Consulting Journal: Methods - Project styles (1)

Methods: Project styles (1)

by David Blakey

In the first of two articles, we look at differing styles of project management.

[Monday 7 July 2003]

Two companies compete in the same sector. They provide services to commercial and domestic customers based on technology. They both need to provide new services to their customers. The time taken to get those services into the market is critical. They manage their projects to do this in different ways. It is worth looking at their differing styles of project management and examining how the various factors in their styles work together.

Project models

The first company manages its projects mainly on a sequential model, so that they start a project and then progressively build each of the services. If a project is terminated early, then some of the services may not exist at all. Any services that were under development when the project was terminated will be incomplete and unusable. The services that have already been developed will be complete. They will probably not be marketable without the remaining services, however.

The second company manages its projects mainly on an iterative model. They build prototypes and then gradually refine these prototypes into finished services. If one of their projects is terminated early, then all the services exist, although they may not be complete.

One factor of their differing styles is therefore their project management model: sequential or iterative.

Problem management

There are other differences. These are their approaches when a project runs into trouble and there is not enough time or money to complete them. Time is important for both companies, as their launch of new services is dependent upon new technology or new marketing campaigns, and often upon both. There is an advantage to both of them in being able to use expensive new technology as quickly as possible and to remain competitive by getting new services to market quickly.

The first company will blow their budget to produce a complete set of high quality services within a given time.

The second company will hold their budget and settle for services whose quality and performance are lower than planned.

Effects

These different approaches fit well with their project management models. The first company will have to increase the costs of a project in order to complete all their services. The second company will have a set of workable services earlier in their projects, and they can curtail their projects before these services have been fine-tuned and neatly packaged.

The impact for the first company is that it must increase the revenue from its new services to pay for the budget blow-out. The second company will often go to market with its inferior services and then improve those services through future projects financed from the revenue from those services.

The first company has more run-away projects than the second. Because it needs to increase its budget in order to get a complete set of high quality services, the first company has little control over the amount of that increased expenditure. In simple terms, it has to spend whatever amount is needed in order to have the complete set of services that it needs for the market.

The second company has more low quality services than the first, although many of these services are improved by later projects. Strangely, its reputation in the market is for announcing new services that are superior to quality to those of the first company.

Constraining time

This situation seems only to occur when time is a constant. In a market with few sellers, time in getting new services to market is important.

When quality is the main constraint, both time and budget may blow out. Time and money are linked. If the time increases, then the cost does too.

When the budget is the main constraint, then quality tends to decrease, while time stays much the same. Given the link between time and money, the budget constraints are usually time constraints as well.

When time is the main constraint, then companies have a choice between quality and budget. This choice is largely made for them by their project management styles. It would be difficult for the first company, with its beginning-to-end style, to settle for lower quality within a fixed budget. Similarly, it would be difficult for the second company, with its bottom-up style, to ensure higher quality within the same time by increasing its budget.

We shall look at how these project management styles and problem management approaches can affect consulting assignments in the next article.

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