International Project Management

Chapter 1

Project Management Basics

You can have it good, fast, or cheap: pick any two. The Project Manager’s Maxim [1]

In order to gain a grasp on project management, we must first have a basic understanding of what a project is and is not. Many individuals will claim that they work on projects, are a project manager or have too many projects to keep up. In many cases, they are correct about such a claim, but in other circumstances, there is simply a lack of understanding for what a true project is and the responsibilities associated with a project. There are a few criteria that must be identified early:

A project must have a defined start and finish. It is temporary. The first element that is frequently lost on individuals is that a project is not a part of operations and requires a distinctly defined start and finish to qualify as a project. All too often individuals will be a part of the operations function and they have several tasks to address every day, but when these tasks are part of an on-going, cyclical process, it is not a project. In fact, if a defined end-point is lacking, then it is not a project. To properly manage a project, there should be a well-defined schedule breaking down required efforts into smaller subsections and identifying intermediate deliverables. More on schedules later. [2]

A project must create a unique product, service or event. A project will eventually result in the desired work product, which can take many forms. Individuals who develop new products will eventually see their concept turn into something that the end consumer can use. Professionals intend to create a new service that will provide for the needs of the consumer by easing a task or bringing something new or improved to the world. [3] Some project managers will organize an event such as a charity fundraiser. Each of these work products are involved in creating something new or different that has not been created before.

A project must be complex. This requirement is certainly subjective. Very few individuals would challenge the claim that planning, designing, construction and occupation of a 100-story skyscraper is not complex and would not meet the requirements of a project. Very few individuals would argue that tying your shoes each morning is complex or is a project. However, there are so many examples in between that one might be inclined to claim project status while others would be firmly set against such a claim. Experience in the particular industry would be crucial to this judgement call and ultimately those involved will have to make the determination on how to handle the specific assignment, as a project or as a process.

A project must be non-routine. The key word is unique. If the product, service or event has occurred before and the planning will simply involve taking out the last schedule, adjusting the start date and following the steps almost identical to the first project, then there is no project involved. A process has been defined and the repetitive versions are variations on a project. Thus, those who work on a manufacturing line and perform the same inspections on a daily routine, will not qualify as managing a project. Both skills, project management and process management are absolutely necessary, but they are distinctly different roles and require different skill sets. [4]

A project will have a separate budget identified. In order to develop a new product, service or event that is new to the world, complex and non-routine will require a budget. This could be as small as a few hundred dollars for a non-profit organization that uses volunteer hours, but it could also be $42 billion as the Beijing Olympics demonstrated [5]. A defined budget should be prepared based on estimates from the project team, project manager and prior experiences. More on this later, as well.

The example frequently given to identify a project is that of changing a tire. If somebody changes your tire for you on the side of the road, they are providing you with a service. That may meet one of the definitions. You may never have changed a tire yourself, which may indicate that it is a new experience. You may have to pay for the tire to be changed and might indicate that there is a budget. However, we must consider one important element. Changing a tire is a routine topic simply based on the fact that there is an instruction manual provided, usually in the glove box, and thousands of tires are changed each day by individuals who follow the prescribed process to change the tire. One might also argue that this is not a project based on the fact that it is not too complex. The required steps are usually completed in a page or two. Thus with a recipe, experience by millions of individuals worldwide and a budget that would consist of one line item, changing a tire is not a project.

Figure 1.1. Examples of projects and non-projects

Another example frequently referenced is the remake of a movie. Considering the gross lack of creativity in the movie industry today, producers frequently will fall back upon a past success to draw current success. Consider a movie that was made in the 1960s or 1970s that was incredibly popular. Would the remake of this movie be considered a project or not? Take a look again at the requirements:

A project must have a defined start and finish. Making the second movie would certainly require a start and finish schedule with the actors, crew and staff.

A project must create a unique product, service or event. This might be questionable, but anybody that has seen a remake knows that they rarely have the same quality as the original and therefore it is essentially a unique product. If it were not, why would individuals wish to see the original again?

A project must be complex. There should be little question that the making of a movie is a complex task. Numerous individuals, sets and resources must be well coordinated for location, timeliness and quality of material.

A project must be non-routine. Gathering this particular set of actors, crew and staff is likely unusual. The location, sets and materials needed will be different than other movies made even if with the same basic actors and director. It is unlikely that the majority of other individuals are all involved, unless it is a sequel.

