9789147097265

Anette Hallin • Tina Karrbom Gustavsson

PROJECT Liber • Universitetsforlaget

MANAGEMENT

orts ON p Sup ICATI gers TIF mana R E C ject ro of p

Anette Hallin • Tina Karrbom Gustavsson

PROJECT MANAGEMENT Liber • Universitetsforlaget

Translation: Sandra Brunsberg

Preface Writing a textbook is exciting and challenging. While working on it, we as authors have naturally striven to have the intended readers in mind, in this case, readers who want to learn more about Project Management. The ambition is, of course, to explain concepts and contexts as clearly as possible. The fact that there have been two of us, and that the text and illustrations have been tossed back and forth between us, has had a considerable impact on the way the book has turned out.

But we have also had the privilege in the final stages of help from other readers – both academics and experienced project managers – whose constructive criticism has contributed to the quality of the book. We are extremely grateful to you: Monica Lindgren, Johann Packendorff, Carl Wikefeldt, Andrea Malmsten Gellerstig, Anna Svarts, Erik Frejd and colleagues, Sven Antvik, Claes Hansson, and Sven Ringmar. Any errors that may remain are in no way your responsibility; instead, our heartfelt thanks to you for taking the time to read and comment!

Finally, we would like to extend out thanks to Carina Blohmé, Åsa Sterner and our publisher at Liber, Ola Håkansson, who have not only read and commented on the book in detail, but also structured the work most commendably. Thanks also to Sandra Brunsberg, who with her usual seriosity and professionalism, has done a great job of translating the book into English.

Stockholm, June 2012 Anette Hallin & Tina Karrbom Gustavsson

Contents Chapter 1.

Introduction....................................................................... 7 What is a project?................................................................................... 8 Goal-oriented and goal-seeking projects............................................. 10 Project management for different kinds of ­projects......................... 13 This book and the Project Spiral.......................................................... 19

Chapter 2.

How, when and why does a project come about?........... 23 A project is initiated............................................................................... 24 Feasibility study..................................................................................... 26 Functions in projects............................................................................. 38 The Project Spiral.................................................................................. 46

Chapter 3.

The pre-conditions of the project and the project manager........................................................................... 49 The project in the organization............................................................ 50 The organizational context and the project........................................ 52 Relationships between different functions in the project................ 53 The project and the world surrounding the organization................. 56 Choosing project strategies.................................................................. 57 The different goals of a project............................................................ 58 Arriving at and setting the goals of the project.................................. 60 The Iron Triangle.................................................................................... 62 Goal concepts in relation to each other.............................................. 63 Project models........................................................................................ 65 The Project Spiral.................................................................................. 74

Chapter 4.

The project plan and the project manager’s toolbox...... 77 The project plan..................................................................................... 78 How is the planning done?.................................................................... 79 “Tools” = methods.................................................................................. 79 Planning of activities............................................................................. 80 Estimation of resources and time needed.......................................... 82 Analysis of dependencies between activities in the project............. 84 Making a time schedule......................................................................... 87 Resource histogram and buffers.......................................................... 88 Human resources and project organization........................................ 90 The Project Spiral.................................................................................. 94

Chapter 5.

Project calculation........................................................... 97 Budgeted costs, project budgets, actual costs................................... 98 Some basic financial concepts............................................................. 99 The project manager’s responsibility................................................... 101 Drafting a project calculation............................................................... 102 The Project Spiral.................................................................................. 120

Chapter 6.

Uncertainty analysis, project communication planning and quality planning........................................................ 123 Uncertainty analysis – risks and opportunities.................................. 124 Project communication planning......................................................... 133 Quality planning..................................................................................... 134 The Project Spiral.................................................................................. 139

Chapter 7.

Project leadership............................................................. 141 The project manager’s task................................................................... 142 The project manager’s mandate and powers...................................... 143 The project manager’s competence..................................................... 144 The project team.................................................................................... 150 Project communication......................................................................... 165 The Project Spiral.................................................................................. 172

Chapter 8.

Project control.................................................................. 175 Control..................................................................................................... 176 Follow-up of function, time and costs................................................. 181 The Earned Value Management method............................................. 184 Change management............................................................................. 186 The Project Spiral.................................................................................. 189

Chapter 9.

