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PROJECT
MANAGEMENT
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Dr. Kerzner’s 16 Points to Project
Management Maturity
1. Adopt a project management methodology and use it consistently.
2. Implement a philosophy that drives the company toward project
management maturity and communicate it to everyone.
3. Commit to developing effective plans at the beginning of each project.
4. Minimize scope changes by committing to realistic objectives.
5. Recognize that cost and schedule management are inseparable.
6. Select the right person as the project manager.
7. Provide executives with project sponsor information, not project
management information.
8. Strengthen involvement and support of line management.
9. Focus on deliverables rather than resources.
10. Cultivate effective communication, cooperation, and trust to achieve
rapid project management maturity.
11. Share recognition for project success with the entire project team and
line management.
12. Eliminate nonproductive meetings.
13. Focus on identifying and solving problems early, quickly, and cost
effectively.
14. Measure progress periodically.
15. Use project management software as a tool—not as a substitute for
effective planning or interpersonal skills.
16. Institute an all-employee training program with periodic updates based
upon documented lessons learned.
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PROJECT
MANAGEMENT
A Systems Approach to
Planning, Scheduling,
and Controlling
ELEVENTH EDITION
HAROLD
KERZNER,
Ph.D.
Senior Executive Director for Project Management
The International Institute for Learning
New York, New York
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Cover illustration: xiaoke ma/iStockphoto
This book is printed on acid-free paper.
Copyright © 2013 by John Wiley & Sons, Inc. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under
Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA
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make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically
disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by
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Library of Congress Cataloging-in-Publication Data:
Kerzner, Harold.
Project management : a systems approach to planning, scheduling, and controlling / Harold Kerzner, Ph. D. Senior Executive
Director for Project Management, the International Institute for Learning, New York, New York. — Eleventh edition.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-02227-6 (cloth); ISBN 978-1-118-41585-6 (ebk); ISBN 978-1-118-41855-0 (ebk); ISBN 978-1-118-43357-7
(ebk); ISBN 978-1-118-48322-0 (ebk); ISBN 978-1-118-48323-7 (ebk) 1. Project management. 2. Project management—Case
studies. I. Title.
HD69.P75K47 2013
658.4’04 —dc23
2012026239
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
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To
Dr. Herman Krier,
my Friend and Guru,
who taught me well the
meaning of the word “persistence”
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Contents
Preface
1
xxiii
OVERVIEW
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
1
Introduction 1
Understanding Project Management 2
Defining Project Success 7
Success, Trade-Offs, and Competing Constraints 8
The Project Manager–Line Manager Interface 9
Defining the Project Manager’s Role 14
Defining the Functional Manager’s Role 15
Defining the Functional Employee’s Role 18
Defining the Executive’s Role 19
Working with Executives 19
Committee Sponsorship/Governance 20
The Project Manager as the Planning Agent 23
Project Champions 24
The Downside of Project Management 25
Project-Driven versus Non–Project-Driven Organizations 25
Marketing in the Project-Driven Organization 28
Classification of Projects 30
Location of the Project Manager 30
Differing Views of Project Management 32
Public-Sector Project Management 34
International Project Management 38
Concurrent Engineering: A Project Management Approach 38
Added Value 39
Studying Tips for the PMI® Project Management Certification Exam
Problems
40
42
Case Study
Williams Machine Tool Company
44
vii
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2
PROJECT MANAGEMENT GROWTH: CONCEPTS
AND DEFINITIONS
47
2.0
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
2.20
2.21
2.22
Introduction 47
General Systems Management 48
Project Management: 1945–1960 48
Project Management: 1960–1985 49
Project Management: 1985–2012 55
Resistance to Change 59
Systems, Programs, and Projects: A Definition 64
Product versus Project Management: A Definition 66
Maturity and Excellence: A Definition 68
Informal Project Management: A Definition 69
The Many Faces of Success 70
The Many Faces of Failure 73
The Stage-Gate Process 76
Project Life Cycles 78
Gate Review Meetings (Project Closure) 83
Engagement Project Management 84
Project Management Methodologies: A Definition 85
Enterprise Project Management Methodologies 87
Methodologies Can Fail 91
Organizational Change Management and Corporate Cultures 94
Project Management Intellectual Property 100
Systems Thinking 101
Studying Tips for the PMI® Project Management Certification Exam
Problems
107
Case Study
Creating a Methodology 108
3
ORGANIZATIONAL STRUCTURES
3.0
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
111
Introduction 111
Organizational Work Flow 113
Traditional (Classical) Organization 114
Developing Work Integration Positions 117
Line-Staff Organization (Project Coordinator) 121
Pure Product (Projectized) Organization 122
Matrix Organizational Form 125
Modification of Matrix Structures 132
The Strong, Weak, or Balanced Matrix 136
Center for Project Management Expertise 136
Matrix Layering 137
104
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3.11
3.12
3.13
3.14
3.15
3.16
3.17
Selecting the Organizational Form 138
Structuring the Small Company 143
Strategic Business Unit (SBU) Project Management 146
Transitional Management 147
Barriers to Implementing Project Management in Emerging Markets 149
Seven Fallacies that Delay Project Management Maturity 156
Studying Tips for the PMI® Project Management Certification Exam 159
Problems
161
Case Studies
Jones and Shephard Accountants, Inc.
Coronado Communications 168
4
ORGANIZING AND STAFFING THE PROJECT OFFICE
AND TEAM
171
4.0
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
Introduction 171
The Staffing Environment 172
Selecting the Project Manager: An Executive Decision 174
Skill Requirements for Project and Program Managers 178
Special Cases in Project Manager Selection 184
Selecting the Wrong Project Manager 184
Next Generation Project Managers 188
Duties and Job Descriptions 189
The Organizational Staffing Process 193
The Project Office 199
The Functional Team 204
The Project Organizational Chart 205
Special Problems 208
Selecting the Project Management Implementation Team 210
Mistakes Made by Inexperienced Project Managers 213
Studying Tips for the PMI® Project Management Certification Exam
Problems
5
166
216
MANAGEMENT FUNCTIONS
5.0
5.1
5.2
5.3
5.4
5.5
5.6
223
Introduction 223
Controlling 225
Directing 225
Project Authority 230
Interpersonal Influences 237
Barriers to Project Team Development 240
Suggestions for Handling the Newly Formed Team 243
214
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5.7
5.8
5.9
5.10
5.11
5.12
5.13
5.14
5.15
5.16
5.17
5.18
5.19
5.20
5.21
5.22
5.23
5.24
5.25
5.26
5.27
5.28
5.29
5.30
Team Building as an Ongoing Process 246
Dysfunctions of a Team 247
Leadership in a Project Environment 250
Life-Cycle Leadership 252
Value-Based Project Leadership 255
Organizational Impact 257
Employee–Manager Problems 259
Management Pitfalls 262
Communications 265
Project Review Meetings 274
Project Management Bottlenecks 275
Cross-Cutting Skills 276
Active Listening 277
Project Problem-Solving 278
Brainstorming 288
Project Decision-Making 293
Predicting the Outcome of a Decision 301
Facilitation 303
Handling Negative Team Dynamics 306
Communication Traps 307
Proverbs and Laws 309
Human Behavior Education 311
Management Policies and Procedures 312
Studying Tips for the PMI® Project Management Certification Exam 313
Problems 318
Case Studies
The Trophy Project 327
Communication Failures 329
McRoy Aerospace 332
The Poor Worker 333
The Prima Donna 334
The Team Meeting 335
Leadership Effectiveness (A) 337
Leadership Effectiveness (B) 341
Motivational Questionnaire 347
6
MANAGEMENT OF YOUR TIME AND STRESS
6.0
6.1
6.2
6.3
Introduction 355
Understanding Time Management 356
Time Robbers 356
Time Management Forms 358
355
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6.4
6.5
6.6
Effective Time Management 359
Stress and Burnout 360
Studying Tips for the PMI® Project Management Certification Exam 362
Problems
363
Case Study
The Reluctant Workers
7
CONFLICTS
7.0
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
364
365
Introduction 365
Objectives 366
The Conflict Environment 367
Types of Conflicts 368
Conflict Resolution 371
Understanding Superior, Subordinate, and Functional Conflicts 372
The Management of Conflicts 374
Conflict Resolution Modes 375
Studying Tips for the PMI® Project Management Certification Exam 377
Problems
379
Case Studies
Facilities Scheduling at Mayer Manufacturing 382
Telestar International 383
Handling Conflict in Project Management 384
8
SPECIAL TOPICS
8.0
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
8.13
391
Introduction 392
Performance Measurement 392
Financial Compensation and Rewards 399
Critical Issues with Rewarding Project Teams 405
Effective Project Management in the Small Business Organization 408
Mega Projects 410
Morality, Ethics, and the Corporate Culture 411
Professional Responsibilities 414
Internal Partnerships 417
External Partnerships 418
Training and Education 420
Integrated Product/Project Teams 422
Virtual Project Teams 424
Breakthrough Projects 427
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8.14 Managing Innovation Projects 427
8.15 Agile Project Management 430
8.16 Studying Tips for the PMI® Project Management Certification Exam 431
Problems
437
Case Study
Is It Fraud? 440
9
THE VARIABLES FOR SUCCESS
9.0
9.1
9.2
9.3
9.4
9.5
9.6
9.7
443
Introduction 443
Predicting Project Success 444
Project Management Effectiveness 448
Expectations 449
Lessons Learned 450
Understanding Best Practices 451
Best Practices versus Proven Practices 458
