Working towards best practices in project management

Working towards best practices in project management

International Journal of Project Management 20 (2002) 93±98 www.elsevier.com/locate/ijproman Working towards best practices in project management: a...

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International Journal of Project Management 20 (2002) 93±98

www.elsevier.com/locate/ijproman

Working towards best practices in project management: a Canadian study Robert Loo * Faculty of Management, University of Lethbridge, Lethbridge, Alberta, Canada T1K 3M4 Received 9 February 2000; received in revised form 27 June 2000; accepted 9 July 2000

Abstract This study examined the best practices in a heterogeneous sample of 34 Canadian organizations having professional project managers. The study also examined barriers to best practices and the organizational context in terms of leadership styles and organizational culture. Like other studies, these results revealed a mix of technical and people-oriented best practices and areas for improvement. Recommendations are presented for organizations. # 2001 Elsevier Science Ltd. All rights reserved. Keywords: Best practices; Leadership; Organizational culture; Planning

1. Introduction Best practices may be described as optimum ways of performing work processes to achieve high performance [1,2]. While much of the best practices literature addresses best practices in the context of competition where organizations benchmark against the best, worldclass organizations for targeted processes such as new product performance [3] or a human resource management process such as training [4], there is also the context of internal benchmarking. As Thurow states, ``Great companies compete against themselves. They may be the best but they are never good enough, they can always become better.'' [5, p. 285]. O'Dell, Grayson and Essaides [6] devote a book to methods for the internal transfer of best practices rather than focussing on benchmarking against external organizations. Similarly, Toney and Powers [7] examined best practices in a project management benchmarking study of Fortune 500 companies. They identi®ed some 19 key success factors grouped into three areas: project strategy (e.g. strategic communications), project management professionalism (e.g. optimize employee compensation), and standardized methodology and procedures (e.g. emphasize project and people management). Striving for best practices also ®ts the TQM approach to management where one is involved in benchmarking and continuous improvement. For example, Jawaharnesan and Price [8] studied project management best practices in the UK * Tel.: +1-403-329-2174; fax: +1-403-329-2038. E-mail address: [email protected] 0263-7863/01/$22.00 # 2001 Elsevier Science Ltd. All rights reserved. PII: S0263-7863(00)00042-9

construction industry and found that `preparing and organising' and `developing project de®nition' were among the highest ranked tasks. Best practices do not emerge from a vacuum, rather, an organizational culture must exist that values and nurtures best practices [3]. One key element is the existence of competencies where competencies may be seen as a set of knowledge, skills, and abilities competencies; a task or activity competency; an output competency; and a result competency [9,10]. In terms of leadership, three di€erent kinds of competencies are required: leadership competencies such as the ability to lead change; functional competencies such as technical and human resource management skills; and personal skills such as high achievement motivation and persistence [11]. Besides the competency literature, there is a substantial literature that focusses speci®cally on project leadership. For example, Zimmerer and Yasin [12] reported that in their study of American project managers, the highest rated characteristics for e€ective project managers and for project success were team building, communicating, demonstrating trust, and focussing on results among others. Similarly, the key project tools for success were project scheduling, budgeting, and execution planning among a others. They concluded that their pro®le ``reveals a leader who recognizes that it is absolutely essential to build a project team, reinforce positive behaviour, communicate, demonstrate trust and respect, develop team members and empower them to perform and set goals while remaining ¯exible to respond to the inevitable changes'' [12, pp. 37±38]. Kerzner [13] has done a notable job of tying together these di€erent

