Relationship Between Project Management And Leadership Management Essay

Relationship Between Project Management And Leadership Management Essay Executive Summary The following report is critical analysis of Lenovo Groups leadership approach, problems, project planning and decisions made by leadership in the company. Lenovo Groups predecessor was founded in Beijing by few scientists as an enterprise of the Computer Institute of the Chinese Academy of Sciences in 1981. Dell and HP who were the masters in Personal Computer products were facing difficulties in localizing their business before 2004 in the Chinese market. At that time they were not a serious issue to Lenovo. They did not create any threat to Lenovo. But when Lenovo started its expansion in 2004 its strategy was affected by the strategies followed by HP and Dell. Lenovo than modify its strategies in order to gain competitive advantage, increase its market share and improve its performance. We will see in following report that how Lenovo adopted project management and leadership strategies in order to overcome the challenges faced in establishing its brand in the Personal Computer ma rket. How Lenovo focused on customers, resisting bureaucracy, and cutting across boundaries thinking globally, demonstrating enormous energy and being able to energize and invigorate others. Leadership style at Lenovo is in general of two types people oriented described as democratic. Project managers at Lenovo organization are both leaders and followers. The project managers leadership position at Lenovo encompasses interpersonal role, informational role and a decision maker role. Lenovo sent many managers to observe highly successful organization where the leadership factors of speed, the bias of action and utter customer fixation have helped drive this high discount store to success. In the result of adaptation of leadership strategies they improved the teamwork and finally Project-oriented approach of company improved international integration. 1. INTRODUCTION Background Working Title The importance of team work in project management- A case study of Lenovo Introduction to Project Management Project management is a disciple that intends to co-ordinate, plan, and control and organizes the diverse and complex activities of todays commercial, industrial, management and Information Technology projects. There is one general characteristic shared in common by all the projects the projection of thoughts, concepts and ideas into new endeavors. Project Leadership: Pulling together the science of project management with effective leadership judgment is the essence of project leadership. The dizzying array of suggestions for leadership combined with the time sensitive project completion challenges create a need for a new model. The model developed offers guidance on how and when to apply leadership principles to the various stages of a project. The definition of project leadership is the systematic application of leadership understanding and skills at each stage of a project lifecycle. Statement of the Problem: Giants like Dell and HP who were the masters in Personal Computer products were facing difficulties in localizing their business before 2004 in the Chinese market. At that time they were not a serious issue to Lenovo. They did not create any threat to Lenovo. When Lenovo started its expansion in 2004 its competitive strategy was affected by the strategies followed by HP and Dell. Lenovo had to modify its strategies in order to gain competitive advantage, increase its market share and improve its performance. This essay discusses how Lenovo adopted project management and leadership strategies in order to overcome the challenges faced in establishing its brand in the Personal Computer market. Background of the study: The Personal Computer industry has been developing by bounds and leaps nowadays. In 2007 the sales of Personal Computers around the world were estimated to about 250 billion units. This represents 10% increase over the previous year. Lenovo is one of the leading Personal Computer manufacturers. It has a product line which includes servers, storage devices, projectors, and printer supplies, computing accessories, mobile handsets, printers, digital products and computing services. The primary business of Lenovo is Personal Computer. It was estimated to yield about 98% of the turnover of the company [Larson, 2009]. In May 2005 Lenovo acquired IBMs Personal Computing Division. After that Lenovo has witnessed accelerating growth in business and expansion of market share. Its share penetrated into the overseas markets too. Lenovo transferred its headquarters from China to USA, Raleigh, North Carolina. Today, the Lenovo group has branch offices in sixty six countries around the world. It has business operations in 170 countries and employs over 30,000 people worldwide. Lenovo is organized into 4 geographical units: America, Europe, Middle East and Africa, Greater China and Asia-Pacific. Within each geographical unit there are functional departments that include transportation, marketing and sales, production and supply chain management. Outside of Greater China the sales compromises of 60% of the total turnover of the company in the next quarter of 2008. About Lenovo: Lenovo Groups predecessor was founded in Beijing in 1984 by Liu Chuanzhi and ten other computer scientists as an enterprise of the Computer Institute of the Chinese Academy of Sciences. In the first years Lenovo was a small distributor of imported foreign branded computers then the company started producing its self branded desktops in 1990 and since then evolved into chinas leading computer firm. In 1997 the brand became chinas top selling PC desktop brand. By 2006 the brand holds the market leadership and over 25% share in china for more than eight consecutive years plus some brand presence in Asia, competing against brands such as Dell, HP and Toshiba. Over the years Lenovo has also diversified into other PC products such as portables, workstations, and servers as well as into mobile phones and digital entertainment products [Lewis, 2006]. Due to the fact that Lenovo spun off its foreign branded distribution business, which accounted for a third of their