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Starting Points of Project Excellence 
Brane Semolič1, Jure Kovač2
1 University of Maribor, Faculty of Logistics, Mariborska cesta 7, 3000 Celje, Slovenia
2 University of Maribor, Faculty of Organizational Sciences, Kidričeva cesta 55a, 4000 Kranj, Slovenia
e-mail: brane.semolic@siol.net
Abstract
In modern business environment, it is becoming increasingly harder for organisations, regardless of their size and operational 
goal, to carry out the necessary changes in a timely manner. At the same time, it is becoming ever harder for companies to 
build competitive advantage. Projects and project management are key tools in gaining control over development processes 
and adapting to changes in the modern organisation business environment. Global trend analyses show that mastery of 
project work and project management is becoming one of the key success factors of any modern organisation, where the level 
of mastery of project work is gaining increasing importance. In the following text, the scope of project work and the concept 
of project excellence will be presented.
Key words: modern environment, project, project management, project excellence
1. Characteristics of Modern Business 
Environment and New Approaches to 
Business Organisation
Why are projects and project work becoming increasingly important business ingredients in the modern world? Because we have been 
facing, since the beginning of the nineties, the problems 
of unstable business environment, requiring from us the 
ability to develop rapidly and a high level of adaptability in 
every-day business operations. Business globalisation and 
rapid technological development, particularly in the area 
of information technologies and telecommunications, 
have brough about problems of shortening of the product 
life cycle, necessity for drastic reduction of product/service 
development time, increase in the share of order-based 
production, and others. Traditional business organisation 
that we are all familiar with and, to a large extent, still 
practice, is a poor basis for the development of such 
competencies in a modern organisation that will allow it 
to successfully face emerging demands and challenges.
In many cases, organisational development did 
not, unfortunately, keep pace with the technological 
development described above. To illustrate the issue, let 
us just mention that the bases for the theory of business 
organisation that we still use today to a large extent, 
were developped at the beginning of last century by 
Fayol, Taylor and their contemporaries. We believe a 
comparison between technological development and 
business levels at the time with today’s level and demands 
is needless. Project, network and quantum organisation 
are notions that apply to modern approaches to better 
business management in organisations facing problems 
and challenges of the modern business world.
In order to illustrate the usefulness of work methods and 
techniques developped by modern project management, 
let us mention the study (Kerzner, 1998) published in the 
nineties, which presented the results of project work and 
compared them to work methods utilised in traditional 
business organisation. The results showed that, in most 
observed companies, new product development and 
mastery time reduced drastically, and an increase in 
revenues, business profitability and customer satisfaction 
level was also noted. 
Another empirical example showing that new 
approaches to company business organisation and 
management must be saught is provided by some of the 
Japanese automobile manufacturers, such as TOYOTA. 
In the nineties, when American automobile manufacturers 
faced problems of decrease in competitiveness and 
profitability of their companies, TOYOTA’s American 
subsidiary was achieving significantly better results. To 
illustrate this fact, let us mention (Baumann, 2005) that 
the profit during the period of observation was 2 % in the 
GM company, as compared to 8 % for the aforementioned 
Japanese manufacturer. As early as 1997, the American 
automobile industry commissioned a study seeking to 
find out what the essence of TOYOTA’s approach was. 
The study shows that Japanese companies do not observe 
the golden rules of industrial production formulated in 
the West after World War II. These rules are based on the 
following premises (Baumann, 2005):
■ The importance of capital, as capital, labour and raw 
materials are primary production inputs;
■ Mass production – increase in prosperity through 
capital investment, labour cost reduction resulting 
from it, and and using the force of capital to put 
pressure on suppliers;
■ Scientific management – three groups of employees 
were formed, namely managers, responsible for 
decision-making and representing the interests of 
capital owners, experts, defining how and when 
things should be done, and workers, whose role is to 
physically carry out the set objectives; 
■ Financial management – the basic assumption is 
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that financial decisions have the most influence on 
a company’s success and that investments should 
be made into growing economic activities and that 
companies in good standing should be bought. 
Practice has shown many times that such an approach is 
questionable. Investment into new promising technologies 
often did not bring the desired financial results. 
Charismatic management model, based on constraint, 
personal charisma and cost reduction, has almost always 
proved to bring profitability only short-term. 
Analysis showed that the TOYOTA company’s 
business is based on different premises. The most 
important factor is knowledge, through which costs 
can be reduced, and utilisation of labour, raw materials 
and assets can be optimised. Another difference is that 
there is only one type of employees in their companies, 
comprising all the employees. Each individual employee 
contributes a portion of the knowledge in the process of 
creation of a new value. Knowledge cannot be bought; 
it is acquired through continuous learning. Transfer of 
foreign knowledge into a company’s own environment 
shows considerable net losses of knowledge in such 
transfers. A lot of the learning occurs in the product 
development processes. Such an approach brough the 
TOYOTA company outstanding results, including a 
four-time increase in development productivity, two 
to three-time decrease in development time and costs, 
ten-time increase in the number of innovations, etc. The 
described cases show that modern times require different 
organisation governance and management concepts, as 
the traditional concepts’ time is past, and they no longer 
produce appropriate results. The reasons for this are to 
be found in the instability and dynamism of the modern 
business environment, rapid technological development 
and globalisation of business and competition.
