Dwindling standards of project management are having an impact on innovation and efficiency in Australian manufacturing. By Craig Hingston.
Long-time AMTIL member Archer Enterprises, a precision engineering firm based in Somersby, NSW, is one company that has observed a noticeable drop in the standard of project management across a number of industries, and it is having a negative impact on product development.
“We’re aware that companies have been downsizing since the GFC and now we are seeing the consequences of that change,” says Archer’s Operations Director Russell Byrne. “The people who drove product development and managed it properly, the technicians and the project managers, are missing.”
Byrne adds that without people filling those strategic roles, the quality of project scopes of work has worsened.
“We are seeing junior staff, project officers and in some cases senior executives who don’t have the right technical or management skills being given responsibility to run projects,” he explains. “They approach us with ill-informed intentions and minimal information. We do step in and guide them; that is a normal part of our technology relationship. But the added assistance they require from us has sometimes meant rewriting the scope of works.
Given the general lack of expertise of those involved, it also takes a lot longer for people to make decisions. A few years ago Archer would be handed a solid scope of works and be able to start work on it immediately. However, according to Byrne, it is now more common to make a start, have someone make changes, start again, see further changes, start yet again, make even more changes, and so on. Besides being a waste of time and resources, this delays the product development cycle and the time products take to get to market.
“Some companies attempt to develop new intellectual property from the board room,” says Byrne. “They don’t understand mechanical and electronic technology or properties of raw materials. Nor do they understand what it takes to plan and prepare for a new product or how to follow it through with us along the design, analysis, manufacturing and testing phases. This is obviously not something that can be solved overnight, but companies need to be aware that when they let valuable technical and project management expertise go, it is detrimental to their future.”
Anyone can do it?
Yvonne Butler, Chief Executive Officer of the Australian Institute of Project Management (AIPM), says that some companies have been deploying project management for so long that it has become a generic business capability and there is a belief that anyone can do it.
“It is great that elements of project management are embedded in the organisation – we applaud and encourage them for doing that,” says Butler. “But the double-edged sword is that they have the wrong perception of project management and the value it brings to the enterprise. The project management role is handed over to people without formal skills or certification which demonstrates their competency and currency, and the organisation becomes less sustainable.
“Project management protects the value of a company. If you don’t use the disciplines of project management across the organisation you are giving its value away.”
As an example, Butler cites the large IT and telecommunications companies that implemented project management cultures a few years ago. Because the initial implementation wasn’t handled very well, those companies then had to embark on multi-billion dollar transformation programs in order to redress the problems so as to become sustainable.
“Effective project management requires professionally trained people who ‘get stuff done’ and bring about positive change to processes and culture,” says Butler. “Not just in a few siloed areas but right across the organisation. At the time of the GFC, boards said we need to prune costs off our bottom line and each department manager had to make head count decisions. There was no regard for their portfolio of projects, what they had in their books, the pipeline. It was a siloed approach. They asked themselves what can we afford to delay? The question should have been what do we need in order to still be competitive when we come out of this?”
Butler believes that process oriented industry sectors, such as manufacturing, often fail to comprehend the value of project management, arguing that they tend to be more asset-focused than project-focused. She says that project management is highly necessary in manufacturing because it is outcome-focused: it has to deliver an outcome, and when it does this it delivers enduring benefits for the organisation. This includes oversight of current outcomes – the projects being manufactured today – as well as what happens in the future.
At a time when the sector is being told to embrace advanced manufacturing, Industry 4.0, collaboration, automation, innovation and so on, it is going to take skilled project managers to help to facilitate this evolution.
“Project management is needed to integrate change in a business,” says Butler. “There are many disciplines within an organisation that must evolve together. Each one impacts on the others and the way to create change where everyone is on the same page is to have project managers involved.”
Butler understands the frustration being experienced by companies like Archer.
“We need to make sure that if organisations consciously decide not to retain a project management competency then the layer below needs to know how to govern projects and value risk,” she says. “They need to see the correlation between technical expertise and project management. There is a direct connection between project managers and shareholders because dividends increase when a company continually delivers its work on time and within budget. because We don’t need every managing director or general manager to become a project manager but they need to understand what project managers do. This requires a return to the simpler language that boards understand.”
According to Butler, the future is about making people more aware and improving skill sets: “When you have people in project management roles and they are not competent – in other words they don’t have qualifications that reflect our Australian standards, they don’t understand the balance within an organisation of technical competency with behavioural competency. It is about so much more than Gant charts. We have to make sure that business leaders are equipped with knowledge, if not the expertise, of the value of project management and the contribution that certified project managers make.”
“I want Government to come to us first, not the consultants, so that we can show them what is required and what they need to deliver success,” Butler adds. “It’s not all gloom and doom. We are starting to see at state level with the big infrastructure projects that project management is being written into the scope of works. It is not mandated but it is good all the same to see it mentioned. Government tenders don’t insist on having project management capabilities included so this is one area that we need to look at. The AIPM plans to work with recruitment companies to initiate the promotion of project managers in companies. If they can define what value the project manager brings to their clients they can become ambassadors for our members.”
Everything is a project
Dr Michael Myers OAM is the founder of a social enterprise Re-Engineering Australia Foundation, which inspires students regarding careers path opportunities in engineering and manufacturing via a series of hi-tech competitions. One of these is the F1 in Schools Technology Challenge, involving 40,000 young people.
“Manufacturers have deleted soft skills without considering the strategic direction of their companies,” says Myers. “If you ignore or de-value project management you stop innovating, you lose customer service, and you fail to manage your people.
“Everything is a project and has to be managed properly from teenagers designing and making an 80kph model F1 car to home owners building a deck or laying a driveway. All of us engage in projects in different areas of life without even knowing it. Project management has become so discrete that it is ignored. ”