A project management case study
Editors Note: The following case study was submitted by Larry Bennigson through the courtesy of Harvard Business School. If you would like to send in your views and analyses we will try to publish as many as space will allow in a coming issue of the PMQ.
Selecting a Program Manager
Following a weekly corporate staff meeting on finance and operations, Mr. J.R. Stewart, Executive Vice President of Eastern Electronics, Inc. (EEI), was discussing the selection of a Program Manager for the forthcoming Army BAT Program with Arnold Knepper, EEI Vice President and General Manager of EEI’s Microwave Division.
Mr. Stewart had opened the discussion with, “Arnie, I saw M/Gen. Yager of AMC (Army Missile Command) at a symposium last week and he asked about our plans for the BAT Program. In particular, he was concerned about who would replace Jerry Carson as Program Manager now that he has accepted the OSD (Office of Secretary of Defense) appointment to work in DDRS&E (Director Defense Research and Engineering).” (Carson was the prosepective Program Manager for BAT. He led the proposal effort and accepted an OSD appointment three days before AMC announced that EEI had won the BAT award.)
“I’ve been working on that problem, Mr. Stewart, and I’ve narrowed the candidates down to two people: Jim Martin and Boyd Dowler. I’d like to discuss it with you because choosing between them is going to be difficult.”
“Before we get down to details, Arnie, how did you select Martin and Dowler? What criteria did you use?”
“I didn’t use any specific criteria. Since we’re so shallow on candidates who would make good Program Managers, there weren’t many options.”
“Look, Arnie, Carson is gone and since Gen. Yager is keen on who manages his pet projects, I feel we’ll have to be careful in our selection. This is particularly true since Gen. Yager championed the BAT Project and got OSD to approve it. Therefore, why don’t you come back next week with a written list of selection criteria and pertinent data on Martin and Dowler. Since we’ve got three weeks before we start negotiations on the Bat contract, I feel we can take another week on a decision this important. Also, let’s talk a little about developing Program Managers so that our options won’t be so thin in the future.”
Background on EEI and the BAT Program
EEI is a leader in military electronics with products ranging from components to missile systems. It’s primary strength is in radar technology with all three military services and NASA serving as customers for its radars. EEI has eight divisions scattered throughout the United States. The Microwave Division is the second largest with annual sales of 150 million. Three major programs account for 80 percent of the Microwave Division’s sales.
Microwave uses Program Managers supported by staffs of various sizes to administer its programs. Traditionally, the Division’s technical strength consists of several functional support groups and development laboratories, many of which were formed when the Division was first organized in 1943.
In late May, 1966, the Microwave Division won the Bat Program. The BAT Program will develop and test several prototypes of an advanced surface-to-air defense missile. The missile will use a new and relatively untried guidance technique. If prototype tests are successful, a production program with a potential of several hundred million dollars could follow. The Army has a “wait and see” attitude about production commitments. EEI feels that it won the award because of its technical approach on the BAT. If the BAT is successful, it could represent over half of Microwave’s business from 1969 through 1973.
Meeting to Select the BAT Program Manager
Knepper opened the 13 June meeting by showing Mr. Stewart the criteria he had listed for Program Managers (shown as Exhibit 1).
Stewart commented, “I like your list, Arnie, but let me add my nickel’s worth.
“To begin with, we want people who are experienced engineers. A good Program Manager has to be able to sort through the pieces himself if a technical problem begins to inhibit progress. Our Program Managers should be able to relate technical details of their programs to the customer or to top management at a moments notice. Further, they should be able to provide an up-to-the-minute status report on the project.
“Also, we want managers. We want people who can work out the best balance between the technical objectives of the program and the estimated cost and schedule. Too many times in the past our technical oriented Program Managers have overemphasized technical performance at the expense of cost and schedule.
“In addition, they must have loyalty and dedication. Not only is loyalty to the project and upper management necessary, but loyalty to their people. They must sacrifice themselves when necessary to demonstrate that the confidence placed in them is repaid with their best efforts to accomplish the task.
“Moreover, Program Managers must be able to obtain customer acceptance and approval on technical and program issues. In many ways this is more of an art than a science and is very much a function of the type of program involved. Above all else, Program Managers must not dictate to the customer what the best approach or alternative is. The most effective Program Managers have a way of getting the customer to select or ratify the approach that we feel is in our best interest.
“And finally, the world loves a tiger! We need high rpm-type guys who will rattle a cage or two when it is necessary to get things done.
