Project management has evolved over time and the approaches we use now are a response to changing organizational structures and working practices.

The command-and-control models of the past are no longer appropriate for many projects in a modern environment.

Project managers, and their teams, are faced with six new challenges that cannot be adequately addressed without collaboration:

  • operating within fluid organizations
  • outsourcing
  • managing distributed teams
  • the generation gap between project team members
  • increasing project complexity
  • consumer engagement.

Let’s look at these challenges in details.

1. Fluid organizations

The global economic climate has not been kind to business over the early part of the 21st Century, with issues around sub-prime debt and the single European currency. Organizations have reacted by shifting focus in order to stay solvent. Companies ‘right-sized’ through programmes of redundancies. Vacancies were not filled. The contractor market in some sectors was buoyant as companies were reluctant to hire permanent staff. Departments merged and split apart; non-core work was stopped or offshored and portfolios of projects were constantly reviewed, updated and changed to ensure they aligned to ever-shifting executive demands.

Project managers have to operate in this dynamic environment and become more ‘hands on’ with project work. Project team members may have feared for their jobs, or been given more tasks to do when colleagues were not replaced. Executive stakeholders changed, making project communication harder. Projects were cancelled or put on hold.

All of these issues required (and still require) project managers to respond to the business challenges of both fluid economic situations and shifts in the internal political landscape. This is very different to the stability of the command-and-control approaches we have seen in the past. Collaborative working involves project managers and their teams in continually redefining measures, plans, approaches and deliverables to meet these challenges.

2. Outsourcing

Organizations are becoming more reliant on outsourcing partners, partly as a response to economic turmoil. As companies choose to focus on their core competencies, outsourcing non-core work like cleaning services or IT service desk support has become commonplace. These personnel may be based in the same location as the rest of the project team, and act as part of the host company.

As a result, project teams often include people who are not directly employed by the same company as the in-house project manager or the hiring organization of the consultant project manager.

Research from Helsinki University of Technology shows that a strong collaborative culture that includes third party suppliers can reduce project costs and mitigate against the negative effect of project issues*. This research represents the upside. Our combined experience of over 30 years involvement in outsourcing has highlighted a variety of challenges for project managers reliant on outsourcer involvement. Outsource partners may be expert and specialized. They may even have empathy with the project’s goals and objectives but in the final analysis, their allegiance is to their own organization and their objectives are oriented towards ensuring the relationship is profitable.

None of the principles, themes or processes of PRINCE2 discusses supplier management in detail, although procurement management is a knowledge area in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – 4th Edition (2008). In a project with external suppliers, the project manager is now a supplier manager who has to contend with a foreign organization, culture and methods of operation. Outsourcers also heighten project risk, not because of any lack of competence, but because a project manager is less able to take immediate corrective action as would be possible with internal colleagues. Culture, politics, contractual limitations (not to mention pressure when projects veer off track) can lead to strained relationships and the negative effect on delivery that often comes with it.

3. Distributed teams

In addition to outsourcing and offshoring, there is growing acceptance of flexible working practices that enable employees to work from home. These can be cheaper for companies as they are not required to provide permanent office space for all employees. Flexible and home working policies cut the cost of travel, help employees manage their work/life balance and allows companies to draw from a wider pool of employees, such as lone parents who may otherwise find it difficult to join the workforce. According to Mick Hegarty, Strategy and Commercial Director at the UK telecoms firm BT Business, who spoke at the Remote Worker Awards in London, 2010, the company has reported a £6–7m saving per year in operating costs as a result of flexible working practices. 75 per cent of employees have taken up flexible working options.

As a result, project managers are likely to be managing distributed or virtual teams, that is, teams that are not co-located and who collaborate at distance using technology. In a research study by ProjectsAtWork only 31 per cent of project professionals reported that their team members were in the same time zone as them. Nearly a quarter of participants reported a time difference of over nine hours.

Distributed teams of this nature may benefit from being able to maintain 24 hour working and selecting the most qualified team members for the job instead of those who happen to work locally, but global teams bring their own challenges. Project leaders have to manage cultural and language issues and collaboration across a distributed team can be more challenging.

