Evolutionary learning in strategy project systems

Evolutionary Learning in Strategy-Project Systems A PMI Research Monograph Paul Gardiner Adil Eltigani Terence Williams Richard Kirkham Lixiong Ou Antonio Calabrese Jonas Söderlund Foreword by Ed Hoffman Technical Editor – David Ling Library of Congress Cataloging-in-Publication Data has been applied for ISBN: 978-1-62825-484-6 Published by: Project Management Institute, Inc 14 Campus Boulevard Newtown Square, Pennsylvania 19073-3299 USA Phone: +1 610-356-4600 Fax: +1 610-482-9971 Email: customercare@pmi.org Internet: PMI.org ©2018 Project Management Institute, Inc All rights reserved Our copyright content is protected by U.S intellectual property law that is recognized by most countries To republish or reproduce our content, you must obtain our permission Please go to http://www.pmi.org/permissions for details PMI, the PMI logo, PMBOK, OPM3, PMP, CAPM, PgMP, PfMP, PMI-RMP, PMI-SP, PMI-ACP, PMI-PBA, PROJECT MANAGEMENT JOURNAL, PM NETWORK, PMI TODAY, PULSE OF THE PROFESSION and the slogan MAKING PROJECT MANAGEMENT INDISPENSABLE FOR BUSINESS RESULTS are all marks of Project Management Institute, Inc For a comprehensive list of PMI trademarks, contact the PMI Legal Department All other trademarks, service marks, trade names, trade dress, product names and logos appearing herein are the property of their respective owners Any rights not expressly granted herein are reserved To inquire about discounts for resale or educational purposes, please contact the PMI Book Service Center PMI Book Service Center P.O Box 932683, Atlanta, GA 31193-2683 USA Phone: +1 866-276-4764 (within the U.S or Canada) or + 770-280-4129 (globally) Fax: + 770-280-4113 Email: info@bookorders.pmi.org Printed in the United States of America No part of this work may be reproduced or transmitted in any form or by any means, electronic, manual, photocopying, recording, or by any information storage and retrieval system, without prior written permission of the publisher The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48—1984) 10 Contents Acknowledgments�� v Abbreviations��vii Foreword�� ix Chapter 1: Introduction��1 Chapter 2: Literature Review�� Chapter 3: Pilot Study�� 39 Chapter 4: Refining the Conceptual Framework�� 47 Chapter 5: Research Methodology��55 Chapter 6: Results and Data Analysis�� 67 Chapter 7: Discussion�� 101 Chapter 8: Conclusions�� 127 References�� 133 Appendix 1: Interview Protocols��151 Appendix 2: Full Set of Data Analysis Tables�� 155 Appendix 3: Data Analysis Cards�� 263 Glossary��275 iii Acknowledgments The authors express their sincere gratitude to the Project Management Institute (PMI) for the award of the sponsored research grant to enable them to undertake the research reported here The authors are also grateful to the British University of Dubai and the National Research Foundation of the United Arab Emirates for earlier seed funding, which supported the pilot work conducted as a precursor to the international research project reported in this monograph As always, a major research project involves many helpers along the way without whom the project may never have finished or may have fallen well short of the aim and objectives established at the start We are particularly grateful to the reviewers of our original research proposal submitted to PMI; to our project liaison, V K Narayanan; and for the ongoing help and support from Carla Messikomer, Kristin Dunn, and Jake Williams of PMI who always listened to us when plans were hit by uncertainty We also acknowledge the many staff at SKEMA Business School who were involved in the administrative and financial management of the research program, and our friends and families who helped to keep us going to the end v Abbreviations APM – Association of Project Management CKO – chief knowledge officer ERM – enterprise risk management ISO – International Organization for Standardization PMI – Project Management Institute PPPM – project, program, and portfolio management RBV – resource-based view UAE – United Arab Emirates VRIO – valuable, rare, inimitable, organization support vii Foreword There is a saying at NASA that “the safest launch is no launch.” It is a cryptic, reality-based acknowledgment that you can never be certain when it comes to the complex factors involved in launching a rocket There is an implicit message for objectivists who search for standards of perfection to align before agreeing about the suitability for action The quote lends recognition that what may be desired in theory will not hold up in practice The tension between knowledge management and the learning of organizational lessons provides a similar bind There is a noticeable contrast between objectivist theoretical epistemology of knowledge and a practice-based perspective (Hislop, 2013; Nicolini, 2011) Specifically, the latter is typically unseemly, with much more uncertainty It is the difference between the project management student and the project professional who is left to wonder why reality never proceeds like a textbook There is often skepticism between those who practice and those who research The pressures in both fields are driven by somewhat different perspectives Thus, the knowledge practitioner is responsible for circumstances that paint knowledge in unique colors As NASA’s chief knowledge officer (CKO), I faced powerful factors that drove my focus and the solutions I wanted to implement The theoretical foundations offer a direction, but putting knowledge into practice is a journey largely determined by existing barriers and the layout of the organizational terrain There is certainly a strong connection between knowledge management research and practice However, with the increasing importance of knowledge capability for project and organizational success, it is important to be aware of their differences What Makes Practice-Driven Knowledge Management