Skip to main content

Tag: Strategic & Business Management

Collaborative Leadership: Managing in the Matrix

Written by George Pitagorsky on . Posted in Articles. 11 Comments on Collaborative Leadership: Managing in the Matrix

“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.” Lao Tzu

The most effective leader doesn’t dictate or mandate, they set direction and eliminate roadblocks. The great leader collaborates with his subordinates, peers, and superiors. He asks more questions and gives fewer orders, deadlines, and directives. At the same time, the great leader must know the character of the people. Not just subordinates but also peers and superiors. Leaders lead across hierarchies and must change their style to suit the situation and the needs of the people they are dealing with.

Leadership starts with a vision. A collaborative approach implies that the vision begins as a draft or seed. It is presented and then evolves through dialogue so that it is owned by all stakeholders. While collaboration takes much more time and effort than the alternative, it pays off. A dictated vision is less likely to be attained than one that has resulted from the contributions and approval of the people who will actualize it and live with the results.

We must transform theoretical into practical for it to be of any use. The theory of a collaborative leadership approach has been expressed many times in many contexts. How does it translate into practical action that a Project Manager can apply in the real world?

We will use obtaining estimates and setting targets as an example of the application of a collaborative approach.

Working in The Matrix

Most Project Managers do not have direct authority over the people working on their projects. When working with “matrixed” resources, collaboration is a must. Anyone who has ever tried to force a deadline on a functional manager or a member of a functional group or operational user organization knows this experientially. Unfortunately, that doesn’t stop them from doing it again. Why? Because of fear and the belief that there is no choice.

The big boss says, “I want this by next Tuesday.” The PM knows that to do it by then Task X must be done by this Thursday. Therefore, the PM thinks there is no choice but to mandate the date to the people responsible for Task X. He’s got to meet the big boss’ deadline.

He goes to the functional manager in charge of the group responsible for Task X and says, “You have to complete your task by Thursday in order for me to meet my deadline.”

The functional manager could comply and deliver. Everyone is happy.

What’s the likelihood of that in your situation?

The functional manager who doesn’t know how to or doesn’t like to say no could say he will comply and not deliver. A different functional manager might laugh and walk away.
Do these responses ever happen? Neither of them is particularly healthy.

An alternative scenario is that the functional manager, who is clever enough and kind enough to take your statement as a question (“Can you deliver?”), assesses the task and says that there is no way it can be done in that time frame, because the effort and duration required are too great and/or there is a backlog of work and therefore no resources to put on the task. We could do Task X by a week from next Tuesday.

If lack of resources is the reason for not being able to hit the deadline, a priority change or additional resources could resolve the problem. That would require a decision from on-high.

There is a choice

The Project Manager who thinks there is no choice but to comply with the big boss’ deadline is in trouble; caught between a rock (the functional manager who says ‘no’) and a hard place (the boss’ deadline). The PM who recognizes that there is a choice has some hope.

The choice is to go back to the boss with a logical and fact based argument and say “Can’t do it by then. It can be done by a later date unless you and/or your peers change priorities. If you do change priorities, then you will have to bear the cost of slowing down or interrupting other work. Still want it?”

This is taking a collaborative approach in managing your peers and superiors. As a leader, you have enabled your boss (or client) to make a decision and set a rational deadline. You have protected your team and yourself from a forced march to failure. You have protected your boss from having unmet expectations and making promises to his boss that cannot be fulfilled.

Of course, doing this means that you must overcome your fear of pushing back and your perception that what the boss says is an unconditional command. Take the command as a question, just like the clever and kind functional manager did.

Also, recognize that your boss may be completely irrational and not care about the facts and logic. He may just want what he wants and think that wanting will make it happen. It might, but at what cost in quality, morale, and trade-offs outside of the boss’ limited purview. This kind of boss, you want to fire.

Managing Direct Reports

Now let’s change the scenario, instead of relying on people from other groups, who don’t report to you, the entire deliverable required by the boss can be delivered by your direct reports; people who you can order around and mandate the delivery date.

The collaborative leader will not mandate the deadline. He will say what needs to be done and ask “When can you deliver?” If the answer is not by next Thursday, then he will ask why and how it could be done sooner. In effect, he is managing his direct reports, his subordinates as if they were peers or superiors.