revenues, as a new listed company at Hong Kong Stock Exchange in 2001, annual growth rates were moderate with 12% in 1998-2004. Lenovo group itself is already listed at Hong Kong Stock Exchange since 1994 and gained total revenues of United States $ 2.9bn in 2004, over 90% of thereof in china. In 2000 Lenovo Group announced to aim at total revenue of United States 10bn by 2005 and to become one of the Fortune Global 500 companies by 2010 ate latest. Since 2003 they have also wanted to become a global leading brand and to generate 25% of their revenues in overseas markets by 2006. In May 2005 Lenovo already came closer to these goals when they acquired IBMs PC Division for United States $1.7bn, including their global brands ThinkPad and ThinkCentre. The acquisition made the Lenovo Group into the worlds third largest PC vendor, with around United States $13bn in annual revenue, 60% thereof abroad, and products serving enterprises and consumers in more than 160 countries. Lenovos new executive headquarters moved from Beijing to purchase, New York with principal operations in Beijing and Raleigh, North Carolina and an enterprise sales organization worldwide, including sales headquarters in New York, Paris, Beijing and Sydney. The company operates six manufacturing sites in China and India and runs nine RD centres in different countries, employing more than 19000 people. The below figure shows the worldwide revenues of Lenovo: Figure 2: Worldwide revenues of Lenovo Source: Larson, 2009, Project Management, Watermark Learning, Inc., New Jersey According to Meng Yutian (2006) Lenovos Group senior supervisor of brand management in Beijing, the new groups advantages lie in technology innovation and a strong combination of both consumer PC retailing and b2b client handling. She admitted that Dell has a more efficient supply chain which is to be challenged by their ongoing post merger integrations with IBM PCs. Lenovo is also implementing a new global brand strategy to match its new worldwide reach. Lenovos priority is to maintain and extend the brand equities of the brands Lenovo, ThinkPad, ThinkCentre and Lianxiang in all major markets worldwide. Relevant Research Relationship between Leadership and Project Management: A project is a short term endeavor undertaken to create a unique service or product. Every project has elements such as uncertainty and risk associated with it. They might sometime lead to the failure of the project. Increase in project costs, lack of resources, erroneous development are few examples of risk in projects. These unforeseen circumstances and failures are common in all types of projects irrespective of their industry. The main objective of project management is to predict or forecast maximum number of risks and problems that would be encountered while completing the project and plan, control and organize the project related activities such that the project is successfully completed despite all hindrances [Davidson F J, 2003]. The process of project management should begin even before any resource is assigned and should last till the complete set of activities is done. The ultimate aim and objective of a project manager should be focused towards earning the satisfaction of purchaser, project sponsor, principal stakeholders and customers and deliver the project within the promised time limit without incurring more cost and spending excess of resources than that were originally budgeted, planned or allocated. Project management is the application of skills, tools, and techniques to project activities to meet project requirements. This requires project managers to understand the project objectives, limitations, lifecycle and roles of the participants. It also suggests that project managers should possess a variety of essential skills. Every project has an objective that is a reason for performing the project. This objective can implement a new computer system, by constructing a building merging 2 companies or developing a new product. Each objective has 2 considerations: Scope and quality. Every project has one or more limitations on how well and how quickly the objectives can be achieved. These limitations frequently include budget, resources, time and technology. The limitations create risks that the objectives may not be met and these risks need to be identified. Project Lifecycle: All projects have a lifecycle. That is there are certain predictable events that will take place in the life of every project. The wise project leader will understand this lifecycle and plan for it. The alternative is to be surprised when leading a project. Understanding the project lifecycle is part of the science of project leadership in that it can be studied, there is a definite process that can be followed and project leaders can learn what they need to do at each stage. A simple and a generic project lifecycle model is used. The basic stages of this model can be identified and the project leadership tasks must be accomplished during each stage will apply to most projects in most industries. Projects in certain may have additional unique project leadership responsibilities. Even on very small projects however the intent of the responsibilities identifies the needs to be understood and accomplished. By understanding the most typical project leadership responsibilities a skilled project leader can scale up or down the complexity depending upon the person who leads the project [Harold, 2009]. To achieve success in the project the organization need to use a collection of skills that demonstrate their ability to lead a team. The organization is working with others and use others skills to energize and direct a diverse group of people to always give a high performance. These people come from different parts of the organization, each having its own culture through the leadership style of the departmental manager. People have to overcome these cultural variations to create a climate of co-operation and co-ordinate the efforts of the team members without direct line authority. There is a diverse range of options about what makes an effective leader. There are no common characteristics that the organization must have to be effective, without which they are doomed to fail. At