by Shane Henson — October 2, 2013—There is significant financial risk for any project of note, but particularly for major ones that are complex in nature, a new report confirms. According to the Project Management Institute’s (PMI) newest publication, Pulse of the Profession In-Depth Report: Navigating Complexity, the average budgets for projects that are highly complex are nearly twice as large as those with lower levels of complexity—using significantly more resources and putting even more dollars at risk for the organizations managing them. The report builds on insight distilled in PMI’s 2013 Pulse of the Profession, which revealed that companies risk $135 million for every $1 billion spent on a project.
Although there may be a perception that navigating complex projects requires a different set of skills or capabilities, PMI says its research proves otherwise. Regardless of the number of highly complex projects, organizations are managing projects with relatively the same set of project management techniques, methods and practices, and have about the same level of project management maturity. Further, PMI’s research confirms that a project’s success or failure is not determined by the degree of complexity, but by the mix of capabilities applied.
While the new report finds several commonly reported attributes of complex projects, including ambiguity and divergent stakeholder agendas, there are no universal parameters for defining complexity. Engaging in debate about a definition may only serve to distract organizations from implementing practices that will improve the outcomes of all projects and programs, PMI adds. As reported in the 2013 Pulse of the Profession, high-performing organizations achieve an average project success rate of 80 percent, and risk 14 times fewer dollars than low performers. According to PMI, their success lies in:
- Creating a culture of project and program management with engaged project sponsors: Organizations with mature project management practices average a significantly higher percentage of projects meeting original goals and business intent compared to organizations with less mature practices. Pulse research reveals that 79 percent of projects undertaken by high performers have active project sponsors, compared to less than half (43 percent) at low-performing organizations.
- Assessing and developing talent with a focus on fostering leadership skills: Among successful organizations, leadership development is most aligned to organizational strategy. PMI’s Pulse of the Profession In-Depth Report: Talent Management revealed that 70 percent of organizations have aligned their leadership development program to organizational strategy.
- Communicating effectively with all stakeholder groups: One out of two failed projects can be attributed to poor communications, says PMI. High performers report that effective communications to all stakeholders—more than any other factor—has the greatest impact on highly complex projects, and place more importance on effective communications than low performers do.
Conducted since 2006, PMI’s Pulse of the Profession is the annual global survey of project management professionals. The report charts the major trends for project management now and in the future. It also features original market research that reports feedback and insights from project, program and portfolio managers, along with an analysis of third-party data.
