Posts Tagged ‘budget’

Budget Season! Time to Start Thinking about 2012

by Matthew Carmen on May 23, 2011

Well here we are in May. 2011 seems to be flying by – the year is almost half over, and in the corporate world you know what that means:

Time to start planning for 2012.

This is that time of the year everyone dislikes. For operations and the overall business, it is essentially time away from what they want to focus on, and for the finance teams, it is that time when they find themselves refereeing battles between operations and business for the finite amount of dollars.  All in all, this time of the year is where the challenges of the year ahead are discussed, strategized around, and hopefully addressed.

The three distinct groups – business, operations, and finance teams, each play a role in ensuring a successful budgeting and planning season.  In the case of the business, each area – whether a business unit, product line or service; needs to have its strategy fully developed by the executive team and communicated to all levels of the business.  By doing this, each person – from the lowest level all the way up – will know:

  • What the corporate strategy is, going forward,
  • How their work will help move the company towards the goal, and
  • It will provide management teams the direction in which to plan programs and projects.

By establishing a clear direction across the board, the business will be able to have conversations with the operational areas (such as IT) to make sure that the needs of the business are top priority for everyone.

No Personal Agendas

In my experiences, which have taken place in each of the three distinct areas, one thing has always been paramount to success, “Don’t come to the negotiations with a personal agenda”.  The more emotion that is brought to the table, the longer and more drawn out the negotiations become, and feelings are hurt at the end of the process.  Many times these feelings carry forward and the working relationships between people, groups and departments can be irreparably harmed.  This definitely does not help the long-term growth of a company.

The IT Operations View

In the case of the IT operations groups, this time of year is typically focused on two major things;

  1. The planning of programs and projects that benefit the business, and
  2. The planning of the IT organization.

In the case of the second point, IT has to weigh the benefits to the business versus the needs of the IT organization.  This means that with a finite amount of budget dollars available, the IT department needs to find the right mix of dollars for the benefit of the business while having enough budget to make sure the IT department is able to do the things it needs to do to ensure the business survives long term.  This internal IT spend will likely include: disaster recovery, continued infrastructure modernization, replacement systems for facilities, server and storage growth and refresh, etc.  These areas of spend need to be voiced to the business and discussions need to take place at this time of year, at times, the business seems to forget that ongoing operations need to be sustained and this costs money. May and June are critical communication months in the budgeting and planning season.  Communicating now means that once the finance team is ready to open the budgeting tool, usually right after the July 4th holiday, the whole budgeting project goes more smoothly.

The Finance Team View

The finance team always hopes for a smooth budget season.  Depending on the work they do in these early stages of the process, this smooth season is possible.  At this time of the year, the finance team needs to make sure that its message is communicated as well.  The finance team needs to make sure that all of the business and operational groups know and understand the process by which the budget will happen, what the key dates are, what the budgeting system will include and what business and operations will need to add to it.  These are all very important, the more the business and operational groups understand about what they are responsible to do at this point and throughout the whole budgeting process, the easier it becomes for everyone.

Another area that the finance team needs to be working on at this point is the final testing for its budgeting system.  Changes to the system from previous years may have been done due to upgraded equipment and upgrades in software functionality.  If a completely new system has been implemented (Hyperion and Cognos-TM1 are the two largest systems currently in use by midsized and large companies), the work becomes even more challenging.  Lastly, on the finance side of the budgeting triangle, training the usage of the system must be planned for.  All planning sessions need to be calendared, and anyone who will use the system including: cost center managers, department managers, executives and financial representation should be included in the training. (Either a complete training on a new system, or in the case of the use of the same system, a refresher course will be needed as well as complete training for new users.)

Plan Ahead for Success

Just like most endeavors, the more work that is put into the early phases of the annual planning exercise, the easier it become to achieve success.  The easier the complete budgeting process is, the less evasive to all areas involved it is.  Remember, for most people involved, the budget process is an addition to their “regular” job.  Remember, throughout the whole process, nothing is personal, it is all about moving the business forward…the right way.  Lastly, there are professionals, like myself, that can help with anything from questions to process and system integration.  We are here to help and make your business grow.