Studying Tips for the PMI® Project Management Certification Exam
Problems
459
460
Case Study
Radiance International 460
10
WORKING WITH EXECUTIVES
10.0
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
463
Introduction 463
The Project Sponsor 464
Handling Disagreements with the Sponsor 474
The Collective Belief 475
The Exit Champion 476
The In-House Representatives 477
Stakeholder Relations Management 478
Politics 486
Studying Tips for the PMI® Project Management Certification Exam 487
Problems
488
Case Studies
Corwin Corporation 491
The Prioritization of Projects 499
The Irresponsible Sponsors 500
Selling Executives on Project Management
502
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11
PLANNING
11.0
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
11.9
11.10
11.11
11.12
11.13
11.14
11.15
11.16
11.17
11.17
11.19
11.20
11.21
11.22
11.23
11.24
11.25
11.26
11.27
11.28
11.29
11.30
11.31
11.32
11.33
11.34
11.35
11.36
Introduction 505
Validating the Assumptions 508
Validating the Objectives 509
General Planning 510
Life-Cycle Phases 513
Proposal Preparation 516
Kickoff Meetings 516
Understanding Participants’ Roles 519
Project Planning 519
The Statement of Work 521
Project Specifications 526
Milestone Schedules 528
Work Breakdown Structure 529
WBS Decomposition Problems 536
Work Breakdown Structure Dictionary 540
Role of the Executive in Project Selection 541
Role of the Executive in Planning 546
The Planning Cycle 546
Work Planning Authorization 547
Why Do Plans Fail? 548
Stopping Projects 549
Handling Project Phaseouts and Transfers 550
Detailed Schedules and Charts 551
Master Production Scheduling 554
Project Plan 556
Total Project Planning 561
The Project Charter 565
Project Baselines 566
Verification and Validation 570
Requirements Traceability Matrix 571
Management Control 572
The Project Manager–Line Manager Interface 575
Fast-Tracking 577
Configuration Management 578
Enterprise Project Management Methodologies 579
Project Audits 582
Studying Tips for the PMI® Project Management Certification Exam 583
Problems
12
505
586
NETWORK SCHEDULING TECHNIQUES
12.0 Introduction 597
12.1 Network Fundamentals
600
597
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12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11
12.12
12.13
12.14
12.15
12.16
12.17
12.18
12.19
12.20
12.21
Graphical Evaluation and Review Technique (GERT) 604
Dependencies 605
Slack Time 606
Network Replanning 612
Estimating Activity Time 616
Estimating Total Project Time 617
Total PERT/CPM Planning 618
Crash Times 620
PERT/CPM Problem Areas 623
Alternative PERT/CPM Models 626
Precedence Networks 627
Lag 630
Scheduling Problems 632
The Myths of Schedule Compression 632
Understanding Project Management Software 634
Software Features Offered 634
Software Classification 636
Implementation Problems 637
Critical Chain 638
Studying Tips for the PMI® Project Management Certification Exam
Problems
640
643
Case Studies
Crosby Manufacturing Corporation
The Invisible Sponsor 658
13
PROJECT GRAPHICS
13.0
13.1
13.2
13.3
13.4
13.5
661
Introduction 661
Customer Reporting 662
Bar (Gantt) Chart 663
Other Conventional Presentation Techniques 670
Logic Diagrams/Networks 673
Studying Tips for the PMI® Project Management Certification Exam
Problems
14
675
PRICING AND ESTIMATING
14.0
14.1
14.2
14.3
14.4
14.5
656
677
Introduction 677
Global Pricing Strategies 678
Types of Estimates 679
Pricing Process 682
Organizational Input Requirements
Labor Distributions 686
684
674
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14.6
14.7
14.8
14.9
14.10
14.11
14.12
14.13
14.14
14.15
14.16
14.17
14.18
14.19
14.20
14.21
14.22
14.23
14.24
14.25
14.26
14.27
14.28
14.29
14.30
Overhead Rates 690
Materials/Support Costs 692
Pricing Out the Work 695
Smoothing Out Department Man-Hours 696
The Pricing Review Procedure 698
Systems Pricing 700
Developing the Supporting/Backup Costs 701
The Low-Bidder Dilemma 705
Special Problems 705
Estimating Pitfalls 706
Estimating High-Risk Projects 707
Project Risks 708
The Disaster of Applying the 10 Percent Solution to Project Estimates
Life-Cycle Costing (LCC) 714
Logistics Support 719
Economic Project Selection Criteria: Capital Budgeting 720
Payback Period 720
The Time Value of Money 721
Net Present Value (NPV) 722
Internal Rate of Return (IRR) 723
Comparing IRR, NPV, and Payback 724
Risk Analysis 724
Capital Rationing 725
Project Financing 726
Studying Tips for the PMI® Project Management Certification Exam
Problems
730
Case Study
The Estimating Problem
15
COST CONTROL
15.0
15.1
15.2
15.3
15.4
15.5
15.6
15.7
15.8
15.9
15.10
15.11
734
737
Introduction 737
Understanding Control 741
The Operating Cycle 744
Cost Account Codes 745
Budgets 750
The Earned Value Measurement System (EVMS) 752
Variance and Earned Value 754
The Cost Baseline 773
Justifying the Costs 775
The Cost Overrun Dilemma 778
Recording Material Costs Using Earned Value Measurement 779
The Material Accounting Criterion 782
712
728
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15.12
15.13
15.14
15.15
15.16
15.17
15.18
15.19
15.20
15.21
15.22
15.23
15.24
Material Variances: Price and Usage 783
Summary Variances 784
Status Reporting 785
Cost Control Problems 792
Project Management Information Systems 793
Enterprise Resource Planning 793
Project Metrics 794
Key Performance Indicators 800
Value-Based Metrics 806
Dashboards and Scorecards 812
Business Intelligence 815
Infographics 816
Studying Tips for the PMI® Project Management Certification Exam 816
Problems
820
Case Studies
The Bathtub Period 838
Franklin Electronics 839
Trouble in Paradise 841
16
TRADE-OFF ANALYSIS IN A PROJECT ENVIRONMENT
16.0
16.1
16.2
16.3
16.4
16.5
17
Introduction 845
Methodology for Trade-Off Analysis 848
Contracts: Their Influence on Projects 865
Industry Trade-Off Preferences 866
Conclusion 869
Studying Tips for the PMI® Project Management
Certification Exam 869
RISK MANAGEMENT
17.0
17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8
17.9
17.10
17.11
17.12
845
871
Introduction 872
Definition of Risk 873
Tolerance for Risk 875
Definition of Risk Management 876
Certainty, Risk, and Uncertainty 877
Risk Management Process 883
Plan Risk Management (11.1) 884
Risk Identification (11.2) 885
Risk Analysis (11.3, 11.4) 892
Qualitative Risk Analysis (11.3) 897
Quantitative Risk Analysis (11.4) 903
Probability Distributions and the Monte Carlo Process 904
Plan Risk Response (11.5) 913
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17.13
17.14
17.15
17.16
17.17
17.18
17.19
Monitor and Control Risks (11.6) 919
Some Implementation Considerations 920
The Use of Lessons Learned 921
Dependencies Between Risks 925
The Impact of Risk Handling Measures 930
Risk and Concurrent Engineering 933
Studying Tips for the PMI® Project Management Certification Exam 936
Problems 940
Case Studies
Teloxy Engineering (A) 948
Teloxy Engineering (B) 948
The Risk Management Department 949
18
LEARNING CURVES
18.0
18.1
18.2
18.3
18.4
18.5
18.6
18.7
18.8
18.9
18.10
18.11
18.12
18.13
18.14
18.15
953
Introduction 953
General Theory 954
The Learning Curve Concept 954
Graphic Representation 956
Key Words Associated with Learning Curves 958
The Cumulative Average Curve 958
Sources of Experience 960
Developing Slope Measures 963
Unit Costs and Use of Midpoints 964
Selection of Learning Curves 965
Follow-On Orders 966
Manufacturing Breaks 966
Learning Curve Limitations 968
Prices and Experience 968
Competitive Weapon 970
Studying Tips for the PMI® Project Management Certification Exam 971
Problems 972
19
CONTRACT MANAGEMENT
19.0
19.1
19.2
19.3
19.4
19.5
19.6
19.7
19.8
975
Introduction 975
Procurement 976
Plan Procurements 978
Conducting the Procurements 981
Conduct Procurements: Request Seller Responses 983
Conduct Procurements: Select Sellers 983
Types of Contracts 987
Incentive Contracts 991
Contract Type versus Risk 994
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19.9
19.10
19.11
19.12
19.13
19.14
Contract Administration 995
Contract Closure 998
Using a Checklist 999
Proposal-Contractual Interaction 1000
Summary 1003
Studying Tips for the PMI® Project Management Certification Exam 1004
Case Studies
The Scheduling Dilemma 1009
To Bid or Not to Bid 1011
The Management Reserve 1012
20
QUALITY MANAGEMENT
20.0
20.1
20.2
20.3
20.4
20.5
20.6
20.7
20.8
20.9
20.10
20.11
20.12
20.13
20.14
20.15
20.16
20.17
20.18
20.19
21
1015
Introduction 1016
Definition of Quality 1017
The Quality Movement 1019
Comparison of the Quality Pioneers 1022
The Taguchi Approach 1023
The Malcolm Baldrige National Quality Award 1026
ISO 9000 1027
Quality Management Concepts 1029
The Cost of Quality 1032
The Seven Quality Control Tools 1035
Process Capability (CP) 1052
Acceptance Sampling 1054
Implementing Six Sigma 1054
Lean Six Sigma and DMAIC 1056
Quality Leadership 1057
Responsibility for Quality 1058
Quality Circles 1058
Just-In-Time Manufacturing (JIT) 1059
Total Quality Management (TQM) 1061
Studying Tips for the PMI® Project Management Certification Exam 1065
MODERN DEVELOPMENTS IN PROJECT MANAGEMENT
21.0
21.1
21.2
21.3
21.4
21.5
21.6
21.7
21.8
1069
Introduction 1069
The Project Management Maturity Model (PMMM) 1070
Developing Effective Procedural Documentation 1074
Project Management Methodologies 1078
Continuous Improvement 1079
Capacity Planning 1080
Competency Models 1082
Managing Multiple Projects 1084
End-of-Phase Review Meetings 1085
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Case Study
Honicker Corporation
22
1086
THE BUSINESS OF SCOPE CHANGES
22.0
22.1
22.2
22.3
22.4
1089
Introduction 1089
Need for Business Knowledge 1091
Timing of Scope Changes 1092
Business Need for a Scope Change 1093
Rationale for Not Approving a Scope Change
1094
Case Study
Kemko Manufacturing 1094
23
THE PROJECT OFFICE
23.0
23.1
23.2
23.3
23.4
23.5
23.6
23.7
23.8
23.9
23.10
23.11
23.12
23.13
23.14
23.15
23.16
1097
Introduction 1097
Present-Day Project Office 1098
Implementation Risks 1099
Types of Project Offices 1100
Networking Project Management Offices 1101
Project Management Information Systems 1101
Dissemination of Information 1103
Mentoring 1104
Development of Standards and Templates 1105
Project Management Benchmarking 1105
Business Case Development 1106
Customized Training (Related to Project Management)
Managing Stakeholder Relations 1108
Continuous Improvement 1109
Capacity Planning 1109
