The project economy

There are three main types of management at any organization, be it public or private, profitable or nonprofit:

• Operations Management to optimize resource usage and increase productivity of repetitive tasks, those that keep the business running, pay the payrolls, and generate benefits. Operation Management techniques have been practiced and improved since the Industrial Revolution.
• Project Management arose just over half a century ago, when managers realized operation management techniques were not enough to manage projects. A project is a temporary endeavor undertaken to create a unique product, service, or result. This definition applies when making ideas a reality via decomposition into tasks and teamwork. When a project is finished, the product of the project is transitioned to operations.
• Demand Management: Big organizations use demand management to prioritize possible initiatives candidates to be executed as projects.

Let’s take the example of one of the most important companies today:

• Apple is one of the most important companies in the world thanks to operations management (manufacturing, sales, etc.). All you have to do is to stop by an Apple Store to check out the health of this business.
• Nonetheless, Apple has become a market leader by transforming ideas into products, mainly thanks to 6 successful projects: the Macintosh Project, the iMac Project, the iPod Project, the iPhone Project, the iPad Project, and the Apple Watch Project. They were not managed properly as projects but programs—a program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Apple’s leading position explanation should also include the lessons learned from failed projects: the Lisa Project (computer), the Newton Project (PDA), the QuickTake Project (camera), etc.
• Although Apple keeps strict secret on next releases, we can assume they invest big money on research and development. They devote expensive teams to demand management, analyzing quite a few numbers of new initiatives regarding health wearable devices, cloud computing, artificial intelligence, etc. No organization has all resources to execute all projects. They need feasibility studies, cash flow analysis, prioritization, etc.

Three management types can be represented sequentially:

Project Management stands between Demand and Operations Management. Last project phases may overlap with Operations Management: projects frequently include services setup and go-live commissioning and first operations follow-up. Initial project phases usually meet Demand Management: project planning efforts are devoted to rationalizing the go/no-go decision. Project Management initiation processes guide us on how to manage a project, even before it is approved.

Large projects can be split into sequential phases. On each closure stage gate, a decision needs to be made to continue or stop the project. Any project or phase can be managed by applying the 5 process groups—initiating, planning, executing, monitoring/controlling, and closing. At any project or phase, we can produce documents for the business case, the project charter, the project plan, deliverables, and product transition to operations. Intensive planning is only advisable when most requirements are clear since the very beginning of the project or phase. This is the case for predictive projects.

Other projects are approved despite most requirements are not clear. They are called adaptive/agile projects. Detailed requirements are elaborated progressively, via continuous collaboration with certain stakeholders.

Companies give more and more value to project management to make ideas a reality. According to recent research by PMI, the number of individuals working in project-based roles will increase from 66 million in 2017 to 88 million in 2027. And the value of economic activity worldwide that is project oriented will grow from $12 trillion in 2013 to $20 trillion in 2027. Companies will employ more and more project management professionals, devoted 100% to manage projects.

These professionals should be able to manage predictive or agile projects, big or small ones. In the project economy, people have the skills and capabilities they need to turn ideas into reality, and organizations deliver value to stakeholders through successful completion of projects, delivery of products, and alignment to value streams. There will be more and more people working 100% on projects; but also, less, and less fixed job descriptions: people will see how their jobs are redefined from one project to another.

Frequently Asked Questions

What is the difference between operations and project management?

Operations management handles ongoing, repetitive tasks to keep a business running, while project management deals with temporary initiatives that produce unique outcomes.

Why is demand management important in large organizations?

Demand management helps organizations prioritize which initiatives to pursue as projects, ensuring resources are allocated to the most valuable efforts.

What does the term “Project Economy” refer to?

The Project Economy describes a world where work is increasingly project-based, requiring professionals skilled in managing both predictive and agile projects to drive innovation and value.