ArticlePDF Available

Large Complex Programs as Open Systems Key Points

Authors:
  • Strategic Program Management LLC
Article

Large Complex Programs as Open Systems Key Points

Abstract

This Executive Insight looks at large complex programs from a systems perspective recognizing that such programs are not as well bounded as classical project management theory, as espoused by Taylor, Gantt and Fayol , would have us believe. Rather, they behave in both independent and interconnected ways in a dynamic systems environment. They demonstrate the evolutionary nature of all complex systems. They face uncertainty and emergence that comes with human actions and interactions. Large complex programs struggle from insufficient situational awareness, treating the program to be more well-bounded than reality would suggest and using simplified models to understand the complexity inherent in execution. Best practices from project management were typically not derived from such environments and, worse, have fallen short on other large complex programs. Large complex programs are characterized by boundaries that change in response to changing environments; emphasize coping with challenges and change; go beyond uncertainty and require a change in perspective; face a high level of unknown unknowns and unclear/incompatible stakeholder needs. Systems theory represents a different way of seeing, thinking and acting Systems are viewed as greater than the sum of their parts. A system’s holistic properties can never be completely known. Different perspectives will provide different views that may overlap and not be completely compatible.
1
Large Complex Projects
January 11, 2021
Large Complex Programs as Open Systems
Key Points
Large complex programs are characterized by boundaries that change in response to changing
environments.
Best practices from project management have failed to serve large complex programs well.
Systems theory represents a different way of thinking about the open systems nature of large
complex programs.
Traditional and neo-classical project management (PM) theories are compared from a systems
perspective.
Specific guidance is provided for large complex programs to be successful.
Key leverage points in large complex programs are outlined.
Strategies for leverage are also outlined.
Introduction
This Executive Insight looks at large complex programs from a systems perspective, recognizing that
such programs are not as well-bounded as classical project management (PM) theory (as espoused by
Taylor, Gantt, and Fayol
1
) would have us believe. Rather large complex programs behave in both
independent and interconnected ways in a dynamic systems environment. The focus in this Executive
Insight is on open systems, which are analogous to large complex programs.
This Executive Insight highlights the open systems nature of large complex programs, contrasts it with
traditional PM theory and, importantly, provides meaningful guidance on mindsets, behaviors, and
practices that are required to improve achieving successful outcomes.
Characteristics of Large Complex Programs
Large complex programs are characterized in several ways. They have boundaries that change in
response to changing environments. They emphasize coping with challenges. Changes on such programs
often go beyond simple uncertainty, requiring a change in perspective. Participants involved in large
1
See R. Prieto, Theory of Management of Large Complex Projects
2
complex programs will face a high level of unknown unknowns and unclear/incompatible stakeholder
needs.
Large complex programs demonstrate the evolutionary nature of all complex systems. They face the
uncertainty and the emergence that come with almost every human, government, corporate, and
market action and interaction. Large complex programs also struggle from insufficient situational
awareness, being treated as if they were well-bounded more than they really are.
These programs also struggle with the overuse of simplified models, which are thought to be useful in
understanding the complexity inherent in their execution. Such is not the case. In fact, the best practices
developed from traditional project management (PM) theory have shown to fall short when put into use
on large complex programs.
Large complex programs inhabit the open systems world. The adoption of a systems approach to the
management of large complex programs carries with it a requirement to think strategically.
Systems Perspective
Systems theory represents a different way of seeing, thinking, and acting.
2
Systems are viewed as greater than the sum of their parts. In systems theory, a system is defined as a
configuration of parts connected and joined by a web of relationships. A system’s holistic properties can
never be completely known. Different perspectives will provide different views that may overlap and not
be completely compatible.
Complexity of systems may exist at multiple levelscomponent, sub-system, system, and system of
systems. Flexibility, adaptability, and responsiveness provide resilience in complex systems. Redundancy
of information flows and critical resources are essential characteristics in well-performing systems. Time
must be managed, first to accommodate disruptions and disturbances, and second, to allow the system
to recover.
