Project Management Institute

Raise the red flags

BY SANDRA A. SWANSON -- PHOTOS BY MORGAN ANDERSON

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Joan Bever, Tribune Company, Chicago, Illinois, USA

In businesses large and small, the executive suite carries an overwhelming list of responsibilities. When a company is trying to stay competitive—or just stay afloat—it's rare for CEOs, CIOs and other executives to have a firm grasp on the day-to-day developments affecting the projects in their portfolio.

And that's a big mistake, given that the execution of strategic projects has a dramatic effect on an organization's success.

“One of the biggest pitfalls we have seen top executives make is abdicating their leadership role to the project management team,” says Rick Warter, practice director at the San Francisco, California, USA office of Point B, a management consulting firm whose services include setting up project management offices (PMOs) for organizations. “The ‘C-suite’ has to stay involved to reinforce what the business value of the project is.”

When executives finally learn that a project is about to go off the rails, it can be too late to avert a crisis. But there are steps that upper management can take to facilitate communication with project teams—and to raise red flags in the early stages of a project's life cycle.

SOMETIMES NUMBERS LIE

Start by having an enterprise portfolio project management information system in place to ensure that relevant details are captured for all projects—in particular those deemed necessary for achieving strategic corporate goals, says Bassam Samman, PMP, CEO and founder of CMCS, a portfolio and project management consultancy in Dubai, United Arab Emirates. “This will enable executives to have a single version of the truth of the status of all of those projects, and thus do their own business intelligence analysis.”

Getting at the real truth behind project status is no easy task, though. For instance, critical-path method scheduling will provide important indicators of a project's health, but those indicators can be manipulated, Mr. Samman says.

Case in point: David Walton, founder and managing director of Bestoutcome, a project management consultancy in Slough, Berkshire, England, assessed the progress of a new e-commerce platform. While reviewing the project governance documentation, Mr. Walton found that the project manager had kept all status indicators at “green.”

If the hours spent in a particular iteration are high, it may hint that the project is running behind schedule or is about to go over budget.

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—Joan Bever

“This was despite a mutinous team, constantly missed deadlines, a poor-performing supplier and a constantly changing scope,” he says.

It's common for executives to focus only on projects with obvious warning signs while ignoring the others. But there's a growing trend among executives to carefully review all projects, even those with excellent status reports, Mr. Samman says.

A savvy executive will also ask project teams to track the time spent on high-level tasks. It's a good indicator of where trouble areas may be occurring, says Joan Bever, managing director of the technology PMO at media conglomerate Tribune Company, Chicago, Illinois, USA.

“For instance, in some of our interactive development projects, we noticed there was not enough time spent in quality assurance testing,” she says. “As a result, some of the product releases were experiencing a lot of bugs or didn't perform properly when faced with high-volume activity.”

On the flip side, if the hours spent in a particular iteration are high, it may hint that the project is running behind schedule or is about to go over budget, Ms. Bever adds.

Other indicators of impending trouble can include the number of scope changes, budget variance and amount of labor spent managing the project, Mr. Warter says.

It's essential to look beyond those metrics, too, though. When tracking the progress of projects, a common error executives make is “getting lost in the numbers,” Mr. Warter says. “It is more important to engage in a conversation with your project management team on how the project is going and what outcomes you are trying to achieve.”

img WHEN YOU’RE THE CLIENT

Consultants can play a vital role by complementing the internal project management team with their knowledge and support. But that outside help can add complexity to the project management process.

“There will be a lot of internal politics that an outside consultant would not be able to understand and manage,” says Bassam Samman, CMCS, Dubai, United Arab Emirates.

To help monitor project performance, here are some tips for working effectively with project managers outside your organization:

  • Create a detailed communication plan. It should spell out the type and frequency of information the consultant must provide to the organization.
  • Have a well-defined list of deliverables in the contract—and make sure the consultants know their performance assessment will be based on that list, Mr. Samman says.
  • When you draft a statement of work, don't make it too rigid, says Joan Bever, Tribune Company, Chicago, Illinois, USA. “Be mindful to add flexibility for both the vendor and you as scope, deadlines, resources or budget changes,” she says. “Be clear as to what is in scope for the project, but also what is not in scope for the project.”
  • Always have a representative from your project team or organization dedicated to oversee the consultants’ activities. “The consultants need to know that the company is serious about their deliverables,” Ms. Bever says. “If possible, have them work on site to ensure high communication and collaboration. This will keep consultants in alignment with the project team's and company's expectations as they change or evolve.”

He advocates that executives conduct regular “360-degree reviews” of projects. Look beyond the triple constraints to external threats, strategic alignment and business readiness trends.