Different from Theory and Research? Organizations are driven by strategy and mission In a mission-based environment like NASA, anything that is not considered mission related has a hard time being noticed For this reason, knowledge in practice ix Appendix 265 B3 State-owned information technology enterprise Need to improve problem solving Periodic reports and minutes of meetings Recognizing that traditional paper reports, the efficiency of problems solving is low Discrete project management capabilities residing with the individuals; individual capability of learning; capability of ex post facto risk response Decided to have enterprise-wide weekly project review meetings to analyze problems and find solutions Capability of fast problem solving C1 National enterprise Need for strategic alignment of projects Clear strategy implementation path; annual targets Realizing that projects are not aligned with the strategy Discrete project management capabilities residing with the individuals; individual capability of learning Develop a framework for strategy implementation; annual development of business objectives and reporting to top management Capability to establish annual goals; better project selection C2 National enterprise Need to improve project management knowledge A project management method; capable project managers Realizing that engineers act as project managers with little knowledge about project management Discrete project management capabilities residing with the individuals; individual capability of learning Develop a methodology for project management with help of experts; train all staff in project management Capability within functional units to manage projects C3 National enterprise Interproject coordination issues causing delays Mechanism and routines of coordination and communication between projects Realizing the need to establish a formal communication mechanism Discrete project management capabilities residing with the individuals; individual capability of learning Develop a sound project coordination mechanism Capability to effectively coordinate between projects D1 Large multinational developer of advanced instruments and complex heavy machines Need to improve project management A global project management methodology Understanding the importance of culture and context in project management Leadership focus on cultural differences; culture of knowledge sharing; culture of quality Decided to develop a project management system that caters to cultural and contextual differences between global offices Managing global projects using a project management methodology that balances between global governance and local cultures (continued) 266 Evolutionary Learning in Strategy-Project Systems D2 Large multinational developer of advanced instruments and complex heavy machines Request from staff to share their knowledge New knowledge sharing module Recognition that new digital technologies changed the culture to a culture of sharing; learning the need for a different method of learning that is more interactive Culture of knowledge sharing In the system, created a module for employees to create knowledge sharing media Improved knowledge sharing E1 Large multinational contractor Poor procurement decisions made by some project managers New unit “Project Risk and Opportunity Management;” golden rules for project selection High business risk due to decentralized power creating a need for more balance Leadership and effective governance at different levels (e.g., putting in place quarterly meetings) Creation of a new technical unit; changes in rules, e.g., removing power of attorney from project managers Better risk management and contract management capability; new sensing capability select projects aligned with strategy E2 Large multinational contractor Issues arising in bid/no-bid process Output from periodical review meetings; new lessons learned resource Realization of need for new capabilities for bidding in new and competitive market Vice president of operations; project portfolio management board; change management capability Instigation of periodical review meetings at different levels where “people meet people” Risk mitigation; knowledge sharing and transfer E3 Large multinational contractor Change in strategy from diversification to a focus on capabilities in specific industries (e.g., oil and gas) A new lessons learned management process was approved Recognition of need to widen scope of lessons learned from only technical to managerial and process issues Project portfolio management board and strategic change management capability Creation of a new lessons learned management process Improved analytic and assessment of lessons learned; changed attitudes in HR for better understanding of wider scenarios and complex contexts E4 Large multinational contractor Mismatch of internal and external standards upon entering new market 50 new documents of standards and procurement conditions Recognizing that they lack some technical and contractual information Organizational agility; change management Collect information required; develop documents (standards and contract conditions) Capability to penetrate new markets (continued) Appendix 267 F1 Mature high-tech organization in North America Safety incident Updated policies; new case study Learning about the culture of complacency in the organization; learning the need to balance between following rigorous processes and making fast decisions (do it fast versus follow the process and policies) Learning capability; strong culture of following policies and procedures Investigate about the incident; update policies; capture lessons learned and use them as a case study in training Better decision-making capability; manage risk balance; more effective knowledge sharing F2 Mature high-tech organization in North America A major technical failure causing major financial losses