Overview

The success or failure of projects is a topic that has interested both practitioners and theorists for decades. Several attempts have been made to report in detail what went wrong or well in a project implementation as defined, with the hope that all could learn from it and, as a consequence, projects would be managed with higher success rates in the future. We take a different perspective and approach. Our interest is to look for the exceptional thinker and manager—one who is not fixed on what is given, but seeks out and acts on opportunities to create the maximum value for a project's stakeholders.

This report addresses a study which was partially funded by Project Management Institute (PMI) in 2008 and 2009, with the objectives of: (1) investigating the basic premises and limiting assumptions of the widely accepted project management paradigm, and (2) offering an alternative perspective to the general conceptual and practical discussion in project management. This study is an attempt to change the thinking about how project managers should address their responsibilities in managing their projects. We did not wish to study team-related behaviors or leadership issues like teamwork quality or conflicts, etc. It is far too easy to drift off in this direction, even though many empirical studies showed that these factors are related to project success. For readers interested in these discussions we refer to the work on organization and interpersonal conflict—e.g., Coser, 1956; Guetzkow and Gyr, 1954; Hearn and Anderson, 2002; Pinkley, 1990; Barki and Hartwick, 2001; Thomas, 1992; and a plethora of others. While all recognize that project management is about getting people to do what needs to be done (Klein, 2006) our focus is on the decision-making process of the project manager.

As cited by Darmody (2007, pg. PS.15.1), Jim Dodge gave a lecture in London in 1919 titled “An Exhaustive Review of the Formation of the Earth and its Oceans, with Some Conclusive Educational Remarks on the Solar System and Prognostications on the Ultimate End of the Universe.” Title notwithstanding, a comment made regarding the talk was, “What's the use?” To which we are told his response was:

If your ultimate ambition is to roll a ton of rails,

To build an automobile or make a keg of nails,

You will find that life's a burden, you will find existence stale,

If you live by rule and precedent you pretty sure will fail,

And if you only work and sleep and eat three meals a day

Why there isn't any answer and it really doesn't pay.

Not to be outdone, Albert Einstein (1879–1955) is also quoted as saying, “We can't solve problems by using the same kind of thinking we used when we created them”—or to use the lingua franca of shop foremen, “If you always do what you always did, you'll always get what you always got.” Related to project management, we propose that a different perspective is necessary to better understand the limitations of our project management. This is in order to better explain the many phenomena that are related to the management of projects and, consequently, to improve the practical outcome. Steele (2003) stated: “Radical improvement of project performance is impossible as long as projects are approached in the same way as they have been in the past. Refinements of technique can lead, at best, to incremental gains in project performance and do not solve the systemic and structural problems that plague projects.” (Pourdehnad, 2007). We started with the idea that “A project's success or failure results from a complex pattern of changing conditions in the internal and external environments of that project. These changes happen because of a concurrence or convergence of conditions that did not exist previously but are now present” (Pourdehnad, 2007). We wish to add the comment “…or recognized,” as hindsight often tells us what “didn't exist” was merely something overlooked. With this in mind, we attempted in this study to address behavioral issues as well as decision-related issues on a different level of analysis: the mindset of how project managers implement their projects.

Conducting the research for this study proved the adage that nothing is as simple as it seems. It was quite clear that our research required determining to what extent the “mindset” of a project manager impacts success, or failure, of a project. The research opened a Pandora's box of issues, the first being, simply, who is a project manager, or what matters in a project? We quickly realized that the discussion needs to be conducted on a different level of abstraction, or a different “logic” is needed to contribute something innovative. From that point of view, this study is not about the development of a “new” set of tools that if applied will guarantee a higher success rate. It is more about demonstrating by way of an empirical study that the way of thinking influences project performance beyond the simple application of tools. Thus, this study addresses several stakeholders, in particular those who are responsible for implementing projects, those who will suffer the consequences if things go wrong, and those who are responsible for the selection and development of project managers.

