Author: Drew Davison

Drew Davison is the owner and principal consultant at Davison Consulting and a former system development executive. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check - The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath - The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at [email protected]

From the Sponsor’s Desk – Seven Rules for Successful Outsourcing

In my last post, The Need to Confront Executive Edicts, we looked at the damage a well-intentioned edict from a CEO inflicted on a project and its participants, how the project fared and what could have been done to turn the outcome into a win-win situation.

In this post, we’ll see what steps one organization took to reduce its operating expenses by outsourcing key human resource functions and the consequences it reaped by focusing only on the financial outcomes. We’ll also look at the steps it could have taken to yield a very different result.

Thanks to G.A. for the details on this case.

The Situation

This mid-size technology organization had encountered a downturn in business and revenue when the financial meltdown hit in 2008. The CEO and CFO responded with staff layoffs and compensation reductions but the organization was still facing a cash crunch. The CEO challenged the CFO to scour the organization’s expenses to find other opportunities to cut costs.

One of the areas the CFO highlighted was the Human Resources organization. The function reported to him so a lengthy senior management battle wouldn’t be required. In addition, a number of his colleagues in other firms had mentioned successfully outsourcing their human resource functions while achieving a significant reduction in costs. As well, the CFO would be seen as being proactive and leading the charge to reduce costs. So he reviewed the opportunity with the CEO.

The CEO was enthused with the idea. The existing HR organization cost in excess of $3 million annually. If they could cut that cost by one third or more, it would give them ongoing relief and have a positive impact on the bottom line. The CEO and CFO agreed to proceed with outsourcing of the HR function.

The Goal

To save $1 million or more annually through the outsourcing of the HR function. The HR Director and a few senior staff would be retained to look after the HR needs of the company’s executives. The target was to have the changeover completed within four months.

The Project

The CFO immediately got in touch with two colleagues who had mentioned successfully outsourcing human resources functions. Both used the same outsourcer. They indicated that the outsourcing organization picked up responsibility for placement, payroll, promotions, compensation adjustments, leaves, internal staff moves, contract administration, terminations and the usual suite of HR functions. Their services were accessible through a fully secure internet environment. The only services they explicitly excluded from their offerings were recruiting and screening.

Because of the four month target and the glowing reports from his colleagues about the outsourcer’s performance, the CFO contacted the outsourcer’s local agent directly and set up a meeting to review their offerings and figure out next steps should the meeting go well. Then he talked to the Human Resources Director about the plans. Understandably, the HR Director was livid. He suggested some alternatives. They could look at short term refinements in the current processes. They could launch a reengineering initiative to completely revamp their current processes. They could evaluate a number of Software as a Service (SaaS) offerings he was aware of. Finally, they needed to at least consider other outsourcers and assess their collective offerings, performance and client ratings before making a decision. They also needed to engage with other company managers to get their input on the challenge and the options available.

The CFO saw the suggestions from the HR Director as a delaying tactic. They would have involved more people both inside and outside the organization. They would have involved additional time, cost and debate to arrive at a consensus. The CFO had the CEO’s backing. He felt he needed to act. So the CFO and HR Director met with the targeted outsourcer. They were both impressed with the outsourcers claimed capabilities and client list. When the discussions got down to money, the outsourcers initial cost figures were about double what the CFO was looking for. Negotiations continued for a period of time after the meeting. The CFO become frustrated with the pace of the discussions and finally issued an ultimatum – give me your best price and most aggressive plan to complete the transition or look elsewhere for business. The outsourcer responded with an offer that would reduce the annual HR costs by 25% and complete in eighteen weeks from the date of contract signing.

The CFO reviewed the proposal with the CEO and recommended that they proceed with the deal. The CEO agreed and signed on the dotted line. The project was launched. The CFO then informed the HR Director that the project was his to implement. So, the HR Director sent an email out to all management and staff announcing the deal and the timeframe. He assured everyone that the new arrangement would live up to the “standards of excellence” currently provided by the HR organization. He prepared and distributed a separate letter to the HR staff identifying who would be let go and outlining the termination process and timing. He sent out a third missive to the company’s executives identifying the in-house contacts who would look after their HR needs. Finally, he assigned a senior member of his organization to run the project and work with the outsourcer to make everything happen as planned.

The Results

The project was delivered and operational in twenty-six weeks, two months later than planned. The operational impact was hugely negative. Responsibility for recruiting and screening was thrown back on line managers. Services that used to take a day or two, required weeks, sometimes months. Somehow, some of the data provided by HR to the outsourcer was corrupted. That resulted in some employees being in the wrong organizations, in the wrong pay grades, with the wrong employment status. Security was compromised when notices of termination were not appropriately forwarded to remove departed employees’ system and physical access. Compensation for two company executives was mishandled, to the executives’ detriment, because special arrangements weren’t passed to the outsourcer. Response to problems was abysmal.

There was such an uproar among company managers and executives that the CFO dismissed the HR Director and brought in a contract HR professional to do damage control and fix the problems. The contractor immediately brought together representatives from the management and executive ranks, IT, the remaining HR staff and the outsourcer to identify and prioritize the problems and put an action plan in place. He also worked with the group to establish some basic service standards. He set up a hot line for use by company managers and staff to record problems and feed them into the priority setting process. Finally, he produced a weekly bulletin for management that addressed progress against the plan and performance against standards.

An audit requested by the CEO and done about six months after the situation stabilized revealed that actual cost savings would be about $200,000 annually, dramatically below what was expected. The difference was attributable to three factors – higher outsourcing costs from processing more staff and functions than originally planned, the number of “special situations” that needed to be addressed on an exception basis and the retention of more HR staff than originally planned to support executive needs. The audit report noted the increased load on management ranks for recruiting and screening activity but didn’t quantify the cost. The report also observed a reduction in respect for senior management’s leadership capability. As for the glowing outsourcer endorsements from the CFO’s colleagues, it seems they weren’t really in the know on the changes in their own organizations. According to them, everything seemed to be just fine but they weren’t really involved in the transition.

