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Development and ProjectsA.P. Van Der Merwe. Faculty of Economics and Management Sciences, Rand Afrikaans University, South Africa. In proceedings of: Sym-Org 2000 7th International Management Symposium: “Managing change”, Zlatibor, Yugoslavia, 31 May-2 June, 2000. (Separate) Published in: International Journal of Management; Volume 5, Number 19-20, December 2000, pp 4-19.
Abstract: This paper investigates industrial, business and social development across the economic spectrum to find how the education of project managers could affect future society.
1. INTRODUCTION The results of this study found that economic development can result from business development, and that social development is not seen as a contributor to economic growth. Lessons are drawn from recent history and the trends experienced from first, second and third world economies. A study was made of the organizations past, present and future, to find driving factors for economic growth through the employment of people. Technology as a contributor to economic growth was investigated, and it was found that machines are in competition with the employment of people. The more machines are deployed the less people have work. The question was asked: “If labour was completely replaced by machines, how will people earn money?” The result is that it would seem as if first world technology deployed in third world economies does not create employment but reduces it.
To rectify the increasing debt of third world countries the International Monetary Fund and the World Bank announced publicly in December 1989 that they saw trade and not aide as the solution. Trade based on efficient and effective businesses. This study attempts to show how these businesses of the future could be organized on four new pillars: strategy, structure, processes and projects that are interlinked and influence one another. Management by projects plays a central role in organisations of the future where project management needs to be described in terms of the fundamentals applicable to business development. From the literature surveyed a trend developed where project management from the perspective of industrial development can be seen as the past, from the perspective of business development as the present and from social development as the future.
A modular approach to project management is presented, using a life cycle model developed and proven by actual application to succeed in business development as well as in social development. Business development is seen as the driver or engine that leads social development, connected by or through education. Education in project management as a life skill in an outcomes based environment is seen as essential for the development of third world economies. At the international project management symposium SOVNET’99, held in Moscow, Russia, from 1-4 December 1999, the question of how to train and educate a project manager was greatly debated at every opportunity. Competence is seen as knowledge, experience and attitude, although interest is also featuring in this equation lately. (IPMA Competence Baseline, 1999 : 16) Knowledge can be taught in an academic institution but skill can only be developed through practical experience. Project management literature focuses on the “project” almost exclusively and lacks exposure to formal management theory and practice defined by Follett as: “getting things done”. (Follet, 1949 : 30). But herein lies industry’s greatest dilemma. Project managers who are doing things (estimated one million in Britain alone) do not belong to institutes, speak at seminars or produce written material.
2. ECONOMIC DEVELOPMENT According to the classical view of macro economic theory, all people have work when they produce goods and services, in return for which they earn money, which they spend on goods and services to create demand. Price is used as a mechanism to control supply and demand. In the words of J.B. Say when he formulated his famous law, “supply creates its own demand” or in the words of Richard Attenborough (famous wild life film producer) “Where there is something to eat there is some thing to eat it” giving rise to people’s wants and needs. Economic research considers the possibility of raising the standard of living not only for the rich but also for the poor. This has led to the study of economic growth, which is usually defined as the annual rate of increase in real gross domestic product (GDP) or real gross national product (GNP). GDP is defined as the total value of all final goods and services produced within the economy in a give period of time. (Fourie, 1989 : 25) (GDP and GNP are equal when local interests abroad are the same as foreign interests in the local economy. To calculate GNP, subtract from GDP all profits, interest, wages and other income earned by non-residents and add profits, interest, wages and other income earned by ex-patriots.) (Mohr, 1988 :38-39) Dividing GDP by the number of nationals from a specific country results in per capita data. This is simply stated as an average $ earned per person per year. The figure is used to measure efficiency and growth. The Union Bank of Switzerland goes one step further when calculating purchasing power parity for their research into prices and earning around the world, by taking the average working hours per year into consideration, in each city surveyed. (Enz, 1991 : 5). Per capita GDP is used to determine the level of economic activity in a country. Research done during the 1980's showed variations from $12 000 to $136 for per capita GDP in various countries. These vast differences in the level of economic activity between established countries and less developed countries has led to a difference in terminology where economic growth describes the process of increased GDP, and economic development the process which results in an increase in real potential production. This implies a fundamental change in the community as a whole, as well as its economic system in the case of a developing country. (Fourie, 1989 : 239-242)
Of particular significance is the physical displacement between rural and urban areas, cultural patterns, training of workers and a totally different approach to health services, transport etc. between developed and less developed countries. To overcome this problem, the world competitive analysis report determines economic growth in an economy through per capita GDP and compares this data to other similar nations in three segments. These are: First world or developed countries such as England, France and Germany, Second world or developing countries such as Brazil, China and Russia, and Third world or undeveloped countries such as Angola, Burma and Ethiopia. Economic growth is attained when a country’s per capita GDP increases year on year. There are four factors in the growth process. These are,
“An inquiry into the nature and causes of wealth of nations” published in 1776 by Adam Smith it is postulated that the economy grows when production increases in volume and/or efficiency. He found that by separating production into several different operations and having people specialize, production could be made more efficient. The extent to which specialization could be implemented depended on the size of the market. The more people, the larger the market, the greater specialization and therefore higher productivity.
