Hello, readers, and welcome back to our project management series. In our last article, we started discussing the retrospective appraisal of project management techniques. We defined what project evaluation is and divided project management evaluation into different eras. We were able to discuss the first era, known as the just-in-case era. If you missed it, you can find it here. Today, we will continue by exploring the last three eras, which are the lean era, agile era and networking era. We will also be looking at the project management evaluation techniques used during these eras.
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Lean Era (1970s – 2000s)
This era began in the early 1980s but was not widespread until the global recession in the 1990s. This was a period of consolidation and rationalization by focusing on strategic priorities and removal of anything that did not add value toward the achievement of the strategic/organizational objectives. The responsibilities of the project manager were shifted to delivering strategic objectives, therefore making the managerial process more complex.
Consumers in this era realized they had choices. Performance and sustainability of performance began to become increasingly dependent upon customer satisfaction, thus shifting the focus again to new dimensions, such as quality, time, cost, flexibility, customer satisfaction, etc. The changes in the business and social environment grew rapidly. However, they were still foreseeable and the future could still be planned for. Organizations gradually shifted focus from “efficiency to effectiveness,” i.e., it became more important to do the right things and not just do things right. During this era, performance was measured using the integrated performance measurement.
Integrated Performance Measurement Era (1970s–2000s)
By the 1980s, there was the growing realization that the traditional financial and productivity performance measures were no longer sufficient to manage organizations competing in modern market. As the responsibilities of the project manager became much more complex, measuring performance had to be much more rounded than just weighing in on the monetary profits of the organization. The method was internally focused. Performance measurement had become a multi-dimensional domain and it needed to be treated as such, this led to a more integrated and balanced approach to performance measurement, i.e., Integrated Performance Measurement Era. This era had a lot of emphasis placed on The Performance Measurement System, i.e., what to measure and how to measure it?
Performance Measurement System
Although there are several frameworks and models for performance measurement, Balanced Scorecard is a widely accepted model. It is a set of measures that give top managers a comprehensive view of the business by including financial measures, customer satisfaction measures, internal process measures, and innovation and improvement measures (Kaplan and Norton, 1992 & 1996). Other well-known tools are Strategic Measurement and Reporting Technique (SMART), Cambridge Performance Measurement Systems Design Process, Integrated Performance Measurement System Reference Model and Performance Prism. Most of these works helped to simplify design and development of integrated performance measurement systems.
Towards the end of the 1990s, changes in the economic, business, and social environment became even more rapid. The future was becoming too difficult to be predicted. Organizations had to depend a lot on their intuition as analytical thinking could not be depended upon again due to the rapidity of change. Through the 2000s organizations shifted their focus from effectiveness to competitiveness. It became increasingly important to make money, not just more money but more than the competitors. This era is called the Agile Era.
Success in this era was still measured in terms of wealth but not in absolute terms; it was measured in relative terms, i.e., relative to competition. Organizations continued to focus on value adding activities while minimizing the distraction of other peripheral activities. During this period, the notion competencies and capabilities took the lean principles to another level by organizations focusing on their core competencies and outsourcing their non-core activities. Time became too short to establish proper inter-organizational relationships every time, so besides the highly valued inter-organizational relations, trans-organizational relations emerge; the nature of these relationships is dominantly cooperative. The main role of mangers was to manage/lead these trans-organizational teams. The proper performance of the organization is dependent on the optimum performance of the organizational teams lead by the Project manager. These and other factors are used in evaluating the performance of the project manager in this period. Today, only the agile business survives.
Integrated Performance Management Era (1990 – date)
This era was a direct influence of the Integrated Performance Measurement Era in the Lean era. The frameworks and models developed for the performance measurement system brought about other fundamental questions, such as ‘what is the purpose of performance measurement?’ ‘How best should we use performance measures to manage the performance of managers and consequently the organization as a whole?’ After some attempts to answering these questions through research, it was concluded that the successful implementation of performance measurement depends less on selecting the right measures and more on the way the measures are implemented and used by the people in the business. This line of thinking led to development of the concept of Performance Management.
Performance Management, according to John Adair, is the application of information (from the performance measurement system) and knowledge arising from organizational context. The primary interest of this era has been to investigate the success and failures of the implementation of the performance measurement system.
Customarily, when taking a journey through the evolution of performance measurement, only four systems spread through different eras are recognized.