How a Great Leader Could Have Changed the Outcome

This case is similar, in many ways, to my last post. No question, there was an executive edict to cut costs and another one to outsource human resources functions. However, in the previous post, the Product Director did a number of things right and delivered a quality solution. In this case the HR Director chose to “just follow orders” and lost his job because of it. What could he have done differently to ensure a better outcome for himself and his company? Plenty! He needed to manage the change from beginning to end including understanding and articulating his role in the venture. Sure he was under extreme pressure, tight deadlines and the emotional turmoil from the need, potentially, to decimate his organization. All the more reason for a clear, measured response. The following steps would have helped him deliver successfully, regardless of the solution chosen.

  1. He needed to separate the problem from the solution. The company needed to save money quickly. That should have informed all future actions.
  2. He needed to identify impacted managers and executives and started the engagement process. Their participation was essential for a successful outcome regardless of the approach taken. And they could have been very useful allies in negotiating a more appropriate course of action.
  3. He should have solicited feedback on service and support needs – what services, how often, what time of year, turnaround needs, etc. and used this as a framework for establishing service standards for the future solution.
  4. He should have articulated end-to-end current service processes and costs, not just the HR portion of it, to compare against other alternatives.
  5. He needed to evaluate other alternatives and talk to customers using these services, even if only at a high level, to create a level playing field. Options could have included:
    1. Improve/reengineer current processes including more self-serve options for managers.
    2. Consider SaaS and vendor alternatives including the current HR software provider who may have been in a position to deliver other solutions.
    3. Consider other outsourcing candidates and whatever feedback they could provide regarding customer satisfaction and industry analysis.
  6. Within a couple of weeks of being told that outsourcing was a go, he needed to present a balanced assessment of the options, risks, issues, costs, benefits and potential timelines to senior management with his recommendation on how to achieve the desired outcomes. The executives had a vested interest in the success of the change. They needed to be involved in the decision and its execution. With the time pressure he was under, he needed to divide and conquer, to enlist the help of his senior staff to do some of the due diligence, to dialogue with HR colleagues and alternate vendors.
  7. Finally, he needed to recognize that he was responsible for managing the final operating solution and for managing the relationship with any selected outsourcers. In that context, he needed to guide whatever solution was selected to a successful outcome, keep all of the involved parties focused on the target outcomes and ensure adherence to those targets throughout the project.

You know the old saying, “haste makes waste”. It’s certainly true in this case. If you encounter a similar challenge, take a deep breath and approach the task at hand with a calm, cool and collected mindset. Leverage all those practices you know have been proven and add value. Marshall the insights and support of your colleagues. Involve the affected stakeholders right up front. Always consider alternatives, both business and technology, regardless of the edict. Finally, put these points on your checklist of things to do in future endeavours so you can be a Great Leader. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on.


Don’t forget to leave your comments below.

From the Sponsor’s Desk – The Need to Confront Executive Edicts

davison Feb19In my last post, Lessons from Being Acquired, we looked at the actions a managing partner took when her colleagues decided to pursue an offer to become part of a much larger professional services firm. Her up-front actions to engage her partners in a thorough assessment of the offer laid the foundation for a mostly successful transition and equipped the staff to deal with the challenges encountered.

Sometimes, a senior executive will proclaim an aggressive target hoping it will act as an incentive for the project team. In this post, we’ll look at the damage a well-intentioned edict from a CEO inflicted on a project and its participants, how the project fared and what could have been done to turn the outcome into a win-win situation.

Thanks to H.J. for the details on this case.

The Situation

This mid-size financial services organization had a well-rounded product and service portfolio of savings and investment products including an existing mutual fund line up and full services brokerage. The one service it didn’t have was a discount brokerage. The company had made several attempts to launch such a service but the initiative was always postponed or cancelled by other corporate priorities and developments in the marketplace.

Finally, the CEO decided that the time was right for the discount brokerage. He called in the CIO to discuss his plans and develop a ballpark target for the launch. Both executives had extensive experience with the industry and company. They reasoned that the company already offered mutual funds and a full service brokerage. How hard could it be to implement the new service? So they agreed on a three month target for the product launch which would also position its introduction at the start of the most active trading and investment period. 

The CEO then discussed his plans with the Marketing VP who was responsible for product development. The Marketing VP indicated he saw no reason why the three month target couldn’t be met. It was a go.

The Goal

To launch the discount brokerage in three months.

The Project

The Marketing VP broke the news to his Product Development Director. The Director’s initial reaction was “You’re joking, right?” The company had a well-defined and often used new product development process that had met the test of time. Typical elapsed time for new product and service launches ranged from seven to thirteen months. The Product Director pointed out that every part of the organization with the exception of their Real Estate division would have to make changes to their processes, systems and practices to support the new product. Three months was not doable! The Market VP’s response: “Give it your best shot”.

The Product Director met with the CIO to outline his concerns, seek support for extending the target date and, while he was at it, get the very best project manager he could get. Of course, the CIO was complicit with the CEO in setting the three month target so he presented the rationale he and the CEO had used to arrive at the target in the first place. The Product Director countered with his arguments, to no avail. The CIO’s stance: “Give it your best shot”. At least the Product Director was able to secure the services of one of the company’s best project managers.

