Effective Project Management of Organisation Transformation

Context

The ability to successfully deliver large and complex organisation transformation

projects is vital for Australian businesses in the aftermath of COVID-19. It is well
known that productivity has stagnated (average growth in labour productivity is 1.6%
annually compared to 2.7% in the period 2006 – 2019 and 1994 - 2005 respectively,
Productivity Commission Insights, Feb 2020). Now, as the vagaries of business
disruption due to the pandemic, trade disruptions due to tensions with China and a
struggling manufacturing sector impedes Australia’s future economic potential, the
private and government sector is expected to think big and innovatively. Gas based
manufacturing is being touted as a panacea to lower power costs in a bid to revive
manufacturing. Hydrogen is being primed as a future with Green-Steel
manufacturing as one of the ways to bring back long lost manufacturing jobs.
Similarly, service-based companies are relying on Digital Transformation to drive
efficiencies and innovation. Government is being forced to spend big on large
infrastructure projects in a return to Keynesian economics of driving demand (e.g.
Badgerys Creek Airport Metro Link, Social Housing in Victoria). The situation is
nothing but what Project Management Institute describes as VUCA (very volatile and
prone to change). This means that many businesses will see profits declining or
compelled to explore alternative ways of serving their markets (e.g. food delivery
business, growth of click and collect and online shopping). The ability to plot the
transformation required and then implementing it well will be crucial for the overall
health of businesses and ultimately the Australian economy.

Project Management of Organisation Transformation

Most people will agree that the role of Project Management is crucial to the design
and delivery of large transformation projects. While large capital and infrastructure
projects (e.g. Sydney Light Rail project, WestConnex road project in Sydney, Sydney
Metro) rigorously adopts a project methodology and produces associated project
artefacts (e.g. Business Case, Project Scope document, Change Orders, Risk
Register, Project Communication plans) the transformation projects which are non-
tangible in nature (e.g. Operating Model design, Business Process reengineering,
Mergers or Integrations) are nebulous in comparison incapable of being defined by a

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project management methodology. In most circumstances a hybrid project

management methodology is used fulfilling the maxim “horses for courses”.

It is natural to ask here the question that what value does a Project Management role
bring to the table. Many organisations have now established inhouse team to
manage large transitions rather than relying on external consultants. I have had the
opportunity to work in this kind of arrangement for several years both as an external
consultant and internal resource. It is my observation that the role of Project
Manager is akin to a glue that binds different resources together allowing them to
work and deliver a solution in a collaborative style. In most cases, the Project
Manger has limited knowledge of the subject at hand and therefore must rely on
Subject Matter Experts (SMEs). This calls into action the Servant Leadership style
that is required of an effective Project Manager. However, as the project matures the
SMEs quickly learn the project management skills (proactive communication, project
reporting, issues resolution) resulting in a situation where the value delivered by a
Project Manager or the Project Management Office is in question. It is at this point
where I have concluded that the ongoing value of Project Management decreases
unless something more is on offer.

I have often witnessed Project Management function being responsible for “fire-
fighting”, project updates and project reporting, day to day management which often
involves acting as a bridge to help arrive at a solution, managing risks by putting in
place contingency measures, stakeholder management, etc. While these are very
important functions but after certain duration project team members become adept
thus raising a question mark whether the Project Manager needs to undertake them
on full-time. This then leads to the question what should the role composition of a
modern-day Project Manager resemble? In trying to answer this question my
analysis shows that the Project Management Office through Project Manager has not
adequately addressed two critical aspects of successful project delivery; deploying a
suitable project team and project team’s ongoing performance management. Both
have a significant impact on project success. Yet I have seldom seen these areas
adequately addressed. Project Management of organisation transformation is unduly
tilted towards project status reporting, “fire-fighting”, risk management and
stakeholder management (stakeholder management does not deploy any

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sophisticated approach but largely relies on individual skills thus leaving it to

chance). This is not sophisticated enough, and not adequate as Australian
organisations try to implement more and more transformations. It is too process
driven and often misses the bigger picture of effectiveness, productive use of
resources. Project Managers primarily concerned with “fire-fighting” is an inefficient
way of using an expensive resource. Also, it does not empower project team
members to take more accountability of end results. Lack of focus on how to
motivate project team performance, hold people accountable and limited view on
how to successfully deploy an effective project team are major areas that are
currently underserved. These areas should constitute a greater proportion of time in
Project Manager’s and Project Management Office’s role.