Hand-over and closure..................................................... 191 Hand-over of the project outcome....................................................... 192 Closure.................................................................................................... 195 Knowledge development....................................................................... 199 Successful or failed project?................................................................. 204 The Project Spiral.................................................................................. 205

Chapter 10. The project in the project-based organization................. 209 From earlier days until now.................................................................. 210 Multi-project activities........................................................................... 211 Project maturity and project maturity models................................... 218 IT communication tools ....................................................................... 220 Interest organizations and certification of project managers ......... 223 The Project Spiral.................................................................................. 227 Chapter 11. Perspectives on project management............................. 229 The ability to lead others ..................................................................... 230 Goal-oriented and goal-seeking projects............................................. 230 The Project Spiral.................................................................................. 231 The role of project manager................................................................. 232 What is a project – in fact?.................................................................... 233 Project research – too narrow?............................................................ 234 Writing a book on project management – the impossible project... 235 References............................................................................................. 236 Index...................................................................................................... 242

Chapter 1.

Introduction

“Project” is a concept used in many contexts today. It is clearly regarded as a suitable form in contexts where a specific task is to be carried out in a specific time frame with specially allocated resources. In this chapter, you will read about:

• how a “project” is usually defined • the difference between goal-oriented and goal-seeking projects • five different projects that you will come across several times in this book:

– The Tramline Project – The Pacemaker Project – The Kick-off Project – The City Development Project – The Profitability Project

• how and why different types of project management look different.

What is a project?

An online search of the concept “project” gives several hundred million hits.

Clearly, then, “project” is a word used in all kinds of context today, not only in companies and other organizations1, but also when people describe different phenomena in their private lives. Family, career, taking a course or repainting a house – everything can be described as a project. Even overcoming a serious illness is sometimes described as a project. What we probably mean when we use the word “project” in situations like these is that they are temporary in nature (painting a house is something we do in a few days or weeks) and that we need to allocate specific resources to them (for instance, work, paint, brushes, and other material) to solve the problem and reach the goal (a repainted house) that the “project” aims at (Packendorff 1993).

Projects have also become a more common phenomenon in organizations (e.g., Söderholm 2007). Here, too, the word is often used to describe a temporary activity, carried out with clearly delimited resources aimed at an expressed goal.

At the same time, when we compare projects in different organizations, they can clearly look very different. Thus, the person or people that manProjects can look age and work in the project need to adapt the way they work to different in different the specific situation (Svenningson & Alvesson 2010). Also, the contexts need for support in managing and executing a project may look different. In some contexts, support may be needed to increase control and order, while in other contexts it may be needed to encourage new ideas and to break with ingrained thought and action patterns.

Even though the theory of project management was largely developed from military and industrial projects during the twentieth century, it was quickly realized in other areas, too, that the project was a very suitable working method for performing a specific task in a specific time frame with specially allocated resources.

Today, the project is a very common working method, and it is by no means always confined to contexts that use the project management terminology that you will learn in this book. A real estate agent selling houses and apartments could be seen as a project manager since he or she is working on the task of selling a property in a limited time and with defined resources. A book publisher could also be seen as a project leader since the work involves doing what it takes to publish a book at a given point in time and with given resources. In the same way, a teacher can be seen as a project leader, since the courses he or she runs can be seen as projects: they are time-limited (a term or a year), they have a goal (that the students should learn what the course aims stipulate), and they are carried out with 1 “Organizations” in this book refers to all types of organization, even companies.

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Project management

allocated resources (teacher, students, teaching materials, premises). Even if the course aims are the same year after year, each course is unique in that the conditions change: the students are new, the resources may change, teaching materials are replaced, and so on. In none of these activities, however, is it particularly common to use the concepts or even the methods of project management theory, at least not consciously (see also Lindgren & Packendorff 2007.)

Instead, the traditional definition of a project is: “a temporary endeavor undertaken to create a unique product or service” (PMI, 2008).

According to this definition, then, a project is, firstly, something that is done temporarily: over a limited, often predetermined period. Secondly, a project is an endeavour: one or a number of people decide to set aside resources to execute the project. Finally, the project has a unique goal: the product or service developed in the project is different and special compared with other similar products or services. This means that a project is not suited for repetitive tasks. According to this definition, the opposite of a project is a process, that is, the repetitive method used to carry out a given task.

Project activity and process activity The article “Creative Chaos” (in Swedish) (Wikström & Gustavsson 1999) describes the differences between project activity and process activity. Whereas a process activity, such as the manufacture of newsprint at a paper mill, is based on repeatability, calibration and optimization under relatively stable con-

On a building site, on the other hand, there are no monitors to follow continuously; no figures, updated on the screen in real time through sensors and advanced algorithms, to rely on and react to; and building projects are not about calibration. Value is created through change – for example, a meadow that becomes a tramline, or a vision that results in an attractive city – not through having achieved a state of stability.

ditions, a project activity, such as a building project, is based on movement and constant

This implies that the core activity – and

change under relatively turbulent conditions.

thereby the core competence – is and must be different for these activities. It also implies

The monitors in the control room of a paper mill provide the operators with information about the production in real time. Supported by measured values, figures, and different process diagrams, the operator can create a picture of the situation and thereby a feeling of control. The aim is a sort of “steady state”, that is, a stable and trouble-free production, hour after hour without interrupting the paper

that experience cannot be transferred as a matter of course from one form of activity to another. Each project can, of course, be even more efficient and each process can natur­ ally be even more innovative, but basically, it is the project competence and the process competence respectively that need to be developed in order for the respective activity to become more competitive.

production.