The Product Director next met with the project manager and the head of the company’s PMO. Collectively they drafted an approach that they hoped could get them close to the three month target. Some of the practices they agreed to:

  • Apply the existing product development process rigorously. With the pressure from the tight target, this was no time to sacrifice rigor and jeopardize quality.
  • Apply the gating practices incorporated in the process. The gates would provide an excellent checkpoint for executive review and an opportunity to revise estimated costs and schedules.
  • Engage the heads of all affected areas up front. That included Marketing, Sales, Legal, Finance, IT and Client Services.
  • Leverage the CEO to explain to the organization the goal, the rationale and the expectations and to build the organizational commitment that would be needed to secure timely decisions and the right resources when needed.
  • Parallel as much of the work as possible. That could result in rework and the added cost and time that would entail but they didn’t see too many other options.
  • Use broad collaboration to develop and approve every project deliverable. That would mean huge scheduling challenges to get everyone involved in a timely fashion. They’d use the CEO to reinforce the priority of the undertaking on a regular basis.

Off they went. The project manager developed a plan with the participation of all the areas affected. The most optimistic completion date was in six months. The most pessimistic estimate? Thirteen months! The Product Director and PM knew that starting a project already a minimum of three months behind was a disaster waiting to happen. So they reviewed their plan with the Marketing VP and CIO and asked for an audience with the CEO to present their plan. The executives countered that they would keep the CEO in the loop and to “just give it your best shot”.

So they did. The product design proceeded in parallel with the contract work. The contract work encountered difficulties that required outside legal expertise. That delayed completion of the contract design and required changes. Also in parallel, the affected business areas analyzed and developed the business processes and practices that would be required to support the new product. That drove system design activity, job design work, development of marketing and sales materials, training programs, and finally coding and system testing.

Many of the design sessions had upwards of twenty staff representing the affected areas. The attitude was positive in the beginning but the frustrations started to build as contract and product design changes necessitated redo of already agreed to deliverables. Tracing changes though all deliverables was difficult and time-consuming. Many of the key staff were working twelve hour days and six day weeks. The Product Director and PM gave succinct, to the point weekly updates on progress to the Marketing VP, CIO and other involved executives.

Unfortunately, the Marketing VP and CIO were not completely honest with the CEO about the project’s progress. About two months in, the Customer Services VP had shared one of the PM’s status reports with the CEO and the shit hit the proverbial fan. The estimated completion date was five months beyond the initial three month target. The CEO was irate. He tore a strip off all the VP’s involved in the project but saved the real venom for the Marketing VP and CIO. The CEO’s dissatisfaction became common knowledge throughout the organization. The environment became sufficiently toxic that a number of people involved in the project resigned from the company including the Product Director, the project manager and a number of senior IT staff.

The Results

The project was delivered successfully in eight months. It was a quality implementation, the staffs affected were well trained, the new processes and systems worked as planned and the product was successful in the marketplace. But the project team felt that they had failed. The company perspective was also that the project had failed. There were no accolades, celebrations, promotions, pats on the back. There was, in fact, a palpable bitterness among project team members. They had worked their butts off, put in long days and many weekends, tried creative approaches to deliver early and had delivered everything that was asked for except hitting that stupid three month target. Respect for the CEO and the senior executives was at an all-time low. All of this because of an executive edict that should have been dealt with at the very start.

How a Great Leader Could Have Changed the Outcome

The unfortunate aspect of this case is that the Product Director and PM did a number of things right.

  • They lined up and leveraged most of the key stakeholders.
  • They developed and managed a risk plan that helped them prioritize effort and deal with the major risks first.
  • They used a tried and true product development process.
  • They ran activities in parallel in an attempt to accelerate delivery.
  • They built quality into every deliverable.

Unfortunately, they used the CEO as a mouthpiece to get priority resource commitments but they didn’t engage him as the project sponsor. In a previous post, Speaking Truth to Power, I reviewed a case where a contract PM confronted fundamental issues head on at the very start of his involvement, endured verbal abuse and threats of termination for the first two months before turning around the project and his tormentors.

In this situation, the Product Director should have met with his boss and the CEO to set the record straight right up front – there never was any hope of making the three month target. I know his boss said he’d keep the CEO apprised of progress. Not good enough! The CEO was the project’s sponsor. It was his baby. Without that face to face discussion and an acceptance by the CEO that he needed to listen to other alternatives, the project was doomed.

Had that discussion taken place, there were a number of options the Product Director could have presented and the CEO could have considered:

  • Launch the service with a minimal automated front end and add the back end systems solutions as they became available. The service volumes for the first six months could have been handled easily with this approach.
  • Phase the introduction to incorporate essential features and functions initially and add incremental features and functions over time.
  • Roll out the service by geographical area to constrain initial volumes and add additional regions as the delivered capability came on stream.
  • Any combination of the above.

Sure, pushing for a meeting with the CEO to discuss and agree on a more rational plan was a potential career limiting move for the Product Director. But he had some options other than saying the three month edict couldn’t be met. Reviewing those options with the CEO and getting agreement on a viable course of action was imperative. As it turned out, not engaging the CEO was a career ending act with the company.

If you’ve been through executive edicts, you know how damaging they can be. Bite the bullet right up front. Make sure everyone – sponsors, targets, change agents and champions – is working from the same playbook. And, if you find yourself in a similar situation, put these points on your checklist of things to do so you can be a Great Leader. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on. Thanks

Don’t forget to leave your comments below.

From the Sponsor’s Desk – Lessons from Being Acquired

davisonJan22In my last post, Project Recovery Fundamentals, we looked at the steps a project manager took to turn around project performance and stakeholder support when the initial assumptions and guidance structure on her project proved to be fatally flawed. This project manager was surprised on a number of key fronts but took the right actions to turn the situation around and deliver with smiles all around.

In this post, we’ll look at the actions a managing partner took when her colleagues decided to pursue an offer to become part of a much larger professional services firm. Her up-front actions to engage her partners in a thorough assessment of the offer laid the foundation for a mostly successful transition and equipped the staff to deal with the challenges encountered.

