Contemporary Project Management

Timothy J. Kloppenborg •

Vittal Anantatmula •

Kathryn N. Wells

F O U R T H E D I T I O N

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203

MS Project 2016 Instructions in Contemporary Project Management 4e

Chapter MS Project

3 MS Project 2016 Introduction

Ribbon, Quick Access Toolbar, view panes, Zoom Slider, Shortcuts, Scheduling Mode Selector

Setting Up Your First Project

Auto schedule, start date, identifying information, summary row

Create Milestone Schedule

Key milestones, zero duration, must finish on, information

7 Set Up a Work Breakdown Structure (WBS)

Understand the WBS definitions and displays

Enter WBS Elements (tasks), Create the outline,

Insert WBS Code Identifier column, Hide or show subtasks detail

8 Using MS Project for Critical Path Schedules

Set Up the Project Schedule

Set or update the project start date, Define organization’s working and nonworking time

Build the Network Diagram and Identify the Critical Path

Enter tasks and milestones, edit the timescale, understand and define task dependencies, assign task duration estimates, identify the critical path, understand the network diagram view

Display and Print Schedules

9 Define Resources

Resource views, max units, resource calendars

Assigning Resources

Basic assignment, modify an assignment

Identify Overallocated Resources

Resource usage and Detailed Gantt views together

Overallocated Resources

Finding overallocated resources, dealing with overallocations

Crashing a Critical Path Activity

10 Develop Bottom-up Project Budget

Assignment costs, task costs, various cost perspectives

Develop Summary Project Budget

12 Baseline the Project Plan

First time baseline, subsequent baselines, viewing variances

14 Using MS Project to Monitor and Control Projects

What Makes a Schedule Useful?

How MS Project recalculates based on reported actuals, current and future impacts of variances, define the performance update process (who, what, when)

Steps to Update the Project Schedule

Acquire performance data, set and display status date, Enter duration-based performance data, reschedule remaining work, revise future estimates

15 Close Project

Creating project progress reports, sharing reports, export a report to MS Excel, archive project work, capture and publish lessons learned

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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PMBOK® Guide 6e Coverage in Contemporary Project Management 4e The numbers refer to the text page where the process is defined. Project management (PM) processes and knowledge areas 10–11 Project life cycle 7–10, 62–64 Projects and strategic planning 33–37 Organizational influences 102–110 Portfolio and program management 37–42

PMBOK® Guide, 6th ed. Coverage

Knowledge Areas

Initiating Process Group Planning Process Group

Executing Process Group

Monitoring & Controlling Process Group

Closing Process Group

Project Integration Management

Develop Project Charter 60–79

Develop Project Management Plan 409–410

Direct and Manage Project Work 459–460 Manage Project Knowledge 192–193, 504–508

Monitor and Control Project Work 460–462 Perform Integrated Change Control 229–232, 462–463

Close Project or Phase 503, 508–511

Project Scope Management

Plan Scope Management 211–212 Collect Requirements 212–216 Define Scope 216–220 Create WBS 220–229

Validate Scope 500–501 Control Scope 475–476

Project Schedule Management

Plan Schedule Management 246 Define Activities 249–253 Sequence Activities 253–255 Estimate Activity Durations 255–258 Develop Schedule 259–267

Control Schedule 476–480

Project Cost Management

Plan Cost Management 329–330 Estimate Costs 330–341 Determine Budget 342–344

Control Costs 345, 476–480

Project Quality Management

Plan Quality Management 401–404 Manage Quality 404–406, 469–474

Control Quality 406–409, 469–474

Project Resources Management

Plan Resource Management 290–295 Estimate Activity Resources 290

Aquire Resources 138–141 Develop Team 141–157 Manage Team 157–161

Control Resources 476

Project Com- munications Management

Plan Communications Management 188–192

Manage Communications 193–199, 465–467

Monitor Communications 467–468

Project Risk Management

Plan Risk Management 360–366 Identify Risks 75, 366–368 Perform Qualitative Risk Analysis 75, 368–372 Perform Quantitative Risk Analysis 372–373 Plan Risk Responses 75, 373–377

Implement Risk Responses 464–465

Monitor Risks 463–464

Project Procurement Management

Plan Procurement Management 431–433, 438–441

Conduct Procurements 434–438

Control Procurments 441

Project Stake- holder Management

Identify Stakehold- ers 75–77, 178–184

Plan Stakeholder Engagement 184–186 Manage Stakeholder Engagement 187–188

Monitor Stakeholder Engagement 188

Source: Adapted from A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, Inc., 2017): 31.

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Contemporary Project Management ORGANIZE LEAD PLAN PERFORM

FOURTH EDITION

TIMOTHY J. KLOPPENBORG Xavier University

VITTAL ANANTATMULA Western Carolina University

KATHRYN N. WELLS Keller Williams Real Estate

Australia • Brazil • Mexico • Singapore • United Kingdom • United States

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This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest.

Important Notice: Media content referenced within the product description or the product text may not be available in the eBook version.

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Contemporary Project Management, Fourth Edition

Timothy J. Kloppenborg

2019 2015

Cengage Learning Customer & Sales Support, 1-800-354-9706

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permissionrequest@cengage.com

2017947974

978 1 337 40645 1

Cengage Learning 20

02210

40 125

www.cengage.com.

www.cengage.com

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Printed in the United States of America Print Number: 01 Print Year: 2017

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MS Project 2016 Instructions in Contemporary Project Management 4e

Chapter MS Project

3 MS Project 2016 Introduction

Ribbon, Quick Access Toolbar, view panes, Zoom Slider, Shortcuts, Scheduling Mode Selector

Setting Up Your First Project

Auto schedule, start date, identifying information, summary row

Create Milestone Schedule

Key milestones, zero duration, must finish on, information

7 Set Up a Work Breakdown Structure (WBS)

Understand the WBS definitions and displays

Enter WBS Elements (tasks), Create the outline,

Insert WBS Code Identifier column, Hide or show subtasks detail

8 Using MS Project for Critical Path Schedules

Set Up the Project Schedule

Set or update the project start date, Define organization’s working and nonworking time

Build the Network Diagram and Identify the Critical Path

Enter tasks and milestones, edit the timescale, understand and define task dependencies, assign task duration estimates, identify the critical path, understand the network diagram view

Display and Print Schedules

9 Define Resources

Resource views, max units, resource calendars

Assigning Resources

Basic assignment, modify an assignment

Identify Overallocated Resources

Resource usage and Detailed Gantt views together

Overallocated Resources

Finding overallocated resources, dealing with overallocations

Crashing a Critical Path Activity

10 Develop Bottom-up Project Budget

Assignment costs, task costs, various cost perspectives

Develop Summary Project Budget

12 Baseline the Project Plan

First time baseline, subsequent baselines, viewing variances

14 Using MS Project to Monitor and Control Projects

What Makes a Schedule Useful?