Project Team Performance

Anecdotal comments that I often hear/read from friends, colleagues and local media
about Australian corporate life is that the organisational culture is ‘laidback’ or ‘lazy’.
Many complain about career stagnation and how they would like to move to more
competitive environment if the right opportunity crosses their path. Now, there are no
definite metrics to judge whether these comments are true or personal prejudices.
The closest studies that one can hope to analyse to test the veracity of this claim is
by studying the competitiveness reports published periodically by World Economic
Forum (Davos, Switzerland), Institute for Management Development (Lausanne,
Switzerland), INSEAD (Fontainebleau, France and Singapore), et al. WEF ranks
Australia 16th most competitive, IMD ranks it as 18th most competitive and INSEAD
ranks the country 10th in terms of talent competitiveness. This shows that the claim
above is not an absolute truth but at the same time there are pockets of inefficiencies
in Australian economic society reflecting to some degree on the organisational
culture.

Using my experience of last 6 years that I have worked here, it is a general

observation that performance metrics of project teams are seldom developed.
Project timelines agreed and defined in project schedules tend to be flexible and gets
postponed without raising too many eyebrows. Working beyond defined job
description and sometimes beyond business hours in order to achieve project

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timelines is not the accepted norm. This has dangerous implications for a country
and its businesses that is under pressure from well established and emerging
entrepreneurial hotspots (think about the time it has taken NBN to deliver broadband
or the time it is taking us to roll out 5G. Similar projects of more complexity in places
like China, Indonesia, UAE, Malaysia, India will typically take less time).

Project Management Office must take responsibility for owning the process of project
performance management. However, care should be taken in defining what this
entails. Common practice is to develop Key Performance Indicators (KPIs) and
dashboard for managing KPIs. In fact, most project management literature also
define project performance in a narrow sense. They state that the project manager’s
role is to understand what the critical metrics (i.e. KPIs) are that need to be
identified, measured, reported (i.e. project dashboard), and managed such that the
project will be viewed as a success by all the stakeholders (Harold Kerzner, 2017).

This is a symptomatic view of project performance and fails to recognise underlying

factors. Also, the effort should be on individual team member’s performance metrics
and not so much on project performance metrics (this is already adequately
addressed by existing project management practices such as weekly project
meetings, dashboard).

To arrive at a solution, the system view of project team performance borrowed from
systems theory (Rice, 1967) is an opportunity for Project Management Office and
Project Manager to create the right environment (read this as project’s organisation
culture, organisation structure, employee relations climate, technology and working
practices) for project team performance. Systems theory is the basis of input-
process-output-outcome model of managing performance. Inputs are the skills and
knowledge that an individual brings to a job (elaborated further below in this paper).
Process is how people perform their jobs (i.e. established project management
process). Outputs are the results of performance expressed as visible effect which is
the result of effort but may or may not be necessarily measured in quantified terms. If
we closely analyse current situation readers will appreciate that focus of Project
Management is more on process and less on input and output. This is a flaw and
needs correction.

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Numerous studies and examples are now available (e.g. Deloitte and Accenture’s
decision to stop performance appraisal) that suggests that regular performance
feedback, developmental coaching and a focus on potential rather than past
performance is a more productive approach than the traditional performance
appraisal process. Digital tools are now available to enable this shift in approach.
Project Managers should carefully design processes to implement an agenda for
project team’s development, motivation and overall performance. Consequences for
poor project performance should be articulated and team members should be held
accountable for project schedule variations. Project Managers should imbibe the
spirit of Servant Leadership and should be vigorously fulfilling their role as coaches
and counsellors for team members allowing them to be more productive.

In addition to managing individual performance, Project Managers are also required

to pay close attention to shaping the project’s culture. Prof. Udai Pareek (2003) in his
work designed a tool termed ‘OCTAPACE’ to measure organisation culture. It stands
for Openness, Confrontation, Trust, Authenticity, Proactive, Autonomy, Collaboration
and Experimentation. These dimensions are used to measure the state of
organisational culture at play. This is one of many examples that exists. Like modern
day performance management there are several digital tools and techniques that are
available to measure project culture. Once measured, Project Manager working with
Project Management Office should design initiatives that promotes aspects of project
culture that are weak. Systems Theory suggests that organisation culture is a key
ingredient towards individual performance. This is an area of immense opportunity
for Project Management Office and Project Manager to contribute towards project
success.