A project will have a separate budget identified. A movie absolutely requires a budget to cover all of the staff, materials, food, housing, etc. necessary to move a small city during the shoot.

Now that we have covered what a project is, we can begin to look a bit at the history of modern project management.

History of Project Management

Projects have been managed since the beginning of time, but there wasn’t always a formal procedure of how to manage projects. It appears that over time there was a growing need to manage projects more formally as resources become more difficult to secure and control.

Consider some of the greatest projects of all times in the wonders of the world such as the Great Pyramids of Egypt and the Great Wall of China. The pyramids and the wall that separates China from Mongolia have to be considered some of the greatest feats of history simply because of the magnitude of the work required with primitive tools. However, they learned to use the tools available and used massive amounts of manual labor, which would not be economically possible in the twenty-first century.

During industrialization of the 19th century in the nations of Great Britain, Germany and the US, companies began to organize and implement upgrades of machinery and techniques into the massive production plants using rudimentary project management skills. [6] Let’s take one example here. John Rockefeller required some serious project management skills to make the transcontinental railroad possible and with an attempt to remain efficient. Consider the shear magnitude of moving a small city of surveyors, carpenters, welders, cooks and butchers that it took to keep up with the movement of laying a few miles of track every few days. The men would have to sleep in rolling carriages on the rails that were recently completed. There were herds of cattle that had to be moved with the men because the distance to move beef and other food-stocks would be too expensive. The cattle were even moved on the rail as it was being completed. Consider the details of communication for the westward moving crew with civil war veterans and Irish immigrants who needed to meet up with the eastward moving crew from San Francisco comprised heavily of Chinese immigrants. If either of the two teams of surveyors was not planning accurately, the eastward and westward rails could be off by several dozen miles. Instead, they had to be within fractions of an inch for everything to work properly.

Furthermore, consider that the railroad industry was being supported by the iron industry for the rails for Pennsylvania, lumber industry for the rail ties in Michigan and Wisconsin, boating to move the rail ties across Lake Michigan, cattle industry to feed the workers and numerous other industries. Planning, execution, controlling and communication were effectively implemented despite the lack of modern tools, by today’s standards. Ultimately this effort changed a very dangerous three-month trip by wagon to one-week trip on a reasonably safe and less strenuous rail ride. The closing of this project was ceremoniously completed with the golden spike driven into the last rail, which was promptly removed and replaced with a standard iron spike for obvious reasons! This is one example that projects were existent and doing well. [7]

Looking forward to the early 1900s, many individuals marvel at the auto industry and Ford’s production line. However, Ford is the master of process management and not project management. Production lines are necessary, following a project. Ford developed the Model-T and was happy with the results. In fact, the popular phrase from Ford’s autobiography Any customer can have a car painted any color that he wants so long as it is black [8] carries on to this day. Henry Ford was not interested initially in creating numerous different cars and performance. His fame comes from finding ways to make that same vehicle more cost-effective and find ways to make sure that the product quality was identical from automobile to automobile. Hence, project management took a back seat at Ford during those years and process management or operations management was critical.

Many other industrialization efforts such as buildings, railways, new factories and businesses required project management, which lead into process improvements during that period. My personal favorites are the inventions of Thomas Edison. The man was tireless and during the late 1800s and early 1900s he managed to secure over 1,000 patents. This is more than four times the number of patents issued to all inventors from 1790 to 1800, the first decade of the patent office in the United States! [9] Look at a list of products developed during that time by Thomas Edison (1,093 patents) alone. Consider the unimaginable list from Westinghouse (361 patents) [10] and many others [11]:

Edison’s Inventions

✓  Automatic Telegraphy

✓  Cement

✓  Disc Phonograph

✓  Electric Generator

✓  Electric Lamp

✓  Electric Light and Power System

✓  Electric Pen

✓  Loud-Speaking Telephone

✓  Motion Pictures

✓  Ore Milling

✓  Quadruplex Telegraph

✓  Stock Ticker

✓  Storage Battery

✓  Telephone Transmitter

✓  Tinfoil Phonograph

✓  Vote Recorder

✓  Wax Cylinder Phonograph

Of course, similarly impressive lists of projects in construction, land development, business formulations and exploration could be presented for these periods, but that is not the intent of this book or chapter!

Consider the growth of computers and information technology during the 1950s. Look back to the examples that were