Open access peer-reviewed chapter - ONLINE FIRST

Balancing Hedging and Flexing for Inclusive Project Management

Written By

Wim Leendertse, Bert de Groot and Tim Busscher

Submitted: January 15th, 2022 Reviewed: February 1st, 2022 Published: May 12th, 2022

DOI: 10.5772/intechopen.102972

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Project Management - New Trends and Applications Edited by Marinela Mircea

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Project Management - New Trends and Applications [Working Title]

Prof. Marinela Mircea and Dr. Tien M. Manh Nguyen

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Abstract

Current project management often emphasizes hedging through a strictly phased and funneled development of the project scope. However, an increasingly engaged project environment and rise in the complexity of societal challenges cause an emerging demand for more open and interactive ways of managing projects. This requires projects to adopt an integrated management approach that focuses on flexing, which emphasizes the ability of a project to adapt to and co-create with the environment. Overemphasizing flexing, however, may undermine the controlled nature of project management. Therefore, it is necessary to find a form of project management that is both open and interactive without losing control. On the basis of specific project contexts and characteristics, this chapter presents criteria and tools for balancing hedging and flexing for inclusive project management.

Keywords

  • project management
  • hedging
  • flexing
  • stakeholder participation

1. Introduction

Our society is presented with grand challenges. We have to deal with many issues at the same time, such as climate change, the energy transition, the transition to a circular economy, empowered citizens, the increasing role of digitization, increasing attention to the living environment and nature, etc. This means that projects, which can be seen as interventions in our society, can no longer be separated from their environment. Current project management, however, still follows a hedging approach that is strongly based on the classical step-wise development of a predefined output, where the environment is seen as a threat that must be mitigated. In order to be able to respond to the increasing complexity of the project environment, there is an emerging demand for a more open and interactive approach to project management. We refer to this approach as a flexing approach. While a flexing approach may emphasize the ability of projects to move along with and shape their environment, this also increases the interdependencies between the project and its environment, thereby increasing complexity, leading to less control of the project and potentially causing projects to drift. Therefore, it is necessary to find a form of project management that is open and interactive without losing control. The theory and practice of process management offer valuable insights for this. On the basis of insights from recent project and process management literature, this chapter describes how strategies and instruments of process management can be combined with project management tools and techniques to come to a more open form of management without losing manageability.

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2. From hedging to flexing in project management

2.1 What is meant by “project” and “project management”?

Literature has numerous definitions of the term “project.” One of the most used definitions was developed by Turner and Müller [1], who define a project as a temporary endeavor in which human, material, and financial resources are organized in a novel way, to undertake a unique scope of work, of given specification, within constraints of cost and time, so as to achieve beneficial change defined by quantitative and qualitative objectives. Following this definition, project management can be seen as the organizational activities, to be carried out by a plurality of specialized persons or groups, in a temporary joint venture that aims to deliver a clearly specified result within a limited period of time, within certain conditions and with finite resources. In short, project management concerns the application of knowledge, skills, tools, and techniques to ensure that project activities meet project requirements [2].

2.2 Limitations of classic project management

Classic project management is strongly focused on manageability and control. It is based on a causal rational paradigm [3, 4], where the process of managing a project is translated in a sequential and linear phasing of activities that should lead to a predefined result. This is further expressed in scope, cost, and time management using dedicated project management tools and techniques, suggesting that the appropriate use of these instruments leads to the intended result. In this paradigm, the project is regarded as a closed system with a clear boundary to its environment. This system is not isolated—there is interaction between the system and its environment—but changes in that environment may have a negative effect on project progress and are considered a potential threat that must be mitigated. Projects are therefore supposed to conduct risk analyses and develop contingency plans to cope with risk. In general, classic project management is based on advanced predictions that must be achieved via a strictly defined path through the correct and effective use of project management tools and techniques. These tools and techniques take the form of methods, rules, step-by-step procedures, frameworks, and models. A search on Google quickly reveals the multitude of project management tools and techniques and a multitude of handbooks that describe these [2, 5, 6]. Organizations such as the International Project Management Association (IPMA) and the Project Management Institute (PMI) even offer dedicated courses to learn these tools and techniques and to certify project managers.

