December 2008 Archives

Even on Mars, projects budgets and teams are shrinking.
    Five years ago, the U.S. National Aeronautics and Space Administration (NASA) launched its twin Mars rovers, Spirit and Odyssey. Since then, they've been taking a beating. An article published this week in the Columbus Dispatch reports on how the Mars rover project team has seen continual success despite being forced to do more with less, partially due to the resilience of the machines themselves.
    "They're like that old Volvo or Honda in your driveway--they keep running and running," said John Callas, rover project manager at NASA's Jet Propulsion Laboratory in Pasadena, California, USA.
    And it's a good thing, too.
    Earlier this year, NASA proposed slashing US$4 million from the project's US$20 million annual operating budget--which would have meant putting the Spirit rover in "hibernation." But the rover team protested and the cuts to the US$800 million project didn't happen. But the team has seen some brutal cuts in staff numbers. In a five-year period, it has seen its ranks drop from 280 scientists and technicians to roughly 60.
    Going lean means sometimes making do with what's on hand. "We're learning how to make things work for a long time on Mars," said Geoffrey Landis, a scientist at the NASA Glenn Research Center in Cleveland, Ohio, USA and member of the rover science team. "The experience will help us make more capable rovers and eventually put people on Mars."
    What would you do if stakeholders proposed cutting 20 percent of your budget for the year? Would you protest or absorb the cut? And have you been on a long-term project that has seen team size drop drastically?

Let's face it, McDonald's doesn't exactly scream sustainability. Yet the fast food chain has shown a fierce determination to demonstrate its green cred that goes back to way before it became so cool. In the late '80s and early '90s, McDonald's focused on reducing its packaging--eliminating 300 million pounds of the stuff. Granted, there was plenty of packaging to get rid of, but still ...
    Since then, the company has tackled sustainability projects on multiple levels, everything from collaborating with Greenpeace on a soy moratorium aimed at protecting the Amazon to rolling out an environmental scorecard for its suppliers. The company also recently opened a green version of the Golden Arches on the south side of Chicago, Illinois, USA. And now others are under construction in France, Brazil, Canada and Costa Rica.
    Of course with the global economic crisis, the big question for McDonald's and every other company out there is whether the commitment to corporate social responsibility (CSR) projects will last. Bob Langert, McDonald's vice president, says CSR can't be a standalone. On his blog, he writes: "CSR must be part of the way we think and act every single day. It is this type of mindset and way of doing business that does not waiver in the face of economic instability."
    The struggle to balance sustainability and the bottom line isn't likely to end anytime soon. Check out the February issue of PM Network for an in-depth look at how the crunch may turn out to have a "cleansing effect" on sustainability.

Ready or not, for most of the world, the busy holiday season is here. And the excitement--and, let's face it, the stress--is pushing work to the back burner.
What's a project manager to do? In some cases, the decision has been made for you.
Take Aspen, Colorado, USA--city law prohibits construction within the city limits for eight days, from 25 December to 1 January.
    "It's really messing my schedule up, and at this time of the year, we need to take advantage of every good day," Gary Wesley, superintendent of a construction project in Aspen, told The Aspen Times. "I had a lot that was going to happen that week."
Project managers and construction workers interviewed by The Aspen Times and Aspen Public Radio this week seem to view the construction prohibition as a recent development.    But the city's Construction Management Plan Requirements Manual, which was revised 19 September 2007 and dated December 2007, clearly states: "No construction is permitted on ... federally designated holidays including: Christmas week (Dec. 25 - Jan. 1)."
    The situation highlights the need to exercise due diligence in the initial stages of project planning. It must may prevent a lot of headaches once delays such as the holiday season strike--and mean one less source of stress.
    How do you plan for the holiday seasons? Does work slow or just stop completely?