Project Reality Check #15: The Requirements Game

by Gary Monti on March 29, 2011

Nailing down requirements is the number one complaint of project managers. Addressing this requires two skills: political adroitness and finding a balance point between exploring solutions and exploiting what is known and available. I’d like to share some from a workshop I provide on decision-making in uncertainty.

Political Adroitness

A mantra regarding project requirements goes something like this,

“Requirements are stated needs, expectations are unstated needs. Clients tend to judge based on expectations.”

For example, a common retail experience is a customer picking a $20 pan from a display that includes $200 triple-clad pans. The expectation frequently is quality-by-association. As you might guess, the customer ends up disappointed because food cooks unevenly, burns, and sticks to the pan. They return to the store angry that misrepresentation occurred and they want their money back, at a minimum, or demand the $200 pan at no extra charge, at the extreme.

When something similar occurs on a project the best way to deal with it is by leaning into the situation as quickly as possible. The longer the expectation is held, the greater potential for damage in the relationship. Do this is by offering possible “straw” scopes. These are scopes that fit within the time and money parameters established and meant as much for example as anything else. This can take several iterations.

Initially, the goal is getting the client to see the expectations just don’t match the time, money, and resource limits established. In other words, see if they will shift their view and do it in such a way the relationship stays intact. When acceptance of the need to shift sets in, then drive towards THE scope that appears to work.

The reason “appears” is used is simple. The scope has yet to be drilled down to clear requirements that can be turned into specifications. Which leads to another aspect of political adroitness – working with the team.

The team needs to be involved in creating the scoping alternatives because they are the ones ultimately shouldering the responsibility. As you might have already guessed, having a good working relationship with team leads and subject matter experts is critical. If these relationships are absent team members can simply say the requirements aren’t clear, take a passive-aggressive position, and leave the project manager hanging.

The Explore/Exploit Balance

In complexity theory the above falls under the “explore/exploit balance.” This is where the risk comes into play. Typically, there is insufficient time to explore all options. On the flip side, the team may run into conflict and severe limitations if they dive in based on using what has worked in the past. The solution is best when the customer, project manager, and the team all share the risk. In other words a balance is needed; one that is optimal and spreads the benefits equally with the difficulties.

To recap, it isn’t enough to simply say the client should be realistic and not expect a $20 pan to perform like a $200 one. The PM and team need to push as far as they can working with the client in developing a realistic solution – one that will save reputations, relationships, and pocket books as well as produce the desired deliverable.

Project fogs are maddening. They are:

  • Pervasive;
  • Sensed by all;
  • Capable of frustrating excellent plans;
  • Have broad impact on project performance;
  • Complex and, like all things complex, require reams and reams of reports to define thoroughly making it virtually impossible to understand on paper. Nothing specific jumps out;
  • Unable to be resolved with a quick fix;

What does a project manager do? The answer is simple and can be stated in a paradox, “Embrace the project fog.” To do this the fog must first be understood.

When a project starts “things happen” and the fog begins to roll in. It shows up at boundaries taking the form of technical problems along with the environment and key stakeholders being confused, undirected, uncooperative, unsupportive or even antagonistic. The project manager is faced with the challenge of getting the project moving again while staying within the triple constraint of scope, time, and budget.

Brittle Plans

Usually, no plan is perfect. The reason is the plan is an abstract and a distillate of the planning process. It contains what the team thinks will work based on certain assumptions and is drawn from a larger universe of possible solutions.

Within project constraints the wisdom of the team is forged into the knowledge-based plan.

There can be alternatives built in but no plan is omniscient. So, things happen and the plan can become brittle and break. This is why toy makers have children play with the final product. A two year old can quickly find limits and defects in a product developed by a room full of engineers.