However, due to this closed system perspective, potential opportunities may be missed and the defensive attitude may lead to problems in delivering projects. This limits the contribution that projects can (and should) make to the major societal challenges we are facing today and the potential use of opportunities as tool for adaptation. In addition, society is becoming increasingly engaged, and a sectoral project-oriented process without the engagement of its environment is no longer accepted. Or as Van Buuren et al. [7] argued, the main characteristic and focus of (classic) project management is its main disadvantage: it tends to focus primarily on the realization of one single project ambition, suffers from a singular logic, and is limited in terms of scope, budget, and time. An answer may be a more open system approach in which the boundary of the system becomes permeable and stakeholders are included as co-actors, especially in more dynamic environments with a relatively high degree of uncertainty. A shift in focus of project management from purely instrumental to more process-oriented.

2.3 From hedging to flexing

Classic project management, based on a hedging strategy, offers hardly any room for adjustments to the project scope, planning, or budget, to respond to changes in the environment. In general, hedging is less satisfactory in dynamic environments when complexity in and around the project is relatively high. In these cases, a process-oriented approach, or flexing, is more appropriate. Flexing is often characterized by a broader scope (integration of challenges), a flexible planning on various timescales (short, medium, and long term), interim monitoring, a partly flexible budget to which several parties contribute (co-financing), and involvement of stakeholders through open dialog and a co-creative approach. Determining the right mix, i.e., a balance between hedging and flexing (which may even change over time), is the key challenge in modern project management. This mix is determined by both the context of the project and the capabilities of the project organization. By “context” we mean the unique conditions in which the project is being managed [8], including the organization’s internal context (e.g., other projects, departments, and organizational strategy), and external context (e.g., stakeholders, adjacent environment). Table 1 shows main characteristics of classic project management and a process-oriented approach [9].

(Classic) project managementProcess management
Main focus
  • A well-thought-out solution to a problem

  • Organic development of a solution to a problem or problems through involvement of stakeholders and their interests

Dealing with dynamics
  • Through decisiveness and control

  • Through resilience, responsiveness and being open to other options

  • Changing circumstances must not affect the course of action

  • Changing circumstances are windows of opportunity.

  • The project has the ability to deal with change (adaptive capacity)

  • Closed system focus

  • Open system focus.

  • Interaction with the project environment for enrichment (opportunities, integration of challenges, engagement)

Context
  • A stable, predictable environment

  • An unstable, dynamic environment

Table 1.

Main characteristics of (classic) project management and process management (derived from [9]).

In the next sections, we will first look at the context of a project from a complexity perspective. Higher degrees of complexity of a project and/or its environment require the project to deal with higher levels of uncertainty, which requires more flexibility of the project. Then we will discuss strategies to open project boundaries and to increase the ability of a project to reach out to its environment through stakeholder engagement, active opportunity seeking, and inclusive planning. Subsequently, we will discuss the ability of the project organization itself to proactively deal with uncertainty. In the final section, we will bring it all together as related building blocks for next-generation project management.

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3. Projects and complexity

Complexity is an often-used concept in project development and management. In our daily use, it often refers to the perspective of the project participants on the difficulty of a project. From a more fundamental perspective, complexity revolves around actors or elements in or close to a project that interact with each other in a reciprocal way. For example, nowadays, the project environment in both project development and implementation requires intensive interaction, which may lead to a multitude of interdependent relationships of the project with its environment.

Not all projects are necessarily complex. Some projects can be classified as simple or complicated. The degree of complexity—i.e., a simple, complicated, or complex project—has implications for project management; or at least, it should have. Higher degrees of complexity often imply more uncertainty, more vulnerability for change, and need a management style that can deal with this. In general, simple or complicated projects can be managed on the basis of a hedging project management approach, whereas complex projects need more flexibility and a more flexing project management approach.

On the basis of a recent literature review of international peer-reviewed journals on project complexity, four forms of complexity can be distilled: technical or structural complexity, organizational complexity, contextual complexity, and institutional complexity [10]. Projects may have to deal with any form of complexity. Technical or structural complexity relates to the tasks and substantive aspects of a project. This not only includes the diversity and number of tasks or aspects within a project, but also the interdependencies between tasks or technologies. Organizational complexity relates to the organizational structure of the project or its parent organization. A complex organizational structure is one that consists of several interdependent parts. Institutional complexity is the result of different institutional logics of the actors involved in a project. Institutional logics influence personal definitions and working methods, which are partly shaped by the cultural and political background of the actors. For this chapter, especially the fourth identified type of complexity, the concept of contextual complexity, is relevant. Contextual complexityis described in literature as the complexity resulting from environmental influences. The literature review of Busscher et al. [10] revealed several indicators of contextual complexity, which can be used to assess the degree of complexity of a project in a specific context. The following indicators were found in the studied literature: the amount of project stakeholders, the level of sociopolitical interests or influence in project, the degree of support (from stakeholders) for the project, the internal (intra organizational) support for the project, the degree of competition in the market, geographical differences in regulations, the level of influence of contextual developments on the project, and the amount and intensity of social discussions.