New case study Young engineers working under pressure; learning the need to balance between following rigorous processes and making fast decisions (do it fast versus follow the process and policies) Learning capability Investigate about the incident; capture lessons learned and use them as a case study in training Better decision-making capability; manage risk balance; more effective knowledge sharing G1 Large multinational manufacturing company Market share Global development process (GDP) Learning the need to share knowledge across all company branches around the world to improve time to market and reduce cost Understands the complexity of the highly competitive industry; capability to transfer knowledge through practice; leadership; culture of quality and continuous improvement Decided to develop a global development process (GDP); benchmarking Capability to manage multiple complex and megaprojects cross-functionally and globally with improved time to market and less cost G2 Large multinational manufacturing company Time waste and difficulties in financial systems Regional financial system (working toward a global system at time of research) Learning the difficulties arising from the different systems in different countries; learning that nonfinancial people need a simplified financial system Understanding the complexity of the highly competitive industry; capability to transfer knowledge through practice; leadership; culture of quality and continuous improvement Decided to have a global financial system; root cause analysis Capability to manage regional financial systems with reduced complexity and central governance G3 Large multinational manufacturing company Cost A global testing system available for all branches in the world Recognition of the benefits of integrating different testing systems in global offices into a global system to reduce resources and cost Understands the complexity of the highly competitive industry; capability to transfer knowledge through practice; leadership; culture of quality and continuous improvement Decided to develop a central global testing system Capability to product tests using a global system with less cost (continued) 268 Evolutionary Learning in Strategy-Project Systems H1 Telecommunications operator in the Middle East Financial crisis Network infrastructure The need to expand infrastructure Leadership Invest in network infrastructure Capability to increase market share H2 Telecommunications operator in the Middle East Chronic escalation of issues using “red flags” to very senior management Cross-functional problem-solving mechanism Lack of collaborative problem solving Leadership New mechanisms (quite controlling) put in place Cross-functional communication, collaboration, and decision making H3 Telecommunications operator in the Middle East Delivery time slippage and missed milestones Development of balanced scorecard for project teams Realization of poor awareness of delivery time slippage and corrective action Leadership and organizational agility at senior levels Use of KPIs in a balanced scorecard approach used to force change and introduce milestone planning Greater focus on time scales, milestones, and scope changes that affect delivery H4 Telecommunications operator in the Middle East Dynamic changing market Introduction of strategy maps and portfolio management Need to be flexible and agile and connected between projects and strategy Leadership and agility Large internal engagement project and introduction of structured and agile roadmapping Better connectivity and management between strategy and projects; greater balance of approach (top-down and bottom-up) H5 Telecommunications operator in the Middle East Time to market suffering Agile as a method for teams “We recognized last year that our time to market was suffering, because we were running a very serial-based delivery” Leadership and organizational agility “Specific teams were identified to deliver agile development” Shorter time to market H6 Telecommunications operator in the Middle East Poor change management after major internal project New behavior-related processes connected with change projects Realization that behavior change is very weak after internal projects Leadership and organizational agility Started investing in change management Improved stakeholder analysis capabilities, political awareness, behavioral insights, etc (continued) Appendix 269 H7 Telecommunications operator in the Middle East Lack of project management maturity across projects Corporate PMO Realization that all project managers are doing things in a different way and lack of a coordinated approach Leadership and organizational agility Creation of a corporate PMO Better project management maturity as improved project selection process and standardized project supporting and reporting tools H8 Telecommunications operator in the Middle East Poor performance at cross-functional projects More sophisticated governance, better able to handle complexity Realization that a move to take on corporate clients would need new capabilities in complex environments Leadership and organizational agility Improving program and project governance New capabilities to handle complexity from new corporate clients H9 Telecommunications operator in the Middle East Knowledge getting lost from project to project New processes around lessons learned Realization of lack of lessons learned tools PMO Introducing and training in new techniques and processes, e.g., brainstorming, incentives, etc Learning into practice and reuse of learning by teams H10 Telecommunications operator in the Middle East Project managers lack experience and knowledge New processes added to corporate project methodology Realization of a lack of project management maturity PMO Developed value-focused processes and risk management and quality performance New value management, risk management, and