Project Controls: Earned Value 101 (Repost)

OG
Okitanye Gaogane, Academy Director, InnoLead Consulting

We have all experienced that orange tank. Are you one of those drivers that take heed of the sign and get to the nearest petrol station to refuel, or do you let the car come to a stop first, call a cab, buy a container and go and buy extra fuel? The car operates off of resources and the dashboard acts in an advisory capacity. Taking heed of the warning indicators on the dashboard is metaphorically what Project Controls is.

Now here is a classic office case that explains project performance, project analytics and simplifies earned value management. Our office has an 80L capacity petrol tank car and when you drive at normal speed doing 12km/L the fuel will cover 960km. Gaborone-Kasane is 924km, so if we send a consultant on a Kasane mission on a full tank we have a nice contingency of an extra 36km.

I have a colleague, who shall remain anonymous in this article lest the law enforcement officers start following him. If I give him this car, by the time he is halfway to the destination, the fancy dashboard will be reading Distance To Empty DTE: 100KM. If he ignores this he will not even make it to Nata.

How does this relate to project management? This consultant I am referring to, the only thing that matters to him is time. He breaks traffic (project management) rules and is very wasteful in terms of resources (petrol) because to him the most important thing is Time; not necessarily a bad priority. We have seen this in a number of projects, haven’t we? His argument is that there is quality in the ride, and I say he is a risky and wasteful fellow in many ways.

Back to earned value. What is earned value?

Englert and Associates, Inc. define it as, a method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance is as planned.

In our scenario, the plan was to have used 462km worth of fuel (P293) this is referred to as earned value. The dashboard says we have used 860km worth of fuel (P545), this is called actual performance. Our cost performance index says that for every 53 km travelled we are spending 100 km worth of fuel. This does not take a genius to figure out that to arrive in Kasane at the same speed we need an estimate to completion of twice the original budget. The beauty of analytics is that you now have to make informed decisions on whether you will do a budget change request and continue at the same driving behaviour or sacrifice speed for resource conservation.

Cutting the story short, if you are leading the project and you have no way of reporting current performance and extrapolating future performance, then you are as good as driving a car without a dashboard. You will get a lovely surprise when the car stops in the middle of nowhere. At a national level, I can only hope that future projects have at a bare minimum, cost controllers, schedule controllers, planners, and risk managers to manage the MEGA Pula project analytics. This is business, we need to EARN VALUE for every taxpayer-PULA spent.

Okitanye Gaogane holds the position of Academy Director at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw.

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The curse of WhatsApp group chat on project teams

Kabelo
Kabelo Bitsang, Consultant, InnoLead Consulting

Project teams have correctly embraced mobile technologies but this can have downsides and actually harm the project. WhatsApp is the most popular messaging service in Botswana and its group chat feature is being used by project teams to stay in touch and coordinate activities.  While using this service seems like a simple way to improve team communication, it actually does more harm than good. WhatsApp group chat has the following (sometimes hidden) downsides.

The all-day meeting

Good project meetings have a clear start, end and narrow focus.  Meetings are a necessary part of project life but in a WhatsApp Group chat it feel like you are in a meeting that never ends. An issue can be discussed all day without any resolution because there is no time limit to the discussion. Since the team cannot all look at the same screen to discuss a deliverable it can be unclear what is even being discussed. Unlike a structured meeting, on WhatsApp, anyone can speak at any time and there is no thread to the conversation. The unstructured nature of the conversation will make it difficult to close issues or even set deadlines for closure. You can think an issue is resolved only for someone to open it up again 5 hours later. Project teams have a tendency to mix in important announcements with casual chat leading to a situation where you have to read everything for fear of missing out. Some teams can suffer from too many face to face meetings which use up valuable time but WhatsApp makes the situation worse by creating a meeting that never ends.

Governance is thrown out the window

If a project team uses a group chat application this can seriously weaken the governance and controls. With WhatsApp, there is no separation between project decisions, suggestions, opinions and instructions.  It all gets mixed together with no clear accountability and tracking. If you later go through a chat log it is very difficult to determine what should go into the issue log, assumptions log, risk log or decision register. There is a risk of an off the cuff suggestion being interpreted as an instruction and costing the project time and money. There is also a dangerous tendency to assume that if no one disagrees with a suggestion then that is proof of a consensus. Chat logs cannot be referenced later, it is not a real project record that can be archived. Traceability is an important aspect of project controls and the more project issues are discussed on WhatsApp the less of a documentation trail there will be.

