Reinventing IT Project Management – Peter Drucker Style

Peter Drucker was the most influential management thinker of the 20th Century for good reason and those reasons have become even clearer in 2010. Drucker consistently pointed out the need for business leaders to reinvent their enterprises by systematically improving their knowledge work (organizational) productivity.

It’s clear that the next generation of project management will need to be at the heart of this reinvention because projects are the only true mechanism for sustainable change. Knowledge work (work that uses ideas, expertise, information and relationships to achieve tasks) is the central ingredient to today’s enterprises and enterprise projects. Unfortunately, the interdependence and changing nature of this work does not respond well to the scientific management methods that helped companies successfully manage projects over the past century.

The implication of this for large organizations and society overall is huge. According to the Project Management Institute, $12 trillion—nearly 20 percent of the world’s GDP—is invested in projects. And with this work, systematically improving productivity within and across organizations is the most common bottleneck. This bottleneck causes high enterprise project failure rates, which, for large enterprise technology projects, is as high as 70 percent according to Standish Group research.

Managers involved with changing large organizations consistently run into the “knowledge work” problem. It’s usually not the technology that fails, it’s the interaction between the technology and the organization itself. For me, I saw this often when I worked as an employee for more than 20 years in large organizations―where among other jobs I ran the Coca-Cola Company’s global information technology function and was CFO of Coca-Cola Beverages Ltd.

Whilst Peter Drucker didn’t focus his writing specifically on technology projects, there is nothing in large enterprises that exposes the function and dysfunction of “knowledge work productivity” more than these types of projects, given the their ever-changing inter and intra-organizational complications.

The Nature of Knowledge Work

Traditional project management was designed for what Peter Drucker termed “manual work” and is based on the scientific management principles developed by Frederick Taylor in the early 1900’s. This type of work―like the work required for building an assembly line―was and is visible, specialized and stable. Knowledge work on the other hand is invisible, holistic, and ever changing. Unlike manual workers who mainly use their hands and backs to get work done, knowledge workers use their situational knowledge to accomplish goals in dynamic environments.

Knowledge work needs to be managed differently than manual work because there are so many ways for it to go off track. A few common examples of unproductive knowledge work include:

  1. Too many meetings that produce too few decisions and actions.

  2. Competing internal priorities with no mechanism for resolution.

  3. Studies that are completed and put on the shelf.

  4. Projects that get started but are never finished.

  5. Projects that get started but are not finished on time.

  6. Projects that never get started but get talked about every year.

  7. High executive turnover that causes frequent changes in direction.

To productively manage the often invisible and ever changing nature of knowledge work projects better, Drucker advised executives to take a more holistic approach, understanding that large projects, like business itself, is more of a social science. He emphasized our need to remove unproductive work and restructure work as part of an overall system. In this light he believed that knowledge should be organized through teams, with clarity around who is in charge at what time, for what reason, and for how long. The key difference between the traditional approach is the need to facilitate this across organizations as well as within organizations―including the project team, corporate functions and divisions, outside consulting firms, and sometimes the board of directors.

Acceleration is the New Quality

The next frontier of project management, in line with Drucker’s thinking, requires that we deliver improvements with greater speed to compete globally. In the 21st Century, large firms won’t threaten smaller companies nearly as much as fast companies will threaten slower ones. Does it take your large company a couple of weeks to set up a meeting with key people because their calendars are so busy or because they won’t be in the office for awhile? And even then, is it difficult to get contentious tradeoffs made and decisions acted upon? If so, you are either in trouble or headed toward it.

The role of acceleration is to knowledge work projects what quality control is to manual work projects because knowledge work changes so rapidly. With knowledge work, acceleration doesn’t imply that the efforts can be shoddy or sloppy. Rather, it means that work needs to be facilitated in real time. It requires ongoing prototyping in the field versus striving for perfection in the office. In today’s knowledge age, what matters most is not what you know but how fast you can apply it. In a rapidly changing competitive environment, acceleration is an essential ingredient in achieving high quality and sustainable competitive advantage.

For knowledge work projects to be managed more productively, consistent with Drucker’s ideas on knowledge worker productivity, a holistic underlying system is needed. It must get everyone on the same page and properly sequence and accelerate Where-Why-What-When-How-Who. Managers often are clear on many of these things at an individual level. But, collectively, it’s very common to have different individual views that don’t add up to a shared enterprise picture. With large enterprise projects, this results in unproductive work and high failure rates.

Using a purely objective approach based on scientific management principles to manage the fluid and invisible nature of knowledge work does not work well in practice. When knowledge work is managed like manual work, it tends to get over-engineered, with overly complex governance structures and project designs. Over-engineering knowledge work that is invisible, holistic and ever-changing makes the work take longer and cost more to implement and manage.

Knowledge work productivity often benefits from a “just-in-time” mindset versus the “just-in-case” approach. With manual work, taking more time to prepare often improves results and reduces risk because the work is stable and won’t change while you’re preparing. With the ever-changing nature of knowledge work, “just in time” is typically more productive and less risky.

Exchange Complexity for Complication

Where traditional project management benefits from being very specialized and mechanized, effective enterprise knowledge work projects require a more holistic and socialized approach. It requires a minor amount of initial complexity at the front end to avoid an unworkable amount of complication later on.