The Solution: Embrace the Fog

To disperse project fogs the project manager and team must embrace it. Embracing the project fog means dealing with it on its own terms. It means finding something that is equally pervasive, can be felt by all, and has a broad, positive impact across the difficult boundary. The solution has some other characteristics. It is:

  • Readily implementable;
  • Truly simple, i.e., dispels most or all of the fog by resolving all the conflicts and uncertainties;
  • Ultimately easily documented, and;
  • Seen by all as being a realistic solution;

The solution is the fog’s equal in terms of appearance and a countermanding positive performance. It is the team’s wisdom focused into a new or modified deliverable and/or process commonly called the workaround.

Yes, the word that gets beaten and abused – viewed as something just about anyone can do so, hop to it and git ‘er done. The fact is a truly good workaround that satisfies everyone from conceptual engineer to maintenance technician could be quite sophisticated and frequently a work of art.

The workaround’s simplicity can be viewed by the uninitiated as simple-minded.

I doubt anything could be further from the truth. Why? There is no linear, detailed, step-by-step path to the solution. The successful workaround reflects a power arising from and distributed across the diverse team, not resident in any one person or thing. Changing the team members or distracting them with too much work can disrupt the dynamic and turn off the ability to embrace the project fog.

So, when confronted with project fog embrace it! Pull your nose out of the details, put the team in charge, turn them loose, buy the coffee, soda, and pizza. Let them create the simple, documentable, durable solution. Watch them work their magic!

Inherent conflict between projects and operations might be called white-collar cage wrestling. Participants are focused, strong, and may carry the belief – winning means dominance of their approach. Who’s right? They both are. What is at stake is delivery of a product that performs well and is sustainable. This is especially true when the deliverable goes into production as an ongoing process or tangible deliverable produced in quantity. There is a solution to this tension, but first examination of the underlying causes will help in crafting that solution.

What Is Success?

Projects bring about change – that is why they exist. So, success is defined by bringing about some transformation.

Operations go in the other direction. Success is defined by stability. Specifically, stable reproduction of the desired process or product.

From a somewhat oversimplified perspective the situation can be restated as: Six sigma can be highly relevant in production while having little or no application in executing the project.

Is There a Middle Ground?

Can a compromise be reached? A better question might be, “Is compromise needed?” The answer is, ”No.” Taking a page from the Software Engineering Institute’s Taxonomy of Operational Risks a solution can be found. A very robust list of categories provides a framework for guiding projects in a way that leads to sound operational performance. Terms such as “usability” and “maintenance processes” are included. The definition of project success includes operational success!

So What’s the Problem?

This all seems well and good, and it is until other realities step in – the introduction of constraints. An example from the auto industry shows this well. In the 1970s the reality of “world cars” was exploding onto the scene. The desire to lower production costs plus move into international markets caused a frenzy of effort that continues to this day. This was compounded by issues commonplace today, e.g., time zone, cultures, metrics, languages, etc. The driving force at the time was the US market.  In the rush to globalize some cars in the US ended up having a mix of metric and standard parts.

Another constraint is the huge appetite for variety in the American market. Designers were pushed to develop new, fresh designs on an almost annual basis. Production and maintainability took a back seat. This led to craziness when it came to maintenance, e.g., having to loosen motor mounts and jack up the engine in order to change the oil. Some companies, such as Jaguar, almost went out of business over these issues. Boeing and Airbus could probably weigh in on this topic, too.

A Broader Solution

What shows when stepping back and looking at the situation is poor governance. The tension and animosity that can exist between project managers and operations managers may simply be a reflection of failure at the top.

Balancing the constraints is the responsibilities of senior management. It’s why there are the extra zeroes in senior management’s paycheck. This has been well stated in the career guidance book, “What Color Is Your Parachute?

To let the tension simply roll downhill to the operations and project managers can reflect poor risk and quality management if not an abrogation of responsibility.

If experiencing high tension and severe challenges then the pathway out includes looking up for direction rather than preparing for the next peer-to-peer fight.

