SPECIAL SECTION || Organiiational Agility

In a time of extraordinary upheaval, organizations must build agility into their DNA using iterative practices and robust risk and change management

BY SARAH FISTER GALE ILLUSTRATIONS BY JAMES STEINBERG

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PM NETWORK OCTOBER 2012 WWW.PMLORC

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based on a solid foundation of project management standards. Karthik Project Managers on Twitter (#pmot) Talk About the Components of Organizational Agility 56 PM NETWORK OCTOBER 2012 WWW. Faced with a tumultuous marketplace. organizations have to act fast." Business and project leaders are discovering one of the best ways to do that is by aggressively reshaping their culture and business practices on a three-pronged front: • More collaborative and robust risk management • Rigorous change management to better adapt to changing market conditions • Increased use of iterative practices. Recklessness is no substitute for organizational agility. "In this age of declining budgets. organizations have to deliver more results at a faster pace than ever before.PMI. Utah.ORC . adapt to change quickly and deliver value incrementally across the project life cycle. Whether due to anemic economic growth or the continuing digital revolution. that enable teams to follow new lines of thought AH three practices are gaining favor as organizations worldwide scramble for an elusive edge on the competition. USA. according to PMI's 2012 Pulse of the Profession report Severe resource constraints caused by economic conditions require PMs to be ultra efficient.AGILITY DOES NOT EOUAL ANARCHY. an online university based in Salt Lake City. To thrive in such an uncertain business world. PMI's Pulse of the Profession Organizational Agility report found that of projects at organizations with high agility: • 73% finish on time • 75% finish on budget • 83% meet goals and business objectives • 71% meet or exceed ROI All those numbers are well above the survey average. Yet the increased volatility and complexity of the project landscape makes reacting to— and planning for—changing market conditions more difficult than ever before. CIO of Western Governors University (WGU). organizations—and their project management offices (PMOs)—must identify risks sooner. But a solid foundation of project management practices still applies—even if it is implemented in a quick and iterative manner. according to a 2010 report by the Institute for Corporate Productivity. "It's a paradox. three-quarters of executives said their business environment was changing." says Niel Nickolaisen.

head of cloud operations at NEC. an IT firm in Mumbai.S." he says. PMP. Verma says. in turn. By joining forces. USA. Establishing stringent selection criteria lets organizations identify where to take risks—and where to scale back. we have the capacity and resources to support innovations that push our competitive advantage. Only then can they make changes to projects before problems arise. Georgia." he says." THE RIGHT RISKS When organizations are forced to make rapid-fire decisions. That lets the school focus on a more cutting-edge student analytics project that could help the university improve graduation rates. India. Chennai. executives say they plan to reorganize their approach to risk management over the next three years. then focus your innovation efforts on projects to support that advantage. particularly those within the PMO. Nickolaisen opts for off-the-shelf solutions that require fewer resources for implementation. every project plan is evaluated based on whether it will increase graduation rates." Mr. A June study by Deloitte and Forbes Insight found that 91 percent of U. for example. Tamilnadu. At WGU. @froivkanhik. early and consistent risk management allows organizations to be more flexible and manage obstacles more fiuidly. "You can't achieve agility if everyone works in isolation. India Ramamurthy. PMP. executives and PMOs each get a more diverse perspective on risks and opportunities. improve operational excellence and serve WGU employees. That can only happen when executives. "Because we choose standardized solutions for those projects." —Kshitiz Verma. You've got to operate as a team where everyone has a chance to contribute." Mr. Nickolaisen says that at WGU. Mr. India \\ I think org change should be bottom up. Proactive risk management that begins during project selection and planning enables executives and project leaders to identify the factors that could secure— or sabotage—success. "Executives choose projects for business reasons. Strategies include: • Elevating the profile of risk management throughout the organization (52 percent) • Reorganizing risk-management processes (39 percent) • Providing additional training for staff (37 percent) • Incorporating new technologies (31 percent) To make the most of their risk-management efforts. network reliability projects may be mission-critical. Whether it's tracking a shifting regulatory environment or recognizing a lack of adequate internal resources. "That's when you get organizational agility. says Mr." says Kshitiz Verma." he says." Such partnerships enable organizational leaders to build the strongest portfolio and ensure that project goals align with business strategy. Verma says. organizations can deliver projects faster and more efficiently than their rivals. NEC Mumbai. but they may not fully understand the technological or resource limitations related to those choices. This. You need the support from the people OCTOBER 2012 PM NETWORK 57 . "The next step in managing project risks is preventing the risks that derail projects. liberates organizations to take calculated risks and turn all the volatility and chaos to their advantage. projects can careen out of control. business units and project teams work together throughout the project life cycle. senior manager of the PMO at Gulfstream Aerospace Corporation in Savannah. so Mr. "You have to define your competitive advantage. Nickolaisen. By stripping away the layers of procedures that can slow projects and replacing them with more collaborative decision-making processes. "You've got to operate as a team where everyone has a chance to contribute. not dealing with them after they happen."Organizations across sectors are trying to increase their agility so that they can get innovative products to market faster. says Pete Nathan. but they don't drive competitive advantage. executives need to leverage the firsthand knowledge and expertise of project leaders. ITERATIVE APPROACHES To lessen the possibility of failure on these high- "You can't achieve agility if everyone worRs in isolation.