Deploying a suitable project team

Daniel Goleman in his seminal work ‘Emotional Intelligence (also referred as EQ)’
has spoken elaborately on the importance of emotional intelligence. In his book he
has developed a model for emotional intelligence and has relied on research
conducted by eminent management consulting firm Korn Ferry Hay Group to show
that emotional intelligence is more important than Intelligent Quotient (IQ). Goleman
has listed several emotional intelligence competencies that are believed to be an

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indicator of the presence or absence of EQ. Examples include competencies such

as; self-awareness, self-regulation, social skill, empathy, motivation, etc. In essence
emotional competencies are nothing but behaviours that supports the theory that
performance of an individual has two aspects; outcomes and behaviours (readers
will recall that business outcomes achieved by some Wall Street Executives prior to
GFC were stellar but the behaviours were questionable). Goleman’s work shows that
given a standard level of IQ among employees (which can be assumed to have been
tested during the recruitment & selection process) it is the EQ which is a predictor of
superior performance. In my observation this powerful theory and findings have
largely remain unutilised in the project management world. Project Managers and
PMOs tend to use anecdotal data to select individuals for large and complex project
only to learn later that they were not suitable for the project demands. Through daily
project interactions, team meetings (that are now predominantly conducted online
due to COVID) there is a capability to record these sessions (with permission) and
later analyse to identify emotional competencies displayed. These are powerful data
points to build an emotional profile for project team members in an organisational
database. This database can be effectively leveraged in future to match team
members to available projects using an objective selection criterion. This is at least
an improvement over the random and anecdotal based current project selection and
staffing practices. As organisational environment becomes more ‘projectified’ the
emotional profile database maintained by PMO can be a useful tool for
recommending project selection to Project Directors and Executives in a scenario
where multiple individuals have expressed interest for a project role.

Additionally, PMO and Project Manager as part of their daily performance

management function should study data on project member’s emotional profile on
display and compare it to project requirements. Wherever gaps are noticed Project
Managers are expected to provide coaching and counselling by leveraging their
experience and expertise. Many advanced digital solutions can now be designed
(even in-house HRIS can be used) to illustratively share insights to project team
members showing how they are performing vis-à-vis their emotional competencies
compared to project requirements. This can serve as a powerful insight allowing for
introspection and development.

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This is a more sophisticated approach of addressing root-causes and taking a

developmental view of project resources. It is a more strategic approach and if
practiced over a period of time will develop powerful competencies within an
organisation to work successfully in a project environment.

Conclusion

The discussion shows that the role of Project Manager managing large
transformations needs a reset. If this does not happen most organisations will
continue to use Project Managers and Project Management Office in a sub-optimal
manner primarily focused on ‘mechanics’ and ignoring the ‘substance’. It is also
important for our national revival as companies emerge from the pandemic. I have
spoken about role composition of Project Manager in a transformation. At the start of
a project it should begin by devoting more time to instilling the project management
processes and artefacts but once team members have become adept the mantle
should be transferred in favour of motivating team performance, designing the
correct culture, coaching and counselling. This should be the role of a Project
Manager and Project Management Office in enabling more Australian organisations
to complete their transformations successfully. It remains to be seen how many
organisations now embrace these concepts.

References
1. Armstrong’s Handbook of Performance Management, 6 th edition, Michael
Armstrong, Kogan Page, USA
2. Emotional Intelligence: Why it can matter more than IQ, Daniel Goleman,
Bloomsbury, USA
3. Pareek U. (2003): Training instruments in HRD and OD. 2 nd edition, Tata
McGraw-Hill Publishing Company Limited, New Delhi, India
4. PC Productivity Insights, Recent Productivity Trends, Feb 2020, Australian
Government
5. Project Management, 12th edition, A systems approach to planning,
scheduling and controlling, Harold Kerzner, Wiley, USA
6. VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity as defined
in PMBOK 6th edition, Project Management Institute, USA