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www.efmd.org/globalfocus

Ed Andrews argues that project management

is the key to sustainable success

Why project
management
matters We have all heard of project management. Many imagine
it as some loosely defined or ethereal function that bridges
across multiple departments and is useful especially in
IT or other operations of a company. Many believe that it
is also useful in a crisis but perhaps not important on an
ongoing basis.
However, project management has over the last few decades
emerged as a much more important business competency.
In fact it is a discipline that companies cannot do without. If
implemented correctly it becomes one of the key factors in
corporate sustainability for success.
Project management embraces not only the management
and execution of individual projects but also programmes
of projects and portfolios of strategic initiatives. It is project,
programme and portfolio (PPP) management.
PPP management has become a strategic imperative for
companies, helping not only in the ability to deliver strategy

Why project management matters by Ed Andrews
75%
75% of Senior Executives
asked agreed that new
recruits lacked the skills
they needed for the role of
project manager in industry
Project management is growing
so fast and is so increasingly
recognised as an imperative for
organisations that there is a
rising gap in the supply of and
demand for project managers
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EFMD Global Focus | Volume 04 | Issue 02 2010
in a timely and cost-effective manner but, as importantly, to choose those
projects that most strongly support the strategic intent of an organisation.
It is a feedback mechanism that allows companies to begin projects with a
set of assumptions and to be able to quickly discern whether the expected
outcomes will be met. If not, then it provides the mechanisms to quickly
alter the project so as to achieve a successful conclusion or, alternatively,
to end it without further expenditure.
It might sound odd to use project management to kill projects. But consider,
for example, that you are in the pharmaceutical industry where you will funnel
a large number of potential products through a sieve, hoping to find the one or
two that will be winners. The sooner you can finish that winnowing process and
eliminate the losers, the less money, resources and time will be spent.
If the correct implementation of project management has value to
organisations we ought to be able to simply begin using it and reap
the successes that it will bring. But can we?
Well, there is a problem that first needs to be addressed. It deals with
the fact that project management is growing so fast and is so increasingly
recognised as an imperative for organisations that there is a rising gap
in the supply of and demand for project managers.
Global skills deficiencies
Over the last year the Project Management Institute (PMI) has sponsored a
number of research projects looking at the kinds of skills that industry needs
and at the growing gap in the supply of and demand for project managers.
Research with the Economist Intelligence Unit, part of The Economist group,
surveyed 600 senior executives globally and found that 95% agreed that certain
leadership skills were necessary for the success of their operations. However,
75% also agreed that new recruits lacked the skills that they needed. The study
detailed those skills by defining leadership, communication, agility, critical
thinking and motivational capabilities as essential for success. Specifically one
question in the survey said it all: Over the next five years, which of the following
skills will be most important to your companys success?
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The answers, detailed in Figure 1, are all, essentially,
project management skills.
PMI also completed in 2008 and 2009 a series of three
corporate-academic workshops in America and
Europe exploring the talent issues facing companies.
One of these, in Brussels, was a joint seminar with
EFMD.
The workshops validated the corporate survey and
have even suggested that project management is
a life skill, one that should be taught at the earliest
educational levels regardless of an individuals
functional focus, whether it is business, science,
engineering or social studies.
The business literature is rife with concerns about
current MBA programmes where new graduates
can readily analyse a financial situation or model
an equation but have no skills in actual execution.
Clearly there is a significant gap in what is being
taught in educational institutions today and what
the corporate world and government agencies truly
need for organisational success.
A total of 75 executives and academic leaders,
primarily deans and department heads, attended the
three workshops. The findings were telling in several
ways and are summarised into three categories:
What can academe do?
Make project management part of the core
(undergraduate) curriculum (especially in
business and engineering)
Create advanced (masters) project management
programmes or minors/concentrations/certificates
in project management
Embrace linkages with the corporate world
and the need for leadership skills
Conduct research in project management
Benchmark best practices in project management
Validate the value of project management
Prepare case studies of project management
successes
What can corporations/government agencies do?
Work closely with academe in structuring course
content/programmes
Provide access to facilities, personnel and data
for academic researchers
Provide executives opportunities to be adjunct
lecturers (real-world experience)
What can PMI do?
Be the liaison between academe and industry/
government
Facilitate/mentor project management course/
programme development
Set quality standards for project management
degree programmes
Provide resources and support for academe
and students
Facilitate acquisition/training of project
management faculty
Supply-demand gap
In addition to the skills deficiencies there is an
actual supply-demand gap in project management.
This gap is the result of a number of issues all
colliding at the same time.
First, project management is a relatively young
profession, having formalised itself only in the
1960s. The result is that many of those in the
profession are reaching retirement age. The baby
boomer retirement onslaught has governments
globally concerned about who will fill the shoes of
these experienced and talented individuals. Figure
2 demonstrates this concern with data from the US
General Accounting Office (GAO).
In addition, World Bank data on Gross Fixed Capital
Formation, by its own definition large infrastructural
projects such as highways, hospitals, schools and so
on, show that of the global GDP, that is the worlds
economic worth, 20% or $7.5 trillion is related
to projects And these figures do not capture the
additional trillions of dollars of private investment
by companies in new product development, plant
refurbishment and so on, all of which are projects.
The real number on a global basis is likely to be
US$12 trillion, closer to one-third of the worlds GDP.
So what we now have is a situation where projects are
increasing globally, all requiring more and more
project managers, but where experienced project
managers are retiring.
So where are the new project managers going to
come from? Naturally one would expect the academic
world to heed this clarion call and rise to the occasion
by creating more and more project management
programmes. However, that is not exactly the case.
To be fair, there has been a steady increase in project
management courses and degree programmes at
universities and colleges globally. In fact in 1997 there
were only 11 such programmes recognised whereas
today there are well over 3,000 institutions teaching
project management at one level or another.
Yet despite that growth there is still nowhere near
the number of degree programmes necessary to
satisfy the growing gap in the supply-demand of
project managers.
The role of the corporation
If corporations truly understand the self-interest of
assuring their continued success, then they have a
huge opportunity, perhaps even a mandate, to work
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Why project management matters by Ed Andrews EFMD Global Focus | Volume 04 | Issue 02 2010