Project managers (PMs) have to deliver; yet power to get the job done can be elusive. Is there a way PMs can take care of themselves and the team knowing they are lower on the food chain? Can they get some power? Yes. How so? Let’s explore.

Portfolios, Programs, and Projects

First some background. A simple, common hierarchy with a current situation in the transportation industry is:

Location Position Example
External Client EPA
Internal Portfolio Mgr internal combustion engine
Internal Program Mgrs gasoline diesel
Internal Project Mgrs 1000cc 3000cc 4000cc 5000cc

The “client” in this case is the external regulatory agency. The deliverable is a reduction in emissions for the various types of engines a manufacturer produces with standards varying based on the displacement and fuel consumed. We’ll look at the client after examining the internal organization.

Internally, working from the top-down, there is a progression from strategic (market position, profits, etc.) to the tactical/tangible (every engine coming off the assembly line has to meet stringent requirements within the next few years). Teams in the internal combustion industry are feeling the heat with pressure coming down from above. Deadlines and goals have been set.

To maintain a healthy balance in this situation PMs will do best understanding and communicating in the language used by those with more strategic positions and power. This language also needs to provide a portal through which the PMs can express project concerns. The language is risk management.

Now, shift focus to the client. It is through the client the PM can gain influence – better known as power. The connection between the PM and the client is quality. As the old saying goes, “The proof of the pudding is in the eating.” Again, each engine needs to perform per regulatory limitations.

So, in a way, the PM has a direct connection with the client through quality. It is important to avoid being Pollyannaish and think the PM has the power baton of the client. The situation is subtler. This is where risk management comes into play.

By understanding how the performance of the deliverable is impacted by quality the PM can gain leverage communicating through the business case. How? The PM uses a specific aspect of risk management – Expected Monetary Value (EMV). EMV can take quality, time, and money and combine them into one model – a model understandable to both the business unit and project team. A good EMV model tells how good or bad things can get in the current risk environment and points to areas where changes (time, money, resources) are needed.

This seems a bit roundabout if quality is the focus. So, why do this? Simple. There can be an intrinsic desire for quality in an organization. That desire, though, can vary in commitment from organization to organization as well as within an organization.

On the other hand, the focus on time and money is pretty much universal and that is the context in which quality sits – always the bridesmaid, never the bride. EMV flips the situation and addresses time and money squarely in the context of quality looking to see how stable and acceptable the deliverable will be in various risk environments.

Consequently, EMV models can help bridge client power to the team’s need to perform and cross over the obstacles of time, money, and resource constraints by showing how squeezing the team too tightly or working in the current risk environment could hammer profits and viability in the long run.

With the stage set, in the next blog some of the specifics of the EMV model and how it works will be addressed.

Project Leadership #4: Trust is bidirectional

by Himanshu Jhamb on January 10, 2011

There have been many a books written about TRUST. It is, without doubt, one of the most important assessments that we, as humans, make, usually internally and act on the basis of that. In the project management world, there are a number of levels at which the PM needs to establish trust, before s/he can make anything happen. A few key ones that are encountered day to day:

  • Trust with the Client
  • Trust with your Management
  • Trust with the Team

Now, trust is a funny thing. It has a way of following the age old adage – “What goes around, usually, comes around”. In other words, it is bidirectional. The tricky part about trust is that you cannot control when and how you’ll get it, no matter how hard you try. In fact, it is one of those unique things that you get, only by giving first!

Coming back to my three categories above:

TRUST with your CLIENT

Establishing trust with the CLIENT is to provide them with stellar service that sends a clear message that you CARE for them. It is not about appeasing them, but guiding them. Amateur Project Managers might shy away from guiding the client thinking “The client is always right”, Project leaders know that clients are humans, too, and that humans have this strange knack of “Not always being right”. In this knowing, Project Leaders are compassionate to their clients’ needs and also, their ignorance (Yes, clients can be ignorant – not a bad thing, if you are compassionate to their needs). Once the clients learn to observe and value this CARE, the ground is fertile for trust to bloom. Trust can be a beautiful thing. It lowers the cost of transacting with the client(s) manifolds. Project leaders who have experienced this know what I am talking about.