We do not claim that failure could be prevented if the results of our study are applied. On the contrary, we discuss the role of uncertainty (unknown-unknowns) in projects, and this is related to the notion that it is by nature impossible to always succeed. We show that changing the view on how to conduct the implementation of a project has severe consequences for the performance of a project. Our results show that there are people who question the constraints of a project and who, despite these constraints, achieve extraordinary results because they implement projects with a different mindset. Consequently our results are, for some, not new or surprising at all. But we hope that for those who are not aware of these practices, this study will trigger a new thought process. We do not attempt to define specific recipes for success; rather, we use empirical data to demonstrate that the success of a project strongly depends on the specific mindset of the project manager.

Limiting Effects of the Triple Constraints Paradigm

The management of projects is traditionally thought to be concerned with meeting three main requirements : budget, schedule and technical specifications. These fundamental project objectives are known as the “triple constraint.” These restrictions set and define the fundamental base by which many existing tools and methods are developed and evaluated to support and improve the decisions and the management processes for implementing projects. The combination of these three fundamental objectives and the methods/techniques/tools to allocate and coordinate limited resources to implement complex projects define a specific project management paradigm that is called the Triple Constraint paradigm (TC-paradigm). The TC-paradigm was developed during the implementation of several major defense programs in the early 1950 and later improved for the successful launch of the Apollo missions to the moon.

The term paradigm became a buzzword often used in the management literature. It is derived from the ancient Greek paradeigma, which means model, framework, pattern, or example.¹ Compared to the natural sciences for which Thomas Kuhn (1970) studied their impact, paradigms in management are far more numerous and often several competing paradigms are available at any one time. In the view of Kuhn, paradigms are guidelines for theoretical thoughts and scientific research. They represent conceptual views of the world consisting of formal theories. By choosing a paradigm its user accepts actual scientific practice, which includes law, theory, application, and instrumentation together (p. 10). From the perspective of management, Pfeffer (1982) mentions that “A paradigm is not just the view of the world but embodies procedures for inquiring about the world and categories into which these observations are collected. Thus paradigms have within them an internal consistency that makes evolutionary change or adoption nearly impossible” (p. 228). Furthermore, Barker (1992) defines a paradigm as “a set of rules and regulations (written or unwritten) that does two things: (1) it establishes or defines boundaries; and (2) it tells you how to behave inside the boundaries in order to be successful” (p. 6) For the purpose of this study, two conclusions are important. First, paradigms provide a set of principles and rules that are the basic tools for efficiently solving a specific set of problems. The advantage is that these rules lead to efficient solutions, but their disadvantage is that they also establish the boundaries of a paradigm and routinely limit the consideration of alternate ideas that lie outside of the paradigm. Therefore, it cannot be expected that all occurring problems could be solved within the paradigm. This leads to the second conclusion, that only an innovative perspective which takes that perspective beyond the paradigm will generate important insights leading to a modification or change of the established paradigm.

In general, the TC-paradigm helps to create a fundamental understanding of the managerial complexities related to the implementation of projects, as manifested by A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fourth Edition. The TC-paradigm mainly focuses the management of projects on planning and conformance with schedule, budget, and scope during the implementation of projects. Many tools and techniques, like the Critical Path Method and the Earned Value Method, were developed to allow a paradigm conformant management of projects. Despite the positive impact and wide recognition of the fundamental principles of the TC-paradigm, many projects fail. Depending on the specific context (construction, engineering, R&D, software, etc.) failure rates of more than 60% are reported (e.g., see Economist, June 11, 2005). This situation has attracted significant research to identify common reasons for project failures, as we will discuss later. Many causes for project failures were empirically identified (a breakdown in communications between parties is a typical example) and led to improvements and changes in procedures, etc. The research also demonstrated that many projects failed because the implementing organizations were managing them without the use of the TC-paradigm metric. Since most of these discussions are conducted within the boundaries of the TC-paradigm, these studies remain descriptive. Conclusions drawn are from the perspective of the conformance to the TC-paradigm, e.g., were the project goals defined, plans developed, communication structures implemented, etc.? In many instances the question of a possible root cause, like the limitations, restrictions or applicability of the underlying paradigm, were not raised, since the TC-paradigm implicitly guided these research efforts. Many authors conclude, with an indirect paradigm critique that the simple conformance to specific standards will not lead to general project success (Shenhar, 2001).

Only a few authors discuss the potential limitations of the TC-paradigm for the implementation of projects. By comparing their critique we identified seven main issues (Table 1).