How MS Project recalculates based on reported actuals, current and future impacts of variances, define the performance update process (who, what, when)

Steps to Update the Project Schedule

Acquire performance data, set and display status date, Enter duration-based performance data, reschedule remaining work, revise future estimates

15 Close Project

Creating project progress reports, sharing reports, export a report to MS Excel, archive project work, capture and publish lessons learned

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203

PMBOK® Guide 6e Coverage in Contemporary Project Management 4e The numbers refer to the text page where the process is defined. Project management (PM) processes and knowledge areas 10–11 Project life cycle 7–10, 62–64 Projects and strategic planning 33–37 Organizational influences 102–110 Portfolio and program management 37–42

PMBOK® Guide, 6th ed. Coverage

Knowledge Areas

Initiating Process Group Planning Process Group

Executing Process Group

Monitoring & Controlling Process Group

Closing Process Group

Project Integration Management

Develop Project Charter 60–79

Develop Project Management Plan 409–410

Direct and Manage Project Work 459–460 Manage Project Knowledge 192–193, 504–508

Monitor and Control Project Work 460–462 Perform Integrated Change Control 229–232, 462–463

Close Project or Phase 503, 508–511

Project Scope Management

Plan Scope Management 211–212 Collect Requirements 212–216 Define Scope 216–220 Create WBS 220–229

Validate Scope 500–501 Control Scope 475–476

Project Schedule Management

Plan Schedule Management 246 Define Activities 249–253 Sequence Activities 253–255 Estimate Activity Durations 255–258 Develop Schedule 259–267

Control Schedule 476–480

Project Cost Management

Plan Cost Management 329–330 Estimate Costs 330–341 Determine Budget 342–344

Control Costs 345, 476–480

Project Quality Management

Plan Quality Management 401–404 Manage Quality 404–406, 469–474

Control Quality 406–409, 469–474

Project Resources Management

Plan Resource Management 290–295 Estimate Activity Resources 290

Aquire Resources 138–141 Develop Team 141–157 Manage Team 157–161

Control Resources 476

Project Com- munications Management

Plan Communications Management 188–192

Manage Communications 193–199, 465–467

Monitor Communications 467–468

Project Risk Management

Plan Risk Management 360–366 Identify Risks 75, 366–368 Perform Qualitative Risk Analysis 75, 368–372 Perform Quantitative Risk Analysis 372–373 Plan Risk Responses 75, 373–377

Implement Risk Responses 464–465

Monitor Risks 463–464

Project Procurement Management

Plan Procurement Management 431–433, 438–441

Conduct Procurements 434–438

Control Procurments 441

Project Stake- holder Management

Identify Stakehold- ers 75–77, 178–184

Plan Stakeholder Engagement 184–186 Manage Stakeholder Engagement 187–188

Monitor Stakeholder Engagement 188

Source: Adapted from A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, Inc., 2017): 31.

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Brief Contents

Preface xx About the Authors xxix

PART 1 Organizing Projects 1 Introduction to Project Management 2

2 Project Selection and Prioritization 32

3 Chartering Projects 60

PART 2 Leading Projects 4 Organizational Capability: Structure, Culture, and Roles 100

5 Leading and Managing Project Teams 136

6 Stakeholder Analysis and Communication Planning 176

PART 3 Planning Projects 7 Scope Planning 210

8 Scheduling Projects 244

9 Resourcing Projects 286

10 Budgeting Projects 328

11 Project Risk Planning 358

12 Project Quality Planning and Project Kickoff 386

PART 4 Performing Projects 13 Project Supply Chain Management 426

14 Determining Project Progress and Results 456

15 Finishing the Project and Realizing the Benefits 498

Appendix A PMP and CAPM Exam Prep Suggestions 522 Appendix B Agile Differences Covered 527 Appendix C Answers to Selected Exercises 532 Appendix D Project Deliverables 537 Appendix E Strengths Themes As Used in Project Management [Available Online]

Index 539

v Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).

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Requirements Documents

13.1 Identify Stakeholders

Stakeholder

Register Stakeholder Engagement

Assessment Matrix

Integration

Scope

Schedule

Cost

Quality

Resources

Communication

Risk

Procurement

Stakeholders

12.1 Plan Procurement Management

11.1 Plan Risk

Management

10.1 Plan Communications

Management

9.1 Plan Resource

Management

8.1 Plan Quality

Management

7.1 Plan Cost

Management

6.1 Plan Schedule

Management

5.1 Plan Scope

Management

Duration

Estimates

Scope Statement

Activity List

Milestone List

Network

4.1 Develop Project Charter

Charter

Assumptions Log

Cost Baseline

Resource Requirements

RACI Team

Charter

Quality Mgt. Plan

Communications Matrix

Risk Register

Bid Documents Make or Buy

Analysis

6.5 Develop Schedule

Schedule Baseline

5.2 Collect Requirements

5.4 Create WBS

Scope

4.2 Develop Project Management Plan

Activities

9.2 Estimate Activity

Resources

11.2 Identify Risks

11.3 Perform Qualitative

Risk Analysis

11.4 Perform Quantitative Risk Analysis

11.5 Plan Risk

Responses

13.2 Plan Stakeholders Engagement

6.4 Estimate activity

Durations

7.3 Determine Budget

7.2 Estimate Costs

6.3 Sequence Activities

1.2 Foundational Elements

2.4 Organizational Systems

3.4 Project Manager Competencies Selecting Projects

Project Customer Tradeoff Matrix

Life Cycle and Development Approach Elevator Pitch

Leader Roles and Responsibilities Project Selection and Prioritization Matrix Project Resource Assignment Matrix