TRUST with your Management

Assuming that you work for someone, there is a set of folks who are as important to your career well-being as the client. Your Management team, that is, the people that you report to. Your Management team is your primary client – You could do a fabulous job for your company’s clients but not take care of the concerns of your own company; that’s when this distinction shows up in not so pleasant ways. You need to establish trust with your management so that you keep the cost of transacting with them low, as well. Here are a few ways of doing that:

  • Reporting status to them before asked for.
  • Making sure there are no to very little escalations in your project(s).
  • Running your project on time and within budget.
  • Being a hawk with scope on your projects.

These are all ways of taking care of the concerns of your management – and hence, the building blocks of trust with them. By now, I am sure you are getting the gist of this post: These actions are all about giving first… and in turn, you are rewarded with their TRUST.

TRUST with your Team

One of the most important and commonly overlooked aspects by project managers is establishing trust within your team. Again, it all starts with a declaration of CARE for your team. Project Leaders show this in a number of ways. My favorite is to make sure that when you make commitments to the client and put a plan together to deliver those commitments, you DO NOT plan on having your team work more than the regular workday. I have seen many a project plans where the team is slated to work 12-14 hours in a day for over 2 months at a stretch. Heck! I saw one in which the PM had the team working for 36 hours in a day! It is not surprising that morale is low in an overworked and underappreciated team. Another way is to be result-focused and not overly rules-focused. Unless you are working with a bunch of monkeys (highly unlikely – though, I have heard some folks call their teams that!), you need to take care of the human concerns of people. As long as you keep your head wrapped around results, and be flexible with everything else – you will be rewarded with TRUST. I have personally been bailed out of sticky situations by my team many a times, and have even had the team putting in extra hours to get stuff done on their personal time – WITHOUT being ASKED! It’s a wonderful thing when you see this on your projects… when things follow the path of least resistance and simply flow… bidirectional, like TRUST!

Have any stories that made your life really easy as a Project Manager, once you established TRUST? Do share!

“Hangman” is a game having a lot in common with project management. The goals are identical, i.e., figure out what the stakeholder(s) in control wants/means without them telling the project manager (PM) directly. The noose of the triple constraint tightens as the PM and team try to decipher just what is needed and they miss the mark.

There IS a substantial difference between Hangman and managing a project. In Hangman determining the word or phrase (scope) the controlling player has in mind is all that is required. With a project there is a chance for triple jeopardy since the PM and team must not only get the scope correct, they must also make sure there are sufficient resources left in terms of time and money to actually implement the scope. There is a way to not only survive but also succeed in such situations.

Terminology – Constraints vs. Principles

The first thing needed is a distinction between what is desired and what actually works. The term itself, “triple constraint,” implies boundaries of some sort. There is value in taking this term apart.

Rather than say, “The triple constraint means scope, time, and budget” stakeholders would be better served by stating, “There is a scope constraint, a time constraint, and a budget constraint placed on the project.” Why? Simple. Scope, time and budget refer to three of the nine principle sets in project management with the other six being communications, human resources, procurement, quality, risk, and integration.

“Principles” means there is a balanced interplay among all the variables and stakeholders in the project. Constraint means an arbitrary limit being placed on the project. It is called arbitrary because it is made in isolation with the responsibility for integrating being passed along illegitimately to others usually down the power chain.

That sounds like a pretty strong use of “illegitimately.” However, it does apply since the responsibility for a constraint stays with the person who makes it especially if he is the power broker.

