A case for a paradigm shift in the foundational theory of client-side construction project management. Greg Usher

Transcription

1 A case for a paradigm shift in the foundational theory of client-side construction project management Greg Usher

2 Explore whether the traditionally-accepted, underlying body of theory for project management adequately explains the challenges faced by client-side, construction project management. Investigate an alternate body of theory, to determine if it is a more valid theoretical foundation. Explore what an alternate foundation body of theory could mean for the development of the profession.

3 So what? TOOLS AND SYSTEMS METHODOLOGIES FRAMEWORKS FOUNDATIONAL THEORY

4 There is no explicit theory of Project Management (Koskella & Howell: 2002) Project Management is a subset of Production Management (PMBOK: US 2011) What is the theory of Production Management? PRODUCTION MANAGEMENT FORDISM SHEWHART TAYLORISM

5 3 foundation theories of Production Management TAYLORISM SHEWHART FORDISM OBJECTIVES Machine efficiency. Labor productivity. Reducing variations. Waste reduction. Quality Improvement. Cost reduction. Profit maximization. Standardization (components, processes and outputs). UNDERLYING PRINCIPLES Each part of a task can be scientifically studied. A repeatable, non-varying, best method, can be developed for performing each task. Workers will be trained in the best, scientifically developed method for performing the tasks. Work can be divided (decomposed) so that management can plan using scientific principles, and workers simply need to execute the developed plan (without deviation). Output requirements known from commencement of input stage. Reducing variations in the manufacturing processes will improve quality. Deviations in the routine process indicate a breakdown in the production process. All deviations result in lost economic outcomes until they are rectified. Quality can be improved if enough management control is applied. Standardized inputs, processes and outputs. Processes can be tightly controlled by management. Deskilling production processes will increase efficiency and allow continuous improvement. Customer s needs are fully known at the commencement of the process. Customer s needs do not change throughout the process. TRANSFORMATIONAL VIEW OF PRODUCTION MANAGEMENT

6 TIME (Taylorism) COST (Fordism) QUALITY (Shewhart /Deming)

7 CLIENT NEEDS IDENTIFIED INPUTS (Resources) PRODUCTION PROCESSES (Transformation) OUTPUTS (Goods & Services) CLIENT NEEDS SATISFIED What do Taylorism, Shewhart s theories and Fordism have in common? All three were developed for, and by observing, one very specific form of production management: Factory-based manufacturing

8 NEEDS: Tangible, completely understood by client, able to be planned for in advance. INPUTS: Exactly quantifiable, known, able to be completely ordered in advance. PROCESS: Linear, sequential, independent, any deviations will result in economic inefficiency and all must be removed. OUTPUTS: Exactly as requested (without deviation), quantifiable from input stage. SATISFACTION: Absolute (completely happy or completely unhappy)

9 In order to determine if Production Management is the most valid theoretical foundation for client-side construction project management, we need: i. A comparator body of theory; and ii. Assessment criteria.

10 STRATEGIC MANAGEMENT Purpose: To deliver a unique outcome. (Tse & Olsen:1999, Hitt et al: 2011, Porter: 1980, Project Management Institute (U.S.):2013) Time: Variable delivery time scales. (Altshuler & Luberoff: 2003, Orueta & Fainstein: 2008, Acur & Englyst: 2006, Ensign: 2008 ) Inception: Codifying intangible concepts into formal plans. (Schaap:2012, MintZberg 1994, Hart: 1992, Ingason & Jonasson: 2009) Delivery Environments: Complexity, variability and unpredictability (Bracker: 1980, Project Management Institute (U.S.):2013, Steiner & Miner: 1972, Ives:2005) Skills required: Generalist, quick at assessment, see opportunities and risks (Steiner & Miner: 1972, Williams & Samset: 2010)

11 DESIGN: Deliberate & Analytical. External/ Internal Environment Detailed plans (Mintzberg:1994,1987; Andrew: 1987; Pettigrew:1992) EMERGENT: Flexible & innovative Adapts to real time environment Broad intent established Opportunistic response to changes (Quinn:1978, Mintzberg & Waters:1985, Johnson et al: 2005) DESIGN: Completely formed, prior statement of intent EMERGENT: Optimal output achieved through response to new information, risks and opportunities

12 COMPARATIVE ANALYSIS Do the fundamental principles and assumptions of the body of theory adequately explain the challenges commonly faced by practitioners. (Koskella & Howell: 2008, Zikmund et al: 2010) Do the fundamental principles and assumptions of the body of theory aligns with the common practices observed within the field. (Saunders et al: 2012, Neuman: 2011)

13 Does the strategic management body of theory explain the challenges experienced by client-side, construction, project management relating to the construction process, the perceived value of the project and client dissatisfaction, better than the transformational production management body of theory?