David Ricardo devised the law of diminishing returns in 1800, in terms of which production may increase but only at a decreasing rate until a maximum is reached. Malthus added his law of population to show that as production increased, consumption increased but at a more rapid rate. This meant that as population increased the average amount of food prodused would continue to decrease until only a subsistence level was reached. (Fourie, 1989 : 243-245)
Until 1930, Adam Smith’s theory held true and economic growth was unprecedented in the history of man. The great depression and the Second World War saw the emergence of the Keynesian model. In his book “The general theory of employment, interest and money” J.M. Keynes postulated, that one could not rely solely on market forces to carry the economy back to full employment. Government’s expenditure was to be applied to offset unfavourable deviations in private expenditure to create employment. Monetarists led by Milton Friedman became critical of Keynes after the Second World War with the emergence of inflation. Monetarists were extremely critical of exaggerated government expenditure to keep total expenditure at an acceptable level and saw inflation as a natural consequence of 100% employment levels.
With employment at close to 100%, economists had until 1970 concentrated only on the demand side of the economy. Oil shortages awoke the concept of limited natural resources on space ship earth and brought to realisation for the first time that there could be problems with the supply side of the economic equation. For the first time in history inflation and recession occurred at the same time. (Yergin, 1991 : 615) Generally speaking prior to 1900 authors spoke of the earth as an unlimited recourse. During the 1900 authors spoke of some limits to the earths recourses and now at start of 2000 the limitations of the earths recourses are an established fact. The enormous economic growth of the 1950’s and 1960’s resulted in a baby boom - exponential growth of the human population. For thousands of years the human birth rate was slightly higher than the death rate resulting in very slow increases in population. But now, global population was increasing exponentially and trends clearly showed that demand was outstripping supply.
In 1972 the Club of Rome presented a “Doomsday Model” to the world in which it was again postulated that the global economy would slow down to a zero growth rate due to increases in population while at the same time experiencing an increase in consumption at a faster rate, returning to the theories of Ricardo and Malthus. Since then the rise of the twin evils of inflation and recession have been seen to play havoc with economies the world over; all the while, global economic growth of space ship earth is slowing down. Curiously, no global GDP calculation has ever been made public to date. The industrial revolution brought about an increasing rate in the economic process. Technological developments resulted in increased productivity, increased production led to increased employment which led to increased personal wealth and capital formation. This led to more funds being available for training labour, giving rise to both a market in which to sell goods and a labour force to produce increasing output. (Hirschey, 1992 :12-15)
Technology during the 80’s and 90’s has kept production in pace with consumption as it races ahead. The cost of economic growth in terms of environmental impact has in the last days of the 20th century revealed disparities. It is argued that high levels of pollution resulting from production in the 1st world, damages the environment globally, leading to crop losses in the 3rd world. It is further argued that if damage to the environment is deducted from global GDP the trend that emerges is one of global recession and not growth. (Prof. Heap, Towards sustainable consumption, The Royal Society, 19 March 1999). Today, economic development in 3rd world countries has not taken place, as they show shortages in all four factors required to sustain economic development. Production is limited and they have become nations of consumers. While the population growth has continued to increase in these countries, economic growth has not. (Bhattacharya 1993 : 4)
First world investment in the social development of the lower developed countries has resulted in increased life expectancy and birth rate, without creating work. While in the 1st world work is replaced by technology, the birth rate has also decreased keeping unemployment figures low. It would seem that in some lower developed countries once a measure of economic development is attained, social development takes on a higher priority. Increased expenditure on social development instead of on continued economic development leads to economic downfall as several developing countries have experienced recently. (Ro, 1993 :30-36). Economic development must be synchronized with social development. To better understand this aspect I have constructed a matrix (Fig. 1) in which different economies are related to different kinds of developments.
Figure 1. Economic / Development Matrix
Source: Own research.
The first thing to realise from fig. 1 is that industrial and business development (ADG & BEH) are producers of wealth, and social development (CFJ) is a consumer of wealth. Secondly, 1st world industrial development (A) is a mature market with little growth left in it leading to many organisations in this sector experiencing financial difficulty. Thirdly, most of the world’s wealth is presently being created in the business development (BEH) sector. It can therefore be said that industrial development was our past,, business development our present, and social development our future. Appling the Pareto principle to the matrix, 80% of the creation of global wealth could be represented in ADB & E while 20% of global wealth is created in GHCF & J. Global population was 80% and growing in GHJ, but is 20% in ABCDE & F combined but shrinking in ABC. Global production of goods and services is 80% in AB & CD as is the consumption of these goods and services. (Fig. 2). 80% of all jobs are in AB & CD and 20% in GHJ & CF. Most of the worlds profit is produced in B while most of the worlds debt lies in J.
Figure 2. Economic / Development Matrix
Source: Own research. As the population of the first world is shrinking technology is deployed to improve efficiency in order to produce more with less people resulting in global unemployment figures continue to grow in the third world. By definition, the 1st world is developed, prompting people to realise that in order for the global economy to grow, 2nd and 3rd world economies now need to be developed. The basic premise of the production function is that people work but this is simply no longer true. There are several examples where people are paid not to work, or paid not to produce, with the result that two of the four factors required for economic growth i.e. the size and quality of the labour force and the availability of natural resources, are no longer valid. This has proved technology to be a competitor to employment, as it replaces people in the production function with more efficient machines and can be seen where several of the most successful commodities ever presented on the stock exchange require no natural resources.
Until the start of industrialization during the eighteenth centaury an extended family of approximately 40 people farmed about one hectare manually. Mechanisation improved efficiency to the extent that 80 people could now farm four hectares resulting in farms getting bigger and employing more people specialising in the different activities. Today, (in the year 2000) technology has progressed to a point that one man can farm 400 hectares on a fully automated farm or milk 400 cows in a fully automated plant. Furthermore most food production today, is untouched by human hands from breaking the ground to the final product being offered for sale at the point of consumption. The same goes for clothing where once the women of the family hand spun, manually weaved fabric for use around the home. Where it once took 25 people and months of continues labour to manufacture a wagon from raw material a modern car is manufactured in about three hours by 12 people and every year requires less and less people in the production up to the point where fully automated robotic plants need only five technicians to service the robots manufacturing 30 cars a month.