Systems methodologies are characterized as either hard or soft. Hard systems methodologies,
sometimes referred to as operations research, do not deal as effectively with complex human conflict
as do soft systems methodologies. The latter consider the broader environment, including human and
sociological elements. Soft systems methodologies also are often iterative, providing learning at each
stage.
Traditional vs Neo-Classical PM Theory from a Systems Perspective
Table 1 compares traditional and neo-classical theory of project management (PM) from a systems
perspective.
2
De Rosnay, Macroscope: A New World Scientific System, 1975
3
Table 1
Comparison of Traditional and Neo-Classical PM Theory from a Systems Perspective
Traditional PM Theory
Neo-Classical PM Theory
(Systems Theory)
Predominant Project Type
Traditional
Large complex programs and
projects
Foundational Thoughts
Taylor; Fayol; Gantt
von Bertalanffy
Nature of Projects
“Newtonian”3; mechanistic;
deterministic (Descartes)
Relativistic (Einstein, quantum
physics); organismic (Darwin,
evolutionary theory); they
represent change, not just are
changed
Nature of PM
Control
Synthesis
Thinking
Reductionist
Anti-reductionist, holistic
Project Boundary
Well-bounded; closed systems do
not interact with their
environment
Open exchange with
environment; open systems have
an ongoing relationship with
their environment; part of a
larger System of Systems (SoS)
View of project
Well-bounded
Embedded in and interacting
with other systems (SoS)
Feedback loops
Defined to support positive
control (negative feedback loop)
Emergent; positive and negative
feedback; reactions to changes
in environment (also change
environment)
Properties
Defined; fixed; derived from the
sum of the parts (components)
Emergent; systemic4
Organizations (individuals,
groups, departments)
Machine-like closed systems;
mechanistic structures (highly
specialized, compartmentalized,
strict rules, well-defined and rigid
hierarchy; well-defined formal
tasks)
Flexible organismic structures
(decentralized, self-organizing,
ongoing process of order-
disorder interaction), distributed
leadership, extensive
interdependence, high individual
discretion, informal tasks,
360°communication)
Planning basis
Environment is knowable,
predictable; limited impact on
strategy and execution
Continuous stakeholder
engagement
Stability
More stable closed system; in
equilibrium with no exchange
with their environment
Less stable open system;
potential disequilibrium (bad =
disruption; good = change,
3
Newtonian view held that the universe was made up of closed systems.
4
Metaphysics (Aristotle) recognized that…”many things have a plurality of parts and are not merely a complete
aggregate, but instead some kind of whole beyond its parts…”
4
Table 1
Comparison of Traditional and Neo-Classical PM Theory from a Systems Perspective
Traditional PM Theory
Neo-Classical PM Theory
(Systems Theory)
creativity, innovation); stabilized
by flows
Structural stability relative as it is
transferred by exchanges with
environment
Emergence
Non-emergent
Emergence of novelty
Strategic Business
Objectives; goals
Fixed
Exist in continuous interaction
with environment
Complexity
Reductionist approaches do not
handle well; complexities
considered in isolation from their
environment
Complexities considered in
context of broader ecosystem;
arises from inclusion of
relationships as a dynamic
property at various levels,
starting with components and
activities
Most valuable contributor
Specialist
Generalist
Project execution
Master schedule; recovery to the
plan
Equifinality5 recognized;
provision for contingent
execution
Predictability
Predictable (order); outcome
determined by initial conditions
Unpredictable (shifting balance
of order and disorder); outcomes
influenced through interaction
with environment; continual
evolution
Logic
Binary; evaluation separates
behavior (inside) from
environment/context (outside)
Spectrum of possibilities;
relational context matters
Nature of Flows
Steady, laminar; clear information
Turbulent; information amidst
the noise
Success Drivers for Large Complex Programs
To be successful, large complex programs must include the following key elements.
Ensure continuous alignment on the program’s strategic business outcomes and individual project
objectives. This begins with strong and continuous communication, which is especially important
given the dynamic nature of implementing organizations over the extended timeframes often
associated with such programs. Feedback is essential.