quality management capabilities I1 Design and construction company for large infrastructure projects Technical issue regarding cable performance Cost reduction across the whole facility under construction Double learning, effective problem solving, and realization of the need for innovation and change Effective communications; regular lessons learned that benefit current project practices; problem solving Benchmarking overseas and adoption of new fibre optic cable technology New technological capability I2 Design and construction company for large infrastructure projects Major fault on architectural finishes causing very high cost impact New KMS, processes, and procedures Realization they needed greater risk and business risk management capability Excellent communication and well-informed leadership Creation of a new KMS, new processes, and new procedures New technical knowledge; new processes and capabilities for managing contractors (continued) 270 Evolutionary Learning in Strategy-Project Systems I3 Design and construction company for large infrastructure projects Inefficient process New process and technique Realization that the process was inefficient Value engineering capability Applied value engineering New technical process for irregular tiling jobs I4 Design and construction company for large infrastructure projects Supplier concerned about safety Internal resources rather than through agents Realization that the business structure creates high risk exposure Strong leadership Restructure of business New in-house capabilities related to quality and safety I5 Design and construction company for large infrastructure projects Delays Greater site presence Realization that too much time spent in the office leads to project delays Flexibility and PMO Greater site presence introduced Better communications and reduction in delays I6 Design and construction company for large infrastructure projects Technological obsolescence New conditions of contract Realization that on long duration projects technical equipment can become obsolete before the handover stage Governance, PMO, and good leadership Changes made to contract conditions Better control of technology in projects I7 Design and construction company for large infrastructure projects Changing market New HR practices Recognition of need for high organization agility Leadership and HR Innovative HR practices introduced New HR capabilities I8 Design and construction company for large infrastructure projects Issues after handover when starting operations New practices Realization that operationalization is a critical stage Strong problem-solving culture and good leadership Development of specific practices to reduce risk at operationalization New capabilities to safeguard operations after handover J1 Client of design and construction company of large infrastructure projects Addition of major new facility New working processes Need to learn how to operate more cross functionally Leadership, agility, ERM Introduction of structured roadmapping using scorecards, vision, mission, strategies, targets, KPIs Increased stakeholder management capability (continued) Appendix 271 J2 Client of design and construction company of large infrastructure projects Customer complaints Better retail services Realization that the facilities have too much retail Quality management system, agility Create less high-value retail offering Improved response to customer complaints K1 Construction contractor of design and construction company of large infrastructure projects Scope changes and document management issues Document management system Realization that employees need instructions they can understand quickly Governance and agility New document management system plus use of emails to give a quick start option Capability to respond better to change requests K2 Construction contractor of design and construction company of large infrastructure projects Too many drawings issued to engineers Adaptation to new document management system Realization that engineers are being issued with many irrelevant drawings as no one is filtering them Internal lessons learned Application of new document management system to achieve correct filtering Additional capabilities at governance, communication and document management K3 Construction contractor of design and construction company of large infrastructure projects Lack of decision making by engineers Increased communication and informal discussions leading to better understanding Overreliance on superiors to make and act on decisions Leadership and learning from practice Development of weekly team meetings with pizza Increased communication and shared responsibility for decision making L1 Small consultancy company To increase the productivity of the project and program managers within the company The “Company Academic Way” in which we share specific problems and attempt to solve and KM system where PowerPoints are created that show the lessons learned and are shared in the organization The need to improve the productivity of clients Enhance knowledge management through the KM system (lessons learned); improved skills, services, and confidence; the outputs also helped with research Two different ways to capitalize and to capture the lessons learned; a central knowledge management system was also developed; in seminars, share problems stored in the system and find solutions Increased efficiency in projects with developed management techniques in both the company and for clients; lessons learned have been applied to both areas (continued) 272 Evolutionary Learning in Strategy-Project Systems M1 Large project management company Feedback from a specific client Customized presentations that are tailored to specific client needs Difficulties in entering new markets The use of lessons learned alongside an agile organization willing to change and good leadership Analysis