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11.6 Implement Risk Responses

13.3 Manage Stakeholder Engagement

13.4 Monitor Stakeholder Engagement

4.3 Direct and Manage Project Work

4.4 Manage Project Knowledge

Scope Baseline with WBS

Resource Histogram Project Crashing

Retrospectives

Closure Documents Customer Feedback Transition Plan

Scope Backlog

Burn Down/Up

Charts

Quality Reports

s Analysis

Realizing s

PM Plan Baselines Life Cycle and Development Approach 4.7 Close Project

or Phase

6.6 Control Schedule

Earned Value Analysis

7.4 Control Costs

5.6 Control Scope

5.5 Validate Scope

8.2 Manage Quality

9.3 Acquire Resources

9.4 Develop Team

9.6 Control Resources

9.5 Manage Team

8.3 Control Quality

Change Requests

10.2 Manage Communications

11.7 Monitor Risks

10.3 Monitor Communications

Team Assignments

Team Assessments

Agendas Minutes

Issues Log Meeting Evaluation Progress Report

12.2 Conduct Procurements

12.3 Control Procurements

Source Selection

Matrix

Lessons Learned Register

Quality Measurements

4.6 Perform Integrated

Change Control

4.5 Monitor and Control

Project Work

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Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxix

PART 1 Organizing Projects

CHAPTER 1 Introduction to Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1 What Is a Project? 3

1.2 History of Project Management 5

1.3 How Can Project Work Be Described? 6 1.3a Projects versus Operations 6 / 1.3b Soft Skills and Hard Skills 7 / 1.3c Authority

and Responsibility 7 / 1.3d Project Life Cycle 7

1.4 Understanding Projects 10 1.4a Project Management Institute 10 / 1.4b Project Management Body of Knowledge

(PMBOK®) 10 / 1.4c The PMI Talent Triangle 11 / 1.4d Selecting and Prioritizing Projects 14 / 1.4e Project Goals and Constraints 14 / 1.4f Defining Project Success and Failure 15 / 1.4g Using Microsoft Project to Help Plan and Measure Projects 16 / 1.4h Types of Projects 16 / 1.4i Scalability of Project Tools 17

1.5 Project Roles 17 1.5a Project Executive-Level Roles 18 / 1.5b Project Management-Level Roles 19 /

1.5c Project Associate-Level Roles 20

1.6 Overview of the Book 20 1.6a Part 1: Organizing and Initiating Projects 20 / 1.6b Part 2: Leading Projects 21 /

1.6c Part 3: Planning Projects 21 / 1.6d Part 4: Performing Projects 23

PMP/CAPM Study Ideas 23

Summary 24

Key Terms Consistent with PMI Standards and Guides 24

Chapter Review Questions 25

Discussion Questions 25

PMBOK® Guide Questions 26 Integrated Example Projects 27

Suburban Homes Construction Project 27

Casa DE PAZ Development Project 28

Semester Project Instructions 28

Project Management in Action 29

References 30

Endnotes 31

viii Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).

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CHAPTER 2 Project Selection and Prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 2.1 Strategic Planning Process 33

2.1a Strategic Analysis 33 / 2.1b Guiding Principles 34 / 2.1c Strategic Objectives 36 / 2.1d Flow-Down Objectives 37

2.2 Portfolio Management 37 2.2a Portfolios 38 / 2.2b Programs 39 / 2.2c Projects and Subprojects 39 /

2.2d Assessing an Organization’s Ability to Perform Projects 42 / 2.2e Identifying Potential Projects 42 / 2.2f Using a Cost-Benefit Analysis Model to Select Projects 43 / 2.2g Using a Scoring Model to Select Projects 45 / 2.2h Prioritizing Projects 48 / 2.2i Resourcing Projects 48

2.3 Securing Projects 49 2.3a Identify Potential Project Opportunities 50 / 2.3b Determine Which Opportunities to

Pursue 50 / 2.3c Prepare and Submit a Project Proposal 51 / 2.3d Negotiate to Secure the Project 51

PMP/CAPM Study Ideas 52

Summary 52

Key Terms Consistent with PMI Standards and Guides 52

Chapter Review Questions 53

Discussion Questions 53

PMBOK® Guide Questions 53 Exercises 54

Integrated Example Projects 55

Casa DE PAZ Development Project 56

Semester Project Instructions 56

Project Management in Action 57

References 58

Endnotes 59

CHAPTER 3 Chartering Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 3.1 What Is a Project Charter? 62

3.2 Why Is a Project Charter Used? 63

3.3 When Is a Charter Needed? 64

3.4 Typical Elements in a Project Charter 65 3.4a Title 65 / 3.4b Scope Overview 65 / 3.4c Business Case 66 /

3.4d Background 66 / 3.4e Milestone Schedule with Acceptance Criteria 66 / 3.4f Risks, Assumptions, and Constraints 67 / 3.4g Resource Estimates 69 / 3.4h Stakeholder List 69 / 3.4i Team Operating Principles 69 / 3.4j Lessons Learned 70 / 3.4k Signatures and Commitment 70

3.5 Constructing a Project Charter 70 3.5a Scope Overview and Business Case Instructions 70 / 3.5b Background

Instructions 71 / 3.5c Milestone Schedule with Acceptance Criteria Instructions 72 / 3.5d Risks, Assumptions, and Constraints Instructions 75 / 3.5e Resources Needed Instructions 75 / 3.5f Stakeholder List Instructions 75 /

Contents ix

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3.5g Team Operating Principles Instructions 77 / 3.5h Lessons Learned Instructions 77 / 3.5i Signatures and Commitment Instructions 78

3.6 Ratifying the Project Charter 79

3.7 Starting a Project Using Microsoft Project 79 3.7a MS Project 2016 Introduction 80 / 3.7b Setting up Your First Project 81 /

3.7c Define Your Project 82 / 3.7d Create a Milestone Schedule 83

PMP/CAPM Study Ideas 88

Summary 88

Key Terms Consistent with PMI Standards and Guides 88

Chapter Review Questions 89

Discussion Questions 89

PMBOK® Guide Questions 89 Exercises 90

Integrated Example Projects 91

Casa DE PAZ Development Project 93

Semester Project Instructions 93

Project Management in Action 93

References 96

Endnotes 97

PART 2 Leading Projects

CHAPTER 4 Organizational Capability: Structure, Culture, and Roles . . . . . . . . . . . . . . . . . . . . . 100 4.1 Types of Organizational Structures 103