1. introduction

9

Over and above these three characteristics for a project, Lundin & Söderholm (1995) add a further dimension: the team. It is the team’s job to perform the task and reach the unique goal (transition) in a pre-determined time.

Goal-oriented and goal-seeking projects In this book, you will meet five project managers working in five different kinds of project that illustrate different project types common in professional life today. Two of them are clearly goal-oriented, that is, they work towards specific previously set goals (the Tramline Project and the Pacemaker Project); two of them are clearly goal-seeking, that is, they have no previously set goals, but instead seek their goal during the course of the project (the Kick-off Project and the City Development Project); and one of them is combined, that is, it has an ­approximate goal that is specified in cooperation with the person who has ­ordered the project (the Profitability Project).

The projects that are about to be presented are, of course, only a few examples of projects being run in organizations today. There are many different kinds of project: research projects, where the goal is to develop a new, special piece of knowledge about, or solution to, a specific problem; development projects, where the goal is to further develop a product, place or service; installation projects, which deal with installing a system of some kind, such as a computer system; and change management projects, which deal with changing or developing the activity in an organization, to name but a few (see also Söderlund 2005). The name we give to a certain project shows how we perceive what is central to it. For example, the Profitability Project may be seen as a change management project, since the employees who work in the company need to change the way they work if the company is to achieve increased profitability. But it can also be seen as the first step towards an installation project, since the project probably also points to the need for a new or updated IT system in order to increase profitability.

Sometimes, we speak of external projects, that is, projects executed outside our own organization, and internal projects, that is, projects executed within the organization. A delivery project is the same thing as a business project, that is, a project that a supplier undertakes to deliver to a client for payment. Among the projects below, the Tramline Project and the Profitability Project are clear business projects.

These names for different kinds of projects are based on different dimensions in each project, and thus, one and the same project may be categorized in different ways. For example, an installation project often also includes a change management project, since the installation will affect the way people work. Moreover,

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Project management

if the installation is delivered by an external supplier, the project will also be regarded as a business project.

Let us now become acquainted with the five projects that you will come across in this book.

The Tramline Project Anna works in a large construction company that builds houses, roads, tunnels and other infrastructure in the community. The company she works for recently won a public contract to build a new tramline planned for a large city and is responsible for the project management of a section of this tramline. Internally, Anna’s position is described as “construction manager”. In practice, this means that she is a sub-project manager. The project follows a strict time schedule, since other sections of the line are dependent on the one Anna is in charge of. Thus, it is of the utmost importance that the project is not delayed – regardless of what problems are encountered during the heavy construction work. To help her, Anna has a project team that consists of building and heavy construction workers. Anna reports continuously to the project manager responsible for constructing the entire tramline; it is from him that she also receives instructions about how long and with what resources her project is to be run. If she runs into problems, with manpower, for instance, she can also turn to him. Anna’s project has a clear goal and is clearly limited in scope, in terms of both time and cost.

The Pacemaker Project Eva works for a company providing solutions within medical technology. She is the project manager for a project whose aim is to develop a new function in the pacemaker that the company sells. This, then, is a development project. To be able to develop the new function, both hardware and new software need to be designed. Various kinds of specialists are working in the project – both medical and technical experts. A pacemaker project like the one Eva is in charge of is initiated by the management and is regarded as a part of the company’s overall business concept: to develop new products in medical technology. Even so, they are in regular contact with doctors and nurses, that is, people who in the future will be implanting pacemakers and who are familiar with the needs and wishes of patients with respect to these devices.

The project has a deadline set by the company. It is important to meet the deadline so that competitors do not launch their corresponding products before Eva’s project team is ready to release its products. Even though Eva’s project is linked

1. introduction

11

to several other projects in the company – both research projects aimed at developing new technology and other development projects – Eva leads her project towards a clear goal. She has to keep abreast of what is happening in the other projects in order to take advantage of the advances they make.