The results of two recently released studies run the gamut on the good, the bad and the ugly of the state of IT right now.
    First, the bad and the ugly from The McKinsey Quarterly study called McKinsey Survey on information technology strategy and spending.
Some of the most interesting take-a-ways include:
•    Two-thirds of respondents--who include CIOs, CTOs and other senior-level people--say their organizations are at risk from information- and technology-based disruption
•    Over 40 percent of respondents favor improving the talent of IT staff and increasing the accountability of business units for implementing IT initiatives
•    Only 23 percent of executives expect to increase their operating costs in 2009, while 43 percent expect to reduce them
    Now, some good. When asked about effectiveness of delivering IT projects on time and on budget, 30 percent of respondents did say they were extremely effective, while 38 percent said they were somewhat effective. (Check out PMI president and CEO Gregory Balestrero's perspective on the study and what it means to project managers.)
    A study of more than 1,000 companies claims the economic downturn is pushing more and more companies to invest in green IT technologies. Twenty-five percent of companies are implementing a comprehensive green IT program, up from 15 percent last year and up from 20 percent in April 2008.
    While the motive may be selfish--saving money on energy costs--it doesn't diminish the outcome.

Some observations by speakers at the now-concluded 2^nd Global Infrastructure Leadership Forum:

 

On Africa:

"There is lots of money available for African investment but not many competent groups to put together good projects and attractive deals. Having a project make money is a foreign concept for public funding companies."--Presenter representing a proposed power generation project in Ghana.

 

Creativity brings financial promise:

A hydropower project proposed for Georgia, the country with the largest hydropower resources in Europe, might not get off the ground if the electricity only was used locally. Georgia has low electric rates. The creative solution--sell power to neighboring Turkey, a high-rate country with growing demand. Plus an international transmission line to Turkey is under construction and will be ready in 2012--the same year the hydro plant would be ready if construction begins in 2009.

 

Money from customers--and the need for good stakeholder relations:

PA Consulting Group's David Keith said more equity for major infrastructure projects must come from developers and others, but ultimately revenues need to come from customers (the projects' beneficiaries) via higher tariffs and demand-side management. He said you need to be able to make profits on these types of projects in order to put money back into operations and maintenance. To make this sort of business case, project leaders must have excellent stakeholder relations.

 

Not as "sexy" as roads, bridges, trains or dams:

Several speakers on a water/wastewater projects panel reminded the audience that while water projects are not as attention-grabbing as other projects presented at the conference, they are socially necessary. Despite that necessity, the speakers agreed that water projects are not as advanced as other types of projects in their proposal cycles.

 

A project was presented to improve water service in a rural area of Gabon. The project included rehabilitation of manual village pumps. The goal is to reduce water-born diseases. Another project proposed building irrigation projects in a semi-arid region of Brazil to grow agriculture there and fight poverty. The speaker noted laws recently passed to encourage public-private partnerships. Finally, a representative of the engineering company Acea described a project for the Dominican Republic that will ultimately reduce consumption through metering, higher tariffs and reducing leakage.

 

An interesting note is that Acea is owned 51 percent by the city of Rome, a part of the world that has millennia of experience with aqueducts.

 

Mexico believes in infrastructure spending:

Dr. Luis Téllez Kuenzler, Mexico's secretary of transportation and communication, spoke at lunch. His country believes in infrastructure to counter the effects of the world economic crisis. Mexico will spend 1% of its GDP in 2009 on highways, rail, ports and airports, including its biggest project, a new Mexico City airport. 40% of this funding will come from public-private partnerships. The goal is to double the distance covered by motorways and raise port capacity by 85%, as well as speed up railroads. Dr. Téllez says crisis is an opportunity.

