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Author: Lisa Anderson

Project Risk – Should You Care?

In my experience, most organizations discuss risk but rarely implement a plan that would mitigate real risks.  Why?  I think it’s because everyone knows risk should be considered but few are clear on how to be successful in minimizing risk and understanding whether it should be considered a priority for an event that might not occur.  On the other hand, ask the companies dependant on supplies from the Hurricane Katrina zone or those dependant on the L.A. ports a few years ago.  I bet they had a sudden appreciation for thinking about risk.

I’ve found that the optimal approach is to focus some energy on evaluating risk and then implement a common sense approach to managing risk.  Sounds good but how do you do that?  Here are a few keys to success.

Identify What Might Go Wrong:

As obvious as it sounds, it rarely occurs in project planning.  Yet it is vital to spend a few minutes and think about what has the potential to go wrong.  What is the probability this task will fail?  Does it matter? 

Oddly, in the cases where companies manage risk, they seem to go overboard in the other direction.  They run into analysis paralysis on risk identification without regard for the probability and impact.  For example, in the Hurricane Katrina example, if your top three supplier was located in a potential hurricane zone, it would have been critical to have a backup plan in place.  Yet, if it was a small, secondary supplier, why would it matter?  Yes, it could cause a disruption to operations; however, the impact would be too small to justify addressing.

Remember your priorities – what has the potential to significantly affect your project or organization matters. 

Determine Potential Reasons: 

Once you’ve identified what could derail your project and have determined that it is important, think about what could be the likely causes.  For example, following the Hurricane Katrina example, the issue is not receiving critical materials/ supplies.  In this case, the cause is obvious – a hurricane. 

However, depending on the situation, there could be many causes of a disruption in supplies.  For example, it could be due to a political event, a bankruptcy of the supplier, a transportation meltdown that has nothing to do with the supplier (perhaps the truck was on its way from Mexico and got stopped by thieves or stuck at the border), etc.  Just as in the first step, think about the most likely and important causes.  Those are the ones you want to include in your plans.

Implement Steps to Mitigate the Risk: 

Don’t be one of the analysis paralysis companies who do an outstanding job of identifying everything that could potentially go wrong but do very little to address it.  You’ll be significantly better off in implementing one or two actions to mitigate the most serious risks than you’ll be in identifying 1000 potential risks and implementing nothing of value.  Sound obvious?  Absolutely – so why do we often get hung up prior to implementing the action?  For those of us that live in an earthquake zone, do you have a survival backpack to get through at least three days? 

Now is the time to implement preventative actions and contingent actions.  First, preventative actions are the most beneficial if not cost prohibitive as it’s better to avoid the risk than to have to address it once it occurs.  For example, if you are concerned about getting hung up at the border or ports, get the appropriate certifications that expedite the process.  From a manufacturing perspective, provide safety training – minimize the risk of the accident from the start.

However, it is also wise to address contingent actions as well.  For the Hurricane Katrina example, ensure you have a backup supplier in another region that can pick up your volume.  Or, in the case of the safety example, if a fire breaks out from an unsafe act, you’ll have water sprinklers standing by. 

Although risk is often overlooked, it has proven to be important.  Since we are now in a world economy, there are substantially more risks than there were in the past.  Therefore, why not implement a common sense approach to ensure you are prepared for the most likely risks.

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Why Project Planning is Critical to Attaining Strategy Goals

As we are beginning to emerge from the recession (and starting to feel as though we’ve survived the worst of it), executives are beginning to think about “what’s next” – how to achieve their strategy and translate it into bottom line results. Yet, they are still tentative about making significant moves and spending precious cash. Thus, I’m seeing a reemergence of the value of project planning. Suddenly, I’ve seen a significant increase in demand for project planning, as executives want to ensure that their strategy is translated into bottom line results.

Project planning puts a process around the conversation of strategy implementation. In my experience in working with many companies across multiple industries and globally, I’ve found that the overwhelming majority of executives develop compelling strategies that would yield significant growth in business performance, yet only a rare few are able to implement the strategy successfully, and reap the rewards. Why? Execution is everything, yet there is a lack of focus on it.

