Tag: Leadership

Project Management is Free!

Written by Cynthia Low on July 16, 2008. Posted in Articles. 5 Comments on Project Management is Free!

If I say “Project Management is Free” every CFO is saying I am either crazy or lying. But I am here to prove them wrong.

Let’s look at a fictitious company; we’ll call them Larger than Life Industries (LTTI). PM Miracle International (PMMI) has had a one year engagement for consulting and training at LTTI. The CFO at LTTI, Joe Carter has called a meeting with the Vice President of Client Services for PMMI, Thurman Munson.

Joe welcomes Thurrman into his office. He gets right to the point; “Thurman,” he says, LTTI is not renewing our contract for PMMI’s services. LTTI needs to cut costs and training is one of the first things taking a hit. Thurman looks a little confused. He says; “Our services are free, actually our services made you money”.

Joe does not believe that Thurman would claim something as outrageous as this. He knows that, of all the people at LTTI, claims like this should not be made to him. He knows where every nickel is going. Joe says, “We have spent over two million dollars with your company in the last 12 months”. Carter pulls out the invoices identifying:

$1,275,000.00 for training 300 employees
$125,000.00 for materials
$150,000.00 for facilities for training
$300,000.00 for travel and expenses
$350,000.00 for consulting services
Total = $2,200,000.00

Thurman pulls out a report and says, “You should also include lost productivity of $750,000.00, and don’t forget their wages as well for training and meetings. That’s another $350,000.00; adding $1,100,000.00 for a total of 3.3 million dollars.

Joe looks at Thurman with a dumbfounded expression. He said, “Where are you going with this?” Thurman smiles and says, “please have a seat and let me explain.”

Thurman gave the following explanation for being able to state that Project Management is Free.

When considering the costs of PM, all costs should be included. This concept that
Project Management is Free has it’s foundations in the book; Quality is Free by Phillip Crosby. There are two points that must be made; what are the costs if conformance and what are the costs of non-conformance?

The costs of conformance include all costs incurred to perform an effort. LTTI spent the following with PMMI:

$1,275,000.00 for training 300 employees
$125,000.00 for materials
$150,000.00 for facilities for training
$300,000.00 for travel and expenses
$350,000.00 for consulting services
$750,000.00 for lost productivity
$350,000.00 for salaries of participants
Total = $3.3 Million

The cost of non-conformance is where this concept is brought home. LTTI needs to look at the changes in performance to determine what the true ROI is for their investment in project management. Here are the improvements:

Reduced rework – $2.7 Million
Reduced changes – $1.3 Million
Schedule delays reduced from 30% late to 10% late = $7.8 Million
Cost overruns reduced from 40% to 15 % over = $8.5 Million
30% increase in contracts awarded = $12 Million
300% increase in customer retention = $9 Million
20% reduction in employee turnover = $3.9 Million
Total = $26.2 Million

Thurman, seeing the wide eyed look on Joe’s face, proudly summarized by pointing out that LTTI netted $22.9 Million. “With this kind of revenue generation you can see how I can claim that Project Management is Free!” Joe smiled and said to Thurman, “double the training for next year!”

Wayne Brantley, MS Ed, PMP, CRP, CPLP is the Senior Director of Professional Education for the University Alliance (www.universityalliance.com). Wayne has taught and consulted project management, quality management, leadership, curriculum development, Internet course development, and return on investment around the world to Fortune 500 companies. He is certified Project Management Professional (PMP) by the Project Management Institute, a Certified Professional in Learning and Performance (CPLP) by the American Society of Training and Development, and a Certified Return on Investment Professional (CRP) by the ROI Institute. Wayne is currently an adjunct faculty member at Villanova University.

The Rules of Lean Project Management: Part 2

Written by Claude Emond on June 3, 2008. Posted in Articles. 3 Comments on The Rules of Lean Project Management: Part 2

This is my second blog entry on the main rules of Lean Project Management, as I see them. It is somewhat linked to the first one, the “Last Planner” rule which says: “The one who executes the work is the one who plans the work.”

