The challenge for growth-hungry small businesses today in the UK and around the world is to reconcile two competing objectives. First, companies must maintain and standardize existing business processes to give your business the opportunity to become truly good through experience curve effects. Greater business efficiency typically leads to a better customer experience and higher profits. Second, companies must change their business operations to survive and compete in the future. How well we are able to achieve the right balance for our business will ultimately determine whether we survive and prosper or go the way of so many small businesses to market neutrality and bankruptcy.
Perhaps you are thinking about what this has to do with project management? To understand that we must first understand the fundamental differences between projects and day-to-day business operations. Although many of the skills required to manage your “business as usual” activities are the same as those required to manage projects, there are some crucial differences. One of the most important differences is that project work tends to be at least cross-functional and often cross-organizational, and each project is unique in some way, rather than following the predictable pattern of business as usual. These characteristics of projects involve opportunities and risks that go beyond those of business as usual. In short, projects are riskier than day-to-day business and therefore require a different management approach.
Projects are the means by which we initiate change in organizations. All companies that try to adapt to future challenges have projects. Frequent examples of projects in small businesses can be set up a corporate website, setting up an office at a new location or implementing a new product, but it can be any temporary activity or set of activities associated with a particular output. Companies increase their production capacity on a project-by-project basis. For ambitious small businesses that want to grow and expand, the need to initiate the right projects and achieve the desired results is even more important than for large national and multinational companies.
Despite the obvious need for Project Management (PM) approach, most small businesses are not worried. This represents an enormous opportunity as effective project management influences the outcome. For example, CBP research shows that project management improvement initiatives can improve project performance by up to 50% in the first project and can be continued with each new project if the company provides ongoing project management tools and support. We could further underline this point by quoting the Standish Group, which conservatively estimates in its CHAOS report that 20% of project costs are wasted because companies do not have a consistent approach to project management.
Let’s take a look at reasons I often hear from small business owners who choose not to engage in project management and then critically address the misconceptions behind these reasons.
1. project management practices need more time.
A process you need to follow can prolong the duration of an activity. Doing something right will almost always take a little more time than a slapdash approach. But if you want to have a quality end result where you build a house that took a little longer, or would you rather have it done quickly, but with a lot of problems? Since poorly executed projects can completely derail a small business if they run badly, it is important to do it well, and PM processes help ensure that things are done well.
Project management devours the money I need to grow my business.
A common misconception is that the implementation of PM processes is enormously expensive. The reality is that there are many free or low-cost sources of advice, techniques, tools, templates and project management services that are easily accessible and accessible over the Internet. If done right, any small business can implement PM processes, techniques and tools at very low cost. It’s likely that small business owners are already using software and other tools.