Voices on Project Management

I like coffee. The smell of the freshly brewed morning cup of coffee invigorates me. Just this morning I met with my mentor and I prepared as usual by getting to the cafeteria early with my cup of coffee in hand.

Our conversations usually range from project war stories to best practices and lessons learned. This time around, the discussion centered on a "must-win" proposal effort. You feel confident about the current proposal, but the day before the submission, you're called into the executive office and told the final cost must be reduced by another 20 percent.

Thoughts swirl through your head. Given that you're the project manager, you'll have to update the basis of the estimation so it supports this new, lower cost.

Many times a must-win proposal means being the lowest bidder, hoping to make up the difference from future change requests. If this is the case, then the direction from the executive office borders on unethical conduct.

Why? Because within defense contracting, a firm fixed price contract is the preferred choice for the government because any overrun would come out of the contractors' profit margin. Imagine that you know it would really take you US$100 to do the job but you bid US$80 knowing that you're the lowest bidder in order to win the contract in the first place. Once you are awarded the contract, you employ various strategies to bring to light that the customer really needs additional "enhancements" in order to fully execute their missions. Magically, the total cost of the enhancements seem to add up to another US$20, plus additional margin.

All bids must provide basis of estimation (BOE) to justify the dollar amount. On the day before the proposal submission if you are directed to lower the final bid number by 20 percent and there is no way you can revise the basis of estimation in time and you signature is on the proposal, then you are lying to get the business.

So what do you do? 

I think that if the original basis is sound and was validated through independent review, then it's the job of the project manager to say no and explain why that can't be done without compromising the integrity of the submission.

Before I could for a response, my mentor said it was okay not to have an answer right then. When that day comes, my action will be rooted in principle and on doing what's right.

Does the end justify the means?

On a personal note, I'll be taking December off in anticipation of a new addition to our family. Best wishes to you for the various holidays coming up.

I received an intriguing question at a recent webinar I led: "How does Six Sigma training address or include the concept of acknowledgment?"

That question was actually a new one for me! So I turned to my colleague, Anne Foley, director of Six Sigma for International Institute of Learning Inc. Apart from the usual reasons why you need to acknowledge a team member, I asked what role she sees acknowledgment playing in Six Sigma training?

She said the training discusses the kind of culture you establish if you only acknowledge those who put fires out, without acknowledging those who actually prevent the fires.

"Fire prevention is critically important to business success but often goes without notice. If you want to change the culture, you must change the way you acknowledge, celebrate and reward employees by honoring those who prevent fires as much (if not more) than those who put them out."

Anne talked about how one of her green belt students discovered his company had a defective inventory management count. Finances showed the company had spent a certain dollar amount on inventory--and that did not match the amount of inventory in the system, which did not match the physical count.

He investigated and found that the inventory-entry process was broken, which could have left the company without critical inventory to run its business had the problem not been discovered. He found it, fixed it and his boss was so happy he wrote it up in an internal company newsletter and gave his employee a whole week off--with pay.

At several companies where Anne has conducted training, managers are trying so hard to acknowledge and encourage fire prevention that they actually run competitions among those who prevent errors--and the awards are big--from free dinners to stock options.

Sincere and heartfelt acknowledgment always makes a profound difference to people. But did you know it also prevents fires? What an awesome tool!

So thanks to the student who brought this question to my attention. I learned something important and hope you did, too!

Do you know a project manager whose achievements deserved to be honored with more than a few nice words? Do you work for an organization where innovation has contributed to the bottom line and the project profession? Or, have you recently worked on a project that went far above and beyond expectations?

Then, it's time to nominate this person, project or organization for a 2010 PMI Professional Award. (See the full list of 2009 Professional Award winners.)

The deadline for most PMI awards--which include categories for products and books as well--is 26 April 2010. For the highly coveted PMI Project of the Year award, the deadline is 1 March 2010. Nominations for both the PMI Eric Jenett Project Management Excellence Award and the PMI Distinguished Project Award are accepted all year.

You can get more information about the awards and submission process on PMI.org.