Summary

Navigating the Project Maze: Understanding Internal vs. Customer Projects

Are you a project management leader constantly juggling different types of projects? Do you find yourself adapting your strategies depending on the client or the team? In this blog post, we'll dive into the critical distinctions between internal and customer (external) projects, drawing insights from the Project Management Cowboy podcast featuring Orman, a seasoned project management expert from Munich.

The Accidental Project Manager's Journey

Orman shares his unconventional path into project management, starting in the automotive and chemical industries. He emphasizes that he became a project manager by necessity, stepping up when others didn't. This highlights a common theme: many project leaders are "accidental project managers" who learn on the job.

Orman's early training provided valuable "aha" moments. He realized that the methods he was using intuitively had established names and frameworks, such as the Work Breakdown Structure (WBS). He notes, "I did things right, and now I learned it was done just coin flipping."

Situational Project Management: Beyond Black and White

Orman advocates for situational project management, a concept he explores in his book. He argues against the rigid "agile vs. waterfall" mentality, emphasizing that project management is a colorful spectrum, not just black and white or gray. He stresses the importance of enriching your toolkit with various methods and choosing the right approach for each specific project situation.

He explains that hybrid approaches, which combine elements of agile and waterfall, aren't necessarily the answer. Hybrid can be like "zebra stripes," where black remains black and white remains white. Instead, Orman favors the rolling wave method, which allows for a reasonable planning horizon while adapting to changing circumstances.

Key Takeaway: Don't get stuck in a rigid methodology. Adapt your approach based on the project's unique needs and context.

Internal vs. Customer Projects: A Fundamental Divide

One of Orman's key insights is the often-overlooked distinction between internal and customer projects. He emphasizes that this difference is crucial but frequently ignored in project management literature.

Internal Projects:

• Often managed as cost centers.
• Typically involve internal stakeholders and resources.

Customer Projects:

• Managed as profit centers.
• Involve external clients, contracts, and procurement processes.
• Require navigating complex relationships between sales, delivery, and procurement departments.

Orman introduces the term Project Business Management to describe the unique challenges of managing customer projects. He highlights the importance of understanding the contractor's perspective and the complexities of working with multiple external vendors. He emphasizes that, in today's environment, the trend is strongly towards buy rather than make, with companies increasingly outsourcing work to external contractors.

The Project Charter: An Internal Authorization

Orman stresses the importance of a project charter, even when a contract is in place. The project charter serves as an internal authorization document on both the contractor and customer sides, ensuring alignment and accountability within each organization. He recommends having two kickoff meetings: one with the customer to discuss project execution and operational disruptions, and another internally to focus on profitability and liquidity.

AI and the Future of Project Management

The podcast also touches on the role of artificial intelligence (AI) in project management. Orman cautions against relying solely on AI-generated data, highlighting the risk of "polluted" information. He emphasizes the need for data scrubbing and vetting processes to ensure the accuracy and reliability of AI-driven insights.

Project Business Foundation

Orman runs a Think Tank called the Project Business Foundation, which performs market research and offers resources such as a project business glossary and a code of conduct. The foundation also provides certifications for consultant educators and practitioners in project business management.

Conclusion: Embrace the Complexity

Managing projects effectively requires a deep understanding of the nuances between internal and customer projects. By embracing situational project management, enriching your toolkit, and navigating the complexities of external vendor relationships, you can lead your projects to success. As Orman emphasizes, never expect a "best practice"; instead, adapt your approach to the unique situation at hand.