Project Perspectives

Periodical of Project Management Association Finland

1/2005 Vol. XXVII, ISSN 1455-4178

8 Manage the Biggest Risk First

16 Multicultural Project Leadership
34 Project Management in 21st Century
46 Project Managers and Disrupted Environments
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Editorial

Table of Contents
4 Association of Reported Project

New Avenues Risk Management Practices and

Project Success
Robert James Voetsch
Denis F. Cioffi
Frank T. Anbari

and Insights 8 Manage the Biggest Risk First

Annika Varjonen
Tony Mobbs
12 The Value of Flexibility In Total
Project Life - Real Option
Applications
Project Perspectives is aiming to provide new insights about characteristics of Jan Rune Baugstø
modern dynamic projects and their appearances. This issue is first focusing on 16 Multicultural Project Leadership
commercial issues in the field of projects and their management. Second topic Marko Mäkilouko
of interest is the characteristics of different project environments and how they 20 Industrial Humanities
are affecting on practical project management. Tales from the Field
Projects are tightly connected with companies’ businesses and we can see Ruth Illman
increasing need to have elaborated solutions for understanding and evaluating 23 The Process of Advancing Project
projects from the commercial viewpoint. Risk management, real options and value Management In Organisations
management are areas that can be invaluable for this purpose. At the moment Morten Fangel
these exists hardly nowhere as appearances of daily skills that are smoothly in- 28 Multiple-Project Managers, What
tegrated with other areas of project management. However, I would encourage Competencies Do You Need?
all progressive companies to go for practical applications in these areas. It can Peerasit Patanakul
be a true competitive advantage. Dragan Milosevic
Appearances of projects in different business environments and in different 34 Project Management in 21st
disciplines are improving our understanding on the content of modern project Century
management. It is very important to document and study project cases, their Ali Jaafari
characteristics and lessons learned. This data gathered from single projects need 42 The Change Masters: Project
to be put in the context. Putting data in context means that we understand a Managers In Short-Duration
Projects
project as a system that that is part of the environment around it. The environ-
Andreas Nilsson
ment is affecting project with its various values, constraints, parties etc.
46 Project Managers and Disruptive
The described reasoning results in an improved structuring of factors and ac-
Environments: Leadership Under
tors within our projects. Various factors or actors can be fully inside the project, Natural Risks and Environmental
part of our company, within project parties or within the business environment. Disasters Situations
This is demonstrating how we can structure the complex world around us and Luis Pons Puiggrós
understands its dynamics. 50 Network Oasis - Environment
In this issue of Project Perspectives we have eleven carefully selected articles for Work and Information
which are showing the way ahead and how our understanding on modern projects Management in Multiple Projects
and their management is developing. Ilkka Kakko
Vesa Salminen

Published by
The Project Management
Association Finland (PMAF)
PMAF is:
- Forum and a meeting place for
project professionals
Dr. Kalle Kähkönen - Developer of project thinking and
knowledge
Chief Research Scientist - Active partner within the
VTT - Technical Research Centre of Finland international project community
PMAF serves with
- Two project management journals
(Finnish & English)
- Yearly Project Day conference and
frequent theme events
- Project management certification
http://www.pry.fi/index_eng.htm
Editorial Board
Kalle Kähkönen, Editor in chief
Aki Latvanne
Printed by
Loimaan Kirjapaino Oy
ISSN 1455-4178
Results from Research and Development
Association of Reported Project Risk
Management Practices and Project Success
The overall question answered by this paper is: Does risk manage-
ment make a difference? That is, do organizations that employ formal
risk management practices outperform those that do not? Data col-
lected from 175 web-survey respondents and 12 selective telephone
interviewees from the Risk Management Specific Interest Group of
the Project Management Institute answer this question in the af-
firmative, and the data analysis supports the positive influence of
project risk management. Several detailed conclusions are presented
and explained.
Introduction
Do organizations that employ formal risk manage-
ment practices outperform those that do not?
This paper is based on exploratory, descriptive,
cross-sectional research (Voetsch, Cioffi & Anbari,
2004). The data sample represents risk manage-
ment applications in a wide range of areas, e.g.,
insurance, financial, operational, environmental,
and occupational. The study explores the scope
Robert James Voetsch of risk consideration in project operations; de-
Bethesda, Maryland, scribes the project risk practices in organizations
USA executing projects; assesses the dynamics of cur-
rent project risk management in organizations;
summarizes the frequency of risk management
practices in projects; updates reported project
success rates; and determines the effect of risk
management practices on reported project man-
agement results.
The research constructs investigated were:
- Perceived Senior Management Support For
Project Risk Management
- Reported Project Risk Management Plan-
Denis F. Cioffi ning Practice
The George Washington
- Reported Project Risk Response Planning
University, USA
and Risk Event Monitoring and Handling
Practice
- Reported Project Success
From a theoretical foundation, these four
research constructs were operationalized as in-
dependent, intervening and dependent variables.
Figure 1 depicts the research construct dynamic.
We consider risk management to be implicit
in all critical success factors (e.g., scope, commu-
nication, cost, and time management), and thus
Frank T. Anbari a conceptual equation for this construct may be
The George Washington expressed as follows:
University, USA
Reported Project Success =
Function (Perceived Senior Management Support,
Reported Risk Management Planning,
Reported Risk Response Planning and
Risk Event Handling)
4 www.pry.fi
This study determines the extent of correlation
between the above four constructs within the
data analyzed.
Summary of Literature Review
This paper takes the critical success factor research
continuum of Pinto & Slevin (1988), Dai (2002),
Cooke-Davies (2002), Tarnow & Frame (2003), and
Dai & Wells (2004) to a more detailed level: that of
the sub-critical success factors as related to project
risk management. Various authors have identified
key indicators of perceived senior management
support for project risk management practices;
of project risk management planning practices, of
project risk event monitoring and handling prac-
tices; and for measuring project success (PMI® Risk
SIG, INCOSE Risk Management Working Group &
the United Kingdom Association for Project Man-
agement Risk Specific Interest Group, 2002; Hulett,
2001; Price Waterhouse Coopers, 2001; Joint Tech-
nical Committee OB/7, 1999; Bosler, 1999; Murray,
1998; Project Management Institute, 2004; Insti-
tution of Civil Engineers & Institute and Faculty
of Actuaries, 2002; International Organization for
Standardization, 2003; British standard BS 6079-
3, 2000; United States Environmental Protection
Agency, 1999; Osborne, 1996; Chapman & Ward,
1997; Kahkonen & Huovila, 1996; Dorofee, Walker,
Alberts. Higuera, Murphy & Williams, 1996; United
States Department of Defense, 1999; Kerzner
1998; 2003; Shenhar, Levy & Dvir, 1997; Pinto
& Kharbanda, 1995; Frame, 1995; Cleland, 1994;
Freeman & Beale, 1992; De Wit, 1988).
Respondents’ Demographics
The research consisted of two interrelated sur-
veys of the membership of the Risk Management
Specific Interest Group (SIG) of the Project Man-
agement Institute (PMI®): a website survey using
close-ended questions and structured interviews
using open-ended questions. A total of 176 web
survey questionnaires were collected between
October 2002 and early February 2003, of which
175 were usable. Twelve telephone interviews were
also conducted to check for consistency.
The overall profile of the respondents to both
surveys is that of private sector professionals
employed in the information and communication
sectors (72% and 45% of the respondents respec-
tively), working in projects in the industrialized
world. Nearly all respondents had a university
degree and had gained some project risk manage-
ment experience within the 12 months previous
to their responses; the sample had a median of
greater than 12 years of project management
experience. Finally, more than 75% of the respon-
dents were employed in organizations that had
annual revenues or an annual budget in excess
of US $100 million.
Summary of Results
Chi-squared analysis tested the statistical signifi-
cance of the relationship between any two-paired
variable combinations. As most social scientists
use 5% to balance the likelihood of Type I and
Type II errors (Garson, 2002), the decision rule was
set at the 95% confidence level to test the null
hypotheses, i.e., any chi-squared probability <.05
led to rejection of the null hypothesis.
In general, this analysis enabled rejection of
all null hypotheses and acceptance of the cor-
responding alternate hypotheses at a 95% level
of confidence, supporting the research model
explored in this paper: senior management support
and resource allocation are associated with the use
of formal project risk management practices; the
use of formal project risk management practices
are associated with the use of formal risk response
planning and better risk event monitoring and
handling; and reported project results are more
likely in compliance with the project management
triple constraint when senior management sup-
ports the use of formal project risk management
practices throughout a project’s life. We report
some details of these analyses below.
Senior Management Support and Use of
Project Risk Management
The analysis revealed statistically significant rela-
tionships between perceived senior management
support of risk management practice and the
implementation of reported project risk planning
practices. Furthermore, organizations reporting
senior management sensitivity to project risk
management also reported use of various project
risk management practices during the life of their
projects, and as one would expect, where senior
managers provide adequate resources, more fre-
quent implementation of formal risk management
processes was reported.
Risk Planning Practices and Risk Event
Monitoring and Handling
The analysis revealed that organizations reporting
formal risk planning efforts also report monitoring
risks more frequently than those organizations
where reported risk planning efforts are less
pronounced. Furthermore, organizations report-
ing more formal risk planning efforts also report
experiencing fewer workarounds.
Risk Response Planning, Risk Event
Handling, and Project Success
The analysis revealed statistically significant
relationships between the generally accepted
risk management practices (risk management
planning, risk response planning, and risk event
Project Perspectives 2005
Yes, risk management
Perceived Senior Management Support
for Project Risk Management does make a
difference and
organizations that
employ formal risk
management practices
Reported Project Risk Management
do outperform those
Planning Practice
that do not employ
such practices.
Reported Project Risk Response Planning and
Risk Event Monitoring and Handling Practices
Reported Project success
Figure 1. Research Construct Dynamic
handling) and the reported project success rate
of an organization as suggested by the triple con-
straint (time, cost, and performance), and reported
customer satisfaction.
In particular, organizations reporting frequent
implementation of formal risk planning efforts also
reported more frequent project success. Similarly,
organizations reporting frequent implementation
of formal risk event monitoring and handling prac-
tices also reported more frequent project success,
as did those reporting strong senior management
support for project risk management.
Common Characteristics of Project Risk
Management
Qualitative data analysis of the telephone survey
responses revealed some key characteristics of
project risk management. It is: senior manage-
ment-driven, widely known but not widely imple-
mented; enunciated by a formal policy directive;
usually implemented with qualitative risk analysis;
often equated with project failure; more prevalent
in project management mature organizations;
and more formal in larger organizations. It has a
positive impact on project performance and per-
ceived project success. Company concern for risk
management in general and project risk manage-
ment in particular has increased measurably since
September 11, 2001.
Data Analysis Conclusions
The data analyses used in this research confirm
that there are statistically significant relationships
in the research model as depicted in Figure 1.
With the above data analyses in hand we can
say firmly: Yes, risk management does make a
difference and organizations that employ formal
risk management practices do outperform those
that do not employ such practices.
Specific Research Findings
The following sections report specific research
findings related to each independent research vari-
able and those dependent research variables from
5
 which a statistically significant relationship was
discerned. The percentages reported are for the
two extreme ends of a cardinal-ordinal scale. These
categories were selected as they demonstrate
more clearly the associations of risk management
policies, attitudes and practices with each other
as well as with the dependent construct variable
Reported Project Success.
Perceived Senior Management Support
of Risk Management Practice
The strongest correlation between perceived senior
management support and reported management
practices included having an organization risk
management policy; a work unit risk management
policy; and a lack of senior management discour-
agement for risk reporting. Not surprisingly, those
who reported rarely having adequate resources
for project risk management also reported rarely
having training in project risk management. A
positive relationship existed between the re-
ported frequency at which adequate resources
are allocated for project risk management and
the reported frequency of formal project risk
management practice.
We could summarize the results above by say-
ing that organizations perceived as risk sensitive
report greater project success.
Consistent with this statement, the research
also discovered that the more frequently a risk
management tool is used, the more frequently
risk monitoring takes place. Organizations where
reported formal risk planning practices are imple-
mented reported monitoring risks more rigorously
than those organizations where reported risk plan-
ning practices are weak.
The data indicate that organizations where
reported formal risk planning efforts are imple-
mented have higher reported project success rates
than those organizations where such practices are
weak and vice versa.
Thus, the weight of the data shows the less
frequently a specific risk management practice (es-
pecially a planning tool) is used, the less frequently
risk response planning and risk event monitoring
and handling practices are conducted.
Reported Risk Response Planning and
Risk Event Monitoring and Handling
Practices
The frequency of the intervening risk response
planning and risk event monitoring and handling
practices variables are:
- Risk Reviews: Only 20.2% report “Almost
Always” holding risk reviews.
- Risk Audits: Only 8.7% report “Almost
Always” conducting risk audits.
- Risk Response Planning: Only 49.4% report
having a company policy requiring risk
response planning.
The data enable the following conclusion: the
more often project risks are monitored the higher
the reported project success rates and vice versa.
Thus, those organizations reporting strong senior
management support for formal risk planning
practices, their actual practice, and risk monitoring
also reported experiencing greater project success
6 www.pry.fi
than those organizations where reported formal
risk planning and monitoring efforts are weak.
Conclusions
In the course of this research we found that ad-
equate resource allocation and staff training for
project risk management are less pronounced than
risk visibility in organizational policymaking, and
that fewer than half of the respondents (45%) use
quantitative tools on an “Almost Always” basis to
develop contingency costs. Even fewer use them
to estimate contingency times (38%) or to select
projects (7%).
In contrast, analysis of the data supports gener-
ally positive influence of project risk management.
In particular, the following four general conclu-
sions can be made:
1. The more sensitive senior management is (per-
ceived to be) to project risk management, the
more frequent is the use of various project risk
management practices. For example, 37% of
respondents from organizations with a stated
risk management policy report using qualitative
risk tools “Almost Always” versus only 8% of the
respondents from organizations without such a
policy.
2. The more that senior managers provide ade-
quate resources for risk management processes,
the more frequent is their implementation. For
example, 58% of the respondents reporting
receiving adequate resources for risk manage-
ment likewise report using qualitative risk
techniques during project selection “Almost
Always,” whereas only 10% of the respondents
“Rarely” receiving such support also report
“Almost Always” using risk tools during project
selection.
3. The more that formal risk planning practices are
implemented, the more rigorous is risk moni-
toring. Also, fewer workarounds are reported.
For example, 43% of the respondents reporting
use of qualitative risk techniques during project
selection also report conducting risk reviews
“Almost Always,” whereas only 10% of those
respondents reporting “Rarely” using such tools
also report “Almost Always” conducting risk
reviews.
4. The more that project success is reported, the
stronger senior management support for formal
risk planning efforts, their subsequent actual
practice, and regular risk monitoring are also
reported. For example, 53% of the respondents
who report their projects conduct risk reviews
“Almost Always” also report completing projects
on time “Almost Always,” whereas only 15% of
the respondents who report “Rarely” conducting
risk reviews also report completing projects on
time “Almost Always.”
In conclusion, there is a statistically significant
relationship between senior management support
for project risk management and the presence of
a project risk management process and between
each of these variables and reported project suc-
cess.
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Project Perspectives 2005
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7
Recent Practical Lessons

Manage the Biggest Risk First

Ensure project success with clear,
high-visibility communication

A call for help came on an October afternoon. A project team stuck with a communication chal-
lenge was looking for a fresh, effective way to get the customer to understand the solution and
its value. This call launched the authors to combine the arts of story telling and visual represen-
tation into a powerful process which
- engages the whole project team in the communication creation
- provides a way to identify early major risks and issues to be addressed
- establishes a shared vision within the team
- produces easy-to-understand communication material to be shared with project sponsor,
Annika Varjonen client and stakeholders.
Visual Impact This paper makes the case for the value of a creative, more holistic way of communicating project
vision, goals and roadmap. We do this by using a real world practical example from a large UK
government programme, where a large team of seasoned business and IT veterans came together
to work on an innovative solution.

Introduction: Communication Is a Critical and the solution roadmap, new members require
Success Factor “bringing up to speed” very quickly.
“They just don’t get it!” said a close friend of All along, the customer or problem owner has
ours who was the director of a large programme. to have the confidence that the right problem is
“Who doesn’t get what, exactly?”, we queried. being addressed by the correct solution.
“Our customer doesn’t get our solution. We have
Tony Mobbs given them a whole series of presentations and More Communication Is Not The Answer
IBM Business Consulting they have voluminous documentation, but still Just like the customers of our friendly Project Di-
Services, U.K. they don’t get it. Can you think of some innovative rector, most projects have had enough of commu-
way of helping us?” nication in its traditional business guise. We knew
that regurgitating more PowerPoint presentations
Why Projects Fail
Projects are becoming increasingly complex,
cross-disciplinary affairs with large and fluctuat-
ing numbers of participants. There are a growing
number of relationships between the various
stakeholders involved in a project. Therefore, the
role of communication is becoming increasingly
critical to the success of any project.
The problem owners have to articulate their
problem in a way that is understandable to the
solution providers. Project team members from
different disciplines must find a way of speaking
each others’ language. New people will be joining
the project team as it expands, some may be from
third party suppliers. Within large project teams,
communication between the senior management
team and the various team leaders may decide
the fate of the project. Where all team members
must have an understanding of the project goals
8 www.pry.fi
and Word documents was not going to provide the
answer. Instead, we turned to the sense-making
tools that are as old as the humankind: stories
and images.
An Ancient Skill To The Rescue: Storytelling
Please, do not be alarmed by the term story telling.
We also plead with you not to put stories down
as yet another fad in consulting. Stories have
been around for much longer than consultants
and stories will go on long after consultants have
disappeared.
Storytelling is a uniting and defining compo-
nent in all communities. Ever since human beings
developed the ability to speak, storytelling has
been a way of bringing communities together,
creating history and shaping the future. Cultural
norms, in the form of values and beliefs, are taught
through the medium of telling stories. Stories
are a natural way for us to learn and grasp new
ideas and concepts. All the world’s religions use
stories or parables to communicate—as do today’s
advertisers.
Though we may not realise it, we do exchange
stories in our everyday work. Stories take on the
guise of anecdotes; rumours and gossip. Equally,
we tell stories to share experiences with col-
leagues, in a way that informally imparts knowl-
edge or understanding. These stories often hold
valuable truths and insights about your working
environment, project, or the people with whom
you work.
Managed and purposeful storytelling provides
a powerful mechanism for the communication
of key components about a project. It can also
provide a non-intrusive, organic means of pro-
ducing sustainable cultural change, of conveying
brands and values and transferring complex tacit
knowledge.
In this paper, we also talk about metaphors.
Metaphor is a general term used to imply a com-
parison in either speech or written text. Simple
similies such as “white as a sheet” or longer stories,
allegories and parables can be metaphorical.
To create a successful metaphor—one that will
help resolve a problem—the relationships between
the elements within the story need to be the same
as the relationships between the elements in the
problem. This makes the metaphor resonate within
the community and allows for the insight that’s
necessary to make changes happen. First and
foremost, a good story engages the listener and
matches with the listener’s own experiences.
Seeing Is Easier Than Reading
When we read a text, our brain must filter the
meaning of these particular letters in this particu-
lar order in this particular context. Only after this
process comes understanding, possibly a mental
image and if we’re really lucky, a notch in the
memory post.
When we look at an image, picture or photo-
graph, we get an instant, “unfiltered” sense of
what we’re looking at and dealing with. Images
tap easily into our emotions, through which they
can initiate a whole string of thoughts and impres-
sions and certainly form lasting memories. This
multi-layer, emotion-reaching quality of images
Project Perspectives 2005
allows for efficient data compression: alongside a Storytelling
comprehensive answer to “what”, a good picture and images are
can also answer to “how”, describing the style and inseparable: images
attitude of the action. always contain a story
Storytelling and images are inseparable: images and images are the
always contain a story and images are the best way
to make a story visible.
best way to make a
story visible.
Results: A Process That Helps Both the
Team and the Customer “Get It”
We used storytelling and images in a seven step
process, working through a number of facilitated
workshops with the project team. In all its simplic-
ity, here’s the outline of the process:
Step 1: Create a Shared Vision
We agreed with our friendly—and smart—Project
Director: to change the customer communica-
tion, the core team first had to agree on a shared
vision. We wanted to make the Big Picture vis-
ible, showing unequivocally what and where the
key milestones and critical turning points of the
project were.
The Big Picture found a natural shape as a jour-
ney. Like a project, it has a beginning, middle and
end; everyone has experience of a journey. As a
metaphor, a journey has almost a physical impact.
A journey also conveys issues to do with attitude
and emotions that, when spelled out, sound cli-
chéd and meaningless but develop wings and fly
when clad in a story. Effectively, the journey also
created a clear timeline for the project.
To get the ball rolling, we created the first visual
of the journey, hung it up on the wall and invited
the project core team to place post-it notes on
the timeline, describing the project actions. In
the beginning, what came up was a complete
hotchpotch of actions, small and large. This ex-
ercise sparked the first debates between people
who were looking at the project from the narrow
perspective of their personal area of expertise to
the exclusion of the whole. Another key finding
for the team was that the majority of the actions
placed on the timeline were within one company
only, excluding both the partner and the customer
view almost completely.
Throughout the whole process, we used large
sheets (3m by 1.5m) of paper on the wall, allowing
plenty of space for everyone to get involved in
building the project skeleton, work on it dynami-
cally and gather around to discuss it together. Just
changing the way of working freed up the team
thinking.
Step 2: Distilling the Bold Steps
Now, because the lack of customer view was vis-
ible on the wall, it was undeniable. This gave us
the opening we had been looking for: sharpening
the customer focus and, at the same time, laying
the foundation of the customer communication
by distilling the Bold Steps.
Bold Steps are the crucial actions on which
the project success hinges, they’re the make-or-
break points. Each Bold Step represents a major
milestone for the project and delivers value to the
customer. We found 11 Bold Steps in the course of
the 5 year project, one major milestone achieved
every four to six months.
9
 Step 3: Determine the Risks, Obstacles and
Benefits
Against each of the Bold Steps, the team identified
the major risks or obstacles that could prevent
the Bold Step from being achieved. They also
crystallised the benefits achieved with each Bold
Step. This allowed the team to change their focus
from activity-based planning to outcome-based
planning.
To further refine the customer view, we asked
questions like “What’s the difficulty or pain experi-
enced by the customer here? What are the benefits
and how could we diminish the difficulties/pain or
increase the benefits? Can we bring some of the
benefits forward and is there something that’s not
currently seen as a benefit but should be?”
Step 4: Create a Metaphor
The initial interviews with the key project team
members had prompted the idea of the project
journey as an obstacle course (familiar from mili-
tary and police training), with the project team
being responsible for making the obstacles as easy
for the customer to overcome as possible. The
team agreed to start working with this metaphor,
also agreeing to change it if it failed to fit or if
we came up with a better idea.
As we worked on the Bold Steps, Risks, Obstacles
and Benefits, the team eventually concluded the
starting metaphor of an obstacle course conveyed
the wrong message. The metaphor was re-crafted
into a journey from one island to another, with
different challenges along the way.
Step 5: Develop Stories
Along with everyone working on the whole story,
each team member was responsible for deepening
the story around one or more of the Bold Steps
in their personal area of expertise. Someone
was named responsible for digging out the key
messages of each of the Bold Steps. Again, the
customer view was emphasised.
As you as a project management professional
know, a project is not a static entity. Nor is a story.
It must be kept alive, expanded and deepened with
10
customer and stakeholder feedback. It’s a continu-
ous loop which will afford you a new window into
the state of the project. Once you become familiar
with listening to and observing the changes in how
the project story is being told, you’ll start picking
up on the faint signals of change early on.
Step 6: Iterate and Refine
A shared understanding can be created by work-
ing together in a dynamic, democratic way, using
images and stories to enable deeper and wider
sense-making and to anchor memory. Shared
understanding with partners, stakeholders and
the customer evolves form a continuous loop of
showing the journey, telling the story, listening
to the feedback, integrating it into the story and
then re-telling the stories.
Iteration is key both within and between all the
steps. Refinement of the metaphor, story and the
images is important to ensure the right messages
are communicated with unambiguous clarity.
Step 7: Determine final Representation and
Format
Once the journey and the Big Picture were up on
the wall and approved by the team, it was time
to share with partners, the stakeholders and with
the customer.
To enable easy sharing of the project story,
we created a folding hand-out. One side showed
the whole of the project journey. The reverse side
www.pry.fi
showed the Bold Steps one by one, with detailed
images and a short description, with key promises
outlined in bullet points.
Sharing a project through a visual journey is
easy. It allows for an instant understanding of
the progress of the project and the relationships
between issues. (And dare we mention that it’s
more fun than showing slides?)
what the story tells about your project. Another
factor to be aware of when you’re working with
stories is the counter story. This is a story which
can be told against your story, often in the shape
of rumours or a jokey version of your story. It’s
better to be prepared for the inevitable: consider
the different perspectives counter stories may take
and what your response to each may be.