4. The generation gap

‘History is in the making,’ write Meagan Johnson and Larry Johnson in their book, Generations, Inc. ‘Never before have five generations occupied the workplace as they do now.’ Project managers (of any age) now find themselves managing multi-generational teams, and facing the challenge of creating a meaningful and rewarding work environmental for a diverse group of people motivated by very different things.

Collaboration becomes increasingly important in ensuring that team members are able to contribute effectively, and as a method of engaging younger team members in project work. Jim Finklestein, in his book Fuse, gives the example of Cisco Systems as a company that has embraced new technology – the Cisco Quad enterprise collaboration system allows employees to work together across geographies and age gaps to improve productivity and increase sales opportunities. He says that ‘connection, collaboration and caring’ are in the DNA of the young people who have grown up not knowing a world without the internet.

Collaboration is hard-wired into the new recruits joining the workforce and project teams now, and to insist they set aside collaborative principles to work in the same way as their older colleagues means losing out on talent. Nearly half of employees aged 16–24 say they would not work for a company that bans access to social networking tools designed for business use. Nearly 60 per cent believe that access to social networking tools increases their effectiveness at work. Collaboration is more than just social networking tools, but these statistics show that it is a key part of managing a multi-generational team.

5. Increased project complexity

It’s not just the human dynamic that is creating a new set of challenges for project managers. Projects themselves are becoming more complex. Technology, infrastructure, regulation, legislation, changing requirements, politics, the level of change: many factors contribute to creating complex project environments. Professor Ali Jaafari from the University of Sydney has argued that the impact of complexity on projects is so great that unless new methods are developed that allow traditional project management approaches to adapt, project managers will become irrelevant to the modern business environment.

Another couple of academics, Sauer and Reich, conclude that collaboration, particularly devolved, collective decision making, is a ‘practical response to complexity’*. They point out that in complex projects no individual has a picture that is complete enough to enable them to make a decision alone. Collaborative project management encourages ownership, accountability and the opportunity to work collectively on problem solving, all of which are important in dealing with complex projects.

6. Consumer engagement

The rise of social media has seen a shift in communication methods and the way that groups are organized. The web has provided more opportunities for groups to self-organize, and for individuals to vocalize complaints or issues with service providers. It also provides access to a multitude of service providers: you no longer need to buy bread from the local bakery; you can identify an artisan baker halfway across the world and have it shipped to you, if you like. Businesses have to work harder to keep customers satisfied – and reporting positive things about their experiences with them – in a world where everyone can be a journalist and brand loyalty has been eroded through choice and cost comparison.

Gamification is the art (or science) of creating consumer engagement through game-type behaviour. It is about leveraging the urge to play that is part of human nature. This can be through awarding ‘badges’ on user profiles on forums for a certain number of interactions, allowing consumers to rate products or services (for example, Amazon encourages customers to write book reviews, and then encourages other customers to rate the reviews for helpfulness) or making special content available to those who complete quizzes, puzzles or games. Gantthead, an IT project management community website, uses badges to ‘reward’ contributors.

Gamification has yet to make deep in-roads into how projects are managed or how businesses are run but as consumer technology becomes even more advanced and incorporates elements of gamification, we are likely to see this spill over into the corporate areas, as we have seen with other consumer-adopted technology like blogs and social networking sites.

Engaging internal customers in this way is an effective method of keeping close to their goals and intentions for the project. Working collaboratively also enables the project team to identify particular project customer groups that could be problematic or downright difficult and focus on these. It’s the kill-them-with-kindness strategy. Successful engagement makes it harder for stakeholders to fail to participate in the project.

These two challenges, and the four we have looked at over the previous two weeks, are all underpinned by the theme of holding project team members and stakeholders together as a cohesive team, aligned to the project objectives. This common theme is why collaborative project management is a good approach for dealing with the challenges of modern projects.

*Sauer, C. and Reich, B. H. 2009. Rethinking IT Project Management: Evidence of a new mindset and its implications. International Journal of Project Management. 27, 182-193.