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© 2012 International Institute for Learning, Inc. Introduction to Managing Complex Projects.

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1 © 2012 International Institute for Learning, Inc. Introduction to Managing Complex Projects

2 © 2012 International Institute for Learning, Inc. 2 Presentation Overview This module includes the following topics: Complexity and Projects Fibonacci Framework Emotions and Decision Making Importance of Risk Management Scheduling Tools Leadership in Complex Projects

3 © 2012 International Institute for Learning, Inc. Group Discussion Despite PMI, IPMA PMBOK, PRINCE2 Hundreds of thousands or PMPs, etc. Continuing unacceptable level of project failures WHY? 3

4 © 2012 International Institute for Learning, Inc. 4 The Somewhere In Between Ordered Deterministic Random Sensitive to initial conditions SimplicityChaos Edge of Chaos

5 © 2012 International Institute for Learning, Inc. Complex Systems Characteristics Non-linear Tipping points/phase shifts Emergence Macro different from micro; non- deterministic Dancing Landscape 5

6 © 2012 International Institute for Learning, Inc. 6 ICCPM Characteristics of Complex Projects Uncertainty, ambiguity, dynamic interfaces, and significant political or external influences Run over a period which exceeds the technology being used at the start of the project You know what you want to produce, but you dont know how youre going to build it Adapted from presentation by Stephen Hayes, CEO ICCPM, at the ICCPM Research and Innovation Conference, Lille, France, 16 Aug 2010

7 © 2012 International Institute for Learning, Inc. 7 IILs Complex Project Framework – FIBONACCI FIBONACCIFIBONACCI

8 © 2012 International Institute for Learning, Inc. 8 Introduction to FIBONACCI Based on IILs project methodology (UPMM), which: Starts with PMIs five standard process groups Adds: Originating to address issues around properly setting project expectations Continuous improvement added to address issues around landscape adaptation –Structural –Temporal –Technical –Directional Re-orients the phase names to reflect added elements required to handle complexity. (FIBONACCI)

9 © 2012 International Institute for Learning, Inc. 9 Framing

10 © 2012 International Institute for Learning, Inc. 10 Summary and Importance of Framing Need to have a realistic understanding of project expectations and risks prior to and during the project. Budget Scope Schedule Business value

11 © 2012 International Institute for Learning, Inc. 11 Potential Pitfalls & Possible Solutions Potential pitfalls: Conspiracy of optimism Related theories, e.g., Prospect Theory Possible Solutions (objectivity) Reference class forecasting Pre-mortem Benefits analysis audits Push back

12 © 2012 International Institute for Learning, Inc. 12 Prospect Theory Daniel Kahneman and Amos Tversky – 1979 Challenged the expected utility theory of economic decision making which suggests rationality of decisions Excessive attention to low-probability high-drama results vs. higher-probability common occurrences (traveling during high terrorism alert vs. traveling anytime by automobile) Ignoring regression to the mean (gambling hot streak, 2008 economic crisis) Problem framing affects decisions

13 © 2012 International Institute for Learning, Inc. 13 Framing the Issue Problem 2 Disease breakout in a small town – 1800 people may die - two possible vaccines available to deal with the crisis Vaccine X: 1200 of 1800 people will die Vaccine Y: 33% probability no one will die; 67% probability 1800 people will die Problem 1 Disease breakout in a small town – 1800 people may die – two possible vaccines available to deal with the crisis Vaccine X: 600 people will be saved Vaccine Y: 33% probability all will be saved; 67% probability all will die K/T experiments: 72% chose the risk-averse (600 will be saved) selection, Vaccine X. K/T experiments: 78% chose the risk-seeking (could not tolerate sure loss of 1200) selection, Vaccine Y.

14 © 2012 International Institute for Learning, Inc. 14 Framing Conclusions Were risk averse when a problem is framed in a particular manner, and risk seeking when the same problem is framed differently. We tend to focus on parts of problems (particularly those that most immediately affect our thinking) rather than the problem as a whole.

15 © 2012 International Institute for Learning, Inc. 15 Reference Class Forecasting – An Outside Look Lovallo/Kahneman and Flyvbjerg both suggest Reference Class Forecasting Select reference class Assess distribution of outcomes Predict your projects position in the distribution Assess reliability of your prediction Correct intuitive estimate Adapted from Lovallo, D. and Kahneman, D., Delusions of Success, Harvard Business Review, p. 7

16 © 2012 International Institute for Learning, Inc. Pre-mortem A post-mortem before the project starts: Envision failed project one year hence Consider why the project might have failed Correct initial top-down estimates 16

17 © 2012 International Institute for Learning, Inc. 17 Inception

18 © 2012 International Institute for Learning, Inc. Before We Look At Inception… SIX VOLUNTEERS PLEASE! 18

19 © 2012 International Institute for Learning, Inc. 19 Summary and Importance of Inception Phase Inception phase parallels and enhances Initiating Initiating is mission critical for complex projects Key factors: Stakeholders Risk Project managers competencies

