WB Bentely Uninove 2017

Workbook
MG 755: Advanced International Project Management Topics
“Advanced International Project

Management Topics”
Joint-Program
Bentley University
McCallum Graduate School of Business
and
Uninove University
at
Bentley University
Waltham, MA-USA
July 31st-August 4th, 2017
Monday - Friday
2017 One-Week Intensive Summer Program
Bentley University and Uninove University (São Paulo) Joint-Program
“Advanced International Project Management Topics”
At Bentley University, Waltham/Boston
7/31 - 8/4, 2017 (Room # AAC 360)
This one-week intensive course uses a combination of expert-led classroom discussions and plant visits to examine the challenges
and best practices in project management. Company visits, case studies and dialogue with senior managers and
scholars provide the setting for studying contemporary organizational systems, processes, behavior, and practices
employed in project managements. The course setting is designed to stimulate critical thinking and insight into
contemporary management issues such as team leadership, organizational complexity, strategic management and
behavior, financial and ethical, dealing with risk, uncertainty, change and conflict, gaining and sustaining
commitment, and leading entrepreneurial activities. – This is a partnership program between Bentley University and
Uninove University (São Paulo, Brazil).
A. Colloquia/Seminars/Workshops:
Speaker & Affiliation Topic Presentation Presentation

Time Location
Leandro Patah - leandro.patah@uol.com.br; Managing Innovation Projects in Monday Bentley University

Mon
Professors of Management at Uninove University Uncertain and Complex 9:00-12:00noon Room AAC 360
7/31
Environments
Tue Etebari Ahmad - <ahmad.etebari@unh.edu> Finance Applied to Project Tuesday Bentley University
8/1 Professor of Finance, University of New Hampshire Management 9:00-12:00noon Room AAC 360
Wed Poorya Hosseini - poorya.hsni@gmail.com, Ph.D., MIT Wednesday Bentley University
Entrepreneurship and Innovation
8/2 9:00-12:00noon Room AAC 360
Ali Touran - A.Touran@neu.edu, Ph.D., P.E., Prof. of Thursday Bentley University
Thu Civil and Environmental Engineering, coordinator of the Project Management in 9:00-12:00noon Room AAC 360
8/3 grad program in Construction Management, Northeastern Infrastructure and Construction
Univ.
Fri Nader Asgary - Nasgary@bentley.edu, Prof of Friday Bentley University
Management and former Associate Provost Project and Innovation Teams 9:00-12:00noon Room AAC 360
8/4
B. Plant & Campus Visits:
Company Business Visiting Time Company Location

(Departure time from
Tree Dormitory bus stop)
1. Bentley Campus visit http://www.bentley.edu/ Monday (7/31) Mr. Bhaskar Nandina
2.Source Code Corporation Source Code is a leader in dedicated server 12:00-12:45
Source Code Corporation
appliance manufacturing services for [leaving campus 1:30] 159 Overland Road
independent software developers and vendors. 2:00-3:30 Waltham, MA 02451
Contact: Arthur - 877-722-3478
100 Terminal Street, Charlestown,
Tuesday (8/1)
Wind turbine blade testing, advanced design MA
3. WTTC 1:30-3:30pm
verification and certification Contact: Rahul Yarala & Eric
Wind Technology Testing Center [WTTC plant tour starts at
http://www.masscec.com/index.cfm/pid/10463 Macaux
2:00pm]
617-315-9355 (9307=direct)
Wednesday (8/2)
4. Free for students ------------- -----------------
Afternoon
Mr. Sandonei Chiodini, MIT Sloan
SoM, 355 Main Street, 7th floor |
Thursday (8/3) NE25-736 | Cambridge, MA 02142-
MIT and 1:30-3:30, MIT 1347, O: +1-617-253-7168, M: +1-
5. MIT and CIC
Cambridge Innovation Center (CIC) [Leave campus 1:30pm] 617-888-4550
http://www.cic.us 4:15 -7:30 CIC CIC, 14th Floor, 1 Broadway,
Claire Drummond | Relationship
Manager | CIC Boston CIC
Cambridge, 617-301-1946 | cic.us
6. A group of International students from Friday (8/4) Group Dinner: 7:45- 9:30 PM,
Bentley/BU/MIT Educational opportunities and challenges in The Grill, 11 Pine St, Waltham,
USA and assessment of the program 2:00-4:30 pm (Bentley
University MA 02453
TABLE OF CONTENTS
A. PowerPoints Presentations
1. Managing Innovation Projects in Uncertain and Complex Environments …...…Section # 1

Leandro Patah
Professors of Management, Uninove University
4. Innovation and Finance………………….. ………………………………………...Section # 4

Ahmad Etebari
Professor of Finance, University of New Hampshire
3. Entrepreneurship and Innovation ………………..……………………….……….Section # 3

Poorya Hosseini. Ph. D., MIT
2. Project Management in Infrastructure and Construction..…....…………………Section # 2

Ali Touran
Prof. of Civil and Environmental Engineering, Northeastern University
5. Project and Innovation Teams……………...............................................................Section # 5

Nader Asgary, Professor of Management at Bentley University
and President of Cyrus Institute of Knowledge
B. Readings - Papers and Case Study
Reading # 1, Prof. Patah

Reading # 2, Prof. Etebari
Reading # 3, Prof. Hosseini
Reading # 4, Prof. Touran
Reading # 5, Prof. Asgary
Managing Innovation
Projects in Uncertain and
Complex Environments
Prof. Leandro Patah, PhD
July, 2017
Our Schedule
 Managing Innovation Projects in Uncertain and Complex Environ.
 Innovation in Innovative Projects
 Uncertain Environments: Sounds Familiar?
 Complexity in the Business Environment
 Complex Projects: Characteristics and Management
 Exercise in Groups
 References
Our Schedule
 References
Innovation
• “Innovation is the implementation of a new or

significantly improved product (or service), or a
process, or a new marketing method, or a new
organizational method in business practices,
workplace organization, or external relations”
Fonte: OCDE (2005).

Projects
• “Project is a temporary effort undertaken to create a

unique product, service or result”
Fonte: PMI (2013).

Projects and Innovation
• “Innovation is the implementation of a new or significantly improved product (or

service), or a process, or a new marketing method, or a new organizational method in
business practices, workplace organization, or external relations”
• “Project is a temporary effort undertaken to create a unique product, service or result”
• Product
• New = Exclusive
• Project assumes Innovation, even small: exclusive!
• And Innovation depends on Project: implementation!

Innovation in Project Management
• Contextualization: expansion of the concept of project management to incorporate

elements such as environment and organizational strategy
• Social and political aspects: how these processes impact projects (power
structures)
• Complexity and uncertainty: new methods to deal with complexity
• Iterative process: with definitions of expectations by phases and learning analysis at
the end of each one
• Project management: as a holistic discipline to achieve efficiency, effectiveness and
innovation
• Approach: adaptive project management
• Success: multidimensional construct measured by efficiency, effectiveness and
innovation
• Internal sale of project management: align the values of project management with
the strategic priorities of the companies
• Project objectives: achieve multiple business results and meet multiple criteria
• Main focus: value creation
Fonte: Svejvig & Anderson (2015).

Innovative Projects
• Nanotechnology
• Biotechnology
• Energy
• Space
• Information Technology
Innovations in the Management of Innovative
Projects
• Renewable Energy
• Smart Cities
What is the Most Innovative Company in the
World?
Fonte: Forbes (2016).

Most Innovative Companies in the World
Fonte: MIT (2017).

Example of Innovations in the
Management of Innovative Projects
• Elon Musk
• If you have not heard of him yet, you will for sure
• Born in South Africa, Canadian and American, 46 years old,

engineer and economist (UPenn - Wharton)
• Salary in 2014: $ 1
• Fortune: $ 15.7 billion
• "The Iron Man of Real Life"
Fonte: Wikipedia (2017).