The result would then be the same as with the functional manager, a choice for the boss.

The PM who pushes down demands rather than pushing back with a logical and fact based argument is not a leader; not even a good manager. While he might get his staff to accept irrational deadlines, he really can’t expect them to meet them while meeting the other demands made on them.

There is damage to morale and a loss of respect for the managers who push down irrational demands. Subordinates view them as being fearful, uncaring and weak. They become angry at being forced into a no-win position. Often the best talent leaves.

Collaborative Leadership

In general, telling people what to do and how to do it will result in suboptimal outcomes. The most valuable staff will lose confidence in their boss, suffer from low morale and may leave for greener pastures. People will cut corners and deliver shoddy results. Deadlines will be missed. Stress levels will increase. People will learn to be told what to do rather than to take initiative.

By asking your staff for their input and treating them as peers, you will create a healthier work environment and bring out the best in people. By considering even your boss’ boss as a peer, you will be better able to help her to achieve her objectives.

5 Project Management Mistakes that Can Get You Sued

Written by Brad Egeland on . Posted in Articles. 14 Comments on 5 Project Management Mistakes that Can Get You Sued

I’m an independent consultant AND a Project Manager.  My online reputation is everything, and the last thing I want would be to have a lawsuit directed at me suddenly. 

If you’re consulting or performing PM services through a third party that is paying you, then generally you’re covered by that organization.  And if not, then your own liability insurance will cover you.  Still the negative connotation of being a party in a lawsuit is enough to cause harm to a consulting or project management practice.  So – hint – you want to avoid a lawsuit whenever possible.

I’m sure there are many ways to quickly get yourself into the middle of an ugly lawsuit as a Project Manager or consultant, all of which we want to avoid.  What I’m going to cover here are the top 5 that come to mind for me.  Again, this is far from a comprehensive list, so please be ready to share your own thoughts and experiences and let’s discuss.

Providing an unusable end solution.  This one goes without saying.  Obviously, if you blow through the client’s project budget and turn over an unusable solution to their end users, you might find yourself the subject of a lawsuit.  Always show yourself as willing to right any wrong and stay with a project until you get it right.  You will greatly reduce your chances of facing a lawsuit if the project fails at first  but stick with it to make it right or, at least, show good effort and intent.  A good show of faith in the face of project adversity will help the client to see that you are on their side and are willing to do whatever it takes to fix the end solution as much as possible.  I’m not saying you won’t have to give away some free work.  You likely will but just about anything is better than an expensive and disruptive lawsuit.

Misrepresenting your credentials and experience.  You shouldn’t lie on your resume, and you shouldn’t lie on your website.  Never give yourself credit for credentials you don’t have.  I’m not sure how easy it is for someone to check your credentials or how many even would, but you just don’t do that.  And, if that deceit is coupled with any failures on your part during the course of the project, a lawsuit may happen.  The integrity of the Project Manager or consultant should never be in question.  The minute it is, the word can get around fast, and you may find yourself losing all of your clients at once, and fast.

Leaking proprietary client information to a competitor. Most project clients will want you to sign a non-disclosure agreement (NDA).  There also may be a formal contract involved.  Either way, logic should tell you that you don’t leak proprietary client information to anyone, let alone a competitor of your valued client.  I have had several clients writing into our agreement a list of direct competitors that I agree not to work with while I’m engaged with this client.  Our project clients are important – honor all such agreements and always be above and beyond reproach.  I don’t even like to give out client names when prospective customers ask for references.  I avoid this at all costs.  It’s been a good practice for me.

Related Article: Strategies to Keep Your Project on Track

Failing to cover your bases with signoffs/approvals.  I’m not saying you always need formal signoffs on all deliverables.  But why not?  You never know when you might run up against a client who seems a bit overly litigious, and if you don’t have the documentation to prove that you met dates, milestones, and deliverables along the way, then you could find yourself being sued without the documentation to defend yourself.  Come up with a formal, generic signoff sheet or email for each deliverable and ask your client to sign it or respond to the email with their approval.  That documentation may be golden one day.  Always be careful.

