When you work with the PMI, you better read up on project management. When Sunil Prahsara, the CEO starts to refer to the project economy as the next big wave in work and business, you better read up on the project economy.
The project revolution
Hence “The Project Revolution: How to Succeed in a Project-Driven World (The Project Economy)” by Antonio Nieto-Rodriguez. Antonio Nieto-Rodriguez is one of the leading thinkers around project managers. He is also involved with the PMI at various levels, including as the initiator of the Brightline initiative, helping executives bridge the expensive and unproductive gap between strategy design and delivery.
Project management is boring
I associate project management with technical and boring Excel sheets, time planning, deadlines, to-do lists and engineers. But without projects, nothing would happen. For example, Singapore, Dubai, the iPhone, the great wall of China, the pyramids, the Taj Mahal, the introduction of the Euro or the Sagrada Familia in Barcelona. All these were the result of ideas being turned into reality. Projects change the world. Projects make impossible dreams possible.
According to recent research, the number of individuals working in project-based roles will increase from 66 million (in 2017) to 88 million (forecast 2027). And the value of economic activity worldwide that is project-oriented will grow from $12 trillion (in 2013) to $20 trillion (forecast 2027). Those are millions of projects requiring millions of project managers per year. Below is from a blog I wrote a while ago about the gig economy.
- In the USA the number of freelancers is 53 million. That is 34% of the USA labour market. Intuit estimates that this proportion will grow to some 40% by 2020. A 2015 survey of over 1,000 American workers noted that about 60% received 25% or more of their income from freelance work. It is a $715 billion market in the USA.
- There are 1.4 million British freelancers working across all sectors. That has grown 14% in the past decade. It is a £ 21 billion market in the UK. Almost 50% of people in the UK want to start their own business.
- In Holland, the revenue commissioners only defined “freelancers” in the 80s. In 1988 there were 1800 of them. Now it is 1.1 million and growing. That is 1 in 6 of the total Dutch labour market. In the 90s it was 1 in 17.
The author calls it project management; I would call it entrepreneurship or gig economy. We both believe that this trend will accelerate and that professional careers will become a sequence of projects. They will be, effectively, managing a portfolio of projects. This sort of career is best approached as a set of projects in which we apply the lessons we have learned from previous jobs, companies and industries while developing ourselves for our next career move, often not known in advance.
Nasim Taleb wrote about this in “Antifragile” Companies have made their operations extremely efficient, reaching levels where finding additional efficiency improvements is no longer possible. Disruptive technologies will accelerate this trend. Robots and artificial intelligence will take over almost all the traditional administrative activities and operational work. Some of these roles have already disappeared or been completely reshaped. Organisations will shift their focus more than ever to projects and project-based work. Projects are the new norm for creating value and, indeed, for staying in business.
The experience economy
In “The experience economy“, Joe Pine described the shift from product to experience. Goods and services are no longer enough. Experiences have emerged to create new value. That is a project. Increasingly, what companies sell are experience projects. Impacting the core of businesses.
The author prediction is that by 2025, regardless of the industry or sector, senior leaders and managers will spend at least 60% of their time selecting, prioritising and driving the execution of projects. That is the project revolution. It is a global revolution. We are all revolutionaries now. And here is some good news, the project revolution will be led by people, not robots. It will be led by people like you. You should read “Robot proof”.
The new leadership literacies
Organisations, on average, already dedicate an unprecedented 30% to 40% of their resources (staff, time, budgets) to project-related activities, which the project revolution will accelerate. CEO will become facilitators. The CEOs of the future will have to become project leaders, strong in facilitation, rather than technical experts. Read “The new leadership literacies”.
The author introduces the project canvas. The project canvas is composed of four major domains:
- Why: the rationale and the purpose and passion for launching and implementing the project successfully.
- Who: the accountability and the governance that will ensure the project is resourced and delivered.
- What, How and When: the hard aspects of projects (definition, design, plans, milestones, cost, risk, procurement) as well as the soft aspects (motivation, skills, stakeholders, change, communication).
- Where: the organisation, the culture, the priorities and the context (internal and external) in which the project is being carried out.
He shares some of the lessons (and a lot more in the book):
- Projects are one-off investments designed to achieve predetermined objectives, whereas operations are day-to-day activities with similar objectives every year (with some marginal improvements).
- A project is a proven method of bringing ideas into reality.
- Projects are restricted in terms of time and budget and are staffed with temporary team members.
- Know how the outcome of the project should look like.
- Every project should have at least one clear and easy-to-memorise objective linked to the ultimate purpose.
- Develop and share stories around your project. Read “Putting stories to work”.
- When there are trade-offs to be made between day-to-day and project work, the first one will always take priority.
- IT and technology projects are different – traditional project management methods don’t seem to work.
- Projects that have a very high priority on the agenda of the executive teams are much more successful.