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contributors to best practices in project management with his six components model of excellence: integrated management processes, organizational culture, management support, training and education, informal project management, and behavioural excellence. The main purposes of the present study were to have project managers identify (a) the best practices in their Canadian organizations, (b) areas for improvement, (c) barriers to best practices in their organizations, and (d) to rate important organizational contexts for best practices, namely, organizational culture and leadership styles. 2. Method 2.1. Sample A random sample of 150 Canadian organizations was selected from the population of 168 organizations having professional project managers in the province of Alberta, the researcher's location. The sample cut across private and public-sectors, organizational size and industry groups. One project manager was randomly selected from each organization's listing of project managers in the Project Management Institute-Canada membership list. 2.2. Questionnaire development The questionnaire was developed from a critical review of the literature on best practices in management and, in particular, project management as well as on key organizational context factors, speci®cally, leadership style and organizational culture. The questionnaire was ®rst pretested using two university instructors and then pretested using 12 project managers randomly selected from the research population. Only minor revisions were required; for example, minor re-wordings to questions to remove ambiguities and slight changes to the layout of the questionnaire to improve readability. 2.3. Procedure and analysis The questionnaire was mailed during the summer-fall 1999 with one follow-up mailing to non-respondents to help increase the response rate. Besides the descriptive statistical analyses of quantitative data, qualitative content analyses [14] were performed on the participants' written comments to identify themes underlying the comments. All participants received a detailed feedback report on the survey results in December 1999. 3. Results The response rate was 22.7% with 34 of 150 organizations returning completed questionnaires for analyses.

While a higher response rate is desirable, it is appreciated that project managers are themselves under great time pressures and many were interested in participating in this study but unable to ®nd the time to complete the questionnaire as stated in their e-mail messages to the author. The respondents tended to have been in the project management profession for a long time (M=16.5 years, S.D.=9.2) and also in their present organization for a long time (M=11.2 years, S.D.=9.2). A wide variety of organizations are represented in the responding organizations: high technology (7), management/engineering consulting ®rms (6), manufacturing (5), construction (5), oil and gas (4), utilities (4), government (2) and one unreported. 4. ``Best PM practices'' in my organization The qualitative content analyses of responses and comments yielded a rich variety of themes that were grouped into categories that were, in turn, grouped into two clusters, technical and people clusters. 4.1. Top ``best PM practice'' In response to the question asking for the top ``best practice'' in their organization, there was an almost even split between ``technical'' and ``people'' themes mentioned. Four technical themes emerged as the organization's top best practice: having an integrated Project Management System (PMS); e€ective scope management of projects; e€ective project planning, scheduling, and controlling; and e€ective contract management. There were four people-related themes that emerged from the comments: having high caliber project teams; having stakeholder participation; e€ective communications within teams and externally; and customer satisfaction. 4.2. Second most important ``best PM practice'' Responses to the question asking for the second most important best practice resulted in four technical themes: having an integrated and appropriate PMS for projects was noted here as with the top best practice; e€ective scope management; e€ective resource management; and contingency planning. Three people-oriented ``best practices'' emerged from the data: continuity in client contact; e€ectively managing human resources; and e€ective communications. 4.3. Third most important ``best PM practice'' Finally, participants were asked to present the third most important best practice; analyses of comments resulted in four technical and one people-oriented theme. The four technical themes were the PMS; controlling costs

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and budgets; the importance of preplanning; and the importance of thorough project documentation. The one people theme centered on the importance of e€ective communications and meetings. Overall, it was interesting to see the best practices split between technical and people practices rather than just emphasize the technical aspects of PM. As several participants noted, it is through people that the work gets done. There were several best practices that recurred over the top three places, namely having an integrated and comprehensive PMS, e€ective planning including preplanning and contingency planning, e€ective scope management, e€ective client and contract management, e€ective resource management, and e€ective communications. 4.4. Most important areas for improving PM practices in my organization Participants were asked to identify the top three most important areas for improving PM practices in their organization. Comments for the most important or top area for improvement were organized into three technical themes and one people theme: implement standard PM practices; improve scope management; improve budget management; and the need for more manager and sta€ training. Some seven themes, six technical and one peopleoriented theme, emerged from comments about the second most important area for improvement: integrate project control methods; apply PM principles to small projects; the need for organizational learning; the need to empower teams; the need for project reviews and audits; the need for ecient and e€ective resource planning; and the need for more e€ective planning and preplanning. Some ®ve themes, four people and one technical theme, emerged from comments about the third most important area for improvement. The need for PM training and education, particularly, training in planning tools; the need for project documentation and the sharing of project tools, techniques, and templates; the need to better manage human resources; the need to promote e€ective communications and trust among all the stakeholders; and the need to improve interpersonal skills. 4.5. Potential barriers to achieving these improvements Numerous potential barriers were identi®ed to achieving the sorts of improvements to PM noted in the previous section. . An over-inclusive view of PM. The view that some managers hold that there is one way to do PM and that everyone in PM needs to know everything about PM was seen as an impediment to improvements.