The Kick-Off Project Jim works for a company where two departments have just been merged, and the management has decided to carry out a kick-off project, which involves the employees at the new department going off on a trip together. This is part of a major project for change that the management has initiated in order to make sure that the employees get to know each other and quickly learn to cooperate. A further objective of the trip is to help maintain the positive company culture that the company considers it has. Jim has been asked to be project manager for the trip, and consequently, his task is to plan the trip and the activities that will be carried out at the destination, within the limits of a given budget. Even though Jim is enthusiastic and has the full support of the management, there are still a number of employees who are by no means as positive, either to the merger of the two departments or to the idea of going off on a trip together. One of Jim’s greatest challenges, then, is to motivate the employees to go along on the trip and moreover to do their bit to make the integra­tion of the two departments as successful as possible. Jim is working alone in this project, which can be described, then, as a small and clearly delimited project in terms of time and resources.

The City Development Project Maria is employed by a municipality, and her job is to develop a particular area of the city that the municipal council, companies in the municipality and other players in the area have identified as significant for the future of the region. The project is, therefore, a development project, and the vision is that, within twenty years, the area will be perceived as an attractive place for businesses to establish in and that people will want to work and live there. Maria has no project team, but works in the project by herself. Since the goal is not measurable, much of her work as a project manager is about communication – she has to continuously check the expectations of the projects with those who are involved in it and affected by it, that is, the stakeholders. For her and others to be able to assess her work, she also has to work actively on articulating intermediate goals and getting the various stakeholders to accept them.

The project has a very small budget, so it is also Maria’s job to secure its funding.

This means not only that she tries to get stakeholders to agree to invest a sum

12

Project management

of money every year, she also tries to interest them in individual activities and ­endeavours that help to achieve the goal in different ways. It is, therefore, very important to create a positive story about the project, and Maria works hard on different kinds of lobbying in an attempt to tie influential people to the project.

The Profitability Project Erik is a project manager at a management consultancy company. The company helps its clients organize and manage their operations to become more efficient. In practice, this may mean helping the clients develop the necessary basis for various strategic decisions, for instance, in a situation where they are considering expanding their business or helping clients re-organize their operations in order to save on costs. The management consultancy firm specializes in analysis and project management. Erik is now managing a business project concerned with helping a company increase its profitability.

The project is initiated by order of the company’s CEO and runs for three months.

After that period, Erik’s project team must have drawn up a proposal for how the company’s profitability can be increased. Erik is assisted by a steering committee, which consists of a representative of the client, the partner in the company who is client manager, and Erik’s immediate boss. Apart from Erik, the project team includes a colleague who helps him with analyses. The client’s employees are at his disposal when it comes to gathering information.

Project management for different kinds of ­projects If we compare these five projects, we notice how very different they are. They last for different periods of time and they demand different kinds of competency and different kinds of resources. This also implies that the project manager in charge of each project needs to adapt his or her project management to achieve the best possible result.

Since the goal-oriented projects have clear, measurable goals set in advance, the project manager’s job is initially to draw up a plan for reaching the goal in the best possible way. A good example of this is the Tramline Project. When the project plan is established, Anna, as project manager, will mainly work with coordinating resources to ensure that the project goal is reached in the stipulated time and with the dedicated resources. Furthermore, Anna has the important task of continuously reporting the progress of the project to the project manager of the whole tramline. When managing a goal-oriented project such as the Tramline Project, then, the project manager can rely to a relatively great extent on rou-

1. introduction

13

tines and processes set up in advance, even if a certain measure of improvisation is, of course, necessary in order to tackle unforeseen events that arise.

In other goal-oriented projects, such as the Pacemaker Project that Eva is in charge of, it is not possible to rely on a predetermined plan to the same degree.

The planning of the Pacemaker Project needs to be more iterative: it needs to be frequently revised, following its own development and changes in its surroundings. Even if we know that a new function is to be designed for the pacemaker, the actual development is about developing new technology, and innovation processes of that kind cannot, of course, be planned in detail in advance. Instead, the plan must be allowed to follow the work of the development engineers. In addition, since there are competitors on the market who are also developing their products, we have to keep a check on them through constant environmental scanning, which may also affect, and lead to changes in, the project plan.

Unlike the goal-oriented projects, the goal-seeking projects have no clear, specified or measurable goals – instead, those involved have agreed on an overarching vision: an inten­tion for the project. This means that, while the project is in progress, the project manager needs to work on setting clear and measurable goals, perhaps in the form of intermediate goals, together with those involved in and ­affected by the project in various ways (the project stakeholders). This, then, is a

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Project management

challenge for Maria in her role as project manager of the City Development Project. In this project, clear, measurable goals cannot be set at the beginning; instead, Maria herself has to formulate intermediate goals in line with the vision and with the support of relevant stakeholders, and then work towards them.