Everything becomes urgent

In a normal project progress meeting, you can prepare beforehand with data, minutes of the previous meeting and reports. You have time to think through your response and you can choose how to present information in a way that creates the correct context. With WhatsApp group chat there is pressure to answer questions immediately, especially with how the notification system works. This is similar to being asked to respond immediately to a complex question in a meeting you did not prepare for. Immediate responses and time pressure usually leads to of badly thought out ideas, shallow analysis and lack of consultation. Projects should be schedule driven and follow the sequence of prioritized activities.  If every query, statement and suggestion requires an immediate response then everything starts to feel urgent and the idea of following a prioritized list of tasks starts to get lost. Lack of prioritization kills schedule driven thinking within project teams. It also complicates risk analysis if every issue must be given equal attention regardless of its impact on project objectives.

WhatsApp is the perfect distraction

Full attention is required to do great work. That means putting away potential distractions and focusing deeply on the task you are performing. Most project tasks are time sensitive and unique in nature so require even more concentration than something routine. Several studies have shown that multitasking reduces the quality of work. WhatsApp group chat is an obvious impediment to deep work because it creates constant distraction throughout the day. You can mute the discussion but unlike email, team members expect immediate responses to WhatsApp queries. The knowledge that there are messages pilling up, all requiring immediate attention creates a mental load and makes it difficult to concentrate. Unlike email there is no subject line to let you quickly know what the message is about, you have to read the whole thing. The other challenge with using this tool is that your work chats are in the same app as your private ones so it becomes very easy to procrastinate and dive even deeper into the distraction well.

Before embedding technology into your processes think about the cost. These group chat applications can be effective in some narrow situations but they should never be the default mode of communication.

Kabelo Bitsang holds the position of Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Does a Project Manager Need to be a Subject Matter Expert?

Victor
Victor Marathe, Consultant, InnoLead Consulting

“Does a Project Manager need to be a Subject Matter Expert?” The general nature of this very commonly debated question presupposes that the honour of subject matter expert is bestowed to only those predominantly inclined to the technical domain. This presumption tends to relegate the project management function and any other management function for that matter, to an offshoot of technical disciplines, and that the project management function can be performed effectively and well with only basic project management knowledge, or none at all. The question also presupposes that without being a technical subject matter expert one cannot be an effective project manager.

The general definition of a subject matter expert is an individual with a high level of knowledge, skill and expertise in a particular subject, topic and/or function.

Considering this definition of subject matter expert, we must first acknowledge that every function, topic and/or domain, therefore, has subject matter experts in their own right. This, therefore, supposes that a project is executed by various subject matter experts. For instance, a typical project team will comprise of technical, project controls, and project management subject matter experts to list but a few.

My colleague Pardon Baleni previously pointed out in his article “Do Engineers Make Great Project Managers” (12.09.16) that the skill set required of project managers is distinctively different and broader than the skills set required for an engineering function. With that in mind, the question “Does a Project Manager Need to Be a Subject Matter Expert” becomes a dead end question. That is the correlation between the two functions is not as absolute as to allow for a Yes or No response.

However, it does prompt for the contextualization and qualification of the two functions and how they fit in the project structure.

This article will thus deviate slightly from presenting arguments for and against the question at hand, but will rather focus on contextualizing the roles of the two functions and how and when they more appropriately fit in the project structure. We shall leave the reader to then form their own conjecture on the question.

Product Subject Matter Expert vs. Project Management Subject Matter Expert

The two Subject Matter Experts under discussion are not mutually exclusive and it is also not a given that being a product Subject Matter Expert qualifies one as a Project Management Subject Matter Expert and vice versa. Both are however critical to the success of a project.

The two Subject Matter Experts operate at different levels of the project and the emphasis is different depending on the type, complexity and phase of the project.

Let us consider the typical project work breakdown structure (WBS). There are two major levels of the WBS. The principal deliverable level and the work package level, which is made up of the secondary deliverables. Generally, the principal deliverables level is decomposed to a level 2 of the WBS and can be developed with resources with a surface level knowledge of the product, but above average project management knowledge and experience.

Level 3 downwards is more detailed and makes up the work package level or secondary deliverables level. To compile WBS deliverables at these lower levels more product knowledgeable resources are required. These are the product and technical subject matter experts.

From the above departure point one we can assert that a Project Management Subject Matter Expert is one who is an authority in project management process and hence is more suited to manage the higher levels of the project WBS. That is, manage the project development cycle.

