Chapter 1

Project Leadership

In This Chapter:

• Twenty-First Century Leadership

• Twenty-First Century Projects

• Management versus Leadership

• Combining Disciplines Leads to Success

• The Power of the Project Leadership Team

• The New Project Leader

• The Core Project Team

Leadership is one of those concepts that is recognizable when you observe it in action but is otherwise somewhat difficult to define. Books about leadership abound, each describing the concept in a different way. Leadership can be defined as:

The art of persuading or influencing other people to set aside their individual concerns and to pursue a common goal that is important for the welfare of the group

The ability to elicit extraordinary performance from ordinary people

The capacity to integrate the goals of the organization with the aspirations of the people through a shared vision and committed action

The ability to motivate people to work toward a common goal

While there are no gauges by which we can effectively measure the value of leadership, leadership is often the factor that makes one team more effective than another. Leaders are often held accountable for team successes and failures. When a team succeeds, we often remark about keen leadership abilities; when a team fails, the leader is likely to receive the blame.

Leadership is people-centered. It always involves actions by a leader (influencer) to affect (influence) the behavior of a follower or followers in a specific situation or activity. Three contributing factors must be present for true leadership to take place: inborn characteristics, learned skills, and the right situation. We may not be able to do much to shape our inborn leadership characteristics, but we certainly can create the appropriate learning opportunities and try to influence our current situation and environment.

Twenty-First Century Leadership

In decades gone by, business leadership was considered the province of just a few people who controlled the organization. In today’s rapidly changing business environment, however, organizations rely on a remarkable array of leaders who operate at varying levels of the enterprise. Twenty-first century leadership looks very different from that of previous centuries for several reasons: the economic environment is more volatile than ever before, there is a strong need for more leadership at differing levels of the organization, and lifelong learning is at the heart of professional success. The most valuable employees will no longer stay in narrow functional areas but will likely work broadly across the enterprise.

As we transition from the traditional stovepipe, function-centric structures to the project-centric workplace, we are seeing the emergence of project management and business analysis as critical business practices. Work has been transformed from multiple workers performing a single task to teams that perform multiple activities on multiple projects, and twenty-first century projects are larger, more strategic, and more complex than ever before.

Twenty-First Century Projects

Virtually all organizations of any size are investing in large-scale transformations of one kind or another. Contemporary projects are about adding value to the organization with breakthrough ideas, optimizing business processes, and using information technology (IT) as a competitive advantage. These initiatives are often spawned by mergers or acquisitions, new strategies, global competition, or the emergence of new technologies. Other initiatives are launched to implement new or reengineered business systems aimed at driving waste out of business operations.

Most of these changes are accompanied by organizational restructuring, new partnerships, cultural transformation, downsizing or right-sizing, and the development of enabling IT systems. Others involve implementing new lines of business and new ways of doing business (e.g., e-business).

In addition to these business-driven changes, IT organizations are transforming themselves, striving to become more service-oriented and better aligned with the business. In the twenty-first century, project teams no longer deal with IT projects in isolation but within the overarching process of business transformation. The reach of change affects all areas of the organization and beyond—to customers, suppliers, and business partners—making the complexity of projects considerable.

Rather than undertaking only a small number of projects, today’s organizations are engaged in virtually hundreds of ongoing projects of varying sizes, durations, and levels of complexity. Business strategy is largely achieved through projects. Projects are essential to the growth and survival of organizations. They create value in the form of new products and services as a response to changes in the business environment, competition, and the marketplace.

To reap the rewards of significant, large-scale business transformation initiatives designed not only to keep organizations in the game but also to make them major players, we must be able to manage complex business transformation projects effectively. Huge cost and schedule overruns, however, have been commonplace in the past. According to leading research companies such as The Standish Group International, Inc., the Software Engineering Institute at Carnegie Mellon University, Gartner, Forrester Research, and Meta Group, vastly inadequate business transformation and information technology project performance has been the order of the day. The actual numbers are at best disappointing, if not unacceptable:¹.

About $80 to $145 billion per year is spent on failed and canceled projects.

As a result of rework, 25 to 40 percent of all spending on projects is wasted.

