Project Management Institute Aspects of complexity: mAnAging projects in A complex World Editor in Chief Terry Cooke-Davies, PhD Contributing Editors Lynn Crawford, DBA, John R. Patton, PMP, Chris Stevens, PhD, and Terry M. Williams, PhD Library of Congress Cataloging-in-Publication Data Aspects of complexity : managing projects in a complex world / editor in chief, Terry Cooke-Davies ; contributing editors, Lynn Crawford … [et al.]. p. cm. ISBN 978-1-935589-30-3 (pbk. : alk. paper) 1. Project management. I. Cooke-Davies, Terry, 1941- II. Crawford, Lynn. HD69.P75A77 2011 658.4’04—dc23 2011024450 Published by: Project Management Institute, Inc. 14 Campus Boulevard Newtown Square, Pennsylvania 19073-3299 USA Phone: 1610-356-4600 Fax: 1610-356-4647 Email: customercare@pmi.org Internet: www.PMI.org ©2011 Project Management Institute, Inc. All rights reserved. “PMI”, the PMI logo, “PMP”, the PMP logo, “PMBOK”, “PgMP”, “Project Management Journal”, “PM Network”, and the PMI Today logo are registered marks of Project Management Institute, Inc. The Quarter Globe Design is a trademark of the Project Management Institute, Inc. For a comprehensive list of PMI marks, contact the PMI Legal Department. PMI Publications welcomes corrections and comments on its books. Please feel free to send comments on typographical, formatting, or other errors. Simply make a copy of the relevant page of the book, mark the error, and send it to: Book Editor, PMI Publications, 14 Campus Boulevard, Newtown Square, PA 19073-3299 USA. To inquire about discounts for resale or educational purposes, please contact the PMI Book Service Center. PMI Book Service Center P.O. Box 932683, Atlanta, GA 31193-2683 USA Phone: 1-866-276-4764 (within the U.S. or Canada) or 11-770-280-4129 (globally) Fax: 11-770-280-4113 Email: book.orders@pmi.org Printed in the United States of America. No part of this work may be reproduced or transmitted in any form or by any means, electronic, manual, photocopying, recording, or by any information storage and retrieval system, without prior written permission of the publisher. The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48—1984). 10 9 8 7 6 5 4 3 2 1 iii Table of Contents Acknowledgments …………………………………………………………………………………….. v Introduction: Managing Projects in a Complex World …………………………………vii Chris Stevens, John Patton, and Terry Cooke-Davies Chapter 1: Complexity in Project Management and the Management of Complex Projects ……………………………………………………………………… 1 Terry Cooke-Davies Part 1 – With Practitioners and Their Managers in Mind ……………. 15 Chapter 2: Managing Projects With High Complexity ………………………………… 17 Stephen Hayes and Daniel Bennett Chapter 3: Tools for Complex Projects ……………………………………………………… 29 Kaye Remington and Julien Pollack Chapter 4: Strategic Management: Developing Policies and Strategies ………… 41 Christoph Loch and Frederick C. Payne Chapter 5: Fear of Flying ………………………………………………………………………….. 57 Stephen Carver and Harvey Maylor Chapter 6: The Impact of Complexity on Project Cost and Schedule Estimates …………………………………………………………… 73 Dale Shermon Chapter 7: Beyond Competence: Developing Managers of Complex Projects ……………………………………………………………………. 87 Lynn Crawford and Ed Hoffman Part 2 – With Researchers and Students in Mind ……………………….. 99 Chapter 8: Human Behavior and Complexity …………………………………………… 101 Terry Cooke-Davies Chapter 9: Controlling Chaos? The Value and the Challenges of Applying Complexity Theory to Project Management …………………………… 115 Kaye Remington and Roxanne Zolin Chapter 10: Systems Thinking and the Systems Movement ……………………… 135 Peter Checkland and Terry Williams Chapter 11: Systems Engineering and Project Management ………………………. 149 Andrew Daw iv Aspects of complexity: mAnAging projects in A complex World Summary ……………………………………………………………………………… 169 Chapter 12: Toward a Coherent Research Agenda ……………………………………. 171 Terry Williams Chapter 13: Toward Project Management 2.0 …………………………………………… 179 Terry Cooke-Davies Contributors ………………………………………………………………………………………….. 189 v Acknowledgments This book owes a great deal to many people. The presenters at each of the Research Open Working Sessions, who so gener- ously provided their experience and insights, and the participants who made the conversations so lively. The contributors who have provided such stimulating chap- ters. The contributing editors, whose wise advice and ready support helped to give the book both shape and substance. And finally, of course Project Management Institute for funding this project and its many staff who have made this publication possible. My grateful thanks to you all. It has been a privilege and a pleasure to work with you on this project. vii Introduction Managing Projects in a Complex World Chris Stevens, John Patton, and Terry Cooke-Davies �And�when�it�comes�to�solutions,�simple�is�better.�Elegant�is�better�still.�� Elegance�is�the�simplicity�found�on�the�far�side�of�complexity.