6 Ingredients for Project Management Success
There is strong anecdotal evidence that failure and success in PPM can affect both the company’s share price and the career outcomes of its leading executives. This makes project management success very important.
Reducing or eliminating failures and nurturing successful project management capabilities should therefore be at the top of a company’s strategic objectives – if they are not already.
Important Best Practices for Project Management Success
A project carried out for the UK’s Chartered Institute of Management Accountants by academics at the Open University and Cranfield School of Management looked at five case studies that featured organizations differing in size and business sector: news and media, professional services, insurance, pharmaceuticals and IT services.
The project found that successful PPM must be supported by strong governance processes, rigorous business cases and close monitoring of project progress and outcomes. The companies studied told researchers that PPM had improved investment decision-making and project delivery, which in turn had helped them respond to economic turbulence.
These findings, alongside the best practice experiences of organizations that have implemented an effective PPM framework, point to the following recommendations for minimizing the impact of project execution on share price volatility:
- Balance the portfolio – move the project selection process away from a focus on the greatest financial value or return, toward projects that can feasibly be delivered on time and on budget – the pursuit of a ‘right blend’ that is consistent with, and contributing toward, overall strategic objectives.
- Eliminate surprises – formal portfolio and project oversight provide executives with a process to identify potential problems earlier in the project lifecycle, and the control visibility to take corrective action, before they impact financial results.
- Build contingencies into the overall portfolio – flexibility often exists within individual projects but, by integrating contingency planning across the entire portfolio of investments, executives are afforded greater flexibility around how, when and where they need to spend money, alongside the flexibility to adjust his spend in response to a crisis
- Maintain response flexibility – with in-depth visibility into resource allocation, executives can quickly respond to an escalating emergency by maneuvering resources from other activities, while calculating the impact this will have on current projects and the wider business
- A balanced portfolio should include a range of reward/risk combinations – successful PPM will include a constant re-appraisal of long-term investments and current cash low as both project and business conditions evolve. Executives are then able to consider investment risks both across the portfolio and within individual projects, and to stop any activities not delivering sufficient benefit.
- PPM needs to be supported by rigorously applied governance mechanisms – regular appraisals of the project portfolio, as a pattern of investments to deliver the business strategy, is essential and relies on up-to-date and accurate reporting of project performance.
Project delivery is only one aspect of maintaining reputation and share price stability. But poor project management is increasingly damaging, resulting in over 60% of share price drops, delays measured in years and losses in the billions.
Senior executives need to begin looking at effective project delivery not as a bonus, but as an essential facet of business success.