Smart Project Management

Five rules for maintaining stakeholder support, managing costs and achieving goals.

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Work, particularly R&D, in organizations is increasingly done through projects. In the words of Eric Verzuh, project manager, consultant, and author of the book The Fast Forward MBA in Project Management,1 “Most managers would do well to learn project management skills.” Effective management is needed from the very beginning of a project. This begins with establishing project rules to define what the project is all about so that the participants and stakeholders understand and agree upon the project and the definition of its success.

The five rules for a successful project are:

1. Agreement on goals among all project participants (those doing the actual hands-on work), stakeholders, and management

2. A good project plan to accomplish these goals

3. Effective communication

4. Scope control

5. R&D management and business management support

These goals are interdependent, but let’s look at each one separately.

Obtaining agreement on goals

Working on a project without agreeing on goals is fraught with danger. This author has seen this happen at least three times; the results were wasted time, effort, and money. Even if the needed agreement was later obtained, initial disagreement about goals can result in lingering resentment and morale problems.

Rule 1 can be difficult to achieve because of the different perspectives of the various project stakeholders and team members. For example, top priorities of R&D management include staff availability for the project, hiring of new staff members if required, and meeting intellectual property protection requirements. Top priorities of the plant engineers on the project team are likely to be low manufacturing costs, low capital investment requirements, and minimum disruption of existing plant operations when manufacturing the new product. Business management will be most concerned with achieving the profit margin and production volumes, identifying potential customers, and beginning the sales effort at the appropriate time. (This often is before project completion. For example, Boeing was selling its 787 Dreamliner passenger aircraft long before the first one rolled off the assembly line.)

Cost goals are related to stakeholders’ expectations for profitability. Project timetables are related to the business case. For example, late delivery of the project’s commercial result may result in lost profits and sales as potential customers take their business to your firm’s competitors.

Product performance can affect its value to the customer and thus the price your firm can charge and the resulting profitability.

Establishing a good project plan

The project manager’s most important responsibility is planning. Planning should involve the participation of project stakeholders and participants. The best approach for Rule 2 is for the project manager to establish the outlines of the plan and then fill in the details with stakeholders. The plan must indicate a clear path to intermediate goals (project milestones) and to the final project goal. The plan must include time estimates for achievement of each milestone. Comparing target milestone completion dates with the actual completion dates permits the rate of progress to be assessed. Thus the project plan can provide early indications the project is falling behind, so the project manager can take timely steps to put the project back on schedule.

A good project plan also shows who is responsible for what. It provides the details needed for estimating the people, equipment, materials, and time needed to get the job done. Good estimates for these four factors enable a good forecast of the project cost. Mind maps can put all this information on a single page.2

Plans may change and priorities alter as the project proceeds and situations change. So the project manager must often replan. If changes become necessary, the project manager should take responsibility, learn about the situation, and take steps to prevent the problems from recurring. The project team and stakeholders must be involved in this replanning process.

One requirement for effectively modifying project plans in a timely manner is risk assessment. Team members should be responsible for identifying potential risk issues. One team member should be responsible for tracking all issues and their resolutions. The lessons from this exercise may be transferrable to other projects, so they should be shared with all team members and stakeholders.

Establish rules for communication

As the project proceeds, Rule 3 is essential. Success depends on project participants and stakeholders being able to come to agreement, identify and solve problems, and coordinate their efforts. This requires effective communication. Effective communication in turn requires that guidelines be set on how project participants will communicate among themselves—often not a simple matter if the project team is a global one. Guidelines also need to be set on how and how frequently to provide progress reports to stakeholders.

Effective communication is necessary because the project manager may not have the independence and authority to make all the decisions needed during the course of a project. The project manager must have the authority to direct the project team members and the workflow to achieve the intended results. However, some decisions will be made by project stakeholders. Project managers also may have to depend on managers in traditional roles such as R&D, manufacturing, and sales and marketing. They may also have to rely on managers in other organizations, such as customers and suppliers, to provide resources including project team members, funding, and facilities in which to do the work.

During the course of a project, team members may have access to proprietary information belonging to stakeholders. The project manager should take responsibility for having all team members respect the confidentiality of this information.

Another reason for effective communication is that the concerns and priorities of stakeholders and potential customers for the project team’s work results can change over time. Frequent communication is needed for project managers to adjust what they are doing to take these changes into account. Moreover, one must guard against unnecessary project scope creep and the problems that can cause.

Control project scope

The project plan defines the scope of the project. Scope creep, the inclusion of additional requirements later in the process, can greatly increase project costs while delaying achievement of goals. So Rule 4, scope control, is essential. The costs and benefits of any changes in project scope must be clearly understood before the scope is expanded.

Controlling costs and maintaining an acceptable rate of progress may sometimes require reducing the project scope. Should this be necessary, it also becomes necessary to manage stakeholders’ expectations. For example, if it is impossible to meet the targeted product cost in the development of a new laboratory instrument, stakeholders must be informed in a timely way. Then the news that the instrument will cost 10 percent more than originally planned will not come as a major shock that might cause some stakeholders to lose faith in the project and reduce or withdraw their support.

Project participants and stakeholders need to understand the tradeoffs between project costs, maintaining the project schedule, and any changes in project scope. This requires timely communication—first between project participants and then with project stakeholders.

Obtain and maintain high-level management support

Rule 5, obtaining strong R&D management and business management support, is essential if work is to be done at the desired pace and milestones are to be achieved on schedule. This support must be maintained in the face of competing priorities of other projects and budget changes caused by poor business conditions.

The project manager is the person responsible for delivering the overall project results. However, this may not be the same as delivering the project’s complete business case. The project may require organizational changes the project manager may not have the authority to make. For example, once the results of the R&D project are achieved, commercialization of these results may require installing a new production line in an existing plant or the construction of a new production facility. Project managers may recommend this but often do not have the authority to commission the necessary work. Marketing the newly developed product may require hiring and training new sales personnel or additional training for current salespeople. Making organizational changes such as these requires the participation of project stakeholders such as production and sales managers.

The appropriate stakeholders must be willing to make the needed organizational changes. Otherwise the project will be just an academic exercise whether or not project goals have been met. Maintaining stakeholders’ financial support and their willingness to make timely organizational changes requires the effective communication discussed above and persuasive skills on the part of the manager to gain the benefits of commercializing the project results.

Categories: Business Management

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Hazcom 2012: Are You Prepared? Magazine Issue Cover
Hazcom 2012: Are You Prepared?

Published: June 1, 2012

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