Wishes and Business Cases

A constraint, then, is essentially a wish to make something so. What works better is examining what is realistic based on the business case. That business case needs to be grounded in reality. For example, if the project is to open a low-risk savings account then having a “budget” constraint of 1-3% interest rate is reasonable. On the flip side, if I am demanding 12% return with the same low risk then I am working from a wish list. The demand will be illegitimate if a PM in charge of investing the money is punished for failing to find a secure 12% savings account. It gets even worse if the wish of having the high return investment includes being able to withdraw any time without penalty (schedule constraint).

Stated more positively:

When needs are derived from realistic business cases rather than wishes, a bridge can be built between the business case and associated project principles comprising scope, time, and budget.

Going back to the previous blog, Rainmaker, building that bridge requires incorporation of other principle sets. In the next blog we will explore those principles with the goal being generation of a balanced relationship with realistic boundaries between scope, time, and budget. It involves the creation of something far more elegant than a triple constraint.

Project Reality Check #1: The Challenge!

by Gary Monti on December 21, 2010

“Challenging” summarizes project management well. This series of blogs will go into the day-to-day realities of project management as well as the theory and bring to light ways to deal with the challenges.

As the series progresses validation for what you already see and do will occur. So, why write this material if that is the case? The answer is simple: Validation is powerful. Projects require connectivity, which requires being seen and accepted – Validation.  Additionally, there will be a few new things that will prove to be valuable.

There’s Just One Project

Listening to students and/or clients from every continent except Antarctica (would like to go there someday) there is a common theme in the answers to the question, “What makes your projects so challenging?” It breaks down to the following:

  • Lack of clear requirements;
  • Being pushed to start, regardless;
  • Arbitrary end date;
  • Arbitrary budget;
  • Dictated resource pool comprising too few resources of adequate skill;
  • Multitasking.

The response is amazingly consistent and is independent of profession, field of study, market, etc. It has led to telling clients and students, “There is just one project in life and we all get a turn on it.” Human nature is the same everywhere. All that differs is the wrapper (culture). Don’t get me wrong, that wrapper can be quite significant. My point is once the effort is made to get beneath it you’ll always find the same thing, A human being.

The Path

This all can sound pretty bleak and make one wonder, “How does a project manager get the job done?” The answer is simple, “Stick to the principles.” As has been stated in previous blogs, simple is not the same as easy.  That simple path is grounded in the 9 areas of project management. By sticking to those principles and flexing them as called for in a given situation the odds of finding a path to success go up accordingly.

The Areas of Project Management

According to PMI® there are 9 areas of project management:

  • Scope
  • Time
  • Budget
  • Communications
  • Human Resources
  • Procurement
  • Quality
  • Risk
  • Integration

We will explore these 9 areas and see how they relate when working to find that path to success when thrown into a challenging situation.

A Key to Success

The word “challenging” opened this blog. To some extent, it is politically correct. “Nightmarish” might be a better word, when you get down to it. How to enjoy situations, stay sane and avoid project nightmares has been a quest ever since entering project management. The secret, which will be explored in this series, is completing a simple sentence.

If everything were okay I would see ________________.

It took most of the last 32 years spent in project management to get to that inquiry (proof that simple is different than easy).

A few things stand out with that statement:

  • It is an inquiry rather than a command. Why is that important? Leaders do better when asking more questions and giving fewer commands;
  • It is recursive. That one inquiry can be asked over-and-over as the breadth and depth of a project are explored.
  • It applies to both politics and technology. The stakeholder map should map isomorphically (clearly) and correctly into the technological map of the project.
  • Variance analysis is promoted. Using that statement promotes gap analysis, which is at the core of project management.

Variance brings us to the goal of project management, i.e., making sure we know what to plan, plan it, and execute within the time, money and resource constraints that fit with the project. In other words, get the job done. It gets down to two simple equations:

Cost Variance = Earned Value – Actual Cost

Schedule Variance = Earned Value – Planned Value

This series will explore what it takes to put teeth into those two equations. Fasten your seat belt!

