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September 2009 Archives

Are You Ready for Your Next Status Report?

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Reporting project status can be exciting--or can be one of those things you'd do anything to avoid.

By conducting frequent, but relevant and appropriate status reviews, including the stakeholders in the process and presenting fact-based information, you will help to avoid any unpleasant project surprises.

To make the reporting process run smoother, project managers should consider these elements when preparing their reports:

Timeliness: This is all about the reporting cycle, the aspects of "when" and "how often" you report. Pick times that will most benefit the stakeholders.

Fact-Based Information: Validate information before it's reported to the stakeholders and produce trustworthy reports that others can base critical decisions on. These steps help gain stakeholder confidence and contributes to the overall success of the project.

Relevance: Know whom you are reporting to and what information is relevant to that stakeholder.

Appropriateness: Be aware of any sensitive information that should be presented only to specific individuals.

Presentation: Spend a little time identifying the medium - such as handouts, e-mail, verbal, telephone -- as well as the method -- free form, discussion-based or single-person, etc -- for the report.

Knowledge: When you don't have the full details on information to be presented, invite a direct resource that produced the result to the presentation.

Audience: Focusing on specific individuals or groups allows you to provide relevant and appropriate information.

By considering all of these elements, you can present a clear picture of the project's status to the necessary attendees.

Maintaining Morale in Tough Times

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Imagine that the project you're managing has to be "right sized" for reasons outside your control. How would you keep up the team morale?

My team and I recently went through this process. (Thankfully, if you manage projects in a large corporation, you can sometimes relocate displaced team members to other parts of the organization. On my team, some of the people were able to be relocated.)

For those who remained on the project, here's what I did to maintain morale, learning a few valuable lessons along the way.

•    Communicate to your team openly. The worst thing you can do is to withhold information. Make a plan. Reserve a portion of your normally scheduled team meetings to keep everyone up to date on the current situation and listen for any concerns.

•    Explore, don't avoid, emotions. When a team member raises an issue or concern, don't wait for the chance to sit down one-on-one with him or her. Take the time right away to listen, understand and listen more.

•    Plan a course of action. 1. Inventory your team members' skill sets. 2. Analyze team member strengths that could benefit other projects. 3. Establish a specific follow-up meeting to communicate any news.

•    Focus on the future. After the restructuring, bring the team together and set the focus on the path ahead. Communicate the roles and responsibilities to mitigate any confusion between team members, which could lead to loss of morale. Without clear roles and responsibilities, it's like trying to drive uphill with the brakes on.

This "right-sizing" exercise has been a learning experience but I hope it will be a long while before I see another one ...

Also see the article, Motivating Team Members in an Insecure Job Market, from PMI Community Post.

Who is a Stakeholder?

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Everyone is talking about stakeholders these days. Surprisingly, this has not always been the case. The modern concept of stakeholders seems to have emerged from the work of the Tavistock Institute in London, England in the late 1960s and early 1970s.

Forty years later, the concept of stakeholder has expanded to include all of the people and organizations that have a real or perceived '"stake" in the project or its outcomes.

A Guide to the Project Management Body of Knowledge (PMBOK® Guide) breaks down a stakeholder as a person or organization that:

•    Is actively involved in the project
•    Has interests that may be positively or negatively affected by the performance or completion of the project
•    May exert influence over the project, its deliverables or its team members

In my work on mapping and managing stakeholders, I have found it important to expand on this basic definition to understand the "stake" of the stakeholder. This helps determine the best way to engage with them.  

Here are some of the different stakes a person or organization may have (most have more than one):

Interest: To be affected by a decision related to the work or its outcomes

Rights: To be treated in a certain way or to have a particular right (including legal or moral) protected

Ownership: To have a legal title to an asset or a property

Knowledge: To possess specialist or organizational knowledge needed for the work

Impact or influence: To be impacted by the work or its outcomes, or have the ability to impact (or influence) the execution of work or its outcomes

Contribution: Relating to the support or assets including the supply of resources, the allocation of funding, or providing advocacy for the objectives of the project

Once you understand the stake the stakeholder is seeking to protect, profit from or enhance, you can structure your communications to let the person know you understand their hopes or concerns. From this starting point, you're in a much better position to manage the relationship to the benefit of both the project and the stakeholder.

Creating Value Out of Change

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Change has become a constant in our fast-moving world, but very few organizations are leaders of change.