� Matthew May, 2007, p. 3 This book has been written with three different audiences in mind: people who manage programs and projects (practitioners), line managers in organizations to which programs and projects make a substantial contribution (managers), and members of the academic research community who have an interest in how com- plexity shapes and influences the practice of program and project management (re- searchers). Chapter 1 will be of interest to all three audiences, because it summarizes a se- ries of dialogues between practitioners, managers, and researchers. These dialogues provided this book with its shape and led to the choice of topics in the remaining chapters of the book. Increasingly in the world of business today, practitioners and managers find themselves potentially overwhelmed by the amount of complexity that they en- counter. Successful project and program managers in these situations have had a natural or learned proactive perspective of what needs to be done. For many, obtain- ing this valuable skill of thinking and acting holistically can be accelerated, but not substituted, by exogenous learning. However, for most, such skills are obtained through years of experience. This experience is given another “C” designation, meaning Craftsmanship rather than Complexity. Chapters 2 to 7 (Part 1 of this book) will focus primarily on the experiential learning of experts, often labeled the “practical” application of the topics covered from a research point of view in Chap- ters 8 to 11 (Part 2). Finally, in the two concluding chapters, the first 11 chapters will be mined for “nuggets” of insight that are then used to outline the implica- tions of the book as a whole for research (Chapter 12) and for management practice (Chapter 13). Project managers in early documented achievements, such as the construction of monuments or biblical narratives, had to both think and practice their leader- ship systemically to be successful. Systems engineering has in the past 100 years evolved from a “hard” systems perspective to a professional discipline based on sys- tems thinking and practice. Project management is an important relation based on viii Aspects of complexity: mAnAging projects in A complex World similar ideas, even though success is generally based on the “soft” systems aspects of managing people. All projects at some level can be viewed as complex, but for most project managers it is not only their understanding of the “how it will be de- livered” but “how they can manage it” that can be, and is often seen as “complex.” Of “complex” projects and “complexity” as a term, it is clear that for most peo- ple when confronted with something they don’t understand, it will be considered as complicated. Where there are exponentially “complicated relationships” making up the whole, they may see it as complex. Breaking programs or portfolios of work down into parts to be managed better has been a common and important practice for handling complicated situations. However, from a systemic perspective, this practice ignores all of the important relationships between those parts. As more parts such as subprojects are added, the relationships between them continue to expand exponentially, so perceived com- plexity rises. During many large and long projects, change is ongoing and normal. Manag- ers need to be more holistic in the way they view changes and current situations, as today’s solutions have the potential to be tomorrow’s problems. For many to understand a situation with a systemic and holistic discipline, as a means for both perceiving and understanding, it becomes possible to manage around the adverse aspects of change, and indeed leverage the positive. Now, let’s move from the consideration of the complicated to that of the truly complex. Part 1 brings together some of the practical perspectives of utilizing sys- tems theory and practice in the context of complex projects and their management. Progress during the history of the human race has always been fraught with challenges. For many, there was little or no precedent to build upon. For many centuries, humans have wondered about and studied from earth what the rest of the universe contains, and how it came about. Progress and understanding were not initially the results of pure study and contemplation. The real adventures in space started through the development of weapons of war. They then progressed to putting astronauts into low earth orbit, then reaching out to the moon and finally deep space. These achievements may be seen as progressive advancement of knowledge and application. The unknown and new complexities of each stage were better under- stood because they were based on the experience gained from earlier projects. In addition, in the most successful cases, each stage was preceded by a strategic focus (for example, the mission to the moon spearheaded by President John F. Kennedy). Using previous experience, plans were established for the moon landing and they became operational, resulting in a final achievement of the goal (Apollo 11 landed on the moon on 16 July 1969). As Doctor Jon Whitty explained during the March 2008 PMI Research Working Session in Sydney, Australia, the “C” word for describing the unknown and new challenges should not be seen in the context of complexity. Rather, to achieve an outcome in such situations, we should consider them in the context of challenges of craftsmanship. ix