A major underlying critique of the TC-paradigm and its related tools and techniques is that they cannot explicitly handle uncertainty, e.g., the Critical Path Method is criticized for not being able to model risk appropriately (Whitty & Maylor, 2009). This inability to model risk is also reflected in several of the identified issues, like the limited applicability, misuse of the TC-paradigm components, inflexibility in accounting for other variables, poor planning tools and human errors. For example:

Limited applicability—The main concern is that the TC-paradigm is limited in its applicability only to large scale construction or engineering projects. Some authors go so far as to claim that the TC-paradigm applies to mainly routine projects, where all issues are well-defined.

Misuse of TC or TC not used—The failing nature of projects has to have a cause, and some authors claim that it is because the concepts of the triple constraint model are misused, misapplied or not used at all. These authors’ critiques remain within the boundaries of the TC-paradigm.

Inflexibility—Once the corners of the triple constraints have been set, there is no room for change. The only possible way to manage variation is with trade-offs between one for another. These constraints are defining a significant paradigm limitation and they purposefully represent a “constraint.” Thus the TC-paradigm as a whole cannot effectively deal with significant changes that are necessary.

Limited Project Planning Tools—Inflexibility is also reflected in the critique of the planning tools. Most project planning tools just reinforce the triple constraint method. The baseline concept and the Earned Value Method (EVM) help to identify variation, but they do not help to identify situations that are fundamentally different from the initial assumptions.

Human Error—The triple constraint model does not explicitly account for any type of human error caused by poor decision-making at the level of senior project, or by poor project manager selection. These errors are sources of variation that are not considered by the specific project management tools.

Of course, the TC-paradigm acknowledges variation, but the concepts of uncertainty (unknown unknowns) and risk (known unknowns) are often misunderstood and misapplied. Risk is an issue which can be avoided or mitigated; also, it can be described both qualitatively and quantitatively and thus are measurable. Quantitatively defined, risk is proportional to potential losses and to the probability of occurrence (Hubbard, 2007). The infamous trade-off discussion addresses this problem, suggesting that variation could be addressed by trading off one or more of the triple constraints against another. The concepts of the TC-paradigm are helpful to identify risks and sources of risks, but they are limited in their conclusion about how to manage these risks. In general, many projects face some form of ambiguity. Ambiguity means the existence of multiple and conflicting interpretations and is linked to confusion and lack of understanding. Hubbard (2007) describes this vagueness or ambiguity as “second order uncertainty.” He also argues, however, that ambiguity could be avoided, while uncertainty (of the “first order” kind) cannot be avoided. He defines uncertainty as the difference between the data required and the data already possessed. The lack of complete certainty, he concludes, is the existence of more than one possibility, and the “true” outcome/state/result/value is not known. In some cases, uncertainty may be purely a consequence of a lack of knowledge or understanding of obtainable facts; it occurs when existing factors or assumptions are questioned, and therefore the basis for calculating risks is questionable or simply not known or understood (Perminova, Gustafsson, & Wilstrom, 2008). For this reason, many current project risk management processes are too limited to effectively support the management of project uncertainty (Ward & Chapman, 2003).

From a project manager's perspective, the TC-paradigm is advantageous, as it conceptually recognizes and supports the management of projects in cases of variation by setting definitive boundaries. However, the TC-paradigm is being used as a substitute for decision-making, and this could lead to situations in which wrong or inadequate decisions are defended. Furthermore, the tools available might lead one to wrong conclusions by restricting perceived options, and as a result projects might fail. It also restricts the need for human involvement, i.e., leading one to make managerial decisions that are contrary or exceptions to guidelines.

Insufficient Success Criteria—Another major area of criticism of the TC-paradigm is the definition of project success. We identified several authors who challenged this issue as part of their TC-paradigm critique (see Table 1). The triple constraint only views success in one light, satisfying the three basic objectives of schedule, budget, and scope. Therefore, if a project violates one of these, project management was not successful or, at best, only partially successful.

