Posts Tagged ‘stakeholders’

The Soul of a Project #19: Faith in a Vacuum

by Gary Monti on June 26, 2012

“If I only knew it would work!” How often do you say that? After all, a great deal of stress would be relieved if you could say for sure the plan would be successful. Unfortunately, you can’t. That is why your leadership position has vulnerability associated with it. It can be crazy making. At the same time commitments are being made everything that could happen, both right and wrong, is swimming in your head. To make matters worse, there can be the sense of isolation where “project manager” is a politically correct way of saying “official scapegoat.”

What to do? The answer is straightforward, stay with the belief everything is simple once you find the right vantage point. Sounds nice but how can you avoid having it be another pious platitude that sounds Pollyannaish?

The answer lies in remembering the same vacuum that promotes a sense of isolation is also a place where you can get power.

What the heck does that mean? What throws a project off balance is greed, fear, or indifference. For example, the boss that wants unlimited overtime is showing greed. The employee who is concerned they will be ground into dust with the overtime can become afraid. The constant deprioritizing of a project shows indifference. In those situations a vacuum is present, a vacuum that lacks a connected set of principles. The project and maybe the organization fragment. People start spinning aimlessly.

What you can do is be the one person who works the principles that apply believing the most that can be accomplished will occur by sticking to those principles. You become a dampening agent, a shock absorber who helps the situation settle down and become productive. People are attracted to those who help heal such situation.

Notice I said, “the most that can be accomplished.” This means as you progress in practicing what you believe you will attract stakeholders. The question is at that point, “How much power do these stakeholders have?” That power base sets the limits of what can be accomplished.

The attraction of others is cemented in showing empathy. See if you can find something specific with which you can work with each stakeholder. For example, with the boss insisting on excessive overtime talk about the possibility of a major catastrophe occurring and she’ll look bad. For the employee who is afraid ask them to stick with laying out their work and realistically state what they can accomplish in the time available. For the manager who de-prioritizes the project state what they won’t get by failing to staff/fund the project.

To the extent you can get realistic stakeholders and team members on board the odds of success go up.

While we think of success in terms of achieving project goals it can also include the cancellation of the project. The fact it doesn’t align with corporate goals or distracts resources from more critical activities can come to the surface and a healthy decision can be made. This can be a difficult decision especially if people are highly invested in the project.

Remember, you may feel isolated but being empathetic and sticking to what works brings about the connections needed.

Project Reality Check #21: Acknowledgement

by Gary Monti on May 10, 2011

Acknowledgement can increase the speed and accuracy of your project and business interactions. Being grounded in honesty it has an added bonus of creating an atmosphere where people can risk being spontaneous and open. This is especially important when discussing difficult matters, not just the “high five” accomplishments. In contrast, lack of acknowledgement leaves people wondering where they stand causing a waste of energy and destabilization of the relationship.

Acknowledgement shows others they are worth the time and effort it takes to think about them. It has proved invaluable when having to evaluate team members, stakeholders, or vendors whose performance has not been up to par…well at least the ones who value the relationship. It keeps the focus on behaviors important for successful continuation of ongoing work.

Providing acknowledgement says,

“Working interdependently with you is important to me.” That open recognition goes a long way towards potentially deepening the relationship by the development of trust, which in turn can increase commitment. Loyalty is promoted.

For those who don’t care about the relationship, the effort spent acknowledging them still has a benefit by bringing into clear focus the need to modify or end the relationship.

Nuances and Weak Signals

Acknowledgement promotes the sharing of nuances, important when building success. It is like an added bonus. Let me explain. Nuance is about the little things; the little things that can make all the difference in the world. In complex situations nuances go by another name: Weak signals.

Successful weak signal analysis (WSA) is one of the holy grails associated with complex projects. WSA is essential on any complex project since it helps determine as early as possible signs of pending success or failure. This information helps the PM change approach in order to enhance the former and dampen the latter and do it in a cost effective way.