Response Journal 2 discusses a subject from an engineering magazine that may pose an ethical problem for engineers. Summarize the subject, explaining how it poses an ethical problem. Go into detail analyzing why it is an ethical situation and what challenges or solutions you see for the problem. Remember to cite the source that you are referring to in your response. Be sure to use the standard citation/referencing system that Finkelstein recommends in Chapter 14 of PBTW or one that is used in your major. Failure to document these sources correctly will result in a grade of Unacceptable. you have to use an engineering magazine

Project Management Institute

Aspects of complexity: mAnAging projects in A

complex World

Editor in Chief Terry Cooke-Davies, PhD

Contributing Editors Lynn Crawford, DBA, John R. Patton, PMP,

Chris Stevens, PhD, and Terry M. Williams, PhD

Library of Congress Cataloging-in-Publication Data

Aspects of complexity : managing projects in a complex world / editor in chief, Terry Cooke-Davies ; contributing editors, Lynn Crawford … [et al.]. p. cm. ISBN 978-1-935589-30-3 (pbk. : alk. paper) 1. Project management. I. Cooke-Davies, Terry, 1941- II. Crawford, Lynn. HD69.P75A77 2011 658.4’04—dc23

2011024450

Published by: Project Management Institute, Inc. 14 Campus Boulevard Newtown Square, Pennsylvania 19073-3299 USA Phone: 1610-356-4600 Fax: 1610-356-4647 Email: customercare@pmi.org Internet: www.PMI.org

©2011 Project Management Institute, Inc. All rights reserved.

“PMI”, the PMI logo, “PMP”, the PMP logo, “PMBOK”, “PgMP”, “Project Management Journal”, “PM Network”, and the PMI Today logo are registered marks of Project Management Institute, Inc. The Quarter Globe Design is a trademark of the Project Management Institute, Inc. For a comprehensive list of PMI marks, contact the PMI Legal Department.

PMI Publications welcomes corrections and comments on its books. Please feel free to send comments on typographical, formatting, or other errors. Simply make a copy of the relevant page of the book, mark the error, and send it to: Book Editor, PMI Publications, 14 Campus Boulevard, Newtown Square, PA 19073-3299 USA.

To inquire about discounts for resale or educational purposes, please contact the PMI Book Service Center. PMI Book Service Center P.O. Box 932683, Atlanta, GA 31193-2683 USA Phone: 1-866-276-4764 (within the U.S. or Canada)

or 11-770-280-4129 (globally) Fax: 11-770-280-4113 Email: book.orders@pmi.org

Printed in the United States of America. No part of this work may be reproduced or transmitted in any form or by any means, electronic, manual, photocopying, recording, or by any information storage and retrieval system, without prior written permission of the publisher.

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48—1984).

10 9 8 7 6 5 4 3 2 1

iii

Table of Contents

Acknowledgments …………………………………………………………………………………….. v

Introduction: Managing Projects in a Complex World …………………………………vii Chris Stevens, John Patton, and Terry Cooke-Davies

Chapter 1: Complexity in Project Management and the Management of Complex Projects ……………………………………………………………………… 1

Terry Cooke-Davies

Part 1 – With Practitioners and Their Managers in Mind ……………. 15 Chapter 2: Managing Projects With High Complexity ………………………………… 17 Stephen Hayes and Daniel Bennett

Chapter 3: Tools for Complex Projects ……………………………………………………… 29 Kaye Remington and Julien Pollack

Chapter 4: Strategic Management: Developing Policies and Strategies ………… 41 Christoph Loch and Frederick C. Payne

Chapter 5: Fear of Flying ………………………………………………………………………….. 57 Stephen Carver and Harvey Maylor

Chapter 6: The Impact of Complexity on Project Cost and Schedule Estimates …………………………………………………………… 73

Dale Shermon

Chapter 7: Beyond Competence: Developing Managers of Complex Projects ……………………………………………………………………. 87

Lynn Crawford and Ed Hoffman

Part 2 – With Researchers and Students in Mind ……………………….. 99 Chapter 8: Human Behavior and Complexity …………………………………………… 101 Terry Cooke-Davies

Chapter 9: Controlling Chaos? The Value and the Challenges of Applying Complexity Theory to Project Management …………………………… 115

Kaye Remington and Roxanne Zolin

Chapter 10: Systems Thinking and the Systems Movement ……………………… 135 Peter Checkland and Terry Williams

Chapter 11: Systems Engineering and Project Management ………………………. 149 Andrew Daw

iv

Aspects of complexity: mAnAging projects in A complex World

Summary ……………………………………………………………………………… 169 Chapter 12: Toward a Coherent Research Agenda ……………………………………. 171 Terry Williams

Chapter 13: Toward Project Management 2.0 …………………………………………… 179 Terry Cooke-Davies

Contributors ………………………………………………………………………………………….. 189

v

Acknowledgments

This book owes a great deal to many people.