Risks of Using a Project Office 1110
Project Portfolio Management 1111
Case Study
The Project Management Lawsuit
24
1116
MANAGING CRISIS PROJECTS 1119
24.0
24.1
24.2
24.3
24.4
24.5
24.6
Introduction 1119
Understanding Crisis Management 1119
Ford versus Firestone 1121
The Air France Concorde Crash 1122
Intel and the Pentium Chip 1123
The Russian Submarine Kursk 1123
The Tylenol Poisonings 1124
1107
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CONTENTS
24.7
24.8
24.9
24.10
24.11
24.12
25
FUTURE OF PROJECT MANAGEMENT 1135
25.0
25.1
25.2
25.3
25.4
25.5
26
Nestlé’s Marketing of Infant Formula 1127
The Space Shuttle Challenger Disaster 1129
The Space Shuttle Columbia Disaster 1130
Victims Versus Villains 1131
Life-Cycle Phases 1132
Project Management Implications 1133
Changing Times 1135
Complex Projects 1139
Complexity Theory 1144
Scope Creep 1145
Project Health Checks 1151
Managing Troubled Projects 1155
THE RISE, FALL, AND RESURRECTION OF IRIDIUM:
A PROJECT MANAGEMENT PERSPECTIVE 1167
26.0
26.1
26.2
26.3
26.4
26.5
26.6
26.7
26.8
26.9
26.10
26.11
26.12
26.13
26.14
26.15
26.16
26.17
26.18
26.19
26.20
26.21
26.22
26.23
26.24
26.25
Introduction 1167
Naming the Project “Iridium” 1169
Obtaining Executive Support 1170
Launching the Venture 1170
The Iridium System 1172
The Terrestrial and Space-Based Network 1172
Project Initiation: Developing the Business Case 1173
The “Hidden” Business Case 1175
Risk Management 1175
The Collective Belief 1177
The Exit Champion 1177
Iridium’s Infancy Years 1178
Debt Financing 1181
The M-Star Project 1182
A New CEO 1183
Satellite Launches 1183
An Initial Public Offering (IPO) 1184
Signing Up Customers 1184
Iridium’s Rapid Ascent 1185
Iridium’s Rapid Descent 1187
The Iridium “Flu” 1191
Searching for a White Knight 1192
The Definition of Failure (October, 1999) 1192
The Satellite Deorbiting Plan 1193
Iridium is Rescued for $25 Million 1194
Iridium Begins to Grow 1194
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Contents
26.26
26.27
26.28
26.29
26.30
26.31
26.32
Shareholder Lawsuits 1195
The Bankruptcy Court Ruling 1195
Autopsy 1196
Financial Impact of the Bankruptcy 1197
What Really Went Wrong? 1198
Lessons Learned 1200
Conclusion 1202
Appendix A. Solutions to the Project Management Conflict Exercise
Appendix B. Solution to Leadership Exercise 1211
Appendix C. Dorale Products Case Studies 1217
Appendix D. Solutions to the Dorale Products Case Studies 1229
Appendix E. Alignment of the PMBOK® Guide to the Text 1235
Author Index
1241
Subject Index
1243
1205
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Preface
Project management has evolved from a management philosophy restricted to a
few functional areas and regarded as something nice to have to an enterprise project management system affecting every functional unit of the company. Simply
stated, project management has evolved into a business process rather than
merely a project management process. More and more companies are now
regarding project management as being mandatory for the survival of the firm.
Organizations that were opponents of project management are now advocates.
Management educators of the past, who preached that project management could
not work and would be just another fad, are now staunch supporters. Project management is here to stay. Colleges and universities are now offering graduate
degrees in project management.
The text discusses the principles of project management. Students who are
interested in advanced topics, such as some of the material in Chapters 21 to 25 of
this text, may wish to read one of my other texts, Advanced Project Management:
Best Practices in Implementation (New York: Wiley, 2004) and Project
Management Best Practices: Achieving Global Excellence, 2nd edition (Hoboken,
NJ: Wiley and IIL Publishers, 2010). John Wiley & Sons and the International
Institute for Learning also introduced a four-book series on project management
best practices, authored by Frank Saladis, Carl Belack, and Harold Kerzner.
This book is addressed not only to those undergraduate and graduate students
who wish to improve upon their project management skills but also to those functional managers and upper-level executives who serve as project sponsors and
must provide continuous support for projects. During the past several years,
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PREFACE
management’s knowledge and understanding of project management has matured
to the point where almost every company is using project management in one
form or another. These companies have come to the realization that project management and productivity are related and that we are now managing our business
as though it is a series of projects. Project management coursework is now consuming more of training budgets than ever before.
General reference is provided in the text to engineers. However, the reader
should not consider project management as strictly engineering-related. The engineering examples are the result of the fact that project management first appeared
in the engineering disciplines, and we should be willing to learn from their mistakes. Project management now resides in every profession, including information
systems, health care, consulting, pharmaceutical, banks, and government agencies.
The text can be used for both undergraduate and graduate courses in business,
information systems, and engineering. The structure of the text is based upon my
belief that project management is much more behavioral than quantitative since
projects are managed by people rather than tools. The first five chapters are part of
the basic core of knowledge necessary to understand project management.
Chapters 6 through 8 deal with the support functions of managing your time effectively, conflicts, and other special topics. Chapters 9 and 10 describe factors for
predicting success and management support. It may seem strange that ten chapters
on organizational behavior and structuring are needed prior to the “hard-core”
chapters of planning, scheduling, and controlling. These first ten chapters are
needed to understand the cultural environment for all projects and systems. These
chapters are necessary for the reader to understand the difficulties in achieving
cross-functional cooperation on projects where team members are working on
multiple projects concurrently and why the people involved, all of whom may have
different backgrounds, cannot simply be forged into a cohesive work unit without
friction. Chapters 11 through 20 are more of the quantitative chapters on planning,
scheduling, cost control, estimating, contracting (and procurement), and quality.
The next five chapters are advanced topics and future trends. Chapter 26 is a capstone case study that can be related to almost all of the chapters in the text.
The changes that were made in the eleventh edition include:
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A new section on success, trade-offs, and competing constraints
A new section on added value
A new section on business intelligence
A new section on project governance
An updated section on processes supporting project management
An updated section on the types of project closure
A new section on engagement project management
A new section on barriers to implementing project management in
emerging markets
A new section on fallacies in implementing project management
A new section on enterprise project management systems
A new section on How Project Management Methodologies Can Fail
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A new section on the future of project management
A new section on managing complex projects
A new section on managing scope creep
A new section on project health checks
A new section on how to recover a troubled project
A new section on managing public projects
A new section on managing international projects
A new section on project politics
A new section on twenty common mistakes in project management
A new section on managing innovation projects
A new section on the differences between best practices and proven
practices
An updated section on project sponsorship
An updated section on culture, teamwork, and trust
A New Section on stakeholder relations management
A new section on value-based leadership
An updated section on validating project assumptions
A new section on validating project objectives
A new section on the WBS dictionary
A new section on validation and verification
A new section on project management baselines
A new section on the traceability matrix
An expansion on WBS core attributes
An expansion on using the WBS and WBS dictionary for verification
A new section on project management metrics
A new section on key performance indicators
A new section on value metrics
A new section on project management dashboards
A new section on portfolio management
A new section on complexity theory
A new section on project management information systems
A new section on enterprise resource planning
A new section on project problem solving
A new section on brainstorming
A new section on project decision-making
A new section on determining the impact of a decision
A new section on active listening
A new section on agile project management
A capstone case study which can be used as a review of the entire
PMBOK® Guide, 5th edition, domain areas
The text contains more than 25 case studies, more than 125 multiple-choice
questions, and nearly 400 discussion questions. There is also a separate book of
cases (Project Management Case Studies, fourth edition) that provides additional
real-world examples.
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PREFACE
This text, the PMBOK® Guide, and the book of cases are ideal as self-study
tools for the Project Management Institute’s PMP® Certification exam. Because
of this, there are tables of cross references on each chapter’s opening page in the
textbook detailing the sections from the book of cases and the Guide to the
Project Management Body of Knowledge (PMBOK® Guide) that apply to that
chapter’s content. The left-hand margin of the pages in the text has side bars that
identify the cross-listing of the material on that page to the appropriate section(s)
of the PMBOK® Guide. At the end of most of the chapters is a section on study
tips for the PMP® exam, including more than 125 multiple-choice questions.