The Product Subject Matter Expert is one who is knowledgeable in the development and function of the product for which the project is being executed. The Product SME is, therefore, more suited to manage the product development cycle.

The next lower level subject matter expert is the technical or discipline subject matter expert. These are individuals who are knowledgeable and skilled in single stream elements that make up the product i.e. electronics, mechanical, software development etc.  These individuals operate and manage the lowest level of the WBS.

In simple terms, the project manager manages the project execution process and product or work package manager manages the product development process. For which it is a subset of the project development cycle.

This is not to assert that one set of skills and or knowledge is more important than the other, but rather to qualify that in the continuum of required skills in the project execution process, the required skills differ for the different levels of management.

It is also worth noting that depending on the size and complexity of the project there could be several layers of project managers and different levels of the project structure. This means that product and technical level operatives on a project could be required to execute project management functions within their sphere of influence on the project scope. Has the assertion that the skill sets are not mutually exclusive but rather complementary and essential for both functions.

Project Management Skills vs. Product Development skills

Project management is no different from any other form of management. Besides understanding the project management cycle, the project manager has to have a keen understanding of managing people, resources and integrating all project management processes to ensure that the overall project is delivered within the set parameters. In short a global management view of the project. This is not a skill that occurs by default as a result of being an experienced product or technical subject matter expert. It is a skill that has to be consciously and deliberately developed and cultivated to become a project management subject matter expert.

The product and/or technical subject matter expert is more technical inclined with lesser emphasis on the global project. The focus of the product subject matter expert is on the technical completeness, functionality and quality of the product.

The dominant perception that needs to be challenged is that subject matter experts naturally evolve into project managers without deliberate project management development. This common misconception more often than not results in catastrophic project failures but is often not acknowledged as the anchor cause of project failure.

On the other end of the continuum we must acknowledge that there is benefit in the project manager having some level of knowledge and skill relevant to the product being developed by the project, but it is less of a potential for project fatal flaws in the absence of such knowledge than the potential for failure presented when the project manager is a product subject matter expert without project management expertise.

One can, therefore, assert that being a technical subject matter expert does is not a prerequisite to being an effective project manager but rather that it is more ideal that one is a project management subject matter expert to be an effective project manager

The depth and breadth of the knowledge and skill should be in line with the complexity and risk associated with the project.

A project manager needs Product and Technical Subject Matter Experts to produce a quality product and to ensure a well scoped out project and execution plan.

Product and Technical Subject Matter Experts must follow a deliberate development process to evolve into competent project managers.

The evolution into a project management specialist is not a natural evolutionary process, it has to be as deliberate a process as the process of evolving into a technical subject matter expert.

Victor Marathe is a  Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Your project needs more pessimism

Kabelo
Kabelo Bitsang, Consultant, InnoLead Consulting

Optimism is like vitamins. It should only be taken in small targeted doses, otherwise, it will poison the host (or project in this case). The glass-half-full positivity championed by self-help gurus and motivational speakers can quickly damage a project team by encouraging them to ignore reality and fail to react to the inevitable changes of project life. Trying to create an environment of “positive thinking” within your team will often lead to ineffective project management.

Optimism Bias –A human weakness

Psychologist Daniel Kahneman defines optimism bias as the human tendency to overestimate our abilities required to perform a specific task and underestimate the complexity and duration of the task in question. He believes that optimism is the biggest flaw in human decision making. Scientific studies have shown that our brains are wired to produce hope. This was useful during our evolution but can create management problems in the complex modern economy.

The optimistic planner is a bad planner

During the planning phases of projects, optimism can be harmful in several ways:

  • Lead to underestimation of the duration of tasks by dismissing the possibility of delays
  • Lead to you falling in love with a certain option and ignoring its pitfalls
  • Lead to you underestimating the complexity of the project, especially the interactions between different systems or processes.
  • Presenting the best case scenario as the most likely scenario to decision makers and stakeholders.
  • Failing to put mitigations in place for risks because the risk event is seen as unlikely
  • Agreeing to superficial deadlines not driven by a schedule or the realistic sequence of events

The optimistic project manager ends up managing by crisis

The optimistic project manager is very slow to react to issues because they believe that they will magically resolve themselves. You cannot solve the problem if you do not even acknowledge that there is a problem. Team members who point out potential problems will be seen as negative and lacking faith in the project. If you surround yourself in a positive thinking bubble, when it bursts it will seem like the sky is falling. You will go through shocks that other people easily saw coming. Minor issues seem earth shattering if you spend your time ignoring reality. Project Earned value metrics are supposed to act as early warning indicators but to an optimist, they are just an annoyance. Good project managers love bad news so do not let your optimism get in the way of receiving useful information.