Fifty percent of new business solutions are rolled back out of production.

Forty percent of problems are found by end users.

Poorly defined applications have led to persistent miscommunication between business and IT that largely contributes to a 66 percent project failure rate for these applications, costing U.S. businesses at least $30 billion every year.

An estimated 60 to 80 percent of project failures can be attributed directly to poor requirements gathering, analysis, and management.

Nearly two-thirds of all IT projects fail or run into trouble.

These dismal statistics and the increased importance of projects in executing business strategies have advanced the value and criticality of project leaders, including project managers, business analysts, technologists, and business visionaries. It is important to recognize the differences between traditional project management and project leadership in this context.

Management versus Leadership

Management competency involves establishing and executing a set of processes that keep a complicated system operating efficiently. Key aspects of management involve planning, budgeting, organizing, staffing, controlling, and problem solving. Some say management is about keeping bureaucracies functioning.

Leadership is a different set of processes, those that create a new organization and change it when the business environment shifts significantly. Leadership involves establishing direction and aligning, motivating, and inspiring people to produce change. The irony is that as new or changed organizations emerge, succeed, and grow through leadership and entrepreneurship, managerial processes need to be put into place to cope with the growth and control the system. As the organization succeeds and managerial processes are put in place, arrogance tends to surface and a strong culture that is resistant to change develops.²

Although there are similarities in the roles of manager, leader, and project leader, there are subtle differences as well. Table 1-1 shows the distinctions between these roles to help you understand the differences as you hone your project leadership competency.

Table 1-1—Comparing Leadership Roles

Organizations in the past have focused on management and virtually excluded the vital role of leadership in projects. The project manager focused heavily on planning, budgeting, organizing, staffing, monitoring, and controlling. All project team members report to the project manager regarding project work assigned to them. Figure 1-1 depicts a traditional project team configuration.

Twenty-first century project teams are required to focus less on management and control, and focus more on leadership, collaboration, and forming multi-disciplinary teams to succeed.

Combining Disciplines Leads to Success

In the last four decades, we have discovered the full power and potential of using information technology effectively. Superior business solutions supported by enabling technology can bring about a significant competitive advantage. In the absence of business-focused project leaders, we often focused on the technology, asked the senior engineer to serve as the project manager, and virtually overlooked the critical role of the business analyst.

Figure 1-1—Traditional Project Team Configuration

All too often, expertise in the technical area of the project was the sole criterion for a project leadership position. Time and again, projects experienced difficulties—not from lack of technical expertise, but from an inability to understand the business need and the strong cultural influences, manage the politics, secure the appropriate resources, and build high-performing project teams. There was often a low tolerance for technical failure and a high tolerance for rework, cost overruns, and schedule delays.

As projects become larger and more cross-functional, global, and complex, organizations are realizing that business analysis and project management leadership skills are indispensable. In the last two decades, the focus of project management has been on quantitative skills like cost management, schedule management, quality control, scope management, and configuration management. Technically competent engineers have made the professional transition to the discipline of project management as a by-product of their technical mastery.

These project managers tend to focus on the tools and techniques used to plan projects, estimate costs and resource requirements, issue requests for proposals, award contracts, and monitor and control issues and risks—the technical side of project management. Often these persons play multiple leadership roles on projects—the role of technical lead, requirements engineer, lead architect, and project manager. Inevitably, after the initial planning activities are complete, the technical activities tend to win most of the project manager’s attention.

It is now becoming clear that the technical project management knowledge areas are necessary but not sufficient to successfully manage the large, enterprise-wide, complex, mission-critical projects that are the norm today. Indeed, it takes a business-focused leadership team with diverse skills and perspectives to pull it off. Combining the business analysis and project management disciplines to corral the best business and technical minds holds great potential. Investing in project leaders and high-performing project teams reaps rewards in terms of reduced cost, lower risk, and faster time to project delivery.

The Power of the Project Leadership Team

Organizations use projects to add value to their products and services to better serve their clients and compete in the marketplace. To realize their goals, organizations tap into the talents and competencies of project leadership teams consisting of the business analyst, the project manager, technologists, and business visionaries.