How can project and program management help? One of the key factors of success is value creation--understanding the context, reasons and impact of a change and defining how to create value out of it.

Both strategic managers and project managers have traditionally tried to keep change to a minimum because it affects their plans. This won't work anymore!

Complex situations, where multiple stakeholders compete with each other and try to influence the outcome on a continual basis, create ongoing change. This requires constant adjustment of the plan through a series of integrated, mutually reinforcing decisions that form a coherent whole.

But how can we keep direction if we are continually adjusting? Program management may be the answer.

First, key stakeholders must be identified. Then, based on their needs and expectations, measurable and agreed benefits that will achieve the stated strategic objectives are defined. This is called the "value proposal."

To construct the value proposal, the program management board and other key stakeholders must first make sense of the impact of the change and agree on the program's expected benefits.

Typically, workshops and individual interviews will enable the program board to build agreement on stakeholders' needs and expectations and classify them into critical success factors (CSFs) and subsets of CSFs.

The sum of the CSFs constitutes the value proposal and will give direction to the change. Projects are then defined and initiated to produce deliverables that will enable the realization of these CSFs.

Because the CSFs are fairly high level, they will not change drastically when new needs appear through external or internal influences. But the relative importance of the CSFs may need to be adjusted.

CSFs will directly influence the projects that are part of the program, sometimes requiring the early closing of a project and the initiation of a new one.

The key to value creation is to understand that:

•    Without direction, time and resources will be wasted on distinct, unconnected projects and activities.

•    The change program direction must be based on key stakeholders needs and expectations, and clearly defined through agreed CSFs.

•    Strategic direction can evolve and be adjusted on an ongoing basis, but always for explicit reasons that will generate added value.

I will address two other factors for success--transition and value realization--in upcoming posts.

Stakeholders: Changing Attitudes, Securing Support

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My last post touched on stakeholder attitudes. Attitude is derived from perceptions--in this context, the stakeholder's perception of the project and how its outcomes will affect the stakeholder's interests.

Fortunately, perceptions are negotiable and can be changed by effective communication. Change perceptions and a change in attitude will follow.

In my research, I considered two key dimensions to attitude:  
1.    How supportive or opposed the stakeholder is toward the project
2.    How receptive the stakeholder is to communication from the project team

Although receptiveness may seem less important, you cannot change a stakeholder's level of support if they refuse to communicate with you.

Levels of support can range from active opposition to active support. For each of the important stakeholders, the project team needs to understand the stakeholder's current level of support and then determine a realistic optimum level.

Exactly what that realistic optimum is varies. For example, environmental activists can never be realistically expected to support a new road through a wilderness area. The realistic optimum may be passive opposition and a communications plan developed to negotiate an outcome that the environmentalists can live with.  

Your project sponsor should be an active supporter. Communication needs to be planned to engage the stakeholder in actively supporting the project.

That means open communication. If the stakeholder is unwilling to communicate, ways need to be devised to open channels. This may involve using other stakeholders in the network around the project to open the communication, changing the way you communicate or just plain persistence.

Only after communication channels are open can you start to listen to the other person and understand their needs, concerns or ambitions. Once these are known, you're in a position to either explain how the current project meets those needs or consider risk-mitigation strategies to modify the project to reduce issues and enhance opportunities.

The whole point of stakeholder management is to optimize the overall attitude of the stakeholder community to allow the project to succeed.

A very significant proportion of the risks around most projects are people-based. The only way to identify, manage and/or mitigate these risks is by effective two-way communication. More on this later.

Start With Acknowledging Yourself

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After my last post, I received a thoughtful e-mail from a project manager in Barcelona, Spain. Because she was constantly criticized growing up, she said she had difficulty acknowledging others.

One's ability to acknowledge is an interesting and important topic. Although it focuses on our personal issues regarding whether or not we were acknowledged in our families, our schools and in our early jobs, we are all people first and project managers second. Therefore I would like to address the heartfelt question that was raised, as it has importance for all of us.

A person's ability to acknowledge others freely, generously and sincerely is linked to the way we're raised. If we were encouraged and praised as children, we're likely to grow up with a deep sense of self-worth and confidence. If we were constantly criticized, we have more work to do to gain a sense of self-worth.

We have to become our own support system, which can be hard. And it's even harder to acknowledge others when we've feel like we have not been acknowledged for who we are and the contributions we make. If that's true for you, then you will have to push yourself more to deliver acknowledgments that may come to mind but that you may have trouble carrying out.

