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 – If at First You Don’t Succeed

Written by Drew Davison on April 29, 2014. Posted in Articles. 5 Comments on From the Sponsor’s Desk – If at First You Don’t Succeed

In my last post, Seven Rules for Successful Outsourcing, we looked at the 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 also considered the steps it could have taken to yield a very different result.

In this post, we’ll look at how one project manager had the opportunity to guide the same project on three different occasions, with two aborted attempts and a final, successful implementation. We’ll also discover the lessons he learned and applied along the way that made all the difference to the final outcome.

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

The Situation

This mid-size manufacturing organization had pursued a growth through acquisition strategy over the previous ten years. The strategy had worked. It had tripled revenue and grown the bottom line. But it hadn’t taken the opportunity to rationalize the acquisitions’ operating practices and technology infrastructures and that was creating a drag on profits. It had multiple financial systems, human resources offerings, ERP solutions, customer management processes and technologies and lots of organizational duplications and gaps. The CEO decided the time was ripe to fix the problem, cut the duplication and waste and start directing more of that growing revenue stream to the bottom line.

The CEO charged the CIO with fixing the problem. Both the CEO and CIO viewed the problem as a technology challenge that required an assessment of each of the technology offerings available, a decision on the preferred solution and conversion of all operating units to that preferred solution. With that frame of reference, they developed a list of candidates to lead the project and selected an engineer who had several years of experience with the parent organization and had distinguished himself on a number of occasions with innovative solutions to operational challenges. They reassigned the selected engineer to the project and gave him a mandate to do what was necessary to eliminate infrastructure duplications and improve operating efficiency.

The Goal

To standardize operating technologies and processes across all operating units within three years at a target budget of $3.6 million. The budget was arrived at by counting the six operating companies, assuming six core processes in each and assigning a $100,000 per process conversion cost.

The Project

As I indicated in the introduction, there were three attempts to deliver this project successfully. The first two failed. The third time’s the charm.

Iteration #1

The newly assigned project manager, let’s call him Steve, jumped at the challenge. He contacted colleagues in all the operating units, explained his mandate and asked for their help. Where he had no previous relationships, he looked for guidance from the CIO and used his recommendations to establish contact. He identified eleven participants in all, people he believed had the knowledge and influence to help him achieve his goal. Everyone he talked to was supportive of the need to streamline operations. So, feeling very confidant, Steve developed a five step plan:

Identify all the core operating processes
Catalogue the various technologies used to support those operating processes in each organization
Develop assessment criteria to evaluate each technology on an objective basis
Assess each technology using the established criteria
Select and recommend one technology for each operating process

As Steve contacted his eleven contributors to get the ball rolling, he found their availability was a challenge. While they all insisted they believed in his project, they claimed lack of time to contribute because of other priorities. He’d call meetings. Six would accept. Three would actually show up. He’d book appointments. Some wouldn’t respond at all and many that did would cancel the day of the meeting. He’d send out draft documents for comment and typically receive feedback from less than half the recipients, many with just cursory or general remarks.

Steve reported to the CIO on a periodic basis. Every meeting focused on the difficulty of getting time and attention from his contributors. The CIO just urged him to keep plugging along but made no other suggestions to improve the effectiveness of the exercise.

Steve had allowed himself nine weeks to complete the five step plan. To his horror, it took him eight weeks to get through the first two steps and even then he wasn’t convinced that he had everyone’s agreement. Things got even worse when he started contacting the vendors who supported the technologies operating in the various business units. Most of the vendors didn’t seem interested in dealing with him. They all had their own contacts and relationships with his company and suggested that if he needed information, he should go through those channels. That added four more names to Steve’s list of contributors and meant that he had to backtrack to bring the new players up to speed on his project and what had been completed to date.

Developing the assessment criteria took seven weeks, not the two weeks he had planned. While he had hoped to develop a generic checklist for use on all the technologies, the contributors wanted process specifics so he had to create purpose-built checklists for each core process. Again, he kept the CIO appraised of the challenges he was facing but the CIO offered very little in the way of assistance to accelerate progress and gain back some of the lost schedule.