If only machines have work how will people buy bread?
In lower developed countries between 70% and 90% of the population are unemployed. Interestingly, when comparisons are made of average per capita GDP at constant prices between 1970 and 1998, 1st world economies have doubled, 2nd world economies have stagnated and 3rd world economies have halved. In South Africa 3% of the population earn 97% of the money. In the USA the top 1% of salary earners earn the same as the bottom 40%. On the worlds stock markets 80% of all stocks listed are owned by only 500 corporations.. (Handy, 1998 :153-178).
The World Bank and the International Monetary Fund have declared support of social development in lower developed countries to be a failure. At this point in time the world’s financial authorities have been requested to scrap the debt of all lower developed countries, as they simply cannot pay it back. It would seem that the key to continued global economic growth lies not in aid but in trade, together with continued technological development which is achieved by more educated labour - not educated in academia, but skilled in methods of production.
Expenditure on social development without synchronized economic development to create employment is a lost cause. Baroness Blackstone, Minister of State for Education and Employment in the UK, stated in a guest editorial in Project Magazine (June 1998): “In an increasingly global economy, Britain simply cannot afford to see its economic performance restricted by poor skills. The most successful businesses in the 21st century will be those that invest in the best-educated and trained workforce. As a consequence, the best way of getting and keeping a job will be to have the skill needed by employers. Furthermore, the concept of a job for life is no longer relevant.” Development of economies, businesses or people should be interpreted in a coordinated holistic manner where improved efficiency means more work for people, not less. Education results in improve efficiency of man and machines. However, what is required is not education in academia, but in skilled methods of production.
The task is to get the workers involved in writing process theory for project management that results in incremental improvement. Project Management has to become the point of departure for management theory where people are managed so that they can manage their work. If the business is to develop then the successful outcome of any change in the organisation can only be achieved when Business Processes and Human Behavioural Processes converge in the person of the project manager. The project lifecycle forms a cornerstone of project understanding where work breakdown structures and responsibility charts take on the command and control aspect of delivering envisioned benefits
Formal education must find a way to stay relevant to the skills that employer’s demand of their employees. Consumption of human capital in parallel with financial capital should be managed to evolve knowledge and skill. Only then can we cease to be wasteful in our expenditure of all capital.
Society does not develop on the backs of people who know things but on the backs of people who can do things.
3. BUSINESS DEVELOPMENT “I came to the study of people in organisations expecting certainty and absolute knowledge in the behavioural sciences. I anticipated that I would find laws governing the behaviour of people and of organisations as sure and as immutable as the laws of the physical sciences. I was disappointed.” (Handy, 1981 : 9). From the earliest time people combined talents and efforts into attaining larger goals when hunting and gathering. Labour specialisation made it possible for individuals to concentrate on tasks they did best without having to do every task necessary for survival and progress. Organisation theory can be seen as social systems of co-operation that are designed to improve individual effort aimed at goal accomplishment. Organisation theory is how these collaborative efforts form, function and survive. (Hodge & Anthony, 1991 : 8)
The industrial revolution marked the beginning of what is referred to today as the modern organisation. Adam Smith brought a much-needed framework to the knowledge about organisations in his work on specialisation of labour. (Smith, 1776). Max Weber built on this in 1900 when he analysed organisations and found the bureaucracy an ideal form of organisation based on knowledge and ability rather than on favouritism, which he found prevalent. (Weber, 1947 : 324-328) His rules for the organisation are worth repeating here as they remind us of the situation that organisations find themselves in today. They are:
1. A division of labour existed in which authority and responsibilities were clearly identified for each member and were legitimised as official duties. 2. The offices or positions were to be organised in a hierarchy of authority resulting in a chain of command. 3. All organisational members were to be selected on the basis of technical qualifications through formal examinations or by virtue of training or education. 4. Officials were appointed, not elected. 5. Administrative officials worked for fixed salaries and were career officials. 6. The administrative official was not an owner of the unit being administered. 7. The administrator would be subject to strict rules, discipline and controls regarding his conduct while performing the official duties. These rules and controls would be impersonal and uniformly applied in all cases.
An organisation based on these tenets, argued Weber, would overcome the inefficiency and cumbersomeness found in the typical organisation of his time. (Weber, 1947 : 324-328) It was not uncommon for positions to be filled by favouritism, rather than by demonstrated competency. Subjectivity and opinion took precedence over objectivity and order in the hiring and placement of employees. Please note these rules govern MANAGEMENT and not the workers. The theory of the firm is based on a combination of people, machines and money in order to maximise profit or to create wealth. Wealth is created when more is paid for consumption than for production. Wealth is the basic building block for economic growth where the firm functions as a basic economic model. (Hirschey & Pappas, 1992 : 4). It was not until the 1920s that a concerted effort to study organisations formally began. The classical school of thought supported by authors like: Fayol, Gannt, Gilbreth, Graicunas, Mooney, Reiley, Taylor, and Webber, attempted to create a set of rational techniques that defined one best way of doing things. The theory was founded on four pillars: Division of labour, scalar and functional processes, structure and control. (Scott & Mitchell, 1976 : 31-35). Scalar and functional processes are the vertical and horizontal growth of the organisational structure in which labour was specialised. Control gave way to the theory of management in which is found the management functions of: Planning, organising, leading and controlling, which gave way to the behavioural school of thought on how organisations formed, functioned and grew. This is supported by authors such as Barnard, Follett, Herzberg, Homans, Lewin, Maslow and McGregor.
