Approximately every twenty years, organizations and leaders struggle to adapt their methods and competencies to the new reality. When it comes to implementing new types of projects, this presents a particularly difficult type of challenge.

In the 1960s, traditional project management practices were introduced. These practices were mainly developed for the reconstruction of Europe after the second world war. They helped organizations primarily focused on operational activities to cope with the increase in projects in a world with a booming economy.

The exponential growth of IT software projects in the 1980s challenged the typical ways of dealing with projects. Most of the large ERP implementations had colossal budget overruns and multiple years of delays during those years. To address this new type of project, new methods were developed to increase control and discipline. Two of the most widely known were the Project Management Body of Knowledge by PMI, and Prince 2, which the UK developed to control their massive erring better IT projects.

The early 2000s saw the rise of the Internet and e-commerce projects. Once again, the existing methods focused on processes, control, and predictive project management. These outdated methods became too rigid and lacked a proper fit with these new projects. Agile methods took the stage a few months after their manifesto was published in 2001, offering freedom and flexibility to the developer’s team while removing any traces of traditional project management practices, including the role of the project manager.

We have now reached another inflection point – senior leaders need to deliver complex new projects: Artificial Intelligence, Big Data, Digital transformations. The failure rates of these projects are extreme. According to Bain & Co research, only 5% of digital transformation projects have achieved or exceeded their goals.

History has repeated itself…our current methods are not fit for their purpose.

In parallel, we are moving from a world driven by efficiency, where operations were the primary focus, to a world driven by change. In this new world, project-based work becomes the primary unit of work, while operations need less and fewer resources to be carried out – I have coined this, The Project Economy.

To succeed in this new reality, leaders must develop a toolkit of competencies and methods. Leaders need to apply a hybrid approach, combining traditional project management with agile practices. They need to include disciplines, such as design thinking, program management, product development, or change management.

Implementation Methods and Competencies: source HBR Project Management Handbook (HBR Press 2021)

From a change management perspective, these new types of projects should not be viewed as merely the introduction of a new technology. Instead, they involve a massive transformation; everything from an organization’s strategy to its business model and its culture. These large-scale transformations possess an inherent complexity…and that is precisely why most of them fail. My co-founding partner Robin Speculand says, “You don’t want a digital strategy. You want a strategy for the digital world.”

Senior leaders often face a difficult challenge: knowing the right timing to leave their old business (which has often been successful) to move into a new one. Leaders need to define and agree on the rationale and purpose. Without a clear vision for the future, undertaking a business transformation will become a recipe for disaster.

These types of major projects require strong involvement from the leadership team, especially in making sure that leaders are first adopters of the changes and that the new business practices and models the adoption for the rest of the organization. Cultural change requires them to challenge the status quo. Good transformations help companies live longer and be more successful overall.

A prime example of the adoption of these concepts is the transformation of the Singapore-based DBS Bank, recognized by Harvard Business Review in 2019 as one of the top 20 business transformations of the past decade. Many organizations begin digitization with one division. Instead, DBS aimed at transforming the entire organization from the start — all business units, departments, and employees embarked on the journey. The transformation program used different implementation methods fitted for the change. For example, integrating the front, middle and back-office divisions was done through more traditional project management while they applied agile methods when developing their new mobile banking app. They adopted a Balanced Scorecard to set objectives, drive behaviours, measure performance, and determine remuneration during the transformation.

Many leadership teams don’t actively participate in the very transformations they wish to see through. Piyush Gupta, CEO of DBS Group, and his leadership team, however, were actively involved in their digital transformation. They spent significant time communicating the new purpose and strategy of the Bank to all employees. This represents a key factor in successful projects, the involvement of senior leaders. Their participation should not be limited to the kick-off meeting — they must be personally involved throughout, dedicating one or two days per week to the project.

The emergence of the Project Economy is an unprecedented transformation, filled with great organizational and cultural consequences. With project-based work serving as the engine that drives change and progress, projects are now the essential model for creating value. Project management has been reinvented — and will continue to be. It no longer focuses simply on deliverables, but now stresses purpose and benefits. As project management’s purview has grown, the need for project managers and executives to work together more closely has grown more imperative than ever.

About the author: Antonio Nieto-Rodriguez is a leading expert in project management and strategy implementation, creator of concepts like the “Project Economy” and the “Hierarchy of Purpose.” His work has been recognized by Thinkers50 with the prestigious award “Ideas into Practice.” He is the author of the recently published Harvard Business Review Project Management Handbook, as well as Lead Successful Projects, The Project Revolution, and The Focused Organization. He has been teaching the value of project management to senior leaders for more than two decades at Duke CE, Instituto de Empresa, Solvay Business School, and Vlerick. Antonio has held executive positions at PricewaterhouseCoopers, BNP Paribas, and GlaxoSmithKline. Former Chairman of the Project Management Institute, he is the founder of Projects & Co and co-founder of the Strategy Implementation Institute. He is a member of Marshall Goldsmith 100 coaches. You can follow Antonio through his LinkedIn Newsletter – Lead Projects Successfully or his website.