As discussed in detail in another volume in this series, The Business Analyst as Strategist: Translating Business Strategies into Valuable Solutions, project-driven organizations develop a portfolio of projects. Executives spend a great deal of time identifying which projects offer the greatest rewards with minimal risks. However, to make good project investment decisions, executives are discovering the need for business analysis to provide solid information backing their decisions.

The business analyst provides the processes, tools, and information that enable executives to develop a portfolio of valuable projects. The business analyst then transitions to focus on project execution to meet business needs and maximize the organization’s return on project investment.

It is not enough for executive teams to just select the right mix of projects to achieve their strategic imperatives. Executive teams must also establish the organizational capabilities to deliver. Project teams must be capable of contributing to the organization’s success. For optimal project execution, several elements are essential:

Appropriate management support and decision-making at key control gates

Effective and targeted business analysis, systems engineering, and project management processes, tools, and techniques

Technical infrastructure and software applications that are tightly aligned with the business

High-performing teams

It is especially important for executives to develop exceptional project managers and business analysts so they can transition into effective project leaders. Figure 1-2, the Business Analyst and Project Management Leadership Model, depicts the transition from capable individual to world-class project leader. The performance of the business analyst is more critical than ever to keep the project team focused on the business benefits sought through project outcomes.

Figure 1-2—Business Analyst and Project Management Leadership Model

With so much riding on successful projects, the business analyst is emerging to fill the information gap between strategy and execution, the project manager has risen to the role of strategic implementer, and cross-functional project teams have become management’s strategic tool to convert strategy to action.

When the project manager and business analyst form a strong partnership with the business and technology teams, they will begin to reap the maximum value of both disciplines. As the business analysis and project management disciplines mature into strategic business practices, so must our project leaders evolve into strategic leaders of change.

The New Project Leader

As programs and projects are launched to realize critical strategic goals, leaders of strategic initiatives should be looked upon as the executive officer team of a small enterprise. Just as a business leader must be multiskilled and strategically focused, a project leader must possess a broad range of knowledge and experience, including competence in several distinct areas—general management, project management, business analysis, the application area (the domain), leadership, and business/technology optimization. Refer to Figure 1-3for a view of project leadership competency areas and ,Table 1-2 for a summary of knowledge and skill requirements.

Figure 1-3—Project Leader Competency Groups

Clearly, a well-formed team of experts is equipped to provide the requisite knowledge and skills better than a single individual. In the twenty-first century, small-but-mighty, high-performing teams of experts are a vital strategic asset.

Table 1-2—Project Leader Knowledge and Skill Requirements

The Core Project Team

It is now becoming clear that successful projects are more about collaboration and leadership as opposed to command and control. In the twenty-first century, the project team structure is transitioning to one of team leadership versus project management. Consider the core project team configuration represented in Figure 1-4. Using this approach, the core team is small, multi-disciplined, dedicated to the project full-time, and co-located. The core team forms sub-teams and brings in subject matter experts when needed.

Figure 1-4—Core Project Team Configuration

This core team shares the leadership of the project, each person taking the lead when his or her expertise is needed. Shared leadership does not mean there is no accountability. The project manager is still responsible for ensuring that the business solution is delivered on time, on budget, and with the full scope promised. The business analyst is responsible for ensuring that the project team fully understands the business need and the benefits expected from the new solution, and for validating that the solution meets the requirements and will deliver the expected business benefits. The architect ensures that the solution is designed and developed according to specifications. The business visionary continues to keep the team focused on the big picture, the strategic goal that will be advanced by the new solution; brings in the appropriate business experts when needed; and helps prepare the organization to operate in a new way once the business solution is deployed.

Whereas in the past project teams revolved around the project manager as their leader, the very nature of project team leadership is changing. The team leadership changes subtly based on the needs of the project. The project manager still leads the project management activities. During requirements elicitation, the business analyst takes the lead and the other core team members slide into more of a support role. As the project moves into solution design and development, the technical architect or developer often assumes the lead role. All core leadership team members support each other, and they get out of the way when their expertise is not the critical element needed.

In the next chapter, we will explore the role of the business analyst as project leader in more detail.