From this point on, organisational theory splits into two parts: systems theory or business processes as referred to in more recent publications as originated by Von Bertalanffy, and supported by: Ackoff, Boulding, Forrester, Kast and Rosenzweig, and behavioural theory, which forms part of industrial psychology.
Today, methods dating from 600 BC to the present seem to be in vogue. The ancient Roman structures of ten reporting to one are back in use as is the emphasis on strategy and business processes. “Plus ca change, plus c’est la meme chose” (the more things change the more they remain the same) - Alphonse Karr, in “Les Guepes”. Organisations of the year 2000 seem to stand on four new pillars: Strategy, structure, processes and projects, which influence and depend on one another when one reviews the most recent publications by, Gibson, Hammer, Peters Scot, Toffler and Turner.
4. PROJECT MANAGEMENT: a. AMERICAN POINT OF VIEW Generally, when asked, those who know will say that modern project management had its origins in 1958 when a Program Evaluation and Review Technique (PERT) Fig. 3 was first developed by Booz, Allen and Hamilton. It was first used to find the shortest possible time in which to develop and produce an operational Polaris missile for the Special Projects Office of the United States Navy. (Kerzner, 1994 : 602). PERT was actually an adaptation of an earlier Precedence Evaluation Technique derived from cause and effect modelling which was used by the Manhattan Project to produce the first atomic bomb.
Figure 3 PERT Network
Source: Own research
Fundamental to PERT is the concept of an ‘event’ or the reaching of a certain stage of completion of a project. Also basic is the expected time required to complete activities leading up to that event. (West, 1977 : 1). At the same time chemical and explosives giant, Du Pont developed a similar technique called the Critical Path Method (CPM). CPM first examines the free time between activities caused by the relationship formed in the pert diagram. Activities which have no free time between the end of the predecessor and the start of the successor form the critical path, marked in red in FIG. 3. Secondly, CPM examines the criticality of an activity by the relationship caused in the duration and cost. As the duration is decreased, by adding more resources a higher cost is incurred. When a point is reached where it is no longer financially viable to further reduce the duration the activity is said to be critical. The reduced duration resulting from this analysis replaces the duration of activities forming the critical path in the first instance, thus reducing the overall duration of the project. (West, 1977 : 2).
The technique begins by drawing up a list of the tasks that need to be completed, in rough order. Next, the duration of the task is considered against the resources required, which impacts on the cost to complete the task. These tasks are now placed in sequence using a PERT diagram and relationships between the tasks are established. (Determining preceding and succeeding tasks.) Working back from the target end date to the start activity one finds the latest date for each task to start and finish. Taking the earliest possible starting date for the project, one now adds the task duration to the start date to find the earliest possible start and finish date for each task. The difference between the early date and the late date is called the float and where this is zero the task is said to be critical. All critical tasks make up the critical path hence theCritical Path Method (CPM). The use of CPM concentrates management attention on those activities which make-up the critical path as these activities would be “critical” to the overall duration of the project. Management attention is therefore focused on the task and the means of achieving that task within cost, time and quality constraints.
Both PERT and CPM had at their core tools and techniques to reduce the time required without impacting on cost and quality constraints to produce the product of the project, by creating a network of activities leading to an event. Use of PERT and CPM became popular when the Department of Defence and Du Pont requested contractors to use these techniques to comply with standard company control procedures. From this one can deduce that these techniques were used to control many contractors working on one project. This aspect then forms the basis of the American point of view that project management is the use of tools and techniques to control many tasks performed by many organisations working on one project. This view is upheld by the Project Management Institute in Boston USA who oversee everything concerning project management in America and who exercise some influence over the various institutes in the rest of the world.
The Project Management Institute has produced “A guide to the project management body of knowledge” (PMBOK) which states that “Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholders’ expectations from a project”. (PMBOK, 1996 : 6). The PMBOK shows a lack of understanding in the use of business processes, project life cycles, work break down structures and the individuals who are to perform the activities. It dictates nine areas of knowledge which fall primarily in the “design stage” of the life cycle which is seen to be synonymous with the “implementation stage”. However, in its defence, PMI does state that all project management knowledge could never be contained in a single volume. PMI publishes a magazine “PM Network” and a journal “Project Management Journal” in which practitioners and professionals can publish their findings.
Articles published in PM Network display a keen insight into the problems affecting project managers today and it is an invaluable source of information reflecting the actual situation within the project management industry at present. The Project Management Journal is aimed more at the academic (theoretical) side of the industry and often states the problem, rather than the solution. PMI also offers Project Management Professional (PMP) status to members who qualify according to a points scheme, but who lose PMP status if annual fees are not paid. PMI is one of the more active institutes internationally and influences theory and practice to a great extent. It offers many benefits to its members and plays a leading role in the project management industry all over the world.
To summarise, the American perspective concentrates on the task, tools and techniques to deliver the product of the project, and co-ordination / control of many tasks performed by many organisations working on a single project.
b. EUROPEAN POINT OF VIEW In Europe it is commonly referred to as “management by projects” rather than “project management”. A point to note is that almost no reference is made to tools and techniques. Project management as practised in Britain and by the European Union is explained as a “systems approach” (synonymous with process),( Project Management Handbook, 1988 : 193) to problem solving and as such has its origin in nature where the first ‘systems’ are found, dating back to the origin of life. Project management is not seen to be “construction or production” but is simply seen as “anything with a beginning and an end” according to Martin Barnes, originator of the New Engineering Contract.