The hunt for and analysis of weak signals can keep a project manager up at night causing loss of focus and the development of tunnel vision. The loyalty and trust promoted by acknowledgement encourages others to help the PM stay on track with eyes wide open. The odds of success go up accordingly.

Think of the trusting clerk with whom you’ve built a relationship. How do you feel when they steer you in the right direction regarding a product with which you have little familiarity but need to work correctly right out of the box? That feeling is the payoff, or should I say one of the payoffs. After all, it just feels good to treat people right.

A Challenge to you!

I’d like to put a challenge out to the reader. How much time are you willing to spend acknowledging others? Who would you pick? Why? Keep your thoughts and associated actions in mind for the next blog where we’ll go deeper into the benefits of acknowledgement along with the damage that occurs when it is absent.

Project Reality Check #5: The Devil is in the Details

by Gary Monti on January 19, 2011

Expected Monetary Value (EMV) connects the customer with the team, as we saw in the previous blog. This tool is very powerful. The numbers are as serious as a heart attack (the reason will be shown later). This blog addresses the mechanics of the EMV model providing a whirlwind tour of the associated calculations.

Remember, the goal is getting the team more power to help the client by tying risk with quality and projecting changes in performance corresponding to changes in the risk terrain.

Probabilities and Closed Systems

At the core, an EMV calculation comprises probability times impact to get a weighted number:

10% (probability) x $1000(impact) = $100(EMV)

Let’s put it to use in a closed system.

CLOSED SYSTEMS. In closed systems the probabilities add up to 100% (summation rule) and options are mutually exclusive which is also referred to as being mutually dependent. For example, if you toss a die there is a 1 in 6 chance of getting a “1.” If you get a “1” that also means you did not get 2, 3, 4, 5, or 6.

EMV calculation. Here’s an example that also brings in financial consequences. A vendor has a 70% chance of needing to do rework and it will cost you $1000 extra. The other 30% of the time the work is as expected with $0 added cost. The total probabilities for this system are 100% (70 + 30). Now, the expected value for this system is;

(.7 x $1000) + (.3 x $0) = $700.

Let’s make it a little more complicated. Say there’s a 70% chance the vendor needs to do rework costing $1000, 20% chance the work is as expected at $0 cost, and a 10% chance the vendor design exceeds customer expectations and you get a $2000 bonus (cost reduction). The percentages for this system add up to 100% (70+20+10). The expected value for the additional cost to this system is now:

(.7 x $1000) + (.2 x $0) + (.1 x -$2000) = $600 + $0 – $200 = $500.

Open Systems And The EMV Model

An open system has a set of four calculations providing context for making decisions:

  • Baseline
  • Total Project EMV
  • Worst Case
  • Best Case

These provide a range of numbers with the Best- and Worst Case being the bookends and the Baseline and Total Project EMV lying in between. Let’s define an open system and jump into the calculations.

OPEN SYSTEMS. Imagine 3 dice. The summation rule applies for each die but the dice are independent of each other and move freely. In other words, you can still get a “1” on dies B and C even when there is a “1” on die A. Substitute “subcontractors” for “dice” and the stage is set to continue on to the calculations!

Baseline. The baseline sums the costs across the WBS (work breakdown structure). Here’s an example:

You are to provide a circuit board for your client using three subcontractors using the following estimates:

The firmware contractor, Dewey, Cheatum, and Howe, estimates $50,000.

The software contractor, Karen Sympathy, estimates $100,000.

The board manufacturer, Flyby Knight, estimates $80,000.

The Baseline simply sums the estimates:

($50,000 + $100,000 + $80,000) = $230,000

Total Project Expected Monetary Value (TPEMV). The TPEMV combines the baseline with any needed reserves to achieve the desired quality and delivery date. Imagine you are trying to determine what your risk reserves should be in order to protect the margin on the project while meeting the desired quality:

  • The firmware contractor, Dewey, Cheatum, and Howe, has a 50% chance of needing $5,000 extra to achieve the desired quality;
  • The software contractor, Karen Sympathy, has a 90% chance of performing adequately for $10,000 less than the estimate;
  • The board manufacturer, Flyby Knight, has a 70% chance of trying to squeeze you for and additional $10,000 to get the desired quality and delivery date.

