Consistently making strategic project decisions
PMO Director, Chiron Corporation
Partner, Critical Skills Inc.
The most thorough project planning; the most well applied tools; the latest software wizardry; cannot undo the effects of poor decision making within the context of projects. This paper examines an approach deployed within a multi-national health care products company to enhance project and new product launch success through attention to key decision making processes within their projects. The firm experienced substantial reduction in time to launch and more projects completed on time, on budget, and on-performance.
People and Decisions
Although people enjoy being involved in decision-making, many shun the task because of the controversy involved. Lacking commonly accepted, unbiased procedures, decision-making becomes a contest among those with different points of views. Nobody needs to be told that excellence in making choices is critical to individual and organizational success. Everyone knows that choices made today influence our lives tomorrow. What is not so obvious is how to use the information available to make the decision today that will be lauded as excellent tomorrow.
Our research demonstrates that most people tend to make a decision based on the benefits and disadvantages of each option presented to them. They limit themselves to the options available at the time, and even when the best option is selected, it usually does not meet their needs. A more efficient way to make decisions, specifically project decisions, is to use a proven and logical method to first identify your goals and then analyze your options. The process developed by Critical Skills Inc. has been designed to address typical weaknesses we encounter when working with clients, while providing a systematic framework that can be used by individual and groups to select the best choice.
Project Managers and Decisions
Project Managers spend significant time engaged in thinking about risk on their projects. Much of this thought is directed toward tasks that are on the critical path, that are new to the project team, or that have not been completed well in the past. Much of the risk analysis is directed toward three key measures of project success: Schedule, Cost, and Compliance. Will the task be completed on time? Will it be completed within budget? Will the output comply with regulatory and quality requirements? There is another more insidious type of risk, however, that is responsible for some spectacular project failures within the pharmaceutical and medical device industries. This type of risk has been a subject of conversation within both the medical device and pharmaceutical communities over the last several years but not necessarily within the context of project management. It is also little mentioned within the Project Management Body of Knowledge. It is Decision-Generated Risk
Everyone can drum-up fabulous examples of bad decisions and their disastrous consequences. While those instances do deserve special attention so that we may benefit from the lessons learned, most decision related risk-causing damage to projects is undetected. It is more akin to death by a thousand cuts. Lessons cannot be learned from those failures. So the mistakes are destined to be repeated. This is unacceptable in an industry that bets millions upon millions of dollars on successful product launches, which are in essence, a collection of projects. It is also unacceptable in an industry where insufficient attention to detail can lead to a plant closing. This paper reviews a practical approach to controlling decision-generated project risk in an effort to accelerate time to launch while maintaining compliance and quality metrics within a regulated health care products environment.
The Role of Decision Making within Projects
There is a reason why well-scoped projects with specific and measurable goals succeed. The specific scope title guides decision-making within the project and helps project resources make well-balanced choices. However, even within well-scoped projects, decisions can be made by project resources that are not in alignment with the project's intended outcomes. It could be a decision about a label, packaging, content mixture, etc. Such decisions can have a serious impact on the project because they can be at a level of detail that escapes the notice of the project manager. Imagine what happens within less well-defined projects. Decision-making on those projects is essentially on autopilot. The result is scope creep, the silo effect, or a number of other project maladies that are common within new product development. It is risk generated by low quality decision-making.
What is required is a more robust approach to decision making (Exhibit 1) that serves as a common language within the project and extends from the project's goals. An important premise is that decision-making is a skill that can be made much more effective once converted into a visible process. A second premise regards the nature of projects within the context of product launches. I would estimate that 85-90% of project tasks within a pharmaceutical product launch have been done before. The project's goals may be a bit different this time, but the majority of tasks we have executed on another project. This implies that many of the decisions will be similar as well. This represents an opportunity to not only identify the critical Work Breakdown Structure (WBS) elements in terms of time and cost, but also to identify and catalog critical decisions within the WBS. The process we used was as follows:
This process was repeated throughout the WBS (Exhibit 2). Templates were then created for each of the critical decisions most commonly experienced within the firm's projects. These templates served to ensure that critical decisions within the project were given due care, had gathered the appropriate data, had evaluated a suitable number of options, and was consistent with the project's overall focus. This approach also provided a unique opportunity for the project manager to coach her resources as they struggled with project related decisions. In most organizations, decision-making occurs invisibly within people's brains leaving no opportunity to identify and share the best thinking.
Through such a systematic approach to decision-making, project risk was substantially reduced, project resources gained confidence in their ability to call the shots, and projects were completed in less time. This approach also afforded a degree of control over projects that the PM rarely experienced yet left the project's resources unencumbered.
The Strategic Decision Method (SDM®)
Behind most decisions lie a myriad details. Some are highly important, some insignificant. There may not be enough information. There may be so much that it overwhelms us.
The two phases of decision analysis learned and practiced in the session are Identification Phase and Analysis Phase:
The first phase of the process allows participants to develop a decision title, which in a way, is the product of previous decisions and to establish meaningful goals. “User friendly” and “Increase customer satisfaction” are great titles that everyone understands, but are quite useless as a criteria to evaluate a number of possible options. Meaningful goals are measurable and contain a specific target of performance (Exhibit 3). Goals must be measurable because they function as a screen to eliminate unacceptable choices. Learning to differentiate between your needs and desires as well as recognizing which ones have the most influence on your final decision is also critical to successful decision-making. The last step in that first phase is to establish a scale of performance based on the ideal choice and not based on someone's preferred choice or “pet option”.
The second phase of this Strategic Decision Method (SDM) has more to do with analyzing the many options (Exhibit 4). First, learning how to identify the relevant options and gather the necessary information is key to avoid information overload. Evaluating each option against the goals and understanding how to automate the process is a key aspect of this phase.
Once the best choice is identified (Exhibit 5), and we start to look at the consequences of implementing this choice in the near future, we must become destructive, negative and pessimistic in our thinking to try to destroy our best choices (Exhibit 6). The degree to which managers accept this process is determined largely by how experienced they are. Experience teaches us that there are no awards for past optimism over current failures.
After a careful consideration of the potential problems (Exhibit 6) related to the best option(s), being able to confidently select one option based on a benefit and risk analysis is the final step. Being able to document the decision made ensures that it will be implemented and not revisited in a couple of weeks, as most of us tend to do. This same process can be used when making or assessing recommendations to a decision maker as opposed to making the decision yourself or leading a group to a final decision.
©2004, Eric Morfin, PMP
Originally published as a part of 2004 PMI Global Congress Proceedings – Anaheim, California