Companies are facing the demand to develop their 
key competencies, with which to compete on the global 
market. These competencies are largely connected with 
the ability to develop new knowledge. More knowledge 
means greater competitive capacity. Knowledge becomes 
tangible as a specific product, service, process or system. 
Final tangible knowledge is the result of the application 
of inter-connected incremental knowledges participating 
in such a process of creation of a new artifact. From the 
business point of view, it is a matter of defining appropriate 
process objectives, allocating adequate resources 
necessary for their realisation, and providing appropriate 
management and motivation of all participants for 
innovative cooperation. It is a specific type of a one-time 
business process, professionally referred to as “project”. 
2. The Scope of Project Management
Project management has hitherto acquired the reputation 
of a highly successful and efficient work method. Its role 
was limited solely to the implementation of one-time 
smaller or larger undertakings. Project management as a 
work method has doubtless prevailed, and still prevails, 
in large one-time construction feats, research projects 
or other types of large-scale pooling of labour and other 
resources in order to complete a specific complex one-
time undertaking. 
In companies whose production is not project-
oriented, project management is largely the work method 
of second level management, while the highest level 
management rarely or occasionally utilises the instruments 
of project management. (Hauc, Kovač, Vrečko, 2002). 
Recently though, a significant shift in the understanding 
and utilisation of project management has been noticable. 
Project management is increasingly becoming the 
prevailing work method in companies searching for new 
forms and types of business process organisation with the 
aim of attaining a better competitive edge. In addition, 
project management is increasingly penetrating non for 
profit organisations, demanding higher efficiency and 
quality in search of new operation modes. 
The prevalence of project work goes hand in hand 
with the development of project management theory. In 
the last twenty years, project management has developped 
from a systems viewpoint, through goal-oriented theory, 
to project-oriented management (the terms used in 
professional literature are: project-based management, 
management by project or project oriented management) 
(Turner, 1993, Turner, 2000, Lock, 2000, Cleland in 
Ireland, 2000). 
Just as a project is a one-time process with clearly 
defined beginning and end dates, project management is 
a one-time undertaking, beginning with clearly defined 
and set project objectives and ending with the delivery of 
results to the customer or users organised by the company 
itself. The international standard (IPMA, ICB, 2002) 
defines project management as a series of tasks including 
the planning, organisation, monitoring and control of all 
the aspects of a project, and the motivation of all those 
involved in it to achieve the project objectives on time and 
to the specified cost, and other criteria used for evaluating 
the successfulness of project implementation. In order for 
a project manager to be able to carry out the set task, he/
she must be familiar with a variety of fields required by 
the profession of project management, which are defined 
in the aforementioned standard. 
Each project has a customer. The project customer can 
be a company’s or organisation’s management, appointing 
an employee to the position of project manager and thus 
delegating to him or her the responsibility for the carrying 
out of set development objectives of the company or 
organisation. In market projects, the customer is the 
official representative of the buyer of project results. 
Customer satisfaction is one of the fundamental 
objectives to be pursued by any successful project 
manager. Well-defined and measurable expectations on 
the side of the customer are a pre-condition for successful 
project implementation. Project quality management is 
a professional field helping the project manager define, 
together with the customer, unambiguous, measurable 
results, and expectations connected with them. Project 
objectives are closely connected with organisations’ 
development strategies and strategic goals. For this reason, 
the successfulness of development projects is conditional 
upon the appropriate level of integration of the strategic 
and project management process.
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Projects represent the realisation of an organisation’s 
development strategies. Regrettably, the traditional 
management theory makes a distinction between 
strategic and project management, which can be seen 
in traditional textbooks in this field. Let us a take as an 
example a book on strategic management describing 
everything from the mission, vision, to methods utilised 
for defining strategic development objectives and 
development strategies connected with these objectives. 
In the part of the book dedicated to the realisation of the 
aforementioned development strategies, such sources are 
very general and succint, and do not, moreover, mention 
project programmes or project management, which are, 
in practice, the basis for successful realisation of the 
said strategies. What follows are not theoretical research 
findings, but empirical facts having shown that companies 
achieve significantly better results through project 
appropach than through traditional work methods. 
The conditions for successful project realisation are 
closely connected with (IPMI, 2005):
■ competency,
■ knowledge,
■ available equipment and
■ willingness to work.