As mentioned above, a higher degree of contextual complexity needs more flexibility of the project—or a more flexing style of project management. However, the need for flexibility does not (always) match the possibilities to be flexible in every phase of the project life cycle [11]. For instance, the need for flexibility may be high in the planning phase and the beginning of the execution phase when the design is elaborated and stakeholders are confronted with the concrete effects of the intervention. As the design evolves, the possibilities for flexibility will decrease and will be lower in the end of the planning phase and low in the execution phase and termination phase. Typically, in project management, a change of phase comes with an intermediate decision, which fixes the boundary conditions for the next phase and by doing so reduces the opportunities for flexibility.

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4. Strategies, tools, and techniques to deal with contextual complexity

4.1 Stakeholder management and opportunity management

Already in the 1980s of the last century, Cleland (1986) introduced stakeholder thinking into project management. Since then, the importance of stakeholder managementin project management has increased, i.e., the process of adapting the specifications, plans, and approaches to the different concerns and expectations of the various stakeholders [2]. A stakeholder can be defined as a group or individual that has an interest in the success or failure of a project [12]. Stakeholder management is the process of managing the expectations of anyone who has an interest in a project or will be affected by its deliverables or outputs. Stakeholder management typically has been used as an iterative process of identifying and analyzing stakeholders from a project perspective, defining strategies and accompanying measures, implementing the measures, and evaluating the effectiveness (plan-do-check-act). In this approach, the stakeholders are considered manageable to meet project goals [13]. Together with the development of stakeholder management also opportunity managementgained increasing attention. Opportunity management can be seen as the inverse of risk management, in the sense that risk management seeks to proactively minimize the probability and/or negative effect of a potential event on a project and opportunity management, in turn, seeks to maximize opportunities that can bring value to a project by connecting project challenges to stakeholder challenges [14]. From a project management perspective, an opportunity is an uncertainty that potentially adds more value to the project than the potential loss of value it may bring along [15]. This interpretation of opportunity management is based on the Mutual Gains Approach as developed at Harvard University in the beginning of this century [16, 17]. Being able to seize opportunities increases the flexibility of the project, since the extra value of an opportunity may be used to, for example, extend the scope of the project or compensate for potential time or cost overruns.

4.2 Co-development

This leaves the question: can one really manage stakeholders and the project environment? As mentioned above, society becomes more emancipated. People take responsibility to design their own environment, and citizens’ initiatives are becoming more and more common [18]. The power of interest groups, NGOs, and individual stakeholders is increasing. These developments imply that projects can no longer act autonomously and instead have to work together with stakeholders. Stakeholder and opportunity management thus have to shift to an orientation focused on co-development. In contrast to “management of stakeholders,” a “management for stakeholders”approach embraces all the stakeholders and tries to reach win-win situations [19]. In line with this approach, participation through co-development is broadly discussed in planning and management literature in the last decades [20, 21, 22, 23, 24, 25].

Co-developmentcan be defined as the joint development and improvement of policies and services at an equal level through constructive dialog [26]. Dialog means interactivity, engagement, and a propensity to act on both sides. It is about empathic understanding of both sides and a communication of equals. The intensity of joint activities can differ (see, for example, the classic ladder of participation by Arnstein, 1966), but communication and information exchange are always the basis for any stakeholder involvement. Attuning and adjusting mutual activities can be added on top of communication and information exchange so as to achieve results more efficiently, i.e., mutual coordination. When, in addition to the abovementioned activities, also resources are exchanged, one may speak of cooperation. Collaboration is considered the ultimate form of cooperation, where information, activities, resources, and responsibilities are jointly planned, implemented, and evaluated to achieve a common goal [27]. In all these definitions, joint development in equity, interaction, and dialog influence on agenda setting, high involvement and common goals are main characteristics of co-development.

4.3 Engaging stakeholders and issue management

Co-development in a project environment means that the project engages the stakeholders in a collaborative problem-solving process [28]. The project organization respects and uses the expertise of the stakeholders and is open and willing to share all information necessary for a joint project design. The design is based on problem-specific interaction involving the interests of all relevant stakeholders. The decision-making is based on the weighing of interests in what Aaltonen & Sivonen [29] describe as an adaptation strategy. Figure 1 shows different corresponding strategies as mentioned in literature the axis from (classic) project management to process management.

