1.2 Recognize why projects are important for business success - Video Tutorials & Practice Problems

<v ->Why do we care?</v> I've just spent a certain amount of time talking about what a project is, the unique characteristics of projects, and perhaps some of you are thinking to yourself, "My organization is really starting to emphasize projects, and I don't get it. I'm not really clear on why we've suddenly jumped into this project management mindset so enthusiastically. Why are we going all out now in this area? Is this just top management flavor of the month, or is there really some reasons why projects have become so important for organizational success?" I submit the latter is correct. There are some very fundamental reasons why projects matter, and I'd like to talk about them because maybe this will give us some clues as to why we need to pay particular attention to projects and do our best in terms of running them. The first point is this. Product life cycles have shrunk down to incredibly, incredibly short spans of time. Let me give you an example. When I was in graduate school, the first PCs were just coming out. Yes, believe it or not, we're now sitting there. Think of the computing power of the laptop you have in front of you on a daily basis, the iPad you have in front of you, or, in fact, the other tablet or any phones, and let's go back to when I first started. The PCs like I was talking about and dealing with were slow. They were big. They were pretty clunky. They didn't have a lot of use. There weren't a lot of things you could do with them, but they were fascinating, and they were being used and embraced dramatically around the world. But the point is, the IBM, for example, PC that I used, when it was first introduced back in the early '80s, the IBM PC set the industry standard, set the industry standard for probably four to five years. So for a period of four or five years, you had a specific PC with very slow operating systems by today's standards, et cetera, and that was what everyone aspired to do. Could you imagine today if you were a company and you introduced a new laptop and you were content to wait four or even five years before introducing a follow-on product? You'd lose your customers in no time at all because the public expects something new and different, and companies are designed now to give them that. These shortened product life cycles are an example of what I'm talking about. Five years? No. We're talking about maybe a year, maybe nine months, certainly no more outside of a year and a half before you have to come out with a new product, or the assumption is that you've lost the hook, that people are gonna look for something else. So we're constantly looking for the next big thing. Companies don't have the luxury of introducing a product and then sitting back for extended periods of time. Another reason why projects are so important is this concept of launch windows. We know in certain industries, and I'll go back again to the software IT industry or even in hardware, we know in those industries that the public expects certain new products within a certain amount of time. And so the company has what they call a launch window, and it works like this. We know what our competitors are doing, and we know when their products are gonna come out the door. So if we don't introduce this product between, say, July and September 15th, we're going to miss our launch window. And if we miss that launch window, we're dead because other products from other competitors are gonna come along and take over the customer. So I have a very narrow range in which I can actually get a new product out the door. That's important because it says speed matters. Another reason why projects are important is the idea of increasingly complex and technical product features that we have. So for example, think of the iWatch, the brand new Apple Watch that's being introduced. Think of all the different features that go into a watch that fits right there on your wrist and all the complexity involved in that and how to make all these things work together and jointly and reliably so that the watch is not breaking down all the time, that it has the features that we expect, that we want to be wowed by. So companies are facing some very critical challenges. Not only do we have to get products out the door quickly, we have to get them in within a certain launch window, and the public is expecting a lot of technically complex ideas as part of that process. Another reason why projects are important is because we no longer play and haven't played in a regional marketplace for a lot of years now. In the global marketplace, our competitors aren't companies from San Francisco or New York City or Birmingham, Alabama. Our competitors are in Seoul, Korea or Shanghai or in Delhi in India, places all around the globe. And so because of these global markets, that's got advantages and disadvantages. The advantages are we have brand new markets to sell our products to or to provide our services for. So the opportunities for a company have opened up dramatically. At the same time, the competition has also increased dramatically. And so going with what we said up above that not only are projects important for those other reasons, they're important because they're a means for maintaining competitive advantage in the face of all these other folks. Another reason why projects are important, this is a little bit perhaps different, and I'd like you to think about this with me for a moment. We have been lucky enough over the past decade or more to live in a period marked by low inflation. Now, if you're older like me, perhaps you remember the end of Jimmy Carter's presidency and the start of Ronald Reagan's presidency when interest rates were 17 or 18%, when inflation was running in double digits. That was a different time, and it was a very hard time economically to make profit. But I submit, it's interestingly enough in a period marked by low inflation, we have equal problems or at least equal opportunities based on the economic conditions. Think about it this way. Because inflation is low, I know as a company that I can't simply continue to raise my prices year after year after year in order to make more profits that way so I'll just keep racking up the the prices on a yearly basis. Inflation, being at the levels it is, suggests that I really don't have that luxury. Therefore, alternatively, I have to find ways to improve, to streamline, to make more efficient my organization's processes. I have to do a better job in-house. Because of low inflation, I have to get better and more competent at what I'm doing in my own organization in order to make continued high profits. And so that being the case, one of the advantages of projects is that they are set up to allow me to become more efficient, to become more creative, to find new systems and processes to streamline what I'm doing. That's why companies are so fully engaged in projects these days, not just in the external markets for new products, but internally to find ways to become more efficient, doing more with less, if you will. That's a feature of the project setting, and it's brought about by this notion of low inflation.