Defensive Pessimism

Embracing pessimism does not mean celebrating failure or being ruled by fear. It also does not mean lacking confidence in your team’s abilities. Defensive pessimism is an approach that involves setting low expectations, assessing possible risks and setting up early warning mechanisms. This is a much more effective approach than irrational hope and confidence about the future driven only by positive thoughts.

Kabelo Bitsang holds the position of Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

What is your strategy?

 

Chilipi
Chilipi Mogasha, Operations Director, InnoLead Consulting

Does your business have a strategy? We have many entrepreneurs in Botswana who have started and are operating businesses that are at various stages of maturity. Some of them are doing quite well, a lot are not, and most are somewhere in between. A key measure of success in business is sustainability. If your business is doing well now, for how long will it continue to do well? If your business is not doing well, when will it start to do well? This is a fundamental question all entrepreneurs need to grapple with if they seek to create an enterprise that is built to last.

So back to the question. Does your business have a strategy? But let us take a step back. What is a strategy? Let us begin by clarifying what strategy IS NOT. Strategy IS NOT your business plan. Business plans serve a useful purpose. A business plan ensures that you are clear on how you will allocate resources in a given time frame towards your business, and your projections on what returns you intend to make. It ensures that you will be able to, within that period, make more money than you use, a key aspect of sustainability. But no, your business plan IS NOT a strategy.

Strategy IS NOT a strategic plan! A strategic plan is a document that spells out how you will implement a strategy within a given timeframe. Most companies have strategic plans typically spanning from 3 to 5 years. The strategy should be within a strategic plan. But this is not always the case. Ironically, when inspected closely, most strategic plans DO NOT contain a strategy. Which brings us back to the question: What is Strategy?

Strategy IS NOT your operational plan. To be sure, operational plans are useful, but they are not strategy. An operational plan spells out your specific actions and targets within a time frame, commonly one year. If you put together a document with, say, targets for the next five years, with corresponding actions or initiatives, this DOES NOT create a strategy. Adding a SWOT analysis does not make it a strategy; neither does a Pestle analysis; a vision statement, a mission statement, values, core purpose, blah blah blah. You have at best a 5-year Operational plan. But like a stew with no salt, its a strategic plan without a strategy!

So if strategy is not a business plan; if it is not an operational plan; and if it is not a strategic plan, then what is Strategy? Strategy is something less tangible but more profound. And for this purpose, it does not matter whether it has been committed to paper or not. Strategy is about doing something different or doing something better than everyone else for your specific selected set of customers. It is about understanding what it is that your customers value from what you do and why they are willing to keep coming back to you and not anyone else for that specifically defined value. It is something that is not immediately obvious to your competitors or which even if it is your competitors are unable to emulate or copy.

Essentially, strategy is what you do better than or different to your competitors. It is a function of your specific unique activities and how those activities link up and reinforce each other.  It is this configuration of your activities that deliver unique or better customer value, and that your competitors are not able to easily emulate, that lends your business its strategic advantage. Having a strategic advantage that you can maintain is the only sure-fire way of creating a sustainable business. And then what you want to do is to continuously improve this sustainable strategy over time, improving it and making it more formidable. Making it harder and harder for your competition to catch up. But first you must answer the question “What is your strategy?”

Chilipi Mogasha holds the position of Operations Manager at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Office of Strategy Management: The Advantages

 

Tshwanelo
Tshwanelo Nkwe, Consultant, InnoLead Consulting

During one of his visits to Botswana, Michael Porter commended us Batswana, for our ability to develop well-crafted strategies with comprehensive outcomes. However, what is more important is his observation that our execution efforts yield minimal results. Research by Kaplan and Norton, the creators of the balanced scorecard (a widely used strategy and performance management tool), identify the following reasons for organisations’ failure to execute.

 

  • 95% of an organisation’s employees are not aware of or do not understand their corporate strategy.
  • Management does not dedicate adequate time discussing the corporate strategy
  • 75% of incentive systems are not linked to the strategy
  • 60% of organisations do not have their budgets linked to the strategy

I am certain that if the employees who are closest to the customers and operate processes that create value are unaware of the strategy, it is unlikely that they will positively contribute to its execution.

