Managing Complex Projects: A New Model offers an innovative way of looking at projects and treating them as complex adaptive systems. Applying the principles of complexity thinking will enable project managers and leadership teams to manage large-scale initiatives successfully.
• Explore how complexity thinking can be used to find new, creative ways to think about and manage projects
• Diagnose complexity on a wide range of projects — from small, independent, short projects to highly complex, longer projects
• Understand and manage the complexity of the business problem, opportunity, solution, and other dimensions that come into play when managing large-scale efforts
Use the Project Complexity Model to determine the most effective approach to managing all aspects of a project based on the level of complexity involved.
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Managing Complex Projects
A New Model
By Kathleen B. Hass
Management Concepts PressCopyright © 2009 Management Concepts, Inc.
All rights reserved.
"I am convinced that the nations and people who master the new sciences of complexity will become the economic, cultural, and political superpowers of the next century." — Heinz Pagels, Physicist
Dr. Gerry Gingrich, instructor at the Information Resources Management College, National Defense University, states: "Military thinkers, politicians, scientists, and corporate executives are all looking for ways to understand the dynamics of global change and to prepare for the 21st century. Many are looking to the new science of complexity for answers. The science of complexity, however, does not yield answers, at least not in the sense that we have typically sought to describe our world and predict its events since the beginning of the Scientific Revolution. What it does yield is a new way of thinking about the world."
Complexity is one of those words that is difficult to define. Some say complexity is the opposite of simplicity; others say complicated is the opposite of simple while complex is the opposite of independent. A complex structure is said to use interwoven components that introduce mutual dependencies and produce more than the sum of their parts. In today's business systems, this is the difference between myriad connecting "stovepipes" and an effective set of "integrated" solutions.
A complex system can also be described as one in which many different components interact in multiple ways. In the context of a design that is difficult to understand or implement, complexity is the quality of being intricate and compounded. When project managers characterize a project as complex, they usually mean the project is "... challenging to manage because of size, complicated interactions, or uncertainties. Often, anxiety goes hand in hand with complexity."
Complex systems and complexity theory have captured the attention of scientists in the fields of anthropology, physics, biology, ecology, economics, political science, psychology, native studies, sociology, finance, and management. Since business organizations as well as project teams are complex systems, the science of complexity theory offers a way to understand and work with the complex nature of organizations and projects. Because complex systems are largely unpredictable, thinking about business systems as complex requires a paradigm shift from long-established business models based on control theory, which is essentially an attempt to manipulate the inputs to a system to obtain a desired effect on the output of the system.
Complexity scientists are careful to differentiate between complicated and complex. Complicated is considered to have input and output flows and straightforward cause and effect (as in machines), where the pieces can be well understood in isolation and the whole can be reassembled from the parts; one problem can bring the system down, since complicated systems do not adapt. Complex, in contrast, is adaptive (as in ecosystems), with cycles, interrelationships, interdependencies, nested systems within systems, and multiple feedback loops. Examples of complex systems include weather systems, the Internet, the U.S. power grid, highways, supply chains, information transfer within organizations, business systems, and business organizations themselves. According to Julio Ottino, professor at the R.R. McCormick School of Engineering and Applied Sciences at Northwestern University, "The hallmarks of these complex systems are adaptation, self-organization and emergence — no one designed the web or metabolic processes within a cell."
COMPLEX SYSTEMS AND COMPLEXITY THEORY
Scientists originally thought the world to be linear, explained by simple cause-and-effect relationships. They theorized that if we could break down natural systems into their component parts, we could not only understand them but also learn how to predict and control them. Gradually, however, complexity theory emerged.
Complexity theory had its beginning in the 1980s at a think tank known as the Santa Fe Institute. Researchers ranging from graduate students to Nobel laureates formulated the theory that the application of ideas like complexity, adaptation, and turmoil at the edge of chaos can begin to explain "... the spontaneous, self-organizing dynamics of the world in a way that no one ever has before — with potential for immense impact on the conduct of economics, business, and even politics. They believe they are forging the first rigorous alternative to the kind of linear, reductionist thinking that has dominated science since the time of Newton — and that has now gone about as far as it can go in addressing the problems of the modern world."
Complexity theory is based on relationships, emergence, patterns, and iterations. It maintains that the universe is full of systems (e.g., weather systems, immune systems, social systems) that are complex and are constantly adapting to their environment; hence the term complex adaptive systems Creativity manifests itself in spontaneous emergence, which is at the center of complexity thinking. Emergence is the result of the intricate interplay of dynamics, forces, and energies. Creativity emerges in systems that are constantly evolving, reorganizing, or dissolving into chaos. The genius of complexity thinking is that it nourishes and masters creativity, never trying to lock it into systems, subsystems, or parts.
Complexity theory states that systems exist on a spectrum ranging from equilibrium to chaos. Equilibrium results in paralysis and death; chaos results in an inability to function. The most productive state to be in is at the edge of chaos, where maximum diversity and creativity lead to new possibilities (Figure 1-1).