What type of work should the Last Planner plan to execute ensure the success of his/her part of the project? The Lean Construction Institute[1] proposes a very simple answer to this question. Projects can be successfully managed by planning and executing reliable promises. What are reliable promises? They are small deliverables that one agrees to complete in a very small timeframe, usually on a weekly basis. This is done for the ongoing project phase/stage and, if we really know what we are doing (according to rolling wave planning principles[2]), it is usually possible to cut the project into more manageable tiny bits. This approach, known as the Percent Plan/Promises Complete (PPC) is a mix of:

The agile software development “timeboxing”[3] approach, applied on an individual basis and
Earned value management using deliverables realised as a measure of project performance achievement, the ultimate seeing is believing measure.

Cutting projects into very small promises that we can literally see at the end of each week is effective in at least three ways:

First, you are in a position to see rapidly tangible progress on the project
Second, you can also quickly see when the project is getting off track and correct the course while time and cost variances are still small enough to be correctable.
Third, according to research by Goldratt, among others, productivity is greatly improved since reduces the time for the Last Planner where to pick up the work still to do after being interrupted. The work then has to be rescheduled to meet timelines. According to some time management studies, people spend in average close to 50% of their workweek on not-planned-for urgent work that comes in the form of frequent interruptions, frequent meaning on average every 30 minutes. Sound familiar?

Using weekly PPC as a measure of progress also has the advantage of giving early feedback about how and where to improve project delivery performance. Some empirical data[4] show instances where project teams managed to increase their PPC from 50 % at the start of a project to more than 80% within a 10 to 12 week timeframe, which is the equivalent of a 60% increase in speed of delivery.

Tracking small deliverables is very simple to do and does not require a complex reporting system (computing timesheets, project expenses, etc.) to accomplish. In all the things I propose, this is also the one approach that the vast majority of participants in my workshops like the most and want to put into place in their organization as soon as possible. And frankly, I believe that if you stick to delivering those small promises, and succeed most of the time, you will discover when you receive your “hours spent and/or incurred costs” report (usually containing one-month old obsolete data), that you are on budget. You already know that you are on time, because you see the promises coming out every week.

So LPM rule No. 2 is: “Do not track time (effort) or cost; track small promises that you can see over time”

And if you want to put together your PPC system fast, there is help available. Just read Hal Macomber’s excellent article “Securing Reliable Promises on Projects”[5] and you will be up and running fast-delivery projects successfully in no time at all.

1 http://www.leanconstruction.org/
2 http://www.maxwideman.com/issacons/iac1077/tsld002.htm
3 http://en.wikipedia.org/wiki/Time_boxing
4 https://www.projecttimes.com/wp-content/uploads/attachments/LCICurt.pdf
5 https://www.projecttimes.com/wp-content/uploads/attachments/reliable_promises.pdf

Putting the Project Manager in the Driver

Written by Cynthia Low on June 3, 2008. Posted in Articles. 4 Comments on Putting the Project Manager in the Driver

A project manager’s training, skills and techniques serve to accomplish one major objective; to provide the project manager a vehicle to successfully attain a goal or target. As with any vehicle the operator must have some training to maneuver and control its progress. The vehicle itself provides no guarantee of reaching the destination or of successful goal attainment. Vehicle quality may also have a bearing on the overall performance and experience. It is the driver that must determine the direction, the route and the rate of speed given the vehicle’s characteristics. Such is the case with project management.