of projects to determine potential improvements in the future and customization of presentations (internally and as a recommendation to clients) Increased sales and better relations with clients; helped show partners we were engaged with their needs to succeed N1 Medium project management company Feedback from several clients Internal documentation that has been compiled in PPTs, mind maps, mails, and processes Problems with estimating required workload Analysis of the existing internal and external feedbacks; customer correctives to lead and readjust Fine analysis of projects using several tools, including software tables, comparisons, and feedback Better understanding throughout the organization with less “absurd”’ costs for clients O1 Large social security company Interviews with team members Better skilled staff Staff members expressed their desire to improve their skills and for progress within the company Strong leadership and the willingness of staff to progress Certifications were created from the processes linked to the project management; reviews of previous cases set up and action plans produced Satisfaction of different wishes meant more motivation and increased productivity P1 Large international construction company Logging of previous encounters in projects A project management office that studies and develops project portfolios using different strategies and techniques The need to develop new strategies, procedures, and methods of work Good motivation in teams, with lots of communication and transparency; leadership Lessons learned were implemented; a change of approach Solutions to many problems, reduced risks, higher from top-down to bottom-up and full transparency within stakeholder engagement, and an increase in the number the organization of projects Q1 Medium project management company Severe delays on a particular project A database of all project information specific for projects Projects were taking too long to complete, and were falling off track Good organization and leadership with the willingness for change Analyzing previous projects and validating project specifications with customers Improved customer relations and added business value through less project delays (continued) Appendix 273 R1 Start-up web development company Advice from expert about agile method Enhanced focus on technical demands and increased capacity to anticipate certain points There was no knowledge sharing or discussions with the technical team Organizational willingness to change and recruitment of an expert in this area The agile method was implemented for project management More reflection of stories and better organization S1 Large data systems company User communication Regular meetings with enhanced communication The organization is not very good at responding to change/migration Set of PMOs responsible for projects and organizational agility Lessons learned were reviewed at regular meetings throughout the whole company: Those lessons learned should be clarified in order to not repeat the same mistakes again Increased customer satisfaction and improved migrations T1 Large consultation company Pressure from team leader SharePoint (platform for sharing knowledge), Pcubed (interactive learning path with templates), and more focused meetings (smaller groups) Mistakes were being constantly repeated Following techniques from a similar organization and good leadership More regular and organized team meetings, sharing of lessons learned, and an interactive training path More organized delivery brings benefits for staff and the organization T2 Small technological innovation company Lack of expertise in marketing More skilled workforce and a changed mindset for taking more risks Difficulties in obtaining financing for projects A trip to a company in the United States and willingness to grow as a business More focus on lessons learned, hiring of a new team member to help with marketing and commercial things: Making errors is not a problem but repeating errors is a fatal error Ability to obtain finance for projects (continued) 274 Evolutionary Learning in Strategy-Project Systems V1 UK government department Communications were fragmented and messy A Knowledge Hub was developed and a project delivery profession was set up as a means of creating informal knowledge exchange Recommendations made from assurance reviewers at gateway reviews: The gateway review process provides opportunities for reflection on project performance at key stages in the project life cycle, and ostensibly, to capture lessons learned The project delivery profession was set up as a means of creating informal knowledge exchange opportunities Training and education/development events PMO-style structure, program directors who oversee projects, and standards and guidance set by the UK government More capturing and sharing of lessons learned, and changes to communication protocols Capability to improve the way they develop soft skills in project teams; improved communications and relationships between key project actors W1 UK government department “Benefits realization and evaluation” A center of excellence that reports through the governance process and formal systems, which allows sharing of lessons learned “Learning that benefits and outcomes need to be evaluated to inform future programs” Willingness to change and organizational agility Learning was taken from abroad, with more discussing and digesting, with benchmarking in papers; focus on informal learning More emphasis on being an intelligent client, being reflective, avoiding groupthink, and knowing when to question and interpret Glossary Activity configuration – represents the unit of analysis in this research and refers to a combination of certain actors, sociocultural contexts, cognitive frames, artifacts, and structural properties, besides diverse practices, which are an observable set of actions that