Thanks to F.P. for the details on this case.

The Situation

This small, local professional services firm had a thirty year track record of service to its loyal customers, mostly small to medium sized organizations. The firm had, in addition to the managing partner, eight practicing partners and an administrative and support staff of forty-two.

The firm faced a number of challenges as it tried to expand its client base and revenue opportunities for its partners. A number of its clients were disappearing through mergers and acquisitions. It wasn’t positioned to take on national or international clients because of its small size and local focus. While it had some success bringing in talented individual practitioners, it wasn’t able to offer the opportunities to other small firms that a larger organization could offer and so mergers were few and far between.

And then a much larger firm came knocking. There were some initial exploratory chats with the senior partners from both firms. They discovered similar cultures and similar practices and processes. Of course, the larger firm had a much bigger and diverse client set but that had some appeal to the smaller firm’s partners. As the discussions progressed, the managing partner decided to take a more disciplined approach to the possible merger. She engaged the other partners and senior staff to develop and apply assessment tools that would allow them to make a fully informed decision and provide an effective framework for the integration if the decision was to proceed. She talked to a few of their most loyal clients and got their blessing. She informed the principals at the larger firm of her intent and received the green light from them as well. Interestingly, when she asked those same principals how they would assess her firm leading up to a decision on the merger, she was greeted with silence and blank looks. She wondered to herself “do they just want our client base?”

The Goal

With the agreement of the firm’s partners and senior staff, the goal was to identify the salient factors that would provide a comprehensive assessment framework for a possible merger with the larger firm, complete the assessment using the framework and, if a decision to proceed was made, use the framework as a platform for managing the integration.

The Project

The managing partner asked the firm’s COO to facilitate the exploratory sessions with the partners and senior staff and lead the assessment activity. The COO proceeded to draft a frame of reference for the initiative to confirm his understanding of what he was being asked to do. The frame of reference included the following points:

  • The need for complete and total confidentiality throughout the assessment process.
  • Responsibilities of the participants including full, active participation, frank, open discussion and respect for the ideas and views of other participants. He also suggested which partners and senior staff would be responsible for assessing the larger firm’s practices, processes and functions.
  • The kinds of factors that could be included in the framework. He suggested things like the larger firm’s financial strength and performance, its client mix, strategies and growth plans, the benefits and costs to the smaller firm, its existing clients, individual partners and staff, practice compatibility and competitive and operational risks.
  • The process for selecting the factors including and the rating scheme and inclusion criteria.
  • The process for using the assessment results to reach a decision.
  • The timeframe for the development of the framework, the conduct of the assessment and a suggested target for the decision.

The COO reviewed his approach with the managing partner. She suggested a few tweaks and agreed to distribute it to the targeted individuals to get the process started. The framework creation process the COO outlined in the frame of reference document proposed the following seven steps:

  1. All involved meet to agree on the frame of reference
  2. Individuals submit proposed assessment factors to COO
  3. COO consolidates and rationalizes submissions and sends out for review
  4. Individuals rate and rank each factor presented and return to COO
  5. COO consolidates results and sends out for review
  6. All involved meet to agree on framework
  7. If necessary, repeat steps 2. through 6.

The meeting on the frame of reference, chaired by the managing partner, was a contentious affair. Four of the partners and all four of the senior staff members involved agreed with the frame of reference up front. Two partners were opposed to the merger and so opposed any further assessment activity. The other two partners were fully in favour of the merger and so questioned the need for so much rigor in the assessment process. The managing partner was in that role for a reason. A strong communicator and collaborator, she managed to persuade the outliers of the value of doing the assessment as proposed. There was unanimous agreement going forward. Independently, she also reviewed the approach with the clients she had spoken to previously and asked them if they would like to participate. They agreed.

And so the submission and consolidation of suggested factors proceeded according to plan over three rounds and six weeks. The initial round netted 114 submissions and 82 unique factors. The second round added another 12 factors and the third round added just 3 new factors but ended up with unanimous agreement to the assessment framework and the 97 assessment factors included.

The Managing partner and COO met with the principals at the larger firm, reviewed the assessment framework with them, developed a plan for the assessment to be carried out and identified the staff from the larger firm that needed to be involved. When the Managing partner offered the larger firm the opportunity to conduct a similar examination of her firm, they declined. She wondered again, “do they just want our client base?”

So off they went, the smaller firm assessing the larger on their 97 factors.

The Results

The first revelation the partners in the smaller firm experienced was that they were not a big priority for the partners in the larger firm. The plan that originally allocated five weeks for the assessment took ten weeks, largely due to the lack of availability of the larger firm’s partners. At the end of the ten week period, reviews of 86 of the 97 factors were completed but the partners agreed that they had sufficient information to reach a decision. The decision: seven of the eight partners and the managing partner voted to proceed with the integration. The COO and senior staff involved also supported the move. The lone partner against the move decided to go into private practice. The key driver for the decision? The potential for the smaller firm’s partners to increase their client set and consequently, personal income. The managing partner informed the principals at the larger firm of their decision which set the formal and legal steps in motion.

During the assessment process, a number of factors received lower ratings that suggested they should receive extra focus during the negotiations and the actual integration effort. Those lower rated factors included:

  • Dissonance between the larger firms stated core values and actual practice. They didn’t seem to practice what they preached.
  • Highly centralized decision-making at the head office rather than the local decision model claimed.
  • Inconsistent application of standard processes and practices across the larger firms practices.
  • No centralized client focus versus the claims of an holistic client view.
  • The transition plan for the smaller firm’s clients.
  • The transition plan for the smaller firm’s staff.
  • The larger firm’s rudimentary technology infrastructure and services compared to the smaller firm.
  • The intended role of the smaller firms partners after integration.
  • Rationalization of the smaller firm’s external relationships and providers.
  • Concerns over budgeting, cost allocation practices, billing, security, human resource practices

Some of these concerns, including the placement of the smaller firm’s partners and staff, were addressed during the negotiations. Other factors dealing with operational concerns were addressed as part of the integration activity carried out over fourteen months following the formalization of the acquisition. The concerns over cultural issues were raised but not explicitly addressed by any formal follow-on actions. However, because they were identified, the smaller firm’s partners and staff had a heads-up of what to expect. That awareness made the transition somewhat easier to manage.

