Episode 302: Con Artists, Swindlers & Project Managers (Free)
This Interview with Jim DePiante was recorded at the PMI Global Congress 2014 in Phoenix, Arizona.
If securities dealers sold securities the way we project managers sell our projects, the authorities would throw those securities dealers in jail.
A project has all the characteristics of any investment. There is the asset itself, the price, the return and the risk associated with the return. How is it then that project managers routinely “sell” investments without knowing the price, nor what the asset or its return will be, all with a straight face and without going to jail!?
Projects must be understood as investments. It’s not enough to say that a project is like an investment. A project is an investment, strictly speaking. In this interview, we review the four characteristics of an investment/project.
Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only.
Cornelius Fichtner: You are listening to The Project Management Podcast™ and we are coming live to you from the PMI Global Congress 2014 in Phoenix. With me right now is Jim DePiante.
Cornelius Fichtner:Hello, Jim!
Jim DePiante: Hello!
Cornelius Fichtner: This is long overdue isn’t it? I've wanted to add you on the program ever since you were the keynote about IBM's Watson. What was that like 4 years ago?
Jim DePiante: Back in Dallas in 2011, so 4 years ago yeah!
Cornelius Fichtner: Yes. Your presentation at this year's congress is titled "Con Artists, Swindlers and Project Managers Managing the Project Portfolio." Very interesting topic! What's your interest in this particular topic?
Jim DePiante: The title of course has to be a little bit provocative. So you want people to attend your presentation. The topic of the presentation is around portfolio management. The idea being if securities dealers sold securities with the same lack of rigor that project portfolio managers invest in projects with the same poor information, they'd probably get thrown in jail.
So the presentation was around doing the things that a good project manager needs to do to give the portfolio manager the kind of meaningful information that that person can use to do the things that a portfolio manager does, which is to say 'Make wise investments and balance that portfolio. Optimize it with respect to return of investment and risk.'
Cornelius Fichtner: Okay. Allow me to get a quick step back and talk about the whole administration of your presentation. What I'd like to know: Is this a new presentation? Have you given this before or is it a requirement for the Global Congress that you present something that has never been presented before?
Jim DePiante: The Global Congress requirement is that when you submit a paper, it cannot have been submitted more than one other time.
Cornelius Fichtner: Okay.
Jim DePiante: So if you submit it, for example, for the EMEA Congress and it's either accepted or not, then you can submit it again for the following North America Congress.
Cornelius Fichtner: Okay.
Jim DePiante: But beyond that, you can't submit the same thing a second…
Cornelius Fichtner: To PMI.
Jim DePiante: To PMI. However, what you do outside of PMI…
Cornelius Fichtner: Right. You retain the copyright. You can now go and use this.
Jim DePiante: So this particular presentation, I actually first gave in Madrid, Spain in 2007.
Cornelius Fichtner: Oh!
Jim DePiante: And I've given flavors of it mostly in Europe interestingly. In fact, I most recently did a brief version of this for IPM Day, International Project Management Day, so it will be up in mid-November about 20-minute version of the same presentation.
Cornelius Fichtner: Okay. So basically if I understand the title correctly, you're calling all project managers liars, right?
Jim DePiante: Well…
Cornelius Fichtner: How rampant do you see this problem actually? How rampant you find that this is, that we are not really sure about the information we have and we're giving almost misinformation when it comes to the financials?
Jim DePiante: My own experience personally and then dealing with other project managers is that the information that we provide to portfolio managers is one thing. It doesn’t give them the information they need to do an adequate job and that the real answer is to take some of the project risk out of the equation by doing a good job managing the project so that we can give portfolio managers a tighter, more reliable set of ranges in terms of scope, schedule and cost for the status of our project as it develops.
I'm sure it's pervasive owing a large measure to the fact that portfolio management is a discipline. It's not as well implemented frankly as project management. And project portfolio managers don't seem to know often enough what they should be asking their project managers for in terms of information.
Cornelius Fichtner: It's sort of a shared responsibility, a shared fault then that the information is lacking?
Jim DePiante: Absolutely. Portfolio managers need to understand the projects in financial terms and the information that they use with respect to project risk namely the scope, the schedule and the budget on their project can only come from the project manager.
Now there's another side to that. That's the business side in terms of what it is that we are creating and what do we expect will be the return on this investment? That really is a thing apart from the project managers do. It has to do with the business case. By the time the project manager takes responsibility for the project, those things should already be well understood in terms of the forecast for the business.
So the value to the business of the asset is something that the project manager isn’t involved in as a project manager. They may be involved in another respect. But as a project manager, it really isn’t the project manager's discipline. That has to do with the business and the portfolio management. So it is shared in that sense.
The project manager's responsibility is around being able to provide meaningful information with respect to scope, schedule and cost as they evolve and as risk is reduced as the project proceeds.
Cornelius Fichtner: Okay. What is the underlying problem then for us project managers? Why do you think we are not really capable of providing good information, good numbers for scope, cost and schedule?
Above are the first few pages of the transcript. The complete PDF transcript is available to Premium subscribers only.