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Experiences Using Next Generation Management Practices

SECOND EDITION

The Future Has Already Begun!

Keynote paper presented at the 9th World Congress of the International Project Management Association, Florence, Italy, June 1992

By Russell D. Archibald
Archibald Associates
San Miguel de Allende, Mexico

and

Dr. Steen Lichtenberg
Lichtenberg and Partners
Denmark


ABSTRACT

The world today requires from managers a holistic, broader view, and requires using management concepts and practices that are more realistic, provide faster responses to changes and uncertainties, and that can handle turbulence and fuzziness. These practices must reach across artificial boundaries, including political, technological, functional, economic, bureaucratic, cultural, and mental-such as the boundary between logic and intuition (right and left brain). Some of the likely future management principles that have been predicted and described in past years are already in practical use by many senior managers in various countries.

This paper presents personal views and experiences as seen from Northern Europe and the United States. Some important trends toward tomorrow’s management practices are highlighted and illustrated through case examples involving managers who have already applied such new and unconventional principles with success.

UNCERTAINTY AND CHANGE REQUIRE A NEW MANAGEMENT MODEL

The accelerating rate of change in all aspects of this world is commonly recognized, and needs no extensive discussion here. Yet our approach to planning and controlling complex projects has traditionally been to eliminate uncertainty and change from our projects, or at least treat them as if changes will not occur. Witness the overwhelming dependence on project planning, scheduling, monitoring and control tools that require single, fixed time and cost estimates “deterministic” methods, in the words of the mathematicians. As stated in a recent book, “We often prefer to do it definite although definitely wrong rather than to do it approximately right.”i

Probabilistic approaches, and the use of “fuzzy logic”, are now beginning to make significant inroads in project management practices around the world, as indicated by the announcement by several project management software vendors of personal computer packages that enable evaluation of PERT/CPM/PDM networks and schedules on a probabilistic basis.ii After the first experiences with the initial PERT approach to probabilities, which were not widely accepted, one of the first really useful packages was PGLTIMING, available since 1979 from Denmark. It calculates and ranks activities and factors of uncertainty according to their relative influence on the overall project uncertainty. A more recent example, named PLANii, identifies the “high risk path” in addition to the traditional “critical path”. Cost engineers are beginning to use range estimatingiv to measure cost uncertainty and risk.

Fuzzy logic has been used to control cement plant operations in Denmark, to decide when to replace cutting tools in French industry, to make regional planning decisions regarding facilities in Poland, and it is reported to be an infatuation in product design in Japan: “Digital computers operate in a precise world: Everything is on or off, yes or no, black or white. But fuzzy logic can accommodate a more complex reality. It lets computers deal with shades of gray concepts such as about, few, many, and almost. Paradoxically, this makes fuzzy logic faster at precise tasks such as focusing cameras. In short, it is Japan’s next weapon in both high and low tech industries. And it works with less software.”v Equivalent benefits have been obtained in Europe by using intelligent approximations in project planning.

To highlight only a few aspects of traditional project management methods that justify our claim that a new model is required, based on a new logic, consider these points vi

• Monolithic Versus Selective Detail: Traditionally, large amounts of detail developed monolithically for all aspects of a project are viewed as highly desirable, yet typically the areas of greatest uncertainty may not be treated at all because they are of a subjective nature. The new logic focuses primarily on the uncertainties and requires detailing them. The approach described later produces more realistic estimates based on 100 critical items and factors than conventional estimates based on 1,000 items in a project.

• Priority To Easy Items Versus the Important Ones: While all agree that priority should be given to the most important items, in traditional project planning and estimating the reverse is usually true. The important subjective factors are often those with the greatest uncertainty, and the new logic requires giving them priority over the easy, material, more certain ones.

