Dr. Harold Kozner, a master of project management, put forward that project management 2.0 is a management concept oriented to delivery value. "Project Management 2.0 will bring a subversive innovation to the industry." Ding Shizhao, founder of Tongji University’s Institute of Engineering Management, believes that Project Management 2.0 provides a new project management methodology that is more suitable for the current development of engineering construction, and is also an essential guide for project managers to deal with the complex and changeable project environment in the future.
From advocating project management in China in April, 1987, to spare no effort to introduce international and modern project management concepts, management models and management technologies into China for dissemination and practice, Ding Shizhao has been fascinated by the theoretical research of project management for more than 30 years, leading the progress of project management. The proposal of project management 2.0 also made him have a deeper and unique thinking on the development of the industry.
Goal Orientation: Value-driven Project Management
"The core task of traditional project management is to control investment, progress and quality as the goal, and such a goal is no longer in line with the law of social development." Ding Shizhao said that if a project meets the standards in terms of investment, progress and quality, it will not be a successful project if its benefits are poor after use.
The success of the project does not depend on whether the results are delivered and accepted by the relevant parties, but on the value perception and value recognition of the deliverables by the relevant parties when the project is delivered, and the value created by the deliverables for the organization and society after the project is put into operation.
Ding Shizhao told reporters that more often, the project is a strategic effort. The significance and value of the project are not limited to the deliverables at the end of the project, but more importantly, a project may still create future value throughout the life cycle after delivery. He said that Project Management 2.0 is a value-driven project management, not a goal-controlled project management. It takes whether to create value as the only criterion for the success of the project, which will have a far-reaching impact on the country’s economic construction and the reform of the construction industry.
Ding Shizhao took a large building as an example, saying that the project had a large initial investment. Although there was no quality and safety accident during the construction process and the project was delivered on time, all the indicators met the standards, it was put on hold after several years of use. It is inevitable that people will have doubts after investing a huge sum of money but not using it for a long time: have you done enough feasibility demonstration before the project construction? How to rectify and utilize idle resources?
Ding Shizhao believes that a project should be carefully demonstrated and scientifically judged before construction. Spending a lot of money on useless construction may win temporary praise, but it will not bring tangible help to the country and the local government. On the contrary, it may become a "burden" for development. Whether there is enough market demand, how to implement the matching funds, and whether it can develop and operate sustainably, etc., all of which need to be fully considered before the construction project. And this is the essence of the concept of Project Management 2.0.
Surprisingly: Realizing the Value of Sustainability
Scientific and technological progress has always been accompanied by major changes in management theory and practice while triggering industrial changes. To build a strong country, China must also develop a project management model that adapts to changes in the new era. Project Management 2.0 systematically puts forward a new concept of project management that faces the future and adapts to changes. Ding Shizhao believes that the development of project management from 1.0 to 2.0 is a breakthrough to lead the future development concept of project management, and it is also a surprising change.
Project Management 1.0 holds that a project must have clear objectives, such as time objectives, cost objectives and time limit for a project. Any project is carried out under certain restrictions, including resource constraints (manpower, financial resources and material resources, etc.) and artificial constraints, among which quality, schedule and cost objectives are the three main constraints that are common in projects. Project management 2.0 puts forward a set of delivery value-oriented concepts, that is, the project is the carrier of a set of sustainable commercial values planned to be realized, and the success of the project is to realize the expected commercial values under competitive constraints.
Ding Shizhao further explained that in the past, indicators such as being within the established scope, on time, and delivering with high quality within the planned cost were only intrinsic characteristics of value. Value measurement indicators should be established during business demonstration or project establishment, reached in stages during project delivery, and continuously reflected in product or service operation.
Project Management 2.0 concretely reflects whether the value is achieved through diversified measurement indicators, including the time to realize the value, the proportion of changes in key assumptions, the number of key constraints and net operating profit. Therefore, in any case, the ultimate goal is to realize the value of sustainability.
Without "positive", "odd" will not go too far; Without the "odd", the "positive" can’t be fully displayed. Obviously, as a task, an engineering project must have a clear goal. The ultimate goal of Project Management 2.0 is the benefit goal, while the three control goals of project 1.0 are actually the next level goals, which complement each other and transform each other.
The way to change: breaking through traditional thinking
Project Management 2.0 fundamentally subverts the traditional definition of project and the definition of project success under triple constraints, which is not only reflected in the breakthrough of ideas, but more importantly, the responsibility of project managers will be redefined, which requires breaking the traditional thinking.
For decades, the traditional view of project management is that if the project is completed and the triple constraints of time, cost and scope are followed, the project will be successful. However, Project Management 2.0 requires that the project manager should be more business-oriented. As the chief commander of the project construction, the project manager is the key to the success of the project. In the process of project construction, the project manager should not only manage the people, money and materials, but also manage the project coordination and progress. More importantly, he should create certain economic and social benefits after the project is completed.
Ding Shizhao said frankly that the role of the project manager should be changed from "the person who organizes experts to do things" to "the person who co-ordinates the value creation activities of interested parties" in a broader sense. How to build consensus among different interested parties and make interested parties truly integrate into the value creation activities of the project is the challenge faced by the project manager.
He believes that project management is a business process, not just a project management process. Project managers should not only produce and manage deliverables, but also take greater responsibility in business management.
"We should keep the theory of project management up to date forever." As an advocate and promoter of Project Management 2.0, Ding Shizhao hopes to spread the most advanced theories of international project management and use these theories to lead practice and promote the high-quality development of project management in China. This is his career here, and it is also the key to promote the reform and development of China’s construction industry.
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