Top 4 Practices of Successful Project-Based Businesses
Hexagon conducted a survey in partnership with ProjectManagement.com to identify high-performing organizational behaviors that can help improve project outcomes. The survey quickly gleaned over 800 responses primarily from project professionals working in the Construction, Architecture, Engineering, or IT industry.
While sifting through the responses, we measured the performance of the organizations represented by the effectiveness of their projects. By measuring their project effectiveness, we were able to siphon the organizations into two categories:
We measured the performance of the organizations represented by the effectiveness of their projects and were able to siphon the organizations into two categories:
- High-performance organizations – achieved their expected business outcomes for more than 80% of their projects
- And low-performance organizations – achieved their expected business outcomes for 30% or less of projects
After further analysis, it was easy to see that the two groups behaved differently from one another. Their behaviors had a direct correlation to the overall performance of their projects. During this blog series, we’ll explore the 4 key findings captured from our analysis of these operational differences. This way, you’ll be able to apply these proven practices to your processes and maximize project success.
Check out these other key findings from the report:
Key Finding #1 – COVID-19’s Impact on Projects and Factors of Successful Recovery
Key Finding #3 – Building a Foundation of Trust – Achieving Project Success with Reliable Data
Key Finding #2: High-performance organizations differentiate themselves in ways that combine to deliver big results.
Comparison has been called the thief of joy, but it can also serve as a springboard for success. Project professionals and business leaders alike are faced with the haunting but necessary question, “How can we be better?” Often, the best way to answer this question is to seek out the advice of those who are at a place where you wish to be.
After consulting the feedback from our respondents, we found that the high-performing organizations displayed 4 key behaviors that set them apart from low performers.
- Improve processes and stay consistent in their practice
- Establish and support a Project Management Office (PMO)
- Pivot spending to align with business needs
- Invest in digital transformation
As we continue, we’ll explore what these 4 behaviors mean and why they serve as defining factors of project success and subsequent company growth.
1. High-performing project-based businesses IMPROVE PROCESSES AND STAY CONSISTENT IN THEIR PRACTICE.
High-performing organizations don’t achieve success by accident. It’s the result of implementing a series of best practices and remaining consistent in following them. We asked our survey takers to identify the causes of any improvements that may have been experienced in the past 3 years. While better project planning was selected by 65.1% of High Performers, improved standard processes were a close second, selected by 56%. Businesses that don’t focus on improving their processes are less efficient and, as a result, their employee morale and returns suffer. Organizations must focus on making steady improvements to the way they operate internally. This allows them to deliver meaningful change.
2. High-performing project-based businesses ESTABLISH & SUPPORT A PMO.
A PMO is a department within your organization dedicated to the management of projects. The PMO’s function is to prioritize projects based on your corporate strategy and goals. It also enables the transparency of important data and serves as a point of contact for all things project related. They ensure the projects with the most ROI potential are implemented within budget and without overburdening employees.
73% of our respondents from high-performing, project-driven organizations had a dedicated Project Management Office – whether it consisted of 2 or 200 people. The PMO had a clearly defined role within the organization. If a company had offices in differing regions, they experienced more success if each satellite office had a designated PMO to run point for the enterprise-wide PMO. This ensured clearer communication between the regions and resulted in the strategic execution of projects regardless of the obstacles presented by disjointed locations.
3. High-performing project-based businesses PIVOT SPENDING TO ALIGN WITH BUSINESS NEEDS.
There’s never enough money to go around. That’s why ensuring the strategic use of your budget is a top priority. The PMI report found that low-performing organizations allocate the majority of their financial resources on training, hiring, and improving processes. While those are valid functions and deserve a portion of the budget, they seemed to completely eclipse another vital portion of project-driven businesses: portfolio and investment planning.
On the contrary, high-performing organizations were found to invest a healthy amount of their resources toward portfolio and investment planning. By doing so, they were able to see the full picture of where their capital investments were being leveraged.
Companies that emphasize project and investment planning can pinpoint areas of financial waste and allocate those resources where they will be most effective. This is key to driving business success. Because of this, organizations can easily pivot capital spending where it can be most beneficial for the company. In the long run, this saves them money and maximizes their ROI – and thus, the high-performer is born.
4. High-performing project-based businesses INVEST IN DIGITAL TRANSFORMATION.
Of the 4 practices, this is arguably the most important. Without the right technology, project-driven businesses cannot effectively implement the other 3 best practices listed above. Survey takers from high-performing organizations said their business currently invests heavily in implementing automated technology. They even acknowledged that the investment in tools (project tools to be specific) is intended to grow throughout the coming years. Over half the companies represented by survey takers were planning to spend at least $1 million, while high-performers were planning to spend over $10 million in the next year.
But what’s the reason for such a hefty investment? Working with outdated tools leaves project teams ill-equipped and inefficient. As a result, businesses suffer financially. That’s why high-performers noted that their success was due in large part to the use of new technology. Simply put, the investment in digital transformation pays for itself.
You’re now equipped with a good sense of the practices that separate high-performing companies from low-performing companies. But as you continue building your own high-performing organization, it’s important to note that excellence is a journey and not a destination. There is always room for improvement! That’s why it’s important to foster an environment where the question “How can we be better?” is consistently asked and welcomed. By improving processes, supporting a PMO, ensuring effective use of your budget, and investing in technology updates, you’ll begin to cement your status as a high-performing organization and reap the financial benefits thereof.
Ready to become a High-Performer within your Industry?
