A successful future for project managers necessitates one important skill: risk management.
Without taking risks there is little chance for success in project management, according to Dr. Harold Kerzner. That and a few people skills don’t hurt either.
“You can take a baseball bat and beat the daylights out of any project team and force that project to be successful, but it will be successful at the expense of all the other projects you have in the company,” said Kerzner, senior executive director at the International Institute for Learning in New York and professor at Baldwin-Wallace College in Berea, Ohio.
Kerzner spoke to a crowd of 1,200 at the recent Project Management ’99 Symposium and Workshops in Toronto, where he discussed the past and present of project management.
“Thirty years ago when I was in the industry as a practising project manager…I was on a project management pay scale and yet today we still can’t get companies to recognize that project managers benefit the bottom line of a company,” Kerzner said.
The author of In Search of Excellence in Project Management shared the findings of his 1986 survey in which he surveyed over 200 prominent companies in the United States to learn how they planned, budgeted, delivered and assessed mission-critical projects.
“I could not find one company that I believed was truly excellent in project management,” he said. But 10 years and two recessions later, in 1996, Kerzner resurrected the study and was able to find about 30 who were.
Change is slow sometimes, he explained, because “it’s very difficult to get companies to recognize the need for change, especially in project management because no executive is going to implement change when things are going well. What you really need to get companies to understand project management is a recession.”
Kerzner made reference to the two U.S. recessions that occurred from 1979 to 1983 and from 1989 to 1993. “It’s really unfortunate that second recession didn’t run about 20 years because if we had a 20 year recession everybody would have a project management career path,” he said.
The reason for this, he continued, is that there are six driving forces that push companies into project management (capital projects, customer expectations, competitiveness, executive understanding, new product development, efficiency and effectiveness, and yet, there is only one that truly matters. And it is none of the above, Kerzner said. It is survival.
“Once you realize that the survival of the firm is at stake, then you begin to realize the importance of project management.”
Following that, a company will go through several life cycle stages in order to achieve excellence in project management: embryonic, executive management acceptance, line management acceptance, growth and maturity.
After recognizing the need for project management in the embryonic stage, Kerzner explained, it is critical to gain the acceptance of executive management.
“Project management will go no place in a company unless senior management buys in and provides visible support where everyone will physically see the support coming from the top down,” Kerzner said, adding this will go a long way in forming line management support.
“Which line managers in your company would support project management if they go upstairs and they don’t even see their own executives supporting it?”
According to Kerzner, it is necessary to gain corporate-wide acceptance of a well-disciplined methodology that includes characteristics like inter-phase reviews, corporate-wide acceptance, critical path scheduling and an ear for the voice of the customer.
With this, he explained, companies can achieve decreased cycle time, lower costs, realistic plans and better communication, not to mention customer satisfaction.
Another hurdle companies go through before achieving maturity is a cost control system, which usually meets with “tremendous resistance.”
Kerzner said cost control is synonymous with horizontal accounting, which allows companies to determine the status of a project by integrating cost and schedule together.
The reason this is difficult, however, is because it “will show real quickly who knows how to do good estimating and who doesn’t…it’s going to show that the launch date was wrong and the budget was wrong. Executives don’t want to hear that they’ve made mistakes.”
According to Kerzner, it normally takes two years to develop some degree of maturity and roughly five more to achieve some degree of excellence.
Of course, the possibility remains that the project could fail. And that’s all right. “Here’s the bottom line…any project manager that always makes the right decision is not making enough decisions. Any company where every project they work on is completed successfully is not taking enough risks or working on enough projects.
“Project management does not guarantee that your project will be successful. Project management guarantees that your project will be managed correctly. If you start out with the wrong objective, if you start out with the wrong resources – project management doesn’t solve those problems.”