Project management practitioners who read the conventional wisdom on those things that threaten project success may be "getting sold a bill of goods" (a U.S. colloquialism meaning to be deceived).
    While project management-types usually don't stay in the industry for long before witnessing a project crash-and-burn firsthand, the ability to accurately identify and clearly articulate the proximate cause of that project failure is often elusive, with individual prejudices coloring analysis. Quality engineers tend to name a lack of quality capability as the main reason behind project failure, while estimators tend to believe inaccurate cost baselines or estimates at completion are the culprits.
    I have a pretty clear idea of the main, if not only, cause of project failure, but before I name it, let me tell you what it isn't:
•    No Six Sigma
•    Lack of Agile project management
•    Failure to engage stakeholders (see my previous post)
•    Inappropriate leadership style
•    Too few Project Management Professional (PMP®) credential holders
•    Insufficient procedures or written guidance
    I could go on, but this list should be sufficient to contradict the majority of management writers who are asserting the key causal factor in project failure.
    So, what is the main causal factor? The project manager and/or project team made bad decisions.
    This is not simply a semantic difference. The ability to make good decisions is absolutely critical to any and all project outcomes, including the ability to meet success criterion. This ability is influenced by several factors, including:
•    The education/capability of the project team
•    Some level of luck, certainly, but mostly:
•    The availability of adequate project cost and schedule performance information, which almost always clarifies the best project decisions
    So important is the generation and delivery of cost and schedule performance information that any manager who eschews such information has automatically signaled their incompetence, and inappropriate placement in any position of authority.
    I'm essentially calling out the anti-cost/schedule performance system crowd. (You know who you are.) If you have ever argued against the introduction of an earned value system on principle, stop calling yourself a project manager because you aren't one. Of course, I'd love to hear from anyone disagreeing with me on this, so, please leave a comment.

Asia Pacific is a veritable project hotspot these days. Between China's massive investment in infrastructure to India's massive IT portfolio, it's the place to be for project managers.
And now here's your chance to be part of the action.
    Registration is open for the PMI Global Congress 2009--Asia Pacific in Kuala Lumpur, Malaysia. The deadline for advanced registration closes 23 January 2009.
    If you are a PMI member, be sure to check out the December PM Network for a preview of the event, including interviews with Congress Project Action Team members. Then in January, there will be another sneak peek on PMI.org. And following the success of live coverage and blogging from the PMI Research Conference last July in Warsaw, Poland and the PMI Global Congress 2008--North America in Denver, Colorado, USA, we are sure to have onsite crack reporting from Kuala Lumpur as well.
    Are you attending congress this year? What are you looking forward to?

The first thing I heard at today's session of the 2^nd Annual Global Infrastructure Leadership Forum in Washington, DC, USA was a challenge--well, two challenges, really, to "getting the big things done": Identifying good major infrastructure projects and getting them financed. What exactly are "good" infrastructure projects? They are ones with solid project management, of course, but also ones that offer a return on investment. Many speakers said governments will have to share the risks, not just private concessionaires.

    Enrique Garcia, the president of the Andean Development Corporation, a major development bank serving all of Latin America, said it was interesting to hear that in the midst of the economic meltdown this forum was discussing infrastructure projects in the medium and long term. He happily reported a very recent trip to Panama where his and other development banks signed a $2.3 billion funding deal for the Panama Canal expansion. To make infrastructure projects possible, Mr. Garcia said, financial institutions have to be partners, not competitors.

    More "good news" came from Masaki Omura, managing director of the Japanese Finance Corporation. He said his institution was proposing major contributions toward infrastructure to cope with difficulties in the private financing sector, including $2 billion in recapitalization of projects in developing countries. Mr. Omura noted that there is still, by World Bank estimates, $165 billion in annual infrastructure demand through 2010 in eastern Asia alone.

    Judge Quentin Kopp of the California High Speed Rail Authority reminded the audience that two great infrastructure projects were built in his state during the Great Depression--the Golden Gate and San Francisco-Oakland Bay Bridges. A number of dams were built then as well.

    Many interesting projects were presented on today's panels. A number of them involved sustainable energy, such as Multiner Energy's efforts to build wind-driven power plants and waste-to-energy plants in Brazil. Another wind project on Cape Verde (an island nation off Africa with the best trade winds in the world) was discussed. And Israel is looking to take advantage of its most abundant renewable resource by building multiple solar energy plants in the southern part of the country.

    CG/LA Infrastructure, the firm running this event, bestowed awards on the "global champions" who are making large projects that improve our world even in extraordinary economic times. And by the end of the day, it seems that one answer emerged to the challenges posed at the beginning of the day--cooperation and sustainability are what will keep these projects going.
 