Conclusions: If Something Does Not
Work—Try Something Different
Engagement will happen if you make room for it
If you want people to participate in something
fully, you need to make it meaningful and alive.
More and more projects deliver intangible out-
comes which an individual in the project team may
never get to actually see or experience. By making
your project vision and goals visual and tangible,
you make them memorable, understandable and
more easily shared. By engaging your team, you
give them a chance to contribute and become
motivated to becoming involved.
Shared vision is worth all the work you put
into building it
The invisible but priceless outcome of engagement
is a shared vision of the project future within
the team. Only a team with a shared vision can
communicate effectively and clearly, inside and
outside.
There will always be a story about your project
A project team will create a story of the project
whether you want them to or not. As a project
manager, you’d want to get a word in what the
story says, or at the very least, be conscious of
Stories and images are not a cookie-cutter
solution
A final word of caution: this is but one approach
to using stories and images in the business envi-
ronment. Do not mistake this for a recipe that will
always produce the same successful end result.
Where we manage a multitude of tasks at work
by rote, using stories and images always involves
a certain level of grope. Iteration, testing, sound-
ing out and feeding back are integral to a story
process, as is the attitude of an explorer.
Fluffy approach? Maybe. But it produces clear
results.
Obviously, our approach will not appeal to all
project managers; it may appear to be too “fluffy
bunnyish” and too “new age”. That’s ok. However,
we are reminded of a traditional project manager
who sat through the first set of workshops, not
really contributing and sitting there with his arms
folded. Suddenly, in the final workshop, he became
very animated “I’ve got it”, he said, “it is all very
clear to me now – I can now see what I need to do
to manage this project! I need to manage at the
Bold Step level, not at the detail level.”
It’s not just what you do, it’s also how you
do it that may decide just how successful your
project is.

Bio summaries
Author: Annika Varjonen
Affiliation: Proprietor, Visual Impact
Degrees: Visualiser
Professional activities: Consulting and coaching on how to use visual methods and storytelling
to create shared meaning in a corporate setting.
Besides having acted as a visualiser and strategy communication consultant since 1996, Annika
Varjonen has speaker/presenter experience in both the United States of America and in Finland.
In the U.S., her speaker experience includes National Speakers Association (NSA) 1997 Con-
vention, American Society for Quality Annual Conference in 1999 and American Society for
Quality/Quality Management Division Conference in 2000. She has also worked at Accenture as
a change management consultant.
Contact information:
annika.varjonen@clinet.fi
Author: Dr. Tony Mobbs
Affiliation: World Wide Cynefin Practice Leader, Cynefin Centre for Organisational Complexity,
IBM Business Consulting Services
Degrees: BSc, PGCE, PhD
Professional activities: Business Change Management Consulting and Mentoring on how to use
Complexity and Story Telling Techniques to facilitate change. Tony Mobbs is an international
trainer in complexity techniques within business. He is a recognised creative thinker and leads
workshops on Innovation within Organisations. Tony also runs courses on the use of Spiral
Dynamics and Integral Psychology for business change. He is an accredited NLP Trainer.
Societies: Institute of Management Consultants

Project Perspectives 2005 11

Recent Practical Lessons
The Value of Flexibility In Total Project Life -
Real Option Applications
“In 10 years, real options will replace NPV as the central
paradigm for investment decisions”
(Tom Copeland)
This paper focuses on the valuation of projects
and in particular the value of flexibility. The Net
Present Value (NPV) method is inadequate when
flexibility is prominent. In these circumstances
an option approach is needed - Real Option
Analysis (ROA). Terramar has carried out several
Real Option Analyses (ROA) in different indus-
tries. Three cases will be presented:
- A staged-investment-option from the
Jan Rune Baugstø
pharmaceutical industry.
Terramar
- A combined option evaluation of a prop-
erty development project.
- A reservoir development option within
the offshore oil industry.
Finally, the paper discusses the way ahead: The
ROA approach is relatively new and it should be
demystified. To effectively implement ROA as a
decision tool, a portfolio perspective is needed.
Introduction
Over time Net Present Value (NPV) has emerged as
the main criterion when evaluating project value.
A simple NPV analysis may go like this: The project
takes one year to establish at an expected cost. In
the next 9 years, the project generates expected
net cash flows of 50 MNOK each year. The appropi-
ate risk-adjusted discount rate is 15 % and hence
the present value of these cash flows is 239 MNOK.
The NPV decision states that if the initial cost is
less than 239 MNOK the project may be accepted,
otherwise the project is rejected.
However, it is often unlikely that the project his-
tory will be as assumed in the NPV calculation. The
project may be deferred, the investment could be
implemented in stages, the project may be scaled
up or down during operations, the project may be
abandoned and so on. In addition, one project may
justify another project which is dependent on the
first one. In short, the management flexibility ex-
ercised during most projects is effectively assumed
away in the NPV approach and consequently it
systematically undervalues projects.
Due to these inadequacies with the NPV meth-
od, many efforts have been made to come up with
alternative methods to effectively implement flex-
ibility in the analyses. These new ideas have been
strongly influenced by the option theory from the
12
finance field and it is fair to say that academia has
pursued the development of this new approach:
Real Option Analysis (ROA). Gradually, ROA is also
applied by the practioners.
Real Option Analysis (ROA)
What is a real option ?
Suppose a company wants to invest in production
facilities for a new product. There is high uncer-
tainty about the market and hence a moderate
production capacity is chosen. However, the com-
pany makes sure that it has the physical, financial
and organizational possibilities to expand produc-
tion if the market turns out to be far better than
expected. This is a real option and the option adds
initial value to the project. The ROA approach aims
at valuing this option in real figures, and thereby
make the approach an operational decision tool.
Suppose for example that the company above has
to make an initial, additional investment (e.g. extra
land) to be able to execute the option at a later
stage. Is the option value large enough to justify
this investment ?
By definition, a real option is a right, but not an
obligation, to take an action at a cost for a period
of time - the life of the option. This will either help
maximize the upside or limit the downside of a
capital investment.
When are Real Option values most significant?
Obviously, for some projects flexibility is of great
value while to others flexibility is of minor inter-
est. Which factors are important to increase the
Real Option value ?
Uncertainty: There must be high uncertainty
about the future. In fact, the option value in-
creases with increasing uncertainty. This is in
contrast to most traditional thinking; instead of
fearing the uncertainty (risk), option thinking is
actively taking advantage of uncertainty.
New information: It must be very likely to
receive new information (decreased uncertainty)
over time.
Managerial flexibility: If there is high un-
certainty and new information decreases this
uncertainty, there is no option value unless man-
agement is able to respond appropriately to this
new information.
Main Types of Real Options
In the ROA litterature, there are several classifica-
tions or groupings of real options. We prefer the
following.
www.pry.fi
The option to defer
A frequent and well-known decision situation:
Should the project be started now or deferred
until some uncertainty is resolved. Sometimes
this problem is analysed with several mutually
exclusive project startup dates. The ROA, on the
other hand, incorporates the entire time frame
with a decision rule on when to start the project
and the ROA value will be greater than any of the
single NPV models.
The option to change scale
If a company starts to produce something and is
unsure about the market, the option to scale the
production capacity up (increasing market) or
down (decreasing market) may be of substantial
value.
The option to abandon
Sometimes a project should be abandoned as
resolved uncertainty makes it non-profitable.
IT-projects are obvious examples. Arguably, this
option is exercised too seldom, in part due to the
lack of understanding of the sunk cost principle.
Although this is not intuitive, this option has an
initial value.
The option to switch
The gold price is rather volatile, and there are gold
mines, which are out of production but still have
significant values. This is because of the inherent
option to open the mine (at a cost) when the gold
price rises above a certain level, which is decided
based on an option approach. Similarly, an open
mine may be closed when the gold price falls below
a certain level.
The option for staged investments (compound
options)
This is an option on an option. A typical example
is a phased investment with design, engineering
and construction. After each phase, there is an
option to defer, abandon or go on depending
on whether the prior options have been realised.
Another typical area is R&D projects.
The option to grow
Suppose a company wants to enter the Chinese
market. They evaluate the first project and reject
it as non-profitable. However, this project may be
an admission ticket to further development in a
promising market and this option value should be
included in valuing the project.
Many projects hold several options and they
may interact. The value of such interacting op-
tions may be different from the single options
added together.
Calculation Methods and Tools
Intuitively, everyone will agree that flexibility is
of value: Under otherwise equal conditions, a
flexible solution is preferred to a solution with
no flexibility. However, the flexibilty may require
additional investments; could the option value
defend this investment ? And in a bidding context
we want to know the option value to be highly
competitive. That is, to effectively implement ROA
as a decision tool, we need to calculate the value
Project Perspectives 2005
of flexibility. And unfortunately, the math is not Sometimes a project
neccesarily simple. should be abandoned
as resolved uncertainty
Traditional tools makes it non-profitable.
One may ask if some well-known decision analysis
tools may be used, in particular decision trees
which in fact appear to address the option situ-
ation. Unfortunately, the answer is ‘no’ and that
is presented in every introduction text to ROA. In
short, the main problem with the decision trees is
they assume a constant risk level (discount rate)
throughout the analysis period, and thereby close
in on a wrong option value. See [Trigeorgis, 1996]
for a simple, demonstrative example.
Financial options
The answer is found in the area of finance. Al-
though financial options have existed a long
time, the financial analysts did not have a proper
valuation tool for options until the pioneer work
by Black, Merton and Scholes who solved the
problem in 1973 [Black & Scholes, 1973], and
were awarded the 1997 Nobel Prize in Econom-
ics. It is in fact a complex, analytical solution to a
partial differential equation (pde), but the input
parameters are easier to understand: current value
of stock, exercise price, time to expiration, stock
value uncertainty and risk-free interest rate. The
financial solutions are to a great extent relevant
for real options, but some of the input parameters
must be redefined:
Stock option Real option
Current value of stock Present value of expected cash flows
Exercise price Investment cost
Time to expiration Time until opportunity disappears
Stock value uncertainty Project uncertainty
Risk-free interest rate Risk-free interest rate
While the analytical solutions are rather com-
plex, numerical alternatives which are much easier
to understand and use have been developed. There
are three main methods for ROA.
Analytic solutions
These solutions have been briefly mentioned
above. As they involve formulating and solving
pdes, they call for rather advanced mathemati-
cal skills if a certain problem is to be solved from
scratch. However, when readily available solutions
exist (e.g. Black-Scholes), they may be useful. This
is especially true at initial, rough option valua-
tions.
Binomial models
These methods are the most frequently used for
ROA. This is partly because they are quite easy to
grasp and cover a wide spectrum of option types
and decision structures.
The method comes under the more general
heading of dynamic programming:
1. Roll out possible values of the underlying asset
during the life of the option(s) in a discrete tree
structure.
2. Roll back the values of the optimal future deci-
sions (options) and calculate the final option
value.
13
 Examples
Input Parameters Calculated Parameters This brief introduction may make the impression
that ROA is an exciting academic approach with
Annual risk-free rate (%) 6% Up movement per step 1.22 minor practical applications. However, during the
Current value of underlaying 100 Down movement per step 0.82 last few years, we have been involved in projects
Life of options in years 5 Risk-free rate per step 6% where the ROA approach has added significant
Annual standard deviation (%) 20% Risk neutral prob (up) 0.60 value in decision support processes. Three of these
Number of steps per year 1 Risk neutral prob (down) 0.40 examples are briefly discussed below.
Expansion factor 1.25
Expansion cost 15 A pharmaceutical production plant
A Norwegian pharmaceutical company is plan-
Steps
0 1 2 3 4 5
ning the foreign production of a medicine against
rheumatism. At present, the market for this me-
dicament is rather uncertain. In addition, some
272 technical issues are still to be solved within a new
53 and promising production process. In total, the
223
41
uncertainty is high.
182 182 At present, raw materials are available in the
32 31 market, but the profitability is strongly linked to
149 149 own production if market conditions turn out to
25 23 be favourable. A letter of intent is agreed to with
122 122 122
19 17 16 local governments, and the company is granted
100 100 100 vast areas of land and favourable infrastructure
14 12 11 connections.
82 82 82 The main plan includes a first stage plant in a
9 7 5 few years, carrying the opportunity to pilot pro-
67 67
5 3 duction and product process validation. However,
55 55 this first stage may be deferred or abandoned
2 depending on market and technical uncertainty.
45 Further on, if the first stage plant is successful
37 and the market develops well, an expansion of the
plant is likely within few years. Hence various op-
Figure 1. Binomial Tree tions are present: The deferral or abandon option
of the first stage plant and the later expansion
option. The latter is dependent on a realisation
of the first stage.
A Monte Carlo model was established to calcu-
late the value of the expected cash flows without
An example of a simple binomial tree is shown flexibility and to estimate the uncertainty (vola-
in Figure 1. tility). The options were calculated with binomial
models interacting with each other as the options
Monte Carlo simulations are clearly interlocked.
As a well-known method within project manage- Mainly due to the high uncertainty, the ROA
ment, simulation offers an attractive solution to value was nearly the double of the corresponding
many options. Its strengths are in implementing NPV value without flexibility.
different decision rules and relationships, and in
adding new sources of uncertainty. Parking garage
There is another interesting feature with this A large, foreign block development comprised dif-
method: Monte Carlo simulations are by far the ferent businesses: A conference hall, shops, apart-
most used method for Project Risk Analysis. Fre- ment hotel and a parking garage. The profitability
quently, an integrated model with the underlying of the different units were partly dependent on
asset valuation (Risk Analysis) and the option each other. In general, the national macro outlook
valuation can be made as Monte Carlo can cover was promising, but rather volatile.
all the calculations needed. The initial NPV calculations revealed a negative
profitability for the parking garage, and this was
Tools connected with high uncertainty: Street parking
There are several tools on the market for ROA. In was common (and hence low willingness to pay),
general, they are either limited or rather expensive, but the local government was planning regula-
[Mun, 2002]. However, the Excel environment of- tions. Demand and accepted price level develop-
fers a wide range of opportunities. In [Copeland ments were uncertain, as was the realisation of
& Antikarov, 2001] and [Winston, 2001], binomial neighbouring rival projects. A further complicat-
modelling in Excel without macros is explained ing factor was the ‘internal’ demand for parking
in detail. We prefer VBA (macro) modelling as places from the other businesses, including an
this produces more visuable trees and is more existing hotel.
flexible at sensitivity analyses. If supplemented A full garage could be build now, but that was a
with an Excel Monte Carlo add-in (e.g. @RISK high-risk solution and several other options were
or Crystal Ball), a lot of the ROA modelling needs available:. The garage could be deferred. A reduced
are covered. garage could be build, and later on there would be

14 www.pry.fi
two alternative options; to expand the garage or Mean NPV as function of threshold value (Max NPV at 1.40)
turn remaining areas into other businesses (with
less uncertainty). Obviously, the different options 1.50
interacted, as did the different businesses.
A Monte Carlo model was established to cover
1.20
up for the uncertainty in all of the businesses.
With some reasonable, conservative restrictions
on the timing of future decisions, the model was 0.90
expanded to include the different options.
The ROA value turned out to be positive with
the deferral option being the key reason. 0.60

Offshore field 0.30

The oil industry has been one of the pioneers in
the use of ROA. Many of these corresponding deci-
sions are such that some, but not all, uncertainties 0.00
0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00
are resolved before a critical decision. Hence the
option value depends on a threshold level for the Figure 2. Optimum Threshold Level
decision, and an optimization process has to be
performed before the final option calculation.
An additional reservoir was under consideration, valuation tools to be competitive,
but there was great uncertainty with respect to Finally, another important point has to be made
the size of the reservoir. Before the final decision, with regards to the ROA: No rational financial
the uncertainty could be reduced through an investor would put all her money in a single stock
exploration well. If these data were satisfactory, option. A similar approach is relevant for the
the reservoir would be developed, and in contrary real options. In other words: The ROA calls for a
the project would be abandoned. There were of portfolio perspective to fully appear as a decision
course certain costs associated with this drilling support approach. However, there is still a lot of
which would be ‘lost’ with a bad outcome. What research to be done and further practical experi-
was the real value of this reservoir at the time of ence to be gained.
the analysis ? Obviously, this value depended on
the threshold level for further development. References
A Monte Carlo option model was established, Black F. and Scholes M. (1973):
incorporating The pricing of options and corporate liabilities. Journal
- the drilling costs of Political Economy, 81, 637-659
- potential development costs Copeland T. and Antikarov V. (2001):
- the net present value of the potential Real options. A Practioner’s Guide. Texere
incomes, depending on reservoir Mun J. (2002): Real Options Analysis. John Wiley & Sons
- threshold level for development
Checking for different values of threshold level, Trigeorgis L. (1996):
the level (decision variable) yielding the maximum Real Options: Managerial Flexibility and Strategy in
Resource Allocation. MIT Press
option value was found, see Figure 2.
Based on this optimum, the option - and Winston W. (2001):
thereby project - value was found. A traditional Financial Models using Simulation and Optimization II.
approach would have been inadequate in pricing Palisade Corporation
the true value of the project.

Critics
ROA is a relatively new approach and therefore
naturally met with criticism. The critics have been
focusing on the complexity (“black box”), the valu-
ing of the underlying project and problems with
the execution of real options. However, all authors
admit the option picture and the NPV limitations,
and no one have presented clear, fully-developed
alternatives. The problem may be condensed to
the following: Should we continue to use methods
with commonly agreed limitations (under certain
conditions) only because they are simple to use
and well understood?
Conclusions and The Way Ahead
At present, ROA is not well-known within the
project management area. However, there is a
general, increasing interest in flexibility and how
to benefit from it. The exercise of future, proactive
project management will have to uncover inherent
options, create new options and apply relevant
Bio summary
Author: Jan Rune Baugstø
Affiliation: Partner, Terramar AS
Degrees: Master of Science
Contact information:
jan.rune.baugsto@terramar.no
Mr. Baugstø has a broad educational
background within science, finance and
history, and has 20 years of experience
from offshore and landbased industry and
insurance. He is responsible for the field of
Analysis in Terramar and has been involved
in a large number of projects within Deci-
sion and Risk Analysis. The last few years
he has been focused on extending Project
Risk Analysis to Project Portfolio and Real
Option Analysis.

Project Perspectives 2005 15

Results from Research and Development

Multicultural Project Leadership

It is important to realize that tolerance and open discussion, as leadership strategies, may work only
in North European multicultural project teams (improved relationships and communication). Other
project teams may need more hierarchical power distribution and more rigid organization charts.
These project teams may also need “softeners” such as good relationships, rewards, and feedback.
The culture depended leadership style requires skills and organizational support. For example, the
hierarchical power distribution within the project team becomes possible only when the project
leader has considerably more formal power than what is usual in the project industry. The leader
must not be set in competition with line managers with regards the influence on the project team
members. The paper includes also examples of practical solutions to the cultural borne problems.

The results presented in this paper his paper are based on a study that included project teams with
three cultural combinations. Under the leadership of Finnish project leader were Finnish-North
European, Finnish-Chinese and Finnish-American project teams.