Figure 1.

Strategies for project and process management.

Strategic stakeholder Involvement(SSI) is a practical tool to engage stakeholders in co-development [30]. This approach combines traditional stakeholder management, designed to minimize risks caused by parties with different interests, with seizing opportunities through issue management. Issue managemententails a process of continuously scanning the environment for new issues, which are developments or events that might happen and force stakeholders to take position. Issues come and go and change over time. Central to issue management is the identification of issues that may influence the project or may be influenced by the project and address these in interaction with the stakeholders from a win-win perspective.

4.4 Co-creation and social design

The descriptions above are based on a so-called inside-out perspective, which looks at the environment from within the project. At the same time, the project can also be seen as an instrument that may contribute to solving broader social issues. This perspective works from the outside-in and assumes the project goal and task to be only one of the goals and tasks that have to be tackled in interaction with and between stakeholders, thus opening the box [13].

Social designis a design methodology to tackle complex issues, placing the combined social issues as the priority. The basic idea is to break down the walls between disciplines and enable truly interdisciplinary work to take place. The classic approach of project management starts with a (project) problem and organizes the most efficient path to come to a predefined output or outcome, which solves that problem. Social design is based on the process and principles of design thinking developed by the British Design Counsel (www.designcounsil.org.uk), the “Double Diamond” or “4D” model. In this approach, the design process starts with a joint problem definition involving all relevant problems of the project and its context and their stakeholders. The idea is that actors collectively scan a relevant context around the project searching for problems and issues. Based on a joint problem definition, information is gathered and possible combinations are developed in a co-creative process. In contrast to the traditional project management life cycle, this process is not linear from problem to solution, but interactively dynamic via diverging and converging stages [20, 31]. Figure 2 shows the typical steps of a social design process.

Figure 2.

Process steps of social design (source: British Design Counsel).

Social design may lead to more integrated solutions and a higher degree of acceptance. However, to keep the process manageable, it is necessary to add some hedging elements to the process, for example, by setting milestones, by setting clear and smart boundaries, and by transparently communicating about the boundaries of the decision-making process.

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5. Building project flexibility

The project context is essential for the successful management of a project [32]. As mentioned above, project organizations need to be responsive and open up to their context and engage stakeholders to enable project success. This requires considerable flexibility of the project organization, as it includes giving room for co-development and co-creation and at the same time keeping the project manageable [8]. Olsson [33] defines project flexibility as the capability to adjust the project to prospective consequences of uncertain circumstances within the context of the project. Adopting a flexible approach improves not only the project results, but also the evaluation of the project management itself.

The extended Pentagon model of Rolstadås et al. [34] offers a model to connect the project management process to the external context through so-called formal qualities, such as structure and technologies, and informal qualities, such as culture, social relations and networks, and interaction (see Figure 3).

Figure 3.

The extended pentagon model (source: [34]).

The distinction between formal and informal qualities may be viewed as hedging versus flexing, controlling versus emerging, or prescriptive versus adaptive. In this model, flexibility is created through the interaction between formal and informal qualities of project organizations. For example, rules may formally be more loosely defined to allow informal qualities to be revealed. Building on this, Sohi et al. [35] delivered a list of flexibility enablers regarding both formal and informal qualities of project organizations as shown in Table 2.

Extended pentagon modelFlexibility enablersCollective learning
Formal qualitiesStructure• Broad task definition• Institutional design
• Functional-based contracts• Multilevel integration
• Standardized processes
• Stable teams
• Self-steering of the project team
• Self-assigning of individuals to tasks
• Late locking
• Short feedback loops
• Continuous locking (iterative)
• Iterative planning
• Iterative delivery
Technologies• Contingency planning• Information management
• Visualized project planning and progress
• Shared interface management
• Joint project office
Informal qualitiesCulture• Seizing opportunities and coping with threats• Diversity
• Possible alternatives• Scope for change
• Embrace change as much as needed• Leadership
• Team priority over individual priority• Capabilities of individuals
• Consensus among team members
Interaction• Open information exchange among different groups• Rules for dialog
Social relations and networks• Trust among involved parties• Trust and open atmosphere
• Network structure rather than hierarchical structure• Informal network
• Team members as stakeholders• Learning platforms
• Continuous learning

Table 2.

Overview of the extended pentagon model in relation to flexibility enablers and collective learning.

