Why Project management Tools Do Not Work For Startups

Project-Management

Conventional project teams require structure and stability while startup world is chaotic

As someone with new product development and manufacturing background the first project management tool that comes to mind is MS Project. I admit that Primavera comes to mind too (shudder! – just because of a course in Critical Path Methods or CPM that I did at UofM). I am sure that someone in IT would think of a SCRUM tool. These are the kinds of tools I refer to as conventional tools in the rest of this article. They are the tools that serve the needs to civil and IT projects. The former can be credited with creation of formal project management and the latter is currently the popular application of it (just google project management and see this). Conventional Project Management tools play an important role in specific applications but do not meet the needs of startups.

Projects are a bundle of tasks that need to be executed with finite resources of people, capital and time. Conventional project management tools help in managing resources and tasks to meet project goals. For simplicity using the 80-20 rule, 80% of the need is met by these tools. The rest usually involves projects with great uncertainty and high risk like startups and new product development. The uncertainty causes ever-changing requirements and needs, thus making a startup’s journey chaotic. To stay on course, startup execution needs to be aligned very closely to the strategy. Strategy gives direction and focus to get the right things done and eliminate waste. Conventional project management tools are not good at linking the strategy to project tasks. This does not mean 80% of the projects do not need strategic alignment. Surely, a million dollar marketing campaign or a major construction projection is aligned to strategy. But typically, the strategic decisions are made outside of the core project team’s day to day activities. The link to strategy is the goals and objectives of the project. These goals and objectives are handed down to the project team, and they typically change or adjusted during periodic project reviews with upper management. This model works well when the goals and objectives of a project do not change frequently.

Startups and new product development the teams should be more agile and lean. Agile is having the ability to react to changing requirements (like customer requirements or changing risks). And lean is eliminating waste. Any amount time spent on the wrong customer or product requirements and any unattended risks or needs leads to waste. In a startup any change in course to strategy should ripple down to the team’s tasks quickly to avoid waste. Projects in corporations’ needs organization and structure. Frequent changes in objectives and goals can be demoralizing and very unsettling for the team. Conventional project management tools work well as they are protected to frequent changes to project goals. But it does not address a startup’s needs. In my research there is not an automated new product development tool. But this situation is likely to change as startups adopt frameworks like the “Lean Startup” methodology.

A startup management tool will improve team communication, organization and speed of execution. I believe it will also help decrease the high mortality of startups and new product failures. At minimum this will help poor adaption of ideas to fail early and reduce the pain and waste associated with going too far with the wrong product or solution.

 

 

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