Areas of Expertise
• Information Technology
• Space Exploration
• Auto Industry
• Photovoltaic Energy
• Power Storage
• High Speed Passenger Transportation
• Tunnel Construction
• implantable Brain Computer Interfaces
• Artificial Intelligence
Companies
Information Technology
• Zip2
• At age 24, he started a company to provide an online city guide for newspapers
with $ 28,000 borrowed from his father. He got contracts with The New York Times
and the Chicago Tribune. In 1999 he sold the company to Compaq for $ 341
million, of which he received $ 22 million
• PayPal
• In 1999 he founded an online financial services company with $ 10 million from the
sale of Zip2. One year later the company merged with Confinity that operated a
money transfer service called PayPal. In 2002 he sold the company to eBay for $
1.5 billion, of which $165 million went to him
SpaceX
• With $ 100 million of his fortune at that time, Musk founded Space Exploration
Technologies, or SpaceX, in 2002
• The company designed and produces the Falcon rocket and the Dragon spacecraft
• In 2009 the Falcon 1 rocket became the first private rocket to put a satellite into
orbit. And in 2012, Dragon was the first private spacecraft to dock at the space
station
• In 2008 SpaceX signed a $ 1.6 billion contract with NASA to provide 12 flights to
the space station, replacing space shuttle retirement in 2011
Tesla Motors
• Manufacturer of fully electric cars, founded in 2003 by 2 other entrepreneurs. In 2004

Musk invested in the company and after the crisis of 2008, took over as CEO and
architect of products, positions occupied by him until today
• The company 1st designed and produced the Tesla Roadster with sales of 2,500
vehicles
• In 2012 it launched its Model S sedan for $ 90,000, voted the best car in the world by
Consumer Reports
• New releases: Model X (SUV Crossover) in 2015 and Model 3 (compact of $ 30,000)
in 2017 with pre-orders of 400,000 units
• "For many years now, we have been carefully studying the phenomenon of
disruptive innovation identified in the late 1990s by Clayton Christensen in the
Harvard Business Review."
Tesla Motors
Solar City
• Musk provided the initial concept and investment needed for his cousins to found
Solar City. The company is the largest US solar generator and supplier
• The company installs solar panels on the roofs of homes and produces energy for
homes in surplus quantity
Powerwall
• Lithium-ion battery that stores solar power and supplies the house at suitable times
• Model: 14 kWh for $ 6,200 enough energy for a house for one day
Hyperloop
• New form of transportation between Los Angeles and San Francisco designed by
Tesla and SpaceX engineers
• Subsonic vacuum train that will take the 560km route in 35 minutes
• Estimated cost $6 billion
• In 2015 Musk announced an 8km pilot line scheduled to begin construction in 2016
The Boring Company
• The Boring Company (TBC) also meaning To Be Continued, Tunnels R

Us and American Tubes and Tunnels is an infrastructure and tunneling company
Neuralink and OpenAI
• Neuralink objective is to make devices to treat serious brain diseases in the

short-term, with the eventual goal of human enhancement
• OpenAI is a non-profit artificial intelligence research company, that aims to

carefully promote and develop friendly AI in such a way as to benefit humanity as a
whole
Our Schedule
 References
Uncertain Environments: Sounds Familiar?
11/2009 09/2013 04/2016 08/2017

Our Problems
Source: The Economist (2016).

Our Problems

Our Problems

Our Opportunities
Source: Folha de Sao Paulo (2016).

Our Schedule
 References
There is No Consensus About Complexity Definition
but Some Perspectives are Usually Taken into Account
Complexity Perspectives
Complexity
• “Complexity is a fact of modern life.” (Frame, 2002, p. 42)
• “Complexity in a management context is a matter of perception and ambiguity.”
(Remington & Pollack, 2007, p. 17)
Complexity Theory Suggests that Order Does Not Allow
Enough Flexibility to Solve Problems
Change of perspective
• Complexity theory:
• “Evolved from Chaos Theory” (Curlee & Gordon, 2011, p. 4) – things are not so
organized as one may think.
• Already established in math and sciences, the complexity theory was applied to
social sciences and, lately, to business administration.
• People usually think that less order and more flexibility mean less control.
• 9-11 Case: complexity theory may be more useful to manage complex projects than linear
approaches.
Source: Curlee & Gordon (2011).

Two Aspects are Commonly Related to Complexity
Theory and Highly Commented in the Media
Butterfly effect Six degrees of separation

The Butterfly Effect is Credited to the Meteorologist
Edward Lorenz
Butterfly effect
• “Many things that do not

appear to have any order
actually do. ” (Curlee &
Gordon, 2011, p. 5).
“. . . all forces are connected.” (Curlee & Gordon, 2011, p. 9).

There Are Only Six Degrees of Separation Between
Everything and Everyone
Six degrees of separation

“Complex Projects Vary Dramatically, Exhibiting
Different Characteristics and Aspects of Systemicity. ”
Complex project
• A complex project can be

understood as a system
characterized by ambiguity and
involves interrelated parts that
operate in terms of differentiation
and interdependency.
Source: Remington & Pollack (2007).

“Complexity is About Anticipating the Unexpected in
Projects.”
Complexity

Our Schedule
 References
The Importance of Complexity to Project Management
Increases as Companies Adopt this Approach
Importance of complexity to project management

• Do we need to
fully control all
parts of the
project?
• Do we want to
fully control all
parts of the
project?

Project Complexity Can be Classified in 4 Types:
Structural, Technical, Directional and Temporal
Types of project complexity (according to sources of complexity)
Structural Technical
Temporal Directional
Source: Remington & Pollack (2007).

There are 3 Levels of Project Complexity:
Assembly, System and Array
Levels of project complexity
Levels
Array
Source: Shenhar & Dvir, 2007.

Managing Complexity Involves a Group of
Methods and Procedures
Methods and procedures to manage complexity
Experience
Learn
Complexity
Management
Promulgate
Revise
Source: Frame, 2002.

Project Management must Emphasize Customers,
Management Tools, and the Role of Project Manager
Challenges of the new project management
• Project management must

increase its focus on customer
Customer
• The role of project

manager must go
beyond implementer Relevant • Besides hard skills
and include customer Aspects (contracts, finance,
focus and authority to schedule, risk
effectively execute their management), it is
job. Manage- necessary to explore soft
Project
ment skills (change
Manager
Tools management, negotiation,
politics, customer
relationship).
Source: Frame, 2002.

Our Schedule
 References
Exercise in Groups
• In groups, you are going to read, discuss and present one innovative idea of
a specific case study, answering three questions:
– 1. What is the main idea on the case that could be implemented to

manage other uncertain and complex projects in order to improve their
success?
– 2. How this idea helped (or not) to manage the project?
– 3. How to implement this idea for other projects?
• The cases and the groups are as following
• You will have 20 minutes to read the text, discuss your topic and prepare
notes
• Then each group will have 5 minutes to present conclusions

Exercise in Groups
• Group 1 – TAV Italy
• Group 2 – Heathrow England
• Group 3 – RailTunnel Sweden
• Group 4 – Christchurch New Zealand
• Group 5 – Dreamliner USA

Our Schedule
 References
References
Curlee, W., & Gordon, R. L. (2011). Complexity Theory and Project Management. Hoboken, NJ: John Wiley & Sons.
Davies, A., Dodgson, M., Gann, D. (2016) Dynamic Capabilities in Complex Projects: The Case of London Heathrow Terminal 5. Project
Management Journal, April/May 2016, p. 26-49.
Eriksson, T., Kadefors, A. (2017). Organisational Design and Development in a Large Rail Tunnel Project – Influence of Heuristics and
Mantras. International Journal of Project Management, v. 35, p. 492-503.
Folha de Sao Paulo. (2016). Indicadores do Mercado Brasileiro se Reaproximam dos de Emergentes. Available in
http://www1.folha.uol.com.br/mercado/2016/05/1774022-indicadores-do-mercado-brasileiro-se-reaproximam-dos-de-
emergentes.shtml. Retrieved on May 23, 2016.
Forbes (2016). The World's Most Innovative Companies. Available in https://www.forbes.com/innovative-companies/list/. Retrieved July
19, 2017.
Frame, J. D. (2002). The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities (2nd ed.).
San Francisco, CA: Jossey-Bass.
Locatelli, G., Mariani, G., Sainati, T. Greco, M. (2017). Corruption in Public Projects and Megaprojects: There is na Elephant in the Room.
International Journal of Project Management, v. 35, p. 252-268.
MIT (2017). 50 Smartest Companies. Available in https://www.technologyreview.com/lists/companies/2017/. Retrieved July 19,2017.
OCDE (2005). Oslo Manual – Guidelines for Collecting and Interpreting Innovation data. 3rd edition. Paris, France.
PMI (2013). A Guide to the Project Management Body of Knowledge. Newtown Square: Project Management Institute.
Remington, K., & Pollack, J. (2007). Tools for Complex Projects. Farnham, Surrey, UK: Gower Publishing.
References
Shenhar, A. J., & Dvir, D. (2007). Reinventing Project Management: the Diamond Approach to Success Growth and Innovation. Boston,
MA: Harvard Business School Press.
Shenhar, A. J. Holzmann, V., Melamed, B., Zhao, Y. (2016). The Challenge of Innovation in Highly Complex Projects: What Can We Learn
from Boeing ’ s Dreamliner Experience? Project Management Journal, v. 47, n. 2, p. 62-78.
Svejvig, P. & Anderson, P. (2015). Rethinking Project Management: A Structured Literature Review with a Critical Look at the Brave New
World. International Journal of Project Management, v. 33, p.278-290.
The Economist (2016). Brazilian Waxing and Waning. Available in http://www.economist.com/blogs/graphicdetail/2016/04/economic-

backgrounder. Retrieved on May 23, 2016.
Walker, B., Vries, H. P, Nilakant, V. (2017). Managing Legitimacy: The Christchurch post-Disaster Reconstruction. International Journal of
Project Management, v. 35, p. 853-863
Wikipedia (2017). Elon Musk. Available in https://en.wikipedia.org/wiki/Elon_Musk. Retrieved on July 19, 2017.
Reading Material
Pich, M. T., Loch C. H., Meyer A. D. (2002). On Uncertainty, Ambiguity, and Complexity in Project Management. Management Science, vol.
48, n. 8, p. 1008–1023.
Innovation and Finance
Ahmad Etebari, Ph.D.