The model is dynamic and involves continuous iterative processes within the project organization and interaction with external stakeholders and contexts. The project team members receive feedback from stakeholders or the context. This feedback is interpreted both individually and collectively. Positive feedback reinforces successful practices, whereas negative feedback will lead to an attempt to alter existing practices. This multilevel process of collective learning is a process of adaptation consisting of changes in common understanding, mutual agreement, and collective action. The ability to build new knowledge, relationships, and practices in response to complex environmental challenges links (collective) learning to flexibility. In fact, collective learning may even be considered a proxy for flexibility. De Groot et al. [36] describe in their article typical identifiers of collective learning in project-oriented organizations as summarized in Table 2.

The enablers and indicators shown in Table 2 resemble the aforementioned characteristics of process management (see Table 1). In general, adaptive project management or flexibility requires a more open approach both within the system of a project organization and through interaction with the project context.

While this might be seen to decrease the control of the project, an open approach does not necessarily lead to a loss of control, but to a different form of control. Project organizations still need a solid structurewith clear roles and responsibilities. However, to enable flexibility, project management may lower barriers between disciplines and promote horizontal and vertical integration through cross-discipline meeting structures and decision-making processes. Project organizations still need technologies, such as skills, tools, and techniques to manage the project. However, the corresponding tools and infrastructure may allow for more explicit anticipation of contingencies through, for example, scenario analyses or systems that enable easy access to information throughout the project organization. Finally, there needs to be a culturethat enables flexibility. Team members may have to get used to a (partially) new way of working. They may be encouraged to look for creative and integral solutions and to view changes as opportunities. In this, important is the organization of interactionthrough social relations and networksbased on open information exchange leading to trust and effective collaboration within the project organization and with the project’s stakeholders.

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6. Balancing hedging and flexing for inclusive project management

Classic project management is based on a closed system approach, where the context is typically seen as a threat for the efficient delivering of the project output or outcome, which has to be mitigated through risk management. We referred to this as a hedging approach. However, the increasingly dynamic and engaged society requires an open (inclusive) approach, where challenges are integrated and stakeholders are involved in the development of the project. In general, opening project boundaries may lead to higher contextual complexity. A higher degree of contextual complexity needs more flexibility of the project or a more flexing style of project management. This leads to an important paradox in current project management. To efficiently manage their projects, project managers need (or are forced) to organize interaction with the project context or their community of interest, while involving more stakeholders or integrating more challenges in the project will lead to more (contextual) complexity and more uncertainty. Consequently, an important task for the project manager is to find a balanced mix between hedging and flexing tools and techniques. Adding to the challenge is the fact that this mix may change during the project phases, because the need for flexing and the possibilities to implement flexing tools and techniques differ per project stage. In practice, in the planning phase, the need for flexibility is relatively high because the elaboration of the project design confronts stakeholders with the concrete effects of interventions, whereas the possibilities to flex are relatively high in this phase because there are still relatively few agreements, little expenses made, and hardly any concrete results realized. As a project progresses, it becomes increasingly difficult to alter the desired project output due to, for example, ongoing agreements between stakeholders and realized project parts limiting the possibilities for other solutions. However, implementing flexing tools and techniques to engage stakeholders remains also in the latter phases important as (most) projects are realized in a continuously changing environment.

Figure 4 gives an overview of the building blocks that become increasingly important in modern, inclusive project management; arranged in such a way that from the left to the right, tools and techniques offer more flexibility.

Figure 4.

Building blocks for inclusive project management.

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7. Conclusion

This chapter has provided an array of tools and techniques that can be used to compose a balanced mix of hedging and flexing for inclusive project management. As such, it provides the building blocks that help to shift the orientation of project managers from a project-problem centrality to a focus on multiple contextual problems and challenges. We argue that project organizations should always strive for project flexibility. Projects, being simple, complicated, or complex, are always potentially confronted with unexpected events. Being flexible may then be the answer to deal with these uncertainties. As discussed above, being able to create diversity and learning are key to increase project flexibility.

Projects are temporary endeavors, which means that they have a beginning and an end. As discussed, in dynamic and engaged contexts, a more open approach of project management may be necessary, which potentially leads to more diversity. However, to come to an end, this diversity has to be converged and funneled by intermediate decision-making or hedging. The real art of modern, inclusive project management is defining a balanced mix of hedging and flexing in every phase of the project.

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Written By

Wim Leendertse, Bert de Groot and Tim Busscher

Submitted: January 15th, 2022 Reviewed: February 1st, 2022 Published: May 12th, 2022