5
Equifinality is a way systems can reach the same goal through different paths
5
If parties do not understand how project goals are being impacted by changes in the dynamic
environment, then surprises occur (and often occur late), when they become problematic and then
require backtracking. If impacts are not fully understood, then risks should be discussed regarding
how things may impact project goals. This will keep the larger team informed and eliminate
surprises later. In addition, the risk discussion could lead the team to discover early on some issues
that are involved in their interrelated plans.
Continuously engage stakeholders in reaching consensus on newly emergent stakeholder issues that
are inevitable, given the fluid boundaries associated with large complex programs.
Seek broader input into what is often dynamic problem solving. This expertise may be crowd-
sourced in a manner similar to that employed in open innovation. The crowd may include
stakeholders, recognizing that owner-led engagement often shifts to a perceived management
of stakeholders as the execution team is established and begins operations. During execution,
engagement grows in importance and the notion of stakeholder management should be discarded.
Recognize that project plans, no matter how well developed, will likely not survive real world
contact. Work sequencing and established organizational and communication hierarchies will break
down to different degrees. The resultant requirements of contingent execution and broad
360°communication represent organizational properties that must be inoculated into project
planning.
Recognize that incentives work. Careful planning is needed, however, regarding the best type of
incentives to be deployed (given the project setting) and the level of such incentives. Also, the
outcomes to be achieved to earn such incentives should be clearly understood. The timing of their
use is critical. To emphasize this last point: all too often incentives are deployed when the program
is indicating that failure is imminent, whereas if used differently, they may be more effective in
keeping the program on the path to success. One excellent example is in mature safety programs
where safety bonuses are earned as the projects advance and are lost until sustained safe
performance returns for a defined period.
Focus on flows
6
, with the goal to better manage their timing and coordination. Understand their
impact on other flows, and, importantly, anticipate their changes and rates of change
7
.
Prepare the organization and execution strategies and plans for four types of operations:
1. Regular
2. Irregular (often the norm)
3. Emergency
4. Catastrophic/contingentthis mode of operations focuses on true resilience of the program
execution operation and plan. It most certainly aids in handling Black Swans (big surprises
that were not foreseen), but also the Black Elephants
8
(big problems everyone sees but no
one wants to deal with) that we often ignore. This concept of operations is characterized by
flexibility, adaptability, responsiveness, capabilities, and capacities.
6
See R. Prieto, Theory of Management of Large Complex Projects
7
R. Prieto, Generalized Analysis of Value Behavior over Time as a Project Performance Predictor, PM World
Journal, Vol. I, Issue III October 2012
8
R. Prieto, On the Subject of Black Elephants, PM World Journal Vol. IX, Issue VII July 2020
6
Define team to include not only the resources immediately available and under the program’s
day-to-day control, but also the broader set of skills, knowledge, and authorities that will act to
enable execution. Importantly, stakeholders need to be viewed as team members and not
adversaries. They should be appropriately engaged in successful program delivery. This last concept
is often the very antithesis of traditional project management’s closed system thinking.
Empower the execution team by defining outcomes, expectations, behaviors, values,
responsibilities, and engagement with the broader team. Emphasize 360°communication and
prudent risk taking. Also stress use of self-directed teams that are focused on contributing to
achievement of overall outcomes (strategic business objectives or SBOs). This is the antithesis of
Taylor’s assembly line, where each team member is only focused on a narrow accomplishment.
Ensure team composition matches the range of potential changes and challenges in the external
environment. Adequate team diversity of skills, experiences, and thoughts is essential. When
problems are complex, diversity (cognitive differences) outweighs ability. Access to required
diversity can be accomplished by access to others outside the project team.
9
Recognize that sole decision-making may be required under chaos, but even then, decisions benefit
from a diversity of views and challenges.
Strong process, procedures, and performance are supported by strong social capital. Connections
between people (team members, stakeholders) must be built early, sustained, and continuously
nurtured. Alignment, collaboration, and true leadership act to increase social capital. Effective use of
social networks to gather knowledge and support are leading indicators of project success.
Risk and opportunity must be equally managed. Recognize that entropy (disorder and randomness)
is present and creates or contributes to threats and opportunities depending on how we address
them. There is a need to understand project risks by all in an open systems environment including
when and if they will transfer at some point to one of the parties. This knowledge and
understanding is an important context for many when making decisions.