Introduction dissolve while project team co-operation disinte-

The multicultural teams continue to interest
companies. The teams provide huge potential in
combining multiple ideas and strengths. From the
practical perspective, multicultural teams could
reduce costs by reducing international reloca-
tions and the need to travel. Still, with all the
accumulated experience, only a portion of the
multicultural projects go well. This paper high-
Marko Mäkilouko lights cultural borne problems and their solutions.
Tampere Polytechnic The assumption is that leaders are in a central
role for solving any up-coming problems during
the project. Ideally, there can be a multicultural
project leadership toolbox that could be used to
improve project work.
Current Leadership Knowledge
Project Leadership
The typical, loose and rapidly changing form of a
project team is likely to make project leadership
challenging. Project literature emphasizes gener-
ally the need for flexibility and versatility in order
to match leadership with varying situations during
project life cycle. Project leaders should be able
to use both people and task oriented leadership
styles [Slevin & Pinto, 1991]. Transformal leader-
ship has been associated with successful projects
and contains the idea of simultaneous two-factor
leadership while adding additional components
to the leadership [Thite, 1999]. The additional
components include charisma, vision, knowledge,
skills, political savvy, networking, interpersonal
skills, communication skills, empathy and coaching
skills [Cleland, 1995].
The leadership demands for the project manag-
ers are very hard, thus it not surprising that some
project problems may be associated with the lack
of the project leadership [Lee-Kelley & Loong,
2003]. Kloppenborg and Petric [Kloppenborg &
Petrick, 1999] describe a process of the project
leadership failure. (1) Issues that are perceived
negatively are not discussed or (2) sensitive is-
sues are by-passed or covered up to project team
member integrity. (3) Measures are taken to excuse
earlier cover-ups. (4) Project goals are allowed to
16
grates. They suggest that high task orientation is
needed to dismiss project defects whether perfor-
mance or behavioral related. Simultaneously high
people orientation is needed to nurture project
team co-operation and to develop team-character.
This may improve trust and communication.
Multicultural Leadership
Mäkilouko [2004] has identified several multi-
cultural leadership styles that summarize cur-
rent multicultural leadership knowledge. The
multicultural leadership styles are summarized
in figure 1.
Ethnocentric leaders indicate cultural blindness,
ethnocentric or even parochial attitudes, and task
oriented leadership dimensions in the multicultural
leadership. Synergistic leaders actively attempt
to build personal relationships with project team
members. They indicate cultural empathy in their
willingness to learn and understand the ways of
other cultures Polycentric leaders are confident
that they understand how people from both
cultures think and can integrate the project team
without team members being fully aware of their
differences
The multicultural leadership model contradicts
the need for both the task and relationships ori-
ented leadership styles simultaneously. Best leaders
use the relationships oriented leadership style.
Only leaders of Finnish-American teams use both
styles. A study done on Hong Kong construction
project designers indicated a similar tendency.
Charismatic and participative leadership styles
were found most effective in increasing team
member satisfaction. [Cheung, 2001]
Finnish, North-European, Chinese and
American Cultures
Schwartz indicates several value differences
between the selected countries. Schwartz uses
value groups to describe major cultural orienta-
tions. The value group differences are collected
in table 1. Better conclusions can be made with
the value groups that are higher in their order of
importance. There is a better national consensus
www.pry.fi

Polycentric Leadership Styles
Synergistic
Leadership Style
Ethnocentric
Leadership Style
People Oriented Task Oriented
Leadership Dimensions Leadership Dimensions
Figure 1. Multicultural Leadership Model [Mäkilouko, 2004]
in these value groups. Finland and other North-
European countries rank high in autonomy and
egalitarian commitment value groups. China ranks
high in mastery and hierarchy. The USA ranks
high in mastery. The mastery tends to translate
into decision centralization and other forms of
power centralization. The hierarchy often means
formality and rigidity in the organizations. The
autonomy and egalitarian commitment tend to
mean independence, autonomy, flexibility, and
very equal organizations.
Research Method
The research was carried out using the grounded
theory method. Data were collected by inter-
viewing project managers and project team key
personnel. The cultural issues were separated from
company specific issues by collecting data from
several different companies and industrial fields.
The study included project teams with three cul-
tural combinations. Under the leadership of Finn-
ish project leader were Finnish-North European,
Finnish-Chinese and Finnish-American project
teams. The study included forty-seven (47) project
leaders and project key-personnel.
Results
Leadership of Finnish - North European Teams
Although the cultural orientation among the
North-European nations is roughly equal, there are
still problems. Cultural borne problems included
confusion about decision-making, and degree of
autonomy. Cultural background for the project
team problems may be the shared high egalitarian
orientation and the low mastery orientation. The
orientations tend to result into open and relatively
low organizations, project teams with high degree
of autonomy, and open communication. In this
Mastery Hierarchy Affective
Autonomy
Finland Low Low Medium
North-European Low Low High
Countries
China High High Low
The USA High Medium Medium
Table 1. Value Orientations of Studied Nations [Schwartz, 1994]
Project Perspectives 2005
Leadership Dimensions
Initiating structure including staffing,
planning, delegating and reporting
+
Personal human relationships
+
Internal negotiation
open working environment everybody tends to
make decisions and be autonomous. As a result
project coordination may sometimes be lost.
These problems were solved by improved intra
team relationships and improved communication,
i.e. orientation to people. Improved relationships
tend also to improve communication and may give
better knowledge about problems at the level of
individual team members. That information can be
used to solve issues in various situation depended
ways, for example increasing or reducing supervi-
sion. Other method to improve communication was
frequent meetings. The project plan played more
the role of a starting point and evolved though
interaction throughout the project. More notable
cultural problems were observed between Swedes
and Finns than other North-European project
teams. Sweden, with the very high egalitarian
commitment, apparently sets very high demands
for personal relationships. Finns had little patience
for such relationships building.
Leadership of Finnish - Chinese Teams
Cultural borne problems included confusion about
style of communication, degree of autonomy, so-
cial hierarchy, patience, and decision-making. The
cultural background for the project team problems
may be the Confucianism rather than the cultural
value groups alone. Typical Chinese, circuitous,
communication needs patience and attention to
preserve other peoples’ self-esteem (face). Many
leaders and Finnish team members had difficulties
in finding the patience. Confucianism control also
the social hierarchy and as a result the decision-
making and autonomy preferences.
These problems were solved by improved intra
team relationships, circuitous communication, and
hierarchical power centralization. Set-up of the
multicultural project team may agree with Chinese
Intellectual Conservatism Egalitarian Harmony
Autonomy Commitment
High Medium High High
High Low High Medium
Low Medium Low Low
Low Medium Medium Low
17
 working preferences. Since Western project team
members may have problems with adjusting under
this style of leadership, thus some leaders divided
their project team into Western and Chinese
parts, and used a different leadership style for the
Chinese part of the project team. Most problem-
atic, for many, was the Chinese’ relationship with
problem solving. It may be necessary to accept that
problems cannot be solved without a loss of face
for someone. Avoiding problems is necessary and
becomes possible when a lot of attention is paid
to design and double-checking. This slows down
the project and requires extra patience.
The best leaders of Finnish-Chinese teams indi-
cated Confucian orientation. The leaders may pay
less attention to project planning, schedule, and
other non-people orientated issues. Relationships,
communication, and patience become the virtues
of these multicultural leaders. There is a high ori-
entation to people, tolerance, and some generosity
by closing eyes to mistakes and problems.
Leadership of Finnish - American Teams
Cultural borne problems included confusion about
hierarchical power distribution, communication
preferences, and work practices. The cultural
background for the project team problems may be
difference in the mastery value group. American
cultural orientation to the mastery may be dis-
played by more hierarchical organization and com-
munication preferences. American team members
supported this by reporting that Finns contacted
who ever the issue belonged to, when the right
way was to go through the line. This may indicate
a preference for decision centralization.
These cultural problems were solved by more
hierarchical power distribution, improved inform-
ing, more rigid organization and work planning,
improved feedback, and frequent rewards and
punishments. The set-up of the multicultural proj-
ect team may agree with American working pref-
erences. Since Europeans, with their low mastery
orientation and higher egalitarian commitment,
may have problems in adjusting into these teams,
special provisions were made for the European
team members. Americans were punished for
breaking rules while Europeans were not punished.
The leadership style may also be explained to the
European team members.
The best leaders of Finnish-American teams
indicated a full range of the transformal leader-
ship and low people orientation as opposed to the
other two types of teams in this study. The leaders
used confrontational and punishing approach
to problem situations. On the other side, good
performance was supported by vision, rewarding,
and individualised consideration.
Practical Project Problem Solutions
Data also revealed a lot of practical solutions to
multicultural project problems. These solutions are
collected to figure 2. The solutions tend to agree
with the cultural background knowledge.
Conclusions
Literature indicates little knowledge about project
leadership. This is surprising since the nature of
project work, without a doubt, makes leadership
very challenging. At the same time we know that
in the changing environment leaders’ roles are
central for the success. When projects are mostly
about change, the project work seems to need
leadership maybe more than anything else. It may
be that there is a great need for good leadership
research in project work.
The current assumption of the project leaders

Finnish - North European Teams

Moderately detailed work planning reduces confusion.
Good relationships improve communication, commitment, and trust.
Decision-making should be considered from the point of visibility and timing.
Preferably early and together rather than later and delegated.
Open communication in global environment easily causes information chaos.
Communication plan restores some order to the chaos.

Finnish - Chinese Teams

Distanced relationships mean a loss of face for team members.
Good relationships are required for project success.
Chinese communication and good relationships require patience. Fast pace and keeping schedules
mean a loss of face. Projects should be peaceful. Long schedule and delay are not often a problem
for the customer if relationships are good.
Problems cannot be solved without a loss of face for someone. It is important to avoid problems.
Responsibility and autonomy are normal but decisions cannot be delegated.
Visible decision-making is necessary to avoid confusion.
Western team members should have sympathy towards other cultures.

Finnish - American Teams

Finely detailed and written work planning reduces confusion.
Internal team communication and decision making need to follow American preferences (top-
down communication and decision-making).
Autonomy for Americans does not mean leaving alone but requires daily support from the project
manager.
Non-native language skills often mean un-polite language and cause a lot of problems.
Excellent English language skills are necessary.

Figure 2. Practical Solutions to Cultural Problems

18 www.pry.fi
needing both the relationships and task orienta-
tions or the transformal leadership may be cultur-
ally biased. The roots for this assumption are in
research that was conducted in the USA. Cultural
leadership considerations seem to indicate that
this assumption is valid in the USA but possibly not
in other cultures or in multicultural leadership. The
studied multicultural teams of North-Europeans
and Finnish-Chinese required orientation to people
rather than the task or transformal orientation.
This study has implications for multicultural
companies. It is important to note that tolerance
and open discussion, as leadership strategies, may
work only in North European multicultural project
teams. This improves relationships and commu-
nication. Other multicultural project teams may
need more hierarchical power distribution and
more rigid organization. These project teams may
also need “softeners” such as good relationships,
rewards, and feedback.
The culture depended leadership style requires
skills and organizational support. For example, the
hierarchical power distribution within the project
team becomes possible only when the project
leader has considerably more formal power than
what is usual in the project industry. The leader
must not be set in competition with line managers
with regards the influence on the project team
members.
References
Slevin D.P., and Pinto J.K. 1991.
Project Leadership: Understanding and Consciously
Choosing Your Style. Project Management Journal,
22(1):29-47.
Project Perspectives 2005
Thite M. 1999. When projects are
Leadership Styles in Information Technology Projects. In-
ternational Journal of Project Management, 18: 235-241.
mostly about change,
the project work seems
Cleland D.I. 1995.
Leadership and the Project Management Body of Knowl- to need leadership
edge. International Journal of Project Management, maybe more than
13(2): 83-88. anything else.
Lee-Kelley L. and Loong K.L. 2003.
Turner’s Five Functions of Project-Based Management
and Situational Leadership in IT Services Projects, Inter-
national Journal of Project Management 21: 583-591.
Kloppenborg, T.J. and Petrick, J.A. 1999.
Leadership in Project Life Cycle and Team Character
Development, Project Management Journal, 30(2): 8-13.
Mäkilouko M.I. 2004.
Coping with Multicultural Projects: the Leadership Styles
of Finnish Project Managers, International Journal of
Project Management, 22(5): 387-396.
Cheung S.O. at al. 2001.
A Satisfying Leadership Behaviour Model for Design Con-
sultants, International Journal of Project Management,
19: 421-429.
Schwartz, S.H. 1994.
The Universal Content and Structure of Values: Towards
an Understanding of National Differences. In Kim, U., et
al. (eds.) Individualism and Collectivism: Theory, Method,
and Applications. London: Sage Publications.
Bio summary
Author: Marko Mäkilouko, Dr.
Affiliation: Program Manager,
Tampere Polytechnic
Contact information:
marko.makilouko@tpu.fi
19
Stories of Live Projects

Industrial Humanities
Tales from the Field
The industrial world often seems distant and frightening for a re- via the port in Chennai, to be pulled into the hall
searcher from the humanities. But could it not instead be seen as yet through this opening.
another one of the “foreign cultures” that have been the key concern Inside the engine hall, some of the supervisors
of the humanities for so long? from the local sub-contractor are engaged in
planning for and discussing this critical installa-
tion. It is not an easy task: we are talking about
seven so-called 46: s, i.e. v-shaped engines with 18
Existence of humanities in the industrial cylinders measuring 46 cm in diameter. They weigh
world? 270 tons each, and together they will produce
Is there room for humanities in the industrial
106 MW. (Getting the engines all the way to the
world: both in a concrete sense and on a more
building site is of course also a real thriller, but let
idealistic level? If so: what, then, does that room
us leave that story aside this time.)
look like? And above all: can it be of interest for a
But in this picture, a paler figure is posing: with
researcher from the humanities to look at facto-
a helmet on her head, happily smiling against a
ries, steel and machines? Can you create human-
background of oil tanks, big cranes, metal waste
istic knowledge on a building site, with your shoes
Ruth Illman and other inventories belonging to a building
in the mud and a helmet on your head?
Dr.Phil. researcher, site. This figure does not look misplaced or lost
We can also pose the opposite question: what
comparative religion at all; she looks like she is just in the right place.
can the industrial world gain from having “wishy-
Åbo Akademi University This, at least, is my opinion, as it is me you see:
washy humanists” mixing up their processes? Can
ruth.illman@abo.fi the humanistic researcher in the drama. This is
you speed up the production processes, increase
the traditional portrait of the researcher in the
the gain or the competitiveness, or present new
field: proudly posing amongst the savages, bravely
technological solutions with a humanist in your
investigating the exotic field in order to document
team? Or are there other kinds of advantages to
strange habits and traditions a long way from
be gained if the industry decides to have dealings
home. It is a humanist in the field.
with the humanities?
How did I end up there? As I was about to start
My experience convinces me that the answer
the work with my Master’s thesis in comparative
to the questions posed above should be in the
religion – the year was 1999 – I by chance came
affirmative: There is room for the humanities in
in contact with a research group at Åbo Akademi
the industrial world – a room that is interesting,
University called PBI: The Research Group for
important and fruitful for both parties to be in-
Project Based Industry. Today, this group is an au-
volved in. Industrial humanities exist.
tonomous research institute in close co-operation
with the university.
Individual in a heavy The researchers connected to this institute are
industry interested in international project industry from
Let me start by describ-
several different points of view: they analyse the
ing how I myself, much
money, the time, the technique, the deliveries, the
by chance, landed in this
competition, but also the human beings involved
field so distant from the
in carrying out these projects, and the fact that the
traditional humanistic
projects are international, multicultural and multi-
surroundings. The picture
religious. Thus, there was room in this institute for
above is taken in Septem-
researchers from the humanities, alongside the
ber 2000 at a building site
business researchers and the engineers.
in Tamil Nadu, southern
India. A Finnish company
Recording experiences on site
is engaged in building a
In co-operation with Finnish companies in the
power plant which will provide the growing region
field, PBI organised a trainee programme giving
with electricity. The plant itself is being built in
students in the final stages of their studies a pos-
the middle of the desert: the closest city is called
sibility to gain practical experience of the work
Tirupattur and it is situated an hour’s car ride
in the international project industry. The students
from here. The picture is taken on the roof of the
stayed at such building sites around the world
future engine hall – the heart of this vast plant.
and worked there as trainees for approximately
One of the walls is still missing, and the engines
half a year. On the one hand, they performed
are due to arrive any day now from Turku, Finland,
some concrete task for the company (e.g. keeping
20 www.pry.fi
books, co-ordinating logistics), on the other, they
collected material for their own Master’s thesis.
In addition, they collected and created empirical
material for the larger research on projects per-
formed by the research group PBI, e.g. by keeping
field diaries.
These field diaries became my research material.
The trainees were asked to write about what hap-
pened at the site on a daily basis – in their own
words, choosing the emphasised areas themselves.
Thus, we received fairly varied texts from the sites.
Some wrote a short and concise summary of the
happenings of the day at the site: which tasks had
been performed, which reports had been written,
which problems had been solved. Other trainees
put their heart and soul into describing all the
persons that the work brought them in contact
with, what was discussed, how they felt and what
they did in their spare time.
Several trainees also described the milieu they
lived in: the site culture as well as the culture
and religion of the country they were staying
in. All these tales from the field were naturally
highly personal depictions and interpretations of
experiences put down in words with greater or
smaller portions of care, humour, emotions and
vocabulary.
Sometimes we, the researchers, also had the
chance to go and visit the trainees to see how they
were doing at these sites that we were reading so
much about. Thus, I ended up walking around the
site in Tamil Nadu a beautiful autumn day in 2000.
Well, you may think, it is one thing to look like
you have something to do there, but did she really
accomplish anything of worth by digging herself
down in these stories? Did it amount to industrial
humanities, or was it just a lot of posing for the
camera, as in the picture?
Any fun with engineering
I myself had my doubts in the beginning. The
field diaries became my doorway to the industrial
world, but as I discretely peeked through the key
hole I was quite certain that I was seriously lost.
Could their really be anything for a researcher of
comparative religion to do here? And even worse:
did they really think that I could contribute with
some relevant knowledge in the field? I understood
absolutely nothing!
My first reading of the diaries made me some-
times bored, sometimes desperate. Are s-charts,
booster units, HFO and LFO, turbo chargers and
such things really part of common knowledge, I
wondered as I made my way through the piles of
technical terminology and engineers’ slang. What
really frightened me was nevertheless the fact
that I was supposed to be interested in all this
talk about machines and calculations and deliver-
ies. With envy I thought about my colleagues in
comparative religion who got to work with exotic
religions and cultures, cosmologies, mythologies
and world-views that were truly interesting … and
here I was with the engineers.
To tell you the truth, I was beginning to fear
that industrial humanities – if such a thing existed
– was something utterly tiresome and complicated.
But my trip to India and the visits at two power
plant projects there opened my eyes to what an
Project Perspectives 2005
interesting milieu these sites can be, also for some-
one from the humanities. In India, in fact, I literally
tripped over the basic ingredients of comparative
religion: myths and rituals.
Observations besides technology
On another site in India, located near the big city
of Belgaum in Karnataka on the east coast, I made
an interesting discovery: inside a vertical pipe
leading to what would become the smokestack
of the engine hall I found a geometrical figure,
painted by someone in chalk directly on the steel
pipe. The symbol resembled an eight-pointed
star, or two rectangles with loops in the corners
placed on top of each other. In the centre, there
was another five-pointed star. With my religion-
researcher’s heart wildly beating, I crawled into
the pipe, photographed the symbol and ran down
to the office to ask the English-speaking secretary
what it was.
The symbol turned out to be a so called rangooli,
a geometrical religious symbol of a kind common
in Hinduism. In the folk belief, they bring good
luck and protection. After a more thorough inves-
tigation, I found rangoolis here and there on the
whole site, mostly drawn in chalk or rice powder
and hidden away from direct view.
Furthermore, there were several kinds of rituals
to be observed at the sites. Another interesting
event that I experienced at this site was a so
called puja – a more or less comprehensive Hindu
ceremony accompanying every new phase in the
work at the site. I myself took part in a small cer-
emony connected to the erection of a new, large
crane. Another, larger ritual had, nevertheless,
been performed a few weeks earlier, when the
foundation of the stack had been finished and the
building of the stack itself was to begin. This puja
was documented by the PBI-trainee at the site.
As you can see, a priest had been sent for from
the nearby temple, and as he is preparing a small
altar on the stack foundation, the local supervisors
are discussing how the ceremony actually should
be performed. On the altar, there are different
kinds of fruits (coconuts, bananas and so on), flow-
ers, leaves, candles, incense and colourful powders
in red and yellow to be used during the act. On the
sites, the god addressed was almost exclusively the
popular elephant-headed god Ganesh, who opens
every door and takes away every obstacle.
Such rituals of course seemed very exotic to
the trainees at the Indian sites in the beginning,
and they described them animatedly and at length
in their field diaries. As time went by, the pujas
however became part of everyday life at the sites,
and the trainees only shortly noted in their diaries
that “we had an engine puja today” or “puja was
performed as usual and the work could begin”.
21
 Cultural encounters in projects
Traditional and tangible empirical material for
the study of religions, thus, was readily available
in industrial projects! I was amazed. These experi-
ences made me anticipate that perhaps this field,
after all, could provide some interesting issues for
a humanistic researcher – research questions and
problems that were genuinely pressing on a deeper
level, not just as marginal notions and curiosities,
but as both challenging and fundamentally im-
portant for my field of research as such.
Gradually, thus, my eyes were opened to what
it was actually all about. I had not become a
member of the research group PBI because I was
good at machines or cash flow, but because I,
coming from the humanities, was good at people.
The humanities belong to the sciences of man: we
study human beings and their lives from different
angles, their interpretations and understandings of
the world surrounding them, their dealings with
other persons, in short: we occupy ourselves with
trying to understand what it means to live as a
human being in the world.
As I returned to the diary material with this new
knowledge , I noticed how the persons started to
emerge from the tales I read. Behind, between,
around and under the descriptions of pipes and
pumps and bank transactions I sighted persons
performing all these activities, persons encoun-
tering each other, interpreting their situation,
choosing to act or restraining from doing so,
choosing to try to understand or simply condemn.
These interpersonal encounters were meant for my
attention; this was my task as a humanist in the
industrial world.
Suddenly, my research became exceptionally
interesting. I will not bore you by describing all
the details of my findings, the reference to my
thesis earlier in the text will do. To cut a long story
short, I was absorbed by the question of cultural
encounters, and what they can mean in such a
field. I found that it was useless to talk about
cultures as abstractions in this context, but that
cultural encounters are always human encounters.
They are encounters between people formed by the
culture, the society and the time they come from
and live in. But, simultaneously, they are unique
individuals interpreting their lives and encounters
in their own way.
Cultural encounters are, thus, multidimensional;
this I could notice in analysing the depictions of
experiences made in the industrial milieu. They
include knowledge, values and personal emotional
interpretations in an unsolvable mix. Aided by
stereotypes and different kinds of value-based
symbols, every trainee drew his own interpretative
limits between us and them, between strangers
and fellow-men, between similarity and differ-
ence.
All the trainees, nevertheless, also crossed these
boundaries at occasions, and saw a friend in the
stranger, a point of identification in the differ-
ence. Thus, I came to the conclusion that cultural
encounters are boundary-crossings: it is crossing
the boundaries that we ourselves have created for
“the other”. Thereby, the dialogue has an important
ethical dimension.
22
All of this, which is deeply humanistic knowl-
edge, I learnt in the industrial research field. In
addition, I actually learnt quite a bit about engines,
and that is not too bad either.
Consequently, it was a misjudgement from my
part, that I as a researcher from the humanities in
the industrial world would have to content myself
with “less humanistic” research questions, or less
interesting problems than my colleagues deal-
ing with more traditional issues of comparative
religion. On the one hand, it proved possible to
analyse such all-time favourites in comparative
religion as myths and rituals in this milieu. But
even more fascinating was, as mentioned above,
the possibility to analyse the entirely new and con-
text-specific questions that arose in the encounter
between the industry and the humanities.
Concluding remarks
I have shortly described how a kind of industrial
humanities took form in my hands, but many other
things could of course have emanated from the
combination of these two parts. My work is but
one experience of what industrial humanities can
be. Nevertheless, I hope it is clear that industrial
humanities exist, and that it is both interesting
and important to develop this field.
The world created under headlines such as
economy, stock exchange and technology in the
pages of our newspapers is often experienced as
foreign – even frightening – by someone rooted
in the humanistic tradition. But so called “foreign
cultures” have always constituted the central issue
in the humanistic field, an issue that we have taken
great pain to become acquainted with in theory
as well as in practice.
The industrial world can thus be seen as yet
another one of these “foreign cultures”, a new
field where our theories, methods and analyses
are truly relevant and coveted. Here we can find
many tangible opportunities to contribute with
more nuanced images of man, deepened under-
standing and new perspectives. It is important to
show that humanistic knowledge is needed also
in the most commonplace and ordinary areas of
our time; that the humanities benefit also other
persons than exclusively culturally oriented ones
or dull researchers.
The possibility to develop industrial humanities
is thus magnificent. My experience shows that
we are greeted with open arms – if we only dare
step out into this field. From the engineering and
economic point of view, I have never been met
with anything but a self-evident conviction that
humanities are needed in all research concern-
ing interpersonal encounters. Perhaps, it is more
a question of us being brave and unprejudiced
enough to go out and conquer (also) this field?
Dr.Phil. Ruth Illman (b. 1976) earned her doctoral
degree in comparative religion in 2004 at Åbo Aka-
demi University. Her dissertation concerned cultural
encounters in international industrial projects. She
has also written several articles and lectured on the
topics of intercultural communication, stereotypes
and interfaith dialogue in different universities in
Finland and Sweden. Currently, she is on maternity
leave, but will return to the research work at the Re-
search Institute for Project Based Industry in Turku,
Finland, in August.
www.pry.fi
Recent Practical Lessons