Competency is defined from the point of view of the 
involved employees and the organisation. Competency 
of the involved personnel is defined on the basis of their 
formal and informal training for the intended work, and 
their intellectual and emotional IQ. Competency level of 
the organisation is defined on the basis of the capacity to 
define project tasks, identify competent personnel capable 
of carrying out the planned tasks, identify the skills lacking 
in the involved personnel in light of the requirements, and 
eliminate the established deficiencies. 
Knowledge required for the successful carrying out of 
a project should also be defined from the point of view of 
the involved individual, as well as that of the organisation. 
Indvidual employees are the ones possessing knowledge 
on how to perform a specific task. These are specific 
expert knowledges related to the implementation process 
of the intended project. They include project management 
knowledge, technical knowledge, economics and business-
related knowledge, legal knowledge, financial knowledge, 
computing knowledge, knowledge required for the use 
of specific tools, methods, techniques, etc. The role of the 
organisation, on the other hand, is to define the needs for 
a specific knowledge and its level required for successful 
implementation of a specific task. In case of deficiencies, 
it must ensure transfer of the required knowledges to 
appropriate employees planned for the implementation of 
the project, through appropriate instructions, trainings, 
and other types of transfer of required knowledges 
and skills to individual employees. In any event, the 
organisation is responsible for seeking and ensuring the 
required knowledge sources. 
Equipment required for the successful implementation 
of a project can also be defined from the point of view 
of the individual involved employee, or the entire 
organisation. The individual aspect involves equipment 
required for the successful work of an individual. It is the 
equipment connected with the work environment, and 
we distinguish between “hard” and “soft” equipment. 
The first group is comprised of premises and equipment, 
standard computing hardware and software, work tools 
and the like. The second includes working climate and 
organisational culture representing the environment 
for the implementation of the planned tasks. The task 
of the organisation is to ensure adequate equipment 
for the individual. Logically, “soft equipment”, assuring 
the appropriate working climate, as a pre-condition for 
successful work, is as important as the “hard equipment”, 
if not more. 
In order to achieve above average results, it takes 
willingness to work, which, again, can be viewed from the 
standpoint of the individual, as well as the organisation. 
Personal willingness to work manifests itself as inside 
motivation for achieving the expected results, and is, in 
addition, expressed through personal discipline required 
for the implementation of the task. Together with 
competency, it gives the individual adequate energy to 
perform the set task. The role of the organisation is to 
develop and systematically support the willingness of 
the involved persons to work. It achieves this through 
its preparedness to face problems of good and bad 
implementation of project tasks, and resolve them with 
the help of the competency described above. It encourages 
and rewards good work and has the ability to solve 
problems in a positive manner. Such an organisation has 
the ability to create willingness to work in all its employees, 
regardless of their area and level of employment. 
3. Project Excellence
Customer satisfaction, connected with the criteria for 
successful project realisation described above, is the 
basic starting point for the introduction of project 
excellence. On the other hand, project management is the 
performing of management functions required for the 
implementation and achieving of the project’s final goal. 
In addition to the well-known functions of management, 
a project manager must pay special attention to the 
activities of integration and connection of the project 
with the environment. Integration activities limit the 
function of project management to the execution level. At 
the execution level, project management is implemented 
through the so-called project (or project phase) life-cycle. 
The basic phases in most projects include the 
following: definition of project starting points (purpose, 
objectives, environment and options), definition of the 
implementation (resources, implementation modes and 
manners, plans), implementation of the project and 
conclusion, and delivery of project results. The entire 
process of project pre-preparation, implementation and 
conclusion is a very complex network of various relatively 
independent sets of activities, differing from each other in 
contents and implementation methods. 
How can it be determined where the observed 
organisation is at? For this purpose, various project 
management maturity models were established (OPM3 
and others). 
As concerns typical phases of introduction of project 
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management into practice, we can summarise the findings 
of the world renowned expert Kerzner, who distinguishes 
the following typical phases (Kerzner, 1998):
■ embryonic phase; in this phase, the organisation 
begins to recognise the need for and benefits of project 
work,
■ executive management acceptance phase; in this phase, 
the support of the executives to the introduction of 
project work in the organisation is noticeable,
■ line management acceptance phase; the support of 
the line management has been involved and reached, 
which manifests itself in the preparedness of top 
executives and their subordinate employees in the 
organisation to undergo additional training,
■ growth phase; in this phase, the organisation records 
changes in its business methods, develops and 
establishes a project management system, and the 
majority of employees are willing to partake in project 
work,
■ maturity phase; the project management system is 
integrated and constitutes an integral and inseparable 
part of the organisation’s business operations. 