the core of leadership is their skill at influencing the behavior of people to achieve their objectives [Martin, 1997]. Autocratic Leadership: One extreme of leadership style is autocrat, where the leader should tell people about what they do to approach. The other extreme is the democrat where information is shared the organization will consult widely and ask people to do the work using a will you approach. The reality is that they adopt a style that is often subconsciously directed by: The situation and the prevailing environment; The type of work, its priority and urgency; The way the team reacts and behaves in the environment. In the crisis most people will tend to adopt a more autocratic style in the interest of getting a quick result. No time exists for consultation, ideas and suggestions are not encouraged and consensus is avoided. The actions required are dictated in command and control mode. Democratic Leadership: The democratic style is regarded as slower encouraging people to give their ideas and opinions always seeking a consensus so the team is fully involved and well motivated to achieve results [Jack M R, 2008]. The leaders of an effective project leader: A list of desirable qualities includes: Flexibility and adaptability; Ability to demonstrate significant initiative; Assertiveness, confidence and verbal fluency; Ambition, drive and commitment; Effective communication and god listening skills; Enthusiasm, imagination and creativity; Being well organized and self disciplined; Being a generalist rather than a specialist having technical awareness; Being able to identify and facilitate problem solving; Being able to make and take decisions promptly; Ability to promote a motivating climate; Ability to keep everyone focused on the project objectives; Having been trained in project management tools and techniques; Being experienced in project management processes and procedures; Being respected by peers and management; Being concerned to achieve success. A program or a project is a specialized situation because of the nature of the work, which is time and cost constrained; the diverse range of skills and experience of people the organization dont know well. To achieve the objectives the organization must see some particular skills to: Ensure that the project tasks are completed on time to the quality desired; Create co-ordination between the team members and develop team work; Support the individual team members and develop their skills for the work; These three key elements of the leadership role are related and interdependent and the organization cannot ignore any one at the expense of the others. They are all directed in one fundamental direction towards the objectives. The actions which the organizations take at each stage of the work are focused on maintaining the balance of these three elements, adopting a range of styles according to the prevailing situation. However in any programme or project there are others involved [Kathy, 2009]. Dimensions of the leadership in project management: The below figure shows the relationship between the key elements of leadership, the objectives and the stakeholders: Figure 3: Relationship between the key elements of leadership, the objectives and the stakeholders Source: Harold, 2009, Project Management: A Systems Approach to Planning, Scheduling, and Controlling, 10th edition, New York The organization spends much of their time inner directed, focusing on the three key elements. They must also spend time outer directed to understand the needs and expectations of their stakeholders, use their skills when appropriate and keep them informed of progress. They must engage their stakeholders and ignore them. They can influence their programmes or project at any time with serious consequences to progress. They can change their minds at any time cause delays and demand changes to their plans [Weiss, 1992]. There are three essential dimensions of leadership in project management. They are: Identifying and managing the stakeholders until completion achieved; Managing the project dynamic lifecycle from definition through planning and execution to closure all the tasks of the programme or project; Managing the performance and that of the team and the stakeholders. Success is directly related to balancing the time and effort they give to each of these dimensions from the start up until they hand over the results to their customer. Theories/ Principles of Leadership with reference to Project Management: The five leadership principles for project success are as follows: Build Vision: Sharing a common vision and goals and having the same understanding about tracking the progress toward this vision is one of the key factors is the success of a project and team. Nurture collaboration: A performing team yields synergy effects the impossible becomes possible. This is why active team collaboration is crucial. Promote Performance: Planning is good and important. At the end of the day the leader and their team have to perform. As a leader it is their responsibility to create an environment that promotes performance on both the individual and team levels. Cultivate Learning: As humans everyone makes mistakes. Effective leaders encourage their teams to explore new avenues and to make mistakes and learn from them. An effective leader builds in sufficient time for the team to learn, create and innovate. Ensure results: Delivering results is both a prerequisite and an outcome of effective project leadership. Project delivery is a team effort, not an individual effort. The effective project leader builds and guides the team to deliver results by incorporating the first four leadership principles. All five leadership principles combined encompass the core of effective project leadership [Richard L, 1995]. Project Leadership Pyramid: The below figure shows the Project Leadership Pyramid: Figure 3: Project Leadership Pyramid Source: Martin, 1997, The Project Management for Project Teams, Singapore Together the five leadership principles described here we build the project leadership pyramid. The principles at the top of this pyramid are the first principle build vision is followed by nurture collaboration, promote performance, cultivate learning