Project Economy

Spotlight Article

The Project Economy Has Arrived by Antonio Nieto-Rodriguez

Project Management

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This document is authorized for use only by mesut yildiz in APM Fall 2022 taught by SUSAN STEVENS, Endicott College from Sep 2022 to Dec 2022.

 

 

Meanwhile, projects (which in volve the changing of organizations) are increasingly driving both short-term performance and long-term value creation—through more-frequent organizational transformations, faster development of new products, quicker adoption of new technologies, and so on. This is a global phenomenon. In Germany, for example, projects have been rising steadily as a percentage of GDP since at least 2009, and in 2019 they accounted for as much as 41% of the total. Precise data is hard to come by for other countries, but similar per- centages are likely to apply in most other Western economies. The percentages

Antonio Nieto-Rodriguez Former chairman, Project Management Institute

AUTHOR

The Project Economy

Has Arrived Use these skills and tools to

make the most of it. U I E T LY BU T pow- erfully, projects have displaced operations as the economic engine of our times. That

shift has been a long time coming. During the 20th century, operations

(which involve the running of orga- nizations) created tremendous value, and they did so through advances in efficiency and productivity. But for most of the current century, productivity growth in Western economies has been almost flat, despite the explosion of the internet, shorter product life cycles, and exponential advances in AI and robotics.

BETTER PROJECT MANAGEMENT

Q

Photographs by JOERG GLAESCHER2 Harvard Business Review November–December 2021

Spotlight

For the exclusive use of m. yildiz, 2022.

This document is authorized for use only by mesut yildiz in APM Fall 2022 taught by SUSAN STEVENS, Endicott College from Sep 2022 to Dec 2022.

 

 

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For the exclusive use of m. yildiz, 2022.

This document is authorized for use only by mesut yildiz in APM Fall 2022 taught by SUSAN STEVENS, Endicott College from Sep 2022 to Dec 2022.

 

 

are probably even higher in China and other leading Asian economies, where project-based work has long been an important source of growth.

And we’re only just getting started. In 2017, the Project Management Institute estimated that the value of project-oriented economic activity worldwide would grow from $12 trillion in 2017 to $20 trillion in 2027, in the pro- cess putting some 88 million people to work in project management–oriented roles—and those estimates were made before nations started spending tril- lions on pandemic-recovery projects.

Forward-looking companies have recognized the organizational impli- cations of this surge. “Soon we will no longer have job descriptions,” one senior IBM talent executive told me. “We will have only project roles.” That’s where the management thinker Roger Martin believes we already should be. “The average person in an office thinks that their life is some sort of regular job,” he told me, “and that the projects they work on get in the way of doing it. In fact, in organizations the entire decision factory should be thought of as nothing but projects.”

Some companies are already starting to make this change. In 2020, Mohamed Alabbar, the founder and chairman of Emaar, the giant Dubai- based property developer, announced that as part of a shift to project-based work, the company had abolished all traditional job titles—including his own—and that employees would now be defined not by the department to which they belonged but by the projects on which they worked. In a similar move, the Richards Group, the largest independently owned ad agency in the United States, has removed almost all its management layers and job titles and now refers to most of its employees as project managers.

This transformation to a project econ- omy will have profound organizational and cultural consequences. The problem is, many leaders still don’t appreciate the value of projects and write them off as a waste of time. Typical is the attitude of one executive who recently told me, “If you want to make sure that something is not done, make it a project.”

It may be that leaders don’t value project management because its methods are too complex to be easily

applied. Many project managers end up producing reams of paperwork, too, which can create the impression that their role is primarily administra- tive. Dismissing the importance and potential of projects for these reasons is a huge mistake. When executives ignore project management, products launch late, strategic initiatives don’t deliver, and company transformations fail, putting the organization’s future seriously at risk.

There’s one more thing that exec- utives often fail to recognize: Projects give work meaning. Behavioral and social science show that projects can be particularly motivating and inspir- ing for team members. The moments they feel most proud of almost always happen on the projects they work on— the successful ones, of course, but often even those that fail.

Leaders need to recognize that their role in the project economy involves more than just the direct sponsorship of individual initiatives. At a broader level, it involves being clear and coura- geous in selecting and prioritizing strategic projects. It involves adopting a project- driven structure and creating a collaborative and empowering culture that reaches across silos. They must also ensure that project management competencies are developed throughout the organization.

I can say all this with confidence because I’ve devoted my career to the study of projects and the practice of

IDEA IN BRIEF

THE SITUATION Projects have displaced operations as the economic engine of our times. By 2027, some 88 million people around the world are likely to be working in project management, and the value of project-oriented economic activity will have reached $20 trillion.

THE PROBLEM Despite this shift, many leaders still undervalue projects and project management. As a result, only 35% of the projects undertaken worldwide are successful—which means we’re wasting an extravagant amount of time, money, and opportunity.

THE WAY FORWARD Companies need to reinvent their approach to project management. They need to adopt a project-driven organizational structure, ensure that executives have the capabilities to sponsor projects, and train managers in modern project management.

ABOUT THE ART

Artist Joerg Glaescher contemplated the intense power of nature by handcrafting waves out of gathered deadwood in the

forest near his home in Leipzig, Germany.

Joerg G laescher/laif/R

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