We as human beings crave acknowledgment. Receiving acknowledgements releases a chemical called dopamine in our brains that makes us feel good, perform better and work harder to get more of what's called "the dopamine drench," per an article titled "In Praise of Praising Your Employees" published in the Gallup Management Journal.

So here's my advice if you were underacknowledged in your earlier life: Start by taking stock of who you are and what your contribution is to your workplace, your family and to the world. Then you can exercise the muscle on the underside of your right arm, as you reach up and over to give yourself a pat on the back!

In my courses, we always start by telling each other something special and unique about ourselves. I invite all of you to do just that--share something special about yourself with a friend or coworker--and send me an e-mail telling me about it. With your permission, I might even post it.

T. Boone Pickens Talks to PMI Today®

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Project managers have to express authority, legendary oil and gas executive T. Boone Pickens said in an exclusive interview in the September issue of PMI's member publication PMI Today.

Founder and chairman of BP Capital Management and author of The First Billion of the Hardest, Mr. Pickens will serve as the keynote speaker for PMI Global Congress 2009--North America. 

In the PMI Today interview, Mr. Pickens discusses everything from innovation to leadership.

Here are some highlights:

On his predictions for growth in the alternative energy sector--and the chance of a bust like the dot-com industry:
Sure, you could have a runaway for awhile, but I think renewable energy is here to stay. There is an opportunity to make money and develop new products in the sector. If we get 200,000 megawatts going in the Great Plains, it is unbelievable what it would do for the economy, jobs and taxes in the small and mid-sized communities, which have lost population over the past several decades. It can all be done with the right leadership.

On what advice he has for project managers:
You have to express authority. You can't just tell everyone to go do their best and then sit back. You are in a role where you can direct. ...

On what project managers thinking of turning to consulting should keep in mind:
Hang out your own shingle. Don't figure out what you are making by the hour because it will make you cry. Go out on your own, double your time, work harder and make it your own. Suck it up and know you are able to accomplish what you want to do.

PMI members can read the full interview in the digital edition of PMI Today on PMI.org.

Taking on Project Management Myths, Part 2

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Written by: Michael Hatfield, PMP

In my continuing series on commonly used, but invalid project management tactics and techniques, I simply could not let my traditional targets, the accountants, off the hook. I'm also going to wade back into a matter I began to address over a decade ago, but, since many of my readers are still not convinced, I simply must re-address it.

So, without further ado, here are my myths 8 and 7:

Myth 8: Nothing an accountant can do in general ledger space can produce cost or schedule performance information, or project at-completion costs or dates. Traditional management techniques are oriented toward "maximizing shareholder wealth," and all of the management information systems designed to support that goal--including generally accepted accounting practices--are based on managing assets.

Managing a project's scope, cost or schedule is a completely different animal. Unfortunately, the idea that all of an organization's information involving money simply has to come from the general ledger is a myth that dies hard, if at all, and accountants have absolutely no motive to correct that assumption.

Myth 7: Bottoms-up estimates at completion (EACs*) are more difficult, more time-consuming more expensive and less accurate than the calculated version.

According to the Association for the Advancement of Cost Engineering International, the most detailed estimate available is named, appropriately, a detailed estimate. It is generated by a professional estimator using off-the-shelf software and is so detailed that it can be handed off to a procurement specialist to begin the buying process. However, it is only accurate to within 15 percent of the project's final cost, at best. The most commonly used formula for calculating the EAC is based on the accuracy of the cost performance index (CPI) (EAC = Budget at Completion / CPI).

Dave Christensen has definitively established that the CPI virtually never changes more than 10 percent in either direction once a project has passed the 15 percent complete point. It follows, then, that the EAC calculated using that CPI is also accurate to within 10 percent and extensive analysis has borne this out.

That being the case, the calculated EAC can be derived from three data points, whereas the bottoms-up version needs literally hundreds. That version is also more expensive, if, for no other reason than it takes more professional time to produce. Finally, since within 10 percent is more accurate than within 15 percent, the calculated version just hit the trifecta.

Looking forward to your thoughts on these two myths.

(*A bottoms-up estimate is when you have already started the project, and you re-estimate all remaining work by work breakdown structures element. You take that number, add it to the cumulative actual costs, and you have a "bottoms-up" EAC.)

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