advances in project management series evidence of the ...€¦ · igor ansoff (december 12,...

PM World Journal The Neglect of Project Management by Senior Executives Vol. II, Issue II – February 2013 Advances in Project Management www.pmworldjournal.net Series Article by Antonio Nieto-Rodriguez

© 2013 Antonio Nieto-Rodriguez www.pmworldlibrary.net of 9

Advances in Project Management Series1

Evidence of the Neglect of Project Management by Senior Executives

By Antonio Nieto-Rodriguez

The Origins of Current Views of Project Management

I have spent the last ten years trying to understand why senior executives seem to neither understand project management nor regard it as an important means of strategy execution. While conducting my research, I discovered that most heads of organizations view project management as a highly technical discipline--an area for engineers and IT professionals. Consequently, they:

• Lack a basic understanding of how to link each of their strategic projects with the company’s overall strategy.

• Do not devote much time to developing project management competencies in-house.

• Fail to implement a formal project selection process and investment committee, which discusses, prioritizes, and decides on all the new project proposals.

• Lack the means to monitor the success or failure of their strategic projects.

But why do so many senior executives feel this way? In an attempt to get to the deeper reasons for their views, I sought answers to the following questions: 1. Do the theories of the most highly regarded business management gurus, those that

influence the way businesses are managed (e.g., Taylor, Drucker, and Porter), mention project management and/or the importance of its link with strategy execution?

2. Have the top business schools, those that train most senior executives and future leaders, been teaching the value of project management and its link with strategy execution?

3. Is project management regularly discussed in the finest business publications?

1 The Advances in Project Management series includes articles by authors of program and project management books published by Gower in the UK. The articles are coordinated by series editor Prof Darren Dalcher, who is also the editor of the Gower Advances in Project Management series of books on new and emerging concepts in PM. For more on Gower project management, visit http://www.gowerpublishing.com/default.aspx?page=2063.



Disregarded by Business Management Gurus

My rationale for scrutinizing the work of the so-called business management gurus is that they have shaped the way companies do business today. Their theories have promoted big waves of change and improvement for many decades and have become obligatory reading for most business school students. I looked at business management experts of the 20th and early 21st centuries whom I considered to be the most influential. My aim was to first understand the impact of their theories on business and then to determine whether they discussed project management as a discipline and/or its link to strategy execution. I describe below three out of the eleven management gurus and its theories that I researched.

FREDERICK WINSLOW TAYLOR (March 20, 1856-March 21, 1915) Summary of Key Premises Considered the father of scientific management, Frederick Winslow Taylor sought to improve industrial efficiency by systematically breaking tasks down into their component elements in an effort to find the one best way to complete them. He is well-known for his time-and-motion studies, which involved using a stopwatch to time a worker’s sequence of motions, eliminating unnecessary motions, and then determining how the task could be performed more efficiently. During the industrial age, scientific management changed the way companies looked at production. Industrial plants and factories, in particular, launched initiatives to improve production efficiencies. These initiatives can be viewed as projects, since they were time limited and independent of daily operations. In fact, each of the four points in Taylor’s principles of scientific management was a project by itself: the scientific study/analysis, the training, the implementation of detailed instructions, and the equal allocation of work between workers and managers. Thus, Taylor’s theories, without mentioning it, led to a significant increase in an organization’s project activity. But this increase was just temporary; once the improvements in the production processes were made, the companies returned to their operations/run the businesses activities.

Mention of Project Management and Its Link with Strategy Execution Although applying Taylor’s theories increased the number of projects in organizations, these theories neither talked about project management or its value nor linked it with strategy execution.



IGOR ANSOFF (December 12, 1918-July 14, 2002)

As the pioneer of strategic management, Igor Ansoff developed a unique set of theories based on analyses of his predecessors’ work combined with his own insights into the variables that contribute to successful strategies.

