BUSINESS MANAGEMENT

The evolution of an industry

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Willem Louw outlines the academic development that has led to more project managers incorporating business management approaches into their work—with excellent results.


For a number of years now the message has become significantly clearer that those charged with the education of business professionals bear a good deal of responsibility for the failure of business people to understand their connection to decision-making around large projects. This is particularly so where the lack of involvement during the front-end phase of projects leads to the poor performance of such projects in terms of meeting cost, schedule and quality targets.

At the beginning of 2012, a then recently retired practitioner, with more than two decades of experience in the management of large projects and bent on exploring and understanding the divide between business and project management (particularly during the front-end of projects), met with a business school academic in the field of Project Management, who had a distinctly commercial outlook on life. It did not take too long for their conversation to migrate to the common interest of lack of business involvement in the decision-making required during the front-end of large capital projects. So a hunch arose in the Centre for Project Management Intelligence (as it was then called) and the University of Stellenbosch Business School Executive Development (USB-ED)—and the conversation about the Business Management of projects began.

Three specific dimensions crystallised as the conversation unfolded. Firstly, it was decided to change the focus of the Centre formally to that of “Business Management of Projects”, thereby formalising the intent of ensuring that Business Management was given particular importance in the field of Project Management in a business school environment. Secondly, a very specific focus was to be considered. Parallel with formalising the creation of a postgraduate diploma in Project Management at the USB, the curriculum would be enhanced to ensure that the fundamentals of Project Management were complemented with a drive towards the front-end of projects and the incorporation of the Business Management dimensions required for this focus. The postgraduate diploma with its enhanced Business Management focus was officially launched in 2013. Thirdly, it was agreed to identify and bring on board a major corporate entity from a sponsorship perspective. This would allow the re-focus to gain significant traction. Conceptually, it was also decided to establish a two-week international programme allowing participants an opportunity to experience the most current international thinking in the field of Business Management of projects. At the beginning of 2014, a sponsorship agreement was formalised with Transnet SOC (Limited), the name of the Centre was changed to the Transnet Centre for Business Management of Projects, and the International Programme for Business Management Projects was launched in September 2014. The hunch was being converted into reality and progress in connecting the dots was becoming distinctly visible.

Capitalising on existing personal networks in exploring the market and subsequently identifying three significant partners was a major achievement in the successful realisation of the International Programme. The partners are significant thought leaders in the context of business management of projects as a concept and consistently ensure that interested stakeholders get beyond the point of being senior businesspeople involved in major capital projects while not knowing what they are supposed to do.

The three partners involved in the International Programme are:

University College London’s Bartlett School of Construction and Project Management
Cranfield University’s School of Management
Independent Project Analysis Inc. (IPA) through its IPA Institute.

After an initial two days at the Stellenbosch Institute for Advanced Studies (STIAS) involving Professor Basil Leonard from the USB, Abel Sithole from the Institute for Future Studies at the USB and Professor Erwin Schwella from the University of Stellenbosch School for Public Leadership, the international part of the programme commenced in mid-September in the United Kingdom at University College London.

Dr Andrew Edkins, director of the Bartlett School, focusing on “The front-end of Project Management” and “It starts with clients” and Professor Peter Morris, head of the School from 2000 to 2012, focusing on an “Introduction to Business Management of Projects”, made a significant contribution to the input from the Bartlett School. These contributions were very ably complemented by their colleagues at the Bartlett School, including:

Dr Efrosyni Konstantinou, course director for the Master’s degree in Strategic Management of Projects, covering “Thinking critically, acting strategically”
Professor Andrew Davies, lecturer in the Management of Projects, covering “Innovation and major projects”
Dr Stephen Pryke, covering “Supply chain management and social network analysis in temporary organisations”
Dr Hedley Smyth, director of Research, covering “Relationship management”
Dr Aris Pantelias, course director for the Master’s degree in Infrastructure Investment and Finance, covering “Financing infrastructure projects”

The scene was set for the following exposure at Cranfield University’s School of Management.

At Cranfield, “The 7 Cs of project organisational design: How to shape an organisation for project delivery” was presented by Dr Harvey Maylor.

Cranfield School of Management is recognised internationally as a centre of excellence in programme and project management. Harvey Maylor presented his 7-C model, which focuses on designing the organisation for excellence in delivering the business of projects. The seven components of Competitive Strategy, Capability, Capacity, Client, Constraints, Change and Complexity have been demonstrated, through research, to represent a major set of challenges facing organisations today. This breakthrough in thinking about organisational design for project delivery is already helping organisations to improve the deployment of organisational strategy. Cranfield is a leading centre of expertise in the delivery of project, programme and change management. Industry funding began as a partnership with EDS (later HP Enterprise Services) in 2008. Since then it has managed an extensive portfolio of research and development, working with its research partners to put the delivery of organisational strategy at the heart of the corporate agenda, through strategic portfolio and programme management. It has had a significant positive impact on the organisations with which it has worked.