4.1a Functional 103 / 4.1b Projectized 104 / 4.1c Matrix 105

4.2 Organizational Culture and Its Impact on Projects 109 4.2a Culture of the Parent Organization 110 / 4.2b Project Cultural Norms 111

4.3 Project Life Cycles 111 4.3a Define-Measure-Analyze-Improve-Control (DMAIC) Model 112 / 4.3b Research and

Development (R&D) Project Life Cycle Model 113 / 4.3c Construction Project Life Cycle Model 113 / 4.3d Agile Project Life Cycle Model 113

4.4 Agile Project Management 114 4.4a What Is Agile? 114 / 4.4b Why Use Agile? 114 / 4.4c What Is an Agile

Mindset? 114 / 4.4d What Are the Key Roles in Agile Projects? 115 / 4.4e How Do You Start an Agile Project? 115 / 4.4f How Do You Continue an Agile Project? 115 / 4.4g What Is Needed for Agile to Be Successful? 116

4.5 Traditional Project Executive Roles 116 4.5a Steering Team 116 / 4.5b Sponsor 117 / 4.5c Customer 119 / 4.5d Chief

Projects Officer/Project Management Office 121

4.6 Traditional Project Management Roles 121 4.6a Functional Manager 121 / 4.6b Project Manager 122 / 4.6c Facilitator 124

4.7 Traditional Project Team Roles 126 4.7a Core Team Members 126 / 4.7b Subject Matter Experts 126

x Contents

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4.8 Role Differences on Agile Projects 126

PMP/CAPM Study Ideas 128

Summary 128

Key Terms Consistent with PMI Standards and Guides 128

Chapter Review Questions 129

Discussion Questions 129

PMBOK® Guide Questions 129 Exercises 130

Integrated Example Projects 130

Casa DE PAZ Development Project 131

Semester Project Instructions 131

Project Management in Action 132

References 134

Endnotes 135

CHAPTER 5 Leading and Managing Project Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 5.1 Acquire Project Team 138

5.1a Preassignment of Project Team Members 139 / 5.1b Negotiation for Project Team Members 139 / 5.1c On-Boarding Project Team Members 140

5.2 Develop Project Team 141 5.2a Stages of Project Team Development 142 / 5.2b Characteristics of High-Performing

Project Teams 144 / 5.2c Assessing Individual Member Capability 147 / 5.2d Assessing Project Team Capability 148 / 5.2e Building Individual and Project Team Capability 150 / 5.2f Establishing Project Team Ground Rules 153

5.3 Manage Project Team 157 5.3a Project Manager Power and Leadership 157 / 5.3b Assessing Performance of

Individuals and Project Teams 159 / 5.3c Project Team Management Outcomes 159

5.4 Relationship Building Within the Core Team 160

5.5 Managing Project Conflicts 161 5.5a Sources of Project Conflict 162 / 5.5b Conflict-Resolution Process and

Styles 163 / 5.5c Negotiation 164

5.6 Communication Needs of Global and Virtual Teams 166 5.6a Virtual Teams 166 / 5.6b Cultural Differences 166 / 5.6c Countries and Project

Communication Preferences 167

PMP/CAPM Study Ideas 167

Summary 168

Key Terms Consistent with PMI Standards and Guides 168

Chapter Review Questions 168

Discussion Questions 169

PMBOK® Guide Questions 170 Integrated Example Projects 170

Casa DE PAZ Development Project 171

Semester Project Instructions 171

Contents xi

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Project Management in Action 172

References 174

Endnotes 175

CHAPTER 6 Stakeholder Analysis and Communication Planning . . . . . . . . . . . . . . . . . . . . . . . . . 176 6.1 Identify Stakeholders 178

6.1a Find Stakeholders 179 / 6.1b Analyze Stakeholders 180 / 6.1c Document Stakeholders 183

6.2 Plan Stakeholder Engagement 184 6.2a Creating a Stakeholder Engagement Assessment Matrix 184 / 6.2b Planning to Build

Relationships with Stakeholders 185

6.3 Manage Stakeholder Engagement 187

6.4 Monitor Stakeholder Engagement 188

6.5 Plan Communications Management 188 6.5a Purposes of a Project Communications Plan 188 / 6.5b Communications Plan

Considerations 189 / 6.5c Communications Matrix 191 / 6.5d Manage Project Knowledge 192

6.6 Manage Communications 193 6.6a Determine Project Information Needs 193 / 6.6b Establish Information Retrieval and

Distribution System 193 / 6.6c Project Meeting Management 194 / 6.6d Issues Management 197

PMP/CAPM Study Ideas 199

Summary 199

Key Terms Consistent with PMI Standards and Guides 200

Chapter Review Questions 200

Discussion Questions 200

PMBOK® Guide Questions 201 Integrated Example Projects 202

Casa DE PAZ Development Project 202

Semester Project Instructions 203

Project Management in Action 204

References 206

Endnotes 207

PART 3 Planning Projects

CHAPTER 7 Scope Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 7.1 Plan Scope Management 211

7.2 Collect Requirements 212 7.2a Gather Stakeholder Input and Needs 213

7.3 Define Scope 217 7.3a Reasons to Define Scope 217 / 7.3b How to Define Scope 217 / 7.3c Defining

Scope in Agile Projects 218

xii Contents

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7.4 Work Breakdown Structure (WBS) 220 7.4a What Is the WBS? 220 / 7.4b Why Use a WBS? 221 / 7.4c WBS

Formats 222 / 7.4d Work Packages 224 / 7.4e How to Construct a WBS 226

7.5 Establish Change Control 229

7.6 Using MS Project for Work Breakdown Structures (WBS) 232 7.6a Set Up a WBS in MS Project 232

PMP/CAPM Study Ideas 237

Summary 239

Key Terms Consistent with PMI Standards and Guides 239

Chapter Review Questions 239

Discussion Questions 239

PMBOK® Guide Questions 240 Exercises 241

Integrated Example Projects 241

Casa DE PAZ Development Project 242

Semester Project Instructions 242

Project Management in Action 242

References 243

CHAPTER 8 Scheduling Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244 8.1 Plan Schedule Management 246

