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PROJECT MANAGEMENT BEST PRACTICES

Achieving Global Excellence

THIRD EDITION

HAROLD KERZNER, P H . D.

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To my wife, Jo Ellyn, who showed me that excellence can be achieved in marriage, family, and life as well as at work

Preface

For almost 50 years, project management was viewed as a process that might be nice to have but not one that was necessary for the survival of the firm. Companies reluctantly invested in some training courses simply to provide their personnel with basic knowledge of planning and scheduling. Project management was viewed as a threat to established lines of authority, and in many companies only partial project management was used. This half-hearted implementation occurred simply to placate lower- and middle-level personnel as well as selected customers.

During this 50-year period, we did everything possible to prevent excellence in project management from occurring. We provided only lip service to empowerment, teamwork, and trust. We hoarded information because the control of information was viewed as power. We placed personal and functional interests ahead of the best interest of the company in the hierarchy of priorities, and we maintained the faulty belief that time was a luxury rather than a constraint.

By the mid-1990s, this mentality began to subside, largely due to two recessions. Companies were under severe competitive pressure to create high-quality products in a shorter period of time. The importance of developing a long-term trusting relationship with the customers had come to the forefront. Businesses were being forced by the stakeholders to change for the better. The survival of the firm was now at stake.

Today, businesses have changed for the better. Trust between the customer and contractor is at an all-time high. New products are being developed at a faster rate than ever before. Project management has become a competitive weapon during competitive bidding. Some companies are receiving sole-source contracts because of the faith that the customer has in the contractor’s ability to deliver a continuous stream of successful projects using a project management methodology. All of these factors have allowed a multitude of companies to achieve some degree of excellence in project management. Business decisions are now being emphasized ahead of personal decisions.

Words that were commonplace ten years ago have taken on new meanings today. Change is no longer being viewed as being entirely bad. Today, change implies continuous improvement. Conflicts are no longer seen as detrimental. Conflicts managed well can be beneficial. Project management is no longer viewed as a system entirely internal to the organization. It is now a competitive weapon that brings higher levels of quality and increased value-added opportunities for the customer.

Companies that were considered excellent in management in the past may no longer be regarded as excellent today, especially with regard to project management. Consider the book entitled In Search of Excellence, written by Tom Peters and Robert Waterman in 1982 (published by Harper & Row, New York). How many of those companies identified in their book are still considered excellent today? How many of those companies have won the prestigious Malcolm Baldrige Award? How many of those companies that have won the award are excellent in project management today? Excellence in project management is a never-ending journey. Companies that are reluctant to invest in continuous improvements in project management soon find themselves with low customer satisfaction ratings.

The differentiation between the first fifty years of project management and the last ten years is in the implementation of project management on a company-wide basis. For more than three decades, we emphasized the quantitative and behavioral tools of project management. Basic knowledge and primary skills were emphasized, and education on project management was provided only to a relatively small group of people. However, within the past ten years, emphasis has been on implementation across the entire company. What was now strategically important was how to put thirty years of basic project management theory in the hands of a few into corporate-wide practice. Today it is the implementation of companywide project management applications that constitutes advanced project management. Subjects such as earned-value analysis, situational leadership, and cost and change control are part of basic project management courses today, whereas fifteen years ago they were considered advanced topics in project management. So, what constitutes applied project management today? Topics related to project management implementation, enterprise project management methodologies, project management offices, and working with stakeholders are advanced project management concepts.

This book covers the advanced project management topics necessary for implementation of and excellence in project management. The book contains numerous quotes from people in the field who have benchmarked best practices in project management and are currently implementing these processes within their own firms. Quotes in this book were provided by several CEOs, presidents, COOs, CIOs, CFOs, senior VPs, VPs, global VPs, general managers, PMO directors, and others. The quotes are invaluable because they show the thought process of these leaders and the direction in which their firms are heading. These companies have obtained some degree of excellence in project management, and what is truly remarkable is the fact that this happened in less than five or six years. Best practices in implementation will be the future of project management well into the twenty-first century. Companies have created best practices libraries for project management. Many of the libraries are used during competitive bidding for differentiation from other competitors. Best practices in project management are now viewed as intellectual property.

Excellence in project management is not achieved simply by developing a project management methodology. Instead, it is how the methodology is used again and again that creates excellence and a stream of successfully managed projects.

Project management practices and methodologies are built around the culture of companies and by determining what it takes to get people to work together, solve problems, and make decisions. Because each company most likely has its own unique culture, it is understandable that each company can have a different number of lifecycle phases, different decision points, and different success criteria. No single approach fits all companies, which is why this book discusses a variety of companies, in different industries, of different sizes, and on different continents. Hopefully, after reading this book, you will come up with ideas as to how your project management activities can improve.

Companies that are discussed in this book include:

3M Indra
ABB Johnson Controls
Alcatel-Lucent Key Plastics
ALSTOM Kodak
American Greetings KONE
AT&T maxIT-VCS
Aviva MCI
Babcock & Wilcox Medical Mutual
Bendix Microsoft
Boeing Minnesota Power & Light
Cassidian Motorola
Chrysler NASA
Chubb Neal and Massy Holdings, Ltd.
Churchill Downs Nortel
Comau NXP
Computer Associates Ohio Bell
Cooper Standard Orange Switzerland
CSC Our Lady of Lourdes Regional Medical Ctr.
Dell Philips
Deloitte Repsol
Department of Defense Roadway Express
DFCU Financial Rockwell Automation
Dow Chemical SAP
DTE Energy Sherwin Williams
EDS Siemens
Eli Lilly SigmaPM
Enakta Slalom
Ericsson Star Alliance
Fluor Tech Mahindra Limited
Ford Tecnicas Reunidas
General Motors Teradyne
Goodyear Thiokol
Harris Tokio Marine
Hewlett-Packard Visteon
Hitachi Wärtsilä
Holcim Westfield Group
IBM World Wildlife Fund
ILLUMINAT Zurich North America

Seminars and webinar courses on project management principles and best practices in project management are available using this text and my text Project Management: A Systems Approach to Planning, Scheduling, and Controlling, 11th edition (Wiley, Hoboken, New Jersey, 2013). Seminars on advanced project management are also available using this text. Information on these courses, e-learning courses, and in-house and public seminars can be obtained by contacting:

Lori Milhaven, Executive Vice President, IIL:

Phone: 800-325-1533 or 212-515-5121

Fax: 212-755-0777

E-mail: lori.milhaven@iil.com

Harold Kerzner
International Institute for Learning, Inc.
2014