1.3 Project Management: The Big Picture

According to PMI, a project is “a temporary endeavor undertaken to create a unique product, service, or result.” Let’s break this definition down into its two main components.

1. Projects Are Temporary. Value creation consists of two types of activities: Process and project management. You are managing a process when the value-added activities are ongoing and repetitive—that is, you produce the same product or service over, and over, and over again. You are working on a project when your goal is to produce a one-of-a-kind output. By design, projects have a beginning and an end. Developing the Pokémon Go app, for instance, is a project; marketing the app and managing software updates are processes.

2. Projects Produce a Unique Output. Value creation delivers an output people desire. Processes are repetitive. A car or a bag of chips comes off the assembly line every few seconds. By contrast, projects deliver something unique, something that has never been done before (see Table 1.2). By definition, uniqueness makes project management a challenge. You have an idea about how to proceed, but you don’t know all the little details—e.g., what resources are required, when each activity will be done, or what everything will cost.

To reiterate the nature of a project, let’s engage in a simple thought exercise. Take another, closer look at Table 1.2. Pick one of the projects from each of the six categories. Now, focusing on those six projects, fill in the table below. Your job is simple.

• Step 1: Identify the beginning and end points for each project. Do this conceptually. Ask, “What initiates this project?” Then ask, “How do you know when the project is done?” For instance, let’s say you chose “Constructing a highway.” The project begins when your project proposal and bid are selected, and you are awarded the project. The project ends when the last barricade is removed, and traffic begins to flow. Of course, as we will discuss later, the project isn’t really done until you finish all the project close-out activities.

• Step 2: Now, identify something about each project that might make it unique. Let’s continue with the highway-construction example. Many highways have been built around the world. Yours is not the first. But it is still one of a kind. Consider this. The soil composition and topography may be unique. You may need to adopt special construction materials and adapt standard construction techniques. Naturally, you could identify other elements that make your highway project unique. Keep your responses simple and straightforward.

To summarize, projects are temporary, one-of-a-kind initiatives. They can be large or small. They may be a little, or radically different from previous efforts. They may take a little or a lot of time. The shortest projects can be done in days; the longest may take years, or even decades, to complete. Over your career, you will manage a wide range of diverse projects. What you need to know now is that a common set of methods and tools can help you manage almost any project effectively. Experienced project managers trust the process. Let’s introduce you to the basics of the project-management process.

The Project Management Life Cycle

You have been involved in many projects over the years. Did you notice that each project consisted of several key steps that you needed to do to get to your desired results? For instance, you picked or selected what projects to work on. Once you figured out what you were going to do, you figured out how to do it. Simply put, you made plans to get the job done. Then you did it. Finally, you wrapped up and probably cleaned up. When you put these common steps together, you get the project life cycle.

Figure 1.1 depicts this project life cycle. As the name suggests, a project’s life cycle measures project completion, typically in time or cost (resource usage). Because projects are unique, each will have its own life cycle. However, you will see two common patterns. Panel A shows what we call the J-type. Panel B illustrates the S-type. Let’s briefly describe each pattern.

• J-Type Projects. Some projects—e.g., delivering a service or event planning—start slowly. Initiation and planning build up progressively over time, often at a measured or steady pace. Then, when delivery occurs, the project accelerates quickly toward completion. If you’ve planned an event wedding, you have experienced the long build-up and hectic execution of a J-type project.

• S-Type Projects. Other projects start at a moderate pace. Planning progresses quickly into execution. In the early stages of execution, the project accelerates until it is well underway, say 70, 80, or even 90% complete. Then the project slows down, taking a relatively long time to complete. Construction, design and development, process improvement, and technology adoption projects often fit this pattern. Why do these projects take a long time to complete? Getting to completion requires a lot of detail work, including making iterative tweaks and getting the “bugs” worked out. This detail work can be slow and tedious.

You may be wondering, “Which of the four stages is the most expensive?” Naturally, costs vary by project, but you’ll find that the total costs of a project are typically distributed as follows.

• Initiation: 5–10%

• Planning: 10–25%

• Delivery: 50–60%

• Closure: 5%

You’re probably not surprised by this cost distribution. Most people expect delivery to be the most expensive phase of a project. That said, let’s offer a warning. Because initiation and planning can represent as little as 15% (maybe even less) of a project’s total costs, you may be tempted to minimize or overlook these phases. Don’t! The decisions you make as you select and plan for a project lock in later costs. Cutting corners in these early phases can drive up your total costs dramatically. Don’t let that happen. Take every phase seriously—i.e., pay attention to the details, dotting your i’s and crossing your t’s. You’ll achieve better results and you’ll become a better project manager faster, an outcome that will provide a nice return on your investment.

The Value-Creation Hierarchy

Our focus is on learning how to manage projects well. That said, projects are often managed as part of a larger value-creation process. During your career, you will likely hear someone mention that they are a portfolio or program manager. You may wonder, “What do these job titles mean?” Importantly, although these managers are not project managers, they work with project managers and need to possess a clear understanding of project management.

Figure 1.2 shows how portfolio, program, and project managers work together to create value. Portfolio managers align value creation to strategic goals. Simply put, they make sure the right programs and projects are selected—and completed. Program managers, by contrast, oversee a variety of related projects. They seek efficiencies, cross-pollinate learning, and allocate resources to achieve goals. Simply put, they make sure that work gets done in a coordinated, cost-efficient way. You already know what project managers do: They make sure projects get done right—on time and on budget!

To give you a little context, let’s return to our highway-construction project. The Department of Transportation (DOT) is responsible for building and maintaining a large freeway network that crisscrosses the United States. In other words, the DOT manages a portfolio of freeways. Each interstate freeway represents a program. For example, Interstate 80, which is an east-west highway that runs 2,900 miles from San Francisco, California, to Teaneck, New Jersey, is managed by a DOT Program Manager. The program manager is responsible for ensuring that all of I-80 is kept functional, safe, and secure.

Each stretch of I-80 coming into and out of a major city is often treated as a project. A local project manager is responsible for maintenance, repair, and any new construction. For instance, if a new overpass needs to be constructed or an existing bridge needs to be repaired, the local project manager takes responsibility for executing these subprojects. Each of these subprojects has a specific beginning and a defined ending. By contrast, keeping I-80 up and running is a long-term continuous effort.

Now that we’ve been through a high-level overview of project management, let’s take a closer look at each of the four phases that comprise the project life cycle.