• Interrelated Areas Are Treated Separately: Time, cost, resources, and technical performance are closely interrelated at the task, subproject and project levels. Yet traditionally, plans and schedules are prepared (often by scheduling specialists) separately from cost estimates (often prepared by specialized, even certified, cost engineers). Both of these areas are traditionally widely separated from the technology or product of the project, and they in turn are far from the sales and marketing people. The new logic is to keep interrelated areas interrelated, and avoid disturbing the whole, using the systems approach. Figure 1 summarizes some of the key factors involved in the old and the new logic.

More…

To read entire paper, click here

 

Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English. Original publication acknowledged; authors retain copyright. This paper was originally presented at the 9th World Congress of the International Project Management Association held in Florence, Italy in June 1992. It is republished here with the authors’ permission.


 

About the Authors

pmwj49-Aug2016-Archibald-PHOTO1 RUSS
Russell D. Archibald

Archibald Associates
San Miguel de Allende, Mexico

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Now 92, with careers spanning more than 70 years, Russ Archibald has had broad international experiences in piloting and designing aircraft and corporate engineering, operations, program and project management. His three project management related careers have been Military/Aerospace (19 years), Corporate Engineer & Executive (17 years), and Management Consultant (33 years to date). Russ has consulted to a wide variety of large and small organizations in 16 countries and he has resided in the USA, France, Mexico, Venezuela, Panama Canal Zone, and Peru with Marion, his wife of 70 years. For the past 23 years they have resided in San Miguel de Allende, Guanajuato, Mexico.

Russ is founding member number 6 of the Project Management Institute/PMI, which today has 470,000 members in 205 countries and territories. He presented the first paper, Planning, Scheduling and Controlling the Efforts of Knowledge Workers, at the formation meeting of PMI in 1969, and was President of the PMI Southern California Chapter in 1991-2, founding member of the PMI Mexico City Chapter in 1996, and in 2006 was awarded the PMI Jim O’Brien Lifetime Achievement Award. A PMI Fellow and Certified Project Management Professional, he co-authored with Prof. Dr. Jean-Pierre Debourse the 2011 PMI research report Project Managers as Senior Executives. He was also a founding member in 1970 and is an Honorary Fellow of the Association of Project Management (APM/IPMA-UK).

Russ is co-author with his grandson Shane Archibald of Leading and Managing Innovation-What Every Executive Team Must Know about Project, Program & Portfolio Management (2nd edition CRC Press 2015, 1st edition 2013 also published in Italian, Portuguese and Spanish); author of Managing High Technology Programs and Projects (3rd edition Wiley 2003, also published in Italian, Russian, and Chinese), and co-author of Network Based Management Information Systems (PERT/CPM) (Wiley 1967). He has contributed chapters to 15 books edited by others, and presented 88 papers at many PMI, IPMA and other conferences in many countries. He holds BS (U. of Missouri 1948) and MS (U. of Texas 1956) degrees in Mechanical Engineering. Russ was awarded an honorary Ph.D. in Strategy, Program, and Project Management from the Ecole Superieure de Commerce de Lille in Lille, France in 2005. See russarchibald.com. Russ can be contacted at [email protected]

 

pmwj49-Aug2016-Archibald-PHOTO2 STEEN
Dr. Steen Lichtenberg

Denmark

 

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Dr. Steen Lichtenberg
, PMI mb. no. 661, hon mb. & former president of IPMA. As an international management and risk management consultant, Steen is recognized as a leading researcher and expert practitioner in risk management. He consults, writes and speaks widely on the topic and has made an innovative contribution to the field, the Successive Principle, today internationally widespread.

Steen Lichtenberg has 40 years’ experience in research and risk management consulting providing support to public and private clients in many major industry sectors, including construction, telecommunications, transport, energy, IT, defense and government. Steen´s input includes in depth project analyses including accurate statistical prognoses of the end results as well as further possibilities of optimization and provisions against risks. He works both on ad hoc tasks or on implementation.

Steen’s contributions to the management discipline over many years have been recognized by a National Gold medal, and honorary membership of IPMA. His work has led to establishment of a governmental sponsored research program, Concept, in Norway which since 2002 aims to follow and further improve the basis for large public decisions.

Dr. Lichtenberg can be contacted at [email protected]