Professor of Finance
University of New Hampshire
Durham, USA
Summer 2017
Finance and program Management
• Financial activities tend to be more continuous than
having clear cut start and finish dates
• Yet, many finance activities can be easily framed in a
project management format. This may include:
– Preparation of financial reports
– Raising capital in private or public markets
– Investing in real assets, e.g., various steps in capital
budgeting, M&A, corporate alliances
– Private sale of the company
– Public sale of the company (IPO)
– Divesting (“Spinning off”) a business unit or a division
– Taking the company private (“going private”)
– Filing for bankruptcy
– Liquidation
Funding Sources
• Founders, Family, Friends
• Crowd
• Venture capitalists (VC)
• Private equity (PE)
• Corporate investors and strategic partners
• Government subsidy
• Commercial banks & other fin’l. institutions
• Public markets
Venture Capital Financing
• Steps to obtaining venture funding:
– Prepare a business plan
– Receive first-state financing
– Receive subsequent staged financing
• Since success of a new firm is highly
dependent on the effort of the managers,
restrictions are placed on management by the
venture capital company and funds are
usually dispersed in stages, after a certain
level of success is achieved.
Venture Capital Funds
• Provide funding for a new, growing or troubled firm
• VCs are pool of funds, not just one investor
• VCs may be set up by anyone: individuals, banks …
• VCs have investment horizons of about 3-7 years
• New venture failure rate is high: 20% to 90%, but one or
two winners make up for those that fail
• VCs exchange money for an equity stake in the business
• New ventures are very risky and there’s info asymmetry
• VCs take Board of Director position at the venture firm
• VCs disburse money in stages, after a certain level of
success is achieved by the venture firm
Types of VC Funding
• Seed Capital: Just starting - no products, no organization
– Need to develop a sample product, do market research, pay bills
• Startup Capital: A sample product; a principal leader
– Need to recruit other key employees, finalize product/service
• Early Stage Capital: A couple of years after launch; sales
increasing; management team in place.
– Need to further expand sales, improve productivity, breakeven
• Expansion Capital: A fast-growing, well-established co.
– Need to enter new markets and take the business to the next level
• Late Stage Capital: Fast growth; high product demand
– Need to expand capacity and working capital
• Public: Getting ready for an IPO
– Need mezzanine or bridge financing to pay the underwriting costs
Earlier stages expose the VCs to greater risk!
Obtaining Government Subsidy
“Elon Musk’s secret? Taxpayer money”

L.A. Times, May 30, 2015
Elon Musk’s empire - Tesla Motors Inc.

Solar City Corp. and privately held Space
Exploration Technologies Corp., known
as SpaceX” - together have benefited
from an estimated $4.9 billion in
government support, according to data
compiled by The Times.” Professor Etebari
The Exit
Research shows that the most profitable exit opportunity
is usually an IPO. VCs hold significant equity stakes and
board positions in the firms they take public, which they
continue to hold a year after the IPO. Researchers argue
that this pattern reflects the certification VCs provide to
investors that the firms they bring to market are not
overvalued.
Professor Etebari
PRIVATE EQUITY: BUYOUT AND VENTURE CAPITAL
BO Funds VC Funds
Corp managers, Scientists (MDs,
Investor
Bankers PhD), former CEOs
Stake in Target 100% Ownership Minority stake
Target Business Public or Private Private only
Financing Debt and equity Equity only
Fund Size $1-10 billion $100-250 million
Investment Pd about 4 years about 7 years
Relative Size 75% of all PEs 25% of all PEs
Expected IRR 25-40% Closer to 40%
Avg Performance About the S&P500 Somewhat better
Investment Banks
• Different from commercial banks
• Help firms raise capital
• Underwrite sale of securities
• Reputation matters as it prevents the
moral hazard inherent with
companies selling their own shares.
Merger/Acquisition as A Project
• Why? Reasons for Acquisition:
• Scale economies, customer-supplier M&A, Cheaper to
buy on WS, New product, Better management…
• Basic Acquisition Structure: Stock purchase or merger?
• Acquisition Process?
• Investment Bank? (Engagement Letter, fees, etc.)
• Valuation
• Confidentiality agreement between buyer and seller
• Letters of intent
• Stay bonuses & other employee retention schemes
• Due diligence: Business, legal, intellectual property,
patents, copyrights, trade secrets, trademarks
Valuation: Risk and Return
CF CF CF P
P0  1 r
1
 2
(1  r )2
 ... H
(1  r )
H
 H
(1  r ) H
 CF (Cash flows): Free cash flow, EBITDA…

 Estimate the resale price (PH)
 Discount CFs and PH at the Opportunity Cost
of Capital – The rate of return earned on a
similar-risk investment.
The Opportunity Cost of
Capital:
Projects Capital $
New
Debt
Equity
Like labor and other production factors, capital has a

cost. Each project must cover its production-factor
costs, as well its cost of capital.
6/12/2017 Ahmad Etebari

The Opportunity Cost of Capital
Return Hi-Tech Market Line

Stocks
Avg.
Stock
Risk Premium
Bond
Gov’t-bond Yld
Risk Free Rate
Low High Risk
Return = Risk-Free Rate + Risk Premium

Using Price Multiples to Estimate
the Security Price?
We often use the comparables’ multiples:
Price = Earnings x Price to Earnings
Price = Sales x Price to Sales
Price = CF x Price to Cash Flow
Here we use the crudest measure of CF: EBITDA

(earnings before interest, tax and depreciation)
Price = EBITDA x Price to EBITDA
What Determines the P/E Ratio
E x P/E = Share Price
Dull Co. $1 x 4 = $ 4
Hotshot Co. $1 x 60 = $60
Both have same EPS. Why one is assigned a higher P/E

multiple?
• Higher Growth
• Lower Risk (business risk, financial risk, regulatory risk...)
a. Business risk: The same growth from a safe business would
be more reliable and valuable than from a risky one.
b. Financial risk: Growth generated through debt financing
would be less valuable than that generated from operations.
Innovation
• Implementing new ideas
• Improving existing products or services
• Can pay off in saving time and money
• Requires
• funding
• inspirational leadership throughout the business
“You either disrupt your own company and products,

or someone else will. Standing still = death.”
Singularity University cofounder and executive
chairman, Peter Diamandis,
Technological Innovations -
Financial Markets
• Investment Funds
• Mutual Fund
• Raises money by selling shares to investors
• Attempts to beat market
• Money Market Fund invest in safe securities
• Exchange-Traded Fund (ETF)
• Portfolio bought or sold in single trade
• Hedge Fund
• Restricted access
• Limited partnership
Technological Innovations –
Financial Institutions
• Financial Institutions
• Commercial banks
• Provide loans, safe money storage
• Investment banks
• Assist companies in raising financing
• Insurance companies
• Invest in corporate stocks and bonds
• Stock, bond, commodities, spot and futures markets
• Examples of financial innovations
Exchange Traded Funds and Exchange
Traded Products (ETFs and ETPs)
• Track an index - equity, fixed-income, commodity…
• Mostly passively managed
• Low expenses and superior performance
• Trading flexibility
• Transparency of the portfolio
• Tax efficiency
• Globally: AUM = $US3.9 trillion; 6,771 in total, from
305 providers listed on 67 exchanges in 55 countries.
• In US: AUM = $2.798; 2000 in total; from 110
providers listed on 3 exchanges; w/ BlackRock,
Vanguard and SSGA dominating the space. (Q1 2017)
US ETFs - Brazil
Largest: $3B AUM
For hedging Real
Adjusted for real
3x daily leveraged
Professor Etebari
US ETFs - Brazil
Largest: $5.67B AUM
3x daily leveraged
For hedging Real
Professor Etebari
Adjusted for real
RoboAdvisers/Startups
• Algorithms for personal/retirement investing
• AUM: $16B on Jan 14; $60B today
• Major Players: Wealthfront, Betterment, Schwab, and
now Vanguard
• Robo-Adviser algos steer investors towards Vanguard
due to their funds’ cheaper fees
• Last October Fidelity teamed up with Betterment to
steer its network of 3,200 independent advisory firms
to Betterment’s software, hence collecting a referral
fee
https://www.betterment.com/
Professor Etebari
Questions &Answers
Professor Etebari
ENTREPRENEURSHIP AND INNOVATION:
LESSONS FROM MIT
Poorya Hosseini, Ph.D
Massachusetts Institute of Technology (MIT)
Department of Mechanical/Biological Engineering
Bioinstrumentation Engineering Analysis and Microscopy (BEAM)