8.2 Purposes of a Project Schedule 247

8.3 Historical Development of Project Schedules 247

8.4 How Project Schedules Are Limited and Created 248

8.5 Define Activities 249

8.6 Sequence Activities 253 8.6a Leads and Lags 254 / 8.6b Alternative Dependencies 255

8.7 Estimate Activity Duration 255 8.7a Problems and Remedies in Duration Estimating 256 / 8.7b Learning Curves 258

8.8 Develop Project Schedules 259 8.8a Two-Pass Method 259 / 8.8b Enumeration Method 263

8.9 Uncertainty in Project Schedules 264 8.9a Program Evaluation and Review Technique 265 / 8.9b Monte Carlo Simulation 266

8.10 Show the Project Schedule on a Gantt Chart 268

8.11 Using Microsoft Project for Critical Path Schedules 268 8.11a Set up the Project Schedule 269 / 8.11b Build the Network Diagram and Identify

the Critical Path 270

PMP/CAPM Study Ideas 275

Summary 276

Key Terms Consistent with PMI Standards and Guides 276

Chapter Review Questions 277

Discussion Questions 277

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Exercises 278

PMBOK® Guide Questions 280 Integrated Example Projects 281

Casa DE PAZ Development Project 281

Semester Project Instructions 283

Project Management in Action 283

References 284

Endnotes 285

CHAPTER 9 Resourcing Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 9.1 Abilities Needed When Resourcing Projects 288

9.1a The Science and Art of Resourcing Projects 288 / 9.1b Considerations When Resourcing Projects 288 / 9.1c Activity- versus Resource-Dominated Schedules 289

9.2 Estimate Resource Needs 290

9.3 Plan Resource Management 290 9.3a Identify Potential Resources 291 / 9.3b Determine Resource Availability 293 /

9.3c Decide Timing Issues When Resourcing Projects 294

9.4 Project Team Composition Issues 295 9.4a Cross-Functional Teams 295 / 9.4b Co-Located Teams 295 / 9.4c Virtual

Teams 295 / 9.4d Outsourcing 295

9.5 Assign a Resource to Each Activity 296 9.5a Show Resource Responsibilities on RACI Chart 297 / 9.5b Show Resource

Assignments on Gantt Chart 297 / 9.5c Summarize Resource Responsibilities by Time Period with Histogram 297

9.6 Dealing with Resource Overloads 300 9.6a Methods of Resolving Resource Overloads 300

9.7 Compress the Project Schedule 303 9.7a Actions to Reduce the Critical Path 303 / 9.7b Crashing 304 / 9.7c Fast

Tracking 307

9.8 Alternative Scheduling Methods 309 9.8a Critical Chain Project Management (CCPM) 309 / 9.8b Reverse Phase

Schedules 310 / 9.8c Rolling Wave Planning 310 / 9.8d Agile Project Planning 310 / 9.8e Auto/Manual Scheduling 310

9.9 Using MS Project for Resource Allocation 311 9.9a Step 1: Defining Resources 311 / 9.9b Step 2: Set Up a Resource Calendar 312 /

9.9c Step 3: Assigning Resources 312 / 9.9d Step 4: Finding Overallocated Resources 315 / 9.9e Step 5: Dealing with Overallocations 316 / 9.9f Crashing a Critical Path Activity 317

PMP/CAPM Study Ideas 319

Summary 319

Key Terms Consistent with PMI Standards and Guides 320

Chapter Review Questions 320

Discussion Questions 320

PMBOK® Guide Questions 321 Exercises 322

xiv Contents

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Integrated Example Projects 324

Casa DE PAZ Development Project 324

Semester Project Instructions 325

Project Management in Action 325

References 327

Endnote 327

CHAPTER 10 Budgeting Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 10.1 Plan Cost Management 329

10.2 Estimate Cost 330 10.2a Types of Cost 331 / 10.2b Accuracy and Timing of Cost Estimates 334 /

10.2c Methods of Estimating Costs 335 / 10.2d Project Cost Estimating Issues 338

10.3 Determine Budget 342 10.3a Aggregating Costs 342 / 10.3b Analyzing Reserve Needs 342 /

10.3c Determining Cash Flow 344

10.4 Establishing Cost Control 345

10.5 Using MS Project for Project Budgets 345 10.5a Developing a Bottom-Up Project Budget Estimate 345 / 10.5b Develop Summary

Project Budget 347

PMP/CAPM Study Ideas 349

Summary 349

Key Terms Consistent with PMI Standards and Guides 350

Chapter Review Questions 350

Discussion Questions 350

PMBOK® Guide Questions 351 Exercises 352

Integrated Example Projects 353

Casa DE PAZ Development Project 354

Semester Project Instructions 354

Project Management in Action 354

References 356

Endnotes 356

CHAPTER 11 Project Risk Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 11.1 Plan Risk Management 360

11.1a Roles and Responsibilities 362 / 11.1b Categories and Definitions 362

11.2 Identify Risks 366 11.2a Information Gathering 366 / 11.2b Reviews 367 / 11.2c Understanding

Relationships 368 / 11.2d Risk Register 368

11.3 Risk Analysis 368 11.3a Perform Qualitative Risk Analysis 368 / 11.3b Perform Quantitative Risk

Analysis 372 / 11.3c Risk Register Updates 373

Contents xv

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11.4 Plan Risk Responses 373 11.4a Strategies for Responding to Risks 373 / 11.4b Risk Register Updates 377

PMP/CAPM Study Ideas 377

Summary 378

Key Terms Consistent with PMI Standards and Guides 378

Chapter Review Questions 379

Discussion Questions 379

PMBOK® Guide Questions 379 Exercises 380

Integrated Example Projects 381

Casa DE PAZ Development Project 381

Semester Project Instructions 382

Project Management in Action 382

References 384

Endnotes 384

CHAPTER 12 Project Quality Planning and Project Kickoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 12.1 Development of Contemporary Quality Concepts 388

12.1a Quality Gurus 388 / 12.1b Total Quality Management/Malcolm Baldrige 389 / 12.1c ISO 9001:2008 390 / 12.1d Lean Six Sigma 390