The presenters at each of the Research Open Working Sessions, who so gener- ously provided their experience and insights, and the participants who made the conversations so lively. The contributors who have provided such stimulating chap- ters. The contributing editors, whose wise advice and ready support helped to give the book both shape and substance. And finally, of course Project Management Institute for funding this project and its many staff who have made this publication possible.

My grateful thanks to you all. It has been a privilege and a pleasure to work with you on this project.

vii

Introduction

Managing Projects in a Complex World

Chris Stevens, John Patton, and Terry Cooke-Davies

�And�when�it�comes�to�solutions,�simple�is�better.�Elegant�is�better�still.�� Elegance�is�the�simplicity�found�on�the�far�side�of�complexity.�

Matthew May, 2007, p. 3

This book has been written with three different audiences in mind: people who manage programs and projects (practitioners), line managers in organizations to which programs and projects make a substantial contribution (managers), and members of the academic research community who have an interest in how com- plexity shapes and influences the practice of program and project management (re- searchers).

Chapter 1 will be of interest to all three audiences, because it summarizes a se- ries of dialogues between practitioners, managers, and researchers. These dialogues provided this book with its shape and led to the choice of topics in the remaining chapters of the book.

Increasingly in the world of business today, practitioners and managers find themselves potentially overwhelmed by the amount of complexity that they en- counter. Successful project and program managers in these situations have had a natural or learned proactive perspective of what needs to be done. For many, obtain- ing this valuable skill of thinking and acting holistically can be accelerated, but not substituted, by exogenous learning. However, for most, such skills are obtained through years of experience. This experience is given another “C” designation, meaning Craftsmanship rather than Complexity. Chapters 2 to 7 (Part 1 of this book) will focus primarily on the experiential learning of experts, often labeled the “practical” application of the topics covered from a research point of view in Chap- ters 8 to 11 (Part 2). Finally, in the two concluding chapters, the first 11 chapters will be mined for “nuggets” of insight that are then used to outline the implica- tions of the book as a whole for research (Chapter 12) and for management practice (Chapter 13).

Project managers in early documented achievements, such as the construction of monuments or biblical narratives, had to both think and practice their leader- ship systemically to be successful. Systems engineering has in the past 100 years evolved from a “hard” systems perspective to a professional discipline based on sys- tems thinking and practice. Project management is an important relation based on

viii

Aspects of complexity: mAnAging projects in A complex World

similar ideas, even though success is generally based on the “soft” systems aspects of managing people. All projects at some level can be viewed as complex, but for most project managers it is not only their understanding of the “how it will be de- livered” but “how they can manage it” that can be, and is often seen as “complex.”

Of “complex” projects and “complexity” as a term, it is clear that for most peo- ple when confronted with something they don’t understand, it will be considered as complicated. Where there are exponentially “complicated relationships” making up the whole, they may see it as complex.

Breaking programs or portfolios of work down into parts to be managed better has been a common and important practice for handling complicated situations. However, from a systemic perspective, this practice ignores all of the important relationships between those parts. As more parts such as subprojects are added, the relationships between them continue to expand exponentially, so perceived com- plexity rises.

During many large and long projects, change is ongoing and normal. Manag- ers need to be more holistic in the way they view changes and current situations, as today’s solutions have the potential to be tomorrow’s problems. For many to understand a situation with a systemic and holistic discipline, as a means for both perceiving and understanding, it becomes possible to manage around the adverse aspects of change, and indeed leverage the positive.

Now, let’s move from the consideration of the complicated to that of the truly complex. Part 1 brings together some of the practical perspectives of utilizing sys- tems theory and practice in the context of complex projects and their management.

Progress during the history of the human race has always been fraught with challenges. For many, there was little or no precedent to build upon. For many centuries, humans have wondered about and studied from earth what the rest of the universe contains, and how it came about. Progress and understanding were not initially the results of pure study and contemplation. The real adventures in space started through the development of weapons of war. They then progressed to putting astronauts into low earth orbit, then reaching out to the moon and finally deep space.

These achievements may be seen as progressive advancement of knowledge and application. The unknown and new complexities of each stage were better under- stood because they were based on the experience gained from earlier projects. In addition, in the most successful cases, each stage was preceded by a strategic focus (for example, the mission to the moon spearheaded by President John F. Kennedy). Using previous experience, plans were established for the moon landing and they became operational, resulting in a final achievement of the goal (Apollo 11 landed on the moon on 16 July 1969).

As Doctor Jon Whitty explained during the March 2008 PMI Research Working Session in Sydney, Australia, the “C” word for describing the unknown and new challenges should not be seen in the context of complexity. Rather, to achieve an outcome in such situations, we should consider them in the context of challenges of craftsmanship.

ix

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