“Okay, Arnie, so much for my views, let’s talk about your two candidates.”
“Well, sir, both Martin and Dowler are current managing other programs. Martin manages the USAF Ripper (air-to-air missile); Dowler, the Army CW Tracker (surface-to-air tracking radar). The Ripper is established in production now after those painful development problems we had. The CW Tracker is finishing test and evaluation and is just starting production. Both programs are in shape for the assistant program managers to take over, if necessary.
“Martin is 44 years old and has been with us 22 years. He is stronger technically than Dowler, who is 38 and has been with us 9 years. Dowler is quick to grasp technical issues, but just does not profess to be the engineer that Martin is. I feel that Martin could do a better job getting the BAT guidance package developed.
“In addition, I had members of my staff discuss Martin and Dowler with their peers and observe their management techniques. Also, I personally interviewed each of them. Here’s how their peers size them up.”
People who have worked for both Martin and Dowler expressed no significant preference on which one they preferred to work for. They felt that Dowler did more to develop them personally than Martin.
Other Program Managers rated Dowler over Martin in responding to customer desires. On the other hand, they rated Martin higher than Dowler on getting along with the functional line managers at Microwave. Also, they felt that Martin was more sensitive to top management policy than Dowler.
The other Program Managers seem to feel that Dowler was somewhat inconsistent concerning his subordinates’ problems. Sometimes he told them exactly what to do and the next time he would ignore them unitl they solved their own problems. However, his own subordinates thought he was reasonable in deciding when to help them and when to leave them alone. On the other hand, Martin made most all of the decisions and always let the people know what had to be done. He left little doubt as to who was boss and in control.
One point that seemed to irritate other Program Managers was Dowler’s approach to organization. To satisfy the customer’s request, he had projectized his program to the maximum extent possible. This was somewhat contrary to management’s aim of centralizing control and using functional groups to serve all the program offices. By way of contrast, Martin didn’t try as hard to sell us on projectizing his program when his customer suggested it.
The functional department managers liked working with Martin best and they had mixed emotions about Dowler. They felt Martin was willing to understand their problems while Dowler had a rather product-oriented, hard-headed attitude about their groups. They further stated that if Dowler didn’t get the services he expected, he didn’t care to discuss the reason, he would go to top division management and obtain approval to assume direct control of certain portions of their groups.
In addition, members of my staff were able to observe specific program management techniques of both Martin and Dowler. To make a side-by-side comparison of the performance on present programs is difficult due to the different nature of each program. It seems that Martin’s program is characterized as a particularly difficult one technically. Tough technical problems caused panic and indecision with occasional complaints from the customer. ON the other hand, Dowler’s program, which was less of a technical challenge, seems to run smoother. Occasionally, I have to throttle his fore-handedness at turning things on and starting activities that our functional managers look on as being unnecessary or premature.
Attitudes on Selling
Martin has mixed views about how much of his effort should go into selling. He feels that running his program constitutes his prime job and selling belongs to marketing. Further, there is no better way to upset him than to borrow a man from his program to support a sales effort. Somewhat like Martin, Dowler feels that once he becomes involved in a program, he considers it his primary job. And, when the program is under control, he feels that it is appropriate to devote a portion of his time to selling advanced versions of the project and/or broadening the applications of the existing product. He considers his selling responsibilities to revolve around selling the Microwave Division through excellent performance on the existing program.
The two men differed significantly in their attitude toward contracting and contract negotiations. Dowler feels Contract Administration should get program office approval for all agreements. He likes to participate actively in initial negotiations and then fade into the background once the initial ground work has been laid. His active participation has created an abrasion or two with our Manager of Contracts. On the other hand, Martin feels company procedure clearly makes such negotiations the responsibility of the Contracts Department.
While Dowler maintained personal contact with his subordinates, he strongly supported use of advanced techniques whether or not they were required by the contract. However, initially, he did not comply with the use of PERT on the CW Tracker Project nearly as closely or as readily as did Martin on the Ripper Program. In fact, Dowler took several months to get his PERT system underway. The customer complained that he was dragging his feet. Dowler’s position was that it took him months to get PERT reliably successful and he wanted a workable system. Having completed his PERT system shakedown, he now relies heavily on it.
Martin stated that he doesn’t delegate his program control to mechanical techniques like PERT or PERT/Cost. Although he used them on the Ripper Program, he preferred to rely on eyeball-to-eyeball observations and control things through personal “contact with the troops.” He feels that in complex technical developments it’s the informal communication system that gets the decisive activities to occur.