Putting a bit of context to the above, some of our local organisations continue to experience the following;

  • A lack of a clear process of translating the strategy into the scorecard map and objectives;
  • There is a proliferation of strategic initiatives across the organisation with no clear link and impact on organisational performance;
  • There are inconsistencies in the way a strategy is tracked, monitored, reported and evaluated, including the inconsistent reporting tools and templates.

The above strongly signal a sense of disintegration between the plan and its execution. For various reasons, some organisations do not have a deliberate and a coherent strategy execution process. Some do not even have strategy implementation plans and are faced with a few stumbling blocks to overcome at the execution phase. I could not agree more as the “Execution problem” is a trend that cuts across organisations of all sizes in various sectors in Botswana, both in the public and private sectors.

Take note that strategy is a continuous process, one that extends beyond the planning phase to include all the activities that are required for effective execution. These typically include;

  • Ensuring an effective cascading process to create alignment
  • Linking budgets, human capital and processes to the strategy
  • Conducting regular strategy meetings to effectively monitor the implementation progress;
  • Conducting annual reviews to evaluate the success and relevance of the strategy against the assumptions made at the planning stage.

The question then becomes, “What can be done to ensure that there is a seamless integration of the strategy management processes highlighted above?”

To facilitate the strategy activities, end to end, in a coordinated and integrated fashion, it is paramount to establish a corporate level function that will ensure the effective management of all strategy related activities. This function is called an Office Of Strategy (OSM). This is a role that is instrumental in ensuring that the corporate strategy is fully implemented. It is the strength and engine for successful strategy execution. It helps to achieve and sustain the strategy focus required to drive desired results.

The OSM has 3 main roles, and these entail the Architect, who ensures strategy processes are in place, the Process Custodian, who ensures the strategy processes are aligned with the strategy, and lastly, the Integrator, who interfaces and coordinates other strategy related systems. Using the analogy of an orchestra leader, the OSM ensures that there is alignment and integration to the diversity of the teams and functions. This way, there is a collaborated and unified effort from everyone, each with their unique piece of instrument, to create beautiful melodies and sing together in a seamless and integrated fashion. Now that is quite something to marvel at!

Harvard Business Review states that “A unit with responsibility for the implementation of strategy becomes a convenient focal point for ideas that percolate up through the organisation.” And of course, there are a few organisations locally that have made tremendous strides towards the establishment of the OSMs and are reaping the rewards of it.

Below are some of the benefits derived from the establishment of the OSM:

  • Enhances the coordination of the entire process of analysis, development, planning, execution and control of the strategy;
  • Closes the gap between strategy formulation and execution, ensuring that they are conducted an integrated way;
  • Ensures that corporate-level plans are translated into the plans of the various units and departments through an effective cascading process;
  • Allows for effective strategy communication to be disseminated to employees, ensuring that everyone has a consistent view of the end goal;
  • Aligns employees’ competency development plans, and their personal goals and incentives, with strategic objectives.
  • Applies consistency in ensuring budgets, human resources planning, information technology investments and marketing programs are clearly linked to strategy, and adequate for implementation;
  • It institutionalises and standardises the tracking, monitoring and reviewing of the strategy implementation progress, and makes strategic adjustments as required;
  • It ensures collection of accurate and credible data for performance reporting, and a continuous scan of the volatile environment organisations operate in to be able to proactively mitigate against potential hindrances;
  • It is the central repository for strategy, and therefore improves data management and storage for strategy projects performance
  • Coordinates the monthly/ quarterly strategy management/ operational meetings to determine action plans, and follows up after the meeting to assure that the action plans are carried out;
  • It allows for better planning and prioritisation projects portfolio in line with the organizational strategic priorities
  • It strengthens information reporting on schedules and cost over-runs, which improves the accuracy of planning
  • The strategy risks are better monitored from a central point;
  • Leadership is kept abreast of strategic issues so that the focus is on learnings adopted: this enhances leadership commitment.
  • Communications regarding strategy activities to lower levels become more frequent: this aids in ensuring that everyone embraces the strategy, and takes ownership of their part.
  • Strategy execution is accelerated as the discipline of execution is embedded within the organisational culture.

The greatest value of OSM does not only come from the benefits mentioned above but from overcoming the barriers to successful strategy implementation as mentioned earlier. When all the above are attained, there are very high chances that an organization is well on its way to achieving long-term competitiveness. The improvement in the quality of strategy work will definitely position organisations for long-term success.

Tshwanelo Nkwe holds the position of Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. She can be contacted on +267 3909102 and innolead@innolead.co.bw