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The Perfect Storm for The Project Economy

Perfect StormThe winds of change were strong before the COVID-19 pandemic. Driven by three macroeconomic trends, the need for projects and project managers was increasing. These three trends are:

1) Accelerating rates of technology adoption

2) The switch to alternative energy sources to maintain GDP and meet emissions targets

3) Infrastructure projects for population growth.

These movements occurring together were spawning an explosion of projects to turn ideas into reality. This increase in project demand was christened The Project Economy by PMI in 2019.

To be fair, these trends and strategies for handling them had already existed for more than a decade. Globalization and business transformation have been discussed extensively. Eric Ries documented his lean startup methodology in 2008 as a way for organizations to adapt and experiment with new ideas and perform market tests. It provided a framework for rapid adaptation and customer-centric design that is baked into many of today’s strategies.

 

COVID-19 Hits
Then COVID-19 changed how the world works, learns and communicates. The digital migration became a stampede as organizations were forced to work online or curtail collaborating and communicating. Digital transformation, an already hot market segment that moves traditional products and services online, was suddenly set on fire.

Organizations had to transform and go online or face losing market share to those that could. Online, non-contact shopping and direct business-to-consumer increased dramatically. Previously niche services such as universal home delivery providers became mainstream.

However, more importantly, digital consumerism became normal. No longer were just millennials using third-party services to arrange home delivery from traditional brick-and-mortar providers; now, Gen X and boomers are, too—the flood gates have opened.

 

A Brighter Future
Lockdown provided a glimpse of a clearer, brighter future. With commuting reduced, air quality in cities improved drastically. People in the state of Punjab saw the snow-covered peaks of the Himalayas for the first time in 40 years. Compared to the past five years, March air pollution figures were down 29% in Los Angeles, 38% in Sydney and 46% in Paris. According to Environmental Protection Agency data for March, carbon monoxide emissions were down by 50% in New York.

Now people have seen what it would be like if there is less pollution; the transition to clean energy may accelerate also. It could already be happening. All the major auto manufacturers reported far fewer sales in Q1 and Q2 due to factory shutdowns and a lack of customers. However, the figures show a green skew. General Motors deliveries were down 34%, Toyota down 35% and Fiat Chrysler down 39% while Tesla sales dropped by only 4.8%.

The transition to alternative energies will likely speed up as nations use the COVID recovery as an opportunity to also reset and refocus for the future. Illuminated by a bolt of clarity, projects aimed at transitioning to renewable energy sources are also set to increase.

 

Population Growth and Technology Uptake
While extremely taxing on hospitals and medical practitioners, hopefully COVID-19 will do little to overall population counts. The population growth in Africa is expanding three times faster than other continents. The current population of 1.3 billion is expected to nearly double to 2.5 billion by 2050.

These additional 1.2 billion people work out at over 100,000 extra people each day for the next 30 years that will need homes, food and water. The housing may happen organically, but the infrastructure for transportation, power, water and hospitals all need projects to make them happen. This buildout to accommodate 40 million extra people every year represents a tsunami of infrastructure projects.

An increasing proportion of power for all these homes and facilities may well be solar and wind that, due to innovation, is now 90% cheaper to install than 10 years ago. Access to power and less expensive technology also brings connectivity. While 82% of the developed world has internet access, only half that figure (41%) of people in developing nations have access to the internet.

Expanding connectivity to those currently without internet access would bring an extra 3.2 billion people online. If visionary innovators and exceptional entrepreneurs are one in a million, we get an additional 3,200 of them today just by providing connectivity. As more people get connected and information becomes more freely available, innovation accelerates in a virtuous cycle.

 

The Perfect Storm of Disruption
The term “perfect storm” was coined by author and journalist Sebastian Junger in 1991 to describe the convergence of several weather systems that led to the creation of a hurricane off the coast of Atlantic Canada. It’s now a phrase often used to describe how converging trends—such as tech, population growth and alternative energy—can combine to create a powerful disruptive force.

COVID-19 caused digital transformation to surge. It also highlighted the potential for alternative energy that, as it becomes more popular and cheaper, helps connect an ever-growing population. Then, as more people come online, technical innovation will accelerate, and the forces magnify.

The Project Economy was christened to describe the demand for more projects and, therefore, project managers. Throwing the consequences of COVID-19 into the mix is akin to adding a powerful accelerant to a firestorm.

 

Impacts on Project Management
There will undoubtedly be a huge demand for projects, but technology and market evolution are changing the skill set needed to be successful:

  1. Less of the old —When I studied project management many years ago, I learned how to create work breakdown structures, plot network diagrams, and calculate slack and lag between tasks. With all the planning, estimation, risk management, and earned value tracking, there was a fair amount of math and admin involved.

These days, on the high-change digital projects I work on, applying math to shaky input data is rightly criticized. There are many fields where these techniques still apply, but when validating digital products, customer feedback on early prototypes is more helpful than precedence diagrams. Also, today’s project management tools calculate all of the familiar stats and tracking metrics automatically.

AI tools in project software can help suggest risk categories to evaluate and report emerging trends in data such as small delays before a project manager might have noticed them. The classic science and math-based project management skills are reducing (in digital products, at least) to free up more PM time for stakeholder collaboration and stewardship.

  1. More power skills In describing The Project Economy, PMI President and CEO Sunil Prashara talks about renaming “soft skills” to “power skills” since the term better describes their importance. With tools doing a lot of the calculating work, soft skills become more critical. Also, in a digital market, customers can choose their products from suppliers all over the world, so organizations must take a customer-centric view of building products or risk losing market share.

The new in-demand skills emerging include emotional intelligence, empathy, conflict resolution and consensus-building. While always valuable, they are now critical to retain a more mobile workforce and customer base.

  1. Technology Quotient (TQ) —Being tech-savvy and able to adopt new tools is vital to keep up with new ways to engage team members. An increased amount of remote work is here to stay, and graduates entering the workforce today grew up digital. They have little experience of paper-based communication or documentation. Collaboration and communication for them are primarily digital and phone-based.

Project managers must embrace these developments or risk becoming irrelevant and disconnected from a growing percentage of team contributors. Online tools and remote work just received a five year fast-forward thanks to lockdowns and work from home.

  1. Different LifecyclesDigital products such as websites and services are less “build then sustain” and more “ongoing evolution” in their nature. Handoffs from one team to the next risk too much information loss in the knowledge worker domain.

Digital-first organizations such as Amazon, Google and Tangerine use long-lived product management lifecycles with stable teams and incremental funding to deliver outcomes. These techniques are in contrast to projects with their temporary nature, upfront budgets, and team ramp-up then handover to support staffing models.  

As organizations undergo digital transformations, many are transitioning to product management lifecycles to fit the characteristics of digital products better. Project managers can still play a variety of crucial roles—but need to adapt to building stable teams and using incremental review and funding.

 

Summary
The Project Economy outlined in 2019 was driven from the convergence of tech, energy and infrastructure. COVID-19 forced a digital upskilling and appreciation for alternative energy that has accelerated the transition.

There will be many opportunities for project managers willing and able to adapt to the new roles offered. Likely, our tools will be smarter—and more of our time spent on stakeholder engagement. The lifecycles and titles used may change, but turning ideas into actions and then actions into results will be very much in demand.

 

[Note: For more articles from Mike Griffiths, visit his blog at www.LeadingAnswers.com. Mike first wrote this article for ProjectManagement.com here.]

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