed as waste – preference for right first time • Agile at programme level? • Little evidence outside IT sector

22. 17.3 Securing improvement Figure 17.4 The three pillars of change • Research indicates for change to be embedded • Approach to change is important • Three pillars need to be in place • If one is removed the change reverses

23. 17.3 Securing improvement (Continued) Table 17.3 Key change issues

24. 17.3 Securing improvement (Continued) • Strategy deployment • Explicit strategy must drive decision-making • Avoid change paralysis • Coherence (all moving in the same direction) is vital • Importance and recognition of drivers • Managed knowledge • Learning before doing, learning by doing • How to identify potential improvement targets and means to achieve them? • How to evaluate possibilities and identify issues that can be addressed at one time?

25. Implementation Full training and support are needed for a considerable period Changes need to be made to how people are assessed Systematic trial and evaluation to determine success Measure if strategic objectives of change are met 17.3 Securing improvement (Continued)

26. Summary • Many improvement initiatives have been tried, most have failed • Project management has not failed • The skills set will be required long after current business forms cease • Project management is creative requiring greatest personal input • Benchmarking organisational maturity has beneficial repercussions • Comparisons of process offer most scope • Lean principles largely embedded in ‘good project management’ • Treatment of waste may offer ‘theoretical benefit’ • Agile approaches are lacking objective evidence

27. Summary (Continued) Three pillars of change Strategy deployment, managed knowledge, implementation practice If one is missing, the change will fail Opportunities exist for the aspiring career project managers Increased recognition of PM contribution will bring greater rewards Continuously improving processes should be the PMs goal Knowledge exists, need to find ways to apply it and evaluate it Need to manage improvement process and its speed