Thus, project management of a goal-seeking project is much more about improvising than management of a goal-oriented project.

Since projects are different, they demand different approaches to project management. This also means that different “tools” may be differently suited to different projects. What are known as the “stage-gate models”, which were the first project models to be developed within Different projects project management theory, are often best suited to goal- demand different oriented projects, since these models assume that a project management has a clearly-defined goal, based on which the project can be planned, controlled and followed up in relatively close detail. The stage-gate models are also based on clarity; for instance, the stages and transitions between the stages, and also the project roles must be clearly defined.

In the stage-gate models, we break down the overarching goals of the project into intermediate goals and plan which activities have to take place for the inter­ mediate goals, and subsequently the main goal, to be accomplished. The principle, then, is that detailed planning, organizing, controlling, following up and docu­menting create conditions for effective project execution (Kerzner, 2009).

The stage-gate models are not particularly well suited to goal-seeking projects, however. They contain no clear goals from which to plan, control or followup the project, so we need to work with what are usually called agile methods. ­“Agile” means flexible, in both mind and body, and agile methods include a number of approaches whose aim in various ways is to increase the smoothness and flexibility of project work.

Working according to an agile method involves striving for close cooperation with the client and not regarding altered requirements as a problem, even if they appear late in the project. Instead, changes are seen as opportunities to deliver enhanced customer benefit. This means that, rather than planning the whole project process, only the next intermediate goal is planned. When that has been reached, a new intermediate goal is set; thus, agile methods are suited to projects where set goals do not exist at the start, or where the goals may be changed for various reasons.

There are also projects where the stage-gate models, with their guiding principle, and the agile methods, with their supporting principle, need to be combined in order for the project to be executed in an acceptable way. It is common for

1. introduction

15

project-based organizations to select ideas from agile methods and then integrate them into their existing stage-gate model.

Lately, agile methods have become increasingly popular in organizations. Three explanations for this are that the methods: 1. provide good support for quickly managing changes 2. support creative and innovative processes and 3. focus on the client and client benefit (see the expanded Iron Triangle on p. 197).

The roots of project management theory Even though project as a concept has become increasingly common today, it could be claimed that the project as a working method, that is, as a way of working and organizing a specific task, has existed as long as humankind. The Egyptian pyramids, the Roman viaducts and the Viking expeditions are some examples from Western history that could be regarded as projects: they all had a specific task, allocated resources and were to be executed in a given period of time.

The concept of “project”, however, was not used in such contexts at that time. In fact, up to the mid-1990s, the concept “project” was used as the name of a proposal, a draft or a plan, for instance, for the drawing an architect made, rather than as the designation for the working method employed when putting the proposal into practice.

Project management theory, that is, the theory of how a project should be run, is sometimes said to have originated in the American defence industry, which established special project offices in the 1930s to provide better control of aircraft development. Between 1942 and 1945, they ran what was called the Manhattan Project, whose aim was to develop nuclear weapons. World War II was in progress and there was great concern about Nazi successes. The American president, Franklin D. Roose­ velt, therefore, gave orders to initiate the Manhattan Project, which, at its height, engaged 130,000 people with various kinds of expertise in a number of different places in North America and Europe, and had a turnover of two billion dollars. As a project, the Manhattan Project can be said to have been successful (it can, however, be discussed to what extent the goal of the project was morally defensible): after a nuclear test in the desert in New Mexico, “Little Boy” was dropped on Hiroshima on 6 August , 1945 and “Fat man” on Nagasaki three days later on 9 August , 1945. The two atomic bombs are said to be the main reason for Japan following Germany’s example and capitulating.

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Project management



Thus, the project as a working method has strong roots in the Western defence industry and it was in these projects that the first project models were designed, models for how to run a project. These models were all so-called stage-gate models , that is, models that break down the overarching goals of a project into intermediate goals, and which contain detailed plans for what is to be done when, and with what resources, in order for the intermediate goals and the overarching goal to be reached.

The fact that the stage-gate models were developed at this time and that they quickly gained a strong foothold can largely be explained by the role of lead-time (the time it takes to complete an activity) as a strongly controlling factor in the projects that were executed. A political power struggle was going on to win the race for new technology, for instance, which was why the focus was on methods for shortening lead-time, by performing several activities in parallel, for example.

Another major project initiated by the American defence industry was the Polaris Project, in which a ballistic robot with nuclear warheads was developed during the Cold War. This project had 250 main suppliers, 9,000 subcontractors and 70,000 ­activities, which meant that coordinating resources (people, activities, material and ­capital) was the greatest challenge alongside the lead-time. The missile, which was first launched in 1960, was developed with the help of Program Evaluation and Review Technique (PERT; see p. 86), which is one of several different tools developed with the aim of minimizing lead-time and managing coordination. Other examples are Work Breakdown Structure (WBS; see p. 81), and logical networks with the principle of critical paths (CPM; see p. 86).