By the time Steve started step 4, assessing each of the technologies, his project was eleven weeks behind with no idea how to address the core issues – this change would involve massive business process change and he lacked committed contributors and the ability to influence enterprise priorities to get that commitment. To compound the challenges, the vendors of the various technologies used in the operating units now knew that something was afoot. They recognized the risks and the opportunities and so they started to exert pressure on their customers to use their offerings across the enterprise. Political pressure would make an objective assessment of the technologies even more difficult. On top of that, the CIO was getting hounded by all of the vendors. They wanted a say.

So the CIO met with the CEO to discuss the problem. Between the two of them, they decided to change the approach Steve had been taking. They would ask all the involved vendors to submit bids on becoming the enterprise vendor for one or more of the core processes. They would also go outside the existing vendor list to solicit bids from companies that offered SaaS and other cloud solutions. The CIO informed Steve of the change in direction and asked him to prepare the Request for Proposals (RFP’s) and get them out to the vendors. Steve was royally pissed. He should have been involved in the meeting with the CEO. He knew the challenges the project was facing and could have contributed to the discussion and the chosen outcome. He felt the RFP approach would run into the same issues he was already facing. He told the CIO what he thought. The CIO essentially ignored Steve’s concerns and in effect said “There, there Steve, everything will be OK. Just trust us.” Would you?

Iteration #2

So Steve decided to give the RFP approach a try even though he had grave concerns. At least if he could narrow down the vendors, he could start working with his contributors to build a viable implementation plan. The work Steve and his contributors had completed on steps 1 through 3 did come in handy. He was able to put together a comprehensive set of business specific RFP’s that could be used by all vendors for all core processes. However, when he approached his now fifteen contributors with an update on the direction of the project and request for feedback on his draft RFP’s, he ran into a load of turbulence. By and large, the contributors did not like the new approach. They felt that they had little say in the decision-making process and little control over the final outcome. A couple of the contributors actually told Steve that they would no longer be involved in the process. A number of the contributors, who were mostly at the middle management level, went to their bosses with their concerns.

Steve brought the feedback to the CIO and this time included the CEO in the loop. Their response: “Just keep going. Everything will be fine.” So he did. He sent out the RFP’s with a submit-by date four weeks in the future. He offered optional sessions so each vendor could meet with the key stakeholders (the CEO and CIO) to discuss the requirements and opportunities. A number of vendors opted for the meeting so Steve proceeded to set them up. Unfortunately, the CEO and CIO were usually unavailable so Steve became the point man.

While Steve was working with the vendors to get the RFP’s in and assessed, two other critical activities were taking place that Steve was not privy to. Senior executives in the operating units were being made aware of the project, how it was being conducted and the concerns their staffs had about the impact on their organizations. And, vendors were lobbying and politicking at the most senior levels of the organization, including the board of directors, to ensure their offerings were selected.

As Steve was getting set to recommend specific vendors for the core processes, with whatever input he could get from the contributors who were still involved, the CEO resigned. It seems the board had concerns about the CEO’s performance and his direction of the infrastructure rationalization project was the last straw. The project was suspended. Steve returned to his old job.

Iteration #3

The new CEO, a senior executive from one of the operation units, took three months to settle in before relaunching the infrastructure rationalization initiative. He met with the CIO to gather some insight and the CIO brought in Steve to provide the details on what went wrong and what needed to happen to make the project successful.

Steve hadn’t been idle since the project was cancelled. He had done his own post mortem. He had done some reading and research. He had chatted at length with a friend who had become a very successful project manager. Here’s the substance he shared with the new CEO and CIO:

The Problems:

This is a business project with significant impact on business operations. It has a large technology component but it’s not a technology project.
It didn’t have the enterprise priority it needed to be successful. In most of the operating units, it wasn’t even on their radar as something that needed their attention.
It didn’t have the commitment of the key business unit decision makers it needed to progress effectively and deliver successfully.
It was woefully under-resourced in terms of dedicated business process and project management knowledge and skills.