14 Observed phenomena Underlying assumptions help explain or understand phenomena Production management Strategic Management Transformation Design Emergent Needs Client needs are identified at the commencement of the process, but require further development before they can be codified Client needs change throughout the life of the project as a result of internal and external factors Formal reporting based on pre-defined parameters is required to allow decision making and control A clear understanding of inputs is required at the commencement of the delivery process to facilitate decision making. Required inputs may change throughout the life of the project Inputs No Yes Yes No No Yes Yes Yes No Yes Yes No No Yes Yes

15 Observed phenomena Underlying assumptions help explain or understand phenomena Production management Strategic Management Transformation Design Emergent Delivery Process The process takes place in a complex and dynamic environment. The process can be flexible. Not all tasks need to be completed as originally sequenced. The process is subject to unpredictability which can alter the intended process Deviations in the planned process may result in time and cost savings Management control over the process and quality of outputs is limited No Yes Yes No No Yes No No Yes No No Yes No Yes Yes Outputs Final output is unique No Yes Yes Final output may not be as originally expected No No Yes Final output may include significant deviation from the originally codified customer need. Delivery of final output delivered does not guarantee customer satisfaction Customer satisfaction is generally not absolute. Satisfaction can vary significantly on different aspects of the final product. Satisfaction No No Yes No No Yes No No Yes

16 The comparative analysis found short-comings in the ability of all three of the theories tested to adequately explain client-side, construction, project management. 1. The delivery process (transformation); 2. The client s perceived value (outputs); 3. Client satisfaction.

17 The delivery process (Construction): Production Management: Stable environment, end goal is mass production or non-varying outputs. Process is linear and sequential, and driven by meticulously planned and strictly adhered to pre-set standards. ALL deviations from original plans result in economic loss and must be rectified and removed. Strategic management (Design School): Does not require strict adherence to original plan, however it does assume the process is able to be managed, more or less, to the original codified plan. Does not require a stable environment, but inherently assumes that deviations can be foreseen and planned for in advance. Strategic management (Emergent School): Anticipates that delivery process will be impacted by unforeseen variables, that cannot be fully planned for and as such does not provide tools or systems for preconstruction decision making requirements. Does not assume that all deviations result in economic loss, asserts that deviations should be considered on their merits to determine if they are opportunities or risks.

18 The perceived value of the project Production Management: Ultimate usefulness (value) of the project is the ability of the outcome to completely fulfil the client s original stated need. Value can be determined based on the final cost of the outcomes against the original planned cost ( i.e. ultimate value can be determined before production begins based on planned resources and process costs). No deviations from original proposition, therefore preconceived value should be perfectly aligned to produced value. Strategic management (Design School): Perceived value should contain minimal deviation from original value proposition. Possibility of dynamic environment requires strategic control systems (i.e. schedules, cost plans, stated outcomes, resource plans, quality standards, etc.) as early warning of deviations. Strategic management (Emergent School): Value cannot be determined until the final outputs are tested against the ACTUAL client needs. Value might be enhanced as a result of deviations from the original plan.

19 Client satisfaction with the delivered project Production Management: Easy to predict if client dissatisfaction will occur. If final output does not completely align with original stated need, transformational theory assumes the client will be completely dissatisfied. Strategic management (Design School): Anticipates the possibility of client dissatisfaction attempts to mitigate through: Detailed and careful planning at the input stage; Strict control of the process and environment; and Early detection and correction of any deviations from stated plan Strategic management (Emergent School): The degree of client satisfaction cannot be anticipated. Client satisfaction can only be known once the client determines if the final output meets their actual need at the end of the project as opposed to their stated need at the commencement (i.e. input stage).

