6 roadblocks to a project management approach
In an earlier blog, I mentioned that project management is not a bandage to be applied when a new hotel project is already derailed, but a strategic competence. It is the ability to predictably, consistently delivery projects for strategic goals.
The 2018 Pulse of the Profession, the Project Management Institute’s annual global survey, shows disturbing statistics: “US$99 million is wasted due to poor project performance for every US$1 billion invested,” and “scaled to encompass total global capital investment, around US$2 trillion is wasted every year.” According to PMI, here are the main reasons too much money is being wasted on poor project performance:
- Organizations fail to bridge the gap between strategy design and delivery.
- Executives do not recognize that strategy is delivered through projects.
- The essential importance of project management as the driver of an organization’s strategy is not fully realized.
In view of the global development pipeline, the hospitality industry has much to gain from embracing project management as a strategic competence, but it is slow to do so. Following are six reasons the hospitality is lagging.
- Internal roadblocks:Implementation of project management is likely to meet resistance within a hospitality organization, primarily because of a lack of understanding of the project management discipline by senior executives. Other reasons point to control of processes, and fear of being tracked, monitored and held accountable. Finally, perceived cost concerns, defensive attitude of the status quo, and ignorance/arrogance also play a negative role.
- Implementation challenges:Implementation of project management requires time and maturity. It takes time to develop and implement a robust methodology, and it requires a certain level of maturity before project delivery can start.
- The knowing-doing gap:Often, senior executives can explain what their company needs to do strategically but cannot actually implement these strategic plans (through project management!).
- Cost-centricity:The hospitality industry is cost-centric, not opportunity-cost centric. Generally, the main concern of developers evolves around perceived cost savings and not on the opportunity cost of delays or the cost of rectification due to schedule compression, for example.
- Quarterly earnings-centricity;Hotel company CEOs are focused on quarterly earnings and year-end financial objectives. A program to improve new hotel opening project performance can easily take 2½ years, due to the change management aspects involved. Therefore, it falls out of the “low-hanging fruits” category to help achieve the next quarterly earnings, making it challenging to engage a CEO in meaningful discussions and get commitment to such change management program.
- The difficulty of selling project management to senior leadership:There is a misalignment of the perceived value between project managers and consultants (the “sellers”) and executives (the “buyers”). The “sellers” see project management as strategic; the “buyers” see project management as tactical/operational when a crisis occurs. The “sellers” focus on tools and techniques, the “buyers” focus on business goals, results and outcomes of projects.
Project management can bring proven value to the company. The misalignment is related to the cognitive gap between what the sellers must promote and what the buyers need to hear. More about this in one of the next blogs.
Happy hotel openings!
Gert Noordzy, founder and managing director, Northside Consulting, Macau S.A.R.
Source: Hotelsmag. Link: http://hotelsmag.com/Industry/Blogs/Details/81963
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