This textbook is currently used in the college market, in the reference market, and for studying for the PMP® Certification exam. Therefore, to satisfy the
needs of all markets, a compromise had to be reached on how much of the text
would be aligned to the PMBOK® Guide and how much new material would be
included without doubling the size of the text. Some colleges and universities use
the textbook to teach project management fundamentals without reference to the
PMBOK® Guide. The text does not contain all of the material necessary to support each section of the PMBOK® Guide. Therefore, to study for the PMP®
Certification exam, the PMBOK® Guide must also be used together with this text.
The text covers material for almost all of the PMBOK® Guide knowledge areas
but not necessarily in the depth that appears in the PMBOK® Guide.
An instructor’s manual is available only to college and university faculty
members by contacting your local Wiley sales representative or by visiting the
Wiley website at www.wiley.com/kerzner. This website includes not only the
instructor’s manual but also 500 PowerPoint slides that follow the content of the
book and help organize and execute classroom instruction and group learning.
Access to the instructor’s material can be provided only through John Wiley &
Sons, not the author.
One-, two-, and three-day seminars on project management and the PMP®
Certification Training using the text are offered by contacting Lori MIlhaven,
Executive Vice President, the International Institute for Learning, at 800-3251533, extension 5121 (email address: lori.milhaven@iil.com).
The problems and case studies at the ends of the chapters cover a variety of
industries. Almost all of the case studies are real-world situations taken from my
consulting practice. Feedback from my colleagues who are using the text has provided me with fruitful criticism, most of which has been incorporated into the
tenth edition.
The majority of the articles on project management that have become classics have been referenced in the textbook throughout the first eleven chapters.
These articles were the basis for many of the modern developments in project
management and are therefore identified throughout the text.
Many colleagues provided valuable criticism. In particular, I am indebted to
those industrial/government training managers whose dedication and commitment to quality project management education and training have led to valuable
changes in this and previous editions. In particular, I wish to thank Frank Saladis,
PMP®, Senior Consultant and Trainer with the International Institute for
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Learning, for his constructive comments, recommendations, and assistance with
the mapping of the text to the PMBOK® Guide as well as recommended changes
to many of the chapters. I am indebted to Dr. Edmund Conrow, PMP®, for a
decade of assistance with the preparation of the risk management chapters in all
of my texts. I am also indebted to Dr. Rene Rendon for his review and recommendations for changes to the chapter on contract management.
To the management team and employees of the International Institute for
Learning, thank you all for 20 years of never-ending encouragement, support, and
assistance with all of my project management research and writings.
Harold Kerzner
The International Institute for Learning
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PROJECT
MANAGEMENT
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Related Case Studies
(from Kerzner/Project
Management Case Studies,
4th Edition)
• Kombs Engineering
• Williams Machine
Tool Company*
• Hyten Corporation
• Macon, Inc.
• Continental Computer
Corporation
• Jackson Industries
Overview
Related Workbook Exercises (from
Kerzner/Project Management
Workbook and PMP ®/CAPM ® Exam
Study Guide, 11th Edition)
• Multiple Choice Exam
PMBOK® Guide, 5th
Edition, Reference
Section for the PMP®
Certification Exam
• Integration
Management
• Scope
Management
• Human Resource
Management
1.0 INTRODUCTION
Executives will be facing increasingly complex challenges during the next decade. These challenges will
be the result of high escalation factors for salaries and raw materials, increased union demands, pressure
from stockholders, and the possibility of long-term high inflation accompanied by a mild recession and a
lack of borrowing power with financial institutions. These environmental conditions have existed before,
but not to the degree that they do today.
*Case Study also appears at end of chapter.
1
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OVERVIEW
In the past, executives have attempted to ease the impact of these environmental conditions by embarking on massive cost-reduction programs. The usual results of these programs have been early retirement,
layoffs, and a reduction in manpower through attrition. As jobs become vacant, executives pressure line
managers to accomplish the same amount of work with fewer resources, either by improving efficiency or
by upgrading performance requirements to a higher position on the learning curve. Because people costs
are more inflationary than the cost of equipment or facilities, executives are funding more and more capital equipment projects in an attempt to increase or improve productivity without increasing labor.
Unfortunately, executives are somewhat limited in how far they can go to reduce manpower without
running a high risk to corporate profitability. Capital equipment projects are not always the answer. Thus,
executives have been forced to look elsewhere for the solutions to their problems.
Almost all of today’s executives are in agreement that the solution to the majority of corporate problems
involves obtaining better control and use of existing corporate resources, looking internally rather than externally for the solution. As part of the attempt to achieve an internal solution, executives are taking a
hard look at the ways corporate activities are managed. Project management is one of the techniques under
consideration.
The project management approach is relatively modern. It is characterized by methods of restructuring
management and adapting special management techniques, with the purpose of obtaining better control and
use of existing resources. Forty years ago project management was confined to U.S. Department of Defense
contractors and construction companies. Today, the concept behind project management is being applied in
such diverse industries and organizations as defense, construction, pharmaceuticals, chemicals, banking,
hospitals, accounting, advertising, law, state and local governments, and the United Nations.
The rapid rate of change in both technology and the marketplace has created enormous strains on existing organizational forms. The traditional structure is highly bureaucratic, and experience has shown that it
cannot respond rapidly enough to a changing environment. Thus, the traditional structure must be replaced
by project management, or other temporary management structures that are highly organic and can respond
very rapidly as situations develop inside and outside the company.
Project management has long been discussed by corporate executives and academics as one of several
workable possibilities for organizational forms of the future that could integrate complex efforts and reduce
bureaucracy. The acceptance of project management has not been easy, however. Many executives are not
willing to accept change and are inflexible when it comes to adapting to a different environment. The project management approach requires a departure from the traditional business organizational form, which is
basically vertical and which emphasizes a strong superior–subordinate relationship.
1.1 UNDERSTANDING PROJECT MANAGEMENT
PMBOK® Guide, 5th Edition
1.2 What Is a Project?
1.3 What Is Project Management?
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In order to understand project management, one must begin with the
definition of a project. A project can be considered to be any series of
activities and tasks that:
Have a specific objective to be completed within certain specifications
Have defined start and end dates
Have funding limits (if applicable)
Consume human and nonhuman resources (i.e., money, people, equipment)
Are multifunctional (i.e., cut across several functional lines)
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Understanding Project Management
3
Project management, on the other hand, involves five process groups as identified in
the PMBOK® Guide, namely:
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Project initiation
● Selection of the best project given resource limits
● Recognizing the benefits of the project
● Preparation of the documents to sanction the project
● Assigning of the project manager
Project planning
● Definition of the work requirements
● Definition of the quality and quantity of work
● Definition of the resources needed
● Scheduling the activities
● Evaluation of the various risks
Project execution
● Negotiating for the project team members
● Directing and managing the work
● Working with the team members to help them improve
Project monitoring and control
● Tracking progress
● Comparing actual outcome to predicted outcome
● Analyzing variances and impacts
● Making adjustments
Project closure
● Verifying that all of the work has been accomplished
● Contractual closure of the contract
● Financial closure of the charge numbers
● Administrative closure of the papework
Successful project management can then be defined as having achieved the project
objectives:
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Within time
Within cost
At the desired performance/technology level
While utilizing the assigned resources effectively and efficiently
Accepted by the customer
The potential benefits from project management are:
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Identification of functional responsibilities to ensure that all activities are
accounted for, regardless of personnel turnover
Minimizing the need for continuous reporting
Identification of time limits for scheduling
Identification of a methodology for trade-off analysis
Measurement of accomplishment against plans
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OVERVIEW
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Early identification of problems so that corrective action may follow
Improved estimating capability for future planning
Knowing when objectives cannot be met or will be exceeded
Unfortunately, the benefits cannot be achieved without overcoming obstacles such as:
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Project complexity
Customer’s special requirements and scope changes
Organizational restructuring
Project risks
Changes in technology
Forward planning and pricing
Project management can mean different things to different people. Quite often, people
misunderstand the concept because they have ongoing projects within their company and
feel that they are using project management to control these activities. In such a case, the
following might be considered an appropriate definition:
Project management is the art of creating the illusion that any outcome is the
result of a series of predetermined, deliberate acts when, in fact, it was dumb luck.
Although this might be the way that some companies are running their projects, this is
not project management. Project management is designed to make better use of existing
resources by getting work to flow horizontally as well as vertically within the company. This
approach does not really destroy the vertical, bureaucratic flow of work but simply requires
that line organizations talk to one another horizontally so work will be accomplished more
smoothly throughout the organization. The vertical flow of work is still the responsibility of
the line managers. The horizontal flow of work is the responsibility of the project managers,
and their primary effort is to communicate and coordinate activities horizontally between the
line organizations.
Figure 1–1 shows how many companies are structured. There are
PMBOK® Guide, 5th Edition
always “class or prestige” gaps between various levels of management.
1.7.2 Project Management Skills
There are also functional gaps between working units of the organization.
If we superimpose the management gaps on top of the functional gaps, we find that companies are made up of small operational islands that refuse to communicate with one
another for fear that giving up information may strengthen their opponents. The project
manager’s responsibility is to get these islands to communicate cross-functionally toward
common goals and objectives.
The following would be an overview definition of project management:
Project management is the planning, organizing, directing, and controlling of
company resources for a relatively short-term objective that has been established
to complete specific goals and objectives. Furthermore, project management utilizes the systems approach to management by having functional personnel (the
vertical hierarchy) assigned to a specific project (the horizontal hierarchy).