- For a strategic project, between 20% and 40% of the executive time should be spent driving the project to success.
- Make sure the project has a fully dedicated budget that has been well estimated.
- The larger the amount or, the higher the dependency on external resources, the more attention the project manager needs to pay to procurement.
- Selecting the right project manager with the right skills and experience is a critical success factor.
- Project prioritisation, project selection, portfolio management, ownership, communication and transparency are also success factors.
- Projects should always be linked to a strategic objective.
- Project management is not ‘for free’. On average, you should add 7% to 15% extra cost to the activity for the dedicated management, monitoring, reporting and extra governance.
- Companies lack visibility about the number of projects they are running.
- They also lack information on how well they are implementing their projects and their overall strategy.
- Too many projects are initiated without proper analysis and a clear business case.
- You should have a cross-departmental governing body that decides in which projects to invest and ensures that projects are correctly executed. In fact, it should be a function in your company. A corporate project management office (PMO).
- Prioritising increases the success rates of strategic projects increases the alignment and focus of senior management teams around strategic goals, clears all doubts for the operational teams when faced with decisions, and, most importantly, builds an execution mindset and culture.
There is a fantastic chapter about waste. One million is wasted every 20 seconds collectively by organisations around the globe due to the ineffective implementation of business strategy through poor project management practices. That equates to roughly $1.5 trillion wasted a year.
- Businesses in the UK waste an estimated £37 billion per year on failed agile IT projects.
- IT failure costs the US economy about $50–150 billion annually.
- Only 2.5% of the companies completed 100% of their projects.
- Nearly 20%s of project unfolded so badly that they threatened the company’s very survival.
The International Space Station (ISS): its original estimated cost of $17.4 billion ultimately grew to $150 billion. In 2011, after nine years of development work on the UK Electronic Health Records Project, the UK government officials scrapped the £12 billion. The Energiewende project will cost Germans more than €1.5 trillion by 2050. The author has a lot more examples.
Since its launch in 2009, Kickstarter, the leading crowdfunding platform for start-ups, has hosted more than 409,000 projects, raising more than $3.30 billion. About 147,000 of them, or 36%, have been successfully funded. However, according to Kickstarter’s statistics, 63.75% of start-up projects funded have failed.
From project management to agile to citizen development
Traditional project management techniques work well when the context (internal and external) in which the project is implemented is stable, and outcomes are predictable and fixed. However, they don’t work well in the connected and fast-changing ecosystems that most organisations are operating in today. Under these circumstances, it is not surprising that we saw the rise of agile. Agile removed most of the burdens that developers were facing working in a controlled and structured approach. The power shifted from the project manager to the IT developer. It is now shifting to the citizen developer.
The author links projects to purpose and passion. I love that. It is one of my hobby horses. The project’s purpose is its fundamental reason for being. An effective purpose reflects the importance people attach to the project’s work – it taps their idealistic motivations – and gets at the deeper reasons for a project’s existence beyond just making money. Anything that gets your blood racing is probably worth doing. Purpose is the new black in business. Key questions to ask:
- What is the emotional connection to the project? What would make people volunteer and contribute to the project?
- Why does the project matter? What opportunity would be lost if the project were not carried out?
- To whom does the project matter most? The sponsor, the project leader, everyone? Why would anyone dedicate their precious time, energy and passion to the project?
- Does the project have an emotional element? What makes the project great and unique?
- What will be remembered about the project ten years from now?
- What aspects would make people volunteer to participate and to contribute to the project?
- Is the project’s passion aligned with the project’s purpose?
Most western companies have a hierarchical, functional structure, which is ideal for running their daily business activities. However, the most significant and most critical projects – the strategic ones – are cross-functional and cross-hierarchical by nature: they cut across the organisation. The most successful organisations today have adjusted their structure to facilitate and support the execution of projects. They have implemented a culture of discipline and accountability. They gave aligned the organisation’s structure with the new changing reality. Where they are able to react at the level of where things are actually happening, which is typically at the operating level.
Within the traditional organisational structure, quick project execution is not possible. Managing just one project in such a complex structure is a challenge, so imagine the difficulty of selecting and executing hundreds of projects of varying sizes. Succeeding in the project revolution requires a lean, agile and project-driven structure. It is like reading “Reinventing organisations”
Tech titans of China
Chinese companies have frequently managed to successfully reformulate their organisations. The author uses examples such as Xiaomi, Alibaba and Haier. They are not companies. They are project-driven ecosystems and innovation platforms. You should read “Tech titans”.
The reason why I am excited about this book is because it has helped me to clarify some of my thinking around the project economy and citizen development. Because citizen development will accelerate some of the impacts that Antonio Nieto-Rodriguez has identified in the areas of marketing, innovation, organisational structures and culture. With an optimistic perspective about passion, purpose and the future of work. What is there not to like.