The Process of Advancing Project

Management In Organisations
Part of being a professional project company is continuously to aim at advancing the project management level and the
good practice in and around the projects. The advancement process is not only a task for the company management and
the specialists in competence and method development. To have project management competence means also to contribute
to a continuously improved management of projects – both at project level and company level.
The paper offers you an opportunity to consider what has been done up till now by yourself or your company to advance
the project handling and how the efforts can be improved. As a starting point we describe a spectrum of 12 instruments,
which can be utilised for the advancement of project management. The spectrum covers both classic methods such as
development of guidelines and training - and more recent methods such as coaching, sparring between project manag-
ers and organisational initiatives. Based on the checklist of 12 instruments we will report on practical experiences from
advancing project management in a Nordic corporation.
Further, it is explained how the tool ”Danish Competence Baseline” can be used in various ways as a means for other
advancement initiatives in addition to self-assessment of competencies. Though it exceed the format of the abstract
we allow us on the following pages to include an extensive draft of the first part of the article in which we present the
spectrum of the 12 instruments.

Improvements are requested - but challenging - Demanding to keep a continuously improve-

to achieve
Many reasons indicate a growing importance
for the company to make a conscious effort to
advance the level of project management – in-
cluding to facilitate competence advancement
of project owners, project managers and project
participants.
- Customers make demands also on management
of projects, including demands for the project
managers to be certified or competence in proj-
ect management to be visualised otherwise.
- A growing number of companies report project
management as a strategic competence, i.e. a
precondition for the company activity.
- Demands from employees on improved working
conditions when participating as manager or
participant in projects.
- There is typically considerable replacement
among the project managers of the company,
which makes request for ongoing competence
advancement of the new managers and an ef-
fort to maintain already achieved competencies
and existing project culture.
- Need for extending the range of competencies
in project management. For example, it could
be necessary with a further advancement from
”guiding project managers” towards ”commu-
nicating project managers”.
However, there are also many challenges, when
the question is to achieve and maintain a high
level for the management of the projects in the
company:
- One thing is individually to learn project man-
agement by heart, another thing is to practice
all the good intentions for incorporating and
applying the methods automatically.
- Also a challenge to extend the range of compe-
tencies. To go from a few project management
heroes to routine in the execution of project
management.
Project Perspectives 2005
ment process alive. For example, the network
groups between the project managers often
shrink after a few meetings
- It is almost a ”natural law” that the employees
in an organisation relapse into the ”line behav-
iour” – if the project concept including project
management is not continuously ”advertised”.
- Project orientation is a question of changing
the power structure in the company.
Summing up, advancement and maintenance of Morten Fangel
the project management level in the company is Fangel Consultants Ltd.
very often a more challenging task than expected. Denmark
Partly because of the mentioned challenges and
partly because good handling of projects is a mat-
ter of experiences and methods, but also a matter
of modification of behaviour and adjustment of
self-knowledge, both at managers, project manag-
ers and participants.
Managing the PM advancement process
So much about the reasons for an applied ap-
proach in order to advance the project manage-
ment and project culture of the company. First
step is to consider how an aiming of advancing
the company project management can be defined
and organised.
The task of advancing the level of project han-
dling can be regarded more or less broadly.
- One possibility is to open up for initiatives, e.g.
ad hoc participation in external courses and ad
hoc introduction of new methods and tolls.
- Another is to make a coherent aiming based on
a requirement analysis and with focus on estab-
lishing methods and tools as well as organising
relevant courses.
- A third possibility is to aim at a total develop-
ment process where the aim is to advance the
exercised competencies of project management
and to achieve real improvements in practice.
23
 We also suggest that you characterise your
company’s present method for aiming at improv-
ing project management in the scheme below and
how the task is expected to / should be approached
in the future.
The three alternatives also reflect how many
large companies have changed the way of im-
proving project management stepwise: First step
is to make single initiative based on the idea that
project management is something that just has to
be learned and perhaps supported by some tools.
Based on recognition that the effect of ad hoc
initiatives has been very modest, more integrated
processes have been implemented, but still with
focus on courses and methods. As this type of
aiming also might have a limited effect on exer-
cised competencies you could choose to attack
the task as an innovative process. Such a process
could contain elements from the other methods,
but the charge is on changing the real handling
of projects. Concerning the organisation of initia-
tives for advanced project management there are
three alternatives:
- One possibility is that the advancement process
is handled in the line organisation including by
the existing staff function concerning personnel
development.
- Another possibility is to “order project concept”
i.e. to handle the advancement initiatives as a
cross-organisational project (but perhaps use
the term process – to avoid a mixture of con-
tents and concept).
- A third possibility is that a unit in the organisa-
tion, e.g. a project office, manages the processes
and acts as a ”Centre of Excellence”
Once more, we recommend that you charac-
terise on the scheme the respectively present and
future definition and organisation of the aiming
at advancing the project management in the
company.
Concurrently with passing from first to second
and third definition of task also the requirement
for organising the process increases. The arrow in
Managed by a
unit in the
organisation e.g.
a project office
Handled as a
project across
the organisation
Handled in the
existing line
organisation
Ad hoc courses
and methods /
tools
Figure 1. Scheme for characterising the respectively present and future definition and
organisation of the aiming at advancing the project management in the company.
24
the scheme links the typical characterisation of
strategies today and the typical characterisation
of how the aiming on improved project manage-
ment should be structured.
The Focus Areas
The entire advancement process can be divided
into three main focus areas:
- The entire advancement process including pro-
cess management, anchoring of the advance-
ment and clarification of the advancement
requirement.
- The project level including advancement of
project methods, training of project involved,
coaching of project managers, and assistance
to project management
- The company level including promotion of
experience communication, project managers
career path, making organisational initiatives,
developing portfolio management and evaluat-
ing advancement effect.
On the next page are listed methods for each of
the mentioned areas. The scheme can be applied
as a brut structure of content for the current type
of processes / projects.
However, the scheme is not a proposal for a
phase process or a milestone plan, although there
are some logic behind the selected rank of listing.
Both the relevant focus areas and methods as well
as the timing are consider at the planning of a
current improvement process.
The spectrum of means will also be examined.
We also encourage you during the reading to
consider the experiences gained from application
of means, both in the Danish Air Material Com-
mand and Siemens.
Therefore we recommend to select some ad-
vancements and incorporate then by using a
broad range of methods and not rely on one single
method. New internal project guidelines that cover
the main part of the advancement areas of project
management are such example. If you want to do
everything, you turn up with nothing!
Advancement Development
process on process on
methods / tools competencies and
and appropriate incorporation of
training improvements
www.pry.fi
 The simple way of controlling the process is to
arrange a stepwise tactic, starting by approaching
one focus area, then another etc.! However, you
might loose the synergy, the momentum and the
impact that normally results in an effect on the
practical project handling.
In all cases, it is a precondition that something
is initiated, that somebody assumes responsibility
for the agreed operations and that the agreed
advancement of project management in the
company is controlled.
Methods for advancing the management of
projects
In general we recommend to apply a broad range
of focus areas and their methods for facilitating
the actual appearance of change in the practical
exercise of project management. However, we
have learned from experience that the effect is
increased if the advancement process has focus
on achieving selected advancements.
Further, we recommend that all processes are
closely linked to the management of specific
projects and project portfolios and that a stepwise
process takes place anchored in and based on vis-
ible results and achieved effects.
The following sections advice on how to prac-
tice each of the other 11 focus areas and their
methods.
Anchoring the advancement process
It is important with an anchoring upwards and
outwards in the organisation to achieve a real
impact of the advancement process.
Concerning the managerial anchoring upwards
it is a question whether it basically is a manage-
ment responsibility to develop the competencies
of the organisation. The management must ask
for advancements.
However, it is not that simply to achieve the
ownership of the management because an aiming
at improved project handling typically also will
intervene in the management’s own concept of
management. Simultaneously with a guiding role
in the process the management will also become
a target group for a development process.
A “mechanic management” of the process is not
enough. Especially in the introductory phases the
management must spare time for involvement in
an “organic management” of the process.
It is also useful with a broad involvement of
project managers and other key persons in the
development process. This will promote real ac-
ceptance and give opportunity to practice the
development. The involvement can also contribute
to the training and facilitation of exchange of
experiences.
The basic method is to meet both the manage-
ment and the participants at their current level
and to visualise which values an improved project
management will present.
A practical method is to create involvement via
seminars that may function as a visible backbone
in the development process and also has proved
to be a suitable method for encouraging manag-
ers and resource persons to accept ownership in
the process.
Project Perspectives 2005
Clarifying need for PM improvements
It is hardly breaking news that it is useful to de-
scribe the need or problem that has triggered the
company to initiate advanced management of
projects. Anyway, it is surprising how little effort
has been made to clarify the requirement before
more specific methods are applied.
During the requirement clarification it is es-
sential to clarify importance of the advancement
process in the company. Has advanced project
management
- any strategic consequence for which tasks
the company can handle,
- any tactical consequence for improved
handling of the specific project
- or has it operational consequence – in line
with other skills?
Typically, the company management, the project
managers and project participants are well aware
of the problem and know what should be done.
Good project management is simply systematised
common sense! The challenge is to do what we
know is “right” and to drop “wrong” conduct! To
make common sense common practice!
Advancement process
1. Managing the PM advancement process
-Planning coherent advancement process
-Establishing internal advancement group as initiators
2. Anchoring the advancement process
-Anchoring the effort solidly at the company management
3. Clarifying need for PM improvements
-Analysis of strong / weak points in the project handling
-Inspiration via conferences or introductory seminar / course
-Benchmarking as to other companies / projects
-Evaluation of total level of maturity as to project culture
-Suitable improvements of the management of projects in brief
4. Developing project management methods
-Project guidelines with focus on improvement
-Paradigm for project manual with forms
-Platform for virtual communication in the projects
-References to good examples and experienced colleagues
-Method description in literature or course maps
Project level
5. Training project personnel
-Internal basis courses for project managers, project participants
and project owners
-Extended training courses for project managers
-Course sessions incorporated in current project process
6. Coaching of project managers
-Focus on planning and evaluation of the project management
-Sparring / coaching of the project manager during the project
process
-Review / audit of the management effort in the project
7. Assisting project management
-Facilitator at organisation of introductory / start-up seminars
-Project guides assist in the daily routine
-Facilitator at the final evaluation of the project handling
8. Facilitating exchange of experiences
-Rules for learning and communication concerning management
of projects
Project company level
-Internal forum / network for project managers and other involved
-Participation in seminars / symposia - prepare and give lectures
9. Project managers' career path
-Certification as lever for competence development
-Ensure status via formal career path for project managers
10. Changing company organisation
-Project office as initiator and support for advanced handling
11. Advancing portfolio management
-Prepare the scope of project orientation in the company
-Visualisation of all projects incl. the anchoring
-Prepare priority and reporting of the projects
-Management pro-active role as to the projects
12. Evaluating effect of PM advancement
-Systematic estimate of short and long term effects
25
 A broad participation and a brief wording of
what is already common knowledge could result
in advanced projects.
A more systematic evaluation of the maturity
concerning management of projects can be made
based on the 31 method competencies as described
in the “Danish National Competence Baseline”.
How professional is the management and is ad-
vancement needed? You can find the answer by
clarifying your present stage – and the need for
improvements. Or the evaluation could be made by
use of the 10-step scale as described in the book.
A precondition for an application of this method
is that the user has knowledge of the range of
methods for project management.
It is further recommended as part of a require-
ment clarification to record examples on best
practice for application of methods and tools in
project management. This will specify the clarifica-
tion of requirement and possibilities and facilitate
the anchoring.
Developing project management methods
Choosing the proper level for the methods of
project handling is an important task. The optimal
for the users is that the methods with descriptions
are both briefly and very specific – but also ap-
plicable in general across projects. Requirements
that hardly can be fulfilled!
One solution could be to prepare guidelines for
the entire company with focus on principles and
rules – and also with focus on most important
improvement areas.
For example, if it is accepted that the project
start-up should remain an improvement area you
could apply the principle that a project start-up
seminar always should be organised in case of
projects with some complexity / size. Another
principle could be that the project owner should
participate in the beginning and/or the end of the
seminar as a minimum.
As a starting point for a profound description
of the methods we recommend a graduation com-
pared with the relevant management effort in the
specific project. Distinguish for example between
management concepts A, B, C.
Methods in electronic concept seem to break
down former barriers for applying the methods
from the fine ring binders in the company.
Another tendency may be that the companies
refrain from preparing an extensive ”tool box”
for project management. An alternative could
be a simple project management model with
references and links to recommended methods
in literature and good examples in the company
i.e. to establish project guidelines based on the
existing knowledge.
The 31 method competencies in the ”Danish
National Competence Baseline” can be used as
a ”rack” for such a simple guidelines that mainly
consists of references and links.
One of the advantages is an easier maintenance
– compared with an internal, coherent ”tool box”.
Another advantage is an almost free upgrading
via new editions of external literature.
Training project personnel
Courses are the classic operation area. Many de-
26
velopment processes in the companies are started
in this forum. However, the effect of such courses
is sometimes surprisingly modest.
This seems especially to be the case with open,
external courses. Unrealistic expectations could
be one reason. A three-day course with test of a
great number of methods do not enable the par-
ticipants to a free juggling in own projects with all
the methods. It is difficult on your own to put the
course learning into practical project handling! As
assessor at certification of project managers this
is quite obvious.
The recommendations are to link training activi-
ties with practical project management as much
as possible. Especially at the initiation of projects
such possibilities are favourable. It could also be
stimulating if demand for practising is raised at
courses / training of project management and / or
if an examination takes place.
The effect of the training activities can be
increased by designing internal courses based on
an extensive requirement specification – both
concerning topics and scope of learning.
Once more we refer to the ”Danish National
Competence Baseline”, which could be applied
for selection of important topics and also be used
to indicate the scope of learning on the 10-step
scale. This includes the training process in general
but could also be practised for the individual
participant.
Coaching of project managers
A supplement or alternative for the training pro-
cess is that the individual project manager has a
coach or a sparring partner. We use the term coach
if the aim primarily is to develop the competencies
of the project manager and the term sparring if
the aim primarily is to improve a current manage-
ment effort.
In both cases the aim is to assist the project
manager in applying his common sense! As a pivot
for coaching or sparring process we recommend
that the project manager prepares a formal plan-
ning and evaluation of own management effort.
As starting point a formal review of the project
manager’s effort has character of control, which
might be useful. We all have a tendency to produce
what is demanded. Depending on how the review is
initiated it could just as well serve as a structured
coaching or sparring process.
As a possible method for coaching / sparring
/ reviews we refer once more to the ”Danish Na-
tional Competence Baseline” – both the method
and the behaviour competencies.
Assisting project management
Further, to advance the levels the project manage-
ment could be offered specific assistance at the
more challenging stages of a project process. The
assistance could take place at two levels:
- Advising or assistance for solution of project
management tasks, e.g. preparation of risk
analyses, an entire project basis, or a status
report.
- Facilitation of the co-operation process at
challenging stages, e.g. at organisation of the
project start-up seminar or closedown seminar
/ meeting.
www.pry.fi
 Assistance in connection with initiation of a
project is also a matter of communicating experi-
ences, while the ”clay is soft” and it still might be
possible to select an alternative approach than
previously used for management of projects! An-
other important task for the assistance is to make
us stop and create a forum for focus and peace
that can lead to learning and later be utilised.
The assistance could be given ad hoc between
the project managers or by internal or external
consultants.
Facilitating exchange of experiences
Now we have reached the ”learning organisation”
or ”knowledge management” concerning man-
agement of projects. The ultimate dream is that
it becomes a culture for the company that the
project managers communicate gained learning
and that new knowledge on project management
is looked up when needed. However, this is seldom
the case in a hectic everyday life, where the cur-
rent challenges in the projects take all attention
and even more.
Typically, specific ”mechanism” is required to en-
sure that the communication of experiences takes
place. At company level a project forum / internal
network could be useful if somebody ensures the
intensity and profit of the specific sessions.
A way of facilitating the profit is to stipulate
that each participant formally plans and evaluates
own management effort – as a combined logbook
and activity plan for the project management. At
the network meetings the project managers give
sparring to each other in turn based on the log-
book / activity plan. This ensures a more specific
dialogue and is experienced more relevant than a
free exchange of experiences.
Registration for certification in project man-
agement can also serve as a vehicle for both a
continued activity and an intensified network
between the project managers.
Project managers’ career path
A formalised career path for the project managers
is a method to prevent good project managers to
run away from the company. A career path can
also ”serve as a vehicle” for advancing the level
of project management.
This is done by making project management a
visible discipline in the organisation. In addition,
for each career level requirements as to compe-
tence levels must be worded. Once more, we refer
to the ”Danish National Competence Baseline” as
a method.
A method to support and create respect for a
career path is to apply IPMA’s four-level certifica-
tion programme. The certification process serves
as a lever for competence development and also
gives a paper of competence levels.
Changing company organisation
A formalisation of the career path also implies an
adjustment of the company organisation. Between
other organisational changes could be mentioned
a selection of project chiefs to attend to projects
within the respective areas and an introduction
of programme management to ensure that the
Project Perspectives 2005
requested, long-term profit of a bulk of projects
is reached.
Recent years have shown a tendency in large
organisations to establish project management of-
fices as centre of excellence to support the whole
range of advancing project management.
Advancing portfolio management
Concerning projects within the company’s core
area the portfolio management is typically under
control. Concerning internal development proj-
ects or cross-sectional, strategically aiming the
portfolio management is often a distinct ”area of
improvement”.
The rule of the thumb is that it is most prac-
ticable first to advance the levels for project
management and then improve portfolio man-
agement later.
Evaluating effect of PM advancement
As a final method we recommend to make a
periodical evaluation of the achieved level for
management of projects. Do we practice the
stipulated improvements? As mentioned, we get
what we can control.
Of course, it is more interesting if we achieve
the requested, long-term effects - in relation
to the company’s clients, its management and
employees. The evaluation is not only a re-active
control at a time when all resources have been
used. It is a pro-active method for keeping up
spirit in a development process that might shrink
in some periods.
Successful advancing of project management
It is a company management task to initiate
advancement processes as to management of
projects in the company and to organise and
control the aiming.
Part of this task is to find time for project own-
ers, project managers, and project participants
to incorporate the requested competencies. The
effect of many good course processes could for
example be minimised because training of new
methods and improved conduct has not been
possible in a hectic everyday life simultaneously
with the course.
It is also a management task to make the chang-
es of own methods and own conduct that are
required to achieve the requested advancement
of project management and project culture.
But it is also important to stress that advanced
management of project is a joint responsibility for
all the involved in the specific project. As project
owner, project manager or project participant
you should not only be competent to handle your
tasks ”as usually”. You must also be competent to
contribute to an ongoing advancement process!
27
Results from Research and Development