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. No PM `champion'. Not having strong leadership or a 'champion' of PM principles in the organization was seen as an impediment. . Leadership and the organizational culture. The concern was raised that senior management cannot ®xate just on the bottom line, there is a need to attend to process (e.g. planning) and people aspects too. . Inadequate investment in training. Organizational short-sightedness was seen as one impediment to investing funds in training for the longer-term payo€. The costs of training and time away from the job for training courses were seen as barriers. . Resistance to change. Sta€ resistance to learning and using PM tools meant that some managers and sta€ are not prepared to change nor do they see a need to change. . Individual versus team compensation. It was noted that compensation systems typically rewarded individual contributors rather than the team for team performance; thus, individuals are reluctant to share information and PM tools with others. . Time pressures and constraints. Everyone is already busy and improvements would require allocating even more time and energy into work at the expense of personal and family time.

The noted barriers to improvements presented no surprises given the body of literature in both the PM and more general management literature on the diculties of change. Fortunately, the literature includes success stories and tips on change management [15]. 5. My organizational culture Overall, the ratings and rankings on organizational culture, as seen in Table 1, reveal organizations that are perceived to be very ethical (``good ethics is good business'') and to have very diverse workforces. On the other hand, some of these organizations might consider re-examining their systems for individual and group rewards/compensation, sta€ involvement/empowerment in areas such as decision-making, their approach to training and development, and willingness to take risks. 5.1. Comments about my organizational culture Analyses of comments about their own organizational culture led to four themes. . Changing culture and managing change. The fact that organizational cultures are not stable but are constantly changing and there is a need to e€ectively manage change.

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Table 1 Describing my organizational culturea My organization

Strongly agree

Takes risks Welcomes change Has a diverse workforce Invests a lot in training Emphasizes ethical practices Has e€ective communications Uses TQM principles Uses teams a lot Involves employees in decisions Rewards individual performance Rewards group performance Has strong organizational culture a

17.6 32.4 29.4 20.6 58.8 26.5 25 39.4 8.8 20.6 26.5 26.5

Agree

52.9 50 55.9 44.1 35.3 52.9 45.8 39.4 55.9 44.1 41.2 47.1

23.5 11.8 11.8 26.4 5.9 14.7 29.2 18.2 26.5 29.4 26.5 20.6

Strongly disagree

5.9 5.9 2.9 8.8 0 5.9 0 3 8.8 5.9 5.9 5.9

Rankings 1

2

3

10.3 17.9 17.9 0 12.8 10.3 7.7 7.7 2.6 0 0 5.1

2.6 5.1 5.1 10.3 10.3 17.9 2.6 2.6 2.6 2.6 0 0

5.1 2.6 2.6 5.1 5.1 5.1 5.1 5.1 12.8 12.8 0 7.7

All table entires are percentages (%) and might not add to 100% due to rounding errors.

. Pressures for innovation. Downsizing over the years has placed a heavier burden on remaining sta€, therefore, innovative PM improvements are seen as very important in organizations. . Bottom-line focus. This theme re¯ected the view that, unforunately, the prime focus in organizations is on the bottom line, people are viewed as a necessary evil and there are too many people. . Distrust. This theme noted the mild distrust between executives and sta€.

able to actively contribute to problem-solving, decisionmaking, and the like. The emphasis on situational leadership makes good sense given the diversity within project teams (e.g. di€erent professional and technical disciplines and degrees of PM experience). Finally, while transformational leadership did not receive relatively high ratings, this style has an important role in organizations; as one participant noted, we are in a very competitive world and Canadian organizations need to change. 7. Shaping the future