Fourteen months after the integration, all seven partners who made the move were very positive about the change. The majority of the staff also had a positive view. The smaller firm’s clients were also happy with the transition process and their relationship with the larger organization. The managing partner, who guided the transition though to its completion, retired with the knowledge that the merger was a change well done.

How a Great Leader Succeeded

The managing partner did a number of things right:

  1. She engaged the key stakeholders

    The managing partner took on the role of sponsor for the change. She brought her partners in early, engaged the COO and senior staff up front and even brought in a few key clients. That helped raise issues and concerns early in the process and ensured appropriate attention and resolution. She also brought in the COO in the change agent role to guide the development and execution of the assessment process. Finally she engaged the principals of the larger firm as key participants in the merger process.

  2. She formalized the assessment process

    By overcoming the initial resistance from half of the partners and completing the assessment framework, she was able to provide all stakeholders with the ability to make informed, rational decisions and guide the integration activities to the benefit of all parties. The objective assessment enabled by the collectively formed framework was a cornerstone for the success of the merger.

  3. She used her soft power effectively

    Even as the managing partner of the small firm, she did not have the hard power to make a unilateral executive decision as do so many managers in sponsor roles. She had to use soft power; persuasion, logic, humor, collegiality, collaboration, negotiation, active listing, partnership. She succeeded under very demanding circumstances with very demanding partners. She managed to diffuse a potentially highly emotional debate and turn it into a rational, knowledge based review and decision.

  4. She helped her partners understand what was important to them

    Although, in the final analysis, the partners’ potential financial gain was the key driver to the decision to proceed, forcing them to go through a thorough due diligence exercise helped them understand the other factors that were important to them. That resulted in a transition incorporating roles, services and practices that they valued. Had they not agreed to go through the formal assessment process, they would likely have lost much that they valued at the smaller firm including, perhaps, their positions as partners.

If you’ve been through mergers or acquisitions, you know how stressful they can be and how contentious the issues can become. In reality, they’re often not much different from other types of major business or technology change. The managing partner in this case did all the right things: she involved all those who needed to be involved, when they needed to be involved; she collaborated; she communicated; she helped the participants figure out how they were going to make the key decisions; she showed leadership throughout.

If you find yourself in a similar situation, put these points on your checklist of things to do so you too can be a Great Leader. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on.


Don’t forget to leave your comments below.

From the Sponsor’s Desk – Project Recovery Fundamentals

davison Dec18In my last post, Five Stakeholder Priorities, we looked at the trials and tribulations experienced by a businessman and entrepreneur who saw an opportunity to create a unique artistic center using a recently acquired, long abandoned industrial complex. The initiative got off to a great start. But then he took his eye off the ball and the difficulties started.

In this post, we’ll look at the steps a project manager took to turn around project performance and stakeholder support when the initial assumptions and guidance structure on her project proved to be fatally flawed. Sometimes, in a project world, things are not always as they seem. This project manager was surprised on a number of key fronts but took the right actions to turn the situation around and deliver with smiles all around.

Thanks to D.G. for the details on this case.

The Situation

This manufacturing concern operated eight distinct web sites to support the wholesale and retail distribution organizations’ sales and service activities. The sites were supported by a content management system (CMS) that controlled over 300 unique web pages. Unfortunately, the version of the software being used was three releases out of date and was no longer supported by the vendor.

IT had tried to convince the business executives to upgrade to the latest release on a number of occasions but the initiative was always deferred because of pressing business priorities. The CIO finally sold the upgrade by promising a quick five month project that would be completely transparent to business operations. The business VP’s affected by the upgrade were somewhat concerned with their sites ongoing stability and so agreed to the project, but only if it could be done within the five month timeframe. They agreed to hold any changes to their sites for the five month period.

The Goal

Upgrade the content management software to the latest release to support the eight sites and 300 plus web pages and convert the sites to the new release in five months elapsed time with no impact on business operations. The upgraded sites would be identical to current sites in function, look and feel and performance. The estimated cost of the project was $2,400,000 based on an estimate from the vendor of $6,500 per page plus an additional 20% to cover planning, training, testing costs and contingency.

The Project

The CIO assigned a senior project manager to the effort. The PM had been with the company for a number of years, was familiar with the web environment and the software that needed upgrading and had a solid track on a variety of projects. Her first step was to sit down with the CIO and clarify the stakeholders and their goals and objectives. The CIO positioned himself as the sponsor, the software vendor as a change agent along with the PM and the groups that supported the content management software and web site operations in IT as targets. Those staff would have to update their knowledge and skills on the new CMS version to support the upgrade and its ongoing operation.

With those marching orders, the PM started assembling her team and developing a plan of attack. Because of the tight time frame, she assumed that she’d have to work on all eight sites in parallel. Other assumptions she made, based on the guidance from the CIO:

  • No business involvement was required
  • The latest software release would allow the generation of pages identical to the existing sites
  • There were no new function or data needs
  • There were no changes required in the underlying technology infrastructure (e.g. data bases, servers, communication and management technologies, web services, security, etc.)
  • Skilled and trained resources were available internally and on the open market to handle the conversion.