"It's a business enabler. PMP. Mr. created a proof of concept and delivered a rapid prototype of the upgrade in two weeks." she says. value-driven pieces. the team was able to make adaptations to increase the project's value. the team won't run it through a formal risk registry and review process. "The PMO provides the facts so the executives can make the best decisions. Then the outcome can be chaos. has to be on board with the basics and the processes.PMI. Jutte says." That's where the PMO comes in. "But you must have support from the top if you want to achieve this kind of change on an organizational level. The IT team chose a project to rework a customer website. And the Pulse of the Profession report has seen a steady rise in the use of agile approaches. England || Describe "organizationa PM NETWORK OCTOBER 2012 WWW. communicating the business value of iterative practices in terms executives understand. Jutte says. a project and risk management consultancy in Delft. "By breaking the project into bite-sized. "We make note of it and discuss it informally." says Bart Jutte. demonstrate the new site and receive feedback on how to proceed. "But we don't spend hours on tasks that don't add value to our process. we lower our risks dramatically. When a project is divided into smaller pieces delivered more frequently and with a regular stream of stakeholder feedback. an issue has a low likelihood of occurring." Mr. from the executive office to the PMO to the delivery team. "It's a low-risk. Kristen Dammers. Then the PMO brought the stakeholders together to show them the prototype. Mr. low-cost way to deliver big benefits. WGU's delivery team breaks them into smaller chunks." he says. The PwC report found that organizations that have had a PMO for six or more years reported higher performance around quality and achieving intended business results. Louisville. delivering iterations in phases. USA. That's one big reason more organizations are adding iterative and agile approaches.value projects. If. for example. PwC's Insights and Trends survey of global project management practices released in August found that 34 percent of respondents use an agile project management approach within their organization. managing director of Concilio. associate vice president of the enterprise program management office at Norton Healthcare. The stakeholders were properly impressed. it's the top tier— the one that can compel the rest to follow—that's often hardest to convince. REDUCING THE DRAMA OF CHANGES No organization can keep up with all the shifts without securing buy-in across the enterprise—and that takes change management. @KristenDammers. Rather than try to explain the benefits of a more agile approach." The best PMO leaders help manage change on projects by acting as a knowledge channel WM\. Jutte is currently working with Crédit Agricole Consumer Finance in Amsterdam. "The programmers are usually in favor of iterative methods. Kentucky. To achieve true buy-in. Not only can project owners get immediate value from those deliverables. the PMO decided to show them. Netherlands.ORC . The hurdles come when you try to get operations and management to accept the approach. everyone. organizations can deliver prototypes on a rapid basis. Alas. The stakeholders were skeptical of the process—and of the IT department's ability to deliver projects on time and budget. The PMO has a pivotal role to play by acting as a source of information and adviser to portfolio leaders. PMO leaders can act as a vital link between senior leaders and project teams. Netherlands to implement an agile approach for its IT department. And by getting their reactions early on. London. they can gain better control over what comes next. 58 for it to work and to have a long lasting effect." But adding such iterative approaches won't deliver benefits without standards as a foundation. Ms." says Janice Weaver. Weaver's team aims to ease the drama of change by building fiexibility into its standard project management practices.

