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Organizational ProjectManagement

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The Power of Transformation through Organizational Project Management

“Management doesn’t get it.”“Executives tell us what they want, but don’t follow through when we need support on our projects.” “All they see is the bottom line—they don’t understand implementation.”“We’re in a silo—the way the organization works, it’s nearly impossible to get the resources we need to get our projects done.”“We’re just not clear on our priorities—the executive team is not willing to move projects down in priority; they’re all important!”“I wish my boss was here.”Walk through the halls of a modern corporation and you’re likely to hear the very same

conversation. The samples above come from graduates of the Cadence 3-day Project Management course and reflect attendee impressions of the challenges they confront on their projects. As you can see from this selection—representative of many more like them—fundamental challenges exist in the way the project management professional functions within and across departments. This is a challenge rooted in the organization’s ability to integrate smart processes in daily work, choose the right measures and controls representative of the business, and deliver on a plan for consistent—and repeatable—improvement over time.

In this brief, we will share a story of a major global consumer electronics concern—and Cadence partner—in their efforts to improve product delivery through improving project management practice maturity.

Product Development Challenges— Project Management Opportunities

In 1997, executives found themselves struggling in a highly competitive market. As a consumer electronics concern, sales performance is driven largely by the holiday sales cycle, late September through December. But they were facing a critical challenge: product development was limping along on an 18-22 month cycle, all but negating any opportunity to react quickly to under-performing products year over year, let alone month over month. They were simply not able to respond with the agility and velocity the consumer market demands.

What’s more, their brightest engineers—their core organizational assets—were saddled with ineffective and inefficient project loads. They averaged 5.2 engineers per project, stretching overall engineering resources across the concurrent project portfolio, while at the same time loading individual projects with often unnecessary engineering capacity.

The team began to measure the variance around the end point in projects over time. As the overall concurrent project load increased, they found significant time sensitivity

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to relatively small increases in project load. With just a 10% increase in project load, one-third of active projects were slipping on the order of four to six weeks or more.

Complicating the operating environment further, successful products were bleeding talent. The brightest engineers with successful project experience had few career options if they wanted to stay in project management, returning instead to their functional areas for promotion to management roles in their own divisions. There was no career ladder to provide continuing growth and expertise in project management.

Each of these factors contributed to faltering project management with strong product management impact. With such stretched resources, the organization began to discover key production challenges during mass production, putting even more strain on business and engineering resources alike.

Initial ApproachAs a product company, the organization

approached these challenges with a product management solution. Working with an outside consultant, they reviewed their product development life cycle in isolation from other processes across the company. What they discovered is that their product development cycle was not the only process life cycle at work.

The software development life cycle supported the developers and engineers building the software that ran the products. Six Sigma was at work in manufacturing. Product development had their own process and language. While each process in its own right appeared to be serving each business unit’s need, these business units were not communicating across process barriers which led to poor prioritization, poor resource management, and poor performance on managing the organizational

product development environment. The only methodology represented across each group in some capacity was project management.

The Project Management Assessment

Cadence was tasked with evaluating overall project management performance around the world in the context of the product development challenges they were facing.

Teams quickly realized, given the depth and breadth of analysis, that there could be no area immune from criticism or question. The processes and benchmarks that served the business would have to stand alone, without political protection from internal vested interests.

First, the organization had put significant resources into training project team members and project managers in the foundational skills of project management, but they had only addressed project management from a training perspective. While team members were trained in the core skills and language of project management, there was no documented organizational standard to serve as a baseline toward which improvement could be targeted at project closeout. This lack of baseline was the root of a steady skill depletion; while the organization was able to improve short term performance in project management with just-in-time training and consulting, the benefits of that training investment evaporated after 2-3 years.

Second, there was a limited process through which to measure performance against best practices in their industry. Project management, so the culture dictated, was the set of processes which allowed delivery of individual projects on time, on scope, and on budget, but saw little connection to other projects, or organizational performance on the whole.

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As a result of Cadence’s initial investigation, the organization realized that product development, software development, Six Sigma, and the other life cycle processes in place served to support engineers and team members doing the work, while project management had the potential to manage the work to be done in a far more robust and significant fashion than had ever been in place before.

