Concept and Purpose of Lean Project Management

The Concept of Lean Project Management

According to the traditional concept, a project is a transformation of inputs to outputs. Project management deconstructs the total transformation into individual transformations (tasks) that need to be performed as efficiently as possible. Planning and execution are carried out through management-as-planning where project outcomes are realized by creating, updating and implementing plans. Dispatching the plans to the performers ensures their execution. Project control is carried out through the thermostat model – the performance is measured against a pre-defined standard and in case of a variance the process is corrected to reach the standard. [1] [2]

The practice of project management anchored in the transformation concept has three shortcomings, as Koskela and Howell argue [3]:

1. It’s difficult to maintain a complete and up-to-date plan. The critical short-term planning is poorly performed or neglected.
2. Execution isn’t managed systematically, as the actual project conditions are not taken into account when transforming higher level plans into short-term plans and actions.
3. Control is seen only as measuring and taking corrective action, while the opportunity for learning and eliminating root causes for underperformance is missed.

There are other major flaws of the transformation concept of project and project management:

• There’s no focus on creating value.
• This concept lacks the scientific method of hypothesis-experiment-evaluation and continuous improvement. Plans are considered sufficient for success if they’re followed, and the purpose of control is to bring the performance back to conform to the plan. This is well-illustrated by the plan-execute-control loop of traditional project management, compared to the plan-do-check-act cycle of the scientific method which considers plans (and projects in general) to be a hypothesis that should be validated.  
• The transformation concept assumes that by local optimization (optimizing tasks) one can optimize the whole (the project). In addition, the focus on transformation ignores non-transformation phenomena present in projects. As a result, traditional project management doesn’t consider waste elimination and the opportunity to improve effectiveness through flow management. 

Koskela describes two other concepts that apply to projects – flow and value generation. He integrates the three models in a transformation-flow-value generation model of production, which he explains also applies to construction and to product design and development (and in our opinion, to projects in general). The concept of flow recognizes that there are both transformational and non-transformational stages. Thus, flow management strives to eliminate “non-value-adding phenomena”. In addition, flow management aims to reduce lead time, simplify processes, and increase flexibility and transparency. In value generation, transformations and flows are controlled to impact the resultant stakeholder value. [4]

All three components of the transformation-flow-value generation model are needed for successful project management.

• Transformation management is needed to create project assets that are instrumental in improving customer value streams and hence for generating customer value. In the LeanPM framework, we prefer to use "creation management" because it’s more universal and applicable to all types of projects and because it shows the purpose (the end state) of the transformation. Also, we extend creation management to manage absorption – the process of integrating project assets into the customer value stream.
• Flow management is required to enable effective, efficient and predictable creation and absorption. For instance, flow optimization results in waste reduction, better quality and shorter project cycle time. Flow management is an enabler of creation and absorption and a means to increase the project’s net value as it reduces costs.
• Value generation management is needed to realize the purpose of projects – creating net value for project stakeholders and society. Also, it’s needed to eliminate strategic waste and other forms of major project waste. Value generation management must be embedded in all project actions and decisions.

The transformation of project management in the 21st century was strongly influenced by Donald Reinertsen through his work on lean product development.

He outlines twelve key problems with the traditional product development that we believe apply to project management orthodoxy: [5]

1. Failure to Correctly Quantify Economics
2. Blindness to Queues
3. Worship of Efficiency
4.  Hostility to Variability
5.  Worship of Conformance
6.  Institutionalization of Large Batch Sizes
7.  Underutilization of Cadence
8.  Managing Timelines instead of Queues
9.  Absence of Work-In-Process Constraints
10.  Inflexibility
11.  Noneconomic Flow Control
12.  Centralized Control

The solution to these problems lies in the domains of value and flow management.

We shouldn’t consider creation, flow and value generation management as independent, but as integrated processes guided by the project’s life cycle benefits and costs. 

In the end, every project is about creating net value so the value generation model may seem sufficient. But if we only use that, we would work at a high level of abstraction. The creation and flow concepts are helpful for managing the means to achieve the end.

For example, managing cost of time is a component of value generation management because it affects a project’s net value. However, to reduce the cost of time, it may be necessary to shorten the project’s cycle time by improving creation and flow management processes.

Looking at it from another angle, changing the schedule priority of a project is a component of value generation management, as it can affect the cost of time and the net value of the project. But changing the priority can also affect the creation process and the team's ability to manage flow which would affect the overall benefits and costs of the change.