Multiple-Project Managers
What Competencies
Do You Need?
This study proposes an integrated list of competencies and their level of importance specifically for
multiple-project managers who lead multiple, simultaneous projects in high-velocity industries. It
recognizes that, in addition to technical, administrative/process, intrapersonal, interpersonal, and
business/strategic competencies that may help multiple-project managers lead each project individu-
ally, they should possess some unique competencies — multiple project management competencies
— to be able to coordinate projects. Based on their organizational strategy and culture, organizations
can contingently select and use this list of competencies in multiple-project managers’ hiring process,
skill development, performance appraisal, and a process of project manager appointment.
Peerasit Patanakul
Howe School of
Technology Management
Stevens Institute of Introduction 2002). Note that even though the terms we used
Technology, In the current business environment, projects are are often used in other studies, they are still not
Stevens Institute Of often considered as means to business success in an industry standard.
Technology, (Frame 1994; Forsberg et al., 2000). And, often To lead a project to success, a project manager
Castle Point On Hudson times, these projects are implemented in a mul- should have knowledge and skills in project man-
Hoboken, New Jersey tiple-project management environment, where agement (Pinto and Slevin 1988; Brown and Eisen-
07030 U.S.A. some projects are managed individually as single hardt 1995). In the literature, several researchers
Phone +1 201 2168156 projects, others as programs, and still others as centered their studies on the competencies of
Fax +1 201 2165385 groups of multiple projects (see Figure 1) (Platje project managers (Gaddis 1959; Archibald 1975;
ppatanak@stevens.edu and Seidel 1993; Ireland 1997; Pennypacker and Einsiedel 1987; Frame 1999; Pettersen 1991;
Dye 2002). Usually, single projects are sufficiently Thamhain 1991). However, those studies were
large and strategic in nature and have one project conducted on the basis of a traditional single-
manager dedicated full-time to a project, often project management environment where a single-
called a single-project manager (Archibald 1975). project manager handles one project at a time.
On the other hand, a program, led by a program Studies on the competencies of multiple-project
manager, is a family of projects that are strongly managers are rare. We believe that between these
dependent, share common goals, and lead to a two groups of project managers, a difference in
single deliverable product or service (PMI 2000). In management tasks exists. Our rationale here is
many cases, some projects, which are smaller and that multiple-project managers may need some
have a more tactical nature tend to be grouped additional competencies that a single-project
such that one project manager (multiple-proj- manager may not.
Dragan Milosevic
ect manager) can lead them at the same time To substantiate our rationale, this research
Department of
(Wysocki et al. 2002). Typically, these projects performs an analysis of multiple-project environ-
Engineering and
are independent in terms of project deliverables, ments in order to develop a framework and to
Technology Management
but they are grouped to achieve more efficiency identify a set of competencies that a multiple-
Portland State University,
in the use of resources and better management project manager should possess, especially in high-
Oregon, U.S.A.
(Archibald 1975; Ireland 1997). This type of proj- velocity industries. By high-velocity, we mean
dragan@etm.pdx.edu
ect management is currently of strong interest to the industries that have rapid and discontinuous
many organizations in various industries (Fricke change in technologies, customer demands, and
and Shenhar 2000; Pennypacker and Dye 2002). competitors, so that information is often insuf-
At a higher level, an aggregation of all projects ficient and inaccurate (Bourgeois and Eisenhardt
in a multiple project management environment 1988). At this time, we do not intend to study the
of one specific organization is often recognized competencies of program managers and portfolio
as a portfolio of projects and is managed by a so managers.
called portfolio manager (Pennypacker and Dye

28 www.pry.fi
 Portfolio of Projects
Portfolio manager

Programs Group of Projects Single Projects

Projects with shared goals
Program 1
Program manager 1
Program 2
Program manager 2
Program n
Program manager n
Projects grouped for
management efficiency Project 1
Project manager 1
Group of projects 1
Multiple project manager 1 Project 2
Group of projects 2 Project manager 2
Multiple project manager 2
Project n
Group of projects n Project manager n
Multiple project manager n

Figure 1. A multiple-project management environment

Literature Review management process, they have to share their

Theoretical Background
As far back as 1955, Robert Katz (1955) proposed
a model of managerial skills, which included
technical, human, and conceptual skills. Katz also
states that when moving up the managerial hi-
erarchy, a manager needs more and more human
and conceptual skills but less and less technical
skills. Shenhar and Thamhain (1994) argue that
the conceptual skill in Katz’s model is too broad.
They proposed a new model, which includes the
managerial knowledge and skills in technical, hu-
man, operational, and strategic areas. They stated
that these skills are significant for engineering
managers in general.
In project management literature, the classical
studies of Gaddis (1959) and Archibald (1975)
emphasize the importance of technical knowledge,
administrative skills, and leadership ability of proj-
ect managers. Later, the works of Einsiedel (1987)
and Posner (1987) propose more of the leadership
and human skills. Thamhain (1991) suggests that
project managers should have leadership, tech-
nical, and administrative skills, while Pettersen
(1991) proposes skills related to problem solving,
administration, supervision and team manage-
ment, interpersonal relations, and some other
personal qualities of project managers. Similar to
the work of Pettersen, Frame (1999) recognizes a
set of competencies including knowledge-based,
social-rooted, and business-judgment competen-
cies. However, these studies are in the context of
single-project managers.
Critical review and proposition
As stated earlier, current project management
environments are often considered to be of a
multiple-project management nature where we
can find both multiple-project managers and
single-project managers; however, assuming that
managing multiple projects is no more than the
sum of managing individual projects appears
to be incorrect. The reasons are that, for a mul-
tiple-project manager, instead of focusing on
individual project’s activities or a single-project
focus among those of multiple projects (Milosevic
and Patanakul 2002). In addition, multiple-project
managers have to manage interdependencies and
interactions among projects (Eskerod 1996). Since
these management tasks place some difference
between single- and multiple-project managers,
we therefore offer:
Proposition: In addition to the project
managers’ competencies proposed in
the literature that relate to single-
project managers, a multiple-project
manager should possess some
competencies specifically for leading
a group of multiple, simultaneous
projects.
Research Methodology
To address the critical review and proposition,
this study has the following research objective:
to identify competencies, including their level
of importance that a multiple- project manager
should possess in current multiple-project man-
agement environments. In this study, our focus
was on market-leader companies in high-veloc-
ity industries that implement their projects in a
multiple-project environment (Figure 1).
To accomplish this research, four specific com-
panies were selected to participate in this study
(see Table 1). In each company, as parts of case
study research methodology, we performed semi-
structured interviews, project document reviews,
and observations (Eisenhardt 1989; Yin 1984).
Then the within-case and cross-case analyses were
conducted. This included literature comparison. At
this stage, we obtained a preliminary list of project
managers’ competencies. By following the Delphi
method (Linstone and Turoff 1975), this list went
through a panel of experts for their analysis.

Project Perspectives 2005 29

 Company A Company B
Department name Project Management Project Management Project Management
Department Group
Department purpose Product development Product development Software development
management management
Number of projects 30-40 40-50
per year
Number of project 12 18
managers
Average number of
projects per project 2-4 2-4
manager
Typical projects New product New product
development development
Table 1. The description of the companies for case study research
Reseach Results and Discussions
In this research, we define competencies as “the
knowledge, skills, and experience of a project
manager that are necessary to lead a project”
(Rowe 1995; Waller 1997). We found that in order
to manage a group of multiple, simultaneous proj-
ects, a multiple-project manager should possess
two sets of competencies: those for managing
an individual project and those to coordinate the
projects. In this study, we categorize the compe-
tencies for managing an individual project into
technical, administrative/process, interpersonal,
intrapersonal, and business/strategic competen-
cies. An additional group consists of multiple-proj-
ect management competencies, which a multiple-
project manager uses to coordinate projects.
The followings are lists of multiple-project
managers’ competencies, including their level of
importance that we found from this study. While
the lists were developed mainly from case study
research, the levels of importance were from
the evaluation of experts by using 1-7 Likert
scales (1 being not important and 7 being very
important). In general, experts indicated that
administrative/process (6.43) and interpersonal
(6.40) are essential categories of competencies
multiple-project managers should possess (see
Table 2). Business/strategic, intrapersonal, and
multiple-project management competencies are
also important (5.80, 5.73, and 5.73 respectively).
Technical competencies are less important (4.09).
This finding confirms the influential studies of
Katz (1955) and Shenhar and Thamhain (1994),
which claim that as the level of administrative
responsibility of managers grows higher, so does
the importance of their human skills over their
technical skills. Following are detailed discussions
of the top five competencies of each category.
Competencies needed for leading each
individual project
Administrative/process competencies include
the knowledge, skills, and experience of a project
manager in planning, organizing, and control-
ling projects. Generally, project managers are
expected to have a “solid foundation of project
management that they can pretty much tie into
any type of project management,” as one of our
30
Company C Company D
Eng.Management
Department Department
Support software
management development
>50 >100
8 4
4-8 10-12
Software Hardware support for
development software development
interviewees commented. Based on the evaluation
of experts, it is very important for a multiple-
project manager in high-velocity industries to
be proficient in monitoring/controlling project
activities (6.67), managing risks (6.50), planning
and scheduling (6.50), managing resources (6.50),
and understanding project management processes
of an organization (6.00), respectively.
Interpersonal competencies include the knowl-
edge, skills, and experience of a project manager in
interacting with other project stakeholders. These
competencies are essential to project managers
because they often have to exert their influence
on project team members without having a direct
authority over them. According to our experts, it is
very important for multiple-project managers to
excel in leadership (6.67), communication (6.50),
team management (6.33), problem solving (6.33),
and conflict management (6.17), in that order.
Business/strategic competencies include the
knowledge, skills, and experience of a project man-
ager in addressing the business/strategic aspects
of projects. Lately, the importance of the business/
strategic competencies in project management has
increased (Frame 1999) as a result of the growth
of the acceptance of projects as basic business
vehicles in the business community (Pennypacker
and Dye 2002). The findings of this study sug-
gest that multiple project managers should have
business sense (6.33), customer concerns (6.00),
integrative capability (6.00), strategic thinking
(5.33), and profit/cost consciousness (5.33).
Intrapersonal competencies are the important
foundation for the development of the other
competencies since they are qualities internal to
a project manager’s character. In this study, the
experts put forth organized and disciplined (6.17),
responsible (6.00), proactive and ambitious (6.00),
self-controlled (5.67), and flexible (5.17) as intrap-
ersonal competencies that multiple-project man-
agers should possess. Although we do not discuss
them here, the other multiple-project manager’s
competencies such as being entrepreneurial (4.83),
creative (4.83), visionary (4.67), and competitive
(4.33) were also ranked by experts.
Technical competencies include the knowledge,
skills, and experience of a project manager related
to the technical facets of the project product.
www.pry.fi
Experts in this study believe that the single
most important competence is the knowledge of
product applications (5.83), which provides mul-
tiple-project managers with an understanding of
the general technological concepts of products
and their applications, followed by knowledge
of technology and trends (4.67), knowledge of
technical tools and techniques related to product
development (4.00), specific knowledge of product
technology (3.50), and the ability to solve technical
problems (2.67). The low ratings of the last three
technical competencies seem to be in tune with
some arguments in the literature that when it
comes to project products and technology, project
managers need no more than a “working” level
of their knowledge. We heard from the interview
that “Even though they (multi-project managers)
might not have technical expertise the project
needs, I would say, it is okay. The team is going
to be staffed with technical people.”
The competencies previously discussed are very
important for managing each individual proj-
ect. In fact, all project managers, single-project
managers and multiple-project managers, should
possess those competencies; however, they may
need them in different intensities and dynamics.
For example, in the aspect of leadership, because
multiple-project managers need to lead multiple
teams concurrently, their time for each team is
limited and used intermittently. Consequently,
in their leadership capacity, they need to apply
a condensed, fast leadership approach, acting in
a discontinuous manner—lead one team, discon-
tinue, and lead another team with a contingency
leadership approach. These same issues have dif-
ferent manifestations to single-project managers
since they have all their time to lead one team in
a continuous manner.
Similarly, the competency of team building
has different intensities and dynamics when used
by single-project managers and multiple-project
managers. While the first apply team building in
a diluted/continuous manner, multiple-project
Competencies Mean *
Administrative/process 6.43 Interpersonal
- Monitoring/control 6.67
- Risk management 6.50
- Planning/scheduling 6.50
- Resource management 6.50
- Company's project management process 6.00
Business/strategic 5.80 Intrapersonal
- Business sense 6.33
- Customer concern 6.00
- Integrative capability 6.00
- Strategic thinking 5.33
- Profit / cost consciousness 5.33
Multiple Project Management 5.73 Technical
- Experience 6.17
- Interdependency management 5.83
- Multitasking 5.67
- Simultaneous team management 5.33
- Interproject process 5.17
* Average score from experts (1- Not important, 7-Very important)
Table 2. The importance level of multiple-project managers’ competencies (top five in each category)
Project Perspectives 2005
managers resort to condensed/discontinuous
team building. In particular, single project man-
agers can use any activity in their project agenda
and even dedicated workshops throughout the
project life—that’s why we call it diluted—to ham-
mer out their team building message within the
same project team. In contrast, multiple-project
managers may have a few hours per week for
any one team and that is the time they have to
use to condense the whole art of team building.
In addition, after these few hours, they may not
see the team for a whole week. This creates an
“out-of-sight out-of-mind” situation, increasing
the pressure on the multiple-project manager to
successfully condense his team building magic in
those few available hours.
The two examples of leadership and team
building competencies clearly indicate that their
intensities and dynamics are significantly different
for single-project managers and multiple-project
managers when they manage individual projects
(such is also the situation with some other compe-
tencies - e.g. project planning). In this difference
lies a major risk in that many see them as being
the same while they are not.
Competencies needed for coordinating projects
Multiple project management competencies: De-
spite the fact that managing groups of multiple
projects has been around for a long time (Archibald
1975), there has been very little empirical research
about it (Fricke and Shenhar 2000), especially, the
research on the competencies. In this study, the
ranking from the expert panel shows that it is
necessary for multiple-project managers to have
experience in managing multiple projects (6.17), be
able to manage interdependency (5.83), multitask
(5.67), simultaneously lead multiple project teams
(5.33), and understand interproject process (5.17),
accordingly. The fact that the experts ranked
experience in managing multiple projects as the
most important competency is in tune with the
study of Kuprenas, et al. (2000).
Competencies Mean *
6.40
- Leadership 6.67
- Communication 6.50
- Team management 6.33
- Problem solving 6.33
- Conflict management 6.17
5.73
- Organized and disciplined 6.17
- Responsible 6.00
- Proactive and ambitious 6.00
- Mature and self-controlled 5.67
- Flexible 5.17
4.13
- Knowledge of product applications 5.83
- Knowledge of technology and trends 4.67
- Knowledge of project products 4.00
- Knowledge/skills of tech.tools and techniques 3.50
- Ability to solve technical problems 2.67
31
 As the most important competence in a catego-
ry of multiple-project management competencies,
experience in this context means multiple-project
managers have been managing multiple projects
for an organization for some time. One of our
interviewees commented: “In my case, after two
years of leading multiple projects for the company,
I was at the point that I was comfortable to lead
multiple projects. If you change a company, you
have to start over.” This ensures that multiple-
project managers have already established their
credibility and network inside or outside the
organization. It is very important since the more
projects multiple-project managers simultaneously
lead, the more issues or human interfaces they
have to deal with.
Multiple-project managers should be compe-
tent in interdependency management, the second
on the expert ranking. Its purpose is to manage
interdependencies and interactions among proj-
ects related to shared milestones, resources, and
technology. To do so, multiple-project managers
should have system perspectives in order to “see
the big picture and not get lost in details,” stated
one interviewee. The understanding of the inter-
dependencies and interactions among projects
also assists multiple-project managers in problem
solving with apprehension that any change in one
project may affect issues of the other projects.
Multiple-project managers, therefore, should keep
in mind that they “have to understand how to
solve the problem with benefit to all the projects
that they are working on as much as possible.”
Also important is multitasking, in which mul-
tiple-project managers estimate their own re-
source capacity in order to set priorities and switch
contexts to multitask among different projects.
Multitasking poses a significant challenge because
often, each project has its unique characteristics.
With these challenges, during switchover from
one task to another, multiple-project managers
will lose some time while refocusing. Rubinstein
et al. (2001) call this lost time “switchover-time
cost,” which “can take about a couple of minutes
for every single change,” according to one inter-
viewee. To be competent in multitasking, project
managers have to minimize the switchover-time
cost by being intensely organized, methodical,
and focused. In addition, multi-project managers
should recognize their own resource capacity.
Sometimes, it is more effective to trust the project
team and delegate some project activities.
Multiple-project managers should be compe-
tent in simultaneously leading several project
teams. They need to select and use different
management styles specifically for each team:
“You have to have a style that allows you to
work with a whole bunch of different kinds of
people. You have to know and adapt your style
to different situations in order to be effective.”
Since they have limited time to spend with each
team, multiple-project managers need to proceed
with what we termed a condensed team building,
meaning they have to put the team together and
gain the team accountability in a quick manner. In
addition, they have to be experts in communica-
tions since “the communication has to be much
more concise (than in single-project manage-
ment).” One interviewee stated, “You may find
32
yourself trying to consolidate communication or
being more organized on formal communication,
like status reports and things like that instead of
informal e-mail or dropping by. It’s hard to have a
lot of face-to-face and time with people.”
The fifth most important competency in the
experts’ ranking is managing the interproject
process. This competence integrates planning/
scheduling, monitoring/control, and resource
management among projects, helping multiple-
project managers optimize their own resource
capacity. They can initially do so by consolidating
projects’ deliverables or milestones and managing
them together. “You (multiple-project managers)
really have to be an organized person. You have
in your head understanding what priorities belong
where so that you can weave those together in an
orderly fashion. This will help you manage your
time appropriately,” according to one of the case
interviewees.
Implications
This study has examined competencies of multiple-
project managers who lead groups of multiple
projects. It intends to raise awareness in the project
management community regarding the differ-
ences between the competencies of single-project
managers and those of multiple-project managers.
The most unique contribution of this study is a set
of competencies that multiple-project managers
need for coordinating projects. We termed it as a
set of multiple project management competen-
cies. Besides the lists, this study also proposes
the level of importance of each competency. This
list of competencies and the level of their impor-
tance can be used in several ways. It can be used
as a group of criteria to hire new multiple-project
managers, as a group of criteria for performance
appraisal, and as a group of assessment factors for
competency development, and as parts of criteria
for project manager appointment. To implement
the lists, organizations should use contingency
approach and use the lists as the guidelines.
Conclusion
This study proposed a list of competencies and their
level of importance that multiple-project manag-
ers in high-velocity industries should possess. We
found that multiple-project managers should
possess administrative/process, interpersonal,
intrapersonal, business/strategic, and technical
competencies to lead each individual project and
a set of multiple project management competen-
cies to manage the coordination among projects.
However, the extent, to which multiple-project
managers should possess these competencies, is
the choice of the organization. In many ways, our
list of competencies seems to be approaching the
studies on competencies of managers in general.
(Katz 1955; Shenhar and Thamhain 1994) The real
difference is in our multiple project management
competencies, for which empirically-grounded
studies are rare. Even though this set of competen-
cies appears to be self-evident, it is actually not.
In fact, this may be one of the reasons leading to
the belief that not every project manager who is
experienced in leading an individual project can
become a successful multiple-project manager.
www.pry.fi
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Project Perspectives 2005 33

Results from Research and Development

Project Management
st
in 21 Century
This paper argues for a paradigm shift in understanding of project management and application of the underlying models.
Project management is an essential competency within the spectrum of the required professional competencies. However,
the nature of competency needed to engage with projects and programmes in an increasingly uncertain and chaotic
world, transcends the contemporary approach (called normative model). The current project management model is mono-
discipline and narrowly focused on management of the delivery phase of projects. Not only must our understanding of
project management as a discipline change, but also our models of professional development and practice must realign
with the demands of complexities that projects and programmes increasingly face, particularly in the new economy.

A multiple competency model of professionalism dubbed- creative-reflective model- is advocated. Under this approach and
as a direct response to the messy nature of projects and their complex environments, the focus is shifted from control to
strategy and leadership. Creativity, flexibility, dynamic processes and focus on upstream side of projects are the hallmarks
of the new approach. This calls for a different mindset on the part of the actors and the act of project management. The
new mindset is dubbed creative-reflective mindset.

As project solutions and strategies must be shaped by challenges created by project and environmental complexities,
creativity becomes vital in this process. The whole approach is shaped by the acute need to engender and deliver break-
through solutions within an intelligent risk resilient framework. Such solutions are often at the cutting edge of technology
and achieved mainly through coalitions of organisations and global networks.