The TC-paradigm serves as the platform to define project management performance,² and the definition and measurement of project success has attracted much discussion over the past three decades. Although the TC-paradigm offers a simple but powerful solution, i.e., staying within the confines of the stated constrains, many authors claim that it is not sufficient to define project success with the triple constraints criteria. In their review of this literature, for example, Jugdev and Müller (2005) conclude that the adherence to the three performance criteria is not sufficient to define project success, and they suggest adding more criteria to the evaluation. Consequently, many alternative success criteria are mentioned in the project management literature, demonstrating that the TC-paradigm has an insufficient view of success and is not fully supported. The problem is that many of these suggestions are, ironically, still based on and thus limited by the TC-paradigm. The problem is not how to define project success within the TC-paradigm, it is how to define project success beyond the paradigm's constraints.

We take a slightly different position in this study. Projects are investments undertaken to create value (economic or social in non-profit environments) for the project's stakeholders. From that perspective, meeting the schedule, budget, and scope objectives might not represent the value potential of a project. Alternative evaluation criteria may also be considered. In our own empirical studies, we identified many successful projects which are seen or evaluated as successful, even though they did not meet one or any of the established TC criteria—e.g., many major infrastructure projects or major software projects (around 60% of all successful projects in our own samples). We also identified projects that met the triple constraints but were evaluated as failures—e.g., software that was developed without being used (around 15% of all failed projects in our own samples). The PMBOK® Guide acknowledges that stakeholder satisfaction must be considered as an important element of project success, yet this “requirement” lies in many instances outside the TC-paradigm. The project manager is judged on compliance with the TC and yet is in constant conflict with these baseline criteria and may be required to deal with additional success criteria. This could lead to the problem where projects meet the triple constraints but the clients were not satisfied. From a conceptual perspective, the main objective of any project manager is to create value for the project's stakeholders. The problem is that the TC-paradigm, with its tools and techniques, guides, encourages, or supports the project manager to manage a project toward meeting the triple constraints and in many ways punishes non-compliance. Value creation outside of that subsumed by the TC-paradigm is not supported. The potential conflict felt by the project manager is similar to one of serving two masters and suggests that the mindset of the project manager is important for success.³

The main critical issues of the TC-paradigm are the starting points for our research efforts. The TC-paradigm is well-established but, as demonstrated, it is accompanied by specific problems or limitations. We ask the question, Why are some project managers able to achieve results for their stakeholders greater than those expected by the TC-paradigm?

Within the TC-paradigm the main concern of project managers is to adhere to the triple constraints in order to achieve project success. Consequently, project managers are deemed to be implementers of predetermined project requirements, which are defined in terms of budget, schedule, and scope to meet the established baseline. These are the success criteria. Under these conditions, it is sufficient for project managers to meet the triple constraints, even though opportunities might have occurred during the project implementation to significantly lower the budget, shorten the project duration, or improve the technical specifications. Within the TC-paradigm there is no incentive for project managers to maximize the project value and take risks to exploit potential opportunities; therefore, the only incentive is to be a good citizen, not break from tradition and fulfill the originally planned objectives.

We recognize that projects have some inherent degree of uncertainty that the project manager is responsible for addressing. These uncertainties present opportunities and are not simply threats to creating project value. How these opportunities are addressed affects the degree to which the project is successful. We expect that a project manager who demonstrates entrepreneurial behavior will seek out and exploit opportunities beyond the established success criteria, however they might be defined, to maximize the value of the project for the stakeholders, whereas the project manager who is strictly bound to the TC-paradigm is less likely to do so. If one agrees that opportunities occur during the project implementation, then project managers who are bound by the TC-paradigm will try to minimize variation around the defined baseline, which is likely to be interpreted as demonstrating accurate predictability, managerial foresight, and in turn, a well-tuned project. Following the support for managerial predictability and a well-tuned project, many decisions made by the project manager will be driven by the TC-paradigm. project managers will not take personal risks to maximize project value, and they might not even be cognizant of the potential increase in value. We call these behaviors and inclinations the “TC-mindset.” But if in fact the project managers are questioning the boundaries of the project and are seeking opportunities to maximize project value, these entrepreneurial behaviors suggest a mindset that we call the “Project Value Mindset.”

The contrast conceptually described between the two identified mindsets leads to our main research question for this investigation: To what degree does the mindset of a project manager affect the achievement of project value?