When we look at the relationship between creation and flow, we can see that flow is an enabler of creation besides being the means to achieving net value generation. So, there’s a means-enabler-end association between the three lean project management components.

Let’s take the example of the Lean-Agile practice of built-in quality. The goal of this practice is to generate net value (end). We perform the quality building activities as a part of deliverable creation process (means). Flow management enables the creation process to build quality into deliverables by the use of pull, small batches of work, quick feedback, queue control, visualization and work-in-progress limits (enabler).

This system of means-enabler-end is what we call Lean Project Management Triad or the Lean Triad.

The creation-flow-value generation/Lean Triad model doesn’t ensure that we use the full potential of lean in project management. For example, the model is not necessarily associated with continuous improvement. Therefore, we need to complement it with explicit lean project management principles.

We have defined “project” as a temporary value stream and “project management” as a practice of managing project value streams to maximize their net benefit. While these definitions describe the essence and the purpose of projects and project management, the creation-flow-value generation model, complemented by the lean project management principles, is the theoretical foundation that provides guidance for practical implementation of lean project management.

To summarize, the Lean Project Management (LeanPM) concept has two pillars:

1. The creation-flow-value generation model of project management which integrates Creation Management, Flow Management and Value Generation Management and is reflected in the means-enabler-end system of the Lean Triad.
2.  The Lean Project Management (LeanPM) principles.

Lean Project Management and the Predictive-Hybrid-Adaptive Model

The well-known predictive-hybrid-adaptive project management model [6], communicates controversial theses and misconceptions, such as:

• That some projects can and should be managed adaptively, while other projects cannot and don’t need to be managed adaptively.
• That the stability of the requirements itself determines the level of uncertainty in the project (there are many other factors that affect the uncertainty).
• That iterative development is always adaptive, and non-iterative development — even when it’s the only feasible — cannot be adaptive and therefore it is always “predictive”.
• That iterative development is the only available practice for achieving adaptability (there are many other practices).
• That project teams can choose a predictive, hybrid or adaptive approach, while the model presupposes a "predictive" approach for certain types of deliverables, regardless of the circumstances.
• That using a development approach called “predictive” makes the project predictable.

LeanPM Framework offers a holistic, value-oriented and adaptive approach to project and portfolio management, which can be tailored to projects of all types and sizes as an alternative to the problematic predictive-hybrid-adaptive model.

The Purpose of Lean Project Management

The purpose of Lean Project Management, based on its two pillars, is:

1. A significant improvement in project success rate
2. A considerable increase in the net value gained by project stakeholders
3. Fostering society’s progress and prosperity

We can achieve these effects by enabling people to create value and continuously improve their work, which requires a comprehensive change in all aspects of project management.

The LeanPM Framework describes the principles, processes and practices that can fulfill the purpose of Lean Project Management. It’s not intended to be a prescriptive framework as it complements and can be used with other project management and agile development methodologies, frameworks and practices.

“You don't do agile or lean you do agile and lean.”
- Martin Fowler 

Lean and Agile share a common evolutionary, adaptive, and people-centered mindset and Agile is influenced by Lean. In Martin Fowler’s words: “if you are doing agile you are doing lean and vice-versa” [7]. That’s why the LeanPM project management framework was not conceived as a substitute for Agile frameworks but aims to make a more explicit and universal use of lean management principles and ideas.

Organizations and project teams will want to experiment and innovate to create their own, context-specific project management method. In doing so, they can use the LeanPM ideas in a way that’s appropriate to their particular situation.  

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[1] Koskela, Lauri (2000). An exploration towards a production theory and its application to construction. Espoo, VTT Building Technology. VTT Publications; 408 

[2] Koskela, Lauri and Howell, Greg (2001) Reforming project management: The role of planning, execution and controlling. Proceedings of the 9th International Group for Lean Construction Conference. Kent Ridge Crescent, Singapore, 6-8 August 2001. Chua, David and Ballard, Glenn (eds.). National University of Singapore (2001) 

[3] Ibid.

[4] Koskela, Lauri (2000). An exploration towards a production theory and its application to construction. Espoo, VTT Building Technology. VTT Publications; 408

[5] Reinertsen, Donald G. (2009). The Principles of Product Development Flow: Second Generation Lean Product Development. Celeritas Publishing

[6] The standard for project management and a guide to the project management body of knowledge (PMBOK guide), Seventh edition, 2021. Newtown Square, Pennsylvania: Project Management Institute, Inc.

[7] https://martinfowler.com/bliki/AgileVersusLean.html (last accessed 2022-10-20)