Learning without training

by Wayne Turmel on January 18, 2010

I love the word “conundrum”.  It’s defined as “A paradoxical, insoluble, or difficult problem; a dilemma”. Here’s the conundrum that has impacted the training business more than any other lately: Companies complain about a shortage of skilled workers, but have slashed training budgets and the big traditional corporate training companies are bleeding customers and money at a time when what they teach has never been needed more. How can you have a shortage of skills that cost companies billions of dollars but no one’s willing to pay for it? That, my friends, is a conundrum.

The problem, I believe is a sea of change, not in what skills people need (as Drucker pointed out, the Leadership, Project Management and Strategy needed to build the pyramids aren’t any different than what we need today), but in who needs them.

Traditionally, the companies identified “competencies” that everyone needed across the organization, and either had their training department provide the content or went out and found it, brought training in-house (or to a centrally located sterile hotel ballroom) for employees to learn. This is still the model that most training companies follow- sell to the entire organization and look for company-wide initiatives… and it’s why they’re in trouble.

The audience for training is no longer the companies themselves, but the individuals in them. One manager might need to improve their business acumen while another does just fine with the numbers but can’t deliver feedback that doesn’t make people cry.  They know they need to develop these skills- if not for this job then for the next one. How do they identify, pay for and attain the learning they need?

Here’s how the players at companies will look at training in the New Year:

  • The Company– will be looking for training that is short, cheap and won’t involve travel or taking people away from their desk. This will mean a huge  increase in web-delivered training,  and if they’re smart, a mix of asynchronous (recorded, available any time) and synchronous (live with a facilitator that knows what they’re doing- and they’re in short supply).The fact that they will ask the impossible ( highly specialized but off the shelf so we don’t have to pay for customization, deep enough to show ROI but we don’t want to pay very much for it or let people invest time away from their jobs) is nothing new- customers always have asked the impossible. It does, however put a lot more pressure on…..
  • The Training Department– which is largely reduced to an administrative function. Rather than deliver a lot of training themselves, slimmed down Training Departments ( or more likely an HR professional juggling multiple jobs) will be asked to source and evaluate training  when it’s needed. This means fewer scheduled “catalog” classes that go on a schedule and are then canceled for low enrollment, and more specific just-in-time requests. What will determine what’s needed? Usually what shows up on performance reviews so an individual manager will have a different training requirement than their coworkers. This will mean they’ll need trusted sources of content, focused on niches or specialties, inexpensive and either public enrollment (so the manager can attend  by themselves but might mix with people from other companies) or scheduled for small groups of like-minded people. How will they find and evaluate this material? Well that’s a problem for….
  • The Training Companies… who will have to move away from licensing their content (because there’s no one left internally to deliver it, and each course isn’t being delivered often enough to provide economies of scale for the Companies) and into varied ways of delivering other than putting an instructor at the front of a room. Again, whether this is the most effective method of training is almost irrelevant, it’s where the market is moving, right or wrong. Gone are the days of huge corporate-wide initiatives, and they’ll be selling through their contacts at the Company to smaller groups (business units, project owners) rather than to a VP with a vision. They will also have to change how they bill their clients as more individuals will be paying (probably with a credit card over the web because who wants to issue 25 Purchase Orders for one class?) and definitely will have to move more of their training either online or into shorter chunks. The days of the 2-week “boot camp” training are gone forever. Additionally, they will have to be able to prove the value of what they do- either in Return on Investment (which for soft skills training is almost impossible but people keep trying) or in value to the learner through Continuing Education Credits, Professional Development Units or accreditation. Even a printed certificate of completion looks great in an HR file. The real change, however, will be for….
  • The Individual Learner– who will have to be responsible for learning what they need to know as they need to know it and finding it in a variety of ways. Maybe it will be traditional training, maybe it will be a book or a podcast.  The team leader who learns from their performance review, shows initiative to learn a skill and prove they’ve learned it (even if it’s just showing the certificate of completion) will be miles ahead of the worker who can’t explain what they can do or how they learned to do it. Additionally, more training will be paid for by the company (in small doses, as long as it’s not too expensive) but will be done after hours or on the employee’s time.  Online courses from trusted sources, marketed to individuals are the wave of the future.