I am attending the 2^nd Annual Global Infrastructure Leadership Forum in Washington, DC, USA, an event that might be described as a mating ritual among sponsors of enormous infrastructure projects around the world, consultants who might find financing for these projects and engineers and equipment makers who can serve these projects once they get going. Ordinarily there would be an enthusiastic atmosphere at a meeting like this, but these are not ordinary times.

    The first session had a panel full of long-time experts on major infrastructure building and each member outdid each other in saying that never in their long careers had they seen a financial situation like the one we're in now: "There is no money;" "no private capital;" "the syndication market is closed;" "public equity is closed and private equity is circling like sharks. Blood is in the water and they are waiting for corpses."

    James Bond, the COO of the World Bank Group's Multilateral Investment Guarantee Agency said there are three crises going now, nested into each other "like Russian dolls": a financial sector crisis, a credit crisis and a deep recession. But the World Bank is in good shape financially, he said, because it is a conservative organization. And he predicted that investor confidence will be rebuilt as bond markets come back more regulated.

    But there is light at the end of the tunnel--or maybe even in the tunnel right now. While Mr. Bond said we will get out of the crisis in six months to a year, projects will go on--good, solid projects with good debt-equity ratios and no "bridges to nowhere." Projects should be financially viable, however--not always the case with infrastructure.

    Hezi Kugler, Director-General of Israel's Ministry of National Infrastructure, said performance-based projects are the way to go, ones with guaranteed benefits. He repeated Mr. Bond's call for well-structured projects. And he also is optimistic that in 2009 there will be more confidence and more capital.

    The next session included a panelist that had reason for optimism: Judge Quentin Kopp is the chairman of the California High-Speed Rail Authority. The voters in his state approved an almost-$10 billion bond issue to get this $45 billion project under way. It will be the first high-speed rail network built in the United States. And voters defied contrary public opinion polls to pass the referendum despite the economy.

    At an evening reception, attendees questioned the speaker, Eugene Robinson, a Washington Post columnist and political analyst, on whether the incoming Obama administration will support infrastructure. "There's a rare consensus in Washington now," said Mr. Robinson. "We're all Keynesian. Any recovery will be accompanied by government spending, and the best way is through infrastructure. 2009 will be an economic opportunity."

Everyone has been watching and reading about the recent terror attacks on India's business capital, Mumbai. The events have passed and patchwork has just begun.
    Those who were directly responsible for the security failure have been shown the door either willingly or under pressure from a combination of higher command, media and public anger.
    I would like to discuss it as a project failure and conduct (with reader participation) the post mortem analysis on what went wrong and how it could have been avoided. The discussion should be based upon information available from news analysis.
Let me start with lessons learned that translate to projects:
    Issue #1: The Indian Intelligence Bureau (IB) is claiming it had informed the government about a possible attack from seaside but no action was taken. There was a risk identified but no mitigation plan was prepared for it. It is important to monitor risk areas and take preventive action before it gets too late.
    In projects, it is the responsibility of project managers to spread awareness about the risks in their projects and their mitigation plans. Don't take even a minor issue casually. If you don't have time to look into the issue, then assign it to someone else and track it to closure.
    Issue #2: India had a couple of terror incidents in the past but no measure was taken to prevent them in the future. It is a universal truth that prevention is always better than correction so it's good to have check points and preventive measures in place before you lose money and resource time.
    Document lessons learned from previous mistakes and ensure everyone is aware of them. It's better to review the learning database periodically and update it if required.
    Let's keep the conversation going. What other lessons learned can you find in these events?
 

U.S. President-elect Barack Obama is putting IT and technology on the national stage--literally. He relied heavily on the use of the Internet and social media tools like Facebook, Flickr and text messaging throughout his campaign.
    And now he plans to appoint the country's first chief technology officer (CTO), a cabinet-level position aimed squarely at bringing technology in the public sector up to par with private industries.
    There is a lot of speculation centered on who will fill the trailblazing position. Names supposedly on the shortlist Shane Robinson of HP and Edward Felten of Princeton University.
    Never has a U.S. president recognized the importance of IT and technological innovation like Obama. And this is sure to be good for industry projects down the road. In fact, two of Obama's three technology pillars on his website indicate increased project activity.