Ensure comprehensive understanding of changes, including disruptions, on the entirety of the
program. Changes and disruptions are not discrete or localized events. They change the program in
ways we must seek to understand. Emergent properties are visible only when considering the
program as a whole.
Related to this is ensuring root causes are understood. Such root causes should be viewed as not
acting elsewhere in the program nor are they necessarily subject to recurrence at a later stage.
Recognize stakeholders do not exist in isolation. They are part of a broader interacting ecosystem.
Even when the number (N) of potential stakeholders may be limited, there are still (N2 N/2)
potential communication channels between them that may act as sources/precursors to influencing
flows.
Understand traditional project control systems control nothing, but rather act to inform
10
and
influence the real control points: the individuals on the team and to a lesser degree various
stakeholders. This does not alleviate the need to strengthen project foundations
11
. Also recognize
9
Law of requisite variety from cybernetics
10
Estimating uncertainty and measuring variance
11
National Academy of Construction Executive Insight, Foundations for Success
7
the broader environment often acts to constrain or otherwise dictate the actions that individuals
can or choose to take. Leadership is important.
Recognize the key points of leverage in large complex programs (shown in Table 2 in order of
significance).
Meaningfully deploy strategies for leverage (shown in Table 3) to guide the program to its desired
outcomes.
Table 2
Key Leverage Points in Large Complex Programs
1. Business and environmental context in which the industry, enterprise, or program exists
2. Strategic business outcomes (SBOs) the program is to deliver
3. Who makes the rules (shareholders, stakeholders, regulators)
4. Rules that impact program execution (resources, constraints, incentives, penalties, latent
risks, and opportunities)
5. Information flows (leading insight, contemporaneous, lagging; information vs noise)
6. Logistical flows (supply chain; management/sequencing/coordination of engineering and
construction)
7. Advantaging negative feedback loops (stabilizing)
8. Limiting/controlling positive feedback loops (drive multi-finality)
9. Monitoring/controlling assumption migration
10. Fixed parameters, standards, regulations
Table 3
Strategies for Leverage12
Preserve flexibility of response (contingent execution).
Provide for decentralization of decision making and action (Workface Planning).
Encourage 360°communication.
Resist opening of regulatory and control loops without dealing with full effects on the program (The
law of unintended consequences).
Identify critical points of weakness or control and act upon them to reinforce or retard change.
Decentralize program and project control to retain overall control on large complex programs.
Resist changes unless full program impacts are understood.
Do not remove or impose constraints without understanding why they exist initially or the systemic
impact of imposing them.
Encourage diversity of thought (Avoid cognitive lock).
Encourage prudent risk taking and require people to “tell, tell, tell.13
Set outcomes. They allow for feedback.
Transparent broad distribution of information leads to good outcomes.14
Value time and timing.
12
Adopted from De Rosnay “The Ten Commandments of the Systemic Approach”
13
Admonishment to young staff earlier in my career: “If you don’t screw up at least once a day, you are not doing
your job!” Corollary was “tell, tell, tell;” then we can help you fix it and learn from it.
14
Knowledge is most powerful if everyone has it.
8
Conclusion
Large complex programs are not well served by traditional PM theory. Instead, they require a significant
change in perspective. The nature of these programs more closely resembles open systems, which are
defined as part of General Systems Theory.
References
L. von Bertalanffy, General Systems Theory: Foundations, Development, Applications. G. Braziller, Inc.,
New York, 1968.
de Rosnay, Joel, The Macroscope: A New World Scientific System, 1979.
A. Montuori, General Systems Theory, International Encyclopedia of Organization Studies.
A. Montouri, Systems Approach, Encyclopedia of Creativity, 2011.
R. Prieto, National Academy of Construction Executive Insights, Foundations for Success, July 2020
(https://www.naocon.org/insights/).
R. Prieto, Generalized Analysis of Value Behavior over Time as a Project Performance Predictor, PM
World Journal, Vol. I, Issue III, October 2012.