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Understanding Project Management
PMBOK® Guide, 5th Edition
5
TOP
MANAGEMENT:
POLICY
2.1.3 Organizational Structures
MIDDLE
MANAGEMENT:
PLANNING
+
=
SUPERVISORS:
SCHEDULING
LABORERS:
OPERATIONS
MANAGEMENT GAPS
FIGURE 1–1.
FUNCTIONAL GAPS:
DEPARTMENTIZATION
OPERATIONAL
ISLANDS
Why are systems necessary?
The above definition requires further comment. Classical management is usually considered to have five functions or principles:
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Planning
Organizing
Staffing
Controlling
Directing
You will notice that, in the above definition, the staffing function has been omitted.
This was intentional because the project manager does not staff the project. Staffing is a
line responsibility. The project manager has the right to request specific resources, but the
final decision of what resources will be committed rests with the line managers.
We should also comment on what is meant by a “relatively” short-term project. Not all
industries have the same definition for a short-term project. In engineering, the project might
be for six months or two years; in construction, three to five years; in nuclear components, ten
years; and in insurance, two weeks. Long-term projects, which consume resources full-time,
are usually set up as a separate division (if large enough) or simply as a line organization.
Figure 1–2 is a pictorial representation of project management. The objective of the
figure is to show that project management is designed to manage or control company
resources on a given activity, within time, within cost, and within performance. Time, cost,
and performance are the constraints on the project. If the project is to be accomplished for
an outside customer, then the project has a fourth constraint: good customer relations. The
reader should immediately realize that it is possible to manage a project internally within
time, cost, and performance and then alienate the customer to such a degree that no further
business will be forthcoming. Executives often select project managers based on who the
customer is and what kind of customer relations will be necessary.
Projects exist to produce deliverables. The person ultimately assigned as the project
manager may very well be assigned based upon the size, nature, and scope of the deliverables. Deliverables are outputs, or the end result of either the completion of the project or
the end of a life-cycle phase of the project. Deliverables are measurable, tangible outputs
and can take such form as:
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Hardware Deliverables: These are hardware items, such as a table, a prototype,
or a piece of equipment.
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LAT
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TIM
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W
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RESOURCES
PERFORMANCE/TECHNOLOGY
FIGURE 1–2.
Overview of project management.
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Software Deliverables: These items are similar to hardware deliverables but are
usually paper products, such as reports, studies, handouts, or documentation.
Some companies do not differentiate between hardware and software deliverables.
Interim Deliverables: These items can be either hardware or software deliverables and progressively evolve as the project proceeds. An example might be a
series of interim reports leading up to the final report.
Another factor influencing the selection of the project manager would be the stakeholders. Stakeholders are individuals or organizations that can be favorably or unfavorably
impacted by the project. As such, project managers must interface with these stakeholders, and
many of the stakeholders can exert their influence or pressure over the direction of the project.
Some stakeholders are referred to as “active” or “key” stakeholders that can possess
decision-making authority during the execution of the project. Each stakeholder can have
his or her own set of objectives, and this could place the project manager in a position of
having to balance a variety of stakeholder interests without creating a conflict-of-interest
situation for the project manager.
Each company has its own categorization system for identifying stakeholders. A typical system might be:
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Organizational stakeholders
Executive officers
Line managers
● Employees
● Unions
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Defining Project Success
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Product/market stakeholders
Customers
Suppliers
Local committees
Governments (local, state, and federal)
General public
Capital market stakeholders
● Shareholders
● Creditors
● Banks
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1.2 DEFINING PROJECT SUCCESS
In the previous section, we defined project success as the completion of an
activity within the constraints of time, cost, and performance. This was the
2.2.3 Project Success
definition used for the past twenty years or so. Today, the definition of project success has been modified to include completion:
PMBOK® Guide, 5th Edition
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Within the allocated time period
Within the budgeted cost
At the proper performance or specification level
With acceptance by the customer/user
With minimum or mutually agreed upon scope changes
Without disturbing the main work flow of the organization
Without changing the corporate culture
The last three elements require further explanation. Very few projects are completed
within the original scope of the project. Scope changes are inevitable and have the potential to destroy not only the morale on a project, but the entire project. Scope changes must
be held to a minimum and those that are required must be approved by both the project
manager and the customer/user.
Project managers must be willing to manage (and make concessions/trade-offs, if necessary) such that the company’s main work flow is not altered. Most project managers
view themselves as self-employed entrepreneurs after project go-ahead, and would like to
divorce their project from the operations of the parent organization. This is not always possible. The project manager must be willing to manage within the guidelines, policies, procedures, rules, and directives of the parent organization.
All corporations have corporate cultures, and even though each project may be inherently different, the project manager should not expect his assigned personnel to deviate from
cultural norms. If the company has a cultural standard of openness and honesty when dealing with customers, then this cultural value should remain in place for all projects, regardless
of who the customer/user is or how strong the project manager’s desire for success is.
As a final note, it should be understood that simply because a project is a success does
not mean that the company as a whole is successful in its project management endeavors.
Excellence in project management is defined as a continuous stream of successfully
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OVERVIEW
managed projects. Any project can be driven to success through formal authority and
strong executive meddling. But in order for a continuous stream of successful projects to
occur, there must exist a strong corporate commitment to project management, and this
commitment must be visible.
1.3 SUCCESS, TRADE-OFFS, AND COMPETING CONSTRAINTS
Although many projects are completed successfully, at least in the eyes of the stakeholders, the final criteria from which success is measured may be different than the initial criteria because of trade-offs. As an example, the triangle shown in Figure 1–2 is referred to
as the triple constraints on a project, namely time, cost, and performance, where performance can be scope, quality, or technology. These are considered to be the primary constraints and are often considered to be the criteria for a project against which success is
measured.
Today, we realize that there can be multiple constraints on a project and, rather than
use the terminology of the triple constraints, we focus our attention on competing constraints. Sometimes the constraints are referred to as primary and secondary constraints.
There may be secondary factors such as risk, customer relations, image, and reputation that
may cause us to deviate from our original success criteria of time, cost, and performance.
This will be covered later in Section 2.10. These changes can occur any time during the
life of a project and can then cause trade-offs in the triple constraints, thus requiring that
changes be made to the success criteria. In an ideal situation, we would perform trade-offs
on any or all of the competing constraints such that acceptable success criteria would still
be met.
As an example, let’s assume that a project was initiated using the success criteria of
the triple constraints as shown in Figure 1–3. Part way through the project, the environment changes, a new senior management team is brought in with their own agenda, or a
corporate crisis occurs such that the credibility of the corporation is at stake. In such a case,
the competing constraints shown in Figure 1–3 can be more important than the original
triple constraints. For simplicity’s sake, a triangle was used for the competing constraints
in Figure 1–3. However, there can be significantly more than three competing constraints
in which some geometric shape other than a triangle might work best.
Secondary factors are also considered to be constraints and may be more important
than the primary constraints. For example, years ago, in Disneyland and Disneyworld,
the project managers designing and building the attractions at the theme parks had six
constraints:
●
●
●
●
●
●
Time
Cost
Scope
Safety
Aesthetic value
Quality
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The Project Manager–Line Manager Interface
Va
Risk
Risk
Quality
Scope
lity
lue
9
a
Qu
Image/
Reputation
st
Co
Tim
e
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Value
Scope
Cost
Time
Image/Reputation
Traditional Projects
Complex Projects
(The Triple Constraints)
(Competing Constraints)
FIGURE 1–3.
Competing constraints.
At Disney, the last three constraints of safety, aesthetic value, and quality were considered locked-in constraints that could not be altered during trade-offs. All trade-offs were
made on time, cost, and scope. Some constraints simply cannot change while others may
have flexibility.
Not all constraints are equal in importance. For example, in the initiation phase of a project, scope may be the critical factor and all trade-offs are made on time and cost. During the
execution phase of the project, time and cost may become more important and then trade-offs
will be made on scope. A more detailed discussion of trade-offs can be found in Chapter 16.
1.4 THE PROJECT MANAGER–LINE MANAGER INTERFACE
PMBOK® Guide, 5th Edition
1.7.2 Project Management Skills
●
●
●
●
●
●
We have stated that the project manager must control company resources
within time, cost, and performance. Most companies have six resources:
Money
Manpower
Equipment
Facilities
Materials
Information/technology
Actually, the project manager does not control any of these resources directly, except
perhaps money (i.e., the project budget).1 Resources are controlled by the line managers,
functional managers, or, as they are often called, resources managers. Project managers
1. Here we are assuming that the line manager and project manager are not the same individual. However, the
terms line manager and functional manager are used interchangeably throughout the text.
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OVERVIEW
must, therefore, negotiate with line managers for all project resources. When we say that
project managers control project resources, we really mean that they control those
resources (which are temporarily loaned to them) through line managers.
Today, we have a new breed of project manager. Years ago, virtually all project managers were engineers with advanced degrees. These people had a command of technology
rather than merely an understanding of technology. If the line manager believed that the
project manager did in fact possess a command of technology, then the line manager would
allow the assigned functional employees to take direction from the project manager. The
result was that project managers were expected to manage people.
Most project managers today have an understanding of technology rather than a command of technology. As a result, the accountability for the success of the project is now
viewed as shared accountability between the project manager and all affected line managers. With shared accountability, the line managers must now have a good understanding
of project management, which is why more line managers are now becoming PMP®S.
Project managers are now expected to focus more so on managing the project’s deliverables rather than providing technical direction to the project team. Management of the
assigned resources is more often than not a line function.
Another important fact is that project managers are treated as though they are managing part of a business rather than simply a project, and as such are expected to make sound
business decisions as well as project decisions. Project managers must understand business
principles. In the future, project managers may be expected to become externally certified
by PMI® and internally certified by their company on the organization’s business processes.
