Project management is the process of getting an initiative from point A to point B within scope, budget and time. Project Management is about execution. It’s the science and art of getting things done. One would think that as companies are getting bigger and the projects become more complex, Project Management is considered a strategic competency. Surprisingly, this is not yet the case. In my role dealing with large Fortune 500 companies I have yet to find a Chief Project Management Officer (CPMO) – a C-level executive driving execution throughout a company using a consistent methodology and a consistent set of tools. Mostly, Project Management is organizationally managed on the division level. In the world of research and development for example, the head of a pharmaceutical division has a VP of Project Management reporting to her. Sometimes the VP of Project Management reports into Finance or IT. Being two or three management layers removed from the C-level executive suite, project management is often seen as a tactical tool or operation.
The importance of Strategic Project Management is increasinly recognized by leading firms. It is the process of:
- Planning and managing the entire product and initiatives portfolio of an organization.
- Maintaining a consistent project management methodology.
- Establishing standards of how work is being conducted internally.
- Managing the increasingly more complex interfaces with vendors, partners and alliances.
Last year, Eli Lilly’s CEO John Lechleiter gave a speech about the three pillars of Lilly’s key competencies. One of those three pillars is Project Management. He said, ” A second competency is project management – which is critical to the success of the complex, multi-year drug development process. Last month, we announced the most sweeping changes in our company’s history. As part of those changes we’re creating a Development Center of Excellence – or COE – that will streamline the development of new medicines with one common operating system, one common set of priorities, and a singular focus. The COE is implementing a project management methodology called “Critical Chain,” developed by physicist Eli Goldratt. Critical Chain was actually first applied at Lilly in a completely different context by our IT group. They, in turn, helped our research labs launch a pilot program that has proved the power of Critical Chain in drug development. Historically, across our pipeline, we have a 60% success rate in hitting milestones on time – in other words, we miss almost half of our deadlines. In the Critical Chain pilot program, the success rate so far is 100%. That’s why we’re now applying Critical Chain in force.” The entire speech can be found here.
Lechleiter’s speech gives some indication of why in Project Management will be increasingly strategic in nature in the future. Every major corporation has to deliver results. When will products ship? Will they be on the market in time to capture a market opportunity? Can we go faster to market than the competition? How can we drive execution without increasing overhead? How can we cooperate effectively in a highly networked business world? Today’s CEOs will have to be able to answer these questions on their calls with Wall Street analysts. They need to be able to make their companies do what is most important: Execute!
- On January 31, 2010