The European approach is based on three fundamental principles: the use of life cycles, Fig. 4 work breakdown structures and responsibility charts. Life cycles can contain from three to seventeen stages but it is generally accepted that a basic four stage model is used to begin with. My research has revealed risk to be the major contributing factor to the use of more than four stages. Van Der Merwe, 1998_3 : 3). Figure 4 Life Cycle Source: Own research.
A life cycle is constructed for a project when a technical expert (Champion) in conjunction with a project process manager (Project Manager) draw Fig. 4 and try to determine the end condition of the project i.e. “How will we know that the project is finished”. Next, the beneficial change is discussed to find what improvement the project is to bring about. A working title is derived from the end condition and beneficial change. Next, a strategic level work breakdown structure of about 10 items per stage is entered. The work of the feasibility stage is now performed by the champion and project manager to determine whether the project is feasible or not , what the expected resource constraints (number of people, expected labour man hours, total duration, equipment cost, cash required if any etc.) for the project looks like at a 50% accuracy level and then draw up a proposal document to communicate the project plan with potential sponsors and stakeholders.
Once sponsors and stakeholders have accepted the total resource cost, the project is allowed to proceed to the design stage. A project start-up meeting is called where earlier decisions are ratified by the people who will now undertake to do the work. Operational level work breakdown structures are determined by the project team. Responsibility charts reflect who has taken responsibility for which task, how much time is to be spent working on the task and when it will be finished. This is done in a group environment where all interested parties are present. People, groups, departments, etc. who accept responsibility are now part of the project team.
Figure 5 Responsibility Chart
Source: Adapted from Turner, 1993 : 281
Work progresses to the end of design where total resource costs for the project now 75%+ accurate, are presented to the sponsors and stakeholders for approval, in order to place contracts and proceed with implementation / construction of the project. Once the end condition has been met the project now proceeds to the end stage where the project team is finally disbanded. The project is managed jointly by the Champion (who is responsible for the technical content) and the Project Manager (who is responsible for the people). In more recent years use has been made of project-based management in which Turner describes each department of an organisation as seen as a project which is to achieve a certain goal. These goals make up the strategic objectives of the organisation as a whole. Successful projects cause the organisation to move from one objective to the next while unsuccessful projects cause the organisation to fail to reach their objectives. (Turner, 1993 : 37-38)
Management’s attention is placed on the management of the people who perform the tasks, and not on how the task is performed. This view is also portrayed by the Association for Project Management (APM) in Britain, Body Of Knowledge, and by the International Project Management Institute (IPMA) in Zurich. British Standard 6079 : 1996 defines project management as “The planning, monitoring and control of all aspects of a project and the motivation of all those involved in it to achieve the project objectives on time and to the specified cost, quality and performance”. (BS 6079, 1996 : 2). It also states “Project management could be said to be as old as humankind, since by definition, any management activity that introduces a new objective or causes change and has a definite start and finish time, is a project”. Note the human / management of people slant given by these definitions. (BS 6079, 1996 : 4).
The Association for Project Management (APM) produces a Body of Knowledge (APM-BOK) advocating 40 areas of knowledge TO MANAGE PEOPLE WHO ARE MANAGING THE WORK. “Project”, the magazine of APM, publishes articles produced by practitioners, and is filled with discussion on management processes, team work, motivation, management of people etc. Central to all is project management as a HUMAN endeavour and a UNIVERSAL process. This is in stark contrast to the management of the activity, task or event portrayed in American literature.
IPMA, the largest project management association (it affiliates all the institutes in Europe eg. France, India, Russia, Germany, Switzerland and Britain), produces the International Journal of Project Management, widely regarded as THE academic authority on project management, and affiliates all APMs. Europe is more academically organised as several universities have programs and degrees dedicated to project management, and differentiation is made between degrees with project management content, and degrees in project management. APM has achieved chartered status and can now award degrees according to British educational standards, and Certified Project Manager status is available (similar to Certified Engineer) to members who qualify.
This puts the formal tertiary education of project managers, as well as their professional status, at the highest internationally acceptable level. National Vocational Qualifications (NVQ) are incorporated, accomplishing the accreditation of training providers, presenters and training material. APM and IPMA offer a range of benefits to members and are at the forefront in establishing the Global Forum - an endeavour to bring about the global status of project management. The European point of view on project management is that an organisation is a project made up of many small projects, and the cumulative success of these projects determines the success of the organisation. Key to this concept is the management of people who perform work on many simultaneously occurring projects. It is here that multi-project management as a business process is taught on a formal tertiary accredited basis.
c. AFRICAN POINT OF VIEW
Africa is gaining acceptance as the origin of man. It is here that we supposedly first swung down from the trees and walked upright across the mud flats of central Africa. Recent archaeological discoveries at an unfinished pyramid in Egypt (accepted as one of the oldest structures in the world) found that slaves were not used to build them as is popularly believed. A construction camp was unearthed containing architects’ drawings and a nearby cemetery contained skeletons with injuries common to tradesmen. (Bauval, 1996 :29-32). From these findings it is speculated that if architects’ drawings and tradesmen existed, a plan for construction also existed If so, then it can be concluded that some form of project management must have been employed. More recently, in the ancient kingdom of Kush, near to where the Ark of the Covenant is believed to be kept, Hancock finds pyramids older than those in Egypt, raising speculation that the building industry started in central Africa and was emulated by the Egyptians, from where it spread to the rest of the world. (Hancock, 1996 : 294). This may be the reason for project management in Africa being seen as the domain of engineers.
