Project Management – APM PMQ and The Project Environment
Project management first needs to consider the reasons why that project may need to exist in the first place. An initial thought is that the organization is faced with a constantly changing environment that is creating problems, opportunities or business needs requiring some degree of response if threats are to be minimized, opportunities exploited and business needs effectively addressed.
Every project is a response to a changing environment. Within that environment are the factors that influence and impact projects.
How the environment influences an organisation
Organizations must develop a strategic approach to managing change. Projects deliver the beneficial change required to implement, enable and satisfy the strategic intent of the organization. Practically this will be achieved by deploying new assets, functions, capabilities, processes, structures, and systems.
The environment is the driving force for the project. It is important for the project manager to understand how these drivers are likely to influence the project. It may impact how they deliver the project, what they deliver, who is involved, and when it needs to be delivered.
Early on in the project, the answers to some of these questions may be uncertain. As a result, planning needs to be flexible, options need to be effectively evaluated and various scenarios assessed in order for the project to emerge as the optimum solution to what might be a range of diverse needs.
Tools and techniques used to determine factors that influence and impact projects
The impact of infrastructure, the physical environment, mitigating the potential adverse impacts of other projects, and the project’s technology are just some of the factors the project manager must take into account when planning the delivery of a project.
The shorter-term practical implementation impacts of the project, as well as its conceptual development and consequent long-term impacts, also need to be fully considered.
In addition, project managers also need to be attuned to the internal aspects, such as the cultural, organisational and social environments of the project’s sponsoring organisation
Understanding this environment includes identifying the project stakeholders and their ability to affect its successful outcome. This means working with people to achieve the best results, especially if the project is based in a highly technical or complex environment.
Therefore, it is essential that the project manager and the project team are comfortable with, and sympathetic towards, their physical, technological, cultural, organizational, and social surroundings.
The objective is to influence the project environment in a positive way or changing the way the project is being delivered, all with the aim of gaining a better reception of the change the project is designed to introduce.
Resistance to change
Resistance to change may be evident among some of the stakeholders, while others may have vested interests, personal or group agendas that are only indirectly related to the project.
Timely identification and categorization of these interests proactively mean that the corresponding risks, which are otherwise likely to undermine the success of the project, can be significantly reduced. Failure to take such an approach could inevitably lead to a less than optimum project outcome.
Every project team member needs to develop the attitude that, just as they are stakeholders, every other project stakeholder is also important.
There should be a commitment to service and the creation of a project management environment in which every decision and action is designed to make the stakeholder’s experience better than it would have been had the project not been implemented. It requires a focus on the quality of the stakeholder’s experience at every stage of the project.
There are a number of common forms of environmental analysis from simple external/internal factors analysis to using a more specific framework. One of the more common forms of analysis for the project environment is PESTLE analysis, a management technique to help project managers understand the environment in which the project operates.
PESTLE analysis is a popular method of examining the many different factors affecting an organisation and the project – the external or internal influences on success or failure. The impact of these factors on the project may be differentiated in six ways:
- Political – Current and potential influences from political pressures.
- Economic – Local, national, and world economic impact.
- Sociological – The effect of changes in the needs of society.
- Technological – New and emerging technology.
- Legal – Local, national, and world legislation.
- Environmental – Local, national, and world environmental issues
The Six Factors
The six factors may be applied to the whole of the organization, or to specific business areas, or to a specific project and could consider external only, internal-only, or both, in order to contemplate the likely effects. Business areas could include:
- the industry/marketplace
- supply sources
- internal capability
Following PESTLE analysis, an organisation would most likely have a number of options available as to how the desired objectives could be achieved.
One strength of a business case for a project is that a number of options have been considered and that there is evidence to show that the organization has not become over-reliant on a single idea, when there may be other more favourable options available.
The purpose of SWOT analysis is to use an established framework to systematically understand the strengths, weaknesses, opportunities, and threats that each project option may face.
SWOT can be particularly powerful in uncovering opportunities that the project may be well placed to take advantage of but that the project team may never have considered when using other forms of comparison.
Similarly, understanding weaknesses of the project options allow for the best approach to be considered in advance, allowing a pro-active approach avoiding threats that would otherwise catch the project team’s unawares.
The uses of PESTLE and SWOT
PESTLE can be used to consider the environment and to establish options for consideration; SWOT may be used as an evaluation tool to test the options being considered and so is more of comparative analysis. SWOT can be used in a wide variety of situations where a comparative analysis is required.
One example of how it might be used in a project is within the concept phase of the project life cycle to evaluate the project options being considered at that point. It can also be used for uncovering the strengths and weaknesses of the organization in relation to the project and in addition isolate the threats and opportunities that may exist in that relationship.
Both PESTLE and SWOT analysis could be used with good rigour but still raise more questions than answers.
Caution should always be expressed when appraising the outputs of traditional models.
The increasing level of uncertainty that exists and the combination of economic unknowns with political, social and environmental concerns regarding the proposed actions and their longer-term implications may require new ways of engaging with uncertainty.
The US military coined the term VUCA to reflect the ‘volatility, uncertainty, complexity and ambiguity of general conditions and situations associated with a multilateral world following the end of the Cold War in the early nineties.
The term has been widely adopted to represent increasingly vulnerable and unpredictable contexts. The key implication of VUCA conditions is that there is an inherent uncertainty that makes it difficult to predict and plan with great accuracy.
The rigidity that comes from expecting full and perfect knowledge is unsustainable and unattainable in turbulent environments. Uncertainty defies anticipation and detailed planning.
VUCA seeks to give a perspective of the project to enable managers to identify emerging opportunities, respond to new conditions, and address shortfalls and differences in outcomes, avoiding the classic mismatches between plans, models, and reality, translating into poor project performance.
The diagram above shows an example of how an organization might use VUCA to understand the risks in particular project situations. The two causative factors, level of confidence in the outcome and current knowledge are combined and rated high or low.
If the organization has high confidence in outcomes and a high level of knowledge it should consider if there is any volatility in the situation, could interest rates suddenly rise, or the costs of materials fluctuate unexpectedly for example. The risk here could originate from complacency and the project becomes exposed to uncontrolled change.