When problems arise and changes occur. "If you can predict in advance what will cause a project to go into a ditch. With that information. Nathan. PMOs can implement review steps to determine if a new project is headed down the same path. Although the exercise was a good one in theory. For example. Odeiar Vando de Oliveira."It's a paradox. AVOIDING SURPRISE PMOs foster even greater organizational agility when they're empowered to find and implement innovative solutions. an absentee project sponsor and multitasking human resources agility" in one word: Flexibility. you can intervene before it happens. Salt LateCity. Ms. This year. that means doing whatever it takes to keep the project moving forward— especially when that comes to guiding the team through unexpected changes. organizations have to dieliver more Jesuits at a faster pace than ever before. @odelar. U t i p A . Weaver points to a new Norton pédiatrie outpatient facility project. 71 percent of organizations that are most effective at change and risk management report having a PMO. it's hard to use both OCTOBER 2012 PM NETWORK 59 . allowing the team to more readily spot danger points and take proactive corrective actions. PMO leaders can intervene and help organizations act with agility—allowing everyone to be more productive. Gulfstream's PMO launched a project to build an analytics tool to act as an early predictor of failure. Prior to the launch meeting. vendors and front-line workers. < • \ PHOTO BY CHAD HURST between leaders. the architect sent an eight-page tabbed spreadsheet denoting all the potential building features and asked representatives from all 20 departments to fill it out before the kickoff event. Often. she says. more than 20 percentage points above the study average. the hospital staff had neither the time nor the patience to complete the document. and the next meeting went much more smoothly." tftUei Nickolaisen^Vdlli^ltfpernors University (WCU). Brazil \\ In the public sector." says Mr. who then came back with a revised statement of work. Weaver met with the architects. It examines risks correlated to previously identified root causes of missed project targets. Sao Paulo. According to the Pulse of the Profession Organizational Agility report. In this age of declining budgets. PMP. So Ms.

" Mr. and clients have a high sense of urgency. take smarter risks. Pollack says. If I k n o T A T something is going to happen." It's that adaptability that drives organizational Ei-i: 60 [change/risk management]. When project leaders spot these potential issues during assessment. but that's what you need to do to succeed. Georgia." Mr.PMI. Catineau. identify risks upfront and be more open to change. PoUack says. Each machine must be configured based on the client's unique specifications. "There are a tremendous amount of logistical issues to contend with. Georgia. the PMO eliminates a recurring risk—and accelerates the company's response time. Of course. By thinking about project obstacles from a portfolio perspective. "We are trying to think about change and risk management more proactively.ORG . "The biggest factor that causes problems on projects is surprise." Mr." he says. it takes a lot longer to deal with. "The sooner problems can be solved. But if PMO leaders and executives work together to add more iterative practices. says Mr. @jeromegedeon. I can plan for it. Atlanta.The biggest factor that causes problems on projects is surprise. "It's easy to get mired down in the day-to-day battle and not take a step back to look at the big picture. Nathan says. working with senior executives to launch a training program and background checks for all technical personnel who will then be ready for action." i l l —Jody Pollack. "Early predictors can be a project's salvation. "You can change its fate and get it back on track. Pollack's team is deepening the talent pool. Atlanta. So rather than waiting until these issues rear their ugly heads. there is no single path to organizational agility. but if it's a surprise. the leaders must manage those changes in the project plan to ensure it doesn't go completely on track. resources are always stretched thin. Jérôme Gédéor). Pollack is currently overseeing deployment of 750 copiers and devices to 85 locations. the more agile an organization becomes. Either way. says Jody Pollack. it takes a lot longer to deal with. W e use risk management techniques as much as we can." P M are both high predictors of troubled projects at Gulfstream. but if it's a surprise. On such projects." Organizations can further enhance their agility by incorporating strategic interventions into the project plan. Nathan. PM NETWORK OCTOBER 2012 WWW. PMP. Or. I can plan for it. and deliver innovative products and solutions to market faster. and many of the locations— such as a chemical company and government sites—require background checks and safety training for the installation crew. "If I know something is going to happen. they can find a new stakeholder or secure additional resources. USA. he says." Mr. Ricoh Company. USA agility. senior program manager at office equipment maker Ricoh Company. they can delay the project until it has the leadership and support needed to succeed. PMP. Mr. they can solve problems.

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