In South Africa, it is generally accepted that project management is the manipulation of steel and concrete in the construction and production industries. The words “project management” conjure up images of a construction site where people are pushing wheelbarrows, carrying planks and mixing concrete. Imagination is void of management by projects, implementation of strategy, directing elements of business or the management of people. Project management in South Africa follows that of the American perspective discussed earlier. While successful in various forms of engineering, production management and operational management or wherever the scheduled sequencing of tasks is required, it is less successful in the information industry and in its application to general management where change is to be brought about within an organisation. Here the European perspective which points the way to success.
Keeping exclusively to the use of tools and techniques has led to the abject failure of projects and the attempted implementation of management by projects, in several unrelated industries, none more so than at the Saldanha Steel Project where the workers on the project burnt down the offices and the plant out of frustration with management. Lack of human understanding and poor management of people issues, it seems, will contribute to failure on any project. A common fallacy exists, that project management forms part of general management and is made up of tools and techniques. This suggests that exposure to the European perspective has been very limited. Funding of projects in Africa by the World Bank, the European Union and the International Monetary Fund has made it necessary for project plans to reflect knowledge of the European perspective in project management. Personal involvement with PMI South African Chapter has revealed that while the majority of members come from the information technology sector, the institute is firmly entrenched in engineering. The chapter decided to disband from PMI in America and is purported to exist as the Project Management Institute of South Africa. Independence meant self-accreditation which is largely seen to be the reason for the break.
Some private initiative has been displayed in the formation of the Association of Project and Change Management (APCM) and it is rumoured that APM (UK) is to open a branch in South Africa. An independent magazine, “Project Pro”, servicing several related industries, provides project management practitioners with a voice, and is the only publicly available magazine on project management in South Africa, at this time. No formal tertiary education or accreditation exists in project management in South Africa, but several universities offer project management as a subject as part of other degrees, notably engineering as mentioned above. This does not detract from the fact that several South African projects have been voted “Best Project In The World” by PMI in recent years Fig. 6. This serves to emphasize that the best project management practitioners are not active in perpetuating theory.
Figure 6 Project Awards
Source: Project Management Institute, www.pmi.org.
The African point of view on project management holds that it falls within the domain of engineering, and is largely influenced by the American perspective. Knowledge of the European perspective is lacking but demand by the European Union that project management training precedes donor funding of projects will undoubtedly change this point of view before long..
5. WORLDS BEST PRACTICES In researching most of the literature available on project management since 1981, as well as being involved with several international institutes, and talking to many internationally prominent figures, personal observation concludes that only the surface is being scratched with regard to available knowledge in project management. When researching multi-project management, almost no information found in available literature. Nevertheless it was realised that practising project managers were being successful - they were merely not being public about it. Interviews were held informally with forty practitioners, fifteen research academics and five well-known writers on the subject.
These interviews were held between 1995 and 1999. All the discussions were held informally and had the same intention: to find a commonality of things that work. A pattern emerged in that what was found in literature and what practitioners, researchers and authors maintained were what made projects successful were:
· that project management software was not used to manage the project, · instead, use was made of a spreadsheet and a database · they managed the incremental improvement of processes · they used life cycles knowingly or unknowingly · that work breakdown structures were broken down in the stages of the life cycle and not across the project as theory dictates · they used responsibility charts to control the people and the work · they made use of champions · technical expertise was separated from procedural expertise · project managers were ORGANISED and IN CONTROL · AND MANAGED THE PEOPLE WHO MANAGED THE WORK
Realising that current textbooks were around 10 years old, journal articles took two years to publish and that only magazine articles displayed current practice, a review was done of magazine articles published between 1995 and 1999 in “Project” and in “PM Network”. In focusing on those articles which discussed solutions and not problems, traces where found that concur with findings from the interviews. With this information in hand a best practise model was constructed Fig. 6 to place 10 strategic level work packages per stage of the lifecycle into positions where most successful practitioners and academics concur they would contribute to the successful completion of projects.
Figure 6 Project Best Practise Model
Source: Own research. Work is completed in a logical sequential order 1-10 within the Proposal stage first. When Sponsor approval is gained, permission has been given to proceed to the Planning stage. Work is then completed in a logical sequential order 1-10 within the Planning stage. When the contract is placed Sponsors approval is sought for permission to proceed to the Implementation stage. Once gained, work is then completed in a logical sequential order 1-10 within the Implementation stage. Acceptance of the product produced and achievement of the end condition gives permission proceed to the Close-out stage. Work is then completed in a logical sequential order 1-10 within the Completion stage. Completion of the project administration places the project on the asset register and gives permission to disband the team.
Fig. 6 represents a model for a project on one page that is continuously incrementally improvable and has a high percentage of repeatability and reuse. If each strategic work package represents 10 Operational level activities and each operational level activity represents 10 Detail level tasks a total of 4000 detailed tasks can be controlled on one page. Exclusive use of target finishes only, negates the use of a PERT diagram and a bar chart can be made for each stage using graph paper and pencil. The stages themselves can exist at set levels of detail when that stage is entered into i.e. Proposal = Strategic level, Planning = Operational level and Implementation = Detail level. This assists rolling wave planning by eliminating long range inaccurate plans. Because the project is dynamic and the plan is static we know the plan is always wrong. Using levels the plan exists only in the strategic level. We know the detail exists but it is not recorded onto the plan until the project actually achieves that stage of the life cycle.