Of particular interest, relevance and value to the participants was the incorporation of the history of the Battle of Britain by guest speaker Stephen Carver, who spoke on “Managing Complexity”, as well as case studies on dealing with the client via the London 2012 Olympics and BAA’s Terminal 5 projects.

The International Programme was concluded with a two-day course on gatekeeping for capital project governance by the IPA Institute in The Hague, Netherlands. IPA Inc. was founded in 1987 to provide a unique project research capability. It serves the extractive and manufacturing industries and has as its mission to improve the capital competitiveness of its customers by improving their projects, namely empirical research aimed at root causes of success and failure of projects. It does this through quantitative benchmarking of capital asset development systems and quantitative project risk assessment. The IPA Institute provides education programmes based on IPA research and consulting work with hundreds of companies primarily providing a forum for in-depth understanding of key elements of the capital project process. Presenters of the course were Paul Barshop, the chief operating officer of IPA, and Valerie Roma, senior project analyst from IPA Netherlands.

The focus of the course was directed at:

identifying the elements of a gatekeeping workflow process for strong stage gates,
describing a common governance structure and its key functions to implement the gatekeeping work flow process,
recognising the challenges to investment committees for high-quality decision-making,
describing the purpose and importance of the business case and its different types of completion in the project definition phases,
identifying different types of assurance and exploring their limitations,
describing the characteristics of effective boards and steering committees, and
applying the learning to one’s own organisation’s governance structures and identifying strengths, weaknesses and opportunities for improvement.

The International Programme was concluded on the last morning of Week Two with two final sessions.

Each of the participants was required to present a framework for assessment wherein the lessons learnt during the programme and the action plans for institutionalising those lessons in their own organisations were critiqued and evaluated. Based on the critique a reflective essay summarising the outcome of the programme for each individual was completed by the participants to enable certification by USB-ED. Finally, an opportunity was created for a presentation by a representative of the Shell organisation in The Hague to share with the participants the Shell experience on formalising benchmarking (and project assurance) and reflecting on the value extracted from such an action for Shell.Suffice it to say that the reality of the hunch and connecting of the dots has culminated very elegantly in the reflections of the participants in their essays. In attendance as participants on the programme were, among others, the general manager of the Transnet SOC Academy, the chief financial officer of Transnet Capital Projects, a senior project director from Transnet Capital Projects and a project director for a project of a Junior Miner in the Democratic Republic of the Congo.Some of the reflections extracted from the reflective essays read as follows:

“The synergy between the various lecturers at all the academic institutions on the subject matters was overwhelming. It is encouraging to have received re-confirmation that the processes and principles currently being applied in our organisation are fully aligned with the best practices outlined by the various lecturers.” “In cases where new information, not previously dealt with by our organisation, was presented, it was so closely related to the current practices that a natural linkage with current information can be made. It was as if the pieces of a puzzle were being put together to create the total picture of ‘Business Management of Projects.’”

“This information can be applied in any other organisation involved in the management of projects.”

“In conclusion, it was encouraging to prove that there is no “silver bullet” for easier project management. The success revolves around applying the methodologies, practices and processes (such as Front-End Loading, Gate reviews, Portfolio Management, etc.) consistently in an organisation in a disciplined manner.” (Chief Financial Officer, Transnet Capital Projects)

“The two-week International Programme for Business Management of Projects was an amazing programme that provided an in-depth look into critical principles of project management. A wide variety of topics was covered which offered one a broad spectrum of topics on project management that has greatly enhanced my knowledge. As brief as the programme was, the concepts learnt can be further entrenched through self-reading, research and application. There are learnings that are difficult to capture in a document such as this that come from having had an opportunity to interact with all the great professors, lecturers, doctors, specialists and industry personnel. The knowledge and experience they have shared with us has had intangible effects of motivation, renewed our interest and excitement in our field and provided us with international exposure to how projects are executed.“ (Senior Project Director, Transnet Capital Projects).

“The International Business Management Programme was a learning experience I wish I had experienced earlier during my career. But then again, if I had this experience earlier it most probably would not have been the same experience. The two weeks highlighted the importance of Business thinking, practices and pre-planning during FEL (or FEP) in support of the Project team’s objectives when executing capital projects to achieve critical Project Goals in respect of Cost, Schedule, Operability and Safety. For me the International Programme in Business Management of Projects was the closure I was searching for during the course while attending the various theoretical modules of the Postgraduate Diploma (PGD) in Project Management. The international study tour wrapped up the whole PGD course in a defined manner.” (Project Director, Junior Miner project in the DRC)

The reality is that Business Management of Projects as a concept has been validated, is no longer just a theoretical construct and has gone way beyond a hunch. Preparing Business Managers involved in project decision-making during the front-end on the understanding they require of the essential roles of technical professionals (e.g. project managers) is of paramount importance.

Simultaneously, it is as important to prepare project managers on the business related issues that may affect the success of the projects that they manage.

Doing this will make a significant contribution to the improvement of the overall success rate of large projects. This is reality and is something that will stand us in good stead as we further the rollout of the Strategic Integrated Projects within the National Development Plan in South Africa.

Willem Louw

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