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A commentary on “commercial management”

in the program/project context

 

COMMENTARY ARTICLE

By Alan Stretton, PhD (Hon)

Sydney, Australia

 



INTRODUCTION

Quite recently, Dalcher 2017 and Hornby 2017b wrote articles in this journal about commercial management in the project context. Both were concerned, in somewhat different ways, with a lack of recognition in the project world about the key importance of the commercial side of project activities. This commentary is about a few of the issues raised in those articles.

TWO DEFINITIONS OF COMMERCIAL MANAGEMENT IN PROJECT CONTEXTS

Institute for Commercial Management (ICM)

For me, by far the most startling item to emerge from Dalcher 2017 was the following definition of commercial management from an institute I had not previously heard of, namely the Institute for Commercial Management (ICM) in the UK. Dalcher says that ICM “purports to be the leading international body for commercial and business development staff”. Its definition is as follows:

Commercial management: …the identification and development of business opportunities and the profitable management of projects and contracts, from inception to completion.

The first part of this definition evidently relates closely with project-based organisations providing project management services to external clients.

This definition relates directly to providers of project management services

What is most startling about the above definition is that it refects precisely what my old employer, Civil & Civic, did in providing project management services to external clients. But in nearly forty years working in such project-based organisations in the construction industry, I never once heard the descriptor commercial management used. This is in direct contradiction to Dalcher’s report that Lowe (in Lowe & Leiringer 2008) “contends that the term commercial management has been used for some time, not least in construction”. Maybe this is so in the UK, but not in my long experience in practice in Australia, New Zealand, or the USA.

The board and GM are responsible for commercial management

The situation with organisations which provide project management services to external clients is that they are automatically operating in a commercial environment. The commercial decisions and management are the responsibility of the board and senior general management (GM). That is a key part of their work.

Since commercial management is part of general management, the descriptor commercial management therefore appears to me to be redundant in this context, in spite of the fact that it appears in the title of Hornby’s book Commercial project management: A guide for selling and delivering professional services (Hornby 2017a)

A final comment is that ICM appears to be running a course exactly parallel to the project management services industry. Should the latter be doing something about this? Is it an opportunity, thinly disguised as a problem?

More…

To read entire article, click here

 

How to cite this paper: Stretton, A. (2018). A commentary on “commercial management” in the program/project context, PM World Journal, Volume VII, Issue IX – September. Available online at https://pmworldjournal.net/wp-content/uploads/2018/09/pmwj74-Sep2018-Stretton-commercial-management-in-program-project-context-commentary.pdf

 



About the Author


Alan Stretton, PhD

Faculty Corps, University of Management
and Technology, Arlington, VA (USA)
Life Fellow, AIPM (Australia)

 

 

Alan Stretton is one of the pioneers of modern project management.  He is currently a member of the Faculty Corps for the University of Management & Technology (UMT), USA.  In 2006 he retired from a position as Adjunct Professor of Project Management in the Faculty of Design, Architecture and Building at the University of Technology, Sydney (UTS), Australia, which he joined in 1988 to develop and deliver a Master of Project Management program.   Prior to joining UTS, Mr. Stretton worked in the building and construction industries in Australia, New Zealand and the USA for some 38 years, which included the project management of construction, R&D, introduction of information and control systems, internal management education programs and organizational change projects.  He has degrees in Civil Engineering (BE, Tasmania) and Mathematics (MA, Oxford), and an honorary PhD in strategy, programme and project management (ESC, Lille, France).  Alan was Chairman of the Standards (PMBOK) Committee of the Project Management Institute (PMI®) from late 1989 to early 1992.  He held a similar position with the Australian Institute of Project Management (AIPM), and was elected a Life Fellow of AIPM in 1996.  He was a member of the Core Working Group in the development of the Australian National Competency Standards for Project Management.  He has published over 190 professional articles and papers.  Alan can be contacted at [email protected].

To see more works by Alan Stretton, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/alan-stretton/.