The described phases are connected with the organisation’s 
development level and its preparedness to utilise project 
management in its own business environment. In the 
following, the author gives a very detailed description 
of the scope of project excellence. In his opinion, 
organisations reach project excellence in the growth and 
maturity phases of the introduction of project management 
(Kerzner, 1998). In order to achieve the cited objective, 
organisations must reach excellence in the following six 
elements of project management:
■ Intergated Management Processes;
■ Project Culture;
■ Management Support;
■ Training and Education;
■ Informal Project Management;
■ Behavioral Excellence.
There are several methods for evaluating the excellence 
of project work. The central model for evaluating project 
excellence, related to individual project implementation, 
is doubtless the one created within the framework of the 
International Project Management Association (IPMA), 
namely the project management excellence award 
programme for successful implementation of individual 
projects (IPMA Award). 
The IPMA Award is based on the TQM model, 
which is, in this case, applied to the management process 
and result evaluation of a specific project. The largest 
number of points a project may be awarded is 1000. 
Out of this, 500 points may be awarded for project 
management, including project objectives (140 points), 
project leadership (80 points), people management (70 
points), resources management (70 points) and processes 
management (140 points). The remaining 500 points are 
awarded for the results regarding customer expectations 
(180 points), results regarding employee expectations (80 
points), results regarding expectations and satisfaction of 
other parties involved in the project (60 points) and the 
evaluation of key performance and project results (180 
points). The first awardees of these prestigious awards 
were companies such as BMW AG, SIEMENS, DAIMLER 
CHRYSLER, DEUTSCHE POST and others.
However, project excellence does not consist solely in 
receiving and holding the prestigious IPMA Award, but 
also in a comprehensive and continuous concern for the 
development of personal and organisational competencies, 
development of personal and organisational knowledge, 
development and ensurance of adequate equipment 
and nurturing a culture of willingness to work in all the 
involved parties. 
4. Conclusion
In modern business environment, it is becoming 
increasingly harder for organisations, regardless of their 
size and operational goal, to carry out the necessary 
changes in a timely manner. At the same time, it is 
becoming ever harder for companies to build competitive 
advantage. Projects and project management are key 
tools in gaining control over development processes and 
adapting to changes in the modern organisation business 
environment. Global trend analyses show that mastery of 
project work and project management is becoming one of 
the key success factors of any modern organisation.
In addition to team work, project work includes 
control over consumption of time and other resources 
necessary for the performance of the task, planning, 
quality control, designing a project information system 
and documentation, designing a control system, 
establishing a system of mutual cooperation (through 
contracts) with other project implementors (mainly 
outside parties), designing project organisation and IT 
support. A series of methods, techniques and work modes 
has been developped for the purpose of implementing the 
above-cited tasks. 
A major advantage of project work is, among others, 
its efficiency. The vast majority of companies have a more 
or less rigid functional organisation. In recent years, in 
developped economies, major efforts are being made to 
lessen the negative impacts of rigid organisation. Project 
management is very successful in reducing the rigidity of 
organisational structures. Its utilisation is therefor rapidly 
spreading. 
In the growh of project management utilisation, the 
level of mastery of project work is coming to the forefront. 
The level of mastery and utilisation of project work 
methodology in the implementation of individual projects 
is particularly important. There are several methods for 
measuring the utilisation of project work. Among them, 
the concept of project excellence developed by IPMA 
doubtless has a central role.
5. References
Baumann, T. (2005): Development Trends in 
Automotive Industry, ORBITAK, Celje.
Cleland, David I., Ireland, Lewis R. (2000): Project 
                      Projektna mreža Slovenije            junij  30
manager’s portable handbook, McGraw-Hill, New York.
Grundy, T., Brown, L. (2002): Strategic Project 
Management, Thomson Learnig, Lodon.
Hauc, A., Kovač, J., Vrečko, I. (2002): Projektni 
managment v slovenski industriji, Zbornik referatov 
Forum 2002, ZPM, Maribor.
Hauc, A. (2007): Projektni management, GV, 
Ljubljana.
International Project Management Award (2002), PM 
Award Office, Nuremberg.
IPMA Competence Baseline (2006), IPMA, Zurich.
IPMI, (2005): Universität Bremen, Bremen.
Kerzner, H. (1998): In Search of Excellence in Project 
Management, Nostrand Reinhold, New York.
Kerzner, H. (2006): Project management: systems 
approach to planning, scheduling, and controlling, Wiley 
& Sons, Hoboken.
 
Lewis, P. James (2001): Fundamentals of Project 
Management, Amacon, New York.
Lock, D. (2000): Project Managment, Gower, 
Hampshire.
Macmillan, H., Tampoe, M. (2000): Strategic 
Managment, Oxford University Press, Oxford.
Phillips, J. J., Bothell, T. W., Snead, Lynne G. (2002): 
The project Management Scorecard, Elsevier Science, 
New York.
Turner, R. J. (1993): The handbook of project-based 
management, McGraw-Hill Book Company, London.
Turner, R. J. (2000): Gower handbook of project 
management, Gower, Vermont.