Figure 1 with academe to affect the necessary change in teaching

Over the next five years, which of the following skills
will be most important to your companys success?
From: Measuring and improving staff performance. 2008 Global study of executives in
co-operation with the Economist Intelligence Unit.
Execution skills
Adaptability
Project risk identification and mitigation skills
Communication skills
Planning skills
Organisational skills
Motivational skills
Team building skills
Interpersonal skills
Analytic skills
Other, please specify 2%
Dont know 1%
0 10
We now have a situation where
projects are increasing globally,
but where experienced project
programmes.
Academe has been maligned as an isolationist ivory tower
reticent to change. Yet when business and global needs
demand, academe will accommodate. But industry and
34% governments must speak to that need, must encourage and,
25%
more importantly, work with academe to solve the problem.
21% Virtually every corporation and government agency has an
18% association or alliance with an academic institution. If each
18% took the time to discuss the issue of their needs seriously
14% with academe, there could be a dramatic increase in
14% meaningful programmes in project management.
13% But it is more than a matter of merely convincing academe
12% of the need; industry must also be willing to assist in a variety
10% of ways. Certainly, financial assistance would be important in
establishing programmes or courses but so would the
willingness to provide experienced leaders and experts
to teach in these programmes and the willingness to lobby
20 30 40 50
for increased government funding for such programmes.
Industry can also assist academe by allowing access to data
for research. The singular issue with business research is
access to organisations for data. A trust relationship needs
to be established between academe and industry at the local
level. The benefits back to industry are apparent a
recruitment pipeline, a secure consulting channel with
academe and the knowledge that the proper skills to
satisfy corporate needs are being taught.

managers are retiring Clearly there is a role for the private sector, a role that it must
proactively accept.
Some of this is already happening. Many corporate-academic
partnerships have proved successful. But they are few and far
between. Nevertheless, if a small percentage of companies
seriously took the opportunity to focus on their self-interest,
their corporate responsibility for success, we would see a
marked increase in project management courses and
Figure 2 programmes globally. By adding project management
Retirement-Age Employees in US Government (%) courses and eventually full-degree programmes in project
Senate testimony by GAO, April 30, 2008 management to existing academic offerings, universities and
colleges are guaranteeing a steady supply of qualified recruits
70 for the corporate and government sectors.
60
The intellectual fabric of academe can only be enriched by
50 Employees addressing the growing corporate and government agency
40 Supervisors need. The opportunity is there for the taking, simply by
Executives
embracing project management, the key to corporate
30
sustainability of success in times of economic turmoil.
20

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2008 2009 2010 2011 2012

ABOUT THE AUTHOR

Dr Edwin J Andrews is Director, Academic and Educational Programs and Services at
the Project Management Institute (edwin.andrews@pmi.org)
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.