When a problem arises in normal business operations, the first question we usually ask is, “What do we have to do to fix this?”
Unfortunately, this is the wrong first question to ask when we are dealing with projects. .
The skills and focus required for effective management of projects are fundamentally different to those for the management of business-as-usual operations. They differ in four crucial ways.
1 Known outcomes versus emerging outcomes
Operational business management is used to managing in a context where the end point, purpose and desired outcomes of the operational processes are known.
So when problems occur they can be solved within the context of the process’s known desired outcomes and performance metrics. Known risks have been designed out of the process and the staff have been trained to do their job consistently. It is all very ordered and designed not to change, except through a change managed process.
In the world of projects the end point and goals of the project are not predefined and are too rarely defined at all.
The reason for the project may be known e.g. “To implement a CRM system”, but this is not the desired business outcome. Projects too often are started with the “What have we got to do?” question when the correct first question is, “What are we intending to achieve?” The wrong question takes you off in the wrong direction.
In addition, risks have to be identified, categorized and where necessary managed, and only a few staff are fully experienced in change delivery-related processes. Projects, therefore, exist in the realm of unknowns and uncertainty.
This is a vastly different world to the certainty of operational management. Projects therefore require very different management.
2 "Live with" versus "handover"
The people working on operational issues tend to live with the results. They know what is practical, achievable and acceptable.
Many of the people working on projects do not live with the results. They do their best and then hand over the results to “the users” to learn, adopt and use.
Indeed, we have created a whole new profession of Change Managers to further isolate the project team from the real world users. Is it any wonder that so many project results are impractical and neither achievable nor acceptable?
3 Cost management versus value management
Then there is the most fundamental difference between operations and projects—costs versus value.
Most operational managers are used to managing costs. They manage and report their budget performance each month.
Projects are about value. They are about defining, delivering and measuring business value. Value can be optimized by the effective management of the costs, but not achieved by cost management alone.
Few managers think “value,” instead they think “cost”. Hence the myopic focus on the management of project costs. Yes, these are important, but no, delivery ‘on budget’ is not the project’s primary or even secondary measure of success.
This lack of value thinking leads to the required value delivery processes being either missing or deficient. Indeed, we wrote a whole book on this topic “Managing for Value” that explains the additional processes that need to be in place to enable effective control of value delivery rather than just cost management and control.
Interestingly, the payoff of managing for value is massive. The most successful organizations are highly capable strategy, project, and value delivery. They live, breath and sleep change rather than being enamored by repeatable operations. According to McKinsey [1], they achieve a more than 40% increase in profitability and shareholder value over time.
4 Continuity and stability versus change & disruption
So, while most organizations are set up not to change and prize continuity; the most successful organizations are set up to constantly change, improve, and beat the market. They are ‘value delivery capable’. They have shifted their thinking and operations to strategy execution, value delivery and constant change.
Orthodox operational organizations are treading a well-worn path, a safe path where change is the exception and is mostly seen as a peripheral issue.
Whereas, the most successful organizations are creating the path as they go. They are in a state of constant flux and change, always focused on achieving new desired business, strategic outcomes and results. They are truly change-driven organizations. This is the world of innovation where "project management thinking" and "operational management thinking" has merged to become "strategyexecution thinking".
I have worked in one such organization—it was both exhilarating and challenging. If you like change, its fun.