COMPLEX ADAPTIVE SYSTEMS
Complex adaptive systems are a specific type of complex system. These systems are complex in that they are diverse and comprise multiple interconnected elements; they are adaptive in that they have the capacity to change and learn from experience. The term "complex adaptive system" was coined at the Santa Fe Institute. In his essay, A Brief Description of Complex Adaptive Systems and Complexity Theory, Peter Fryer describes the most important properties of complex adaptive systems:
* Emergence. Rather than being planned or controlled, the agents in the system interact in apparently random ways. From all these interactions, patterns emerge that inform the behavior of the agents within the system and the behavior of the system itself.
* Co-evolution. All systems exist within their own environment and they are also part of that environment. Therefore, as their environment changes, they need to change to ensure best fit.
* Sub-optimal. A complex adaptive system does not have to be perfect to thrive within its environment. It only has to be slightly better than its competitors; any energy used on being better than that is wasted energy.
* Requisite variety. The greater the variety within the system, the stronger it is. In fact, ambiguity and paradox abound in complex adaptive systems, which use contradictions to create new possibilities to co-evolve with their environment.
* Connectivity. The ways in which the agents in a system connect and relate to one another are critical to the survival of the system, because it is from these connections that the patterns are formed and the feedback is disseminated.
* Simple rules. Complex adaptive systems are not complicated. The emerging patterns may have a rich variety, but the rules governing the functioning of the system are quite simple.
* Iteration. Small changes in the initial conditions of the system can have significant effects after they have passed through the emergence-feedback loop a few times (often referred to as the butterfly effect).
* Self-organizing. There is no hierarchy of command and control in a complex adaptive system. Rather than planning or managing, there is a constant reorganizing to find the best fit with the environment.
* Edge of chaos. Complexity theory is not the same as chaos theory, which derives from mathematics. But chaos does have a place in complexity theory in that systems exist on a spectrum ranging from equilibrium to chaos.
* Nested systems. Most systems are nested within other systems, and many systems are made up of smaller systems.
BUSINESSES AND PROJECT TEAMS AS COMPLEX ADAPTIVE SYSTEMS
Complex adaptive systems are all around us: ant colonies, weather systems, the immune system, the brain, the stock market, business systems, and any group of people who are working toward similar goals, such as political parties, communities, businesses, and yes, project teams. The principles of emergence and self-organization are relevant in all these systems. Complex adaptive systems are a model for thinking about the world around us — but not a model for predicting what will happen.
Businesses are complex adaptive systems nested within a larger complex adaptive system, the global economy. Just as complex adaptive systems in nature fluctuate among the states of equilibrium, edge of chaos, and even chaos depending on their environment, so will a company fluctuate among these states. A business may at times operate in chaos, particularly when old ways of doing things need to be abandoned and new ways need to be found to explore and experiment with a variety of alternatives in an innovative manner. This fluctuation represents the capacity to adapt to changing environments, which is essential to our very survival. As managers we need to allow for and encourage diversity of thought and exploration if we are to achieve creativity and adaptability, even though operating on the edge of chaos may be quite unsettling.
The project teams that implement innovative business solutions are complex adaptive systems nested within companies, and large-scale complex business solutions must be easy to change as the business environment changes (i.e., adaptive). Our challenge is to learn how to employ complexity thinking to complement our conventional project management methods to manage 21st century projects.CHAPTER 2
Applying Complexity Thinking to Projects
"Complexity causes confusion, which ultimately leads to failure." — Jim Crear, CIO, The Standish Group International
So what do complexity, chaos, and uncertainty have to do with managing projects? As Chris Zook of Bain & Company's Global Strategy Practice contends, "As the business landscape becomes more brutal, two out of three companies will need a new business strategy to stay alive."
To turn a new business strategy into reality, organizations will continually resize, restructure, reengineer, transform, and explore new models of management and leadership. Leaders around the globe are looking for ways to understand the nature of global change and to prepare for the significant transformation initiatives that will be necessary to remain competitive.
Roger Lewin and Birute Regine provide the context for complexity thinking.
ROGER LEWIN and BIRUTE REGINE
On the Edge of the Business world
The business world is experiencing accelerating, revolutionary change, driven by rapid technological innovation, the globalization of business, and not least, the arrival of the Internet and the new domain of Internet commerce. The change toward what might be called "the connected economy" rivals the onset of the Industrial Revolution in its impact on society and the way commerce is transacted. Managers are finding that many of their long-established business models are inadequate to help them understand what is going on, or how to deal with it. Where managers once operated with a machine model of their world, which was predicated on linear thinking, control, and predictability, they now find themselves struggling with something more organic and nonlinear, where limited control and a restricted ability to predict are the norm.
IS CONVENTIONAL PROJECT MANAGEMENT ENOUGH?