20 © 2012 International Institute for Learning, Inc. 20 Potential Inception Pitfalls Beware of: Assuming successful traditional PM can lead a complex project Underestimating importance of: Charters acceptance by key stakeholders Political dynamics in stakeholder interactions Emerging (unknown) risk

21 © 2012 International Institute for Learning, Inc. 21 Risk Categories Complex risk categories Structural Technical Directional Temporal Adapted from Remington, Kaye and Pollack, J., Tools for Complex Projects (Surrey, Gower Publishing Ltd, 2008) pp. 6-8 Complex Project (Risk Breakdown Structure) StructuralTechnicalDirectionalTemporal

22 © 2012 International Institute for Learning, Inc. Structural Complexity 22 Hugh effort Difficult to schedule/track Many parallel activities Difficult to track all the risks

23 © 2012 International Institute for Learning, Inc. Technical Complexity 23 Never done before Never seen before Difficult technical solutions

24 © 2012 International Institute for Learning, Inc. Directional Complexity No consensus on strategic direction Competing agendas 24

25 © 2012 International Institute for Learning, Inc. Temporal Complexity 25 Major external changes affect project Leadership M & A Regulatory Political Extended duration projects

26 © 2012 International Institute for Learning, Inc. Beware of Reinforcing Risks 26 Risks ABCDEFG AX B CX D EXXX FX GXX B C G F ED A D E Risk Interface Matrix Circle of Potential Risks

27 © 2012 International Institute for Learning, Inc. 27 Blueprint

28 © 2012 International Institute for Learning, Inc. 28 Summary and Importance of Blueprint Phase Multiple, differing life cycles may be needed Precise planning for all phases of project not possible – rolling wave planning required Importance of involving stakeholders in planning process, getting buy-in Need for exploring non-traditional procurement vehicles Ambiguity in the planning process is normal Repurposed scheduling/tracking tools

29 © 2012 International Institute for Learning, Inc. 29 Potential Planning Pitfalls Discomfort with ambiguity leads to wasting effort trying to pin things down Traditional scheduling tools not able to handle ambiguity/what ifs Imposition of single, inappropriate life cycle due to organizational intransigence Unwillingness of corporate purchasing organization to pursue alternative procurement vehicles

30 © 2012 International Institute for Learning, Inc. 30 Scheduling/Tracking Tool Issues Todays scheduling tools are not difficult to use on simple projects, however: They become much more cumbersome to use on medium to large projects As comprehensive tools evolved, the difficulty of using them increased Difficulty of use limits its use to scheduling specialists Stakeholder interaction with scheduling process marginalized

31 © 2012 International Institute for Learning, Inc. 31 Shift in Scheduling Emphasis Current scheduling tools Linear Deterministic Complex projects are neither linear nor deterministic, so that: Need exists for tools to reflect reality of complex projects New tools need to: Facilitate non-linearity & emergence Promote polyarchic planning Help to motivate project team members

32 © 2012 International Institute for Learning, Inc. 32 NetPoint Graphical path method Link gap Drift, float Collaborative planning

33 © 2012 International Institute for Learning, Inc. 33 Oversight, Navigation & Adjustments

34 © 2012 International Institute for Learning, Inc. 34 Summary and Importance of O, N & A Changing organizational structures Need for polyarchic leadership Use of situational leadership styles KPIs key to stakeholder management Importance of networks to information management

35 © 2012 International Institute for Learning, Inc. 35 Potential O, N & A Pitfalls Traditional hierarchical organization structures not enabling for complex adaptive systems PMs discomfort with continuing uncertainties, ambiguities leads to: I mposition of oligarchic leadership Squelching creativity Demotivating project team Stakeholders not abiding by their agreements KPIs improperly defined or not defined at all Improperly skilled or motivated team members

36 © 2012 International Institute for Learning, Inc. 36 Chimneys to CAS Organization Obolensky, Nick. Complex Adaptive Leadership (Surrey, Gower Publishing, 2010) p. 23

37 © 2012 International Institute for Learning, Inc. 37 The Leader/Follower Charade Complex Adaptive Leadership 1 Charade in todays leader/follower relationship Preponderance of solutions to problems originate in the middle and bottom of the organization. Regardless, leaders pretend theyve got all of the answers, followers are culpable in letting them continue the charade. Subordinates need to challenge in order to follow, and superiors must listen in order to lead. 2 1 Obolensky, Nick. Complex Adaptive Leadership (Burlington, Gower Publishing Company) Hirschorn, L. and T. Gilmore. The New Boundaries of the Boundaryless Company Harvard Business Review, May-June 1992 as cited in Obolensky.

38 © 2012 International Institute for Learning, Inc. 38 Exercise – Leaderless Team

39 © 2012 International Institute for Learning, Inc. 39 Presentation Recap This module included the following topics: Complexity and Projects Fibonacci Model Emotions and Decision Making Importance of Risk Management Scheduling Tools Leadership in Complex Projects

40 © 2012 International Institute for Learning, Inc. 40 Questions?

41 © 2012 International Institute for Learning, Inc. 41


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