There was an increasing interest in the project as a systematic working method that managed both lead-time and coordination of resources, and in the Harvard Business Review, the concept project manager was used for the first time in 1959. Less than ten years later, the International Project Management Association (IPMA) and the Project Management Institute (PMI) were founded; they went on to develop bestpractice based standards for project management, including PMBOK, the first version of which was published in 1987 (see further p. 223).

In Sweden, project management ideas are usually said to have been first developed at SAAB, in connection with the development and construction of the fighter aircraft Viggen in the 1960s. There, several of the American tools and methods were applied. Only a few years after the foundation of IPMA/PMI in the US, Föreningen Nätplan (roughly: Network Plan Association), an interest group for Swedish project managers, was founded in Sweden. Later, the group changed its name to Svenskt Projektforum.

Alongside the development of project management theory that was based on stage-gate models and notions of clear structure, hierarchical leadership, job sharing, and meticulous documentation, methods such as the Incremental Waterfall Model were devised (pp. 72–73). In addition, software and IT-systems development



1. introduction

17

in the 1990s produced new, more flexible and iterative methods like Scrum, Extreme Programming (XP) and the Dynamic Systems Development Method (DSDM), as a backlash to the sequential planning that was considered much too sluggish, un­ necessarily complicated and weighed down by too much documentation. These methods have largely been inspired by the Toyota Production System (TPS) developed in the Japanese automotive industry and better known as the so-called lean principles (Liker, 2004), developed to eliminate waste (that is, things that do not ­represent value to the client), and to create conditions for continuous learning and thereby creating effective, cheap and competitive solutions.

The generic term Agile Methods was coined in 2001, when 17 representatives of different system development methods, including Scrum, Extreme Programming (XP) and Dynamic Systems Development Method (DSDM), met in a wintry Utah, USA, and jointly agreed on the “Agile Manifesto” (Beck et al. 2001, Highsmith 2001), which contains four values and twelve principles.

The four values are: • individuals and interactions over processes and tools • working software over comprehensive documentation • customer collaboration over contract negotiation • responding to change over following a plan The 12 principles that the agile methods must follow to be considered agile are: 1. “Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and developers must work together daily throughout the project.

5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.

6. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

7. Working software is the primary measure of progress.

8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.

9. Continuous attention to technical excellence and good design enhances agility.

10. Simplicity – the art of maximizing the amount of work not done – is essential.

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Project management



11. The best architectures, requirements, and designs emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.”

Source: Beck et al. (2001).

This book and the Project Spiral In this book, you will both learn to use stage-gate models and obtain an orientation in agile methods (Chapter 3). In reality, these are often used in combination, and the challenge for you as a project manager will be to choose models and methods according to the project you are in charge of and the context in which the project is situated. You will also read about how, when and why a project emerges (Chapter 2) and about what “tools” you as a project manager can make use of in the planning of a project (Chapters 4–6). Besides that, you will be able to read about project leadership (Chapter 7) and about how to control, conclude and hand over a project well (Chapters 8 and 9). In Chapter 10, the individual project is placed in a larger context – the project-based organization – and Chapter 11 concludes by providing some broader perspectives on project management and on the project as a phenomenon.

This book is intended both for those of you who study Proj- Projects are a ect Management and those of you who have worked as p ­ roject common working managers for some time or are facing the challenge of man- method so skill in aging your first project. The aim is for you to be better able project management to manage projects. Since the project as a working method is a strategic skill is very common, competence in project management and the ability to combine methods and models constitute a strategic competence for all project-based organizations (see Söderlund 2005).

The book follows the process that goal-oriented projects usually undergo when examined afterwards. Sometimes, a project begins with a feasibility study, or it is initiated anyway, without such a study. After that, the project is planned and executed. Finally, the project is concluded and handed over to whoever has ordered it.

At the same time, this book is designed to support goal-seeking projects that follow agile methods, since they too are executed in stages. Every stage consists of cycles of planning, executing, checking and drawing conclusions (see Gustavsson 2011). There are, therefore, no great differences between how the develop-

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ment of a goal-oriented and of a goal-seeking project can be understood afterwards.

Thus, a project, irrespective of whether it is goal-oriented or goal-seeking, can be regarded afterwards as a spiral that begins with the project idea and gradually develops and is delimited with the help of feasibility studies and planning sessions, and is followed by execution activities, where management and control play an important part. Finally, the project is brought to a close when the project goal has been reached, or the project vision has been fulfilled.