20 1. Identification of needs requires capturing intangible concepts. 2. Development of Inputs is interactive, and results in codified documents. 3. Complexity and variability of process. Underlying assumptions help explain or understand phenomena Production management Strategic Management Transformation Design Emergent

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22 1. Short-comings in existing foundational body of theory. 2. Strategic Management body of theory provides a more valid theoretical basis. 3. Calls into question the veracity of frameworks, methodologies, tools and systems. 4. DOES NOT conclude that strategic management is the correct body of theory. However, it does indicate that production management is not. 5. Look more broadly for theory to evolve the profession.

23 ACUR, N. & ENGLYST, L Assessment of strategy formulation: How to ensure quality in process and outcome. International Journal of Operations & Production Management, 26, 32. ALTSHULER, A. A. & LUBEROFF, D Mega-projects: The changing politics of urban public investment, Brookings Institution Press. ANDREW, K. R The Concept of Corporate Strategy, Homewood, Illinois, Irwin. BRACKER, J The Historical Development of the Strategic Management Concept. Academy of Management Review, 5, ENSIGN, P. C Small Business Strategy as a Dynamic Process: Concepts, Controversies, and Implications. Journal of Business and Entrepreneurship, 20, 20. HART, S. L An integrative framework for strategy-making processes. Academy of Management Review, 17, HITT, M., IRELAND, R. & HOSKISSON, R Strategic Management. Competitiveness and Globlalization, Mason, OH, South-Western. INGASON, H. T. & JÓNASSON, H. I Contemporary knowledge and skill requirements in project management. Project Management Journal, 40, IVES, M IDENTIFYING THE CONTEXTUAL ELEMENTS OF PROJECT MANAGEMENT WITHIN ORGANIZATIONS AND THEIR IMPACT ON PROJECT SUCCESS. Project Management Journal, 36, JOHNSON, G., SCHOLES, K. & WHITTINGTON, R Exploring Corporate Strategy, Prentice Hall Financial Times. KOSKELA, L. & HOWELL, G. The theory of project management: Explanation to novel methods. Proceedings 10th Annual Conference on Lean Construction, IGLC-10, KOSKELA, L. & HOWELL, G The Underlying Theory of Project Management Is Obsolete. Engineering Management Review, IEEE, 36, MINTZBERG, H The Strategy Concept I: Five Ps For Strategy. California Management Review, 30, MINTZBERG, H The Fall and Rise of Strategic Planning. Harvard Business Review, 72, MINTZBERG, H. & WATERS, J. A Of Strategies, Deliberate and Emergent. Strategic Management Journal 6, 16.

24 NEUMAN, W. L Social Research Methods - Qualitative and Quantitative Approaches, Boston., Pearson. ORUETA, F. D. & FAINSTEIN, S. S The New Mega Projects: Genesis and Impacts. International Journal of Urban and Regional Research, 32, PETTIGREW, A. M The character and significance of strategy process research. Strategic Management Journal, 13, PROJECT MANAGEMENT INSTITUTE (U.S.) A guide to the project management body of knowledge (PMBOK Guide), Newtown Square, Pa., Project Management Institute, Inc. PORTER, M. E Competitive Strategy, New York, Free Press. QUINN, J. B Strategic change: Logical Incrementalism. Sloan Management Review, 20, 15. SAUNDERS, M., LEWIS, P. & THORNHILL, A Research Methods for Business Students, Essex, England, Pearson Education Limited. SCHAAP, J. I Strategy Implementations-Can Organizations Attain Outstanding Performance? Strategic Management Review, 6, STEINER, G. A. & MINER, J. B Management Policy and Strategy. TSE, B. C. & OLSEN, M. D Strategic Management. In: BROTHERTON, B. (ed.) The Handbook of Contemporary Management Research. New York: John Wiley & Sons. WILLIAMS, T. & SAMSET, K Issues in front-end decision making on projects. Project Management Journal, 41, ZIKMUND, W. G., BABIN, B. J., CARR, J. C. & GRIFFIN, M Business Research Methods, Mason, Ohio, South-Western Cengage Learning.

25 Research is about to enter Stage II. Looking for experienced client-side, construction, project managers. 30mins-60mins interviews, exploring practitioner's experiences in the profession. HOW TO GET INVOLVED See me after this presentation Business Card. Fill in a form at the USQ booth. your EOI: greg.usher@pointpm.com.au

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