Laser Biomedical Research Center (LBRC)
VentureLabs Fellow at Flagship Pioneering
Advanced International Project Management Topics (AIPMT)

August 2017
Outline
• Introduction: Who am I?
• My academic background
• My current work in Venture Capital (VC)
• MIT’s Global Entrepreneurship Impact
• MIT Philosophy of Creating Ventures
• 24 Steps of Creating a Start-up
• Who is your customer?
• What to do for your customer?
• How customer acquires your product?
• How to make money off your product?
• How do you built your product?
• How to scale your business?
• Story of the Homely (Proprietary)
• Book Review: Zero to One
• Book Review: Lean Startup
• Book Review: Founder’s Dilemma
• Conclusions
2 / 31
Introduction
• Mechanical/Biological Engineering at MIT, PhD

• Major: Biomedical Imaging, Instrumentation
• Minor: Political Science and Economy
• Educational Background
What did I do during my doctoral studies?
McGill University, Montreal
Currently at: Flagship Pioneering creates,

develops, resources and grows first-in-class or
best-in-class companies through its unique
science-based innovation platform
Iran University of Science and Technology (IUST)
Let’s Stop Here!
3
Flagship Ventures
Flagship Pioneering creates, develops, resources

and grows first-in-class or best-in-class
companies through its unique science-based
innovation platform
4 / 31
MIT’s global entrepreneurial impact
Alumni-founded companies have created 4.6

million jobs, generating nearly $2 trillion in
annual revenues ~ MIT News (2017)
Ref: Roberst and Sarnoff (MIT Sloan School of Management) 5 / 31

MIT’s global entrepreneurial impact
Ref: Roberst and Sarnoff (MIT Sloan School of Management) 6 / 31

Companies by MIT Alumni
Intel - Robert Noyce Dropbox - Drew Houston Buzzfeed - Jonah Peretti

and Arash Ferdowsi
Alexa - Brewster Kahle
Akamai - Danny Lewin

Qualcomm - Irwin Jacobs
Khan Academy - Salman Khan
Bose Corporation - Amar Bose
Hewlett Packard - Bill Hewlett
Ref: Business Insider 7 / 31

Disciplined Entrepreneurship
• What Explains MIT’s Success in

Entrepreneurship
• Entrepreneurship Can be Taught
• Three Common Myths that Must Go

• Individuals start companies
• Entrepreneurs are charismatic
• The entrepreneurship gene
Ref: 15.390 (New Enterprises) 8 / 31

How do venture creation begins?

IDEO Rules of Ideation
• Brainstorming is a semi-structured, team-based method of rapid idea generation. It's

a valuable tool for organizations because it helps:
• Generate ideas quickly
• Expand the portfolio of alternatives
• Get people unstuck
• Inject insights from a broader group
• Build enthusiasm
• Across the thousands of brainstorms IDEO has run — both with internal teams and
with clients — we follow seven important rules:
• Defer judgement
• Encourage wild ideas
• Build on the ideas of others
• Stay focused on the topic
• One conversation at a time
• Be visual
• Go for quantity
www.theodysseyonline.com
Ref: https://www.ideou.com/ 10 / 31
Video / Materials to Check
“David vs. Goliath” Ted Talk and audio commentary on NPR by Malcolm
Gladwell (author) http://www.npr.org/2013/11/15/243294593/what-sthe-
real-lesson-of-davidand-goliath
• The Power of Vulnerability by Prof Brene Brown (University of Houston)
http://www.ted.com/talks/brene_brown_on_vulnerability?language=en and then the first
7 minutes of the next Ted talk by Brene at
https://www.ted.com/talks/brene_brown_listening_to_shame
• The Way of Improvisation video by Dave Morris from TEDxVictoria
https://www.youtube.com/watch?v=MUO-pWJ0riQ
• “Avoid Stagnation: How Acceleration Trumps Incubation” by Bill Aulet in
TechCrunch http://techcrunch.com/2014/03/15/avoid-stagnationwhy-
acceleration-trumpsincubation/
• “Talking to Humans” by Giff Constable and Frank Rimalovski
http://www.talkingtohumans.com/
• This is in addition to the IDEO Shopping Cart video “Deep Dive” which is
at https://www.youtube.com/watch?v=2Dtrkrz0yoU

Who is your customer?
Ref: Disciplined Entrepreneurship 12 / 31

Step 1: Market Segmentation
¨ You have your initial idea

¨ You have your initial team
¨ Now what?
Primary Market Research
Quiz 1: What is the singular

necessary and sufficient
condition to have a company?

Select a Beachhead Market
Why Is It Called a Beach Head Market?

Why only one market?

Step 1: Market Segmentation
• Undergraduate Students (Summer time)

• Graduate Students (Abroad)
• Graduate Students (US)
• Home Owners
• Realtors
• People Looking for a White House!
16
Step 2: Beachhead Market
• Undergraduate Students (Summer time) Intermediate, low income

• Graduate Students (Abroad) Harder to access
• Graduate Students (US)

• Young Professionals Have money, Large, Potentially
accessible to salesforce
• Home Owners
• Realtors
• People Looking for a White House! Very hard to access!
The Beachhead: Home owners and realtors are

integral parts of the problem, but end users are:
The graduate students and post-doctoral

fellows moving to a new city and need housing
en.wikipedia.org
Copyright © 2016-2017 Poorya Hosseini, Distribution Limited to AIPMT at Bentley 17

Step 3: End User Profile
• 24-34 years old (any gender) • Income range (30-50k)

• Relocating to Boston from outside MA for the first time
• Motivation - Little network in Boston

- Little understanding on Boston housing
- Have a smooth transition
- Saving money
• Fears - Being ripped off

- Living with terrible people
- Living in bad conditions
- High initial settlement cost
- Getting inaccurate info from agents
- Academic failure as a result
• They are on Facebook, Instagram, LinkedIn, Twitter, campus newspaper

• Hang out on campus, looking for good career options after graduation
• Attached to the native culture and not fully integrated to American society

Step 4: Total Addressable Market (TAM)
• 5 million grads and post-docs

• Around one-third are newbies
• More than %80 are not local
• Some %90 live off-campus
• Around %80 pay realtor fee
almost a million BHM
costs $1750 on average
We are looking at a market of $56

millions at Boston our primary focus
References: http://cgsnet.org, http://nces.ed.gov/, http://boston.com/

Step 5: Persona
o It must be a real person

o Be visual
o Understand all dimensions: Rational,
Emotional and Social
o Err to start on side of too much detail &
then take away
o Priorities
o What do they fear most in the world?
o What motivates them more than
anything else?
o What “water holes” do they go to?
o i.e., where do they congregate with
others like them?
o Do this as a team – it will help unify your
team and will get everyone on the same
(and proper) wavelength
Persona = Final arbiter

Data vs Story
Ad #1: Data-driven
• 795 million ppl w/o enough food
• Developing countries: 12.9%
• 3.1 million deaths for kids under 5
• 66 million primary school students go hungry
• $3.2 billion is needed
• Won’t you give to this cause?
Ad #2: Story-driven
• Raj Shah – 12 years old, love in New Delhi, works mornings & evenings to support
mother, Anjali, who is sick with diabetes & still has to take care of her parents with
limited mobility
• His younger sister, Tanya, is 7
• Going to school but is lethargic & has hard time focusing in school
• Raj has barely eaten for 3 weeks & it is to the point that if he does not get a good
meal in the next 2 weeks lots of very specific bad will happen
• There are 66 million people like Raj
• Won’t you give $50 to help him help himself and his family?