As the project spiral grows, what is regarded as the “project� is gradually delimited: visions become goals, resources are allocated, tasks are defined, and so on.

And even if the impression we get when reading a book such as this is that certain activities take place, or maybe even should take place, at certain specific junctures in the project spiral, many activities are recurring. Planning work takes place continuously, as do management and control activities. And in projects where agile methods play a decisive role, project outcomes are handed over on a regular basis.

A project is handed over and closed (Chapter 9) A project comes about and its preconditions are defined (Chapters 2, 3)

Project Management

A project is led and controlled (Chapter 7, 8) A project is planned (Chapters 4, 5, 6)

Figure1.1. The Project Spiral and the contents of this book.

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Chapter 2.

How, when and why does a project come about?

Regardless of how a project comes about, the person whose idea it is has to succeed in persuading others in order to obtain the necessary resources to be able to execute it. Examples of resources required for a project to be executed are money, materials and people’s time and competence. So, in order to convince people that a project is necessary, the originator of the idea has to identify the problem or the need that the project is intended to solve. This is something that takes place before a project is initiated, or at the start of a project. This chapter deals with

• how a project is initiated • what a feasibility study is • situations where the feasibility study is a project in itself…

• …and where the project begins with a feasibility study phase instead of being preceded by a feasibility study

• the significance of experience and tacit knowledge in the feasibility study/ feasibility study phase

• various systematic analysis tools that are useful in the feasibility study/ feasibility study phase:

– SCQ – Stakeholder analysis – SWOT – PENG analysis

• Various functions in the project: – management function – control function – executive function – advisory function

A project is initiated A project can come about for many different reasons and in many different ways.

In a way, one could say that all projects arise from a problem or a need. At least the originator of the idea for the project – the one who has come up with the idea and/or is passionate about the idea turning into a project – needs to persuade people that the project will solve a problem or address a need. Only when this is accomplished can people be convinced that the project is really necessary, that it is worth investing time, money, and manpower in.

How the problem or the need is formulated depends, naturally, on what the project is intended to deal with. Often, the problem formulation is connected with some kind of altered condition. The need for the Kick-off Project that Jim is responsible for, for instance, arose when two departments at the company where he works were combined, and, when this was done, the management realized the significance of the employees at the two departments being given the opportunity to get to know each other so that the work at the new department would function smoothly.

In the case of the Tramline Project, the project arose from the need for new infrastructure. The problem was that the existing infrastructure in the area was not adequate to move all the people who needed to be transported. A tramline was, therefore, identified as a good solution, and after a municipal procurement process, Anna’s company was awarded the task of building the tramline, and Anna was given the job of managing the construction of one of the sections.

New legal requirements or altered product standards may also lead to the initiation of new projects. The Pacemaker Project that Eva manages, for example, arose from the need to refine and change the existing products. As a result of new product standards demanded by the users and new market conditions with stiffer competition from the company’s competitors on the market, the management of Eva’s company has identified a need to develop the functionality of an existing product and thus, the project has been initiated.

Similarly, it is ultimately new market conditions that have caused the project sponsor to initiate the Profitability Project of which Erik is project manager. The company’s competitors have greater profitability, for which reason its CEO perceives a need to review what the company can do to increase its own profit.

The City Development Project springs from a vision that the area of the city that Maria should get people to perceive as interesting and attractive will be able to function as a driving force for the future growth of the city. The idea was hatched by an enthusiast in the municipality who is convinced that the future of the region will look brighter if more companies are established in the area that Maria is

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working with and if it attracts more tourists and more residents. When this happens, the municipality will increase its tax revenue and thereby its ability to do more for its citizens.

The decision to realize a vision in the form of a project in particular is made, more or less intentionally, based on an assessment of the extent to which the ­vision is new – a unique task to be delivered at a given time – or whether it is a task that recurs at regular intervals. In the latter case, it may instead be wiser to develop a process for work routines (see p. 9). However, the very development of such a process may, of course, be the subject of a project.

It is also worth noting that a project can also be initiated as a way of exercising power: a way for a formal boss or an informal leader to underline power, prestige and influence. The result may be, for example, that projects that are i­ nitiated and allocated resources are not always prioritized and selected on rational grounds and for the good of the organization. This is one reason that project managers ­often speak of management attention, that is, creating and maintaining good ­relations with the executives and informal leaders and thereby obtaining attention.

The project as an idea Today, the project is a commonly occurring concept and it has been used both for apparently simple and for more complex and large-scale situations. One way to problematize the project as a phenomenon is to regard it from different perspectives.