In recent years, the rapid acceleration of technology has forced the project manager to
become more business oriented. According to Hans Thamhain,
The new breed of business leaders must deal effectively with a broad spectrum of contemporary challenges that focus on time-to-market pressures, accelerating technologies,
innovation, resource limitations, technical complexities, social and ethical issues, operational dynamics, cost, risks, and technology itself as summarized below:
●
●
●
●
●
●
●
●
●
●
●
●
High task complexities, risks and uncertainties
Fast-changing markets, technology, regulations
Intense competition, open global markets
Resource constraint, tough performance requirements
Tight, end-date-driven schedules
Total project life-cycle considerations
Complex organizations and cross-functional linkages
Joint ventures, alliances and partnerships, need for dealing with different organizational cultures and values
Complex business processes and stakeholder communities
Need for continuous improvements, upgrades and enhancements
Need for sophisticated people skills, ability to deal with organizational conflict, power,
and politics
Increasing impact of IT and e-business2
2. H. J. Thamhain, Management of Technology (Hoboken, NJ: Wiley, 2005), pp. 3–4.
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Dr. Thamhain further believes that there are paradigm shifts in technology-oriented
business environments that will affect the business leaders of the future, including project
managers. According to Dr. Thamhain, we are shifting from…
●
●
●
●
●
●
… mostly linear work processes to highly dynamic, organic and integrated management systems
…efficiency toward effectiveness
…executing projects to enterprise-wide project management
…managing information to fully utilizing information technology
…managerial control to self-direction and accountability
…managing technology as part of a functional speciality to management of technology as a distinct skill set and professional status3
Another example of the need for the project manager to become more actively
involved in business aspects has been identified by Gary Heerkens. Heerkens provides several revelations of why business knowledge has become important, a few of
which are4:
●
●
●
●
●
It really doesn’t matter how well you execute a project, if you’re working on the wrong
project!
There are times when spending more money on a project could be smart business—
even if you exceed the original budget!
There are times when spending more money on a project could be smart business—
even if the project is delivered after the original deadline!
Forcing the project team to agree to an unrealistic deadline may not be very smart,
from a business standpoint.
A portfolio of projects that all generate a positive cash flow may not represent an organization’s best opportunity for investment.
It should become obvious at this point that successful project management is strongly
dependent on:
●
●
A good daily working relationship between the project manager and those line
managers who directly assign resources to projects
The ability of functional employees to report vertically to line managers at the
same time that they report horizontally to one or more project managers
These two items become critical. In the first item, functional employees who are
assigned to a project manager still take technical direction from their line managers.
Second, employees who report to multiple managers will always favor the manager who
controls their purse strings. Thus, most project managers appear always to be at the mercy
of the line managers.
3. See note 2; Thamhain; p. 28.
4. G. Heerkens, The Business-Savvy Project Manager (New York: McGraw-Hill, 2006), pp. 4–8.
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OVERVIEW
Classical management has often been defined as a process in which the manager does
not necessarily perform things for himself, but accomplishes objectives through others in
a group situation. This basic definition also applies to the project manager. In addition, a
project manager must help himself. There is nobody else to help him.
If we take a close look at project management, we will see that the project manager actually works for the line managers, not vice versa. Many executives do not realize this. They
have a tendency to put a halo around the head of the project manager and give him a bonus
at project completion when, in fact, the credit should be shared with the line managers, who
are continually pressured to make better use of their resources. The project manager is simply the agent through whom this is accomplished. So why do some companies glorify the
project management position?
To illustrate the role of the project manager, consider the time, cost, and performance
constraints shown in Figure 1–2. Many functional managers, if left alone, would recognize
only the performance constraint: “Just give me another $50,000 and two more months, and
I’ll give you the ideal technology.”
The project manager, as part of these communicating, coordinating, and integrating
responsibilities, reminds the line managers that there are also time and cost constraints on
the project. This is the starting point for better resource control.
Project managers depend on line managers. When the project manager gets in trouble,
the only place he can go is to the line manager because additional resources are almost
always required to alleviate the problems. When a line manager gets in trouble, he usually
goes first to the project manager and requests either additional funding or some type of
authorization for scope changes.
To illustrate this working relationship between the project and line managers, consider
the following situation:
Project Manager (addressing the line manager): “I have a serious problem. I’m looking at a
$150,000 cost overrun on my project and I need your help. I’d like you to do the same amount
of work that you are currently scheduled for but in 3,000 fewer man-hours. Since your organization is burdened at $60/hour, this would more than compensate for the cost overrun.”
Line Manager: “Even if I could, why should I? You know that good line managers can
always make work expand to meet budget. I’ll look over my manpower curves and let you
know tomorrow.”
The following day . . .
Line Manager: “I’ve looked over my manpower curves and I have enough work to keep
my people employed. I’ll give you back the 3,000 hours you need, but remember, you owe
me one!”
Several months later . . .
Line Manager: “I’ve just seen the planning for your new project that’s supposed to start
two months from now. You’ll need two people from my department. There are two
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The Project Manager–Line Manager Interface
13
employees that I’d like to use on your project. Unfortunately, these two people are available now. If I don’t pick these people up on your charge number right now, some other project might pick them up in the interim period, and they won’t be available when your
project starts.”
Project Manager: “What you’re saying is that you want me to let you sandbag against one
of my charge numbers, knowing that I really don’t need them.”
Line Manager: “That’s right. I’ll try to find other jobs (and charge numbers) for them to
work on temporarily so that your project won’t be completely burdened. Remember, you
owe me one.”
Project Manager: “O.K. I know that I owe you one, so I’ll do this for you. Does this make
us even?”
Line Manager: “Not at all! But you’re going in the right direction.”
When the project management–line management relationship begins to deteriorate,
the project almost always suffers. Executives must promote a good working relationship
between line and project management. One of the most common ways of destroying this
relationship is by asking, “Who contributes to profits—the line or project manager?”
Project managers feel that they control all project profits because they control the budget.
The line managers, on the other hand, argue that they must staff with appropriately budgeted-for personnel, supply the resources at the desired time, and supervise performance.
Actually, both the vertical and horizontal lines contribute to profits. These types of conflicts can destroy the entire project management system.
The previous examples should indicate that project management is more behavioral
than quantitative. Effective project management requires an understanding of:
●
●
●
Quantitative tools and techniques
Organizational structures
Organizational behavior
Most people understand the quantitative tools for planning, scheduling, and controlling work. It is imperative that project managers understand totally the operations of each
line organization. In addition, project managers must understand their own job description,
especially where their authority begins and ends. During an in-house seminar on engineering project management, the author asked one of the project engineers to provide a
description of his job as a project engineer. During the discussion that followed, several
project managers and line managers said that there was a great deal of overlap between
their job descriptions and that of the project engineer.
Organizational behavior is important because the functional employees at the interface position find themselves reporting to more than one boss—a line manager and one
project manager for each project they are assigned to. Executives must provide proper
training so functional employees can report effectively to multiple managers.
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OVERVIEW
1.5 DEFINING THE PROJECT MANAGER’S ROLE
PMBOK® Guide, 5th Edition
2.2.1 Stakeholders
Chapter 4 Project
Integration Management
The project manager is responsible for coordinating and integrating activities across multiple, functional lines. The integration activities performed
by the project manager include:
●
●
●
Integrating the activities necessary to develop a project plan
Integrating the activities necessary to execute the plan
Integrating the activities necessary to make changes to the plan
These integrative responsibilities are shown in Figure 1–4 where the project manager must
convert the inputs (i.e., resources) into outputs of products, services, and ultimately profits.
In order to do this, the project manager needs strong communicative and interpersonal
skills, must become familiar with the operations of each line organization, and must have
knowledge of the technology being used.
An executive with a computer manufacturer stated that his company was looking
externally for project managers. When asked if he expected candidates to have a command
of computer technology, the executive remarked: “You give me an individual who has
good communicative skills and interpersonal skills, and I’ll give that individual a job. I can
teach people the technology and give them technical experts to assist them in decision
making. But I cannot teach somebody how to work with people.”
The project manager’s job is not an easy one. Project managers may have
increasing responsibility, but very little authority. This lack of authority can force them
to “negotiate” with upper-level management as well as functional management for
control of company resources. They may often be treated as outsiders by the formal
organization.
In the project environment, everything seems to revolve about the project manager.
Although the project organization is a specialized, task-oriented entity, it cannot exist apart
from the traditional structure of the organization. The project manager, therefore, must
PMBOK® Guide, 5th Edition
Chapter 4 Integration
Management
Resources
S Capital
Integration
Management
S Materials
Inputs
S Equipment
S Facilities
S Information
S Personnel
FIGURE 1–4.
Integration management.
Products
Integrated
Processes
Services
Profits
Outputs
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Defining the Functional Manager’s Role
15
walk the fence between the two organizations. The term interface management is often
used for this role, which can be described as managing relationships:
●
●
●
●
Within the project team
Between the project team and the functional organizations
Between the project team and senior management
Between the project team and the customer’s organization, whether an internal or
external organization
To be effective as a project manager, an individual must have management as well as
technical skills. Because engineers often consider their careers limited in the functional
disciplines, they look toward project management and project engineering as career path
opportunities. But becoming a manager entails learning about psychology, human behavior, organizational behavior, interpersonal relations, and communications. MBA programs
have come to the rescue of individuals desiring the background to be effective project
managers.
In the past, executives motivated and retained qualified personnel primarily with
financial incentives. Today other ways are being used, such as a change in title or the
promise of more challenging work. Perhaps the lowest turnover rates of any professions in
the world are in project management and project engineering. In a project environment, the
project managers and project engineers get to see their project through from “birth to
death.” Being able to see the fruits of one’s efforts is highly rewarding. A senior project
manager in a construction company commented on why he never accepted a vice presidency that had been offered to him: “I can take my children and grandchildren into ten
countries in the world and show them facilities that I have built as the project manager.