6. The leadership style in my organization Not surprisingly in PM environments, this sample described their organizations as stressing both task- and people-oriented leadership styles while minimizing a laissez-faire leadership style as seen in Table 2. Given that PM environments tend to have highly educated and motivated sta€, then the high ratings for participative leadership are expected seeing as project sta€ should be Table 2 Leadership style in my organizationa The leadership style in my organization is

Strongly agree

Agree

Disagree

Strongly disagree

Task-oriented People-oriented Directive Participative Laissez-Faire Situational Transactional Transformational

36.4 38.2 26.5 38.2 5.9 14.7 12.1 36.4

51.5 41.2 55.9 38.2 20.6 52.9 63.6 30.3

6.1 11.8 14.7 2.9 52.9 23.5 21.2 27.3

6.1 8.8 2.9 8.8 20.6 8.8 3 6.1

a

Disagree

All table entries are percentages (%) and might not add to 100% due to rounding errors.

Having examined the current state, participants then looked towards shaping the future, particularly the important role of leadership and organizational culture seeing as ``best practices'' take place within the larger organizational context. 7.1. Best PM leadership style in my organization for the future would be Comments were presented about four styles of leadership that would be best for their particular organization in the future. . People-oriented leadership (25.8% of respondents endorsed). Respondents mentioned people-oriented leadership because projects are completed through people. One noted that he had seen this style work while other styles failed and another respondent stated, ``Treat them well and they will remain loyal and the company will succeed.'' . Participative leadership (22.6%). Not surprisingly, a participative style was endorsed given that project sta€ are typically well-educated and articulate

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sta€ who have much (specialized) knowledge and experience to contribute. One person noted the inclusion in decision-making and fostering of creative freedom as important characteristics associated with this style. . Transformational leadership (16.1%). Several respondents advocated transformational leadership, with one stating, ``Because most Canadian organizations are lagging behind the world's leading organizations, though this is not apparent since the [dollar] exchange rate advantage for Canada has hidden weaknesses such as the low productivity of labour.'' . Situational Leadership (12.9% respondents). Several mentioned situational leadership with the following quotes illustrating the rationale for the situational style. ``Situational leadership appears to ®t the future needs the best...this style appears to ®t with the needs of project management and has the ¯exibility that is required in diverse workforces.'' ``Each project is the consequence of a unique contract.'' ``No one [leadership] style is right for every situation. Thus, situational leadership Ð which is a style of styles Ð is best but dicult for many people to develop.'' . Transactional (6.2%), Directive (3.2%), and Task Leadership (3.2%) styles were rarely endorsed.

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. to invest more in training for sta€ and managers alike especially in the areas of con¯ict management, stress management, team building, motivation techniques, and communications skills; and . to implement e€ective team-based compensation and recognition in addition to the commonly-used individual-based compensation systems.

The results and recommendations for these Canadian organizations are in line with those reported in studies from other countries [3,7,8,12,13] which have shown the important role of both technical and people competencies, project leadership, and a supportive organizational culture among other key factors in best practices. Therefore, these results are generalizable beyond this Canadian context and sample. Acknowledgements This research was supported by a grant from the Social Sciences and Humanities Research Council of Canada. More detailed results are available from the author at the Faculty of Management, The University of Lethbridge, Lethbridge, Alberta, Canada T1K 3M4. E-mail: [email protected]

References 8. Conclusions and management implications Overall, results show that these Canadian organizations are doing some PM activities very well (i.e. best practices) but, not surprisingly, that there are areas for improvement in both the technical and people side of PM. What is being done well can be summarized as speci®c technical and people competencies: . e€ective technical competencies centering on project planning, scope management, project control especially over costs/budgets, and having a project management system and documentation; and . e€ective people competencies centering on communications and client/stakeholder participation.

There are several technical PM areas that need improvement: . to standardize, integrate, and disseminate PM practices throughout the organization, . to practice better scope management and frontend planning (preplanning), and . to implement more e€ective budget management.

Similarly, there are several people competencies that need improvement:

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