As she attempted to build a rational plan to deliver on the five month target, she realized the immensity of the challenge. Using the vendors per page estimate, she would need, at the peak, up to fifty staff fully fluent and productive on the new software for about three months. She was familiar with Brook’s Law – adding staff to a late software project just makes it later. She needed help!

She sat down with the CMS vendor account manager to clarify roles and responsibilities and review her initial plan and assumptions. What she discovered just made the situation worse. The vendor was not planning on playing any change agent or project management role as the CIO had suggested. The account manager viewed the vendor’s role as a software provider and provider of technical support and training, nothing more. In addition, he indicated that the $6,500 per page he had quoted related only to upgrades from one version to the next using the vendor supplied conversion tools. Going up three versions would cost considerably more. Other discoveries:

  • There were no conversion utilities to facilitate the software upgrade. The vendor provided tools to help upgrade from one version to the next but not to upgrade over three versions.
  • Implementing exactly the same look and feel as the old sites with the new CMS release probably wasn’t doable. The new release didn’t support the old theme and templates used by three of the sites. It used different plugins for blogs, news feeds, contacts and other functions. The code was more search engine optimized which changed some of the look and feel. And, there were more robust tie-ins to social media sites and tools which required site design decisions.
  • There wasn’t a lot of staff available in the open market with the latest knowledge and skills on tap to do the conversion.
  • The CMS application itself had a number of functional and look and feel changes which would require training and learning curve for the business staff who maintained the business content.

If you’ve ever run, unexpectedly, into a clear plate glass door, you’ll know how the PM felt after that meeting with the vendor. Flattened and deflated. She met with the CIO to brief him on the challenges. She recommended a number of actions:

  • Meet with the three business VP’s and update them on the recent developments. That would include the finding that the five month window was not doable, the costs would be considerably higher and business staff would need to be involved to make the decisions about functionality and look and feel in the revised sites.
  • Explore a staged implementation on a site by site basis over an 18 to 24 month period to address the anticipated CMS skill shortage, business staff impact and other risks associated with the upgrade. That would require concurrent versions of the CMS software for the duration of the project.
  • She also suggested that the CIO approach the vendor for additional support and threaten a switch to a different vendor if more support and some automation tools weren’t forthcoming.

Remember, the CIO and his VP of IT operations had been trying to convince the three business VP’s to upgrade for a number of years. The CIO was not inclined to go running back to them now when there were “a few challenges”. So he ordered the PM to proceed with a conversion on one of the eight web sites and gather information that would enable them to make “a more informed decision”.

The PM picked the smallest and simplest site, assembled a small team with the requisite skills and expertise, badgered the vendor account manager for additional assistance and went to work. Her team made the decisions about any necessary functional or look and feel changes. Their strategy was to use the capabilities of the CRM software and avoid any customized code to replicate the look and feel of the old sites. They created a limited test environment and evaluated the new site against the old. When they were as close as they were going to get and satisfied with the results, they closed the pilot and assembled the results. Their findings:

  • The average cost per page was $10, 200 excluding the costs for planning, training and testing. That was almost 60% over the original estimate. This was the smallest and simplest site but there was a learning curve involved so the PM and her team concluded the findings would be applicable to the remaining sites.
  • The pages had a substantially different look and feel because of the new themes and templates they chose. The old themes and templates were not supported.
  • It took a couple of weeks for staff experienced with the old version of the software to be completely comfortable and fully productive. It took two to four weeks longer for someone who had no experience with the software.
  • Minimal changes were required in the supporting technology infrastructure and tools and the technical skills required for managing the environment.

The PM took the results to the CIO and pitched her previous recommendations. Faced with the information that would support “a more informed decision”, the CIO capitulated and agreed to arrange a meeting with the business VP’s. To the surprise of the CIO and the VP of IT Operations, after some pointed questions and comments, the business VP’s agreed with the PM’s recommendations. Completely! They even agreed on site priorities and a rough time frame, subject to revision to support some planned business initiatives.

With the business VP’s agreement and commitment, the PM revised the stakeholder roles to reflect the business VP’s as co-sponsors, the VP, IT Operations and the business directors responsible for the staff involved in the functional and look and feel decisions were targets and the PM and a newly appointed vendor PM were the change agents. The CIO’s threat to start looking for a new CMS vendor had the desired effect. The vendor agreed to develop conversion tools that would help the company move to the new release and provided the PM to oversee the technical conversion.

The Results

The project was completed sixteen months from the day the business VP’s agreed to the PM’s recommendations. The PM structured the initiative as a program, with a project for each of the eight sites plus a distinct project for the technology infrastructure needed to support the concurrent instances of the CRM software. Sites were converted according to the priority established to integrate effectively with business plans. Total cost – $2,560,000 – just 7% over the initial budget. The overrun was small due, in large part, to the conversion support from the vendor. It also covered the cost of a number of enhancements the business chose to implement, leveraging enhanced capabilities in the new software.

Perhaps the most significant success was the enthusiasm from the business organizations. The business VP’s went from an adversarial, disinterested, “it’s an IT problem” perspective to enthusiastic, informed owners of their technology services. They had new, attractive, functional and fully supported web sites. Their staff were fully involved with the functional and look and feel decisions and thoroughly trained in the new environment. Even the vendor was happy because it was able to take the conversion utilities developed to move across three versions to other clients in the same boat. It was a great ending!

How a Great PM Succeeded

  1. Confirm stakeholder roles

    The PM established the stakeholder roles right up front which let her focus in on the key decision makers. She also evolved the stakeholder model as the project progressed. That enabled her to redirect her attentions accordingly as sponsorship migrated from the CIO to the business VP’s. It was also the catalyst for pushing the vendor into a more active role.