In essence, training has gone from a B2B model with large contracts and licensing agreements to a modified Business to consumer model (the company might pay for it…they might not but if they do they’ll want to be involved in selection and pricing).

Companies that are really serious about helping their people develop skills will have to work with this new dynamic. Training companies that are serious about surviving will have to move to more web-based marketing and offerings, and individual employees will have to take their learning into their own hands.

It is the ROC, too, not just the ROI, stupid!

by Wayne Turmel on October 19, 2009

communication toolsNow, admittedly, the title might have confused you a bit as just about 3 weeks ago, Himanshu posted an article titled It is the ROI, not the ROC, stupid! The simplest explanation for this seemingly contradictory titled post is… the ‘C’ in Himanshu’s post was Cost whereas in my post, the ‘C’ in the ‘ROC’ stands for Communication.

While talking to my father on the phone the other day, I had a breakthrough. Not the kind my therapist would like to see, alas, but one that answered a major business question: “Why do so many managers treat communication tools like they’re made of gold and not use them every day?”  It all comes down to how we measure the ROI (Return on Investment). Maybe we sometimes need to measure the ROC (Return on the Communication) instead.

I was trying to ask some pretty serious questions about his health and Dad kept trying to avoid the conversation and wrap it up. Finally, he said “Look, this is costing you money, so we should talk about this another time…”. Now you, I and just about everyone you know has an unlimited calling plan. Talk for two minutes or twenty, it doesn’t really matter- it’s just not a concern for most of us any more. But because all he could hear was the meter running, my dad didn’t want to get into a long drawn out conversation. Remember this is a guy who taught us to call person-to-person collect for ourselves so he’d know we got to our destination safely and we wouldn’t have to pay for a long distance telephone call from a payphone- he’s a bit frugal to say the least.

That kind of thinking affects managers and organizations as well, and has a direct impact on how they use communication tools with their remote teams. Here are some common examples:

  • “We pay per minute and per connection, so we’ll save webmeetings for when it’s really important” I have numerous clients who have invested in webmeeting platforms, and then refused to let people practice with them, or need to get budget approval to hold a meeting in order to keep costs down. Then they are surprised that people don’t utilize the tool or use it poorly. No one will ever practice or get proficient with a tool that they can’t use at will without the accountants watching. By the way, if you’re still paying per minute per connection it’s time to have a serious talk with your provider…they’re treating you like you’re my dad.
  • “We don’t waste time on chit-chat. Keep it business” In this age of Agile, virtual, matrixed and under-resourced projects – time is money.  The myth is that the less time you spend talking the more time and money you’ll save and people can get on with the “real” work. This is a perfect example of measuring something that doesn’t indicate real results. You can’t easily measure the amount of risk-management, proactivity and trouble-shooting that good, frequent and rich communication gets you. Of course, if you really want hard metrics, measure the amount of rework, lost productivity and project overruns from not staying in constant contact with your team. Take the time to find out what’s really going on with them and who else is sucking up their time.
  • “We didn’t cut the travel budget just to spend it on IT”. Okay, we all agree that the reason we need these tools is our travel budgets were slashed and they are NOT coming back anytime soon (at least not in the foreseeable future). That doesn’t mean we don’t need to communicate effectively and that there is no cost of doing business. Just because people work from home doesn’t mean (magically) it doesn’t cost anything to have them on the payroll. By the way, if you look up from the “telecommunications” line item in the budget you’ll see that you can pay for a lot of bandwidth, webmeetings and telephone calls just with the money you used to spend on drinks for the team when they could get together or put more subtelly … Psssst… “It’s really not that expensive.”

Effective questioning, timely feedback and sharing information have value to an organization and a team. We need to focus less on the dollars spent and more on the value created by those interactions. Sometimes we need to focus on the Return on Communication