Project planning fills a large part of the execution gap. How? First, by talking through the strategy, the key elements of the strategy (which, many times, turn into milestones) seem to naturally emerge in the conversation. Then, by discussing the key elements and the specific actions required to achieve them, a project plan begins to form. Lastly, by discussing the appropriate task owners, support required, and other key details, the detailed execution plan required to achieve the strategy emerges.

I’ve worked with hundreds of projects over the years in multiple roles (ranging in size, scope and role from project leader of multi-million dollar projects to project team member on a small but vital, $1000 customer project), and I’ve found no exception to the following rule: With appropriate executive commitment and upfront project planning, any project has an 80% better chance of achieving the intended results. Yet without those two prerequisites, the project team ends up running around in circles without any results to show for it.

So, what are the keys to success in project planning?

  1. Executive Commitment and Involvement: By executive commitment, I do not mean verbal commitment and it’s done. The executive must demonstrate commitment and be involved to the degree required based on the organization and project team.
    No strategy can succeed without this critical component – after all, who developed the strategy? Who understands the strategy? Who is best to communicate its importance? This step cannot be faked. Undoubtedly, tough decisions will surface, and the Executives must face them head on, evaluate them vs. the strategy and present a clear path forward.
  2. Effective Questioning: A secret to success in project planning is to develop an effective questioning process. Unfortunately, this cannot be left to inexperienced resources, as digging into the strategy to the degree required to develop an aggressive yet practical and clear project plan and timeline is vital. It is easy to get side-tracked on seemingly important topics which are not germane to executing the strategy. In today’s world of limited resources (time, money, skilled personnel), it is critical to stay on target. An effective questioning method backed with execution experience will not only provide a razor-like focus but will also ensure that key components of the strategy do not get overlooked.
  3. A Rigorous Focus on the Critical Path: Although it seems as though every project task is important, all tasks are not created equal. Instead, the critical path (which is the sequence of project tasks that add up to the longest overall duration) is the 80/20 of achieving success. Therefore, the 80/20 of the project planning process should be focused on developing, modifying and continually reevaluating the critical path. Although all task owners are important, the critical path items will be those that lead to success or failure, so spend a few extra minutes on thinking about who you are assigning to own your critical path tasks. Do you want to hang your hat on their ability to succeed? If not, re-think it. Provide training. Beef up the project leadership. Do whatever it takes to minimize risk to the critical path.

There are few items more important than strategy – it is the cornerstone to business growth and profits. So, are you willing to invest the time into an upfront project planning process to ensure a successful rollout of your strategy? A simple well-executed strategy will beat a poorly-executed, yet sophisticated, strategy development process every time.

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Common Pitfalls to ERP Project Success

As we are beginning to emerge from the recession, I’ve noticed that there has been an uptick in interest for ERP implementations. Of course, we are nowhere near the interest levels of pre-2000; however, businesses are beginning to think about investing funds into systems, at least from an upgrade standpoint. Throughout my career in almost every business function in multiple industries and in working with multiple countries and cultures, I’ve seen a common misperception hundreds of times in the last several years: the thought that the newest, brand name system or the latest system functionality will “solve my pressing business issues”. Yet, I haven’t seen it “work” once.


So, what are the common pitfalls to ERP project success? And, is there anything that has proven to “work” to address them? The three most common pitfalls are as follows:

  1. Trying to Solve Process Discipline Issues with Systems

    By far, this is the most common mistake! It is much simpler to think you can resolve business issues by implementing a new system – after all, exploring a new system sounds far more exciting and requires much less work than developing processes, implementing disciplines and establishing and tracking accountabilities.

    For example, a common misconception is “if I implement the latest and greatest system functionality, my inventory levels will drop and everything will be fine.” Reality becomes a disappointment. Actually, what typically occurs is the opposite since process disciplines haven’t been the focus while system implementation complexity has been added into the mix. After all, just as the saying goes with MRP systems, “garbage in, garbage out”, the only thing accomplished by implementing a system prior to establishing process discipline rigor is receiving “garbage sooner”.