Prior to the publication in 1965 of Ansoff’s landmark book Corporate Strategy, companies lacked guidance on how to plan for the future. Traditionally, they developed a budget and projected it several years into the future but paid little attention to strategic and execution issues. Ansoff stressed in his book that in a business environment characterized by growing competition; an increase in mergers, acquisitions, and diversification; and mounting turbulence, it was essential to anticipate future challenges and to draw up appropriate strategies to respond to these challenges.

Ansoff’s strategic management theories had a twofold impact on the number of projects at most companies. At first, companies formed strategy departments and began to implement Ansoff’s teachings through new projects. During this first wave, the primary entities that benefited were consulting companies, which used Ansoff’s concepts to advise businesses in developing their strategies. In the 1970s and 1980s, when the establishment of strategic planning departments was very popular, companies significantly increased their projects. One reason for this upsurge was that strategic planning created greater transparency, allowing companies to have a better view of the different initiatives and translating into more projects. However, companies quickly encountered trouble because the strategic planning process did not cover how to execute multiple projects. At this point, the gap between strategy planning and strategy execution widened and became bigger and bigger every year. Mention of Project Management and Its Link with Strategy Execution As mentioned above, at first Ansoff’s theories increased organizations’ projects only slightly. Once the new strategic development offices were created, however, the number of projects exploded. Ansoff does mention the concept of programs, but he neither expands on it nor explains the link between project management and strategy execution.

MICHAEL EUGENE PORTER (May 23, 1947- ) Michael Porter has been identified by many surveys as the world’s most influential thinker on management and competitiveness. He is the founder of the modern strategy field, and his work has redefined theories about competitiveness, economic development, economically distressed urban communities, environmental policy, and the role of corporations in society. Porter changed the way companies look at their businesses and analyze their strategies. However, his theories did not significantly increase the number of projects.



Through his value-chain concept, he enforced the functional structure of companies, which has become a key challenge for organizations if they want to be able to execute their strategic projects.

Mention of Project Management and Its Link with Strategy Execution Porter does not mention either the importance of project management or the link with strategy execution. Despite the fact that he revolutionized the way companies look at strategy, he surprisingly fails to cover how strategy is executed.

Conclusions None of the most influential business management gurus referred to project management as an important business methodology or as a critical component of strategy execution. This neglect is one of the main reasons why most of today’s business leaders continue to ignore the value of project management.

Ignored by Most Top MBA Programs

After determining that most business management gurus disregard project management and its link with strategy execution, I wanted to find out whether the same was true at the top business schools. Specifically, I wanted know whether the MBA programs at such world-renowned institutions as Harvard and INSEAD, which teach the world’s future CEOs and senior executives, actually include project management as part of their core business curriculum. Masters in Business Administration (MBA) programs have an extraordinary reputation and openly claim that they “help you to develop a leadership mindset and strong foundation of management skills to succeed in your first job and throughout your career. We prepare you for the future. We empower you to make the difference.”2 Over the past 40 years, the MBA has become one of the most sought-after degrees in the world. Many of the current top managers have gone through this business program, and most future leaders will do so. The traditional MBA program has a duration of between 12 and 24 months, and it is divided into two blocks. The first block is composed of core courses, which are mandatory for every student. The second block comprises an extensive list of elective courses, from which students select a certain number that relate to their specialization.

Research into the Inclusion of Project Management Courses Using the Financial Times 2010 ranking of the world’s top business schools,3 I researched whether any of them taught project management as either a core course or an elective. The chart below shows the results of my research: 2 http://www.gsb.stanford.edu/mba/ 3 I performed my research during the autumn of 2010.



The results are astonishing: Only two of the top 100 MBA programs in the world teach project management as a core course. The first business school that required its students to take a course in project management is the UK’s Cranfield School of Management4, which is ranked 26th in the world. The second and last business school that teaches project management as a mandatory course is the University of Iowa’s Tippie5 College of Business, ranked 64th in the world. I strongly believe that by 2020, most of the MBA programs in the world will offer project management as an elective class. A bit more time will be required for project management to become a mandatory course, primarily because it will need to be adapted to the MBA program and its unique way of being taught.

