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Contracts, Projects & Complexity

September 21, 2012

I recently participated in a meeting organized by ICCPM (the International Centre for Complex Project Management). One of the speakers was Dr. Ed Hoffman, Chief Knowledge Officer at NASA.

Dr. Hoffman presented an interesting summary of the differences in approach between a ‘functional organization’ (good at managing standard and repetitive tasks) and a complex project-based organization (good at managing uncertainty and change).

He contrasted their characteristics and attitudes to specific issues or relationships in the following way:

                                         Complex project                              Functional

Problems                    Novel                                                    Routine

Technology               New / invented                                  Improved, more efficient

Team                            Global, multi-disciplinary              Local, homogenous

Cost                              Life-cycle                                              Unit

Schedule                    Project completion                            Productivity rate

Customer                   Part of team                                       Involved at point of sale

Survival skill             Adaptation                                        Control/ stability

These contrasts are important, not least because many organizations today actually need both capabilities and achieving this is demanding.

Dr. Hoffman went on to comment that his research shows that many organizations are good at managing technical risk (interfaces, technical development requirements, interdependencies between technologies), but are not good at organizational or strategic risk (how we work together, managing partners / suppliers, operating as distributed or virtual teams, handling decentralized authority).

These thoughts tally once more with the data IACCM has assembled, pointing to the fact that projects primarily underperform or fail due to commercial issues. Technical assurance disciplines are not mirrored by commercial assurance. There tends to be an assumption that commercial and ‘people’ issues can be fixed and as a result, they are not captured or recorded and arise again and again.

As one example of this, Dr. Hoffman mentioned the growing dependency in most major projects on international partnerships and how ill-prepared many organizations are to manage the organizational and strategic complexity that these imply. That example certainly mirrors my experience. Many contracts and commercial practitioners still don’t see ‘international’ as either relevant, or as requiring any particular incremental skills or knowledge.

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