Introduction - Considerable groundwork (Jaafari 2004a)

In this paper the author briefly reviews the envi-
ronment of projects, business dynamics and the
drivers to change. An attempt is made to sketch
the organisational responses such as resort to
business and project coalition formations, stra-
tegic focus, agility and risk taking behaviour. For
individual professionals this heralds a new state
of play and demands different competencies and
Ali Jaafari mindsets. The ‘creative-reflective’ (CR) mindset has
PhD, ME, MSc, CPEng, been proposed and its relevance to project manag-
FIEAust ers reviewed. C-R is the foundation for a multiple
Professor and President competency model of professional development
Australian International and practice.
University The discussion of project management as a field
(www.aiuni.org) of endeavour is intended to highlight the different
Asia Pacific International emphasis needed for development of the field and
College the role that respective institutions need to play to
(www.apicollege.org) ensure development of project management as a
sustainable and sustaining professional field.
The paper has drawn upon the following
sources:
- Studies of project management in the age
of complexity and change undertaken by
the author, published in various media
(Jaafari, 2004b, 2003a,b,c, 2002, 2001).
This is a shortened version The major aim of these studies has been to
of the paper the author elucidate the complex and chaotic envi-
presented to IRNOP VI ronments, ‘messy’ projects and ventures
Conference in August that characterise the nature of business
25-27, 2004 held in Turku today, and define what it means in terms
Finland (pp. 340-365) of professional formation and practice;
34
on developing new approaches to com-
plex project management, applying life
cycle project management philosophy and
framework;
- An extensive literature review in the field
of professional competency assessment
and development, including the presenta-
tion of the findings to major international
professional and research conferences in
the last 5 years; and
- The author’s professional experience and
observations, as a practitioner, consultant
and educator, working in Australia, Europe,
Middle East and North America in the last
30 years.
Environmental complexity
The world’s political, economic and social land-
scape is changing fast due to many forces and
global drivers (Geyer, 1998; Beinhocker, 1997,
1999; Buckingham and Coffman, 1999; Bucking-
ham and Clifton, 2001; Jaafari, 2004a, 2003a,b,c
and 2001; Porter, 1990; Vernadat, 1996). Advanced
post-industrial societies are experiencing rising
complexities in economic, political, social and en-
vironmental fields (Geyer, 1998; Beinhocker, 1997,
1999; Vernadat, 1996; Jaafari, 2004b, 2003abc,
2002 and 2001). Societies do not necessarily op-
erate as rational and well-tuned systems, but are
in constant state of flux. Emery and Trist (1965)
recognised the changing nature of environment
www.pry.fi
and its influence on management of enterprises
in 1965. The sciences of complexity were however
developed later, as a result of the considerable
multi-discipline research conducted at Santa Fe
Institute in the US, often by invited noble laure-
ates in natural and social sciences (Geyer, 1998).
According to the author’s interpretation of the
complexity theory, the following are character-
istics of complex societies, which fundamentally
influence both the science and art of practice in
all fields of endeavour:
- Open systems – a complex society is made of a
complex web of interacting open systems that
are subject to instability and in throes of con-
stant change within of an Internet like network
of interconnections and interrelationships.
- Chaos – the complex society is affected by
uncertainties that are beyond long term con-
templation and thus defy the classical manage-
ment approach of orderly planning and control.
Social systems change when the conditions are
right following an autocatalytic process.
- Self-organisation – In a complex society the
tendency is for self organisation to take place
following the autocatalytic process leading to
autonomous organic (self steering) organisa-
tion units, based on insights and competence
of the actors as well as synergy, flexibility and
teamwork.
- Interdependence – the growth of interdepen-
dence makes it increasingly difficult, if not
impossible, to make any predictions on the basis
of previous experience. Thus, it is important to
avoid development and use of a linear reduc-
tionist model for forecasting the behaviour of
future events.
This paper is premised on the notion that busi-
ness and social environments typically exhibit the
above characteristics (self evolving open systems,
subject to chaos), and that all significant proj-
ects and human endeavours too tend to exhibit
characters of open systems. Adoption of such a
premise of course impacts the whole thinking
process, and challenges the basic assumptions in
contemporary models of professional development
and practice.
Major drivers to change
Major drivers to change are:
- Rise in complexity and uncertainty: probably
the most critical driver profoundly changing
organisational strategies and formation of in-
dividual mindsets and organisational cultures,
national policies, international trade and poli-
tics and so on.
- Globalisation and emergence of network
economies: network economies are formed to
respond to an increasingly complex and global
nature of business ventures. Often business
eco-systems act as the network for temporary or
permanent coalition of organisations to respond
to the challenges of scale, speed, technology
sourcing and risks.
- Shift in business competitiveness: that is mov-
ing away from cost differentiation to product
and solution customisation and attempting to
extract a premium from a product’s potential
during its first half life.
Project Perspectives 2005
- Advancement of information and communica-
tion technologies (ICT): The dramatic advances
in ICT have changed the fundamentals for busi-
ness conception, development and delivery.
- Rise of the services sector in advanced
economies: In 2000 nearly two-third of the US
economy was attributed to the services sector.
The same pattern can be discerned in most
economies of advanced countries.
- Freeing of capital and labour markets: Gov-
ernments around the world at all levels have
committed themselves to the liberalisation of
trade, investment and labour laws. Private sec-
tor share of investment globally now far exceeds
those of the governments. Unfortunately, the
liberalisation of labour laws has not kept pace.
However, within some economic zones (e.g. the
EU) labour laws have largely been liberalised.
- Socio-demographic changes: What we are wit-
nessing in the advanced nations is the continual
decline of the birth rates and continual rise in
the proportions of retired people (thanks to
higher standards of nutrition and health care).
This presents a dilemma in terms of the stability
and welfare of these societies. In contrast, we
are witnessing a continuous rise in population
and a corresponding rise in poverty in the least
developed countries, creating a huge divide
between the respective world populations, a
potential minefield for political instability and
rise in terrorism or fundamentalism. It is now
believed that around half of the world popula-
tion live below poverty line.
- Customer centricity: The customer centricity
culture is not just a business necessity but a
pillar of liberal society. It is a subset of the hu-
man rights.
Table 1 shows how these drivers affect organi-
sations and individual professionals. As seen, or-
ganisational learning, dynamism and adaptability
are the essentials for survival in today’s turbulent
business and social environment. Terms such as
‘dynamic’ or ‘agile’ are often used to describe
adaptive organisations. Of course, organisa-
tions cannot learn (Jaafari, 2003b); learning and
development of competencies is the domain of
individuals and teams (Jaafari, 2003b). Organi-
sations can develop capabilities based on their
people’s competencies, their culture, systems and
associated business networks. One fundamental
challenge most organisations face today is tapping
of the intellect and creative energies of their staff
and partners in order to respond to change and
remain viable (Jaafari, 2003c, Kanter, et al. 1992,
Boyatzis, 1982).
Whereas during the last quarter of the 20th
century, the focus was on operation management
and achievement of quality management certifi-
cation (with its attendant formalised procedures
and processes), today’s focus is on workplace psy-
chology, including behavioural and socio-cultural
aspects of employees (Jaafari, 2003b, Lester, 1994,
Mulcahy and James, 2000; Robinson, 2000). This
shift shows a move away from the mechanistic
thinking models of the past to a more holistic
view of the organisation’s life and its human
capital. This shift of emphasis is due to a realisa-
tion that in the competitive global environment
35
 Drivers Impact on Organisations Impact on Professionals
Rise in complexity & - Need to respond/reform fast - Job security decreases further
uncertainty - Need for autonomous self-adapting - Versatility (possession of multiple
culture competencies) becomes indispensable
- Dynamic & flexible structures

Globalisation, - Need for global & strategic links/ - Need to work in network economies
emergence of network partnerships, risk sharing, leveraging - Contribute to global value chains
economies expertise, scale and technology - Manage self, align competencies

Competitiveness shift - New business models leveraging the - Need for multiple competencies
human capital & partners' - Continuous learning & self
capabilities, risk resilience assessment
- Learning ahead of competitors - Need to participate in diverse
- Emphasis on creativity/innovation assignments/roles increases

ICT advancement - Leveraging ICT for competitiveness - Mastering work within ICT
- Mastering virtual organisation environments & knowledge systems
concept - Need for new work psychology (based
on trust & teamwork)

Rise of services sector - New business models to apply - More complex product/projects
holistic product-service philosophy demand greater product/customer
knowledge, broader focus
- Leadership/selling skills vital

Freeing of capital & - Vulnerable to capital markets trends - Competency to understand & factor
labour markets - Location-independent labour in global resourcing dynamics
- Rise in international dependency - Frequent career & location changes
- Competition for work increases

Socio-demographic - Population aging signifies changing - Longer working life

changes nature of business (e.g. demand for -
medical & aged care services)
- Need to tap global resources
- Need to recruit or shift business units
to centres of population and
economic growth
- Need to lobby governments for
effective solutions to poverty in least
developed countries
Frequent realignment of skills
- Rise in voluntary engagements
- Mobility in terms of workplace and
assignments
- Sensitive to world trends and
development needs
- Engender technology transfer

Customer centricity - Emphasis on speed to market - Communication/marketing skills vital

- Emphasis on customer needs R&D - Leadership & strong personal ethics
- Customer relations management

Table 1. Major business drivers to change

of today, organisations in developed economies
must increasingly shift away from a commodity
economy (particularly in the services sector) and
deliver complex products and services that can
make a difference to the life of ordinary people
or deliver a strategic advantage to customers and
clients (Collins and Porras, 2000; Kadama, 2002;
Simpson, 2002). This requires a well-developed
Log.Scale
1000X
Potential Reward
human capital and use of creativity and ingenu-
ity as the basis of competition not just efficiency
and cost competitiveness, typical of a commodity
based economy (Jaafari, 2004b, 2003a,b,c, 2002,
2001).
As seen from Figure 1, going from a simple
product to a highly complex product and service
increases risks by orders of magnitude. This is
due to an exponential rise in complexity of both
products and the environment (from local to
international, from a random placid to a turbu-
lent chaotic state). Only capable organisations
can respond to the challenges of business risks

100X
associated with complex products and services
(Figure 2). Capable organisations can take on
10X daring projects/ventures; apply their capabilities
(e.g. creative-competent people, systems, capital
1X resources) and thus reduce the business case risks
Risk to a manageable size.
Low Medium High Very High In the process, capable organisations stand to
reap the rewards, particularly during a product’s
Commodities

Capabilities
Products &
Consumer

Example
Products

Durables

Complex

first half life, where their unique competitive po-

Simple

Products
sition can shield them from competition. Figure
2 shows a basis for classification of organisations
Figure 1. Schematic relationship between from basic capabilities (e.g. a quality certified firm)
risks and associated rewards (Jaafari, 2004b, to a creative-dynamic organisation (Jaafari, 2004b,
2003a,b,c, 2002, 2001) 2003abc, 2002, 2001).

36 www.pry.fi
 I
Very High

Reduction in Business Risk

II

Class III (responvive)

High III
Business Case Risk

Class V (creative-dynamic)
Reduction in Business Risk
IV
Medium

V
Low

Low Medium High Very High

Degree of Innovation
Legend:
Class I (alert) organisations
Class II (focused) organisations
Class III (responsive) organisations
Class IV (capable) organisations
Class V (creative-dynamic) organisations

Figure 2. Classification of organisations in terms of abilities to bring risks down

(Jaafari, 2004b, 2003abc, 2002, 2001)
Project challenges and project management role Figueroa (2003) notes that projects need to un-
The author’s focus in this discussion is on project- derstand the greater mission, values and interests
based ventures and endeavours, though much of the sponsors so as they can deliver the original
of what will be stated here will apply equally to missions set for them. “The Object results from the
other forms. As a consequence of the rise in com- analysis of the customer wishes. The Strategy an-
plexity and the need to shift to a dynamic style swers to the definition of concrete goals that need
of management, organisations increasingly need to be accomplished for the customer and also
professional people with different competencies for Project Management team and if possible by
than those emphasised under a normative mode other actors. The Values and Standard Behaviour
of learning and development (Leroy Ward, et al., constitute the philosophy the Project Manager
2003; Fielding, 2002a,b; Lester, 1994; Robinson, (PM) needs to establish and that is combination
2000). Table 2 demonstrates typical competen- of the philosophy of the client and himself.” (p.2,
cies of which research expertise, creativity and original emphasis)
socio-cultural skills are critical. The real challenge Given the idiosyncratic nature of projects and
for project management is of course its strategic business or social initiatives, and the complex
relevance or optimal response to the mission of the nature of the environment, a project management
project. Figueroa (2003) analysed 3 major projects approach is vital to the success because of the
in Spain, applying a higher level model with four involvement of multiple organisations, complex-
cardinal points: object, values, standard behaviour ity of technology, customer’s unique needs, time,
and strategy (Figure 3). This model recognises that cost and other constraints. Reference to a project
contemporary (normative) model of project man- management approach in this paper of course
agement is incapable of responding adequately to includes reference to program management, or en-
project mission, values and outcomes. terprise project management or any and all forms

Why project must be

Object
What needs to
be done to
reach objects It is believed

Strategy Values

Standard
Behaviour
The conducts model which guides
how to operate the project
Figure 3. The Project Management Mission model (Figueroa, 2003)

Project Perspectives 2005 37

 of project thinking not just the classical project
management. Without such a perspective, failure
risks are far greater. In complex projects, such as
an off-shore oil platform, the magnitude of both
project and environmental complexities will be
so great that the need for holistic ‘breakthrough’
solutions will become undisputable, as the whole
project viability will depend on it. Reference to
the term ‘breakthrough’ in this context indicates
solutions that can develop deeper more marginal
oil and gas fields at prices that can be competitive
with the existing sources and in response to the
growing world thirst for oil and gas resources. So
creativity across the whole value chain becomes
the most critical aspect of professional input.
Contemporary project management under the
spotlight
To better understand the real world of project
management in a complex environment as seen by
project managers themselves, below are excerpts
of comments made by a senior project manager
in response to the recent publication of “Project
Management in the Age of Complexity” in the De-
cember issue of PMI’s Project Management Journal
(Jaafari, 2003c): “Most of the published research
and academic articles on project management
frankly put me to sleep. I see little connection with
their alleged content and the actualities of work-
ing in and dealing with “real world IT projects”,
or at least the ones I have encountered. I believe
you are absolutely on track with your assertions
regarding the current IT environments - fluid,
changing, fast-paced, riddled with communica-
tion and cultural dissonance and disconnected-
ness. There are no clear-cut methods, formulae or
processes by which these activities can be “man-
aged”, they have to be dealt with, cajoled, nudged
and pushed sometimes in the directions necessary
for some definition of success (which can change
from time to time as well.)” Michael Scott, Senior
Project Manager, IBM 10 December 2003.
A study by VW Coaching (VW Report 2002:1)
noted: “Shorter project running times, increased
project complexity, a greater degree of interdisci-
plinary work and an increasing internationalisa-
tion of projects necessitate greater use of project
management.”
However, in page 130, the above report found:
“Project Management concentrates on the op-
erative area of project processing and in general
does not aid the strategic company organisation.
However, when it comes to strategic company
decisions concerning future markets (including

Key project Impact on Organisations Impact on Professional

management role
Transformative - Vision, values, mission
leadership & teamwork - Goals orientation
- Distributed leadership
- Flat flexible organisation
- High level delegation
- Self adaptive (supporting systems)
development & practice
- Transformative leadership
- Meta cognitive abilities (emphasis on
the big picture)
- Decision making abilities
- Possession of technical, managerial,
socio-cultural organisational
competencies

Agent for creativity - Promote a creative culture (allow
time for questioning & new ideas)
- Risk resilience attitude
- Emphasise the whole value chain
- In search of excellence
- Creative broadened mindset
- Systematic value analysis/
management expertise
- Synthesis rather than analysis
mindset

Manage discontinuities/ - Sensing capability to locate shifts - Constant reflection on own

dissonance - Risk & uncertainty management core competencies vs. those in demand
(opportunities) capability - Core skills of risk, uncertainty &
- Devolution within a strategic opportunity management
framework - Flexibility, adaptability, continuous
- Adaptability, flexibility, fast moving learning & change

Strategic - Goals focus & flexible management - Mission orientation & competency to
project/business - Strategic leadership framework and deliver goals
management systems (corporate governance) - Ability to contribute to & manage
- Outsourcing and alliance focus distributed business ventures

Management of - Major focus on partnerships - Core relationship management

relationships/networks - Equitable risk sharing mechanisms competency
- Collaborative systems & tools - Mastery of collaborative technologies

Customer strategic - Focus on delivering value - Core skills in customer value &
advantage and value - Customers and public interest relationship management
focus recognised & included systematically - Core skills in communication

ICT leverage for superior - Constant development of business - Mastery of ICT for project value
performance & cohesion management infrastructure to enhancement & productivity
leverage information and knowledge - Leverage ICT for communications

Promotion of strong - Transparent, consistent policies and - Strong personal & professional ethics
personal and corporate systems - Management of ethics, social and
values & ethics - Emphasis on corporate ethics, social environmental responsibilities at
& environmental responsibilities project/programme level essential
- Emphasis on cultural tolerance & competency
development of social cohesion
Table 2. Nature and role of project management in the age of complexity

38 www.pry.fi
 Very High
Environmental Complexity
High
Medium
Type 2. Bureaucratic
Low
Type 1. Ad-hoc
Low
Project Complexity
Figure 4. Project management typologies (Jaafari, 2003a,b,c)
decisions about products, co-operative partners),
the high complexity of the tasks and the time and
staff limitations will make it imperative to utilize
the methods of project management. Linear pro-
duction processes and value creation chains are
increasingly becoming value creation networks
– partly via international or global co-operative
and are also recognisable in virtual form.”
The author submits that the current project
management approaches are inadequate and
even obsolete in many circumstances, as their
focus is on orderly control despite the fuzziness,
uncertainty and complexity that surround most
project goals, stakeholders’ intentions and business
dynamics (Jaafari, 2004a,b, 2003a,b,c, 2002, 2001).
Based on the preceding studies and the realities of
project management in complex environments, the
author has attempted to articulate project manag-
ers’ role in Table 3 under a new model, termed the
creative-reflective model (Jaafari, 2004b, 2003abc,
2002, 2001). These two terms are used to signify
that project managers need to possess abilities
that are essentially different to, and transcend,
those implied or applied in the normative model
of project management preparation or practice
(Jaafari, 2003a,b,c).
Project managers need to be promoters, integra-
tors and agents of creativity in order to develop
and apply breakthrough solutions that ensure
project success and ultimate business competitive-
ness. This view is in contrast to that which assumes
project managers have no real responsibility for
the end result but need to focus on the delivery
framework, relevant processes and tools, applying
the traditional cost, time and quality criteria. The
implication is that project managers can take on
and deliver any project notwithstanding the fact
that their understanding of the business context
could be very limited. This is not a valid basis,
and has been proven as false by the studies that
have been done by the author and his research
team on life cycle project management, during
the past 8 years as well as other studies (e.g. see
Morris, 2003). Project managers must demonstrate
a deep understanding of the project context and
its related industry dynamics, not necessarily as
experts in every facet of the project, but as one
who can understand the close interplay of tech-
Project Perspectives 2005
Type 4. Creative-reflective
Type 3. Normative
Medium High Very High
nology, management strategy and due diligence
in operating in a particular industry, so as to guide
the team and other participants towards optimal
project value formation and realisation.
The Creative Reflective model
Under the creative-reflective model of profession-
ality project managers preside over creation and
realisation of daring projects within self-organis-
ing teams and businesses. This heralds a major
shift in the development of project managers from
the current preoccupation with learning standard
processes and techniques for the application of the
so-called best practice, to competency for optimal
management of both project and environmental
complexities. The professional competence of the
project managers must thus be the basis for the
determination of optimal approach to projects,
based on the extent of environmental and project
complexities and within a flexible framework.
Figure 4 shows the creative-reflective model of
project management versus other models, as has
been discussed in detail else by the author (Jaafari,
2003a,b,c). Table 3 (based on the work of Lester,
1994), provides a point comparison between nor-
mative and creative-reflective models of project
management.
Multiple competency model
Project managers are not mono-discipline prac-
titioners (never have been); the reality is that
project management is just one competency
among multiple competencies professionals of
today need to possess. The author and one of his
students conducted a global survey of perceived
competencies in 2000 (Jaafari, 2002). This study
confirmed the multiple competency model as seen
in Figure 5.
Technical competencies are generally acquired
as part of the initial discipline in which one is
grounded, such as engineering, IT, business and
the media. As has been pointed out by Gray and
Larson (2000), most corporations (including public
sector ones) have undergone restructuring, includ-
ing refocus on their core business, dismantling
of their internal non-core areas, collapsing their
hierarchies and removal of middle managers, as
well as replacing them with project managers.
39
 Point Normative Model Creative-reflective Model
Character Technical, logical; problem-solving Creative, interpretive; design

Capability Solvable, convergent problems Congruent futures; 'messes,' problematic

situations, divergent problems

Approach Solving problems; applying knowledge Understanding problematic situations

competently and rationally and resolving conflicts of value; framing
and creating desired outcomes

Criteria Logic, efficiency, planned outcomes; Values, ethics, congruence of both

cause-effect, proof methods and outcomes; systemic
interrelationships, theory, faith

Epistemology Objectivism:knowledge is stable and Constructivism:knowledge is transient,

general; precedes and guides action situational, personal and unique; both
informs action and is generated by it

Validation By reference to others' expectations: By questioning fitness for purpose,

standards, accepted wisdom, established fitness of purpose and systemic validity;
discourse; 'truth' 'value'

Thinking Primarily deductive / analytical; sceptical Inductive, deductive and abductive; uses
of intuition 'intelligent intuition'

Profession A bounded, externally-defined role, A portfolio of learningful activity

characterised by norms, values and a individual to the practitioner, integrated
knowledge-base common to the by personal identity, perspectives, values
profession and capabilities

Professionalism Objectivity, rules, codes of practice Exploration of own and others' values,
personal ethics, mutual enquiry, shared
expectations

Professional standards Defined by the employer, professional Negotiated by the participants and other
body or other external agency according stakeholders in the practice situation in
to its norms and values accordance with their values, beliefs and
desired outcomes

Professional Initial development concerned with Ongoing learning and practice through
development acquiring knowledge, developing reflective practice, critical enquiry and
competence and enculturation into the creative synthesis and action; continual
profession's value system; continuing questioning and refinement of personal
development concerned with maintaining knowledge, understanding, practice,
competence and updating knowledge values and beliefs
Table 3. Point comparison of normative versus creative-reflective model of professionality
(after Lester, 1994)
They rely on the skills of these project managers project assignments as and when needed virtually
to access the outsourced resources. globally (Jaafari, 2001).
One consequence of these developments is a rise To summarise the discussion:
in the number of freelance knowledge workers and - Managerial skills (project and or general man-
professional consultants who can participate in agement) are needed by all professionals in order
to participate in, and or manage business and or
government endeavours, particularly focusing
on hard aspects, users’ validated performance
targets, financial targets, time, production of
artefacts etc; Thus, the managerial competency
is one dimension of professionalism;
- Leadership and socio-cultural skills are also
needed by all professionals in order to develop
self, relate to social structures in teams, projects
and business units or in wider sense of leading
organisations, as well as promotion and adher-
ence to strong personal and professional ethics.
These competencies focus on the soft aspects
and human and organisational cultures;
Technical competency (26%) - Technical competencies are also essential, and
Management competencies (43%) go hand in hand with other key competencies.
Technology plays a key role in the competitive-
Soft competencies (31%) ness of ventures and business models. Project
Figure 5. Results of an empirical study showing managers need to be firmly grounded in a
base expertise and develop an appreciation of
competencies held by professionals
the commercial and technological dynamics
(Jaafari, 2002)
40 www.pry.fi
 of their field. A project manager who is active
in the culture and arts field is not sufficiently
knowledgeable to engage in the oil and gas
industry and vice versa.
In conditions of uncertainty, complexity and
chaos focus on rationality and linear processes
will not be sufficient; competencies must relate
to performance in a complex shifting and uncer-
tain world. In this environment, both goals and
environments tend to shift so frequently that they
render rational approaches ineffective. As stated
in Geyer (1998), Jaafari (2004a) Lester (1994)
and Robinson (2000), in such conditions, success
largely depends on adaptability, autonomy and
agility, which in turn depends on the mindset and
competence of the professionals and their strong
adherence to personal and professional ethics.
Technocrats and administrators give way to lead-
ers, who can set the goals, promote creativity and
encourage development of breakthrough solutions
(Robinson 2000). The contemporary normative
model of professionalism, that has been the foun-
dation for professional education and certification
since the dawn of the 20th century, has thus come
under threat (Lester, 1994).
It is befitting to note that the realisation of the
transformative leaders and practitioners requires
a new approach to education and enculturation
of professional people of all disciplines including
project managers. That is why we have set up
new institutions to promote this level of thinking
and professionality (see www.apicollege.org and
www.aiuni.org).
Conclusions
The author presented a case for a fundamental
shift of project management thinking to a new in-
tellectual and professional platform. The creative-
reflective model of professionality was proposed as
suited to the messy nature of business and projects
in today’s complex environment. The author re-
viewed the nature of environments under which
projects and programmes are conceived and deliv-
ered locally or globally. The rise in complexity has
necessitated shifting of emphasis from traditional
business models to newer approaches embodied in
dynamic organisations. Project management is a
core capability for dynamic organisations.
Project management is not a mono-discipline
(never has been). It is not just a set of useful tools
that can be applied by professionals in different
contexts. It is a category of professional compe-
tencies alongside other categories, as leadership
and socio-cultural competencies, business acumen
and associated technical competencies.
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41
Results from Research and Development

The Change Masters:

Project Managers In
Short-Duration Projects
Projects in multi-project environments are often small and most often of short duration. There is no
special method for running those projects other than the traditional methods developed for large
projects. The project managers’ job is fragmented and that they spend much time in meetings with
others, superiors, subordinates and peers. Much of the work is about managing change which has
its origin both within the project and from the context where the project is situated.

