What is The Project Economy?
Project Management Institute (PMI), the main international organisation that spreads and advances the cause of project management, has recently defined “project” as “a temporary endeavour undertaken to create a unique product, service or result”. Nowadays, more than ever before, it is clear that the “temporary” element mentioned in this definition is of paramount importance. If, on the one hand, technological evolution and digital transformation have gradually dethroned approaches and skills, on the other hand, prompt organisational and economic actions have become essential and a priority for every company. The ability to quickly transform ideas into reality is now the determining factor of a company’s effectiveness.
This is the context in which “project economy”, a term coined by PMI in 2019, aims to be a model for truly transforming change into opportunity. Quietly but powerfully, projects have displaced operations as the economic engine of our times. That shift has been a long time coming. The project economy is an extremely useful paradigm shift for managing both the innovation and the growing complexity now typical of every business sector. Whenever it is required to combine increasingly numerous and diverse skills, the project approach acquires further importance.
In 2017, the Project Management Institute estimated that the value of project-oriented economic activity worldwide would grow from US$12 trillion in 2017 to US$20 trillion in 2027, in the process putting some 88 million people to work in project management-oriented roles- and those estimates were made before nations started spending trillions of dollars on pandemic-recovery projects. Data supported by a very precise statistic: organisations that have not adequately structured themselves in the context of change, report a 67% increase in projects that fail in the last five years, crushed by a too sudden transformation of one or more related factors – directly or indirectly – to the project itself.
In 2020, Mohamed Alabbar, the founder and chairman of Emaar, the giant Dubai-based property developer, announced that as part of a shift to project-based work, the company had abolished all traditional job titles—including his own—and that employees would now be defined not by the department to which they belonged but by the projects on which they worked. In a similar move, the Richards Group, the largest independently owned ad agency in the United States, has removed almost all its management layers and job titles and now refers to most of its employees as project managers.
A planned (and hoped for) paradigm shift that will certainly have profound organisational consequences. Every single individual will be fully responsible for their own objectives, which in fact outlines a concrete alternative to corporate structures as we know them today. A model that tends to fostering human capital potentials, hence reducing hierarchy and bureaucracy to a minimum. Therefore, the project becomes the core of the company and it is no longer the result of top-down inputs and actions.
The Principles of The Project Economy
Continuous updating and training are the key words to address project economy as well as observing the three principles underpinning the model outlined by PMI:
- Ability is agility: To fail fast and move to what’s next progressively is far more effective than a perhaps more brilliant but rigid strategy.
- Technology rules, but people influence: Technologies are only as smart as the people behind them, and people can be smarter.
- It’s a project leader’s world: Turning ideas into reality will be increasingly project based. In a scenario in which everything is destined to become a project, the impact on work will certainly be profound. The primacy of those soft skills that now can be definitively called power skills will be sealed. The operation of organisations endemically more and more fluid and agile will depend precisely on the cross-sectional nature of such skills.
Projects used to be temporary, and operations permanent, but now the reverse is true. Operations keep you afloat temporarily, and change is what’s permanent. Anticipating, managing, and driving change thus become the prime directives. And what’s the best way to do those things? Welcome to The Project Economy Age.
– Il Sole 24 Ore
– Harvard Business Review
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