6. INDUSTRIAL, BUSINESS & SOCIAL DEVELOPMENT In point 2 above a matrix is shown comparing industrial, business and social development to 1st, 2nd and 3rd world economies. It is accepted in point 5 above that there is one basic model for a strategic level work breakdown structure of a project. Research was conducted amongst project management practitioners and academics to find in what way the application of project management changes in these different developmental sectors. Using the base model in Fig. 6 it was agreed that projects in these developmental sectors can be classified as follows:
a. Industrial development projects can be seen as having key descriptions such as chemical plant, power station, bridge, dam, engineering, production etc as part of the title. These projects use resources in different ways such as people are established in dedicated centralized teams working full-time on one project at a time. Mostly contractors are used to perform the work of the project, never own staff. Time taken to peruse the project from inception to conclusion is measured in years. Money required for all project costs are of a capital nature and are seen as an investment, which has a payback period. Most management effort is spent in the implementation stage. Management of change to the original plan is a key activity. Project risk, once commitment to the project is gained, does not feature. Product risk is managed in the planning stage, where impact effects quality, time and cost in the implementation stage. Formal design is completed by an in-house design team. Contracts based on specification preparation, tender evaluation and contract negotiation, are always a part of these projects. Implementation is always completed by a contractor with the client present onsite administering the contract. Project Close is not normally seen as part of the project. Commercial Operation is not part of the project. Many formal tool and techniques exist which concentrate on the completion of the task.
b. Business development projects have key descriptions such as business processes, strategy implementation, change management, restructuring, software development etc. in their titles. The use of resources in these projects is established by using people in distributed cross-functional teams, lateral teams or virtual teams working on many projects concurrently, predominantly own staff used, with assistance from some consultants. Time taken for project completion is measured in hours or days. Money is rarely spent on equipment; often there is no capital spent at all. A distinguishing factor in these projects is that the only costs incurred are in labour hours. Most management effort is spent in the planning stage. Due to very short implementation periods, changes to an original plan, result in automatic failure. Managing people is the key activity as own staff are used who have other work to do; loyalty to performing the tasks of the project is critical. Project risk requires alignment with the company’s strategic direction while the marketing window of opportunity remains a constant threat to the project. Product risk is managed in the planning stage as part of design, and normally does not feature during implementation due to the extremely short duration of this stage. Formal design is completed by an in-house design team, including some consultants. Contracts between departments for the supply of labour is a further feature of these projects. Implementation is completed by the same in-house team who did the proposal and design. Project close uses formal approaches but due to work pressure the team members rapidly deploy back to their functional position or move on to other projects. Thus, project closure is not often formally completed. Commercial operation life cycle entertains ongoing modification and changes to project deliverables, often obscuring the end of the project. Few formal tool and techniques exist concentrating on the management of the individual team member.
c. Social development projects have key descriptions containing words such as rural, poverty, education, healthcare, transport, sanitation, housing, policing, etc. as part of the title. Resources required for social projects use local residents managed by consultants to perform the work. Time consumed for project duration is measured in weeks or months. Money consumed is made up of grant aid, donations and/or government finance, and spent mostly as administration overheads with very little of the money going towards paying the workers or completing the project. Project managers spend most of their effort in the proposal stage communicating with stakeholders to gain commitment from the community at large, as without this support no effort spent in planning or implementation will meet with success. As the local community supplies labour, education and skills development are key activities during the planning stage to assemble a workforce for implementation. Project risk originates in and impacts on the proposal stage, while product risk is managed in the planning stage and impact effects quality, time and cost in the implementation stage. Consultants complete formal design. Contract management including specification prepare, tender evaluation and contract negotiation is always a part of these projects, including contracts within the community for the supply of labour. Implementation of the project is completed by the community with very little help from outsiders. Project close is a major event with formal handing over of the project deliverables to the community, done with much fanfare to score political points. Commercial operation of the project is not part of the project. Almost no formal tools and techniques exist concentrating on the involvement of the community.
7. VOCATIONAL MODEL The need for a model becomes evident when one considers that according to basic macro economic theory the global economy grows through investment by the First World in the development of the Third World. This accelerates the pace of development and determines the position of countries on the list of global competitiveness. The higher a country climbs on the list, the more efficiently and effectively it’s economy functions. From this position two problems arise. Firstly, the increased pace of technological advancement increases the rate of vocational redundancy. (This is the rate at which jobs become redundant due to people being replaced by machines to increase efficiency). Secondly, employers demand competent labour for the new positions, which the educational system must provide. Competence is defined as being the sum of knowledge + skill + attitude of a person in performing the function for which he is employed. (Tyson, 1996 : 73). There are two further definitions in use: competence = knowledge + experience + attitude and competence = knowledge + skill + interest of which interest is seen to be the most important attribute. The last one is used by the computer industry and is one I personally favour as it explains how 12 year old children are able to out smart senior practitioners in this industry. However, I have tried to research the scientific foundation of these statements but have been unable to date to find any scientific factual basis for these statements.
Employers have become disenchanted with the educational system, because the individuals the educational system delivers are knowledgeable but not skilled enough to perform the work required of them and need further on-the-job training to become gainfully employed. The problem is that by the time the employee becomes skilled, the vocation may no longer be required. Research done by the Ministry of Education and Employment in England, now points an increasing rate of vocational redundancy. Your ability to have and hold a job will depend on your skills as required by the employer. The problem here is that in the past a chosen vocation may have been good for three generations. Presently, a chosen vocation may be good for ten years. What this research is saying is that your chosen vocation may change every four years. If your education in this vocation takes four years you may not be able to find a job once you have completed your studies. (Project, 1998 : 3-4).
What a vocational model needs to show us is how repeatability and reuse of educational modules can accelerate competence to negate the effect of vocational redundancy.