The Recommendations:

Establish the priority for the initiative across the enterprise and ensure everyone acted accordingly.
Identify and engage the key stakeholders – the business and technology decision- makers whose active participation would be essential for a successful outcome.
Clearly articulate stakeholder roles and responsibilities through the use of a RACI chart or similar tool.
Complete a business case that focused on the business issues, the expected business outcomes and the associated impact on business operations.
Complete a project charter that includes a description of the undertaking, the goals and objectives, functional and non-functional requirements in and out of scope, assumptions, constraints, risks, resources and facilities, etc.
Prioritize the core processes included in the project and plan for a phased and staged implementation. The organization did not have the capacity or capability to accommodate the updating of all core processes concurrently.
Ensure a highly experienced and successful project manager is in place to guide the undertaking.

The new CEO liked Steve’s recommendations and asked him if he’d like to be involved again and in what capacity. Steve responded that he’d love to be involved and would like to be given the project manager role, but with one proviso – that he be provided with a PM mentor who would guide and direct Steve and provide regular feedback on the project, and Steve’s, performance. The new CEO had Steve present his findings and recommendations to the executive committee and asked for their approval to proceed as recommended. They agreed. Steve had his third chance.

The Results

With his mentor in place, the key decision-makers backing him, the priority established and communicated and a new action plan to guide him, he facilitated the prioritization process for the core processes. Financial management and reporting was selected as the most pressing challenge and so he and his team focused exclusively on that as phase 1. The process and infrastructure rationalization was completed under budget but about three months late. That enabled a clean, staged rollout, business unit by business unit. The stakeholders were fully involved in the undertaking and endorsed the late delivery to ensure a pristine implementation. And it was!

The other core processes followed, one by one, with similar staged implementations and similar, highly successful results. The 8th and final phase was completed four years after the start of the third iteration. The whole organization had been involved and they had gotten very good at this. Steve was promoted to Director, Enterprise Project and Change Management about two years into the undertaking in recognition of his stellar leadership and the superb results achieved. Return on Investment: over 60%.

How a Great Leader Learned and Changed the Outcome

Steve started on this journey with no formal project management training or experience. Fortunately he possessed an inquiring mind, good problem solving skills, an ability to think outside the box, tenacity and well developed communication skills. He recognized early on that he had two insurmountable challenges – lack of committed contributors and zero control over enterprise priorities. He also recognized that while he reported to the CIO and looked to him for advice and guidance, the CEO seemed to be calling the shots.

He responded by discovering and applying the best practices outlined under Iteration #3 above. So, if you find yourself in a similar situation, 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 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. Thanks

Don’t forget to leave your comments below.

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

Written by Drew Davison on March 26, 2014. Posted in Articles. 4 Comments on 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.

He needed to separate the problem from the solution. The company needed to save money quickly. That should have informed all future actions.
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.
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.
He should have articulated end-to-end current service processes and costs, not just the HR portion of it, to compare against other alternatives.
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.
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.
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.

Thanks

Don’t forget to leave your comments below.

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

Written by Drew Davison on February 19, 2014. Posted in Articles. 4 Comments on From the Sponsor’s Desk – The Need to Confront Executive Edicts

davison Feb19 In 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.

Don’t forget to leave your comments below.

From the Sponsor’s Desk – Lessons from Being Acquired

Written by Drew Davison on January 22, 2014. Posted in Articles. 4 Comments on From the Sponsor’s Desk – Lessons from Being Acquired

davisonJan22 In 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:

All involved meet to agree on the frame of reference
Individuals submit proposed assessment factors to COO
COO consolidates and rationalizes submissions and sends out for review
Individuals rate and rank each factor presented and return to COO
COO consolidates results and sends out for review
All involved meet to agree on framework
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:

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.
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.
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.
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.

Thanks

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From the Sponsor’s Desk – Project Recovery Fundamentals

Written by Drew Davison on December 18, 2013. Posted in Articles. 7 Comments on From the Sponsor’s Desk – Project Recovery Fundamentals

davison Dec18 In 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

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.
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.
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.
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.
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.

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