A project manager’s training is relatively well defined. The training or vehicle, so to speak, comes in many shapes and sizes with different levels of performance. Suffice to say that vehicle specifications are generally standard in that there are basic requirements to creating a mode of transportation. Not unlike a project manager’s training. There are basic requirements in a PM’s training that are relatively standard. Take the PMBOK for instance representing the specifications to assemble a knowledge-based vehicle for the project manager to utilize. Once mastered it requires that innate or learned ability to take that vehicle and embark on a journey towards a goal. In most cases, as the project manager/driver, you will have passengers who rely on your judgment and will experience your abilities as a driver and leader. On occasion your passengers or team members will have some input that you may wish to consider in your journey.

This brings us to the next level of a project manager’s development, which deals with maturity and ability. Not all trained drivers can master a vehicle with ease, so too is the case with project managers. A fortunate few are born with an innate ability and reach their comfort zone relatively easily and quickly. The vast majorities are left with a time of trial and error and sweating the details until it becomes second nature. Many of us struggle to get the feel of it and find ourselves constantly challenged in an effort to achieve balance from project to project.

Armed with training, experience and a few times at the wheel you tend to organize your mental stimuli on each project to determine what needs your attention most, when is it needed, and to what level of involvement it is needed. It helps also to determine what requires little of your attention. Consider your progress as a driver: As you became more adept and mature, you tended to focus on the aspects of driving that got you safely and expeditiously to your destination. During your initial days at the wheel, you read each and every sign posted and followed every marking so as not to miss any details. In some cases this attention to detail affected your progress, or may have even got you lost, which left you exhausted and consumed when you finally arrived at your destination. Similarly, with project management we must achieve a level of maturity from the knowledge and experience that helps us zero in and ”feel” the project, not just read all the dashboards and reports to reach conclusions.

There are some basic steps to acquiring a comfortable level of maturity. It takes a well-trained eye and a bit of experience to develop to this stage. Following an in-depth and clear understanding of the undertaking, the PM will recognize three aspects that play a leading role in determining the project’s “feel”. The first aspect is Awareness. The second is Priority and the third aspect is Urgency. (APU).

Awareness involves information gathering. It requires early stage analysis of scope, data, documents, contracts, organizational structures, politics, personnel and whatever details may be available. As the project develops through its stages so does the requirement to become aware of each added feature to the overall scheme. Awareness is primarily a quantitative analysis. It requires some judgment but also requires considerable understanding of the role each piece of knowledge base plays in the big picture. This step gives you the basic raw materials needed to assemble the framework from which you will build your model of management. You will, in all likelihood, have a checklist of standard features you feel are required to complete your model of how the project should be managed. You may introduce features such as scheduling or cost control, or you may find that your model requires expertise and, therefore, additional resources. After completing this stage of knowledge absorption, the next step is setting the priorities.

Priorities involve identifying those features or activities you absorbed in the awareness stage, which will create a “no go” situation in your overall progress if a non-compliance should occur. A non-compliance can be a delay in progress, a missing document, or an unfulfilled step in the process. As a project manager it becomes crucial to identify these potential non-conformances and devote additional attention to them to prevent them from crippling your program. It serves to make efficient use of the PM’s time, thus avoiding excessive effort on non-essential activities. In many cases, a well-defined network schedule or cost plan is very useful in identifying these priorities. However, in several instances the plan may not hold enough information to be useful in all cases. Take for instance a departmental political situation that may be affecting a judgment call crucial to the project. In another instance a minor unresolved engineering detail may delay a larger issue of information, or a financial foul-up could stop activities due to lack of funds. Being fully aware of the critical aspects allows the PM to surgically focus his attention. In addition, it is vital to document and communicate these priorities and focus on them during meetings and dealings with members of the project team. This increases the team’s awareness and places more eyes and ears on the potential problem, which then leads us to the aspect of urgency.

