Project Management and the current financial downturn
With the current financial downturn, organizations are looking for ways to cut costs. In their haste, these organizations may make some mistakes concerning the value of project management.
First of all, many decision-makers mistakenly believe that project management is a luxury, an overhead expense that, in a pinch, can be done without. After all, it’s the team members who do the actual work, right? The PM is just an administrator, coordinator or status report writer.
Not True!!
Proven project management processes and practices can make the difference between the success or failure of an enterprise’s business strategy. Project management is more than just coordinating the work of others and reporting on their progress. Project management has protocols, methodologies and proven professional practices based on experience, consensus and scholarly research. There’s a big difference between being a general manager and being a project manager. Project management is a well-defined specialty within the management domain.
Then there is the very serious, but all too common, mistake of taking one of the more senior team members and giving that person PM responsibilities on top of or in addition to their regular, hands-on responsibilities. This would seem to save money. After all, you’re getting one person to fill two roles so there’s only one salary to pay. In addition, you’re paying the salary of a team member, not the higher salary of a professional project manager.
This is another big mistake!!
Regardless of the title of the person in the role, the role of project manager is a full-time role. Organizations who are looking to fill positions such as “PM/Business Analyst” or “PM/Technical Lead” are kidding themselves. This is like an airline looking to fill the position of “Pilot/Flight Attendant”, perhaps expecting the pilot to put the aircraft on auto-pilot while he serves beverages in the cabin.
The above two mistakes are well documented and pretty much accepted among the knowledgeable members of the professional project management community, so I won’t go into any more detail about them here. Rather, I’d like to point out that, with the pressures of the current financial conditions out in industry, there will be a lot of pressure on middle-management to save money. When you combine this with senior management’’s often very limited understanding of modern project management and the value of sound, proven project management processes, the result can be a reduction or even the elimination of the full-time PM role on projects.
The short-term benefits of this short-minded approach will be more than offset by the negative results in the long-term. Projects will fail and this will prove to be very costly at a time when managing costs is more important than ever.
Middle-managers who are unfamiliar with the necessity of professional project management may see this short-sighted approach as an easy way to comply with cost-cutting requirements. Middle-managers who do, indeed, understand the value of project management, but are worried about their own job prospects, may simply go along with senior management’s short-sightedness in order to preserve their own short-term employment prospects.
Just as having a full-time pilot on a commercial airline flight is essential to a successful flight, management at all levels must recognize that full-time project managers are essential to the successful execution and delivery of projects. Rather than remove pilots from airplanes as a cost cutting tactic, an airline will simply find other areas where they can cut costs — perhaps one less flight attendant. If they cannot find any suitable areas for cost cutting, the airline may simply decide to cut down on the number of flights or routes they will offer.
The same is true of organizations with on-going programs of projects. Removing the full-time PM role will only result in project “crashes.” Rather than going on with the projects without the PMs, the organization should identify other areas of cost cutting — perhaps stretching out projects across a longer schedule or removing non-essential scope. If this cannot be done, then the organization should review their programs and portfolios and identify projects that can be postponed or eliminated.
An airline would hate to have to cut out flights, but doing so is an acceptable way to cut costs. Continuing the flights while eliminating pilots is not!! In this tough financial climate, organizations may need to cut down on their projects. However, they cannot continue with their projects without full-time, experienced, project managers. This is simply reality.
Jerry Bucknoff, MBA, PMP
Tags: careers, economic crisis, economy, employment, financial crisis, pmi career framework, recession, value of project management
April 30th, 2009 at 3:49 am
Not everything that means less money is always good in time of crisis. Everyone wants to cut theit budgets but investments that are made in a difficult time are always pay of.
July 9th, 2009 at 11:59 am
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August 20th, 2009 at 4:12 am
I’ve read blogs on a similar topic. I see you haven’t added any new entries recently. Will there be more on the topic of project management? Particulary about the experiences of PM’s in the current, difficult, economy. I added your blog to my favorites and I hope to be your constant reader.
September 14th, 2009 at 8:30 pm
Re:
“I’ve read blogs on a similar topic. I see you haven’t added any new entries recently. Will there be more on the topic of project management? Particulary about the experiences of PM’s in the current, difficult, economy. I added your blog to my favorites and I hope to be your constant reader.”
Thank-you for your comments.
You will be happy to know that we are now back to regular posting on the blog. We look forward to your readership as well as your active participation.
Among the things to look forward to are:
*Special topics on PM employment and the economic crisis’ effect on the PM profession
* Industry specific discussions, including construction and insurance
*The ability to “share” posts on social networking boards such as Linkedin.com and Facebook
Jerry Bucknoff, PMP
Because Project Manager is not just a title – it’s a profession.
September 26th, 2009 at 7:42 am
In response to the Project Management and the current financial downturn. I have a comment regarding the ripple effects of the financial downturn on budget constraints and quality managment. Dont you think some projects will proceed without a project manager and quality not compromised. What about if there is Technical consultant on the project? No need for a project manager?
October 15th, 2009 at 5:40 pm
Michael,
Projects can’t manage themselves. You need someone to manage them and that “someone” can’t be just anybody. It has to be done by a professional project manager. Taking someone who is not a project manager and simply giving that person the title of “project manager” doesn’t make that a person a project manager. Taking a technical person and assigning them a PM role, even without the title, also does not make that person a project manager.
The technical consultant can do the technical work and even supervise some of the technical work of others. However you would still need someone to manage the project, itself. I would not expect a technical consultant to start managing a project any more than I would expect a project manager to do the work of the team members — tasks such as business analysis, product or application design, testing, architecture design, data base design, documentation, etc. These are two very different jobs with very different roles and skill sets.
In fact, this is where a lot of project failures come from. A middle manager promotes the best programmer, architect, network guru, business analyst, DBA, etc. from a job where they are really making a contribution and where they have strong skills, to a completely new job as a project manager and expects this person to be productive. Then the organization has to replace this highly skilled technician with someone who is probably less skilled while, at the same time, they are filling a PM role with someone whose core skill is technology and not project management, who has no experience as a project manager, who (usually) has no training in his new job, who doesn’t know the difference between the development lifecycle (e.g. SDLC) and the project life cycle (PMLC), and who will probably try to learn from other people at his organization who,themselves, are in the same position (i.e., were thrown into a job they probably have little skill at and have no training in). We end up having the blind leading the blind (although, now, they are in a more senior position so it’s just human nature that they see themselves as more skilled). They end up assuming that projects going over budget and over schedule with tons of scope creep is something unavoidable and just a natural part of the project life cycle.
Project management is a profession. While I’m not saying that you should leave common sense at the door, project management is not common sense. It’s not something that a person can just “pick up” or learn on the job without adequate training and mentoring and experience.
Jerry Bucknoff, PMP
October 21st, 2009 at 9:18 pm
[...] A related trend is the attempt by organizations to use a single, temporary, contractor to fill two, very different roles. These are the, so-called, PM/BA (project manager / business analyst) spots and (for I.T. projects) the, so called, PM/Technical Lead spots. You simply can’t manage the baseball team AND play short-stop. If you try to do both, then something has to give. (See my discussion on the PM Best Practices blog: Economic Crisis). [...]