Budget Control Era
Productivity Management Era
Integrated Performance Measurement Era
Integrated Performance Management Era
Empirical research in the performance measurement/evaluation field has revealed the emergence of an additional domain. This area is not generally recognized yet because it still in the embryonic stage. It is speculated that the next phase after the agile era is going to be the Network era, i.e., network performance measurement (integrating suppliers and collaborators).
The agile era is presently being experienced but is gradually fading out to the birth of a new “predicted” era, “the networking era.” The measurement of organizational and project performance will remain a function of internal facing, i.e., financial, customer facing, and society facing measures, called the triple bottom line.
The prediction for the this era is that competitive advantage will be defined through ground-breaking value proposals that offer a blend of commercial, social, political, and environmental values to a complex network of stakeholders. This complex network involves very large and very small organizations. A recent workshop concluded that these small organizations do not have the power, resources and will to protect their interest (intellectual property), and so rather than seeking legal systems they go into collaborative relationships and do business on informal basis, i.e., based on trust and relationship. Thus, shifting focus from competition to collaboration. Highly specialized organizations collaborate around the world to create value for market and customers at a rate and speed never seen before with emphasis on ecological and social values to produce multi-science/ technology products and services.
Due to the scope, pace and strength of economic, social, and other changes, project managers need to be ready for change and practice it often in order to be able to respond appropriately. Also, the manager will soon need to manage global networks, as the performance of projects in this era will be measured by “the networks,” while the performance of the project manager will also be measured by the efficiency of network management.
|Just-in-Case era||Lean Era||Agile Era||Networking Era|
|Approx. Dates||Early 1900s to mid-1970s||Mid 1970s to late 1990s||Mid 1990s to late 2000s||Mid 2000s to unknown|
|Scope, rate and scale of change||Organization, slow and incremental||Organization fast, predictable and incremental||Supply chain turbulent, discontinuous and radical||Network disruptive and transformational|
|Product||Artifacts||Artifacts supported by services||Services supported by artifacts||Social and environmentally responsible services supported by artifacts|
|Dominant Means Of Production||Infrastructure owned by the organization||Infrastructure and IP owned by the organization.||IP owned by the organization. Personal knowledge of the knowledge-worker||Knowledge and network connections owned by the networkers|
|Competitive Forces||Unclear mix of all factors dominated by costs||Focus and differentiation||Value propositions||Being unique in different ways|
|Performance Focus||Efficiency||Effectiveness and waste minimization||Competitiveness||Triple bottom line in the context of the network|
|Work||Manual work||Manual work supported by knowledge work||Knowledge work supported by manual work||Net-work supported by knowledge and manual work|
|Management Competencies||Planning and production||Scenario planning and change management||Learning and intuition. Rapid response to changes||Global autopoietic networking real-time response.|
|Scope Of Management Responsibility||Business as usual. Operational planning and correctly carrying out the task||Delivering the strategic objectives||Ad hoc projects; managing/leading temporary, trans-organizational teams||Managing/leadings networks, people in multiple networks and networks of networks|
|Organizational Power||Few powerful individuals||Organizational structure||Processes, process owners and process teams||Individuals/small groups in multiple networks|
|People||Labor-force seen as necessary evil||Human resources seen as assets||Teams assets and investment||Individuals and autopoietic teams as Innovators and Heuristics|
|Regulatory System||Contracts, laws and regulations||Contracts, laws, regulations and industry standards||Contracts, laws, regulations, industry standards and accepted best practices||Trust, relationships and network standards|
|Relationships||Inter-organizational and Adversarial||Inter-organizational and Cooperative||Inter / trans-organizational and Collaborative||Trans-organizational, Communities of practice|
|Market Dominance||Producer||Cost-conscious customer||Value-conscious, loyal customer||Disloyal, picky, curious, Impulse customer|
Table 1 – Business eras and their characteristics
We have today been able to journey through the ways in which the performance of projects and project managers was evaluated in the past down to the present era and finally to what is predicted in the near future. This article reveals constant changes in the role of the project manager over the years; and, as often as the role changes, the method of evaluating performance also changes.
The current state of knowledge on project management performance evaluation is not complete and a number of questions still remain unanswered about the processes and systems. We leave you with this phrase: According to Bititci, et al., “To prepare for that future and survive today, a robust performance measurement system is needed.”
Thank you for reading. As usual, if you have any question or comment, do leave us a message in the comment box.