Project Management Best Practice 1 – The Project Management Intensity Continuum

Any amount of management represents an overhead expense to the endeavor to which the oversight is applied. Therefore, it is critically important the amount of management applied is limited to that which yields an increased overall product value and not so much that overall value is diminished. This balance between applied management intensity and overall valued added is represented by the Project Management Intensity Continuum.[wcm_restrict plans=”25541, 25542, 25653″]

The value project management offers any initiative comes from the creation of order from what would otherwise be chaos. The more numerous the activities and the more complex their interrelationships, the more value project management offers. When order is created, resources are deployed more effectively; coordinating and focusing their efforts on priority work and achieving greater resource utilization. Subsequently, value generation increases and overall costs decline.

Project Management Intensity Continuum Curve Shape

With respect to the Project Management Intensity Continuum, overall value is equal to the increase in value generation of the end product less the cost of management applied to create the product. As illustrated in Figure 1, The Project Management Intensity Continuum, the initial application of management to any initiative will tend to yield a rapid increase in overall value generation. As additional management is applied, however, profitability gains tend to diminish while the cost of management increases; reducing the rate of overall value increase relative to the additional management applied. Finally, at the point of diminishing total returns, any additional management applied to the governance of an initiative will result in a reduction of overall value creation. At this point, the amount of management applied maximizes the total value return. Beyond this point, too much management is applied and total value generation declines.

While the fundamental shape of the Project Management Intensity Continuum curve remains the same regardless of the project, the rate at which the curve changes will vary from project-to-project in direct correlation with the project’s overall complexity and its overall value potential. As a general rule, more complex projects will require a greater management intensity to coordinate the larger number of assigned resources completing the larger number of often interrelated tasks. Thus, more complex projects have a correspondingly stretched project management intensity continuum curve along the X-axis. Similarly, less complex projects reach an optimal management to overall value balance at a point of far lower management intensity compressing the curve along the X-axis. The height of this diminishing marginal returns curve tends to change with the overall value creation potential of the initiative. Initiatives with high value potential will have taller Project Management Intensity Continuum curves. Those with low potential value creation will tend to be flatter in appearance.

Applying Just Enough Project Management

Applying just enough management in order to realize the project’s peak value potential is the goal of every project manager. While requiring a degree of subjective ‘management feel,’ consider the following sensitivity analysis type questions when attempting to determine whether or not the optimal management to value creation ratio has been achieved:

1. What value does the project’s output quantifiably offer in both objective and subjective terms?
2. What is the current cost of the applied project management?
3. If a project management component was eliminated, what would the corresponding change in cost and value be?
4. If a project management component was added, what would the corresponding change in cost and value be?

Repeat questions 3 and 4 for different management components. For those changes that resulted in an overall value increase (overall value = value added – increased cost), try implementing the change on a trial basis and observe the actual results achieved. Consider making the change permanent for those management additions/deletions that enhance the project’s overall value contribution.[/wcm_restrict][wcm_nonmember plans=”25541, 25542, 25653″]

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