12.2 Core Project Quality Concepts 392 12.2a Stakeholder Satisfaction 393 / 12.2b Process Management 394 / 12.2c Fact-

Based Management 396 / 12.2d Fact-Based Project Management Example 398 / 12.2e Empowered Performance 399 / 12.2f Summary of Core Concepts 400

12.3 Plan Quality Management 401 12.3a Quality Policy 401 / 12.3b Quality Management Plan Contents 403 /

12.3c Quality Baseline 404 / 12.3d Process Improvement Plan 404

12.4 Manage Quality 404

12.5 Control Quality 406

12.6 Cost of Quality 409

12.7 Develop Project Management Plan 409 12.7a Resolve Conflicts 409 / 12.7b Establish Configuration Management 410 /

12.7c Apply Sanity Tests to All Project Plans 410

12.8 Kickoff Project 410 12.8a Preconditions to Meeting Success 411 / 12.8b Meeting Activities 411

12.9 Baseline and Communicate Project Management Plan 413

12.10 Using MS Project for Project Baselines 413 12.10a Baseline the Project Plan 413 / 12.10b Create the First Time Baseline 414 /

12.10c Subsequent Baselines 414 / 12.10d Viewing Baselines and Variances 415

PMP/CAPM Study Ideas 416

Summary 417

Key Terms Consistent with PMI Standards and Guides 417

Chapter Review Questions 418

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Discussion Questions 418

PMBOK® Guide Questions 418 Exercises 419

Integrated Example Projects 420

Casa DE PAZ Development Project 420

Semester Project Instructions 420

Project Management in Action 421

References 423

Endnotes 424

PART 4 Performing Projects

CHAPTER 13 Project Supply Chain Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 13.1 Introduction to Project Supply Chain Management 428

13.1a SCM Components 430 / 13.1b SCM Factors 430 / 13.1c SCM Decisions 430 / 13.1d Project Procurement Management Processes 431

13.2 Plan Procurement Management 431 13.2a Outputs of Planning 431 / 13.2b Make-or-Buy Decisions 432

13.3 Conduct Procurements 434 13.3a Sources for Potential Suppliers 434 / 13.3b Approaches Used When Evaluating

Prospective Suppliers 435 / 13.3c Supplier Selection 436

13.4 Contract Types 438 13.4a Fixed-Price Contracts 439 / 13.4b Cost-Reimbursable Contracts 440 /

13.4c Time and Material (T&M) Contracts 440

13.5 Control Procurements 441

13.6 Improving Project Supply Chains 441 13.6a Project Partnering and Collaboration 442 / 13.6b Third Parties 447 / 13.6c Lean

Purchasing 447 / 13.6d Sourcing 447 / 13.6e Logistics 447 / 13.6f Information 448

PMP/CAPM Study Ideas 448

Summary 448

Key Terms Consistent with PMI Standards and Guides 449

Chapter Review Questions 449

Discussion Questions 449

PMBOK® Guide Questions 450 Exercises 451

Integrated Example Projects 451

Casa DE PAZ Development Project 452

Semester Project Instructions 452

Project Management in Action 452

References 453

Endnotes 454

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CHAPTER 14 Determining Project Progress and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 14.1 Project Balanced Scorecard Approach 458

14.2 Internal Project Issues 459 14.2a Direct and Manage Project Work 459 / 14.2b Monitor and Control Project

Work 460 / 14.2c Monitoring Project Risk 463 / 14.2d Implement Risk Responses 464 / 14.2e Manage Communications 465 / 14.2f Monitor Communications 467

14.3 Customer Issues 469 14.3a Manage and Control Quality 469 / 14.3b Control Scope 475

14.4 Financial Issues 476 14.4a Control Resources 476 / 14.4b Control Schedule and Costs 476 / 14.4c Earned

Value Management for Controlling Schedule and Costs 476

14.5 Using MS Project to Monitor and Control Projects 480 14.5a What Makes a Schedule Useful? 480 / 14.5b How MS Project Recalculates the

Schedule Based on Reported Actuals 481 / 14.5c Current and Future Impacts of Time and Cost Variance 481 / 14.5d Define the Performance Update Process 481 / 14.5e Steps to Update the Project Schedule 482

14.6 Replanning If Necessary 487

PMP/CAPM Study Ideas 488

Summary 488

Key Terms Consistent with PMI Standards and Guides 488

Chapter Review Questions 489

Discussion Questions 489

PMBOK® Guide Questions 490 Exercises 491

Integrated Example Projects 492

Casa DE PAZ Development Project 493

Semester Project Instructions 493

Project Management in Action 494

References 496

Endnotes 497

CHAPTER 15 Finishing the Project and Realizing the Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 15.1 Validate Scope 500

15.2 Terminate Projects Early 501

15.3 Close Project 503 15.3a Write Transition Plan 503 / 15.3b Knowledge Management 504 / 15.3c Create

the Closeout Report 508

15.4 Post-Project Activities 509 15.4a Reassign Workers 509 / 15.4b Celebrate Success and Reward Participants 509 /

15.4c Provide Ongoing Support 510 / 15.4d Ensure Project Benefits Are Realized 510

xviii Contents

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15.5 Using MS Project for Project Closure 511 15.5a Creating Project Progress Reports 511 / 15.5b Archiving Project Work 512

PMP/CAPM Study Ideas 515

Summary 515

Key Terms Consistent with PMI Standards and Guides 515

Chapter Review Questions 515

Discussion Questions 516

PMBOK® Guide Questions 516 Exercise 517

Integrated Example Projects 517

Casa DE PAZ Development Project 518

Semester Project Instructions 518

Project Management in Action 518

References 520

Endnotes 521

Appendix A PMP and CAPM Exam Prep Suggestions . . . . . . . . . . . . . . . . . . . . . . . . . . 522 Appendix B Agile Differences Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 Appendix C Answers to Selected Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532 Appendix D Project Deliverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537 Appendix E Strengths Themes As Used in Project Management . . . . [Available Online] Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539

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Preface

While project managers today still need to use many techniques that have stood the test of several decades, they increasingly also must recognize the business need for a project, sort through multiple conflicting stakeholder demands. They must know how to deal with rapid change, a myriad of communication issues, global and virtual project teams, modern approaches to quality improvement, when to tailor their project management approach to include methods and behaviors from Agile, and many other issues that are more challenging than those in projects of the past.