Urgency is the level of effort that will be injected into each feature of your program or project, based on its priority. Urgency must be measured very carefully to avoid the “cry wolf” syndrome. The PM with his awareness stage completed, his priorities determined and with his judgment in tact will then decide how hard to press on the throttle. It is this aspect of his responsibilities that may determine the success or failure of the project. Urgency is generally preceded by a decision to act in some form. Similar to driving a car, reckless or indiscriminate use of urgency fosters fear and distrust thus loosing the support and confidence of those who you need most to achieve success. Applying urgency appropriately and justifiably helps build trust in your judgment and confidence in the actions needed to resolve a crisis. It also helps you attain maturity and respect.

In conclusion a project manager needs formal training in the skills of PM but must also develop a sense of awareness, priority and urgency to apply the skills learned and needed. This sense quite often is the result of trial and error through one’s developmental stages or via a mentoring program. Experienced managers generally recognize the difficulty in transferring this sense, or savvy, to new managers since, having spent years developing this intangible in themselves, they often feel that only time and practice can help develop it in a new PM.

Robert Mattia is a project manager and operations manager with The State Group International L.L.C, which is embarking on a joint venture business development with S.S. Lootah International in the UAE. He has been with The State Group for the last 14 years and possesses a Bachelor of Technology from Ryerson Polytechnical University (1978) with a major in Project Management. He is a designated A.Sc.T. with the Ontario Association of Certified Engineering Technicians and Technologists, and holds a Certificate in ADR (Alternative Dispute Resolution).

Taking a Risk

Written by Mike Morton on June 3, 2008. Posted in Articles. 3 Comments on Taking a Risk

When people in the project management business talk about risk, we think about the traditional role of risk management within a project

But this week I thought of risk within our lives in a slightly different manner. Stephen Lewis, the world renowned Canadian fighting for recognition of the plight of Africans, was the guest speaker at my daughter

The Electric PMO

Written by Cynthia Low on May 16, 2008. Posted in Articles. 6 Comments on The Electric PMO

I had the great pleasure of sitting in on a round-table discussion at ProjectWorld Canada this week in Montreal. Of all the things you can do at ProjectWorld Canada, sitting with other project managers and doing peer-to-peer learning is by far my favorite. The topics in this case were on placards at each table and you could just select the subject that was of interest and sit in for a half-hour discussion. “A successful Project Management Office (PMO)” caught my attention and I sat in on both sessions to listen in.

I was not at all surprised to find several varied opinions about how to make a PMO successful, but what was most interesting was the wide range of ideas over what constitutes a PMO and what its purpose should be. If you’ve read my column before, you know that my focus in the industry is on project management systems, but imagine the challenge for someone in my area if it is that difficult even to define a PMO. Let’s take a look at a couple of different perspectives of what a PMO could be:

The Owner
It’s the rarest of all PMOs. In this scenario, the PMO has ultimate authority over every project manager. The project managers report directly to the PMO. We see this most often in a mega project environment where the entire organization has been created, in fact, to accomplish a particular project. It can also happen in Defense and Aerospace projects where the government has imposed project management standards, which define how the organization must manage. In this environment we’re more likely to find a small, centralized project management office staffed by highly skilled full-time project scheduler and project cost analyst personnel.

The tools that are chosen for this situation are heavy on the analytics and light on user-friendliness. Compliance and collaboration are not the first concerns here. What’s more important is that we can do strong forecasting, strong project accounting, and that we’re able to have sufficient flexibility to integrate directly into the organization’s ERP and corporate reporting systems. We focus more here on government or contract compliance, so we’re more likely to find things like requirements for Monte Carlo risk analysis and Earned-Value standards for cost analysis.

The Coach
(No, not the couch – that’s where PMO staff end up after a long day!). Perhaps the most common PMO role today is that of mentor or coach. They’re not there to impose their authority on a project or on the project manager but, rather, to be there to guide the Project Manager, to offer assistance if needed, and to provide tools and resources to help the project get out of trouble.

In this case, the PMO is more likely to be a small, highly skilled group and extremely unlikely to be hosting a strong centralized enterprise project management or enterprise portfolio management system. They’re more likely to offer tools that each individual project manager can use, and to facilitate training exercises and the delivery of easy-to-implement templates. There’s not much room here to police the projects under the coach, so the role is supportive rather than prescriptive.

