project manager as CEO

February 16, 2018

We all have heard about the VUCA world and the disruptions that are impacting society and businesses—robotics, artificial intelligence, shared economy, block chain, big data.

However, there is one extreme disruption that media and academia have completely missed. For over 100 years, organizations’ main focus has been on excelling at running business (day-to-day operations) as opposed to changing it (execution of projects). This has been reflecting in the way firms have been structured and run, all in a similar manner—hierarchical—in which power, budgets, and resources are divided over departments, the so-called ‘silos’. Management and management theory were focused on how to run and optimize (efficiency, volumes, costs) the business best. Projects were an addition, but hardly ever a priority.

We are witnessing the rise of the ‘project economy’. The so-called ‘gig economy’ is driven by projects. This massive disruption is not only impacting the way organizations are managed, every aspect of our lives is becoming a set of projects. Some of the areas in which this enormous transformation is happening are:

  • education: For centuries, learning was achieved by memorizing books and hefty material. Today, leading educational systems, starting from early ages, apply the concept of ‘project-based-learning’ to teach. This is how many millennials have learnt. Applying theories and experimenting through projects have proven to be much better learning methods, and will become the norm soon.
  • careers: Not so long ago, professional careers were built in just one organization. Most of our parents worked for one company only. Today, most of us go through different jobs in several companies, for which we are best equipped if we approach them like a set of projects. A study by Intuit predicted that by 2020, 40% of American workers will be independent contractors engaging in short-term ‘project’ jobs.
  • democracy: The present crisis we are seeing in political systems around the world have led to political academia propose new ways of governing countries. One of the most revolutionary experiments is being carried out in Northern Ireland. The Irish Constitutional Convention (ICC), established by the Irish government in 2012, will address a number of potential constitutional reforms through projects.

new paradigm shift that will impact every organization

In the past, the role of CEOs was to provide a vision and strategic direction, whilst leaving execution to their management. What made them successful was their
capability to deliver business results, maximizing shareholder value through day-to-day business activities.

Today, due to the speed of change experienced over the last decade, this organizational model has become obsolete. The day-to-day running of a business will soon be carried out by automation and robots, if not already done. Projects are becoming an essential part of any organization.

My prediction is that by 2025, CEOs, senior leaders, and managers will spend at least 60% of their time selecting, prioritizing, and leading the execution of projects, as opposed to the 10% they spend today, on an average. In the past, growth would come by increasing efficiency and scaling business. In the new world, value will come mostly from executing successfully growth and innovation projects. This is a radical shift in the role of the CEO and the skills needed to lead organizations.

CEOs will need to understand how they can leverage the latest technological advances while focusing on execution of their strategic initiatives. The new core competencies required by them will be their ability to turn around a business and show a successful track record in leading transformational change.

a new source of future CEOs

CEOs traditionally come through very limited channels, either from within the company or from outside:

  • finance: if the company requires cost containment and/or cost cutting
  • sales/marketing: if the company wants to increase their top line and focus on business development
  • R&D/IT: if the company is highly technologically-driven
  • chief operating officer: is the one running the internal side of the business, and so a natural move

However, there have been exceptions in which the CEO came from a project management background. A good example is Siemens AG, the German conglomerate headquartered in Berlin and Munich, the largest industrial manufacturing company in Europe. Siemens employs approximately 372,000 people worldwide with global revenue of around €83 billion in 2017.

The ex-CEO, Klaus-Christian Kleinfeld, founded and led Siemens Management Consulting, an internal global partner for Siemens’ businesses that played a major role in the restructuring of many of the company’s business units around the world before being appointed the CEO in 2005. One of the main assets of Klaus Kleinfeld was that he had a broad understanding of the company’s multiple divisions, and at the same time, had proven that he could make things happen and create immense business value through good project management practices.

Another interesting case is the present President of Argentina, Manuel Macri, an engineer by education, with a long and successful career in project management, who is turning around the country into a new world economic power.

In a VUCA world, project managers are some of the best candidates to be CEOs. They are results-driven and are the CEOs of their projects. They have to bring together all the disparate aspects of theory, reality, vision, multiple business strategies, operational challenges, decision-making, finances, value, politics, and human nature to create successful outcomes. Being popular and charismatic helps substantially as emotional intelligence facilitates leadership.

Project managers often lead transformation initiatives that go across the entire organization. They get to see and interact with the entire company as a whole entity rather than from the ‘siloed’ view of a particular unit, department, or function. A prerequisite, nevertheless, is that at some point in their careers they need to assume P&L responsibility and lead the business successfully for a certain period of time. I strongly believe that if project managers progress towards assuming responsibilities beyond the typical project management field, they will become a new source of future leaders.

What is clear by now is that if CEOs want to succeed in the new ‘project economy’, they will urgently need to acquire project leadership and execution competencies. I am afraid that if they do not take action, they will probably find themselves out of business very soon.