A Personal Viewpoint by Rainer Volz
Looking for the meaning of the word "incentive" in a project management context Max Wideman's excellent PM Glossary will give you the answer: "a contribution to motivation and motivating". Looking up "motivation" then leads us to: "The act of influencing others to accomplish a task with rewards or incentives". The circular reference implies that the two terms have a significant overlap and are sometimes used synonymously, but I think normally we use the terms on different levels. Incentives are motivating but normally on a material level, which is implied by the term "reward", while the more general motivation often is used to include also emotional aspects such as recognition, status, and self-image.
Trying to separate the two terms at least a little bit is no exercise in sophistry but might be useful to describe a change in the perception of the role of project managers. Project management is often described as a "people business", dealing a lot with communication and motivational problems of team members and stakeholders. In co-located teams inside one organisation the full motivation, including material incentives, is delivered by the direct environment, managers and colleagues. As soon as you start to combine people from different environments in a team, the motivational problems start. Jessica Lipnack and Jeffrey Stamps formulated that nicely: "Take a typical team, make it virtual, expect trouble. Working across organizational boundaries introduces communications and motivational problems. You immediately need to compensate just to bring the team up to the level of performance of a co-located team - to bridge the virtual gap" (Virtual Teams, 2000, page 7).
There is literature about how to do that, how to compensate. Typically the research focus is on methods to make communication and collaboration easier, to fight the bottlenecks communication media and a lack of bandwidth often introduce. That means the project manager emphasizes the people business-side even more to overcome external restrictions. Most approaches are based on the assumption that there is a fixed team that can be trained and formed, that trust can be built up. With trust we have the basis for motivation on an emotional level and can go on forming a team that communicates and collaborates like a co-located one would.
While the emotional part of the team's motivation can be built up by the project manager, the material incentives can create a problem. If the team members are from one organisation only the incentive scheme is clear and valid for everybody. So there should be no difference, neither on the material nor on the emotional level. Start introducing people from other organisations and there will be a difference on the material level. While the project manager might eventually be able to develop the same mixture of emotional support and recognition for all team members, the material incentives will remain different, depending on the organisation each participant belongs to. Differences in material rewards can introduce a lot of stress in teams over time, typically the lower-rewarded team members get frustrated and loose some of their motivation. An important reason to look also at the organisation as a whole when looking for project partners. The partners should fit to your "culture", or you will have to make structural arrangements (i.e., virtualise) that compensate for differences. It seems a bit ironic to me that here the restrictions on direct contact and communication between the different parts of a virtual project team, which are imposed by technology, could be an advantage.
As soon as you virtualise the project structure along organisational boundaries you lose most of the people business-side of project management. The motivation and communication part of the job will largely be done inside the sub teams and the overall management role is reduced to interface tasks and contract tracking, you are left with material incentives, as expressed in the contract, to influence accomplishments.
With the virtualisation of the team along organisational boundaries one also gives up the right to choose which individuals work on the tasks. In a strict sense -- if the contracts are good -- the manager isn't interested anymore in what is going on inside the teams, just the deliverables and the dates are important. This attitude leads us to the next logical step. You could add now a dimension and make the participant structure completely volatile - to include resources when required or as much as they bring your endeavour forward. Does this sound like outsourcing? Could be, but it is much more oriented towards the bidding process used in manufacturing. Economic needs and technological developments make it possible to handle more and more processes and services, which previously had to be provided by a project or an organisation itself, as a commodity. They could be provided by anybody, where it is not so important who that might be, as long as the specifications are met and the performance history is ok. This is a perspective the developments in business process management and service grids provide.
At this stage a project manager lost nearly all of the motivational, people-business tasks that are traditionally related with the role. Instead of these the skill set necessary would tend more towards legal and financial skills, risks and options management -- the material incentives mentioned already. Something that is probable? Would PM still be your dream job?
The US Department of Engergy Project Management Qualifications Guide Book qualifications guide book may be useful for those interested in the topic of "why PM's need to have technical skills as well as PM skills." The handbook can be found at http://ma.mbe.doe.gov/ME50/Training/qualstd/proj-mgt.pdf
While the approach is particular to the Department of Engergy Project Mangers it is thought provoking for other companies in the solution of this perennial issue on the skills required by a Project Manager.