A decade ago a major author and contributor to project management theory, Peter Morris, had this to say about the status of project management: "Project management has traditionally been thought of as the process of accomplishing a task on time, in budget, and to technical specification. Today that view is changing to something much more ambitious, exciting and challenging."
Morris' first statement describes the traditional or basic project management approach — a logical, linear process to achieve a well-defined goal. The methodology for achieving that goal is well defined:
* Identify the problem/need (requirements)
* Decompose the problem into logical pieces (deliverables, work packages, activities)
* Do the necessary work to create these pieces (execution)
* Integrate the completed pieces into the final solution (validation and acceptance).
But if project management is that easy, why do major problems invariably arise in managing projects? Often, the more complex the project, the more the proponents of project management exhort project managers to follow the traditional linear approach strictly. If competence in project management disciplines is required to manage the significant change necessary to transform companies, we must ask ourselves if the current project management process is up to the challenge.
The paradigm we use to manage projects goes something like this: If we can decompose the work effort into manageable chunks of work applying reductionism (which postulates that complex systems can be completely understood in terms of their components), we can reduce the complexity and risk, develop a plan, and then execute and rigorously control changes to the plan. Reductionist theory is the basis of many of our business management approaches, including strategic planning, business planning, performance evaluation, budgeting, and yes, project management.
Frances Storr, occupational psychologist at the Herrmann Institute, describes our changing ideas of management in her work, That's Another Fine Mess You've Got Me Into: The Value of Chaos in Organizational Analysis.
That's Another Fine Mess You've Got Me into: The Value of Chaos in Organizational Analysis
The belief is that one can divide the organization's operational plan down into its component parts, allocate responsibilities, sum the resulting actions and the overall aims of the plan will be achieved. Most models of management ignore the reality of organisations as non linear feedback systems and complexity theory suggests a new approach to organisational analysis. Theories of complexity offer a new way of thinking and a new way of seeing the world. In a nonlinear system where slight variations amplify into unpredictable results, the long term future is unknowable. Therefore the skill is not to predict the future but to see patterns. ... One should remain aware of the whole and resist analysing the parts to death.
Although complexity theory is relatively new, thought leaders and practitioners in the field of project management are beginning to embrace its tenets. The Project Management Institute (PMI®) Research Program is actively exploring the nature of complex projects and the relevance of complexity theory to project management. New project management methods and techniques that are adaptive, iterative, agile, and sometimes extreme are emerging. Leaders in the field are beginning to realize that a new paradigm is needed for managing complex projects — one that employs an adaptive method of project management versus the more conventional reductionist approach that emphasizes planning and control.
CONVENTIONAL VERSUS ADAPTIVE PROJECT MANAGEMENT
Our inclination is to manage projects using the traditional reductionist, control-based methods. Indeed, PMI's A Guide to the Project Management Body of Knowledge (PMBOK® Guide), which is widely accepted as the gold standard for codifying the practice of project management, presents a structured, logical approach to project management.
Excerpted from Managing Complex Projects by Kathleen B. Hass. Copyright © 2009 Management Concepts, Inc.. Excerpted by permission of Management Concepts Press.
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Table of Contents
INTRODUCTION Unprecedented Change in the Business Environment,
PART I complexity Thinking in the World of Business,
CHAPTER 1 Complexity Thinking,
CHAPTER 2 Applying complexity Thinking to Projects,
CHAPTER 3 The Project complexity Model,
PART II Applying Complexity Thinking to Assign Key Project Team Members,
CHAPTER 4 competencies required to Manage complex Projects,
CHAPTER 5 Developing Leaders of complex Projects,
PART III Applying Complexity Thinking to Select the Project cycle,
CHAPTER 6 Appropriate Project Cycles for Independent Projects,
CHAPTER 7 Appropriate Project Cycles for Moderately complex Projects,
CHAPTER 8 Appropriate Project Cycles for Highly complex Projects,
PART IV Managing the Dimensions of Project Complexity,
CHAPTER 9 Applying Complexity Thinking to Large, Long-Duration Projects,
CHAPTER 10 Applying Complexity Thinking to Large, Dispersed, culturally diverse Project Teams,
CHAPTER 11 Applying Complexity Thinking to Highly Innovative, urgent Projects,
CHAPTER 12 Applying Complexity Thinking to Ambiguous Business Problems, Opportunities, and Solutions,
CHAPTER 13 Applying Complexity Thinking to Projects with Poorly Understood, Volatile Requirements,
CHAPTER 14 Applying Complexity Thinking to High-Visibility Strategic Projects,
CHAPTER 15 Applying Complexity Thinking to Large-Scale change Initiatives,
CHAPTER 16 Applying Complexity Thinking to Projects with Significant Risks, Dependencies, and External constraints,
CHAPTER 17 Applying Complexity Thinking to Projects with a High Level of IT Complexity,