Outcomes based education, through the creation of a statute, the National Qualifications Authority, a Standards Generating Body and an Education & Training Quality Assurance Body, governments are set to change education to better match skills required by employers. This should result in faster vocational turnaround, giving employers the skills they need when they need them. This results in improved workplace efficiency and effectiveness, improving overall economic performance. In Fig. 7, under outcomes based education (the green section in the middle), the National Qualifications Authority (NQA) in South Africa set up the National Qualifications Framework (NQF) which determines the National Vocational Qualification Level (NVQ)(competence) in an attempt to match the job with the education in a more or less horizontal line from theory to practice through a NVQ level. This is done under the auspices of the Standards Generating Body (SGB) (Certification) made up mostly of academics and some practitioners, and audited by the education & training quality assurance body ETQA (Accreditation) made up of mostly practitioners and some academics. In the case of project management the ETQA fits into the role of the Certification Council of the National Association as stipulated by IPMA. Figure 7: Project management vocational framework model
Source: Own research.
Accreditation is achieved when a national authority certifies the education/training provider, certifies the lecturer as a vocational professional in that specific subject and certifies the course material. This accredits the qualification by finding the student competent, having displayed the required knowledge, experience and attitude. In Fig. 7 formal education is represented on the left and the height of the model (0% to 100%) the level of education achieved in a specific area. Different columns represent “Organising Fields” or “Faculties” or “areas of study”. There are generally twelve of these, nl: Agriculture & Nature Conservation; Culture & Arts; Business, Commerce & Management Studies; Communication Studies & Language; Education, Training & Development; Manufacturing, Engineering & Technology; Human & Social Studies; Law, Military Science & Security; Health Services & Social Services; Physics, Mathematics, Computer and Life Sciences; Services; Physical Planning & Construction. In South Africa, project management has been placed under “Business, Commerce & Management Studies”
The width of the model represents the knowledge / skill mix obtained from different formal education and informal training institutions, moving from left to right: Universities - 90% knowledge / 10% skill; Technikon - 70% knowledge / 30% skill; Trade School - 50% knowledge / 50% skill; Guild - 30% knowledge / 70% skill; On the job - 10% knowledge / 90% skill; On the right are the skills as required by the employer in a specific job, with 0% at the bottom and 100% at the top as for education. Different columns represent different jobs requiring different skill sets, such as nurses or engineers. To explain the model I have used the vocation of an aeroplane pilot. (follow the red line in Fig. 7) If you attend university and achieve a PhD in Aerodynamics, you will be at the top of the scale on the left. This does not mean that you can fly an aeroplane. In the job market skill is demanded which places the PhD at the low end of the skill scale.
On entering into his vocation as a pilot, our PhD finds his education does not provide skills. As he become skilled in flying, his education accelerates his skill up the scale, provided he displays the necessary aptitude for the job. This acceleration is the mutual influence we are looking for. However, at this point in time, it is not known if knowledge accelerates skill or skill accelerates knowledge. The red line in Fig. 7 can also be used to explain the initial NVQ level of an Engineer. Once he leaves the university with a tertiary education he starts to work at the low end of the skill column. After working for four years he has moved up the skill column to a point where his skill is level with his knowledge and he takes his Government Ticket Examination to register as a professional engineer. On passing this examination he is registered as being competent.
Lifelong learning starts on the bottom left, moves a little up the knowledge scale, then switches to the skill scale on the right, moves up the scale a bit more, and then switches back to the knowledge scale and so on. Pure knowledge-based education keeps personal development to the left and purely skills based education to the right. In the education of a project manager we must first determine if it knowledge or skill that is required in the execution of duties. At SOVNET’99 International Project Management Symposium: “Project Management: EAST-WEST At the edge of the millennium”, Moscow, Russia, december 1-4, 1999, this aspect was debated at nearly every plenary session. Fact is that pure academic education in project management does not seem to deliver the goods. I argued that project management is a skill and therefore cannot be taught academically alone but that skills training should also be applied. The next question then becomes “how are skills taught?” or “How does knowledge become skill?” Watching my eight year old son play with a flight simulator on my computer I saw his competence improve when he read the procedure manual and logged flying hours on the simulator as dictated by his interest in the subject.
8. CONCLUSION Development of economies, businesses or people has to be seen in a coordinated holistic manner where improved efficiency means more work for people, not less. Careful consideration should be given to applied technology in first world economies with high and increasing consumption while population diminishes, as apposed to third world economies with low consumption, increasing population and unemployment. Education is of pivotal importance to improve efficiency of man and machines. However, what is required is not education in academia, but in skilled methods of production. The development of the business has progressed along two parallel paths over the past one hundred years. Business processes, the mechanics of the organisation, chain of command and human behavioural processes: I think, I speak, I do, have developed equally but have, like the tracks of a railway, never actually met. It would seem as if the industrial revolution of 1900 is to become the people’s revolution of 2000.
American perspectives on project management concentrate on tasks, tools and techniques to deliver the product of the project, and the co-ordination / control of many tasks performed by many organisations working on a single project. In contrast the European point of view on project management is that an organisation is made up of many small projects and the cumulative success of these projects determines the success of the organisation. Key to this concept is the management of people who perform work on many simultaneously occurring projects. The African point of view on project management is that it falls within the domain of engineering and is largely influenced by the American perspective.
Building team performance is one of the key requirements for implementing change. Using the project manager as the change agent is essential for success. Finally, the history of project management depends on which perspective you adopt. Ultimately, the individual must decide.
· Is project management tools and techniques? · Is project management a method of construction? or, · Is it the point of departure for all management theory where the people are managed so that they can manage their work?
9. REFERENCES
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COLLABORATE, NEVER COMPROMISE |