What do I show my kids as an executive? The size of my office? My bank account? A
stockholder’s report?”
The project manager is actually a general manager and gets to know the total operation of the company. In fact, project managers get to know more about the total operation
of a company than most executives. That is why project management is often used as a
training ground to prepare future general managers who will be capable of filling top management positions.
1.6 DEFINING THE FUNCTIONAL MANAGER’S ROLE
PMBOK® Guide, 5th Edition
Chapter 9 Human Resources
Management
9.1.2 HR Planning: Tools and
Techniques
Assuming that the project and functional managers are not the same person, we can identify a specific role for the functional manager. There are
three elements to this role:
●
The functional manager has the responsibility to define how the
task will be done and where the task will be done (i.e., the technical criteria).
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OVERVIEW
●
●
The functional manager has the responsibility to provide sufficient resources to
accomplish the objective within the project’s constraints (i.e., who will get the job
done).
The functional manager has the responsibility for the deliverable.
In other words, once the project manager identifies the requirements for the project
(i.e., what work has to be done and the constraints), it becomes the line manager’s responsibility to identify the technical criteria. Except perhaps in R&D efforts, the line manager
should be the recognized technical expert. If the line manager believes that certain technical portions of the project manager’s requirements are unsound, then the line manager
has the right, by virtue of his expertise, to take exception and plead his case to a higher
authority.
In Section 1.1 we stated that all resources (including personnel) are controlled by the
line manager. The project manager has the right to request specific staff, but the final
appointments rest with line managers. It helps if project managers understand the line
manager’s problems:
●
●
●
●
●
●
●
●
●
●
●
Unlimited work requests (especially during competitive bidding)
Predetermined deadlines
All requests having a high priority
Limited number of resources
Limited availability of resources
Unscheduled changes in the project plan
Unpredicted lack of progress
Unplanned absence of resources
Unplanned breakdown of resources
Unplanned loss of resources
Unplanned turnover of personnel
Only in a very few industries will the line manager be able to identify to the project
manager in advance exactly what resources will be available when the project is scheduled
to begin. It is not important for the project manager to have the best available resources.
Functional managers should not commit to certain people’s availability. Rather, the functional manager should commit to achieving his portion of the deliverables within time,
cost, and performance even if he has to use average or below-average personnel. If the project manager is unhappy with the assigned functional resources, then the project manager
should closely track that portion of the project. Only if and when the project manager is
convinced by the evidence that the assigned resources are unacceptable should he confront
the line manager and demand better resources.
The fact that a project manager is assigned does not relieve the line manager of his
functional responsibility to perform. If a functional manager assigns resources such that the
constraints are not met, then both the project and functional managers will be blamed. One
company is even considering evaluating line managers for merit increases and promotion
based on how often they have lived up to their commitments to the project managers.
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Defining the Functional Manager’s Role
17
Therefore, it is extremely valuable to everyone concerned to have all project commitments
made visible to all.
Some companies carry the concept of commitments to extremes. An aircraft components manufacturer has a Commitment Department headed by a second-level manager. The
function of the Commitment Department is to track how well the line managers keep their
promises to the project managers. The department manager reports directly to the vice president of the division. In this company, line managers are extremely careful and cautious in
making commitments, but do everything possible to meet deliverables. This same company
has gone so far as to tell both project and line personnel that they run the risk of being discharged from the company for burying a problem rather than bringing the problem to the
surface immediately.
In one automotive company, the tension between the project and line managers
became so combative that it was having a serious impact on the performance and constraints of the project. The project managers argued that the line managers were not fulfilling their promises whereas the line managers were arguing that the project managers’
requirements were poorly defined. To alleviate the problem, a new form was created which
served as a contractual agreement between the project and the line managers who had
to commit to the deliverables. This resulted in “shared accountability” for the project’s
deliverables.
Project management is designed to have shared authority and responsibility between
the project and line managers. Project managers plan, monitor, and control the project,
whereas functional managers perform the work. Table 1–1 shows this shared responsibility.
The one exception to Table 1–1 occurs when the project and line managers are the same person. This situation, which happens more often than not, creates a conflict of interest.
If a line manager has to assign resources to six projects, one of which is under his direct
control, he might save the best resources for his project. In this case, his project will be a
success at the expense of all of the other projects.
The exact relationship between project and line managers is of paramount importance
in project management where multiple-boss reporting prevails. Table 1–2 shows that
the relationship between project and line managers is not always in balance and thus,
of course, has a bearing on who exerts more influence over the assigned functional
employees.
PMBOK® Guide, 5th Edition
TABLE 1–1. DUAL RESPONSIBILITY
2.1.3 Organizational Structure
Responsibility
Topic
Project Manager
Line Manager
Rewards
Direction
Evaluation
Measurement
Control
Give recommendation: Informal
Milestone (summary)
Summary
Summary
Summary
Provide rewards: Formal
Detailed
Detailed
Detailed
Detailed
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OVERVIEW
PMBOK® Guide, 5th Edition
2.1.3 Organizational Structure
TABLE 1–2. REPORTING RELATIONSHIPS
Project Manager (PM)/Line Manager (LM)/Employee Relationship
PM Receives
Functional Progress
From
Employee
Performance
Evaluations
Made By
Type of Project
Manager
Type of Matrix
Structure*
PM Negotiates For
Employees Take
Technical Direction
From
Lightweight
Weak
Deliverables
LMs
Primarily LMs
LMs only with no
input from PM
Heavyweight
Strong
People who report
informally to PM
but formally to
LMs
PM and LMs
Assigned employees
who report to LMs
LMs with input
from PM
Tiger teams
Very strong
People who report
entirely to PM
full-time for
duration of project
PM only
Assigned employees
who now report
directly to PM
PM only
*The types of organizational structures are discussed in Chapter 3.
1.7 DEFINING THE FUNCTIONAL EMPLOYEE’S ROLE
Once the line managers commit to the deliverables, it is the responsibility of the assigned
functional employees to achieve the functional deliverables. For years the functional employees were called subordinates. Although this term still exists in textbooks, industry prefers to
regard the assigned employees as “associates” rather than subordinates. The reason for this
is that in project management the associates can be a higher pay grade than the project manager. The associates can even be a higher pay grade than their functional manager.
In most organizations, the assigned employees report on a “solid” line to their functional manager, even though they may be working on several projects simultaneously. The
employees are usually a “dotted” line to the project but solid to their function. This places
the employees in the often awkward position of reporting to multiple individuals. This situation is further complicated when the project manager has more technical knowledge
than the line manager. This occurs during R&D projects.
The functional employee is expected to accomplish the following activities when
assigned to projects:
●
●
●
●
●
Accept responsibility for accomplishing the assigned deliverables within the
project’s constraints
Complete the work at the earliest possible time
Periodically inform both the project and line manager of the project’s status
Bring problems to the surface quickly for resolution
Share information with the rest of the project team
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Working with Executives
19
1.8 DEFINING THE EXECUTIVE’S ROLE
In a project environment there are new expectations of and for the executives, as well as a
new interfacing role.5 Executives are expected to interface a project as follows:
●
●
●
●
In project planning and objective-setting
In conflict resolution
In priority-setting
As project sponsor6
Executives are expected to interface with projects very closely at project initiation and
planning, but to remain at a distance during execution unless needed for priority-setting
and conflict resolution. One reason why executives “meddle” during project execution is
that they are not getting accurate information from the project manager as to project status. If project managers provide executives with meaningful status reports, then the
so-called meddling may be reduced or even eliminated.
1.9 WORKING WITH EXECUTIVES
Success in project management is like a three-legged stool. The first leg is the project manager, the second leg is the line manager, and the third leg is senior management. If any of
the three legs fail, then even delicate balancing may not prevent the stool from toppling.
The critical node in project management is the project manager–line manager interface. At this interface, the project and line managers must view each other as equals and
be willing to share authority, responsibility, and accountability. In excellently managed
companies, project managers do not negotiate for resources but simply ask for the line
manager’s commitment to executing his portion of the work within time, cost, and performance. Therefore, in excellent companies, it should not matter who the line manager
assigns as long as the line manager lives up to his commitments.
Since the project and line managers are “equals,” senior management involvement is
necessary to provide advice and guidance to the project manager, as well as to provide
encouragement to the line managers to keep their promises. When executives act in this
capacity, they assume the role of project sponsors, as shown in Figure 1–5,7 which also
shows that sponsorship need not always be at the executive levels. The exact person
appointed as the project sponsor is based on the dollar value of the project, the priority of
the project, and who the customer is.
The ultimate objective of the project sponsor is to provide behind-the-scenes assistance
to project personnel for projects both “internal” to the company, as well as “external,” as
shown in Figure 1–5. Projects can still be successful without this commitment and support,
as long as all work flows smoothly. But in time of crisis, having a “big brother” available as
a possible sounding board will surely help.
5. The expectations are discussed in Section 9.3.
6. The role of the project sponsor is discussed in Section 10.1.
7. Section 10.1 describes the role of the project sponsor in more depth.
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OVERVIEW
PMBOK® Guide, 5th Edition
2.2.1 Project Stakeholders
PRIORITY PROJECTS
PROJECT SPONSOR:
SENIOR MANAGEMENT
MAINTENANCE PROJECTS
PROJECT SPONSOR:
LOWER/MIDDLE MANAGEMENT
RELATIONSHIP:
PROJECT
SPONSOR
PROJECT
MANAGER
PROJECT
TEAM
FIGURE 1–5.