    Thus, clearly the solution to this dilemma is to spend the time and effort up front implementing the appropriate process disciplines. Then, you will find that you can leverage already-existing functionality to take your organization to the next level or you will be prepared to take advantage of the benefits of a new system.

  2. Focusing on Bells and Whistles instead of Core Functionality

    The second most common mistake is to get caught up in bells and whistles (exciting system functionality that might be interesting but only a “nice-to-have” for your business requirements) and overlook the unique functionality which is the cornerstone of your business. As far-fetched as this might sound, it has occurred in almost every ERP selection and implementation project I’ve participated in. Typically, whatever latest and greatest functionality the new system has is what is focused on, regardless of the fit with the company requirements.

    Since this is a common occurrence, a way to avoid this pitfall is to focus up front on identifying functionality unique to your business and then stick to it. I’ve found the 80/20 to success is a rigorous focus on unique, core functionality. For example, in an aerospace metals service center, item number functionality incorporating multidimensional specs and characteristics is the cornerstone. On the other hand, in the windows and doors manufacturing industry, configurator functionality is key.

  3. Focusing Too Much Effort on System Cost instead of Implementation Cost and Risk:

    Since there is typically a significant focus on software selection, the focus tends to be on software cost. Additionally, it is easier to compare software costs since it is clearer than understanding the implementation requirements. It always sounds easier to implement than it turns out to be!

    And, if you haven’t focused on the unique business requirements, your implementation costs are likely to skyrocket. Once you are partially into the implementation, it can become a perpetual sinkhole of money and resources as you must find a way to address critical functionality to support core business functions. Although it is a challenge to interview implementation partners upfront and to dig into enough of the critical details without getting sidetracked with standard implementation questions, it is the only route to success.

    Aside from finding a resource who is expert in business processes for your industry and who also has expertise in systems analysis to focus on analyzing the implementation requirements (cost, resources, time), your best bet is to spend the extra money for a proof of concept on critical functionality. Once key business users are focused on a proof of concept, they will uncover the hidden complexity in implementation whiich can be utilized to build the optimal implementation plan.

Many times, knowing where the rough spots are on the road is half the battle to success. Therefore, focus extra resources on theseareas, and you’ll be one of the few companies to achieve the expected implementation results within budget. Why bother going through the implementation nightmare to hope you’ll get back to where you started?

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Top Traits of Successful Project Leaders

As we kick off 2010, it seems appropriate to consider how to “start on the right foot”. After all, in 2009, many businesses were suffering in the recession and searching for cash flow; thus, many projects went on hold. However, in order to thrive in 2010, it will become critical to get in front of the competition and put in extra effort on key business projects. One fail-proof way to achieve these goals is to ensure the best project leaders are focused on the core projects.

In my experience in working across multiple industries and with many different Executives, leadership is the number one key to project success. I’ve seen mediocre projects succeed with excellent leadership while sure-to-succeed projects fail due to a lack of leadership. Thus, finding and keeping the best project leaders is critical. What are the top traits of successful project leaders? Project leaders do the following:

  1. Set Direction. As with all leaders, it is vital for project leaders to set direction. It is the leader’s responsibility to develop the strategy and communicate it clearly and repeatedly to the project team and throughout the organization. There is a huge difference in a project team with a clear direction where everyone knows how they fit in and how they contribute value, than in the ones where the project leader might know it, but everyone else sees only their small piece of the puzzle – not the value of their “small piece” or how the bigger picture will be achieved.
  2. Manage the Critical Path with Rigor. There’s no doubt that the single best way to accelerate project results is to manage the critical path with rigor. In essence, the definition of a critical path is the sequence of project tasks which add up to the longest overall duration. Thus, managing the critical path is what will have the most significant affect in accelerating the project’s progress and achieving the results. I’ve found that proactively managing the critical path is the optimal approach. In other words, ask the owners of the critical path tasks in advance if they see any roadblocks to achieving their task. Remind them of approaching due dates. Offer assistance. In essence, prioritize and focus most of your attention of the critical path tasks.
  3. Listen and Provide Feedback. Lastly, they listen. Think about the leaders that stand out in the crowd. Do they take the time to listen to their project team members, customers, suppliers, and investors? Where do they spend the majority of their time – isolated in the executive suites or interacting with people? As a leader, don’t worry about what you want to say – ask a few provocative/thought-provoking questions; then be quiet and listen. What could be more important to succeeding in the new global economy than listening to the experts – the people who perform the jobs, the people on your team, the people you partner with in your supply chain (customers/ suppliers), etc?