Failure to document requirements well.  As Project Managers, we all know that it’s a bad idea to embark on a project without good, detailed project requirements in place.  It’s what you use to develop your customer’s final solution.  Unfortunately, bad requirements happen all the time, and they can lead to projects going over budget, over time, and – if not corrected at all – the final result may be an end solution that isn’t usable.  So really, this one can overlap a bit with the first topic above.  But requirements are the lifeblood of the project and as the delivery organization it is your job to make sure that the requirements are well documented and signoff/approved by the project client.  If you have poor requirements to develop the solution from then, don’t start the project work until you have good requirements.  If you start, then the finger will be pointed at you, and a lawsuit may come about.

Summary / call for input

Lawsuits are ugly.  Customers can sometimes be overly litigious.  And sometimes you don’t know that until the project is well underway.  A lawsuit may have a basis, or it may be unfounded…but either way, it can be damaging to you.  Be honest, by above reproach, follow through, and don’t forget to document everything.

Thankfully, I’ve never even been close to being involved in one.  No threats, no actions.  The key is to be open and honest with your project clients at all times and always give them your best.  Failure happens, but if the project client knows you’ve been upfront with info, have given the project 100% and are willing to do what you can to fix issues along the way, then you will greatly reduce any chance of legal action should failure be the final outcome.  Stick with the client and make their satisfaction your ultimate goal.  It will always work to your benefit over time.

How about our readers?  What are your thoughts on this?  Have you or your organization ever faced a lawsuit as a result of a failed project?  What happened?  What did you do to work it out with the client?  Please share and discuss.

Key Performance Indicators; How to Use Them for Project Success

Written by Curt Finch on . Posted in Articles. 11 Comments on Key Performance Indicators; How to Use Them for Project Success

Companies that sell services to other businesses-project management, data management, software development or IT consultancies, for example-often track time in order to automate invoicing, but they may be overlooking the other benefits these systems can provide. Real-time access to relevant Key Performance Indicators (KPIs) such as ‘percent billable’ and ‘completed vs. estimated’ can give early warnings of project problems and lead your company to faster growth and more profitability. I would first like to explain what KPIs are, and then show you how to use some simple ones to improve your business or rate of project success that can be calculated from any time and data labor source.

A key performance indicator is ‘key,’ which means that your KPI has to be one of a very few things that you are measuring which you believe will make a huge difference to your business long-term. In other words, a KPI measures progress toward a strategic goal. If you have 100 KPIs, then you’re not going to be able to use any of them to drive organizational behavior because your company doesn’t have 100 strategic goals. Ten KPIs can be effective, five KPIs are better, and one KPI is ideal.

Related Article: Measuring Project Success Using Business KPIs

A Quantifiable Indicator. A KPI must be measurable. “Make customers more successful” is not an effective KPI without some way to measure the success of your customers. “Be the most convenient drugstore” won’t work either if there is no way to measure convenience. It is also important for KPI definitions to remain stable from year to year. For a KPI of “increase utilization rates,” you need to address considerations like whether to measure by hours or by dollars.

Performance Measurement. KPIs are used to measure the performance of a project or organization, frequently through activities such as performance improvement derived from training, labor utilization rates, or customer satisfaction. KPIs are often tied to strategy through techniques such as the Balanced Scorecard, but they don’t have to be as complicated as that to be useful and effective. As with most things, simplicity increases efficacy.

KPIs can differ depending on strategy. They help an organization to measure progress towards their organizational goals, such as increased penetration of existing customers or markets, on-time delivery or reduced scope creep.

A KPI is part of a ‘SMART’ goal-one that is Specific, Measurable, Achievable, Relevant, and Time-based-which is made up of a direction, KPI, target and time frame. An example of this would be to “increase average revenue per sale to $10,000 by January.” In this case, ‘average revenue per sale’ is the KPI. The aforementioned goal wouldn’t be SMART if it wasn’t achievable, if the word ‘January’ was left out, or if was not relevant, e.g. if this was a portion of the organization that had nothing to do with sales or marketing, like HR.

