The difference between the cost risk of high-performing organizations and low-performing organizations is the difference between a pond and an ocean. A company that does very well with meeting project goals, timelines, and budgets risks only $20 million per $1 billion spent, whereas lower-performing companies risk $280 million per $1 billion spent. In this way, low performance really becomes a matter of life and death for the business. The Project Management Institute’s 2013 Pulse of the Profession is here to help us hit that high level of performance that keeps our heads well above water.
The report begins by delineating how the best-performing organizations approach project, program, and portfolio management better than their peers:
- They create efficiencies to drive organizational success.
- They focus on talent management and improving its role in project management.
- They employ project, program and portfolio management practices strategically.
As it stands, project success rates are declining. According to data collected from respondents in the study, only 17% of project management in organizations has reached a high level of maturity, and the percentages dip even lower when dealing with maturity in organizational agility, effectiveness of portfolio management, and benefits realization. The bad news continues, as training and development in project management have also declined since 2010, with less than half of organizations surveyed having a process to develop project management competency. There has even been an increase in the number of projects canceled or delayed due to economic conditions.
High-performing organizations have protocols in place to address all of these potential failings. They provide consistent and continuous training and development for project managers, in addition to being more likely to have a defined career path for project managers. Projects of organizations with training available are shown to perform higher in scope, quality, and business benefits—three key performance indicators. Standardization of project management practices is another mark of high performers, with the report espousing the value of “open innovation,” which is when companies form partnerships to innovate together. The report details how critical sponsors are to this:
Having active project sponsors – executives who actively champion the strategic value of projects and communicate the intended benefits to stakeholders – is critical to the success of an organization’s projects. But support from high levels within the organization must be sincere. As Jeffrey Liker notes in The Toyota Way, “… the difference between success and failure is the difference between head nodding and verbal support from the top and getting real action from the top… A committed leader must provide the resources to keep things moving. This includes top-notch people to work on lean, financial support and accountability for delivering results.”
The report concludes by listing three steps to minimize risk, namely being focusing on talent development, supporting standardization, and ensuring alignment with organization strategy. And while the current set of statistics may support a lot of doom and gloom, they also demonstrate very clearly how organizations can improve and live to see better days. Use the data to keep your risk to a minimum. You want to be feeding the ducks, not the sharks.