Persona (Example)
Living Habits
¨ Raj Kumar
• Careful in spending ¨ Age: 26 (Single) from India (Hindi)
• Attends campus events ¨ Grad housting at UIUC
• Goes out and drink occasionally ¨ Small social network in the US
• On average 5 hours on the internet ¨ Almost no network in Boston.
• Enjoys Marvel films reruns of Big Bang Theory
• Recently on Coffee Meets Bagel.
• Actively on Facebook to keep up with friends from
back home and during his studies
• Visits India every 1-2 years Education Background
• Skype with family to stay in touch
• BSc at Indian Institute of Technology (IIT)
• Fears academic failure & financial problem • Now M.Sc. in EE at UI Urbana-Champaign
• Starting Course 6 PhD at MIT
• Aspires for academic jobs (becoming prof)
Housing Priorities • No industry exposure
● Needs a room and roommates to hang out with Finance

● Will prioritize cleanliness is his housing search
● Close public transportation to get to/from campus • Has $10K in savings
● Looking to spend $900-1200/month on rent and • Credit Score of 750
utilities • Credit card limit is $3000 USD
• Will Obtain $2200/month in PhD program

What to do for your customer?

Step 6: Full Life Cycle Use (FLCU)
2 My needs
• Raj struggles to find affordable 3 Finding options

1 Catalyst to Action
housing in Cambridge
• Raj is accepted to MIT and chooses • Wants to visit properties before
• Evaluates listings online using
filters and virtual reality to get a
to relocate to Cambridge committing feel for the space.
• Attends the Open House and meets • Will identify several listings of
future roommates interest
8 Determining Value and Paying 4 Analyzing + Making Decisions
• Saving time and money

• potentially visit the listings in person
• Reliability and service
• Share findings with group to compare
and contrast listings, converge on
• Pre-arrival credit check
everyone’s favorite
• Pays for rental services online
5 Acquirign the product
7 Using/Getting Value • Will identify the listing of interest to

the online realtor who has already
• Will not have to pay a realtor fee 6 Installing the product processed credit history to determine
unless chooses to visit the location eligibility
• Will pay based on satisfaction with
• Will receive the contract for
the lease and sign online with
performance of realtor
the rest of living group
Copyright © 2016-2017 Poorya Hosseini, Distribution Limited to AIPMT at Bentley

FILLBEE Example

Window of the Opportunity
Know your Windows of Opportunities & take advantage of them with

well designed Triggers – timing is crucial!

Step 7: High Level Product Specs
• Define it from the customer’s perspective,

not yours
• Talk about benefits, not features
• Don’t drown them in detail
• Make it visual
Don’t mention price! It’s way too early.

It is a living document – test, validate,
iterate. One way to do it: Build a product
brochure / mockup

Step 7: High-Level Product Description
Ref: www.roomie.com, www.zillow.com 28

Step 8: Quantified Value Proposition
Reduced Cost: Disrupting traditional realtor-based rental model (%70 cut in fees)
i. In-house rental reps instead of realtors (tapping into available part-time labor
in Boston) to arrange property showings
ii. Hire artisans to present listings accurately and in the best light
iii. Integrate to existing online platforms (such as www.docusign.com)
Reducing Searching Time: From Weeks to Days,
a. Leveraging technology to present tailored, high quality property listings
b. Speeding up deal process by electronically completing background checks and
credit history before arrival to Boston
All-in-One Solution: In addition to having rental listings, we help with tour scheduling,
lease signing and facilitating the transactions.
Easy to Access: Online platform, the process can begin well in advance to arrival
Trustworthy and Reliability:
a. Guarantee accuracy of the information
b. Rating system for owners
c. Provide consulting to match customer needs

Step 10: Defining Your Core
• Zappos: Customer Service

• EnerNOC: Customer IP – Long Term Contracts
• Gemvera: User Experience
• Facebook: Network Effects
• Google: Data
• Microsoft: Dominant Design
• Honda: Motors

Step 11: Competitive Position
• Homely’s value proposition is excellent customer experience through

maximizing engagement with the agents and reducing cost through
economies of scale
Status-Quo
Homely • No relationship
• Unreliable
Service and Trust
Realtors Zillow • Takes too long

• Lack of transparency
Homely
Craigslist • Personal
• Trustworthy
• Time-efficient
• Cost-efficient
Savings (money and time)

Step 12: Decision Making Unit (DMU)
End-Users: These are graduates, postdoctoral

fellows or researchers looking for a housing
option and are our primary users.
Champions: Current Tenants
Primary Economic Buyer: Prospective

Tenants
Influencers:
○ Homeowners - Other Homeowners
○ Current Tenants/Neighbors - Friends
○ Prospective Tenants - Colleges,
Friends
Veto Power:
Homeowners

Step 13: Decision Making Process (DMP)
Prospective Tenant Homeowner
● Needs to relocate in a few months ● There is an upcoming vacancy or availability

● Hears about Homely from campus’ Student in their properties (~4 months in advance)
Life Office or friends ● Reaches out to Homely to take curate and
● Creates a profile on Homely to obtain access publish their listing
to our listings (1 day) ● Homely takes care of listing the property
● Filters down to a few options (2-4 weeks) online (within 1-2 weeks)
● Homely completes background and credit ● Homely completes securing tenants who will
history checks (~1 day) rent (~2-8 weeks)
● Schedules tours with current tenants, or ● Homely sends profiles of interested and
neighbors if the listing is vacant (~1 week) vetted tenants to homeowners for approval
● Choose the listing they are most interested in (~1 week)
and signs contract (~1 day) ● Contract signing through Homely (~1 day)
Current Tenant/Neighbor
● Hears about Homely through homeowner or friends (~4 months before their lease ends)
● Agrees to show their home to prospective tenants and creates profile on Homely (~1 day)
● Schedules and gives tours as is convenient for them over the period of ~3 months
● Compensated for each tour (~1 week after the tour)

Zero to One (Peter Thiel)
New York Magazine
Copyright © 2016-2017 Poorya Hosseini, Distribution Limited to AIPMT at Bentley 34 / 31

Five Dysfunctions of a Team
“ The Five Dysfunctions of a Team is a business book by consultant

and speaker Patrick Lencioni first published in 2002. It describes the
many pitfalls that teams face as they seek to "row together". This book
explores the fundamental causes of organizational politics and team
failure. Like most of Lencioni's books, the bulk of it is written as
a business fable. This book has appeared on American best-seller
lists including: New York Times, Business Week, Wall Street
Journal and USA Today.” Source: Wiki

Lean Start-up (Eric Ries)
• Zappos.com is an online shoe and clothing

shop based in Las Vegas, Nevada.
• In July 2009, the company announced that

Amazon.com would acquire it in an all-stock
deal worth about $1.2 billion

Project Management in
Infrastructure and Construction
Ali Touran, Ph.D., P.E., Fellow ASCE
Professor and Coordinator of the Construction Management Program
Northeastern University, Boston
August 2017
Outline
• Overview of construction industry

• Project organization and project parties
• Costs
• Scheduling
• Project cash flow
• Project control
Construction Project Management Objectives
• Keep projects within budget (cost estimates,

cost analysis, budgeting, cost control, change
order management)
• Keep projects on time (scheduling, resource
management, project acceleration/expediting)
• Maintain quality (Technical specifications,
quality assurance/quality control)
• Maintain safety during construction
Differences between a construction
project and an industrial project
• Each Project is unique

• Duration varies from project to project
• Labor productivity is a challenge as the labor force is ever-
changing
• Project execution is affected by weather
Construction Industry Overview
• Total annual construction expenditure exceeded
$1,100 billion in the United States in 2007 and is
now estimated at $1,218.5 billions in April 2017 (US
Census Bureau).
• Approximately ⅔ of the total expenditure is New
Construction and ⅓ is Remodeling, Retrofit and
Maintenance.
• About 5% of gainful employment in the U.S. is due to
Construction.
• About 13% of the U.S. Gross Domestic Product (GDP)
is related to Construction.
Total Annual Construction
Expenditure in the U.S.
Annual Value of Construction Put in Place in the U.S.
(Census Bureau)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
2008r 2009r 2010r 2011r 2012r 2013r 2014r

Construction Industry Overview
Contractors’ Profile
Rankings according to ENR, May 2017
Rank Company Total revenue in
2016 ($m)
1 Bechtel Group, SF, CA $24,251
2 Fluor Corp., Irving, TX $15,186
10 Whiting-Turner, PA $5,505
200 Shimmick Construction, $421

CA
400 Primus Builders, CA $170
The Top Global Contractors
Based on ENR, August 2016
Ranked based on total contracting revenue
Rank Company 2015 Total Revenue

($million)
1 China State Const. 115,083
Engineering Corp., Beijing
2 China Railway Group, 112,670
Beijing
3 China Railway Construction 96,011
Group, Beijing
4 China Communications 68,348
Construction Grp.
5 Vinci, France 43,449
Outline

• Costs
• Scheduling
• Project control
Types of Construction Projects
Project Types
Heavy 20- Industrial 5-