Simple, Useful KPIs

Billability (often termed ‘utilization rate’) is the percentage of time in a given period during which employees are working in a revenue-producing capacity. You must configure your timesheet system to track whether or not work on a project is considered billable to the customer. Once you have this information, utilization for any period, group or person is found by the formula B divided by T, where:

B = billable hours for the employee/group in the period

T = all hours worked for the employee/group in the period

Most organizations try to keep their utilization rate above 70% or so. The higher, the better, until you’ve reached a point where administrative tasks that are necessary to the business or specific project (like tracking time) are not getting accomplished. Then you know you’ve pushed it too far.

Adherence to Estimate. Customers do not like it when you underbid, but you won’t win the business if you overbid. Many consultancies do a poor job in this area. The KPI you want to minimize here is defined by the formula [(E-A)/E] where:

E = estimated hours to complete project

A = actual hours used to complete project

Just tracking this KPI is a good start, and you can get the data to calculate it from any timesheet system, even paper ones. Automated systems, however, often have reports to calculate it for you. Improving this number can be difficult for some companies until they understand a simple truth-that similar projects often have a strikingly similar ratio of early phase cost to overall project cost.

The early phases of a project are usually referred to as the ‘requirements,’ ‘design,’ or ‘specification’ phases, depending on what your consultancy is doing. If you find that after carefully tracking time on a batch of similar projects, the first two phases usually take about 10% of the total project time, you can use that data to predict the length of future projects.

The following diagram shows how tracking the time it takes to complete a project helps in planning future projects. By tracking time and subsequently learning that the first two phases of Projects 1 and 2 took 10% of all project time to complete, the projected length of Project 3 becomes easy to determine. If the first two phases of Project 3 take 1.8 months to complete, you can estimate that the entire project will be completed in 18 months. This project estimation technique has proven itself to be extremely accurate for similar projects in a variety of companies.

Percentage of Projects Profitable is a KPI that can really affect your business in a positive way. As an analogy, consider a Journyx customer, British Petroleum (BP), and their experiences in drilling for oil. They created a strategic vision for their company which they termed ‘no dry holes’. Drilling for oil and not finding it is expensive. Rather than trying to make up for all the dry holes by finding an occasional gusher, BP decided to try to never have a dry hole in the first place. Changing the attitude that dry holes were an inevitable cost of doing business fundamentally changed their culture in very positive ways.

Project management and other consultancies also have dry holes: projects which lose money for the company. Due to an inadequate understanding of costs, many of these go unnoticed. If you set a strategic goal for your company of ‘no unprofitable projects,’ it will change the nature of discussions in your business.

For example, it empowers frontline employees to legitimately push back when a project is being taken on for political reasons. Conversely, having the attitude that the winners will make up for the losers doesn’t do this. Getting direct per-project cost data from a timesheet system is easy. Correctly applying indirect data (such as sales or accounting time) to the direct costs is a bit more complicated. Connecting all of this to revenue data gives you per-project profitability. Once you have that data, you can work on your KPI of ‘percentage of profitable projects’ and try to maximize it. The formula for this KPI for a given time period (usually a quarter or a year) is:

# of profitable projects / # of projects

You should seek to maximize this number. Even if you are willing to lose money on a few strategic projects in order to enter a certain market, you should determine how many you’re willing to do that on, and keep your losses around that area reasonable.

Conclusion

These are three examples of KPIs that you may find useful, with information on how to calculate them. None of these requires an automated system (although that dramatically lowers the effort of data collection). Other KPIs that could be useful are ‘calendar time to complete a job’ (because overhead costs increase substantially due to all the status communication problems when there are delays), ‘percentage of customers satisfied’ and ‘time to complete initial free estimate.’ Any of these may be right for your business once you’ve chosen a strategy, but a strategy without metrics won’t get you very far. KPIs are the answer.

Curt Finch is the CEO of Journyx (http://pr.journyx.com), a provider of Web-based software located in Austin, Texas, that tracks time and project accounting solutions to guide customers to per-person, per-project profitability. Journyx has thousands of customers worldwide and is the first and only company to establish Per Person/Per Project Profitability (P5), a proprietary process that enables customers to gather and analyze information to discover profit opportunities. In 1997, Curt created the world’s first Internet-based timesheet application – the foundation for the current Journyx product offering. Curt is an avid speaker and author, and recently published All Your Money Won’t Another Minute Buy: Valuing Time as a Business Resource.