Introduction describe project management in a small project,

Despite the growing research interest in project
management during the last couple of decades,
we still know little about what it is like to work
as a project manager in projects of short duration.
Short-duration project management is about proj-
ect management in projects lasting for a couple of
months or less, as opposed to projects lasting for a
couple of years. Most of the project management
Andreas Nilsson techniques and tools developed in the middle of
Department of Business
the last century for large projects. As the tools
Administration,
now are used in small and short projects too, the
Umeå School of Business
question of what project managers do when they
and Economics,
lead the projects of short duration grows in inter-
Umeå University,
est. Are the short-duration projects handled as the
Umeå, Sweden
large ones or are they handled differently?
Payne and Turner (1999) suggested that because
there is such a great difference between small and
large projects, they should be handled in differ-
ent ways. Hence, the subject for this study is to
lasting for only a short time and depending on a
number of different projects. It aims to answer the
question: What do the project managers do when
they lead short-duration projects?
Framework for short-duration projects
The classification of projects due to their duration
in time is context dependent. A project lasting for
six months would be seen as short in a context
where most projects last for a couple of years while
it would have been seen as long in an environment
where most projects last for one or two months.
In some cases, the 300 000-dollar project is large
while in other contexts it is considered as small.
There are no clear borders between the dif-
ferent sizes and durations of the projects, rather
there are continuums of which figure 1 shows the
extremes. The figure presents some examples of
projects classified as long or short, small or large.

2 4
System delivery
Large Large system
upgrades Mobile telephone
projects system
development
Project size
1 3
Software
development Organization
Small development
projects Consultancy
projects Maintenance

Short projects Long projects

Project duration
Figure 1. Example of projects classified by size and by duration

42 www.pry.fi
The software development projects studied in this
paper would most probably end up in quadrant
number one, as they often are short and, both
due to the workers connection to the project and
to the size of the budget, are small (Turner 1993,
1999). The projects in quadrant number four, on
the other hand, are mainly the traditional large
and relatively long projects for which the project
techniques were developed.
Multi-project Organization
Companies running projects in parallel and in
sequence are usually called multi-project organi-
zations (Engwall and Jerbrandt 2003, Payne 1995).
In these organizations there are often routines
developed on how to handle the interrelationships
between the different projects. Payne (1995) sug-
gested that the projects in multi-project organi-
zations often are smaller and shorter in duration
than in organizations running single projects.
In multi-project organizations both the project
managers and the project workers usually work in
more than one project at the time. The projects in
the organization have to compete for the financial
and personnel resources needed (Sjögren Källqvist
2002, Turner 1999). Due to the shared resources
each project manager also need to keep an eye
on what is happening in the other projects as
something happening in another project would
affect their own project.
It is suggested that there are differences be-
tween the job of general project manager (cf.
PMBoK 2000), but little research seems to support
such a statement. There might be some differences
though, as Maylor (2003) suggests, that the proj-
ect manager is responsible for overseeing change
while the general manager manages status quo.
The project manager have different tasks that are
changing all the time to manage within the tem-
porary structures of the project while the general
manager’s tasks are consistent for a long time
and are handled within more or less permanent
structures. The main task for the general manager
is to optimize the organization and the work. For
Maintenance Main Project B
Project 1
Sub-Project Sub-Project
Software Hardware
Design Project Design Project
(Client) (Telesoft) Administrator
PM and Configuration
Assisting PM
Team 1 Team 2 Team 3
Figure 2. Project organization chart with a dashed line showing the studied project
Project Perspectives 2005
the project manager the main task is to resolve
conflicts of different kinds (Maylor 2003: 11).
Method
The study comprises the following main parts:
1. Introductory interviews to learn to know
the company and the project managers
2. During one week each the work of the
project managers and the assisting project
manager were followed and documented
3. Second interview to validate what was
documented
4. Material analysis
The company studied, Telesoft, was earlier a
part of a large telecommunications company but
due to the rapid change in the telecom industry
recently, demands on a more efficient organiza-
tion led to some organizational changes where the
client sold Telesoft a year ago. Today Telesoft is
owned by another large company but is still acting
and working mainly for the former owners, now
in a client – consultant relationship. Hence, the
project studied was now shared between the two
organizations with Telesoft acting as a consultant
to the former parent company. The organization
structure is complicated and will be described
from two different perspectives, the organizational
perspective and the time-line perspective.
Organizational perspective
The project is a software design project in a larger
telecom system project, figure 2. Earlier main-
projects is also connected to the Design project
via the superior Software sub-project. The main-
projects are run by the client but the software
design project is run entirely by Telesoft and three
of its peer projects are shared between Telesoft
and the client, with some workers at Telesoft and
some at the client. It could be argued that the
design project is not a single project as it is part
of a larger project, however, the design project
is responsible for achieving its own goals for its
clearly defined products, and by making its own
planning and resource allocation it can be seen as a
Main Project C
Project 2 System Test
Sub-Project Sub-Project
System Test
Project Software System Software tools
Test development
Manager
Team 4 Team 5
43
 project of its own. In other words the organization
described is the product breakdown structure of
the telecom system where every sub-project has
clear goals and frames.
Time-line perspective
For every new model of the telecom system
planned there will be a new project on the
main-project level. For every model there will be
number of versions of the software with differ-
ent functionality. These projects are running for
between 8 and 12 weeks ending up in a state of
maintenance after delivery when the products are
tested, working fine and delivered to customer.
During the maintenance stage errors made during
the design will be corrected and some late changes
will be implemented. This result in the design
project having a number of projects running at
the time. Consequently, the project always has
projects running in different stages and it is in this
environment the project manager has to work and
try to make their project to reach the goal.
The studied project managers
In the design project the management is divided
between David, acting as the project manager, and
Diana, acting as assistant project manager. David
started at the client’s organization about five years
ago after having finished his studies in informatics.
He has worked mainly as a software designer but
he has for a recent period worked as team leader
in one of the teams in the design project. When
the study was conducted he had had the position
of a project manager in the design project for only
a couple of months, however, he had good help
from Diana, his assisting project manager who had
held her position for some years. Diana started
as a computer engineer in the client’s company
18 years ago. She started as a software designer
but during the last 7 years she has had different
positions as project manager and assisting project
manager.
To change, or not to change: that is the
question for a project manager
One major task the project managers’ job con-
sisted of was change management. The changes
were, for example, in delivery dates, the product
specifications or the staffing. It is the project
managers’ duty to handle the changes there ef-
fect on the project is as positive as possible. Some
changes would result in more work and therefore
in a delay. It was then the project managers’ job
to try to postpone the changes in order to be
able to schedule for them in later versions of the
product. In other words, the project managers
are in a position where they are responsible for
implementing changes at the same time as they
have to prevent change to protect the project and
the project workers.
Implementing change
Some changes stem from the project’s environ-
ment including the company and the peer projects
while other changes stem from issues happened
within the sub-project. This means that when
handling some changes the project managers had
to stick to routines established by the company,
44
as the changes like the change requests were ex-
pected to come. When handling other unexpected
changes the method used emerged at the time as
there were no pre-designed routines available.
Some other changes were familiar to the project
managers and they had their own routines to
handle those.
External changes
Decisions on changes originating from outside the
design project are outside the control of the proj-
ect manager as they are often made on a higher
hierarchical level. One example was when one
project was getting closer to the end and someone
brought up the question of whether it was possible
to change the previous decision on which version
of the first project that was to be used as a base
for the next. David argued that a change would
save his team some job and the project might then
finish before plan. Two days later a meeting on a
higher level changed the decision so the version
that David suggested was to be the base on which
the new project would be built. In this case David
had to wait for the decision from higher level and
could only give suggestions on what he though
were the best. He then had to plan his teams’ work
to fit the two possible outcomes. Another example
was one occasion when the client’s organization
planned to show one of the earlier products for
a potential customer. At this stage the product
was not tested and finished so orders were sent
out that everything else was less important than
correction of any faults that may occur in the
product to be shown. For David this meant that
he had to plan for who had to work overtime and
during the coming weekend and also he had to
plan the other work so the right priorities were
made there in order not to loose too much ground.
These two examples show the project manager in a
situation where someone else is making the deci-
sions and the project manager has to implement
what is decided. Hence, the project manager does
not seem to be as influential as Galbraith (1971)
suggested.
Internal changes
Other changes stem from within the single project.
It can be the person coming back from sick leave
earlier than expected. In this case the project
manager had to discuss with several people to
find out where they needed him the most before
he could put him into work. Another example
of internal changes was the extra meetings that
were held during the end of the study to handle
the increasing amount of trouble reports. During
the weeks of the study there were an unusually
high amount of trouble reports and with all the
work that was planned this became a problem. In
order to solve this problem it was decided to meet
every morning to discuss what team had too much
to do and to send people between the teams to
help where it was needed. Contrary to the earlier
described changes the latter were in the design
project and the project manager had to find his
own solutions in order to handle them. All solu-
tions, except those affecting the project workers’
work situation, were decided upon by the project
manager himself.
www.pry.fi
Avoiding change
Project managers spent much time keeping
changes and demands from outside the project
away and to protect the project workers from
disturbances. According to Pinto and Slevin (1989)
this is a success factor, to shield the project from
disturbances. One example from the present study
was the handling of change requests. When Diana
received a change request she tried to determine
how much work it demanded and what team, or
teams, was needed to do the job. Her first way of
handling the change request was then to try to
postpone the change as long as possible to be able
to plan the work to fit into the other work.
This pattern of managing change was repeated
in almost all cases where change was requested for
or when suggestions came up needing the project
managers to re-plan the project. One example on
the latter was when someone superior wanted to
re-schedule the versions. The first reaction from
all the project managers present in that meet-
ing was: “No, that’s not possible”, but later they
agreed to the change under the conditions that
other changes to the planning was made and the
version discussed were kept “Slim”, not including
to much new functionality. Some of the other
functionality should then be placed in a new, not
yet planned version.
Short-duration project managers’ work
Earlier studies of multi-project organizations have
mainly been from a top-management perspective
(cf. Artto et al. 2002, Blomquist and Müller 2004,
Sjögren Källqvist 2002) where focus has been on
how the top management handles a portfolio or
a program of projects. In this study the opposite
perspective was taken resulting in a description
of how the project managers handle their single,
small, short-duration projects in the multi-project
environment.
Looking at the main-projects from the top
management perspective in this case would show
three relatively clearly defined projects, one main-
tenance project, one project in a closing phase,
and one project where production is going on.
If we instead look at it from the short-duration
project managers’ perspective the three projects
are handled more or less as one project with several
versions. Even though the main-projects on lower
level are handled as one there still are priorities
made on higher level leading to changed focus
for the short-duration project managers and their
teams’ work. Looking at the projects from the
above would probably have made the effects of
the prioritization hard to see but from the sub-
project level the prioritization gets high impact. In
the complex situation where the project managers
work, they constantly need to adjust their project
to what is happening in the project’s environment.
They need to keep these relations under constant
observation and use them to keep the project
development in the right direction.
Conclusion
It appeared in the study that much of the project
managers’ time was spent in meetings where han-
dling of different kinds of change was a major task.
When handling the change the primary action was
Project Perspectives 2005
to protect the teams and the project workers from
disturbance in order to get the job done. The situa-
tion with the project’s ever changing requirements
might not be experienced similarly on the top level
of the main-project, but for the project managers
in the design project it is a daily fact. Therefore,
looking at the multi-project environment from
the short-duration project’s perspective opens up
a new interesting field for further studies.
Acknowledgements
I appreciate financial support from Hans Werthén-
Foundation, Wallenberg’s foundation and from
Handelsbanken Research Foundation. Tomas
Blomquist, Anders Söderholm and Tim Wilson have
supported during the research process and have
given feedback on earlier versions of this paper.
An earlier version of this paper was resented
at the IRNOP VI conference in Turku, Finland in
August 2004.
References
Artto K. A., Dietrich P. H. and Ikonen T., 2002
Industry Models of Project Portfolio Management and
Their Development, In, Proceedings from PMI Research
Conference, Seattle, p. 3-13
Blomquist T. and Müller R., 2004
Program and Portfolio Managers. In Slevin D.P., Pinto J.K.
and Cleland D.I. (eds) Frontiers of Project Management
Research, Newton Sq: PMI
Engwall M. and Jerbrandt A. 2003
The resource allocation syndrome: the prime challenge
of multi project management?, International journal of
project management, 21(6), pp 403-409.
Galbraith J. R., 1971
Matrix organization designs: How to combine functional
and project forms, Business horizons, 14(1), pp. 29-40
Maylor H., 2003
Project Management, 3rd Prentice Hall, London
Payne J. H., 1995
Management of multiple simultaneous projects: a
state-of-the-art review, International Journal of Project
Management, 13(3), pp. 163-168
Payne J. H. and Turner J. R., 1999
Company-wide project management: the planning and
control of programmes of projects of different type.
International journal of project management, 17(1), pp.
55-59
Pinto, J. K. and Slevin, D. P. (1989)
Critical Success Factors In R&D Projects. Research Tech-
nology Management, 32(1), pp. 31-35
PMBoK, 2000
A Guide to the Project Management Body of Knowl-
edge, Project Management Institute, Newtown Square,
Pennsylvania
Sjögren Källqvist A., 2002
Projektledning från ovan [Project management from
above]. INDEK, Royal Institute of Technology, Stockholm
Turner J. R., 1993
Handbook of project-based management: Improving the
processes for achieving strategic objectives, McGraw-
Hill, London
Turner J. R., 1999
Handbook of project-based management: Improving
the processes for achieving strategic objectives, 2nd ed.
McGraw-Hill, London
45
Results from Research and Development

Project Managers and

Disruptive Environments:
Leadership Under Natural
Risks and Environmental
Disasters Situations
Project Management tools can be applied to disruptive environments, defined as threatening and
disorganizing environments. Disruptive environments interrupt daily life.
Project Managers must adapt to the new paradigm of risk. The paper is part of a research work on
how to improve prevention, coordination, and actions responding to natural risks and environmen-
tal disasters in a global change scenario, using project management techniques adapted to that
specific disruptive environment.
Damage and loss prevention is the main concern, but our present risk knowledge corresponds to a
new paradigm. The paper describes a preliminary 9W’s approach to review the conflict. It includes
responses to questions like: Warning, Why, What, Who, Whom, When, Where, Ways, and Whole-
Luis Pons Puiggrós ness relative to disruptive scenarios.
Universitat Politècnica The paper concentrates on leadership issues and analyzes existing solutions in most of European
De Catalunya Union countries and draws the guidelines or basic proposals on leadership for disruptive environ-
Spain ments top management.

Introduction The paper also recommends adopting:

We assumed that Project management tools can
be applied to disruptive environments, defined as
threatening and disorganizing environments. The
paper first concentrates on defining disruptive
environment properties selecting 9 W questions
as an approach to define those scenarios where
leadership must play its roles. The final research
study shall include how to improve prevention, co-
ordination, and actions responding to natural risks
and environmental disasters in a global change
scenario, using project management techniques
adapted to that specific and better known disrup-
tive environment.
The scenarios summarized hereafter show
real cases. The study will not enter on all disrup-
tive situations; the research is about the special
environment of natural risks and environmental
disasters. As a second priority this paper concen-
trates on the position of the project manager
and is oriented to our understanding of the main
leadership issues.
We selected a few comments on the Prestige
tanker disaster as well as the Chernobyl reactor
accidents. The paper values contributions of EU
(European Union) legislators and administration.
- a team management model and
- strategic priorities or guidelines
As argued in the paper from the two ex-
amples.
Motivation: Prevention and Then Project
Management in Disruptive Environments
Natural risks and environmental disasters or
emergencies are studied for prevention. They
trigger mechanisms of coordination or action
plans that are clear and well defined by EU au-
thorities, national, regional or local governments
and administrations, considering in many parts of
the processes the cooperation and participation
of stakeholders; public access is possible in spite
that understanding documents might require ex-
perts’ assistance and time. We will focus on cases
where the “Major Force” constraint happens and
then we possibly may solve the conflict using a
special kind of Project Management. Additional
explanations on why we must learn to manage in
Risk and uncertainty are also in (Pons 2003) .We
will now begin using Benyakar (2003) definition
of disruptive environment situations to direct the
research:

