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16th Feb 2023
Author: Dr Angela Lecomber FAIPM CPPD and Geoff Rankins FAIPM CPPD
Project professionals often view disruption as a negative, but it’s time to flip that perception. AIPM Fellow Dr Angela Lecomber FAIPM CPPD and Fellow Geoff Rankins FAIPM CPPD talk about how project professionals must keep challenging their thinking and consider disruption an opportunity with the potential to create better outcomes.
Disruption has traditionally been considered problematic. This changed with Clayton Christensen’s theory of disruptive innovation (considered to be the most influential business idea of the early 21st century, according to the Harvard Business Review). This article takes a broader view of disruption, whether caused by technological or business model innovation or some other cause.
Angela: Disruptions have been a constant feature of the COVID era. What are the main disruptions you’ve seen?
Geoff: It depends on what you mean by disruption. In project management, and engineering projects specifically, it’s a defined term meaning that a plan isn’t expected to meet its target. It’s considered a break or interruption in the normal course of an activity or process.
During the pandemic, the most obvious have been supply chain disruptions affecting companies that import or export products. Companies are reconsidering ‘just in time’ approaches which we could say are now ‘just out the window’.
There have also been many other COVID related disruptions including the sudden switch to remote working, followed by quiet quitting and the great resignation. This has resulted in new hybrid working models and innovative strategies to attract and retain staff.
Angela: So, do project variances imply that the project has been impacted by a disruption?
Geoff: Not always. It depends on the scale and source of the variance. Often variances arise from known risks or issues that should have been expected but weren’t considered. Other times, the variances arise from unexpected causes.
Even before this pandemic, I rarely completed a project on time and on budget, except for one very small project that finished on budget but one week late. My most successful projects either finished well under or well over on one or both metrics.
Angela: What leads to project disruption? Is there a taxonomy or categorisation for this?
Geoff: Generally, there are three broad causes of disruption to projects: (1) unforeseen or foreseen risks that become issues (such as the pandemic), (2) risks whose exposure grows larger than the organisation’s risk appetite or risk capacity, and (3) general uncertainties that might exist in the project’s environment but aren’t treated as quantified risks.
However, in my experience, minor risks and minor issues in projects are not considered disruptions; they’re almost expected. Project managers can prepare for disruptions by developing a risk management plan and contingency budgets in time and money wherein they anticipate most risks and prepare strategies to deal with them.
Angela: Can a disruption arise inside a project or programme?
Geoff: Sometimes a new approach to a project or its management might cause disruption. For example, I’ve seen troubled projects attempt to adopt ‘Agile’ as part of their recovery efforts.
Angela: True, but there are other ways to view disruption. Disruption caused by projects can change an organisation. Project stakeholders are likely to be impacted or affected by the deliverables of projects in a variety of different ways.
Geoff: And projects affect BAU, and in turn, changes in BAU can disrupt the same project.
Angela: Disruptions are generally seen as something to be avoided, but disruptions don’t always have negative impacts. What are your thoughts on this?
Geoff: I agree. While a disruption may damage a project’s expected value, it’s equally possible a disruption may increase that value. This ties in with newer thinking from ISO 31000 and M_o_R 4 (Management of Risk version 4), where risk management has two purposes: to protect expected value and create new value. For example, it might be initially disruptive when organisations adopt new project management methods, but it should improve outcomes in the long run.
The disruption: Geoff was running a public sector programme when the government expected a significant increase in public servants’ salaries.
The challenge: Managing a 20% reduction in the programme’s budget.
The opportunity: Rather than just decreasing each project’s budget by 20%, Geoff focussed on value and looked for low-value projects that could be terminated to reduce expenditure.
The outcome: Geoff significantly increased the programme’s value for-money proposition.
Angela: What should the focus be in dealing with disruptions?
Geoff: A focus on project metrics such as timeframe and budget often distracts from the business purpose of a project. The approach should be a two-fold focus on protecting value (from threats) and creating value (from opportunities).
For example, if an opportunity would increase a project’s costs by 20% but also increase the value of the project’s outcomes by 100%, then protecting the project’s cost budget is not in the organisation’s best interests.
“While it’s important to focus on the mechanics of responding to a disruption, it may be valuable to first step back and look for opportunities and the silver lining.” Geoff Rankins
Angela: Do we need to reframe the way we look at risk?
Geoff: When people talk about risk, they generally mean threat. Their mindset needs to accommodate the concept of opportunities. Current project management methodologies such as PRINCE2, MSP and M_o_R 4 present risks in a binary way: either as a threat or an opportunity.
But why can’t a situation be both a threat AND an opportunity?
For example, suppose a project had been commissioned, and its plans assumed it would use a particular tool. Then, a much better tool comes onto the market at some time during the project’s life. The project’s stakeholders could regard the innovation as a threat to the approved plans and associated outcomes. Alternatively, or perhaps concurrently, they could view the innovation as an opportunity to increase the value of the project to the organisation, even though this would mean major disruption to the project’s existing plans and outcomes.
The threat: Geotechnical experts warned of the potential for collapsing cliffs falling on traffic on the highway between Sydney and Wollongong.
The opportunity: Rather than just addressing the direct threat, authorities saw an opportunity to create a bridge out over the ocean.
The outcome: The Sea Cliff Bridge at Stanwell Park is now a popular tourist attraction and driving experience. An opportunity was exploited that reduced the threat at the same time.
Angela: So, should we always be looking for the silver lining of disruptions?
Geoff: Absolutely. In addition to focusing on addressing the immediate negative impacts of the issue or threat and using a band aid solution, stakeholders should look for opportunities to do something more. Dwight Eisenhower once said: “If you can’t solve a problem, enlarge it.”
The disruption: An engineering firm was asked to respond to a maintenance tender, where they knew that the maintenance was currently being performed in a facility containing asbestos which the firm’s corporate policies would not condone.
The opportunity: At face value, the firm could not respond to the tender. However, they took a broader view and decided to offer to demolish the existing facility and build a new facility that the firm would own at no expense to the tenderer.
The outcome: They saw the opportunity to increase their maintenance rates at the next contract renewal or sell their facility to the tenderer at a significant profit.
Angela: So, will there always be upsides to disruption for projects?
Geoff: If mindsets don’t change, and if by disruption we mean ‘negative impacts,’ then there is no upside. But if ways of thinking can broaden, then opportunities to create value exist.
For example, suppose that most threats in an engineering project originate in one of the solution’s components. If stakeholders try to address each risk independently, they will spend a lot of time and money but may not address the root cause, which is that component. In a situation such as this, there is an opportunity to eliminate all risks directly relating to the component by replacing that component with something else.
For me, this quote sums up the attitude project leaders of tomorrow must embody: “We are all (sometimes) faced with a series of great opportunities brilliantly disguised as impossible situations.” Charles Swindoll
This article is taken from the Summer 2022 edition of Paradigm Shift.
If you liked this article, you can see more by reading the latest edition of the Australian Institute of Project Management’s digital magazine.
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