25% 10%
Building-
residential
30-35%
Building-
commercial
40-45%
Construction Spending 2017 in the U.S.
Value of Construction put in place for 2017 Value of Construction put in place
(U.S. Census Bureau April 2017) in $Billions
for 2017 (U.S. Census Bureau
April 2017) in $Billions
22
275
253
517
943 426
Private Public Residential Nonresidential State and Local Federal

Project Life-Cycle
Conceptual Preliminary BIDDING

Detailed Contract
Design/ Engineering Construction
Design Documents
feasibility (Architect/Engi
(Architect/ (Contractor)
(Owner, neer)
Engineer)
Architect)
Ability to Influence Final Cost Over
Project Life
The effect of clarity of scope on accuracy of
cost estimates
Parties Involved in a Project
• Owner
• Contractor
• Architect/Engineer
• Financier
• Consultants
• Subcontractors
TRADITIONAL
CONTRACT
RELATIONSHIP
OWNER A/E
CONTRACTOR
SUB1 SUB 2 SUB

3
Design-Build Delivery System
OWNER
DESIGN-
BUILDER
SUB1 SUB2 SUB3

Outline

• Costs
• Scheduling
• Project control
CONSTRUCTION COSTS
• Direct costs
• Labor
• Equipment
• Material
• Subcontracts
• Project indirect costs (job overhead)
• Contractor's indirect costs
•Contingency
• Profit
CONSTRUCTION COSTS
•On large projects, the profit margin can be as small as 1-3%.
•On average, for small to moderate-sized projects:

•Head office overhead = 2-8%
•Project overhead = 5-15%
•Profit and contingency = 5-20%
ESTIMATING LABOR COSTS
Hourly
Estimate rates
From labor ($/hr)
From quantities
agreements,
(cy)
Blue- etc.
prints
Task
labor
cost ($)
Productivity Task
Company’s rates (cy/hr) duration (hr)
historical
records
COST ESTIMATE ORGANIZATION
Recap Sheet
Summary Sheet Summary Sheet Summary Sheet

Div 1 Div 2 Div 3
Worksheet 1 Worksheet 2 Worksheet 1 Worksheet 2
Recap Sheet contains summary of all division costs.

Each summary sheet contains the results of cost estimate for a specific
division.
Worksheets contain calculations and serve as backup for summary
sheets (such as cut and fill quantities, tonnage of steel, vol. of concrete)
COST ESTIMATE ORGANIZATION
• One common method of organizing the cost estimate

(especially for building projects) is to follow the CSI
Masterformat’s 16 divisions. A newer version of
Masterformat contains 32 divisions, although the
original 16 divisions are still commonly used.
• Any item in the estimate can be tied to an item

number in the Masterformat.
• Go to http://www.gpcsa.org/ipin2/CSIDivisions.asp
for a listing of the 16 divisions.
SOURCES OF CONSTRUCTION
COST DATA
* Contractor's historical records
* Labor rates from public sources (prevailing rates)
and labor agreements
* Equipment rates from equipment rentals or sources such
as Blue Book Equipment rental Rates
* Cost data published by ...
- R.S. Means, Inc.
- Walker's Bldg. Estimator's Ref.
- Dodge
- Richardson (heavy)
Outline

• Costs
• Scheduling
• Project control
Planning & Scheduling Tools
• Barchart
• Network-based scheduling techniques (CPM
and PERT)
• Linear Scheduling Method (LSM)
Barcharts
Barcharts
• Barchart or Gantt Chart was first introduced by
Henry Gantt early in the 20th century.
• Pros:
• Easy to use and understand
• Everybody is familiar with the barchart in
the industry
• A broad and flexible planning tool
Barcharts
• Cons:
• Activity interrelationships (sequences) are not
evident, especially in large complicated projects.
• The effect of one activity’s delay on total project
duration is not apparent from the barchart and
cannot be calculated systematically.
• Not sufficiently powerful for control and progress
reporting.
"Anything that is complex is not useful
and anything that is useful is simple.”
Mikhail Kalashnikov
Critical Path Method
• Historical Background…
• CPM was developed during 1956-1959 as a result of a joint effort by DuPont

Company and Remington Rand Univac. The main objective of CPM researchers
was to develop a planning/scheduling and control system to help managers reduce
construction and maintenance duration times.
• Concurrent with this research effort, another team comprised of researchers from
Lockheed, Navy, and Booz.Allen & Hamilton, developed PERT (Project Evaluation
and Review Technique). PERT was created to help better organize and manage the
huge POLARIS Weapons System Program. The major difference between PERT and
CPM was that with PERT, the uncertainty associated with activity durations was
considered and a probabilistic approach was used to compute the probability of
completing the total project before a specified date.
Network development
Network Scheduling
Important dates and milestones work as guidelines for
the scheduler. The scheduler has to fit project activities
within this milestones.
NTP
Building enclosure complete Finish
deadline
Network Schedule
C
Station
Construct
37 mos.
$100m
AA B DD FF HH
Design/
Design/ Approvals Transit
Transit Systems
Systems Testing
Testing
Permits
Permits 6 mos. NTP Construct
Construct Install
Install 4 4mos.
mos. Revenue
2525mos.
mos. $5m 15
15mos.
mos. 21
30mos.
mos. $15m
$35m $130m $100m
EE G
Vehicle
Vehicle Vehicle
Design
Design Manufacture
1818mos.
mos. 18 mos.
$15m $100m
Linear Scheduling Method (LSM)
Outline

• Costs
• Scheduling
• Project control
Project Cash Flow
• Purpose
• Have a plan for expenditure of funds during construction
• Determine payment amounts to the contractor/builder
• Use as a control tool to status project progress with
respect to budget and schedule
Developing Project Cash Flow Curves
• Create a schedule of values using a project management
software or a barchart.
• If using a project management software, simply cost load
activities (limit to 30 to 100 activities)
• Develop a histogram of costs assuming uniform expenditure
(or bell-shaped expenditure curves)
• Develop a cumulative expenditure curve (S-curve)
Example of Schedule of Values
Consider a segment of a two-lane rural highway with a length of 30,000
ft. The cost of the project is divided among four major activities and
indicated on the project barchart (cost-loaded). Develop project cash
flow curve and the S-Curve.
Developing Cash Flow Curves
Month 1 2 3 4 5 6
Earthwork 1500000 1500000 1500000 1500000
Base/subbase 400000 400000 400000
Asphalt 675000 675000
Road signs 200000
Expenditures $ 1,500,000 $ 1,500,000 $ 1,900,000 $ 1,900,000 $ 1,075,000 $ 875,000

Cumulative $ 1,500,000 $ 3,000,000 $ 4,900,000 $ 6,800,000 $ 7,875,000 $ 8,750,000
Project Cash Flow Curves
Expenditures Project S Curve
$2,000,000
$1,800,000 $10,000,000
$1,600,000 $9,000,000
$8,000,000
$1,400,000
$7,000,000
$1,200,000
$6,000,000
$1,000,000
$5,000,000
$800,000
$4,000,000
$600,000
$3,000,000
$400,000
$2,000,000
$200,000
$1,000,000
$- $-
1 2 3 4 5 6 1 2 3 4 5 6
Outline

• Costs
• Scheduling
• Project control
INTEGRATED COST/SCHEDULE CONTROL
COST INTEGRATED NETWORKS
• Work Breakdown Structure (WBS)

• Work Packages (WP)
• S- Curve
• Earned Value Analysis
Work Breakdown Structure
An Example of WBS / OBS
WBS Work Packages vs Schedule Bars
Project S Curve
Percent completion
100%
Finish timeTime
Earned Value Analysis
Percent completion
100%
BCWS
Delay
BCWP: Earned Value Budget underrun
ACWP
TIME Finish timeTime

NOW
This project as of now is running below budget but late!