By analyzing that broader organizational context, executives can get a clearer indication of how a project is truly progressing, Mr. Warter says.

His company has gone through this exercise with many of its healthcare and financial services clients who are implementing core IT systems. In one case, the review allowed a CFO to turn an estimated one-year delay into a three-month delay by allowing her to prioritize and resolve key issues the project was facing, he says.

MAKE MEETINGS AND MILESTONES WORK

At Conifer Health Solutions, a healthcare consultancy in Frisco, Texas, USA, vice president and CIO Chris Tyler makes sure there are frequent measurable milestones—every six weeks, at most.

“In my experience, projects end up in these troublesome positions because of a lack of succinctly defined success criteria, or because of lengthy timelines that do not quickly deliver measurable results,” he says.

Even with the best project management and delivery team in place, projects that span more than six weeks without measurable results can easily find themselves in trouble, Mr. Tyler attests.

As an executive with little time to stay in tune with the day-to-day activities of a project, he says the most effective approach is to ensure the project has a work breakdown structure that facilitates meaningful status updates: “Factoring shorter milestones into the plan will likely increase costs of the overall project. But it will better allow for the agility needed to sustain accurate direction of the project, and alignment with the more fluid corporate strategies that are required to successfully run most companies today.”

Ask the project manager probing questions that drive the necessary discussions to get at the root of any problems. Choose these questions wisely, though; the most common mistake senior executives make is not asking the right ones, Mr. Walton says.

  • Is there anything that keeps the project team up at night?
  • Are there roadblocks you can help remove?
  • How is the sponsor handling his or her role?
  • How are you keeping stakeholders engaged and supportive?
  • If it was your money, would you still do this project?
  • How much contingency is left in terms of money and time?

A TRUE OPEN-DOOR CULTURE

Although regular meetings are important, the ultimate goal is to have a project team that shares challenges as soon as they arise. You don't want them just waiting for a monthly update or steering committee meeting.

“Work with your team to create an escalation plan for executives when key issues arise, so you can be aware of trouble areas more quickly,” Ms. Bever says. “To let a week expire without action is costly and demoralizing to a project team.”

Getting at the real truth behind project status is no easy task. Critical-path method scheduling will provide important indicators of a project's health, but those indicators can be manipulated.

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—Bassam Samman, PMP, CMCS, Dubai, United Arab Emirates

To create an environment where employees feel comfortable speaking up when something goes wrong, executives must do more than pay lip service to an open-door policy. Take an honest look at the culture that exists at your organization. Are employees receiving subtle messages that encourage them to camouflage red flags?

“Inevitably, projects have problems,” Ms. Bever says. And when those problems arise, the executives’ response sets the tone for how well the project team will keep them informed of future dilemmas.

“Some executives who have not been involved in projects before expect everything to be delivered on time and within budget,” Mr. Walton says. “Projects deal with the future and uncertainty, and this is an unrealistic expectation.”

If a project member is berated—or fired—for communicating problems on a project, the team will be reluctant to deliver additional bad news. That, in turn, leaves considerably less reaction time for resolving problems.

The Tribune Company, for one, made a concerted effort to create an environment where timely updates, both good and bad, were encouraged and expected, according to Ms. Bever.

“We actually started to celebrate some of our failures,” she says. “We wanted the project team to understand that it is okay to make mistakes once in a while, because we were spending too much time on contingency planning and not enough time on delivering projects. Many of our project teams were paralyzed on projects due to the ‘what-if’ scenario mapping. A good balance of both good judgment and risk-taking was required to deliver on more projects and to move our company ahead.”

In addition, top executives need to remind the project team of their critical role in the organization.

“It's all about communication,” Mr. Samman says. “They need to make it clear to the project team that they depend on the performance of those projects for making strategic decisions.”

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In my experience, projects end up in troublesome positions because of a lack of succinctly defined success criteria, or because of lengthy timelines that do not quickly deliver measurable results.

—Chris Tyler, Conifer Health Solutions, Frisco, Texas, USA

 

Make sure everyone understands the organization's vision and strategy—and that there are clear expectations for how projects must support those main objectives.

“When the project team has a clear understanding of the project expectations and priorities, it can keep executives informed on the particular facets that affect project budget, scope or delivery time,” Ms. Bever says.

The key is getting that critical information when you need it most—before trouble occurs. PM

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img Save This Project Exchange ideas about project recovery in the PMI Troubled Projects Community of Practice at troubledprojects.vc.PMI.org.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK MARCH 2011 WWW.PMI.ORG

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