and at the base of the pyramid ensure the results. The pyramid is a powerful image. This image is used for a simple reason: that is although think building vision is probably the most important principle of effective leadership. Most people see the bottom line as the results. Thus the vision is at the top and the results are at the foundation of the pyramid. They are framed by vision and results. When a pyramid is approached from a far distance first the top should be seen. But in this case vision is the top of the pyramid. As we get closer we see more of the pyramid until we are standing in the first row of the building blocks. We feel overwhelmed by the size of the pyramid. It is not possible to see the top of the pyramid. Lenovos leadership strategies: As an MNC Lenovo is headquartered in Raleigh and has branches in 66 countries and sales operations in more than 50 countries around the world. Lenovo is a global company with major research centers in Beijing, Shanghai and Shenzhen, China; Yamato, Japan; and Research Triangle Park, North Carolina; and primary operational hubs in Beijing, Research Triangle Park, Singapore and Paris. Lenovo operates manufacturing and/or assembly facilities in China, India, the United States and Mexico with a total of approximately 25,000 employees in 2007. To tide over the recent economic crisis Lenovo announced a global restructuring in January 2009, streamlining America which expected to result in a saving of US$ 300 million. In two decades founder Liu Chuanzhi has successfully transformed, Lenovo from a small state owned enterprise into a flagship joint stock conglomerate that is largely owned by overseas investors. Under Liu Lenovo established an option plan and incentive mechanism which enabled a large number of young people embarks on the first line of leadership positions. Meanwhile Liu combined the modern Western management theories with the practice of Chinese enterprises, and put forward management ideas such as a roof model of corporate governance theory. Lius core philosophy is to build a team, set a strategy and organize a team. People believe such as practical and effective approach has contributed to Lenovos success as a large modern company with international competitive edge. Leadership Style at Lenovo: An important part of the leadership is the style of leadership with which the leader carries out the role. In todays environment where it is necessary to have good ideas from every position in the organization, those people whose management styles suppress and intimidate are not needed. Lenovo proclaims high priorities for focusing on customers, resisting bureaucracy, and cutting across boundaries thinking globally, demonstrating enormous energy and being able to energize and invigorate others. Lenovo sent many managers to observe highly successful organization where the leadership factors of speed, the bias of action and utter customer fixation have helped drive this high discount store to success [Davidson, 1996]. Leadership style at Lenovo is in general of two types: people oriented described as democratic, permissive, consensus-seeking, participative, follower-oriented and considerate, and task centered, described as structured, task dominated, restrictive, directive, autocratic and socially distant. Task oriented leadership style usually is associated with productivity but may depress follower satisfaction whereas people centered leadership tends to enhance group cohesiveness but not consistently increase productivity. The following are the leadership styles adopted at Lenovo for project management: Project leadership is an interpersonal and strategic process, which seeks to influence the project stakeholders to work toward closure of the project purposes. Project leadership takes place through interaction not in isolation. Project managers at Lenovo organization are both leaders and followers, operating in a culture where both formal and informal networking relationships proliferate. In such relationships networking goes beyond the project managers formal authority, often leading to the use of influence over peers and superiors to affect the outcome of the project. The project managers leadership position at Lenovo encompasses three fundamental roles: an interpersonal role, which includes figurehead and leader in liaison functions; an informational role, which entails disseminating information and acting as a spokesperson; and a decision maker role, in which the project manager acts as entrepreneur, resource allocator and negotiator. Project leaders are the people who do the right thing; project managers are the people who do the things right. Lenovo recognizes that both the roles are important in management but they differ profoundly [Bagherpour M, 2010]. There are according to Lenovo people in senior positions in organizations doing the wrong thing well. Part of the fault for having people do the wrong thing may well lie with their schools of management, where they teach people to be good management technicians but they fail to train people for leadership. Lenovo goes further to identify the competencies found in people who exhibit effective leadership in their proven track records: Management of attention Management of trust Management of meaning Management of self. Challenges faced by Lenovo Lenovo, which entered the US market, as a fresher, in 2004, did not have any idea about how to compete with the leaders HP and Dell in gaining the market share. Lenovo decided to follow a project- centric approach in order to find a place for itself in the personal computer market. The project-focused approach became the limelight of the companys success story in future. Conclusion Recommendations Solutions to the problem identified: In order to address the challenges, Lenovo proposed different changes in its business strategy and model in 2004, by employing a project-focused approach to develop its corporate strategy. The particular steps taken to implement the project management as a tool to execute the corporate strategy are: After the confirmation of the overall corporate strategy of company, Lenovo sets to organize the priority tasks which require co-operation of multi-department into projects, which is known as