Employing Company Procedures
Dowler consistently ignores company procedures if he feels he has a reason to do so. He feels that time is worth too much money to use established procedures and have to wait for decisions and action to result from them. His reputation for taking charge often carries functional people along with his approach even though they may be reluctant. The functional managers often complain that his “take-over” attitude is fragmenting their groups.
Martin normally employed company procedures to the letter. It was rare indeed when he violated them or ever found occasion to challenge them.
Mr. Knepper’s Interviews with Dowler and Martin
Dowler explained his orgainzation in the following way. Other Program Managers and their staffs of 20 to 40 people are supplemented by “procuring” services from the functional groups. Dowler tried such an arrangement, he said, but gradually increased his staff to about 170 and projectized. The Army’s request to projectized helped Dowler sell us (the Microwave Division management), on the change. Dowler explained that time and time again he was dissatisfied with performance of the services he had to “procure.” He said he had to demand approval for direct control of certain functional personnel to end poor performance and late deliveries.
Dowler is the first to admit that his “take-overs” have created friction with functional managers. He feels the functional managers expected him to “break his pick” in attempting to direct individuals in their groups.
Dowler notes that now functional managers cooperate in giving him what he wants because they figure he’ll get it one way or another.
His attitude about other organizations in the Microwave Division is somewhat condescending. In fact, he has commented freely that he would like to have his own estimating and pricing group since he has no confidence in estimating or pricing as it is now done. I’m not sure I agree. Estimating and pricing must be oriented to division-wide objectives and cannot yield to the Program Managers when there is a conflict in objectives and trades to be made.
He feels that many schedule slippages on Microwave programs would be prevented in the program offices through proper planning rather than blaming them on supporting organizations. He felt the key was to anticipate trouble spots and “pursue two or more courses of action” when the outcome of one could set the program back if it were unsuccessful.
Dowler summarized his interview by stating that people at Microwave feel his program’s success was due to luck and rule breaking. He stated this was an unfortunate conclusion and added that people didn’t realize how proper planning and Program Office control eliminates most of the usual problems. He said that on his program there was no great show of the Program Manager putting out fires, insisting on weekend work, and living in a general crisis status.
Martin’s interview was somewhat less candid than Dowler’s. Martin started by stating that the Program Manager’s role was to stay on top of things through actually getting into the swim and seeing what was being done. He stated that he didn’t exercise himself unnecessarily about unavoidable cost and schedule problems which were largely out of his control in Microwave’s functional setup. It was impossible for him to directly control the functional groups that spent the money. He concentrated his energy on the items he could control, which he felt were major and primarily technical in nature. He said, “In the last analysis, technical performance would normally make up for a little overrun or a delivery slip. Customer satisfaction and product performance overshadows the rest.” He freely admitted that the Ripper Program had more than its share of development problems. He stated that he was handcuffed by a poorly structured contract. Also, he complained about late reporting of actual expenditures from the Accounting Department. In addition, Martin stated that priority conflicts in manufacturing were largely to blame for the late deliveries of Ripper missiles. He said that despite his efforts, manufacturing never seemed to fully understand his position and the specific needs of the Ripper Program.
Finally, Martin said he felt projectizing was helpful in some companies but was unnecessary at Microwave. He said that when he was assigned to the Ripper Program, company procedures required him to use the existing functional organization to accomplish the task. He felt there was no opportunity foregone in not projectizing his program because in the long run projectizing would tend to fragment the functional groups wherein Microwave’s technical strength lies. In his summary, Martin, expressed his approach as one of following established division policy and keeping abreast of the program. “After all,” he said, “administration is largely a matter of giving attention to the right details.”
At this point, Mr. Stewart says, “Well, Arnie, it looks like you’ve researched the alternatives. I’ve got to go to a meeting, but when I get back let’s discuss our corporate objectives on the BAT Program. We should give some thought to ‘where the battle will be won or lost.’ In particular, how can we ensure that we develop the guidance package successfully? Then, you can tell me which one you have chosen and why. We’ll discuss your choice a few minutes and then I want to hear about your plans for developing future program managers.”
Question: 1) Who should Mr. Knepper select? Why?
2) Outline a program for developing program managers.
Job Requirements – BAT Program Manager
1. Must know the product.
2. Should know the customer and be acceptable to him.
3. Must be capable of managing a large program.
(BAT Program will be the largest Microwave program, if successful; twice as large as any current program.)
4. Must have sales ability.
5. Must be capable of obtaining internal cooperation from support groups.