The Project Environment – The need for Projects
Organizations operate in a dynamic context, full of uncertainty, novelty, and turbulence. This article identifies how organizations can use projects, programmes, and portfolios to enhance performance, bring about change, and enable organizations to adapt, improve, and grow. Every project environment is critically designed for peak performance.
Project-work, therefore, represents an intentional investment in development, enhancement, and improvement.
The need for investment emerges from the aspirational plans and an overarching purpose that transpire from the strategic intent of an organization, reflected in each project’s business case.
Project-work encompasses strategic investments that enable assets, structures, systems, activities, and capabilities to be formed, maintained, or enhanced so that the organizational plans and ambitions can be realized.
Organizational Change
Organizational change is introduced through projects, programmes, and portfolios to deliver business value. The business value is accrued through the realization of benefits that result from project-work.
Benefits are part of ensuring that investments are made to deliver value to the organization.
This normally applies even when the project is being done by a supplier or contracting organization, or if the work is needed to maintain current capability or to conform to new regulations or directives so that smooth business operations can be allowed to proceed.
The successful deployment of change, the support of new behaviours and the utilization of new capability, resulting in the realization of benefits, involves engaging with, promoting, and working with diverse communities and groups.
To ensure that value is created and sustained, organizations need to consider and address the full investment life cycle ensuring that forecasted benefits materialise.
Delivering Project Strategy
Delivering strategy is enabled using projects, programmes, and portfolios. Portfolios structure investments in line with strategic objectives, while balancing, aligning, and scrutinising capacity and resources.
Programmes combine business-as-usual with projects and steady-state activity dictated by strategic priorities. Projects are transient endeavours that bring about change and achieve planned objectives.
Together, they combine to deliver the beneficial change required to implement, enable and satisfy the strategic intent of the organisation.
Stakeholders, those individuals, or groups who have an interest or role in the project, programme, or portfolio, or are impacted by it, cannot by definition be ‘managed’.
Rather, depending on their stake, and the role that ideally, they will play, the people involved in the work, from sponsor to team member, are part of the effort to keep the stakeholder appropriately engaged and influenced to do the right things.
This is not easy work and benefits from a facilitative approach rather than assuming that ‘command-and-control’ approaches will be effective.
The Project Environment influence on projects
It is relevant that the first section of a learning resource on project management considers 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 project environment. Within that environment are the factors that influence and impact projects.
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.
At the project start, 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 for the project Environment
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 consider when planning the delivery of a project.
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, organizational, and social environments of the project’s sponsoring organization.
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.
Resistance to Change
It is essential that the project manager and the project team are comfortable with, and sympathetic towards, their physical, technological, cultural, organisational and social surroundings.
The objective is influencing 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 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.
PESTLE
There are several 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 management understand the environment in which the project operates.
PESTLE analysis is a popular method of examining the many different factors affecting an organization 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 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, to contemplate the likely effects.
Business areas could include:
customers
the industry/marketplace
competitors
supply sources
internal capability
technology
intermediaries
stakeholders
time
governance requirements
Following PESTLE analysis, an organization would most likely have several options available as to how the desired objectives could be achieved.
One strength of a business case for a project is that several 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.
SWOT analysis
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 unawares.
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. 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.
VUCA
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 above diagram 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.
In the opposite situation, low confidence and low available data, there is likely to be ambiguity and therefore the project is likely to have difficulty delivering requirements to the satisfaction of stakeholders unless it can use a robust process for defining requirements more reliably.
At the heart of VUCA is the development of a learning culture for greater levels of preparedness, anticipation, evolution, and pro-active intervention.
A failure to process and manage learning is one of the major causes of projects failing to perform to the required degree