4 http://www.som.cranfield.ac.uk/som/p786/Programmes-and-Executive-Development/MBA/your-mba-programme/The-Cranfield-MBA-Programme-structure 5 http://tippie.uiowa.edu/fulltimemba/academics/corecourses.cfm



Discounted as a Key Topic by the Finest Business Publications

Despite all of my findings indicating that project management has been ignored, I decided to complete one last piece of research before drawing conclusions. This involved reviewing McKinsey Quarterly and Harvard Business Review to see how these top business publications cover the topic of project management and its link with strategy execution. First I looked at McKinsey Quarterly, which was founded in 1964 by McKinsey & Company and is targeted to chief executives, top managers, and selected academics. Its articles are written by McKinsey consultants to offer practical suggestions culled from their experience with the world’s largest companies. Initially, the Quarterly was distributed by the McKinsey partners but is now distributed electronically.

Reviewing the list of functions on the electronic version of the McKinsey Quarterly, I noticed many familiar ones but none related to project management or strategy execution. Does this mean that these two topics are not sufficiently relevant? Second, I looked at the Harvard Business Review6, the bible in terms of business management thinking and new trends. First published in 1992 by Harvard University, its

6 http://www.hbr.com



mission is to improve the practice of project management and its impact on changing the world. In 2010, the Review had a circulation of 236,000. Reviewing the publication’s website to determine the topics mentioned and the number of references to each topic, this is what I found:

Table – Number of references/articles per topic Harvard Business Review (07.03.11) Clearly, the key topics written about in the Harvard Business Review are the ones most addressed by business gurus, which in turn are the subjects taught most frequently at the top business schools and discussed most often by leading consultants. Only 432 Harvard Business Review articles have been written about project management, which represent less than 0.50 percent of the total number of articles published. Strategy



execution—or implementation, as the publication calls it—is the subject of a somewhat greater number of articles (1,203); but both topics are far from the top of the list.

Conclusions

My research shows very clearly why project management has not been relevant and explains the consequent disregard of this discipline by senior leaders. For most of the project management community, this is a very painful discovery; but it helps to understand the reasons for this indifference. For many strategists, this lack of awareness of the importance of project management explains the problems with strategy execution. Only when project management is recognized as being vital to strategy execution will companies begin to more effectively achieve their goals.



About the Author Antonio Nieto-Rodriguez

Antonio Nieto-Rodriguez is the head of Transversal Portfolio

Management and in charge of the entire portfolio and project management practices at BNP Paribas Fortis. In addition to being member of the board of the London Business School Alumni in Belgium, he also holds a membership with the PMI Belgium Chapter board and was a founding member of the PMI EMEA Corporate Networking Group. Prior to his current role as Transversal Portfolio Manager, Mr. Nieto-Rodriguez was the head of post-merger integration at Fortis Bank, leading what was the largest takeover in the financial service history: the acquisition of ABN AMRO. Before that, he worked for 10 years at PricewaterhouseCoopers as a senior manager, becoming the global lead practitioner for project management. The author of the book The Focused Organization, Mr. Nieto-Rodriguez has been featured in several magazines, including PM Network®, Strategy Business Review and The Economist. He is also the author of the white paper “Boosting Business Performance through Programme and Project Management”, which was written after he conducted one of the first global project management maturity surveys. Mr. Nieto-Rodriguez is a professor of project management for MBA students at Solvay Business School in Brussels, and is a regular keynote speaker at large international events where he speaks on the strategic value of project management; he is often voted as ‘best speaker’. Mr. Nieto-Rodriguez undertook undergraduate studies in Germany, Mexico, Italy and the United States and has a university degree in economics from the Universidad Complutense in Madrid. He has an MBA from London Business School and is fluent in Spanish, English, French, Dutch, Italian and German. As a hobby, Mr. Nieto-Rodriguez teaches business students and convinces senior leaders about the value of project management, positioning project management as a key management concept for executing organizations strategies. Information about Antonio’s book, The Focused Organization, can be found at http://www.gowerpublishing.com/isbn/9781409425663.

advances in project management series evidence of the ...€¦ · igor ansoff (december 12,...

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