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The PORTABLE MBA in PROJECT MANAGEMENT PORTABLE MBA in PROJECT MANAGEMENT EDITED BY ERIC VERZUH John Wiley & Sons, Inc. PORTABLE MBA in PROJECT MANAGEMENT The Portable MBA Series The Portable MBA, Fourth Edition, Robert Bruner, Mark Eaker, R. Edward Freeman, Robert Spekman, Elizabeth Teisberg, and S. Venkataraman The Portable MBA Desk Reference, Second Edition, Nitin Nohria The Portable MBA in Economics, Philip K. Y. Young The Portable MBA in Entrepreneurship, Second Edition, William D. Bygrave The Portable MBA in Entrepreneurship Case Studies, William D. Bygrave The Portable MBA in Finance and Accounting, Third Edition, John Leslie Livingstone and Theodore Grossman The Portable MBA in Investment, Peter L. Bernstein The Portable MBA in Management, Second Edition, Allan R. Cohen The Portable MBA in Market-Driven Management: Using the New Marketing Concept to Create a Customer-Oriented Company, Frederick E. Webster The Portable MBA in Marketing, Second Edition, Alexander Hiam and Charles Schewe The Portable MBA in New Product Development: Managing and Forecasting for Strategic Success, Robert J. Thomas The Portable MBA in Psychology for Leaders, Dean Tjosvold The Portable MBA in Real-Time Strategy: Improvising Team-Based Planning for a Fast-Changing World, Lee Tom Perry, Randall G. Stott, and W. Norman Smallwood The Portable MBA in Strategy, Second Edition, Liam Fahey and Robert Randall The Portable MBA in Total Quality Management: Strategies and Techniques Proven at Today’s Most Successful Companies, Stephen George and Arnold Weimerskirch PORTABLE MBA in PROJECT MANAGEMENT EDITED BY ERIC VERZUH John Wiley & Sons, Inc. This book is printed on acid-free paper. ➇ Copyright © 2003 by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per- copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, e-mail: [email protected]. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. The publisher is not engaged in rendering professional services, and you should consult a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our Web site at www.wiley.com. Chapter 3 is abridged from Project Management: A Managerial Approach, 5th edition, by Jack R. Meredith and Samuel J. Mantel Jr. Copyright © 2003 by John Wiley & Sons, Inc. This material is used by permission of John Wiley & Sons, Inc. Chapter 8 is from The Pfeiffer Book of Successful Team-Building Tools, edited by Elaine Beich. Copyright © 2001 by John Wiley & Sons, Inc. This material is used by permission of Pfeiffer/Jossey- Bass, Inc., a subsidiary of John Wiley & Sons, Inc. Chapter 9 is from Managing Software Development Projects, 2nd edition, by Neal Whitten. Copyright © 1995 by John Wiley & Sons, Inc. All rights reserved. Chapter 10 is from Mastering Virtual Teams, 2nd edition, by Deborah L. Duarte and Nancy Tennant Snyder. Copyright © 2001 by Jossey-Bass, Inc. This material is used by permission of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc. Chapter 12 Copyright © 2003 by the pci group. Chapter 13 is from Creating an Environment for Successful Projects, by Robert J. Graham and Randall L. Englund. Copyright © 1997 by Jossey-Bass, Inc. This material is used by permission of Jossey-Bass, Inc., a subsidiary of John Wiley & Sons, Inc. ISBN 0-471-26899-2 Printed in the United States of America. 10987654321 To my parents, Jim Verzuh and Julie Welle Verzuh, and to my parents-in-law, Larry and Fran Kissler, whose lives and accomplishments continue to be an inspiration. Preface In the 1990s, project management moved from a little-used industrial engineer- ing discipline to the engine of managing America’s work. Prior to 1990, project management techniques were unknown to most corporate managers who con- sidered projects to be the realm of engineers or the IS department. In universi- ties, with few exceptions, the only place to learn project management was the industrial and management engineering program—not even “real engineering.” Fast forward to 2003 and project management has leapt to center stage. Corpo- rations are using the “project management office” to implement consistent proj- ect management practices across the enterprise and manage mission-critical strategic initiatives. From the CEO’s office down to the frontlines, business and government organizations have “projectized” their work and are looking to the classic discipline of project management to give them greater productivity and faster response to changing market conditions. This shift has not gone unno- ticed on campus where business schools now offer masters programs in project management and many graduate and undergraduate curriculums include at least one course on project management. What prompted this revolution? The Amer- ican economy is increasingly characterized by change and change means proj- ects; project management is the tool set of the twenty-first century. The growing use of project management mirrors the growing number of projects we find in our workplace. In every industry and profession, organiza- tions find a greater proportion of their time and resources are committed to projects, giving rise to the project-based organization. In the past, many firms considered themselves project based. Consulting firms, construction-related businesses, aerospace companies, and agencies such as the U.S. Army Corps of Engineers can find that 80 percent to 100 percent of their revenue/budget is attributable to projects. However, a firm need not be completely devoted to projects to face the challenges of managing multiple projects or to gain the benefits of applying the project management discipline. If even 20 percent of your organization’s budget or revenue is represented by projects, consider your- self a project-based organization. That isn’t suggesting you try to jam the oper- ations of your entire department or company into the project mold—it is vii viii Preface suggesting that if one-fifth of your budget/revenue is project-based, signifi- cantly improving the performance of your projects will have an impact on your overall bottom line. This book is intended for the leaders of this emerging entity known as the project-based organization. CIOs, department managers, program managers, and senior project managers being challenged to implement project manage- ment—to formalize the processes of managing projects—will find strategies and standards for leveraging the proven discipline of project management. For our purposes, the project-based organization can be a department, di- vision, or entire company. Government agencies and nonprofits should consider themselves candidates as well as for-profit businesses. The traditional project- based firms often focused on a few very large projects or programs. The new breed of multiproject enterprise is often comprised of many smaller, indepen- dent projects. Optimizing performance on one project is already difficult. Op- timizing performance across many concurrent projects requires a conscious method of management. As we optimize the project portion of the business, we cannot afford to ignore the nonproject side. The goal of this book is to provide the methods and framework necessary to run an organization that must suc- cessfully deliver many independent projects. The discipline of project management is well developed. There exist, lit- erally, hundreds of books intended to help us better manage a project. The body of knowledge for managing a multiproject organization is far less devel- oped. This book, intended as a resource for leaders of the project-based orga- nization, must address both topics. It is impossible for a CIO, engineering director, vice-president of new product development, or owner of a construc- tion or consulting firm to optimize their organization’s project performance if she or he cannot
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