strategic projects. Strategic projects vary from the Research and Design projects. In Research and Design projects the cost and time will not be used as yardsticks for success of the project. Such projects will be about expanding them into new markets, solves the underlying problems, enhances the organizational efficiency, integrates the strategic resources or improves the capabilities and satisfaction of an employee. In the past, some strategic planning was not followed up adequately but the strategic project management application solves this problem and the strategic projects started to execute and provides the necessary results. Lenovo selected strategic alliances or joint ventures with global corporations such as Visa, Coca-Cola, Disney, and Pacific Century Cyber Works and so on as its entry model which effectively reduced the risk of international expansion and shortened the time to enter the target market. Second Lenovo sought to optimize the process of supply chain. In order to increase the efficiency of its global supply chain, Lenovo made strong commitment to continuously improve its management process and has so far achieved remarkable progress. By simplifying its global supply chain infrastructure including its logistics network, Lenovo further enhanced its service capacity by 10% with each computers cost of end to end supply chain reduced by 17% as compared with 2008 [Goodman R A, 1967]. Third Lenovo strived to refocus its corporate attention on the key and emerging markets in the world. In 2004 consumer PC accounted for above 42% of the global PC market. The key for Lenovo was to expand its business scale by replicating the successful experience in china to the other areas. In this regard Lenovo won an impressive array of contracts in India and ASEAN countries through effective marketing strategies. Lenovo also outperformed the industry in key emerging markets such as Russia, Mexico, Brazil and Turkey. Meanwhile Lenovo made important progress in adjusting to the changing market conditions and accelerated its expansion in the fast growing industry segments with a belief that such rapid growth is expected to continue in the coming years. Lenovo attempted to expand both relational and transactional business models. In 2006 Lenovos relational business increased in all areas. After making efforts on the adjustment of customer segmentation and customer relational management, Lenovos profitability raised by a large margin. In future Lenovos business focus is expected to remain on providing services to key customers and improving the share in the medium sized enterprises market. In contrast in 2006 Lenovos transactional business accounted for 35% of the sales of global PC market. Looking forward to maintain sustainable growth, Lenovo continued to develop its business partners through marketing activities, accelerate the development of emerging markets and enhance the performance ability in some countries as well as to expand the productivity and the channel coverage of its sales teams [Gray C F, 2005]. Lenovo aimed to establish a global brand. In 2006, Lenovo had done a superb job in marketing and brand building by sponsoring the Olympic Games, ATT Williams Formula one team and the NBA games. To raise the awareness and image of the brand the group launched a publicity campaign for two of its major products which has in turn helped enhance Lenovos brand visualization: ThinkPad ultra slim X300 made the cover of Business Week as soon as it appeared on the market and the Idea Pad U110 won three major awards on international consumer electronics show in Las Vegas, the United States. Through those efforts Lenovo had made a deeper impression in the international arenas and gained rapid recognition consequently the image of Lenovo brand had improved by 13% according to a survey. Project Management and Leadership Solutions: Lenovo established a Project Management Office to coordinate the strategic projects. In 2004 and early 2005, Lenovo put the organizational structure and the processes for its Project Management Office. It formalized the relationships between the Project Management Office and strategic leaders and budget resources for the office. Constantly all other departmental regulations of Lenovo needed to conform to the regulations of Project Management Office, with brief regulations which was outlined by particular departments of business. However, the Project Management Office of Lenovo did not interfere with the projects often; or it offered training and establishes standard procedures. The employees of Lenovo saw the Project Management Office as a resource rather than a facility of administration. Designing a Project Management Office as a facility of administration was one of thing that had condemned such offices in the past, but Lenovos office thrived to win an excellent team award for the company. The company believed that specific conditions should exist to utilize the project management successfully: First, the company has to face a challenge; second, the office had to be prioritized by the leadership of the company; third, the office had to be led by a professional team and they had to guarantee that company-specific systems are developed; and finally, they also required to confirm that the organizational culture of the company could be appreciated. Otherwise it was difficult to evaluate. Lenovo also earmarked money for strategic implementation. Previously, it finished the strategic plans which were not supported financially. But with the shift of strategy, the leadership team had to set aside extra money to evaluate the projects outside the original budget and provided bonus for those who were involved and paved way for the execution of the strategic plans successfully. Identifying Valuing project management professionals- Lenovo sent their top talent in project management to take the certification exam of Project Management Professional and apply for project management standards [Project Management Institute, 2008]. The certification of Project Management Office is managed and developed by the Institute of Project Management, which is the biggest institute for professional project management in the world. The certification of Project Management Profe