  2. Socialize your assumptions

    It appears that one of the stumbling blocks preventing approval for the CRM upgrade in previous years was the underlying assumption that all web sites had to be done at the same time. It was never stated, but the pitch from the VP IT Operations and the CIO didn’t articulate an alternative. The PM articulated a number of assumptions that she felt had a material impact on her project. She did not include one-time implementation among them. She also vetted them with the other stakeholders and received their reactions, positive and negative.

  3. Translate your assumptions into facts

    The PM not only documented and socialized her assumptions, she went one step further – she took the time to verify the accuracy of her assumptions, to determine whether they were risks that had to be managed and mitigated or to address them with targeted actions. And she took those actions right up front, before they could seriously damage her project.

  4. Think big, do small

    The PM had a significant amount of work to deliver in a limited amount of time, not an unusual situation for a project manager. However, instead of having one massive plan, she looked at the overall challenge, the business priorities, the various pieces and the relationships among them and developed her program and project approach. It made planning and managing the work much easier and facilitated tracking and reporting that was much more meaningful to her stakeholders. Also, by phasing and staging her deliverables, she was able to reduce the risks and incorporate learnings from the previous phases in the business, technical and conversion efforts.

  5. Call in all your favours

    Positioning this undertaking as an IT initiative was dumb. It was a business project with a large IT component. But it was still a business project first and foremost. The business VP’s needed to be involved. Their staff needed to be involved. The vendor needed to be involved. Forcing their hands and getting them committed and involved set the project on the path to success.

If your project is in trouble, go back to first principles. Who am I working for, with? Who should I be working for, with? What do they want? Why? When? Why? What’s the overall goal, objective? What are my options for getting there to minimize risk and maximize value? You know the drill. This PM did all the right things to get back on track. If you find yourself in a similar situation, put these points on your checklist of things to do so you too can be a Great PM. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on. Thanks

Don’t forget to leave your comments below.

From the Sponsor’s Desk – Five Stakeholder Priorities

In my last post with Ruby Tomar, The Checklist Champion, we looked at the insights Dr. Atul Gawande presents in his book, The Checklist Manifesto: How to Get Things Right. The book describes his journey as head of the World Health Organization’s safe surgery initiative to improve world-wide surgical outcomes. They achieved amazing results with a simple, nineteen point checklist, dedication and perseverance. We also explored how to leverage Dr. Gawande’s findings using the Project Pre-Check building blocks or by building your own framework to deliver sustainable change.

In this post, we’ll look at the trials and tribulations experienced by a businessman and entrepreneur who saw an opportunity to create a unique artistic center using a recently acquired, long abandoned industrial complex. The initiative got off to a great start. He was actively involved through the formative stages, the design of the facilities and promotion of the center to encourage artists to set up shop. But then he took his eye off the ball and the difficulties started.

Thanks to A.M. for the details on this case.

The Situation

Our subject, a successful entrepreneur and businessman, came across an interesting investment opportunity – a derelict, former industrial complex on the edge of the town where he lived. It was being offered for sale at a great price. He took the plunge and acquired the property. However, he wasn’t exactly sure what to do with the site – sit on it and hope for value appreciation or develop it into a vital, profitable enterprise.

He chatted with family, friends, colleagues and business associates over a number of months to get some ideas. He talked to local politicians, educational organizations and art groups. He consulted with other communities near and far about what they had done with similar facilities. An idea started to take hold – the creation of a community for the visual arts that would attract the cream of the local and regional artistic crop practicing a wide range of artistic endeavours including painting, photography, sculpture, clay, fabric, wood, metal, glass and other disciplines. He had made up his mind!

The Goal

Create an artistic center of excellence for the visual arts that would attract the best and the brightest and build a lasting legacy for the facility and the community.

The Project

The entrepreneur, the sponsor of the venture, enlisted the help of some local artists and an architect with experience in this kind of endeavour to design a complex using the existing facility as much as possible. The design incorporated space for forty studios of varying kinds and a gallery to show off and sell the artists’ works.

The construction occurred in three distinct stages over eleven months to allow artists to move in to the finished sections while the construction continued. At the end of the construction period, 72% of the studios were occupied or rented, the artists in residence were thrilled with the environment and that enthusiasm spread through the artistic community. Over the next year, the remaining studios were rented and refinements requested by the tenants were made to improve the creative and retail spaces.

While the construction was underway, the sponsor started working on the management structure for the center. He was a busy guy with other companies to run and opportunities to pursue. He didn’t have the time or inclination to be a hands-on manager. The approach he chose was to run the facility as a non-profit with a volunteer board of directors to oversee day to day operations and the relationship with the artists and the community. He proceeded to recruit local talent to staff the seven person board and made sure the board understood his expectation and their role. By the time the construction was complete the board was in place and fully operational.

The board developed mission and vision statements for the center and shared those with the sponsor. They used excess funds to hire a full time manager to oversee the operation of the gallery, stage shows of the artists’ works and promote the gallery. They appointed specific board members to look after artist relationships, physical plant, community engagement, education outreach and financial oversight. The education and community engagement components were very successful, with shows from local artists running in the gallery and a growing number of classes featuring all aspects of the artistic spectrum running every week. The center was a going concern and, on the surface, appeared to be a very successful venture.

But not all the artists were happy. They were concerned that much of the focus had shifted to community and education. Those activities created more traffic, more noise, more disruption. They filled the parking lot with cars belonging to those taking classes, not buying art from the center’s artists. There was also a backlash to the gallery’s practice of running shows for local artists who were not center tenants. The artists argued that they paid rent. The center’s facilities should be used for their exclusive use and benefit.

Of course, the director responsible for artist relationships brought these concerns to the other board members. Understandably, the directors responsible for community engagement and education outreach were not sympathetic. In fact, they viewed the artists’ complaints as evidence that they were doing great things. As well, some of the disgruntled artists expressed their displeasure to the sponsor. He was now engaged in another venture and had very little time to spend on the center’s problems. He challenged the board chair to get the issues resolved.