Research Objectives and Contributions

The vanishing point or convergence of this research project was the general discussion of project management success factors and potential possibilities to improve project performance. This discussion is mainly tied to the TC-paradigm and implicitly criticizes the TC-paradigm limitations as presented in Table 1. This research project takes a different perspective. Instead of analyzing a project's performance through the lens of satisficing⁴ the triple constraints or other project performance criteria, it analyzes a project's performance under the premise of value maximization. The research focus is on the mindset of the project manager whose project-related decisions are guided by the established paradigm. One of the basic premises of this research project is the incongruence between the TC-paradigm and uncertainty.

The overarching research question is to understand the degree to which a project manager stays close to the TC-paradigm and satisfies the triple constraints, versus the degree to which a project manager attempts to maximize the project value and achieves better project results. Differently phrased, the question could also be described as to what degree a project manager “breaks with” the TC-paradigm and demonstrates a value maximizing mindset. The research questions are: (1) Does a project manager who looks toward project maximization challenge the TC-paradigm, and (2) if so, are the achieved results seen as more economically valuable? The main research objective is to empirically demonstrate the importance of a project manager's value mindset on project performance. The empirical establishment of this relationship will help us to understand the interaction of project-management-specific procedures (planning, controlling, etc.) with the behavioral decision level of the management of projects. It will also have significant theoretical and practical implications for the discussion of improving project performance and for the training of project personnel in general. A measurement system is developed to measure a project manager's value mindset. This might serve as a helpful tool for self-evaluation.

Project uncertainties are sources of opportunities, and as such they have to be recognized and exploited. This is only possible if the project managers are alert for these opportunities. A precondition for this alertness is the motivation to maximize a project's value, which is driven by the established paradigm. These arguments are linked to the field of entrepreneurship, a field that also addresses the questions of opportunity recognition, evaluation, and exploitation. A comprehensive literature review suggests that research on entrepreneurial behaviors of project managers is sparse, and the possibility of the occurrence of opportunities on the project level is not systematically explored.⁵ This theoretical gap leads to the second major research objective. With this research effort we seek to integrate the main arguments of the entrepreneurship research field into the conceptual discourse of project management. This discussion will allow us to theoretically treat the existence and occurrence of uncertainty during project implementation. The importance of uncertainty and its theoretical differentiation from the concept of risk is not well understood and in most practical and theoretical discussions uncertainty and risk are treated as closely related theoretical phenomena. Furthermore, uncertainty is seen in most discussions as a negative consequence of managing projects. This is the general conclusion when uncertainty is analyzed through the lens of the TC-paradigm. Changing the paradigm perspective to a maximization paradigm allows for the discussion of potential positive effects of uncertainties. The treatment of project uncertainty through the lens of the maximization paradigm leads to the second contribution of this study. The enrichment of the theoretical foundation of project management by changing the paradigm from one of satisficing and risk avoidance to a maximizing and opportunity-based perspective. The conceptual paradigm change allows us to reevaluate many empirical results and their importance for project success. One major question the empirical research on success factors is concerned with is the importance of senior managers for project success. In a TC-paradigm driven project management organization, opportunities could only be perceived and exploited by senior managers as they make decisions about project changes. Following the TC-paradigm, project managers are relegated to focusing only on the effective and efficient implementation of a project.

The third objective of this research is to offer a new perspective for the practice of managing projects. Instead of focusing on adhering to the triple constraints, project managers will be inspired to seek out opportunities during a project's implementation. Leaders within organizations will find the results useful to emphasize and encourage entrepreneurial behaviors of project managers. The leadership for a project will shift its focus away from minimizing variation around the baseline. Instead, it will focus on discovering and exploiting opportunities that are possible when uncertainties evolve. This will lead to a change in evaluating and offering incentives to project managers. It will also require a different approach to training project managers and other project personnel.

1Clarke, T. & Clegg, S., (2000), Management paradigms for the new millennium International Journal of Management Reviews, 2(1), 45–64 (pg. 46).

2Some may differentiate between “management success” and “project success.” For our purpose, this differentiation is not important.

3See Thomas and Buckle-Henning (2007) for a discussion of how successful project managers make sense of this discrepancy.

4A “less-than ideal” solution assumes that an ideal solution is “known” or recognized but, due to constraints, it is not sought. The term was coined by Herbert Simon (1956).

5Loch et al. (2006) is one of the rare exceptions.