can be analyzed by the researcher Coevolutionary learning – a model of learning in which coevolution occurs between a training environment and a population of learners Complex adaptive system – often known by the acronym CAS, a system in which perfect knowledge of the constituent parts does not translate to a perfect understanding of the “whole system” behavior Complex adaptive systems are “complex” in that they are characterized by dynamic relationships that are not aggregations of individual static entities Complex adaptive systems are characterized by adaptiveness, nonlinear behavior, and the ability to self-organize The most commonly used example of a complex adaptive system is the human brain Duality (of structure) – as illustrated in the structuration theory, duality of structure refers to the relationship between the social systems and social action, in that social actions draw from social systems and these actions at the same time are the means of social system reproduction Dynamic capabilities – refer to the capabilities of the organization to create and modify existing capabilities and to modify its resource base Emergent strategy – refers to changes in strategy that occur incrementally, often localized, as a result of learning that happens between formal strategic planning periods Enterprise risk management (ERM) – commonly known by the acronym ERM, it adopts a holistic approach to the identification, analysis, and response to risks across the enterprise; by definition, this includes risks at project, program, and portfolio level A holistic approach requires an appreciation of complexity, and recognition that risks are often emergent over time 275 276 Evolutionary Learning in Strategy-Project Systems Evolutionary learning laboratory – a participatory system-based approach to organizational learning that is designed to help untangle complex and uncertain relationships in social environments as an aid to better decision making Governance – the use of institutions, structures of authority, and collaboration to allocate resources and coordinate or control activity in society or the economy Governance of projects concerns those areas of governance (public or corporate) that are specifically related to project activities Good project governance ensures that relevant, sustainable alternatives are chosen and delivered efficiently H-form – a holding organization structure representing a conglomerate corporate body Knowing in practice – refers to knowledge that can best be understood and researched from within social practice, because knowledge is developed through practice and knowledgeable actors shape practice M-form – an organization structure in which the corporate body is organized into multidivisional units, each with related strategic objectives Organizational resilience – the ability of an organization to withstand “shocks” and seize opportunities An organization’s resilience is critical in competitive “posture,” profitability, and sustainability Resilience is a strategic objective intended to help an organization survive and prosper A highly resilient organization is also more adaptive, competitive, agile, and robust than less resilient organizations P-form – an organization structure in which the dominant basis for organizing is by projects Also called project-form PPPM system – the system of individual projects, organized in programs, which form part of the overall portfolio of project-oriented work of an organization Project epoch – a period of time, often years, in which an organization uses and improves a specific project implementation that defines the type of projects it pursues, the market in which it operates, and the project capabilities it employs Project risk maturity model – maturity models are designed to enable organizations to assess current practices and procedures against industry norms and benchmarks Project risk maturity models are widely used Glossary 277 in ERM to enable project and program teams to understand the quality of the data used in the analysis of risk and the impact of risk intelligence on business decisions Projectification – the process of changing the work of an organization or society to be undertaken by project-related principles, rules, techniques, and procedures Projectyness – an organizational spectrum along which an organizational initiative or work activity is said to lie somewhere between two extremes characterized as pure project and pure business-as-usual Results chains – a set of related activity configurations found in the data analysis Rethinking project management – a network established in the United Kingdom by the Engineering and Physical Sciences Research Council (www.rethinkingpm.org.uk) that operated from 2005 to 2006 Strategy-project system – the sum of activities, structures, and resources relating to the strategy side and project side of an organization and the degree of integration between them Systemic weltanschauung – a system-based, holistic worldview U-form – a unitary organization structure in which the organization is managed along strong functional lines Vanguard projects – projects that develop and refine new capabilities through an iterative process between projects before a capability is fully supported and institutionalized by the organization ... knowledge predominantly through talking, arguing, laughing, and socializing Bringing together project practitioners to share their xii Evolutionary Learning in Strategy- Project Systems experiences... important role in turning tangible project management assets into an actual source of competitiveness 10 Evolutionary Learning in Strategy- Project Systems The Strategy- Project System In this section,... practical implications for industry of systemic evolutionary learning in different sectors and contexts (Crawford & Cooke-Davies, 2012) 4 Evolutionary Learning in Strategy- Project Systems The literature