Contemporary project management utilizes the tried-and-true project management techniques along with modern improvements such as the most current versions of Micro- soft® Project Professional 2016, the sixth edition of the Guide to the Project Management Body of Knowledge (PMBOK® Guide), and many approaches derived from adaptive (Agile) project management. Contemporary project management also uses many tools and understandings that come from modern approaches to quality and communications, expanded role definitions, leadership principles, human strengths, and many other sources. Contemporary project management is scalable, using simple versions of impor- tant techniques on small projects and more involved versions on more complex projects.

Distinctive Approach This book covers contemporary project management topics using contemporary project management methods. For example, when considering the topic of dealing with multiple stakeholders, every chapter was reviewed by students, practitioners, and academics. This allowed simultaneous consideration of student learning, practitioner realism, and aca- demic research and teaching perspectives.

The practical examples and practitioner reviewers came from a variety of industries, dif- ferent parts of the world, and from many sizes and types of projects in order to emphasize the scalability and universality of contemporary project management techniques.

New to This Edition Core, behavioral, and technical learning objectives. We have expanded the number of learning objectives and classified them as core, behavioral, or technical. About half of the objectives are core: what we believe every student of project management should learn. A professor could teach a solid project management introductory class by deeply using only the core objectives. On the other hand, there are measurable student objectives for either a behavioral or a technical approach. All suggested stu- dent assignments and questions are tied specifically to one of the learning objectives. A professor could use this text for a two-semester sequence that emphasizes both in- depth behavioral and technical approaches. Videos. Exclusively available to those using the MindTap product for this book, we have created dozens of short (average time, five minutes) videos to show the art of many of the techniques. These demonstrate the use of many of the techniques in a by-hand or spreadsheet fashion as well as using Microsoft Project 2016. Several questions that can be assigned to students are included with the videos that

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demonstrate how to use Microsoft Project to complement learning. Answers (some- times definitive, sometimes representative, depending on the nature of the tech- nique) are included in the instructor’s manual (IM). Extensive flowchart to help the sixth edition of the PMBOK® Guide come to life. All sixth edition PMBOK® Guide knowledge areas, processes, and process groups, plus major deliverables from each process and the primary workflows between them, are specifically included in an interactive, color-coded flowchart that is included in full inside the back cover of the text. We also start each chapter by showing the portion of the flowchart that is covered in that chapter. We now use definitions both from the PMBOK® Guide, Sixth Edition and also from more than a dozen Project Management Institute specialized Practice Guides and Standards. The end of each chapter contains specific suggestions for PMP® and CAPM® test preparation pertaining to the chapter’s topics plus ten PMBOK® Guide-type ques- tions that are typical of what would be seen on PMP® and CAPM® exams. Appendix A gives general study suggestions for the CAPM® and PMP® exams. Project deliverables. A list of 38 project deliverables that can be used as assignments for students and in-class exercises are included in Appendix D. Each deliverable is specifically tied to a student learning objective and shown on the PMBOK® Guide flowchart. About half of these are core, while the others are behavioral or technical. Examples of completed deliverables are included in the text. Teaching suggestions and grading rubrics are included in the IM. Appendix D identifies the type of objec- tive, chapter covered, and PMBOK® Guide process, knowledge area, and process group in which the deliverable is typically created on a real project. Substantial increase in Agile coverage. Agile techniques and methods are consid- ered much more often than even three years ago. As such, many experienced project managers who have also become Agile proponents have contributed to the increased Agile coverage in this book. At multiple points in most chapters, if Agile methods or suggested behaviors are different from traditional project management, these varia- tions are noted. We use an Agile icon to draw attention to these. We also have cre- ated Appendix B, which is a bulleted list of the approximately 180 differences between Agile and traditional project management that are discussed in the book. This extensive coverage allows a professor to teach project management emphasizing an Agile approach, if desired. It also allows a professor to develop an Agile project management course. Two new continuing project examples. We have created two project examples that are included in all 15 chapters of the text. One project is a construction project by a for-profit company that is planned and managed in a traditional fashion. The other is a development project at a nonprofit that is planned and managed in a more (but not exclusively) Agile fashion. In Chapter 1, we introduce both these case studies. After that, we alternate chapters, with each chapter showing what one project did using the concepts and techniques of a chapter and posing questions for the stu- dents to answer about the other project. Answers to the questions are in the IM. This can be another useful vehicle for students to practice their skills and to generate class discussion.

Distinctive Features PMBOK® Guide, Sixth Edition approach. This consistency with the current stan- dard gives students a significant leg up if they decide to become certified Project Management Professionals (PMPs®) or Certified Associates in Project Management

Preface xxi

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(CAPMs®). This text includes an color-coded PMBOK® Guide, Sixth Edition flow- chart, all definitions consistent with PMI guides and standards, CAPM and PMP test preparation suggestions, and test practice questions. Actual project as learning vehicle. A section at the end of each chapter lists deliver- ables for students to create (in teams or individually) for a real project. These assign- ments have been refined over the last two decades while working with the local PMI® chapter, which provided a panel of PMP® judges to evaluate projects from a practical point of view. Included in the IM are extensive tools and suggestions devel- oped over the last 20 years for instructors, guiding them as they have students learn in the best possible way—with real projects. Students are encouraged to keep clean copies of all deliverables so they can demonstrate their project skills in job inter- views. A listing of these deliverables is included in Appendix D. Student-oriented, measurable learning objectives. Each chapter begins with a list of the core objectives for the chapter along with more in-depth behavioral and/or tech- nical objectives for most chapters. The chapter also starts with showing the PMBOK® topics covered in the chapter. The chapter material, end-of-chapter ques- tions and problems, PowerPoint® slides, all deliverables, and test questions have all been updated to correlate to specific objectives. Microsoft® Project Professional 2016 fully integrated into the fabric of eight chap- ters. Microsoft® Project Professional 2016 is shown in a step-by-step manner with numerous screen captures. On all screen captures, critical path activities are shown in contrasting color for emphasis. We have created videos to demonstrate these techniques and developed questions tied to specific learning objectives that can be assigned to the videos to test student learning. Blend of traditional and modern methods. Proven methods developed over the past half century are combined with exciting new methods, including Agile, that are emerging from both industry and research. This book covers the responsibilities of many individuals who can have an impact on projects both as they are practiced in traditional and in Agile environments, so aspiring project managers can understand not only their own roles, but also those of people with whom they need to interact. Integrated example projects. A variety of experienced project leaders from around the world have contributed examples to demonstrate many of the techniques and concepts throughout the book. These highly experienced and credentialed managers have worked closely with the authors to ensure that the examples demonstrate ideas discussed in the chapter. The variety of industries, locations, and sizes of the projects help the students to visualize both how universal project management is and how to appropriately scale the planning and management activities.