The Results

It is important to remember that the members of the board were all unpaid, part time, volunteer directors. They were involved because of the center’s perceived value to the community. They were not working for the sponsor. They were not working for the artists. When things didn’t immediately improve from the artists’ perspective, the sponsor took a strip off the board chair at a board meeting. The chair resigned. The sponsor then aimed his wrath at the community engagement and education outreach directors. They resigned. The gallery manager left because of the enmity she experienced from some of the artists. The sponsor appointed one of the remaining directors as chair, managed to find two qualified volunteers to fill the other vacant positions and demanded the board fix the problems post haste. He then turned his attentions back to his other ventures.

The reformed board went back to the original mission and vision documents. From the review of those documents, it seemed that the recent troubles had been entirely due to the artists’ complaints and the inability of the board to remedy those issues. And that was the dilemma – how to reconcile the artists concerns regarding the distractions from the education and community outreach activities and the use of the gallery to show the works of artists who were not tenants at the center with the apparent expectations of the sponsor to promote the center through arts education and community engagement. The board recognized that the survival of the center rested on fixing this problem.

So they went back to the entrepreneur, the sponsor. He was busy. He had other things on his mind. He was annoyed that the board couldn’t just get on with fixing the issues. But he agreed to meet. The board chair asked the sponsor to talk about his vision for the center and how the artists’ needs could be rationalized with the community outreach, education and gallery activities. As the sponsor spoke about his vision, the directors started to see the light. From the sponsor’s perspective, those activities were to be designed and conducted to enhance the artists’ works, to increase sales, to build community appreciation for the center’s artists and to contribute to the center’s goal as a visual arts center of excellence. Not, as had previously been assumed, to be run as activities independent from the artists own efforts. It was an Ah-Ha moment!

The board proceeded to revise the mission and vision statements. The old documents presented community outreach, education and gallery activities as standalone, independent functions. The new versions made the supporting role of the activities perfectly clear and included examples of what was acceptable and what was not. The board reviewed the revised versions with the sponsor and asked him to formally sign the documents to give them added weight. He agreed. The documents were reviewed with the artists. When all the artists had bought in, the director responsible for artist relationships also signed on their behalf. It was a chance for a new beginning.

From that point on, the artists were actively engaged in the community outreach and education plans and programs. The gallery only showed and sold the works of the center’s artists. Business boomed. The artists were happy. The sponsor was happy. The board was happy. Disaster was averted!

What Great Stakeholders Would Have Done Differently

Fortunately, the issues in the above case were identified, addressed and remedied in time to avert a disaster. The underlying challenge seems to have been a lack of communication and agreement among the entrepreneur, the sponsor of the development, with the other stakeholders, the artists (the targets) and the board (the change agent). There are five key steps that any of the stakeholder groups could have pursued in collaboration that would have avoided the issues and the associated conflict.

  1. Manage realization of the vision
    Early in the creation of the center, the sponsor was a hands-on participant. That frequent engagement kept everybody on the same page. However, as the center evolved from a project to an operating concern, the sponsor backed off and left the day to day decision-making to the board. The board had the foresight to develop a mission and a vision to guide their actions, based on their understanding of what the sponsor expected. They even reviewed them with the sponsor. But they didn’t test it by developing stories or scenarios that would confirm the accuracy of their understanding. Unfortunately, the sponsor didn’t really take a good hard look at the documents either, to confirm that they accurately reflected what he wanted. The artists? They didn’t even know the documents existed. If all the stakeholders had been involved with the creation and use of the mission and vision from the start and on an ongoing basis, the trauma experienced probably would have been avoided.
  2. Build the stakeholder group
    The sponsor did a great job of getting the board in place to cover the operating demands of the center. In fact, the community outreach, education and gallery operations were so successful they brought the underlying issues out into the open. However, confronting the board members in an accusatory fashion did nothing to resolve the concerns of the artists and provided no additional insights that the board could act upon. Transitioning from project mode to ongoing operations is often a risky time. Engaging all stakeholders in a positive, collaborative manner would have been a more productive approach to solve the challenges and to build a constructive behavioural model for the future.
  3. Follow a roadmap
    The sponsor laid out a path at the start that included broad consultation, staged construction and occupancy, board formation and transfer of day to day operational responsibility. He focused on the project but directed his attention to other undertakings and forgot about his oversight needs when the center was up and running. It is vital that a roadmap conceived to realize a particular vision also includes the activities necessary to transition to an operating mode and to ensure appropriate operations oversight.
  4. Deliver incrementally
    The sponsor conceived of the incremental delivery strategy and it worked perfectly. Building the arts center incrementally allowed him to recruit artists and rent in stages. The enthusiastic response from the initial group of artists encouraged others to take a look, and ultimately to move in. Conceiving the non-profit management approach early on and staffing the board up front helped get the center up and running quickly and effectively.
  5. Track achievements
    There were some key targets set by the sponsor, including center of excellence, best and brightest artists and lasting legacy for the facility and community. However, specific goals were never set, metrics were never established and measurement processes to track performance were never implemented. Without goals, metrics and measurement, chances are those aspirations will not be realized.

This case reinforces that old saying “the road to Hell is paved with good intentions”. The board had the best of intentions when they developed their mission and vision statements. But they forgot that those documents don’t just belong to the board, they serve all stakeholders. And if all stakeholders don’t buy in completely and behave accordingly, it’s just a con job. Who should initiate debate and discussion about a project’s direction and performance? Any stakeholder who has a need for clarity and confirmation! The artists did just that. Remember, stakeholder agreement on all project decisions is a prerequisite for success.

If you find yourself in a similar situation, put these points on your checklist of things to do so you too can be a Great Stakeholder. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on. Thanks

Don’t forget to leave your comments below.