Earned Value Analysis
EXAMPLE PROBLEM – Earned Value Analysis
A contractor has developed the following budgeted schedule for a highway project
(Fig. 1 next slide). Based on his experience and historical data (including overhead and
profit), the contractor has assigned the following “earned values” for bid items:
$ 7.75 per cy of earthwork

$ 27 per cy of base/subbase
$ 61 per cy of bituminous pavement
An average cross-section of the highway is given in Fig. 2 (next slide). Length of the
highway is 30,000 ft. The contractor has collected data every month on project
progress. The results are given in the table below.
Month 1 Month 2 Month 3 Month 4
Cy Cost $ Cy Cost $ Cy Cost $ Cy Cost $
Earthwork 175,000 1,200,000 200,000 1600,000 150,000 1100,000 120,000 950,000
Base 16,000 420,000 18,000 600,000
Pavement 5,000 380,000
EXAMPLE PROBLEM
SUMMARY
• We reviewed the management of infrastructure construction
as practiced in the United States.
• An overview of the industry was provided.
• Various contracting arrangements and stakeholders were
described.
• Common methods of estimating costs and developing
schedules were covered.
• Project controls (earned value analysis) was described.
Leading Multi-national
Teams
Dr. Nader Asgary, CIK President,
Prof. of Management and Economics,
and former Associate Provost
Bentley University
Nasgary@Bentely.edu
781-891-2784
1
CYRUS Institute of Knowledge
http://www.cyrusik.org/
ENTREPRENEURSHIP, INNOVATION, AND DEVELOPMENT

IN THE ERA OF GLOBALIZATION
Co-authors:
Dr. Nader Asgary: BU
Dr. Tarek Hatem: AUC
Dr. Emerson António Maccari
Dr. Marcos Rogério Mazieri
Uninove University in Brazil
2
Achievements
??????????
Team ??????????
Individual
?
S. Jobs
N. Mandela
T. Edison
M. Gandhi
H. Ford M. King
A CASTLE IS ONLY AS STRONG
AS THE PEOPLE WHO DEFEND
IT !
Examples:
4
The Wright Brothers - Innovation and
Team Work
• The Wright Brothers
• How We Invented The World?
https://www.youtube.com/watch?v=vvRBNuOr6OI
By David McCullough
• https://www.youtube.com/watch?v=ILxNvBbLTzU
• http://www.biography.com/news/the-wright-brothers-david-mccullough-book
5
Were the Wright brothers really first? Not in Brazil
Alberto Santos-Dumont
https://www.youtube.com/watch?v=o7Rf-MnERfo
Alberto Santos-Dumont
Born 20 July 1873

Palmira, Minas Gerais, Empire of
Brazil
Died 23 July 1932 (aged 59)
Guarujá, São Paulo, Brazil
Resting place São João Batista Cemetery, Rio de
Janeiro, Brazil
Occupation Aviator, inventor
Honours Grand Officier de la Légion d'honneur
6
Hyperloop: MIT Students Design 700mph Travel Pods
https://www.inverse.com/article/10841-mit-wins-spacex-hyperloop-design-competition
7
Teams Performance
Homogeneous
Diverse Diverse
Number
of Teams
Low Performance High
8
Diversity in Teams
• Diverse teams provide

– A wide range of perspectives
– A large variety of potential solutions for
problems or opportunities
– The potential for synergy
– But … there is the potential for conflict
as individuals may interpret events and
information differently
9
An Example: Royal Dutch Shell
• Project teams: defined duration, clear deliverables.

• Management teams: indefinite length, clear membership,
high-level deliverables.
• Production/work teams: regular and on-going work (e.g.
accounting, finance, R&D).
• Service teams: regular and on-going support (e.g. IT
support, HR support for a global business unit).
• Action teams: fast and fluid (e.g. emergency response
teams).
This list was compiled by Arie Baan of Royal Dutch Shell to describe the scope of global teams at that company.
Personal communication
10
Managing Global Innovation
Lit. Survey
Title “Traditional practices won’t work. You
need a stricter, more top-down playbook”,
by Wilson and Doz (2012), HBR
Authors of the Book “Managing Global
Innovation”
Background: Spent 10 year, 47 companies (i.e.,
Citi, HP, Intel, Infosys, Samsung, etc.). In 2004 teamed
with Booz & Company to conduct a global survey. 186
companies, 19 countries, 17 sectors, with combined
innovation spend $78 billion
11
10 Rules
1. Start Small
2. Provide Stable Organizational
Context
3. Assign Oversite and Support to a
Senior Management
4. Use Rigorous Project Management
and Seasoned Leaders
5. Appoint a Lead Site 12
Cont.
6. Define Innovation Clearly
7. Allocate Resources Based on
Capability NOT Availability
8. Build Knowledge Overlap for
Collaboration
9. Limit the Number of Subcontracts
and Partners
10. Don’t Rely only on Technology for 13
Communication
A Systematic Approach
Foundation of Global Business: A System
Approach by Asgary et. al., (2015), IAP.
Management of Technology - Based
Projects, (2014) by Hans J. Thamhain,
Wiley.
Leadership Lessons from Managing
Multinational Project Teams, by Asgary
and Thamhain (2016).
• International Journal of Innovation and Technology Management, 2016
14
Leadership Lessons from Managing
Multinational Project Teams
Objectives is to improve the understanding
of the:
1. Dynamics and interaction of culturally
diverse project teams
2. Influences of managerial leadership on
performance.
Special focus is on complex, technology-based, geographically
dispersed project environments.
15
Leadership Lessons…
Finding
• Personal interest
• Pride and satisfaction
• Professional work challenge
• Accomplishments and recognition
16
Other Studies
• Estimates suggest that within the U.S.
alone, over 8 million employees are part of
such distributed teams (Nellore &
Balachandra, 2001).
• In Brazil ?
17
Survey of 10,000 PMs, VPs, GMs
 Of all issues that critically impact project

performance, over 60% have their root-cause
on the people side (conflict, attitude,
commitment, cooperation, culture, values, …)
 Over 75% of all project failures are being
blamed on management & leadership issues.
 PM researchers put the numbers even higher!
(e.g. Hubble Telescope).
18
HQTS
19
Organizational
Culture Structure
Work & Unified
Work-Command &
Control
Processes
Fast Changes
Support Sys
Time
Zones 20
Teamwork Leadership
Commitment
Motivation Politics
Managing
Conflict w/o formal
People Power
authority
Trust
21
Because of this complexity…
22
Critical Insight #1
To be effective, team leaders must integrate
• Organizational System
• Admin system, business process, IT
• Managerial Controls
• Direction, leadership, reward, punishment, policies,
procedures
• Personal Attitude & Self-Control
Personal drive, motivation, professional interest, desire,

peer pressure, ownership, commitment, etc.
23
As organizations become flatter, leaner, more agile
and self-directed, much of enterprise performance is
team-centered
– Project leaders must manage with little or no
formal authority
– Authority must be earned
– Leadership effectiveness involves many
components (empowerment, competence, trust,
respect, commitment...)
– Team leader’s role is facilitator & cheerleader
24
Critical Insight #2
In complex work environments, most management “control” is
derived from
– Personal drive, motivation and determination to
reach agreed-on objectives
– Unified team spirit and can-do attitude
• Professionally stimulating work environment

• Ownership & commitment
• Job skills & confidence.
25
26
American Football – team work
NBA Finals battle between Lebron James'
Cavs and Stephen Curry's Warriors
Hyperloop: MIT students team design 700mph

travel pods
https://www.inverse.com/article/10841-mit-wins-spacex-hyperloop-design-
competition
27
Core Management Issues for
Today’s Complex Projects
 Manage “Technical” Work Content
 Manage Talent
 Manage Knowledge
 Manage Information
 Manage Communications
 Manage Collaboration and Commitment
 Build Supportive Organizational Environment
 Ensure Direction and Leadership.
28
29
Jeff Immelt (GE):
“I’m proud of our team. They are
passionate and committed. …I
spend about one-third of my time
with my partner Bill Conaty (HR).
We recruit, we train, we develop,
we improve. We think about
people constantly…“
30
Bill Gates (MS):
“All people we hire are technically

competent. But, they also must
have people skills…..”
31
Managing Project Teams: What we know
Project
Team
Team Leadership
.
Behavior
Business
Process
Leadership Project
Management
Group
Non-linearities
Dynamics ? Risk
32
What Do We Know About
Managing Teams?
A Lot about… Little about…
• Process - Dynamics
- Non-linearity
• Interfaces
- Uncertainties & risks
• Barriers - Cost
• Complexities - B-success, Key Performance
• Leadership Indicators (KPI)
- Critical Success Factors(CSF)

• Teamwork
33
We are less sure on…
1. What is high team performance (METRICS)?
2. What influences team performance (MODEL)?
3. Which influences are controllable by mgrs?
4. What conditions are conducive to team
performance (CATALYSTS)?
5. How can mgrs control these influences
[ACTIONS?]
34
1. Project performance decreases with
complexity (i.e. more failures)
2. Team development time increases with
complexity
35
Team Development Time vs. Complexity
Not all team leaders are equal!