1. Barack Obama will protect the openness of the Internet:
Obama and [Vice President-elect Joe] Biden strongly support the principle of network neutrality to preserve the benefits of open competition on the Internet.
2. Deploy a modern communications infrastructure:
Obama and Biden believe we can get true broadband to every community in America.
3. Improve America's competitiveness:
Obama and Biden will ensure our goods and services are treated fairly in foreign markets, invest in the sciences, and will provide new research grants to the most outstanding early career researchers in the country.

If I had a dime for every copy of every project management article that prodded the reader to further engage stakeholders, I wouldn't have to spend time writing this blog. I could probably buy New Zealand.
    Indeed, failure to engage stakeholders has become the cardinal sin of the project management industry if you read all the trade journals. I do believe that they are only a short distance away from requiring all managers of failed projects to wear a scarlet FES, for Failed to Engage Stakeholders, reminiscent of Nathaniel Hawthorne's novel of a very similar name. Being the hopeless iconoclast that I am, I can't help to make the opposite assertion: Project managers should eschew these all-wise, all-knowing stakeholders for the following reasons.
    First off, who are we talking about here? Which "stakeholder"? If it's the customer, then, of course, "engage" them (which, I assume means, you talk together). But keep in mind, customer involvement often involves their asking for additional stuff on your project or higher quality standards. The desire to accommodate these stakeholders is the most common cause of that most fatal of project-killers: scope creep. And, once a good dose of scope creep has wrecked your project, it won't do the culpable project manager any good to respond, "I was just engaging the stakeholders!"
    Then there are the stakeholders who are neither on your project team nor in your customer's organization: These are "nuisances." If the scope of your project involves doing something that provably impacts others in an adverse manner, that's your customer's problem, isn't it? They probably should have spent a little more time getting the appropriate permits before they ponied up the money for your baseline. And, if these stakeholders don't belong to your or your customer's organizations and aren't provably adversely affected, then they should probably shut up and go away. Does that sound harsh? Okay, they don't have to be ignored or exiled, but they absolutely should not be consulted on what should happen on your project. Indeed, to do so is akin to project management malpractice.
    So there. I was getting a little tired of nobody posting comments on my blogs, and I figure this piece will pretty much cure that.

Well, it's official, as of Monday the United States is in a recession. That's following the announcement earlier this month that many European countries had entered a recession. Two of Europe's biggest economies--Germany and Italy--fell by 0.5% in the third quarter of 2008, after a 0.4 percent drop in the second.
    And the numbers only get worse from there. Here is just a taste of more bad economic news, from CNNMoney.com:

• The Institute for Supply Management said its November (U.S.) manufacturing index fell to a 26-year low of 36.2 from 38.9 in October. That was worse than what economists were expecting, according to a survey from briefing.com.
•  October U.S. construction spending fell 1.2% versus a flat reading in the previous month. Economists thought spending would drop 1%.

    And all of this is clearly taking its toll on projects--even in once booming markets like Dubai, United Arab Emirates. On Monday, construction and engineering giant Murray & Roberts (M&R) said its Trump Towers project in Dubai would be suspended by the developer, Nakheel, until the global economic system stabilized.
    Is there anything that can slow this downward spiral? Public works projects maybe? That is the path many countries are starting to go down as the situation grows worse.
    The European Union called for member countries to spend $258 billion to spur growth. Britain and Spain are leading the way with plans ranging from $14 billion and $30 billion already announced, according to washingtonpost.com.
    And it doesn't stop there. China is increasing its nuclear power plant projects and said it would spend 4 trillion yuan renminbi on an economic stimulus package that includes projects to address low-income housing, sustainability, technological innovation and post-disaster rebuilding, among other things.
    Over in Italy, the first-ever bridge linking the country to Sicily is now expected to get the green light. And South Africa is planning on increasing its public spending programs over the next 5 years to reduce poverty and cut unemployment, which currently sits at about 23%.
    The influx in these types of project may be a good thing for the economy, infrastructure, social responsibility ... the list goes on. But what are the implications for project management and project managers? What does it take to succeed on public works projects? Can anyone do it? Is this a career option for project managers who may be facing cuts in struggling industries?