• OBJECTIVE SETTING
• UP-FRONT PLANNING
• PROJECT ORGANIZATION
• KEY STAFFING
• MASTER PLAN
• POLICIES
• MONITORING EXECUTION
• PRIORITY SETTING
• CONFLICT RESOLUTION
• EXECUTIVE-CLIENT CONTACT
PROJECT
MANAGER
The project sponsor interface.
When an executive is required to act as a project sponsor, then the executive has the
responsibility to make effective and timely project decisions. To accomplish this, the executive needs timely, accurate, and complete data for such decisions. Keeping management
informed serves this purpose, while the all-too-common practice of “stonewalling” prevents
an executive from making effective project decisions.
It is not necessary for project sponsorship to remain exclusively at the executive levels. As companies mature in their understanding and implementation of project management, project sponsorship may be pushed down to middle-level management. Committee
sponsorship is also possible.
1.10 COMMITTEE SPONSORSHIP/GOVERNANCE
All projects have the potential of getting into trouble but, in general, project management
can work well as long as the project’s requirements do not impose severe pressure upon
the project manager and a project sponsor exists as an ally to assist the project manager
when trouble does appear. Unfortunately, in today’s chaotic environment, this pressure
appears to be increasing because:
●
●
Companies are accepting high-risk and highly complex projects as a necessity for
survival
Customers are demanding low-volume, high-quality products with some degree of
customization
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Committee Sponsorship/Governance
●
●
●
●
●
21
Project life cycles and new product development times are being compressed
Enterprise environmental factors are having a greater impact on project execution
Customers and stakeholders want to be more actively involved in the execution of
projects
Companies are developing strategic partnerships with suppliers, and each supplier
can be at a different level of project management maturity
Global competition has forced companies to accept projects from customers that
are all at a different level of project management maturity and with different
reporting requirements
These pressures tend to slow down the decision-making processes at a time when
stakeholders want the projects and processes to be accelerated. One person, while acting
as the project sponsor, may have neither the time nor capability to address all of these additional issues. The result will be a project slowdown and can occur because of:
●
●
●
●
●
The project manager being expected to make decisions in areas where he or she
has limited knowledge
The project manager hesitating to accept full accountability and ownership for the
projects
Excessive layers of management being superimposed on top of the project management organization
Risk management being pushed up to higher levels in the organization hierarchy
resulting in delayed decisions
The project manager demonstrating questionable leadership ability on some of the
nontraditional projects
The problems resulting from these pressures may not be able to be resolved, at least
easily and in a timely manner, by a single project sponsor. These problems can be resolved
using effective project governance. Project governance is actually a framework by which
decisions are made. Governance relates to decisions that define expectations, accountability, responsibility, the granting of power, or verifying performance. Governance relates to
consistent management, cohesive policies, and processes and decision-making rights for a
given area of responsibility. Governance enables efficient and effective decision-making to
take place.
Every project can have different governance even if each project uses the same enterprise project management methodology. The governance function can operate as a separate process or as part of project management leadership. Governance is designed not to
replace project decision-making but to prevent undesirable decisions from being made.
Historically, governance was provided by a single project sponsor. Today, governance
is a committee and can include representatives from each stakeholder’s organization.
Table 1-3 shows various governance approaches based upon the type of project team. The
membership of the committee can change from project to project and industry to industry.
The membership may also vary based upon the number of stakeholders and whether the
project is for an internal or external client. On long-term projects, membership can change
throughout the project.
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OVERVIEW
TABLE 1–3. TYPES OF PROJECT GOVERNANCE
Structure
Description
Governance
Dispersed locally
Team members can be full- or
part-time. They are still attached
administratively to their functional area.
Usually a single person is acting as the
sponsor but may be an internal
committee based upon the project’s
complexity.
Dispersed geographically
This is a virtual team. The project
manager may never see some of the
team members. Team members can be
full- or part-time.
Usually governance by committee and
can include stakeholder membership.
Colocated
All of the team members are physically
located in close proximity to the project
manager. The project manager does not
have any responsibility for wage and
salary administration.
Usually a single person acting as the
sponsor.
Projectized
This is similar to a colocated team but
the project manager generally functions
as a line manager and may have wage
and salary responsibilities.
May be governance by committee
based upon the size of the project and
the number of strategic partners.
Governance on projects and programs sometimes fails because people confuse project
governance with corporate governance. The result is that members of the committee are
not sure what their role should be. Some of the major differences include:
●
●
●
●
Alignment: Corporate governance focuses on how well the portfolio of projects is
aligned to and satisfies overall business objectives. Project governance focuses on
ways to keep a project on track.
Direction: Corporate governance provides strategic direction with a focus on how
project success will satisfy corporate objectives. Project governance is more operation direction with decisions based upon the predefined parameters on project
scope, time, cost, and functionality.
Dashboards: Corporate governance dashboards are based upon financial, marketing, and sales metrics. Project governance dashboards have operations metrics on
time, cost, scope, quality, action items, risks, and deliverables.
Membership: Corporate governance committees are composed of the seniormost
levels of management. Project government membership may include some membership from middle management.
Another reason why failure may occur is when members of the project or program
governance group do not understand project or program management. This can lead to
micromanagement by the governance committee. There is always the question of what
decisions must be made by the governance committee and what decisions the project manager can make. In general, the project manager should have the authority for decisions
related to actions necessary to maintain the baselines. Governance committees must have
the authority to approve scope changes above a certain dollar value and to make decisions
necessary to align the project to corporate objectives and strategy.
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The Project Manager as the Planning Agent
23
1.11 THE PROJECT MANAGER AS THE PLANNING AGENT
The major responsibility of the project manager is planning. If project
planning is performed correctly, then it is conceivable that the project manChapter 9 Project Human
ager will work himself out of a job because the project can run itself. This
Resources Management
rarely happens, however. Few projects are ever completed without some
conflict or trade-offs for the project manager to resolve.
In most cases, the project manager provides overall or summary definitions of the
work to be accomplished, but the line managers (the true experts) do the detailed planning.
Although project managers cannot control or assign line resources, they must make sure
that the resources are adequate and scheduled to satisfy the needs of the project, not vice
versa. As the architect of the project plan, the project manager must provide:
PMBOK® Guide, 5th Edition
●
●
●
●
●
●
Complete task definitions
Resource requirement definitions (possibly skill levels)
Major timetable milestones
Definition of end-item quality and reliability requirements
The basis for performance measurement
Definition of project success
These factors, if properly established, result in:
●
●
●
Assurance that functional units will understand their total responsibilities toward
achieving project needs.
Assurance that problems resulting from scheduling and allocation of critical
resources are known beforehand.
Early identification of problems that may jeopardize successful project completion
so that effective corrective action and replanning can be taken to prevent or resolve
the problems.
Project managers are responsible for project administration and, therefore, must have
the right to establish their own policies, procedures, rules, guidelines, and directives—
provided these policies, guidelines, and so on, conform to overall company policy.
Companies with mature project management structures usually have rather loose company
guidelines, so project managers have some degree of flexibility in how to control their
projects. However, project managers cannot make any promises to a functional employee
concerning:
●
●
●
●
●
●
●
Promotion
Grade
Salary
Bonus
Overtime
Responsibility
Future work assignments
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OVERVIEW
These seven items can be administered by line managers only, but the project manager
can have indirect involvement by telling the line manager how well an employee is doing
(and putting it in writing), requesting overtime because the project budget will permit it, and
offering individuals the opportunity to perform work above their current pay grade.
However, such work above pay grade can cause severe managerial headaches if not coordinated with the line manager, because the individual will expect immediate rewards if he performs well.
Establishing project administrative requirements is part of project planning. Executives
must either work with the project managers at project initiation or act as resources later.
Improper project administrative planning can create a situation that requires:
●
●
●
A continuous revision and/or establishment of company and/or project policies,
procedures, and directives
A continuous shifting in organizational responsibility and possible unnecessary
restructuring
A need for staff to acquire new knowledge and skills
If these situations occur simultaneously on several projects, there can be confusion
throughout the organization.
1.12 PROJECT CHAMPIONS
Corporations encourage employees to think up new ideas that, if approved by the corporation, will generate monetary and nonmonetary rewards for the idea generator. One such
reward is naming the individual the “project champion.” Unfortunately, the project champion often becomes the project manager, and, although the idea was technically sound, the
project fails.
Table 1–4 provides a comparison between project managers and project champions. It
shows that the project champions may become so attached to the technical side of the project that they become derelict in their administrative responsibilities. Perhaps the project
champion might function best as a project engineer rather than the project manager.
TABLE 1–4. PROJECT MANAGERS VERSUS PROJECT CHAMPIONS
Project Managers
Project Champions
•
•
•
•
Prefer working individually
Committed to technology
•
•
•
•
•
•
•
Committed to the profession
Seek to exceed the objective
Are unwilling to take risks; try to test everything
Seek perfection
Think in terms of long time spans
Manage things
Are committed to and pursue intellectual values
•
•
•
•
•
•
•
Prefer to work in groups
Committed to their managerial and technical
responsibilities
Committed to the corporation
Seek to achieve the objective
Are willing to take risks
Seek what is possible
Think in terms of short time spans
Manage people
Are committed to and pursue material values
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Project-Driven versus Non–Project-Driven Organizations
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This comparison does not mean that technically oriented project managers-champions
will fail. Rather, it implies that the selection of the “proper” project manager should be
based on all facets of the project.
1.13 THE DOWNSIDE OF PROJECT MANAGEMENT
Project management is often recognized only as a high-salaried, highly challenging position whereby the project manager receives excellent training in general management.
For projects that are done for external sources, the project manager is first viewed as
starting out with a pot of gold and then as having to manage the project so that sufficient
profits will be made for the stockholders. If the project manager performs well, the project will be successful. But the personal cost may be high for the project manager.
There are severe risks that are not always evident. Some project management positions may ...
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