R. Prieto, On the Subject of Black Elephants, PM World Journal, Vol. IX, Issue VII, July 2020.
R. Prieto, Theory of Management of Large Complex Projects.”
Senge, P., The Fifth Discipline, New York: Doubleday, 1990.
B. F. Van Dyk, A Systems Thinking Assessment of Project Management, 2002.
About the Author
Bob Prieto was elected to the National Academy of Construction in 2011. He is a senior executive who is
effective in shaping and executing business strategy and a recognized leader within the infrastructure,
engineering, and construction industries.
Although the author and NAC have made every effort to ensure accuracy and completeness of the advice
or information presented within, NAC and the author assume no responsibility for any errors,
inaccuracies, omissions, or inconsistencies it may contain, or for any results obtained from the use of this
information. The information is provided on an “as is” basis with no guarantees of completeness,
accuracy, usefulness, or timeliness, and without any warranties of any kind whatsoever, express or
implied. Reliance on any information provided by NAC or the author is solely at your own risk.
ResearchGate has not been able to resolve any citations for this publication.
Article
Full-text available
Our professional societies will have to challenge the almost religious beliefs of Fayol and Gantt, at least at scale, if we are to take on the Black Elephants. They will have to act in concert to create a 21st century knowledge commons, capitalizing the new currency of effective project management – data. Risk management must not only recognize the existence of Black Elephants and Black Swans but also the reality that large complex systems, the very ones required to address Black Elephants, behave catastrophically.
Book
Full-text available
The essence of the “Theory of Management of Large Complex Projects’ can be captured in three central thoughts. First, that project readiness is a good but not sufficient first step in the broader project initiation process. Project readiness typically presupposes that the owner’s organization is itself ready to undertake the project. This is more often than not, not the case. Second, that the classical theory of project management which focuses on the “transformational” processes which occur in discrete activities, strung together such that the output of one or more is the input to others, is no longer adequate in considering large complex projects. This activity based focus, memorialized in work breakdown structures, neglects the importance of “flows” within the project context. As we more tightly link supply chains into project processes, we begin to see some of the flow considerations that are core in the realm of logistics as being analogs for efficient project management. Precedence’s and unnecessary coupling of activities may harm a project’s performance in ways that may not be evident on initial inspection. Additionally, these flows are no longer static or predictable. Third, a core underlying premise that projects are “bounded” is breached in the world of large complex projects. Rather than well defined boundary limits we discover semi-permeable boundaries across which “influencing flows” transit, impacting the transformational flows within the project proper. These flows arise from a multiplicity of stakeholder’s and other agents who in turn are influenced by the project itself.
Article
Full-text available
As projects have grown more complex our performance analysis frameworks have remained largely unchanged even as newer more powerful tools have become available to manage and manipulate large volumes of data. Newer analytical tools provide deeper insights into existing data sets especially from a statistical point of view but we continue to use traditional project metrics to assess project performance on both a retrospective as well as prospective basis. Whether our measure of project achievement is cost, schedule, physical % complete, risk or manhours we look at a relatively common set of “achievement” metrics that include absolute values (datum); changes in those values (progress) and their rate of change (progress rate). In limited instances we consider changes in the rate of progress (ramp rate) but do not more broadly analyze this throughout the project. Higher order performance measures that look at disruption and overall efficiency of delivery are not typically considered.
The Ten Commandments of the Systemic Approach
  • Adopted From De Rosnay
Adopted from De Rosnay "The Ten Commandments of the Systemic Approach"
  • Joel De Rosnay
  • The Macroscope
de Rosnay, Joel, The Macroscope: A New World Scientific System, 1979.
International Encyclopedia of Organization Studies
  • A Montuori
A. Montuori, "General Systems Theory," International Encyclopedia of Organization Studies.
National Academy of Construction Executive Insights
  • R Prieto
R. Prieto, National Academy of Construction Executive Insights, "Foundations for Success," July 2020 (https://www.naocon.org/insights/).
The Fifth Discipline
  • P Senge
Senge, P., The Fifth Discipline, New York: Doubleday, 1990.
A Systems Thinking Assessment of Project Management
  • B F Van Dyk
B. F. Van Dyk, "A Systems Thinking Assessment of Project Management," 2002. About the Author