Many leaders cite the saying that “people are your number one asset”, but their actions show differently – people pay attention to what they see, not what they hear. If the right people are your number oneasset, what could be more important than listening to your employees, spending time to jointly set goals, establishing metrics to track progress towards the goals, communicating their value to the organization (how they fit into the big picture), and providing ongoing and timely feedback (both positive and corrective)?

If your project leader has these three traits, there’s no doubt you’ll achieve RESULTS. In today’s economy, those who can outpace their competition with solid results will be those who “win the race”.

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Accelerate Project Results

In today’s news headlines, we hear that companies are beginning to rebound from the recession in terms of improved profit; however, when we dig further, it’s clear that the majority of the improvement is due to cost cutting without a commensurate improvement in revenue. When you look a bit closer, companies are still struggling severely to resurrect sales, and much of the low hanging fruit cost projects have been exhausted. Thus, in order to get in front of this trend of the never-ending survival focus, it is imperative to accelerate results in order to thrive. Accelerating project results is one key component in achieving this goal.

Accelerating project results is not complex; however, it is not typically easy to implement. After all, if accelerating project results was easy, everyone would already be focused on it. The reason it is not complex, yet isn’t easy, is that there are no short cuts; instead persistence and focus will pay dividends.

The three keys to success include:

  1. Remove unnecessary waste.
  2. Manage the critical path with rigor.
  3. Clearly define goals and then tie metrics, rewards and recognition to it.

Remove Unnecessary Waste: Although this sounds logical and obvious, it is often overlooked or gets pushed aside when business politics and other organizational concerns arise. Just as with solid operations principles, common sense rules the day. After all, why take extra steps to achieve the same end result?

Thus, a concentrated effort is required to understand the desired results (goals). Is each step required to achieve the goal? Is there a way to combine steps or eliminate unnecessary handoffs? Are you adding steps for political reasons? Is there another way to accomplish the goal? Are you adding a step that adds unnecessary but cool features or benefits? Are you adding complexity for a nice-to-have?

Ask yourself and your team questions. Spend the time upfront to develop just the tasks which are required to achieve the end-result. Then, during implementation, suddenly every step/task is seen as value-added and necessary, and so the project team will have to remain focused.

Manage the Critical Path with Rigor: In my experience in working with hundreds of project teams globally, across a variety of industries, the single best way to accelerate project results is to manage the critical path with rigor. In essence, the definition of a critical path is the sequence of project tasks which add up to the longest overall duration. Thus, managing the critical path is what will have the most significant affect in accelerating the project’s progress and achieving results. I’ve found that proactively managing the critical path is the optimal approach. In other words, ask the owners of the critical path tasks in advance if they see any roadblocks to achieving their task. Remind them of approaching due dates. Offer assistance. In essence, prioritize and focus most of your attention on the critical path tasks.

Clearly Define Goals and Tie Actions to Them: First, if the goals are unclear, time is wasted. Worse, results are not achieved. Second, do not focus on activity and effort; instead, focus attention on the results you want to achieve. People will pay attention to that which is measured and valued. Therefore, measure and value the results and progress towards the results.

This does not need to be complex. Simple metrics focused on critical path progress is sufficient. Then, the key is to continually explain the value of each person’s tasks, how they fit into the overall project and how that project is important to the company’s goals. For example, will the project free up cash flow? Increase profit? Improve organizational support for sales? Why does it matter? Then, tie rewards and recognition into the process, focused solely on results and progress towards results. Appreciate and thank team members. Make sure that bonuses and other compensation cannot be achieved based on activity without results. Ensure that progress towards results is seen as valuable and appreciated.

When these three keys to success are put in place, it is possible to accelerate project results. In today’s economy, those who can outpace their competition with solid results will be those who “win the race”.

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