The question is, “How much extra money should you add to your fix fee bid to make sure the margin is protected?” Here’s how to do it:

For Dewey, Cheatum, and Howe there is a need for an extra (.5 x $5000) or $2500.

For Karen Sympathy there is some cushion to the tune of (.9 x $10,000) or -$9,000.

For Flyby Knight these is need for an extra (.7 x 10) or $7,000

The net of this is $2,500 – $9,000 + $7,000 = $500 in risk reserve.

TPEMV = Baseline + risk reserves = $230,000 + $500 = $230,500.

Worst Case. But what if everything bad that could happen actually did? In that case you need to do a Worst Case calculation and do 100% calculations for the threat and 0% for the opportunity, i.e., leave Karen Sympathy out and assume the worst for Dewey, Cheatum, and Howe and Flyby Knight.

Increase your bid by (100% x $5,000) + (100% x $10,000) or an extra $15,000.

Worst Case = Baseline + 100% threats = $230,000 + $15,000 = $245,000

Best Case. The Best Case leaves out the threats and adds in the opportunities at 100% or (100% x -$10,000) = -$10,000 for Karen Sympathy. The bid then changes to:

Best Case = $230,000 – $10,000 = $220,000

This has been brief. If you have any questions feel free to contact me. The EMV model is a great way to connect with stakeholders and work rationally while keeping relationships intact.

Oh, about that heart attack. The Securities and Exchange Commission (SEC) was founded during the Great Depression because people offering stock for sale only showed the Baseline and Best Case numbers and a more robust model was needed – the EMV model. Risks and reserves have to be reported. Unfortunately, we are climbing out of a repeat of the same situation caused by ignoring the model.

Save Energy, be on the Offensive

by Guy Ralfe on March 17, 2010

In rugby there is a saying “it is easy to play well behind a winning pack”. For those that are not familiar with the game in each side there are 15 players of which 8 of them, “the pack”, work to maintain the possession of the ball and create space for the running backs to break through the oppositions defenses. One of the facts of sports, is that it consumes far more energy defending your position than it takes to continually attack your opposition.

I observed a situation recently on a project, that demonstrated this exact same principle. I guess it shouldn’t come as a surprise as projects are a team sport in  a way just competing against the opposition of time, resources and money. The project I observed had slipped somewhat over time and now that the final delivery was more firmly set in sight, it was apparent that not all could be delivered by the required delivery date.

The delivery date was fixed, but how the project and product managers presented the situation to the stakeholders was that if they wanted to meet the date they would have to forfeit some functionality requests. The stakeholders did not like the position as they had already settled on the bare bones delivery, as the project had consumed all available slack to the current point. Naturally this placed the stakeholders in a difficult position.

What seems to get lost in this play is that now the direction and decision capability is placed 100% in the stakeholders hands. Another key point is that the project had originally committed to delivering the functionality as part of the original scope, but now it is seen as a type of “scope creep” or “nice to have” and must be relinquished. Clever positioning by the project and product managers.

What I was also fortunate enough to witness is the behavior of the teams supporting this project. Because the project manager had lost control of the project over time, the project manager role turns into this ongoing defense of the current status and a slow ongoing erosion of deliverables. Like playing behind a losing pack in any sport, defending your situation on a project consumes time and energy – think of all the ancillary requests to your team members to test things out and provide feedback on how long xyz will take for the next project meeting. All this activity consumes rather than producing for the project and the situation just continues to get worse over time.

As a Project Manager you have to take charge and be the one to declare the future of the project with the support of the stakeholders. Don’t quit on the original commitment, rather try and declare what can be done for the delivery date and plan to make good on the original promise. This way you are in the driving seat and your team will feel compelled and motivated to play your game in the offense.

Don’t be on the defense, it will wear your team out – take charge and lead the offense to capitalize on the effort you have available. It is essential the project manager,” the pack”, is leading the way and creating opportunity for the team not stifling it with indecision.