The Cadence OPM SolutionThe organization tackled their project

challenges with an Organizational Project Management approach. The power of OPM, executives discovered, is in the application of project management tools and processes to transform company goals—as outlined in the strategic plan—into the products and services they move into the marketplace.

As it turns out, project managers and team members were clamoring for an increase in awareness of project management as a methodology, and a standard to support their projects across the company. With OPM, project managers and executives found a common solution.

The Cadence application of OPM is rooted in the SMCI quality cycle—Standardize, Measure, Control, and Improve. Through SMCI, the organization is able to realize the true benefit of project management when applied across all projects, teams, departments, and business units.

The Project Management Institute (PMI) provides the de facto standard for project management practice and outlines that standard in the Project Management Body of Knowledge®, the set of standards of practice as defined by professionals in our field. But a standard is just the first step. In order to build sustainable competitive advantage through projects, the organization must take these standards and

establish and document the processes and practices it will take to adhere to them. The set of guidelines for applying a standard in a flexible, scalable way is called a methodology.

Cadence worked with the organization to incorporate its methodology into their product development methodology between 1997 and 2006. This created a baseline set of metrics for project and business performance. In 2006, PMI announced the OPM3® instrument. In 2008, Cadence used the instrument for evaluating and aligning performance against core project management best practices, and was able to help the organization see clearly where holes in process led to specific performance breakdown.

For control purposes, Cadence helped define executive committees around the product development life cycle designed to review and approve projects and move them through a stage/gate process. A review of annual performance across projects against each best practice led to a baseline cultural shift—team members and leaders across departments began to drive a core expectation of improvement in performance on projects, a key factor in building processes that sustain successful business results.

The product development process established in 1997 had only been highly effective for about five years. Then, in 2002-03, it began to fade into partial use and obsolescence. The company had changed, the business had changed, their needs were different, and practice maturity had improved. Once leaders in product development came to accept this evolution in product development processes internally, they came to another key learning: strategic and consistent application of OPM principles weathers short- to medium-term shifts in product and software development processes over time. While OPM and project management processes can extend the life of the product development life cycle, eventually all of them must move to the next

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level. OPM and the SMCI quality cycle can be the vehicle for overall improvement.

Today, the organization has reduced the product development cycle from 18-22 months to 5-7 months. As a result, they are able to react to holiday sales performance with new products the next holiday season, allowing for more agility in the market and a more customer-centric approach to product development.

Through more strategic project planning up front, project managers are able to request specific resources based on clear and documented needs. As a result, they have reduced per-project engineering capacity from 5.2 to 3.4. Now, the right engineers are working on appropriate projects, and the organization is able to complete more projects per year.

There is less pressure to add projects above the baseline concurrent project load, meaning less susceptibility to end-date shifts they were experiencing in prior analysis.

While OPM served to address these specific results, the impact has been far greater to the broader culture of project management. As the organization grew in consistent project management application, they began to see the benefit of a project management office. Initially, the PMO was conceptual, residing with the business unit manager to perform PMO functions at their discretion. This functional organization proved challenging as each operated at a different level of sophistication.

With OPM, the organization had adopted a centralized standard, while PMOs could still work in a distributed manner. With increasing practice maturity, however, a formalized PMO was inevitable. They built a career path for project managers, allowing exceptionally talented

project management staff to achieve significant rank, while keeping key human and intellectual capital inside the organization.

The journey provided immediate and sustained results. In the 1998-2007 period, the organization experienced massive growth in overall market share; with an annual 18% increase in revenue and a stunning 64% increase in profits. With this annual growth comes massive pressure to continue to deliver and improve performance accordingly. With OPM, they were able to respond quickly, employ the processes necessary to deliver business results, and build a culture of continuous improvement around project and portfolio management cementing their leadership position in consumer electronics around the world.

The Cadence Methodology for Organizational Project Management is designed to help you standardize your organization’s processes through a sophisticated and realistic approach to managing the portfolio of projects across the organization, the programs that make up larger strategic initiatives, and the projects that enable the organization to deliver consistent strategic results.

Cadence shines in helping companies take core standards and establish and document the processes and practices it will take to adhere to them. That’s the Cadence Methodology, a field-tested approach to delivering results on projects through Organizational Project Management.

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