Starting a business should be one of the most energetic and creative activities for any founder. Designing, talking, convincing — these are the most common tasks that an entrepreneur wannabe is thinking of. Once they start the process, they would need to plan, structure, and decide. The work starts to resemble a project manager’s work.
Though entrepreneurship and project management are distinctive areas with different competencies, Taavi Tamberg, Arvi Kuura, and Reet Soosar have researched that “project managers are expected to act as entrepreneurs or intrapreneurs”. Could entrepreneurs learn something from project managers and transfer some of their competencies in their work?
Here are some examples, taken from Nathalie Udo and Sonja Koppensteiner’s research:
- Knowledge of concepts, methodologies, practices, and vocabulary of the profession
When you start cooking something, you gather the tools and ingredients. Similarly, starting a business needs a good understanding of the terminology and the different information that is required by investors. Maybe in the field of entrepreneurship, they are not named like this, but for sure you can find some academic research and books on this.
- Knowing the purpose of the business
Even though the founders do not have all the details figured out yet, having a clear purpose is crucial. Questions like where the business is headed and deciding on long and short-term goals are important to answer. There is a possibility that what the founder initially imagined will change in time, but defining the purpose and following it is important.
- Knowledge of processes, methodologies, and tools & techniques
In project management, as in entrepreneurship, there are tested ways for structuring data. This is one piece of information that partners and investors are expecting the founders to know. Even if it is about a business model canvas or a pitching deck, they are known in the entire venture capital pipeline.
As processes, there is always the question of how much time should founders stay in planning or how quickly should they go to test the market. How much should stay and define different plans or just sketch something and give it a shot? This is also a recipe that differs for every founder.
- Ability to recognize resistance and overcome it
Wishing to bring something new or something improved in the market is understanding that resistance is part of the game. There will be potential resistance on all sides, from the competition, suppliers, and even potential customers. Having strategies for this could be a lot of help for start-up enthusiasts.
- Communication — the ability to provide information regarding tasks, plans, schedules, strategies to stakeholders
Using a methodology in project management gives you the clarity and structure of tools and ways to communicate. In entrepreneurship, this is something that has to be settled and decided by the founders. Here are some of the questions that should be considered:
- How much should they reveal?
- How should they create the stakeholder’s grid?
- How often should they engage in communicating with them?
- Who should communicate from the start-up side?
- Ability to keep the project moving toward successful completion in face of aggressive schedules and discouraging developments
In projects, people are under pressure to meet deadlines and deal with the scarcity of resources. In building a startup, founders could take the structure and the discipline from project management, create templates, and use them in iterations. Yes, iteration is part of the entrepreneurship game also. However, the creative process can be formalized more and get inspiration from project management by creating steps to follow, milestones to overcome, and deadlines to reach.
Some aspects of project management can be transferred to entrepreneurship. A good idea is an idea in practice, even though it is not in the best shape. Plan, schedule, distribute roles, and structure information. Starting a business can look like the most complex project, so it is important to adapt to some of these techniques.
Project management is no longer just viewed as an end-to-end process, but it is also an area in which skills are in high demand. The Project Management Institute’s “Pulse of the Profession” report shows that senior management increasingly places a high value on project management.
It is also becoming a new culture for nearly half of the organizations. Meanwhile, those who do not consider project management a strategic competency posted 67 percent more of their projects failing.
Today, project managers are compelled to think more strategically as they adapt to the uncertainties brought by the pandemic. That’s on top of dealing with multiple stakeholders and changing market dynamics.
For instance, construction companies and laborers face new disruptions as they execute their projects. A report from Markets and Markets highlights the growing awareness about antibacterial construction materials, volatility in raw material prices, and changes in the supply chain particularly for the residential construction sector.
Given the ever-changing business landscape, how can organizations manage projects successfully and get the most out of their teams to meet deadlines, achieve high productivity levels, and drive results?
They can start with selecting and using the right Key Performance Indicators (KPIs) to achieve clarity, focus, and improvement as they go through the stages and elements involved in managing a project.
Why use KPIs in project management?
A KPI expresses the achievement of the desired level of results in an area relevant to the evaluated entity. In terms of project management, KPIs mirror the quality of the implementation processes, quantitative outputs, and project outcomes.
Based on a survey of over 200 contractors and trade professionals conducted by Dodge Data and Analytics and commissioned by the software company Autodesk, contractors can obtain data by employing digital technology to manage projects, but they do not have a system to process their information and utilize it meaningfully. Having identified the most useful KPIs in the field to interpret overall performance, the study concludes that “by adopting specific processes for project management, contractors can reduce risk, thus minimizing downstream problems and improving performance.”
KPIs are applicable across multiple industries and functional areas. However, they are not the same for every industry or for every company. They are selected based on an organization’s environment, activities, and objectives. You can sign up for the live online course offered by The KPI Institute to learn how to implement a KPI Measurement Framework in your organization.
To give you an overview of the KPIs used in project management, the Top 25 Project Management KPIs – 2020 Extended Edition presents the most viewed KPIs based on the information from smartKPIs.com, a database of over 20,000 documented KPIs.
The top 25 KPIs belong to four crucial facets of project management:
- Project Budget involves the number of resources allocated to the project.
- % Project budget variance
- % Project or program budget spent on training
- $ Project budget size
- Project Assessment refers to the reviewing process of the development of projects and their outcomes.
- % Project resource utilization
- $ Profit per project
- # Cost Performance Index (CPI)
- # Project issues addressed ratio
- % Requirements changed during project execution
- % Project budget overruns rate
- # Projects issues identified
- # Projects per project manager
- $ Project cost savings from innovation
- Project Timeline relates to the use of schedules or charts used to plan and subsequently report project progress.
- % Overdue project tasks
- % Project milestones missed
- % Project schedule variance
- # Requests for time extension submitted
- % Time spent on new projects development
- $ Estimate at Completion (EAC)
- % Delivery deadlines met
- # Time per project task
- # Project delay
- % Timely production of management reports
- % Project completion predictability
- Project Team Performance refers to the performance that meets the needs and expectations of company colleagues.
To view the complete profile of each KPI and access exclusive in practice recommendations, you can download the Top 25 Project Management KPIs – 2020 Extended Edition.
- # Conflicts arising during the project
- # Project managers to staff ratio