Execution…(High)
Time
(Low) … Project
(Low) ……..... Complexity ……..… (High)

36
External
Influences
Leadership
Style
Organizational Team
Environment Characteristics
Team Project
Perfor- Perfor-
Project Type & mance mance
Complexity Team/Work
Environment
Organization’s
Abilities
Team
&
Composition
Structures
Influences affecting team characteristics and performance
37
Traits of a
High-Performing Team
Membership
Self-Development Innovative Behavior
High Response Rate
Risk-Sharing
Conflict Management
Committed
Self-Directed The
Change Oriented Effective Effective
Communications
High Morale & Team Effective Cross-Functional
Team Spirit Interfaces & Alliances
Enjoy Work
Quality Oriented
High Need for
Achievements Minimal Reliance
on Procedures
38
Building High-Performing
Project Teams
39
40
41
What the Leader Expects from
the Team Members
 Project ownership and commitment
 Shared leadership
 Cooperation, team spirit, shared values
 Willingness to take and share risks
 Innovative, creative behavior
 Effective communication and interfacing High-Performing
Traits of a
Team
 Organize tasks and team assignments
Membership
Self-Development Innovative Behavior
High Response Rate
Risk-Sharing
Conflict Management
Committed
 Job skills and self-development Self-Directed
Change Oriented
High Morale &

The
Effective
Team
Effective
Communications
Effective Cross-Functional
Capacity for conflict resolution

Team Spirit

Interfaces & Alliances
Enjoy Work
Quality Oriented
High Need for
Minimal Reliance
Achievements
on Procedures
 Change orientation 25
 Accountability; self-direction and self-control

 Information processing, group decision making
 Continuous effort toward work process improvements 42
What the Team Expects
from the Leader
 Clear direction and leadership
 Clear expectations/objectives
 Autonomy and freedom
 Assist in problem solving
 Facilitate a quality work environment
 Create stimulating environment
 Encourage accomplishments
 Provide visibility and recognition
 Resist change and external pressures
 Deal with conflict and power struggles
 Provide stable work environment
43
 Facilitator
 Problem solver
 Conflict manager
 Cheerleader
44
Drivers Toward Team Performance
Variables Characteristics
Work Environment & Project Team
Characteristics of Work Environment:
1 Interesting, Stimulating Work 1.0
2 Accomplishment & Recognition 38. 1.0

27 .43 1.0
3 Conflict & Problem Resolution
.17 .32 3.8 1.0
4 Clear Organizational Objectives
.09 .39 .33 .32 1.0
5 Job Skills & Expertise
.29 .37 .27 .40 .17 1.0
6 Direction & Leadership
.29 .39 .43 .19 .09 .16 1.0
7 Trust, Respect, Credibility
.20 .31 .38 .02 0 .22 .37 1.0
8 Cross-Functional Coop & Support
.34 .23 .36 .22 .11 .13 .38 .47 1.0
9 Effective Communications
.38 .25 .36 .19 .08 .15 .17 .37 .29 1.0
10 Clear Project Plan & Support
.43 .18 .15 .12 .22 .20 .33 .11 .23 .05 1.0
11 Autonomy & Freedom
.10 .19 .09 0 .38 .20 .16 .03 0 .09 .22 1.0
12 Career Developmt/Advancement
.16 .16 .26 .10 -.1 0 .27 .15 .12 0 .15 .30 1.0
13 Job Security
Characteristics of Project Team:
14 Tolerance for Risk Taking .39 .27 .33 .21 .10 .27 .08 .37 .34 .42 .34 .12 .39 1.0
15 Effort + Commitment to Results .43 .35 .30 .28 0 .22 .40 .32 .27 .36 .36 .10 .34 .27 1.0
45
16 Innovative Team Performance .45 .32 .18 .36 .8 .28 .36 .24 .36 .25 .29 .10 .36 .43 .47 1.0
Effective Team Environment as a
Function of Perceived Success
(A Situational Insight to Project Management)
of Motivation …HIGH
Actual Success
LOW…Strength
Reduce risk Increase importance
LOW ….......…...Probability of Success (perceived)…......…. HIGH

46
 Poorly defined work integration/transfer
process, protocol & methods
 Role conflict, confusion over authority,
power struggles
 Lack of trust, accountability among team
members and/or group leaders
 Inappropriate information technologies
or infrastructure
 Unclear overall objectives, requirements
and success criteria
 Unclear work interfaces.
47
 Lack of senior management or sponsor
commitment/support
 Inaccurate/insufficient planning
 Insufficient project performance
measurements
 Insufficient communication/escalation of
problems
48
Many barriers and influences to project
team performance are similar for both
highly complex and less complex
project situations, however the effects
are .
Virtual and multinational team

approaches often amplify these
problems even further!
49
A professionally stimulating
environment
=
strong catalyst focusing
the team effort
on desired results !
Team Work-Penguins
https://www.youtube.com/watch?v=DI4zp7yeuMU
50
Key Influence Factors
People Side:
• Competence
All factors
• Work Challenge
are
• Commitment
interrelated
• Conflict
• Trust & Respect
• Risk.
51
Criteria for
Effective Team Leadership
Direct: Professionally stimulating,
challenging work environment
Recognition, accomplishments
Minimal conflict, anxieties, problems
Clear objectives & directions
Indirect:Effective communications; Job skills

Mgmt involvement & support
Stable work environment
The Three Stooges-Team Work/Leadership 52

https://www.youtube.com/watch?v=08sCJVa32ik
Leadership Style vs Level of Team Integration
….People Orientated Style Y…..High
Motivate Sell
Delegate Tell
LOW……..……Efficiency-Oriented Style X…..…….....HIGH
Phase 4: Phase 3: Phase 2: Phase 1:

Integration-II Integration-I Start-Up Formation
53
How Jobs – Led Apple
Computer
• Apple top 10 Innovation
• Apple – Steve Jobs

https://www.youtube.com/watch?v=f60dheI4ARg
54
Inspirational - United We Stand Divided
We Fall
• https://www.youtube.com/watch?v=GHErw
WV4cqI
Thank You!55
Exercise for Each Team
Define/ identify a project as a team
Identify three strength of your team
Identify three shortcomings of your team
Select a team leader
Draw conclusions about performance of
your team.
 Madagascar Penguins best and funniest team work
 https://www.youtube.com/watch?v=DI4zp7yeuMU
56
Questions ?
Thank You!
57

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Workbook

MG 755: Advanced International Project Management Topics

“Advanced International Project

Speaker & Affiliation Topic Presentation Presentation

Leandro Patah - leandro.patah@uol.com.br; Managing Innovation Projects in Monday Bentley University

B. Plant & Campus Visits:

Company Business Visiting Time Company Location

1. Managing Innovation Projects in Uncertain and Complex Environments …...…Section # 1

4. Innovation and Finance………………….. ………………………………………...Section # 4

3. Entrepreneurship and Innovation ………………..……………………….……….Section # 3

2. Project Management in Infrastructure and Construction..…....…………………Section # 2

5. Project and Innovation Teams……………...............................................................Section # 5

B. Readings - Papers and Case Study

Reading # 1, Prof. Patah

Prof. Leandro Patah, PhD

 Managing Innovation Projects in Uncertain and Complex Environ.

 Innovation in Innovative Projects

 Uncertain Environments: Sounds Familiar?

 Complexity in the Business Environment

 Complex Projects: Characteristics and Management

 Managing Innovation Projects in Uncertain and Complex Environ.

 Innovation in Innovative Projects

 Uncertain Environments: Sounds Familiar?

 Complexity in the Business Environment

 Complex Projects: Characteristics and Management

• “Innovation is the implementation of a new or

Fonte: OCDE (2005).

• “Project is a temporary effort undertaken to create a

Fonte: PMI (2013).

• “Innovation is the implementation of a new or significantly improved product (or

• “Project is a temporary effort undertaken to create a unique product, service or result”

• Project assumes Innovation, even small: exclusive!

• And Innovation depends on Project: implementation!

• Contextualization: expansion of the concept of project management to incorporate

Fonte: Svejvig & Anderson (2015).

Fonte: Forbes (2016).

Fonte: MIT (2017).

• Born in South Africa, Canadian and American, 46 years old,

• Fortune: $ 15.7 billion

• "The Iron Man of Real Life"

Fonte: Wikipedia (2017).

• High Speed ​Passenger Transportation

• implantable Brain Computer Interfaces

• Manufacturer of fully electric cars, founded in 2003 by 2 other entrepreneurs. In 2004

• Estimated cost $6 billion

• The Boring Company (TBC) also meaning To Be Continued, Tunnels R

• Neuralink objective is to make devices to treat serious brain diseases in the

• OpenAI is a non-profit artificial intelligence research company, that aims to

 Managing Innovation Projects in Uncertain and Complex Environ.

 Innovation in Innovative Projects

 Uncertain Environments: Sounds Familiar?

 Complexity in the Business Environment

 Complex Projects: Characteristics and Management

11/2009 09/2013 04/2016 08/2017

Source: The Economist (2016).

Source: The Economist (2016).

Source: The Economist (2016).

Source: Folha de Sao Paulo (2016).

 Managing Innovation Projects in Uncertain and Complex Environ.

 Innovation in Innovative Projects

 Uncertain Environments: Sounds Familiar?

 Complexity in the Business Environment

• High Speed Passenger Transportation