46 www.pry.fi
 Disasters generate situations where breaking
of daily life happens altogether with high risk
and high incertitude: reviewing our portfolio
of management or administration techniques is
necessary.
Morris and Hough (1987) learn from the anato-
my of big projects the reality of Project Manage-
ment, just questioning systematically on success
and failure reasons of real cases; they provide a
listing of both. This exercise generates a list of
factors that may improve the chances to achieve
success. Listing major crisis and associated projects
will possibly change our view on management in
disruptive environments.
Disruptive Environments in Natural Risks
and Environment Disasters.
Disruptive Environment and major crisis: local,
multi-local and worldwide scenarios
Natural risks and environmental disasters are major
crisis where high risk and incertitude generate dis-
ruptive situations. Benyakar defines the disruptive
environment situation. This author leads a research
mainly oriented to psychiatric treatments, as an
expert in military and civilian incidents.
Risk Management as part of a project is applied
in a different manner. Project Management treats
Risk Management as a way to respond to project
risk: the outcome is a risk management plan. This
topic is studied by authors like Chapman (see
the different references (Chapman & Ward 2002;
Chapman 1997; Chapman CB & Ward 2000)). Other
works define the dimension of risks and incertitude
in traditional project management, or as Casals
(2001) describes accidents and risks issues for the
chemical industry. Risk identification, analysis, re-
sponse and, monitoring and control are considered
at Project level. Public officers use the adminis-
trative laws to ensure that the risk management
topics are properly considered. Boundaries and
interactions are analyzed to attain compliance to
existing laws or techniques. Authorities comply
with their formal work and must inform civil
authorities for their bigger plan.
More specifically, implementation of the reac-
tive system is mainly inside nation’s territorial
boundaries. Advisory or normative committees are
formed by international institutions (see the dif-
ferent treaties regarding oil spills, waste disposal,
etc.) providing uniform legal solutions that finally
are introduced in nations’ systems. These laws
create organizations teams and have as expected
a legal framework. But we all can cite cases to
demonstrate that national coordination between
even well trained people and organizations tends
to make results slow or worse.
But disruptive situation never end and borders
are ignored. As Benyakar describes, during the
World Psychiatric Association (WPA)- 2002, Prague
and afterwards Germany both suffered serious
floods; Middle East continued madness and Argen-
tina was ill-crossing through its socio-economic
disaster. All have multi-national or worldwide
impacts. We are obliged to apply common sense,
finding methods to better the management of
those conflicts allow us to exert our responsibility
and rebuild normal life. As a first approach the
Project Perspectives 2005
study is directed to study leadership in Project
Management designed for cases where natural and
environmental risks happen as disasters.
The 9 W’s and disasters
The anatomy tool is the 9 W of disasters inter-
vention questions, cited by Benyakar, which are
similar or almost identical to the usual questions
that a Project Manager might use when analyz-
ing or studying a case of risk minimization or
avoidance:
Warning or prevention, Why, What, Who,
Whom, When, Ways and Wholeness
“Prevention or warning” includes recogniz-
ing external menacing factors associated to the
abilities, capabilities or skills of the individual
or organizations that face the situation, or that
needs to activate these capabilities and use them
in order to avoid the occurrence might happen.
Specialized Public Centers and Universities draw
scenarios or maps of high risks caused by me-
teorological disasters; insurance companies and
a limited number of public may now directly use
that information.
“Why” requires in many cases generating an
immunity in face of psychological impacts of the
risks treated, in order to avoid sequels or psychic
trauma of population. It often determines what
must be done, who must do it, how it must be
done, etc. As an example, Administering Land Plan-
ning impact directly on risk patterns when natural
disasters and determine in some extent ways to
solve that question once it may be considered.
“Why” or the explicit reality of “why” is hard to
investigate and its importance may affect the role
of Project Managers as it is described in the two
examples above.
“What” allows determining your focus of atten-
tion, human level or the different resources. “Who”
refers to the position of the Project Manager in
relation with the different “whom” or “stakehold-
ers” (Mc Cleland 1983). “When” can be sometimes
anticipated, or at least forecasted. It seldom hap-
pens as unpredictability is one of the properties
that determine many of such situations. Responses
to “when” include the teleological chains of
activities and its pace according priorities; then
timing and more in detail, time-planning of tasks
and management of resources are essential. Civil
Protection, NGO, public organizations, all offer
their own and different understanding but most do
no Project Management philosophical approach.
“Where” identifies scenarios and time, capability
and flexibility of deliveries. Resource inventories
and availability, and decision modeling or supply
chain models of management must be ready for
implementation assistance. “Wholeness” requires
recognizing complexity and interactions; the two
cases explained determine the need of a “holistic”
vision.
Our typical vision of Risk Management and
Uncertainty (why it alters schedules and costs) is
a different vision from the case where risk is really
generating the disruptive situation and we imple-
ment project management to solve the conflict.
47
 Two Disruptive Situations
Chernobyl Power Plant accident
April 1986 explosion of a reactor at the Chernobyl
Power Plant is the biggest known civilian nuclear
catastrophe. According to press versions, Swedish
power plants first detected the incident and re-
acted immediately, the first W: warning triggered
a question to the Soviet rulers who continued to
“manage information” of the problem to their
national citizens; truth has no excuses: stakehold-
ers suffered the effects of radiation. Stakehold-
ers described situations that are out of normal
boundaries (Alexievitch, 1998). History is made
of sufferings, but few cases meet in one two big
disasters as there were:
- A Cosmic or Worldwide level disaster:
radioactive spill
- A Social Disaster: the socialist continent
suffering increased once again
Picture number 1 taken by Yan Arthus Bertrand
(http://www.yannarthusbertrand.com/yann2/affi-
chage.php?reference=TVDC%20051&pais=Ukrain
e), is from Pripiat (Ukraine). The 120 neighboring
localities had to be evacuated; Pripiat had before
the accident a total of circa 50.000 persons living
two miles from the nuclear plant. The nuclear plant
can be seen on the horizon.
The question “why” was silenced and of course
the trauma has been limited to a limited number
of active organizations or people. We still do not
have good estimates of persons that directly or
indirectly suffered different degrees of illnesses.
“When” has not concluded yet: recent information
maintain that birds can enter into the concrete
“coffin” made to seal the remains of the reactor
and its still burning fuel. Regarding to “what” re-
sources are employed, there are efforts of EU, the
USA and other governments to provide assistance
to Ukraine but no team is nowadays visible to the
public. Generating trust is extremely important
to the Nuclear Industry; we all need to solve the
challenge of the world’s existing reactors (circa
500 reactors) and centers of nuclear waste stor-
age (32 or more).
The Prestige tanker disaster
Spain’s North Coast includes places like the cape of
Finisterre (End of Earth, Finis Terrae), and Costa da
Morte (Cape of Death). Both areas have splendid
environments and rough winds or seas. Many oil
tankers are often nearby and cause of successive
accidents.
Picture 2. Prestige tanker towards the ocean
48
Picture 1. Abandoned city of Pripiat (Ukraine),
near the nuclear power plant of Chernobyl
Prestige accident happened during November
2002. After the 13th November 2002 accident no-
tice, reaction of Spanish authorities was to direct
the broken and weakened tanker and its cargo
of 70.000 metric tons of asphalt or fuel far from
coast (50 km) to open seas (250 km from coast)
(see Picture 2) where it now lays deep and leaks
(see Picture 4). The government minimized Picture
3 results and asked volunteers to go away from
the disaster area. Government under pressure of
demonstrations was forced to tolerate them but
gave minimum support (Picture 5). When public
and government controlled Media pressed again,
a “political leader” was appointed and an invisible
team or task-force depending from the President
of the Government was created. “Team” first was
in the making of many invisible and surprising
decisions. An important success of that team was
creating more local and national working teams
that helped to make objectives happen inside that
still complex scenario.
Neighboring countries assistance was symbolic
and only few coordination actions were publicly
told. No visible multi-national team was in place
and again information flow minimized.
Conclusions and Leadership lessons for
Project Managers
First important conclusion is that leadership and
stakeholders must agree that any remediation,
subsidies, etc., would never return the situation
exactly to the same that existed before the disrup-
tive situation appeared. The two cases explained
and other from our research never had in the early
beginning leadership oriented to the needs of most
of stakeholders. A limited set of stakeholders were
considered.
Picture 3. Asphalt covered beach
www.pry.fi
 Next conclusion is that, Disruptive Environment
is a complex situation that requires implementing
a different self-organized complexity before daily
or normal life can start again. Complex-Problems
solving generate situations that may need all the
multiple managers’ roles as Mintzberg (1991) de-
fines; it is difficult to imagine one lonely person
matching the capabilities needed. A series of proj-
ect teams can. Proposed “Who” are international
Management Teams, using effective Information
Systems. Stakeholders include citizens of differ-
ent countries, governed by different orientations,
and their interests or positions are different; the
matter is that EU authorities should work in or-
der to integrate this combination of multi-local
international teams and share their experiences.
A major problem is that EU arm’s length may not
arrive to neighboring countries that have social
distress as a second disruption cause.
Information for and from the team is essential:
main effort in both cases was directed to limit
access of the existing knowledge to stakeholders:
War, Espionage or Against Enemies Acts must not
inspire governments’ priorities or emotions to
prevent what they still see as of sedition or fear.
Processes of error self-righting need the public
debate – as a very positive remark, informing the
public is a legal requirement included in EU envi-
ronment policies as a basic principle. Information is
essential and channels must be open. Transparent
information will assist leadership and stakeholders.
Polite frankness can break the communications
channels.
Team leaders must consider as a priority part-
nering with stakeholders. Why can not we share
information with the persons that are so dramati-
cally affected? We all must share liabilities; we
need readiness and all cooperation to respond.
Project Managers in Disruptive Environments
for leadership should implement:
- Multi-national teams for complex problems
- Open Information Channels
- Acceptance that situation would never return
to the previous one
Disruptive situations will give us again the op-
portunity to check the paper contributions.
Picture 5. Volunteers collecting asphalt
References
Alexievitch, S. 1998.
"La supplication” Éditions Jean-Calude Lattès
Benyakar, M.2003
Lo disruptivo. Ed. Biblos, Buenos Aires
Casal; J y otros 2001
Análisis del riesgo en instalaciones industriales, Edicio-
nes UPC – Politext, Barcelona
Chapman CB and Ward SC. 2002
Managing Project Risk and Uncertainty: A constructively
simple approach to decision making. Wiley, Chichester.
Chapman CB 1997
Project risk analysis and management PRAM the generic
process. International Journal of Project Management.
15 - 5, pages 273-281.
Chapman CB and Ward SC. 2000
Estimation and evaluation of uncertainty: a minimal-
ist first pass approach. International Journal of Project
Management 18 , 369-383
Mc Cleland 1983
Systems Analysis and Project Management Ed. Mc Graw
Hill, New York (N.J.)
Mintzberg 1991
La naturaleza del trabajo directivo. Ed. Ariel, Barcelona
Morris and Hough 1987
The anatomy of major projects. John Wiley and sons,
London
Pons L 2003
Explaining Risk and Uncertainty. VII Congreso Internacio-
nal de Ingeniería de Proyectos. Pamplona.

Bio summary
Author:
Pons Puiggrós, Luis
Affiliation:
Professor,
Universitat Politécnica de Catalunya
Degrees:
Dr. in Management and Business
Administration
Professional activities:
Professor of Project Management,
Experience in Media Business,
Technological Innovation and Engineering
Societies:
PMI, AEIPRO, AIQS
Contact information:
luis.pons@upc.es
Picture 4. Slow flowing trickles of asphalt

Project Perspectives 2005 49

Results from Research and Development

Network Oasis
Environment for Work and Information
Management in Multiple Projects
Rapid changes and discontinuities in business environment will challenge enterprises. To challenge
sustainable growth, companies have to find out new business solutions. There will be needed knowl-
edge and value innovations by networks of companies to create these solutions. There is urgent need
to increase productivity of the knowledge work. New tools, methods and environments are needed
to challenge traditional project work in multiple projects. The quality of the human interactions is
taking a vital role in successful projects.
Rapid changes and discontinuities in business environment will challenge enterprises. Companies
have to find out new business solutions to be able gain sustainable growth. Knowledge and value
Ilkka Kakko innovations by networks of companies will be needed to create these solutions. There is urgent
Network Oasis need to increase productivity of the knowledge work. New tools and new environments are needed
Joensuu Scince Park Ltd to challenge traditional project work in multiple projects. The quality of the human interactions is
taking a vital role in successful projects.
A new environment for project work, mWork and netWork is introduced in this article. netWork
Oasis is an environment, which supports companies in multiple project management by offering
an innovation environment metaphora. It will help people in running and participating in multiple
projects linked to each others. It will offer both the real working spaces with state of the art equip-
ment and the virtual project management tools with professional facilitation services.
netWork Oasis is highlighting the importance of high quality interactions and the guiding principle
for the planning of Oasis has been, how to increase the random meetings of very diverse groups of
people. To fulfil its potential and to be highly successful network Oasis has to become the meeting
Vesa Salminen zone for Art, Science and Business.
Lappeenranta University
Of Technology
Introduction service introductions even more important, chal-
Increased competition and globalization of busi- lenging and specifically more difficult. Companies,
nesses are forcing companies to develop new which are able to manage these challenges on
products faster. Electronic business, which brings project management effectively, are the ones to
customers, vendors, suppliers and employees succeed in dynamic markets in which internal and
together, is influencing the way we operate external service providers will execute the devel-
our companies through the use of information opment activities. The management will be done
technology. Time-to-market has to be reduced, according to value recognition and networking.
efficiency has to be increased, and companies are Clusters of networked organizations are collabo-
outsourcing more and more of their businesses, rating around a specific technology and make use
even Product Development (PD). This leads to a of a common architecture to deliver independent
complex and distributed development process. elements of value that grows with the number of
Furthermore, complexity is increasing due to new participating organizations. New ways to create
generations of products with multiple functions in new ideas and innovative working environments
diverse operating conditions. The implementation are needed to sustain in global competition.
of technologies is becoming more multidisciplinary The enterprises have to:
and the use of external knowledge has increased - meet the ever faster changes in business
rapidly. environment and customer requirements
Business environment is influenced by variety - apply growingly new technologies in their
of economic and dynamic trends according which products and product development
companies have to consolidate on a global scale. - enhance the reuse of internal and external
Companies can at the same time be driven by engineering knowledge
technological innovations, all kind of deregulation, - concentrate on core competences by
customer requirements, and other factors. All these making maximum use of components and
factors and trends add the complexity of product services available on the world market
development and make the fast new product and
50 www.pry.fi
 - form virtual enterprises with companies
focusing on complementary core compe-
tences
- change the engineering culture by replac-
ing previous competition by new forms of
cooperation.
That means actually need for better working
methods to manage multiple amounts of projects
and need for networked project environment to
support project management.
Knowledge intensity has increased dramatically
in products and processes. Knowledge manage-
ment is becoming a key strategic issue in enter-
prises. The networking will be another new success
factor. It will change most of the processes within
enterprise environments.
It is possible to reduce time to market by
boosting the new product introduction process.
That increases efficiency in product development
cycle by using re-using and sharing product/parts
knowledge. It is also possible to achieve an optimal
product mix by improving product modularity and
introducing alternative components in company
own product platforms and architectures. This
also influences on optional outsourcing readiness,
which means flexibility in dynamic markets. Many
companies, from different sectors of industry, are
changing rapidly towards a networked, virtual
business. This kind of business strategy requires
newly defined responsibilities, processes, models
and tools. Moreover, it is only possible to imple-
ment through knowledge systematization, knowl-
edge reuse, and better access to available and
existing knowledge. In a collaborative, networked
environment, a strategic management frame-
work is required as a backbone for cooperation
[Salminen et al., 2000]. This type of framework
is possible to be supported by common network
solutions.
netWork Oasis is an ambitious attempt to build
a networked project environment for multiple
project management. It combines art, science
and business while introducing a new Oasis way
of working. Professional facilitation services and
state of the art equipment will enable a fast and
effective problem solving in any phase of the
project. The special emphasis in Oasis is thus in
generating new ideas, probably even with help
of serendipity. The diversity of the Oasis working
community is in key role when achieving better
than expected results.
Theoretical Background
There are many attempts to build community
practices and frameworks to solve multiple project
management in virtual environment.
The long-range vision, of research, is that value
networks will grow up as dynamic markets in which
valued knowledge is traded by value added service
providers [Salminen V et al., 1997]. The need for
Global Engineering Networking has gradually been
increased in global business environment.
Pahng et al. [1998] proposed an object oriented
framework where a large design problem is mod-
eled through the interaction of several distributed
modules. Each module represents a specific aspect
or concern in the development process and can
encapsulate engineering models and software ap-
Project Perspectives 2005
plications. The interaction between the modules
is implemented in a “publish” and “subscribe” ap-
proach. The major advantage that this framework
offered is the ability for the distributed modules
(that contain data and tools) to interact and com-
municate over the network.
Levitt et all [Levitt, et all, 1999] introduced the
concept of activity complexity. It refers to how
many variables must be considered simultane-
ously in one activity while solving a problem. To
determine activity complexity they added the re-
quirement complexity of each of the requirements
to which the activity contributes. They argue that
activity complexity increases as a linear func-
tion- not an exponential or factorial function- of
requirement complexity.
Process complexity can be described as activity
complexity. The higher the activity complexity is,
the higher is the need for cognitive information
processing and the higher is the probability of
making design mistakes. The success in executing
activities depends on available potential alterna-
tives and an important element in that is creation
and applying knowledge. Collaborative problem
solving and activity flexibility depends on team
assignment with an appropriate level of goal
incongruence well as on the level of skill. Com-
plexity of an activity is a measure of the cognitive
problem-solving load that a certain activity will
impose on the actors within the organization
[Thomsen et al., 1998]. Activities that contribute
to many different (possibly conflicting) require-
ments will require more cognitive energy than
simple activities that relate only to one or two
requirements. Activity complexity depends also on
the difficulty of satisfying each individual require-
ment (i.e. requirement complexity). Requirement
complexity increases as a function of the number
of potential solution approaches in activities
that contribute to the requirement. To determine
the activity complexity, we add the requirement
complexities of each of the requirements to which
the activity contributes.
Organizational complexity can be in the struc-
ture of the organization and in the behavior forms
or procedures [Kelly and Allison, 1998]. It can
also be in the networked environment and how
organization is networked. Complexity can arise
also from the individual behaving in networked
environment and organization. It is also influenced
by the deficit of individuals’ or teams’ capability
when executing tasks they are responsible for. That
shows us that enterprises should have a compe-
tence strategy showing how competence will be
converted into human resource management and
knowledge management.
The Design Roadmap (DR) framework described
by Park and Cutkosky [Park H, Cutkowsky, M, 1999]
is a process-oriented model of Product Devel-
opmentPD, which enables computer supported
collaboration among distributed development
teams. The DR framework is built on a directed
graph description of the development process,
where each node, in the graph, represents an activ-
ity, and arcs represent a precedence relationship
between the activities. These graphs represent
design process templates, which can be reused
within their framework.
51
 Collaborative working process should be based
on well-defined internal processes and knowledge
based on the companies’ own core competencies.
After the competencies have been defined, ques-
tions will rise up as to how to change the culture
and processes as well as the technology to support
the new way of working. R&D Support Network
was built to support the SMEs in their needs of
applying the new technology and processes as well
as in establishing collaboration and searching for
focused information in the engineering area and
partnerships. The network was supposed to link
business networks together with a competence
level broker providing business and project sup-
port, funding, training, virtual education and
academic resources. Independence and trust in
this type of community service should be built
up of business-independent information provider
partners, business-oriented tool providers and a
trusted venture capital provider type of organisa-
tion [Horttanainen A, Salminen V, 1999].
Potential Results and Solutions
We figured out an imaginary example to illustrate
the functionality of multiproject environment.
Pulp and papermaking involve numerous steps,
many of which relay on chemical activities. Strate-
gies to solve elementary schemes in the wet-end
of a paper or paperboard machines are of vital
interest within the global paper industry. Figure
1 shows a paper machine with control points and
interaction needs . The papermaking is real-time,
stochastic and intelligent learning process.
All the non-linearity that appears in the chemi-
cal process of the wet-end (e.g. short circulation
and headbox) of the paper machine is difficult to
put into a global model. Machine wet-end must
be decentralized and managed in small modules.
Only one partner cannot develop this type of pro-
cess but many distributed partners and through
multiple well-managed projects.
Stock
Wire Press
Preparation Headbox
Section Section
Section
17 % 20 % 30 % 3%
- 109 data points
- 10100 interactions
- Real-time, stochastic and intelligent learning
Figure 1. Paper Machine Process, Real Time and Stochastic concept
52
Development and implementation of the com-
munity platform (consisting common semantics
and tools), which supports new ways of working
(e.g. enterprises working in networking environ-
ment supported, knowledge and business broker-
age services) contributed to key action “Essential
technologies and infrastructure “. The goal is to
provide tools required to operate in new orga-
nizational environments and form a tested new
infrastructure.
The objective of the network Oasis – project is
to develop a virtual enterprise support oriented
network, functionality and a toolset. The typi-
cal centers in the brokerage service network are
information, knowledge (consisting technology)
and business broker services. network Oasis will
offer also the physical interior and workspace for
these services and multiple project work.
The guiding principle in designing an ideal
workspace is the understanding the importance
of human interactions. Demanding project work
is characterized by creative problem solving and
the quality of the project work is highly depend-
ing on those solutions. netWork Oasis when once
constructed in Joensuu Science Park will encour-
age to increase interactions in very diverse working
community. This will empower intuition, ideas and
innovations.
The very basic objective for Oasis is to increase
the productivity of knowledge work. This will be
achieved by using following methods and ap-
proaches:
- Tandem work – specially designed equip-
ment, working spaces and facilitation
- Virtual networking in reality and real
networking in virtual circumstances - new
methods to be established and tested
- Team/project work – specially designed
working spaces for project groups with
state of the art equipment and dynamic
project work facilitation
Web
Dryer Converting
Surface
Section Section
Treatment
20 % 5% 5%
www.pry.fi
 The urgent need to increase
the productivity of knowledge
work is guiding many
business processes
- Diverse working community – science and
art strongly present, the Creative Class
touch and feel, international but creative
ambiance
- Very close work, learn and play connec-
tion – working spaces closely connected to
workshop flats with high quality accom-
modation services and surrounding Meh-
timäki Brainstorming Campus with great
possibilities for outdoor activities.
- Close follow -up for the results – new
methods for measuring the productivity of
knowledge work to be developed
- Essential new infrastructure will be imple-
mented and tested – the main principle
being users as developers
netWork Oasis – project itself has been a very
challenging multiproject achievement. During the
project work we have implemented and tested
many new ways of thinking and working. The proj-
ect planning groups consist of around 40 people
from different fields of life. Very diverse experience
and expertise is needed to successfully accomplish
the project and managing all that talent has been
a tremendous challenge.
In the very beginning there was a lot of excite-
ment and a flow of new ideas. That was leading
into the chaos and in some early stages of the
project the whole group needed a great amount
of tolerance towards the uncertainty. As a result
of that challenging phase in project the values for
the Oasis were created almost automatically, they
needed just to be written down and they were
straightaway accepted by the whole team. The
values for productive Oasis way of working are:
- respect yourself and your team
- trust yourself, your intuition and your
team
- love co-discovery
- encourage honesty and openess
- find sustainable solutions on personal level
and in your team
- remember human ecology
- look for serendipity
- create wellbeing within yourself and in
your team on physical, mental, emotional
and spiritual level
Conclusions
The cultures of many sectors of industry are
changing rapidly towards networked, virtual busi-
ness. This kind of business strategy demands the
newly defined responsibilities, risk management
and cost/profit sharing system. These are possible
to implement only through knowledge systemati-
sation and through knowledge reuse.
Project Perspectives 2005
The urgent need to increase the productiv-
ity of knowledge work is guiding many business
processes. New ways of working has to be imple-
mented. netWork Oasis concept is giving solutions
by offering the physical working spaces with state
of the art equipment in Joensuu Science Park. It
includes also professional facilitation of dynamic
projects, virtual working environments and very
diverse working community with multitalented
people.
References
[Hisup, 1999] Hisup Park, Mark R. Cutkosky
“Framework for Modeling Dependencies in Collaborative
Engineering Processes,” Research in Engineering Design
11 (1999) 2, 84-102.
Horttanainen A, Salminen V, 1999
R&D Support Network, Community for SMEs Internation-
al Conference on Concurrent Engineering, ICE ´99, 15-17
March, 1999, Paris.
[Kelly and Allison, 1998] Kelly S., Allison M-A
The Complexity Advantage. Business Week Books, Mc-
Graw-Hill 1998.
[Levitt et al, 1999] Levitt R., Thomsen J., Christiansen T.,
Kunz J., Jin Y., Nass C., Simulating Project Work Processes
and Organizations: Towards a Micro-Contingency Theory
of Organizational Design. Management Science, Vol 45,
No.11, November 1999, pp.1479-1495.
[Pahng, 1998] Francis Pahng, Seokhoon Bae, David Wallace,
“A web-based collaborative design modeling environ-
ment”, Proceedings of the Seventh IEEE International
Workshops on Enabling Technologies; Infrastructure for
Collaborative Enterprises Conference, Stanford Univer-
sity, pp.161-167, 1998.
[Salminen, 1997] Salminen, V, et al.
“Global Engineering Networking Turning Engineering
Knowledge into an Accessible Corporate Asset. Inter-
national Conference on Engineering Design, ICED 97,
Tampere, August 19-21 1997.
Salminen, V and Pillai, B [2001]
Adaptive Learning Scheme for Multi-Component En
vironment
A Case study Briefing, published in Proceedings of 32nd ISR,
Seoul, Korean Republic.
[Salminen et al., 2000] Salminen, V., Yassine A., and
Riitahuhta A., A Strategic Management Framework for
Collaborative Product Development. 4th International
Conference on Engineering Design and Automation,
ED&A in Orlando, Florida, July 30-August 2, 2000.
[Thomsen et al., 1998] Thomsen J., Fischer M., Levitt R.,
The Virtual Team Alliance (VTA): An Extended Theory
of Coordination in Concurrent Product Development
Projects. CIFE Working Paper # 44, March 1998, Stanford
University.
53
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