By perspective, we mean regarding something in a particular way, at a particular point in time, in relation to a particular theory, or as a concrete example of something we recognize. Establishing a perspective means putting on a pair of (mental) “spectacles” through which we consciously (or unconsciously – a perspective is not always “established” – it may be there anyway) look at the phenomenon. Doing so allows us to see similarities between two different phenomena where both the dis­ tinguishing features and the similarities enrich the descriptions – and thereby the under­standing – of what is being compared. The perspective we use both expresses and influences how we perceive a phenomenon and how we act in relation to it.

The word project comes from Latin pro (forward) and iacere/iactum (throw). Originally, then, the word meant “that which was thrown forward”: the thought or vision of what was to take place. Thus at an early stage, a project was a way to tackle exceptional tasks. The project was regarded as an adventure, as something exciting and challenging, in other words, the opposite of commonplace, routine and already familiar (Gustavsson, 1998). This perspective places the project manager in the role of



2 . h o w, w h e n a n d w h y d o e s a p r o j e c t c o m e a b o u t ?

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new thinker and challenger – rather like the “entrepreneur” of our time. The idea and the adventure imply a forward-looking venture based on taking a risk – gambling – with the possibility of large profits for the one who succeeds in pulling off the project, in roughly the same way as the adventurer is rewarded by new insights, discoveries and rewards.

At the same time, uncertainty lurks in the background, placing demands on both the manager and the execution. The project manager must be able to improvise and face challenges that arise along the way.

Feasibility study Even if the originator of the idea has identified the need for the project and perhaps even succeeded in convincing others of its necessity, it may be a good idea to perform a feasibility study in order to investigate whether the project is r­ eally worth starting. In the feasibility study, we look at what activities are necessary for the project to achieve the goals set for it, what competencies are needed, how long the project will take, and what it will cost. We may also A feasibility study forms investigate and assess various alternative solutions and/or ways of executing the project. All of this is then placed in the basis for deciding relation to the value that the project is believed to be able whether or not to to generate, in other words, what the goals of the project execute the project would be worth for the one or ones affected by it. A feasibility study, then, deals with producing the basis for a decision on whether the project is to be carried out or not. In short, we could say that the aim of the feasibility study is to guarantee the practicability of the project: in terms of function, time and money, and in relation to the wishes of the project sponsor or the original ­vision of the project.

The feasibility study as an independent project Sometimes, the feasibility study is performed as an independent project, with its own project manager and project team, and resources that are separate from the project that is then initiated in order to realize the vision. For example, this was the case in the Tramline Project. Before the municipality had even decided on a tramline solution, a feasibility study was conducted to investigate how many ­people move about daily in the city; computations and probability calculations were performed of how many people are expected to move to the city in order to estimate how many people would need to use public transport in the future.

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Project Management ISBN 978-91-47-09726-5 © 2012 The authors and Liber AB Publisher: Ola Håkansson Editors: Carina Blohmé and Åsa Sterner Translation: Sandra Brunsberg Cover and graphic design: Fredrik Elvander Illustrations: Jonny Hallberg Photos: p. 169, 170: Andreas Offesson p. 167: Svenska Mässan All others: Thinkstock Typeset: LundaText AB

1:1 Print: Sahara Printing, Egypten 2012

Distribution: Sweden Liber AB S-205 10 Malmö, Sweden tel +46 40-25 86 00, fax +46 40-97 05 50 www.liber.se Kundservice tel +46 8-690 93 30, fax +46 8-690 93 01 Norway Universitetsforlaget AS Postboks 508 NO-0105 Oslo phone: +47 24 14 75 00, fax: +47 24 14 75 01 post@universitetsforlaget.no www.universitetsforlaget.no

All rights reserved No part of this publication may be reproduced, stored in a retrival system, or transmitted, in any form or by any means, electronic, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher.

PROJECT MANAGEMENT This book teaches you the basics of Project Management. It describes how to work as a Project Manager in different kinds of projects – whether they have a clear goal or are based on a vision.

Today, there are projects in all kinds of activities. To show how different kinds of projects can be managed, five examples are presented: the Tramline Project, the Pacemaker Project, the Kick-off Project, the City Development Project and the Profitability Project.

By using these recurring examples, the book deals with planning projects in terms of time, function and cost; managing and controlling projects; and handing over and closing projects. The authors discuss both linear models for project management, what are known as stage-gate models, and agile methods such as Scrum.

The book focuses on managing the individual project, but it is also placed in a broader context – in relation to the surrounding organization or company, and in relation to other projects that it may be connected with in some way.

Best.nr 47-09726-5

Tryck.nr 47-09726-5-00