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Why project
management
matters We have all heard of project management. Many imagine
it as some loosely defined or ethereal function that bridges
across multiple departments and is useful especially in
IT or other operations of a company. Many believe that it
is also useful in a crisis but perhaps not important on an
ongoing basis.
However, project management has over the last few decades
emerged as a much more important business competency.
In fact it is a discipline that companies cannot do without. If
implemented correctly it becomes one of the key factors in
corporate sustainability for success.
Project management embraces not only the management
and execution of individual projects but also programmes
of projects and portfolios of strategic initiatives. It is project,
programme and portfolio (PPP) management.
PPP management has become a strategic imperative for
companies, helping not only in the ability to deliver strategy
49
Why project management matters by Ed Andrews EFMD Global Focus | Volume 04 | Issue 02 2010
75%
projects that most strongly support the strategic intent of an organisation.
It is a feedback mechanism that allows companies to begin projects with a
set of assumptions and to be able to quickly discern whether the expected
outcomes will be met. If not, then it provides the mechanisms to quickly
75% of Senior Executives alter the project so as to achieve a successful conclusion or, alternatively,
to end it without further expenditure.
asked agreed that new
recruits lacked the skills It might sound odd to use project management to kill projects. But consider,
they needed for the role of for example, that you are in the pharmaceutical industry where you will funnel
project manager in industry a large number of potential products through a sieve, hoping to find the one or
two that will be winners. The sooner you can finish that winnowing process and
eliminate the losers, the less money, resources and time will be spent.
If the correct implementation of project management has value to
organisations we ought to be able to simply begin using it and reap
the successes that it will bring. But can we?
Project management is growing
Well, there is a problem that first needs to be addressed. It deals with
so fast and is so increasingly the fact that project management is growing so fast and is so increasingly
recognised as an imperative for recognised as an imperative for organisations that there is a rising gap
in the supply of and demand for project managers.
organisations that there is a Global skills deficiencies
rising gap in the supply of and Over the last year the Project Management Institute (PMI) has sponsored a
demand for project managers number of research projects looking at the kinds of skills that industry needs
and at the growing gap in the supply of and demand for project managers.
Research with the Economist Intelligence Unit, part of The Economist group,
surveyed 600 senior executives globally and found that 95% agreed that certain
leadership skills were necessary for the success of their operations. However,
75% also agreed that new recruits lacked the skills that they needed. The study
detailed those skills by defining leadership, communication, agility, critical
thinking and motivational capabilities as essential for success. Specifically one
question in the survey said it all: Over the next five years, which of the following
skills will be most important to your companys success?
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www.efmd.org/globalfocus
The answers, detailed in Figure 1, are all, essentially, Set quality standards for project management
project management skills. degree programmes
PMI also completed in 2008 and 2009 a series of three Provide resources and support for academe
corporate-academic workshops in America and and students
Europe exploring the talent issues facing companies. Facilitate acquisition/training of project
One of these, in Brussels, was a joint seminar with management faculty
EFMD.
Supply-demand gap
The workshops validated the corporate survey and
In addition to the skills deficiencies there is an
have even suggested that project management is
actual supply-demand gap in project management.
a life skill, one that should be taught at the earliest
This gap is the result of a number of issues all
educational levels regardless of an individuals
colliding at the same time.
functional focus, whether it is business, science,
engineering or social studies. First, project management is a relatively young
profession, having formalised itself only in the
The business literature is rife with concerns about
1960s. The result is that many of those in the
current MBA programmes where new graduates
profession are reaching retirement age. The baby
can readily analyse a financial situation or model
boomer retirement onslaught has governments
an equation but have no skills in actual execution.
globally concerned about who will fill the shoes of
Clearly there is a significant gap in what is being these experienced and talented individuals. Figure
taught in educational institutions today and what 2 demonstrates this concern with data from the US
the corporate world and government agencies truly General Accounting Office (GAO).
need for organisational success.
In addition, World Bank data on Gross Fixed Capital
A total of 75 executives and academic leaders, Formation, by its own definition large infrastructural
primarily deans and department heads, attended the projects such as highways, hospitals, schools and so
three workshops. The findings were telling in several on, show that of the global GDP, that is the worlds
ways and are summarised into three categories: economic worth, 20% or $7.5 trillion is related
What can academe do? to projects And these figures do not capture the
Make project management part of the core additional trillions of dollars of private investment
by companies in new product development, plant
(undergraduate) curriculum (especially in
refurbishment and so on, all of which are projects.
business and engineering)
The real number on a global basis is likely to be
Create advanced (masters) project management US$12 trillion, closer to one-third of the worlds GDP.
programmes or minors/concentrations/certificates
in project management So what we now have is a situation where projects are
increasing globally, all requiring more and more
Embrace linkages with the corporate world project managers, but where experienced project
and the need for leadership skills managers are retiring.
Conduct research in project management
So where are the new project managers going to
Benchmark best practices in project management come from? Naturally one would expect the academic
Validate the value of project management world to heed this clarion call and rise to the occasion
by creating more and more project management
Prepare case studies of project management
programmes. However, that is not exactly the case.
successes
To be fair, there has been a steady increase in project
What can corporations/government agencies do? management courses and degree programmes at
Work closely with academe in structuring course universities and colleges globally. In fact in 1997 there
content/programmes were only 11 such programmes recognised whereas
Provide access to facilities, personnel and data today there are well over 3,000 institutions teaching
for academic researchers project management at one level or another.
Provide executives opportunities to be adjunct Yet despite that growth there is still nowhere near
lecturers (real-world experience) the number of degree programmes necessary to
satisfy the growing gap in the supply-demand of
What can PMI do? project managers.
Be the liaison between academe and industry/ The role of the corporation
government If corporations truly understand the self-interest of
Facilitate/mentor project management course/ assuring their continued success, then they have a
programme development huge opportunity, perhaps even a mandate, to work
51
Why project management matters by Ed Andrews EFMD Global Focus | Volume 04 | Issue 02 2010
managers are retiring Clearly there is a role for the private sector, a role that it must
proactively accept.
Some of this is already happening. Many corporate-academic
partnerships have proved successful. But they are few and far
between. Nevertheless, if a small percentage of companies
seriously took the opportunity to focus on their self-interest,
their corporate responsibility for success, we would see a
marked increase in project management courses and
Figure 2 programmes globally. By adding project management
Retirement-Age Employees in US Government (%) courses and eventually full-degree programmes in project
Senate testimony by GAO, April 30, 2008 management to existing academic offerings, universities and
colleges are guaranteeing a steady supply of qualified recruits
70 for the corporate and government sectors.
60
The intellectual fabric of academe can only be enriched by
50 Employees addressing the growing corporate and government agency
40 Supervisors need. The opportunity is there for the taking, simply by
Executives
embracing project management, the key to corporate
30
sustainability of success in times of economic turmoil.
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