If it’s all about supporting others, the ability to disseminate information is more important than our ability to collect it. So, we look for tools that are strong on document management, strong on communications and light on centralized analysis.

The Scout
Many PMOs are set up like the Defense Early Warning (DEW) System of cold-war fame. The purpose of the office is to identify potential problems within projects and to report back on this to management. Scout PMOs don’t have much authority but often they are much more than reporters. After all, if they can identify the problems early on, why not try to tackle them up front. It’s not unusual to find a desire for an enterprise project management system here, but deploying one can be a challenge. The Scout PMO is often empowered from the highest levels of management, and that’s a good thing if you’re trying to deploy an EPM system. However they’re often viewed with suspicion by the project managers themselves, and that’s an awful thing if you’re looking for the cooperation you need to get an EPM system used by everyone.

Systems for a Scout PMO will be strong on data collection, strong on reporting, and a little lighter on heavy analysis. Assembling information from numerous disparate sources into a single view for management is almost impossible, so the Scout PMO will lobby heavily for data collection and tool standards, as well as some semblance of standards for projects, such as coding for stage gating phases and project durations.

The Facilitator
While it’s not yet the most numerous, certainly one of the most desired types of PMOs anywhere is that of the Facilitator. This kind of PMO doesn’t have authority over the rest of the project managers, yet it doesn’t have a passive role either. The PMO’s role is to facilitate the execution of the projects under its purview. This means that the role includes that of the Coach and the Scout. It’s often said that a facilitator has the toughest role in a negotiation. They are held responsible for the result but carry no authority to generate it and that, indeed, is how it works in this environment also.

The Facilitator PMO will have the backing of senior management but will be a dotted line on the organigram. Without authority, they will resort to cajoling, threatening, inspiring, evangelizing and pleading in order to produce the result, and it’s often very successful.

This PMO is characterized by a small cadre of highly trained and highly charismatic personnel. We’re most likely to find a successful Enterprise Project Management system implemented with this kind of PMO. Communication and collaboration are very significant desirables in this scenario, and that is often a key to making an EPM system work. Also, centralized information is essential to the Facilitator’s being able to identify areas in which project managers, team leads and management must collaborate. So getting all project data into one place is going to be an essential part of making the Facilitator PMO successful.

There are other kinds of Project Management Offices, so if I’ve not mentioned yours or if yours is a hybrid of the couple I’ve described, don’t fret. The point is that before you head off to choose project management software ideal to your PMO, or before you start to implement the project management software you’ve got, it’s worthwhile to think about what role you’re trying to fulfill. None of the definitions I’ve listed are the “best”. They’re all specific to what an organization is trying to accomplish and the particular business challenges they are facing at that time. In fact, it’s not unusual to see the role of a PMO change over time as the organization it serves changes.

Most high-end enterprise project management packages these days have so much flexibility that they can be deployed in many different ways. You can focus on so many different aspects of these systems that they can easily support many different PMO scenarios. So, think about your PMO scenario before leaping directly to installation and training of the system you’ve chosen.

Chris Vandersluis is the founder and president of HMS Software based in Montreal, Canada. He has an economics degree from Montreal’s McGill University and over 22 years experience in the automation of project control systems. He is a long-standing member of both the Project Management Institute (PMI) and the American Association of Cost Engineers (AACE) and is the founder of the Montreal Chapter of the Microsoft Project Association. Mr. Vandersluis has been published in numerous publications including Fortune Magazine, Heavy Construction News, the Ivey Business Journal, PMI’s PMNetwork and Computing Canada. Mr. Vandersluis has been part of the Microsoft Enterprise Project Management Partner Advisory Council since 2003. He teaches Advanced Project Management at McGill University’s Executive Institute. He can be reached at [email protected].