Organization of Topics The book is divided into four major parts. Part 1, Organizing Projects, deals with get- ting a project officially approved.

Chapter 1 introduces contemporary project management by first tracing the history of project management and then discussing what makes a project different from an ongoing operation. Various frameworks that help one understand projects— such as the PMBOK® Guide and Agile—are introduced, as well as the executive-, managerial-, and associate-level roles in managing projects. Chapter 2 discusses how projects support and are an outgrowth of strategic plan- ning, how a portfolio of projects is selected and prioritized, how a client company

xxii Preface

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selects a contractor company to conduct a project, and how a contractor company secures project opportunities from client companies. Chapter 3 presents project charters in a step-by-step fashion. Short, powerful charters help all key participants to develop a common understanding of key project issues and components at a high level and then to formally commit to the project. Charters have become nearly universal in initiating projects in recent years. Microsoft® Project Pro- fessional 2016 is utilized to show milestone schedules within charters.

Part 2, Leading Projects, deals with understanding the project environment and roles and dealing effectively with team members and stakeholders.

Chapter 4 deals with organizational capability issues of structure, life cycle, culture, and roles. The choices parent organizations make in each of these provide both opportunities and limitations to how projects can be conducted. Chapter 5 deals with leading and managing the project team. It includes acquiring and developing the project team, assessing both potential and actual performance of team members and the team as a whole, various types of power a project manager can use, and how to deal productively with project conflict. Chapter 6 introduces methods for understanding and prioritizing various stake- holder demands and for building constructive relationships with stakeholders. Since many projects are less successful due to poor communications, detailed communica- tion planning techniques are introduced along with suggestions for managing meet- ings, an important channel of communication.

Part 3, Planning Projects, deals with all aspects of project planning as defined in thePMBOK® Guide. It proceeds in the most logical order possible to maximize effective- ness and stress continuity, so that each chapter builds on the previous ones, and students can appreciate the interplay between the various knowledge areas and processes.

Chapter 7 helps students understand how to determine the amount of work the project entails. Specifically covered are methods for determining the scope of both the project work and outputs, the work breakdown structure (WBS) that is used to ensure nothing is left out, and how the WBS is portrayed using Microsoft® Project Professional 2016. Chapter 8 is the first scheduling chapter. It shows how to schedule project activities by identifying, sequencing, and estimating the durations for each activity. Then, crit- ical path project schedules are developed, and methods are shown for dealing with uncertainty in time estimates, Gantt charts are introduced for easier communica- tions, and Microsoft® Project Professional 2016 is used to automate the schedule development and communications. Chapter 9 is the second scheduling chapter. Once the critical path schedule is deter- mined, staff management plans are developed, project team composition issues are considered, resources are assigned to activities, and resource overloads are identified and handled. Schedule compression techniques of crashing and fast tracking are demonstrated, and multiple alternative scheduling techniques including Agile are introduced. Resource scheduling is demonstrated with Microsoft® Project Profes- sional 2016. Chapter 10 deals with project budgeting. Estimating cost, budgeting cost, and estab- lishing cost controls are demonstrated. Microsoft® Project Professional 2016 is used for developing both bottom-up and summary project budgets. Chapter 11 demonstrates project risk planning. It includes risk management plan- ning methods for identifying risks, establishing a risk register, qualitatively analyzing

Preface xxiii

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risks for probability and impact, quantitatively analyzing risks if needed, and decid- ing how to respond to each risk with contingency plans for major risks and aware- ness for minor risks. Chapter 12 starts by covering project quality planning. This includes explaining the development of modern quality concepts and how they distill into core project qual- ity demands. Next, the chapter covers how to develop a project quality plan. It then ties all of the planning chapters together with discussions of a project kickoff meet- ing, a baselined project plan, and the ways Microsoft® Project Professional 2016 can be used to establish and maintain the baseline.

Part 4, Performing Projects, discusses the various aspects that must be managed simultaneously while the project is being conducted.

Chapter 13 deals with project supply chain management issues. Some of these issues, such as developing the procurement management plan, qualifying and selecting ven- dors, and determining the type of contract to use are planning issues, but for sim- plicity, they are covered in one chapter with sections on how to conduct and control procurements and to improve the project supply chain. Chapter 14 is concerned with determining project results. This chapter starts with a balanced scorecard approach to controlling projects. Internal project issues covered include risk, change, and communication. Quality is also covered, with an emphasis on achieving client satisfaction. Financial issues discussed are scope, cost, and sched- ule, including how to use Microsoft® Project Professional 2016 for control. Chapter 15 deals with how to end a project—either early or on time. This includes validating to ensure all scope is complete, formally closing procurements and the project, knowledge management, and ensuring the project participants are rewarded and the clients have the support they need to realize intended benefits when using the project deliverables.

MindTap MindTap is a complete digital solution for your project management course. It has enhancements that take students from learning basic concepts to actively engaging in critical thinking applications, while learning Project 2016 skills for their future careers.

The MindTap product for this book features videos from the authors that explain tricky concepts, videos that explain the finer points of what you can do with Project 2016, and quizzes and homework assignments with detailed feedback so that students will have a better understanding of why an answer is right or wrong.

Instructor Resources To access the instructor resources, go to www.cengage.com/login, log in with your SSO account username and password, and search this book’s ISBN (9781337406451) to add instructor resources to your account. Key support materials—instructor’s manual with solutions, test bank in Word and Blackboard formats, data set solutions, and PowerPoint® presentations—provide instructors with a comprehensive capability for customizing their classroom experience. All student resources are also available on the instructor companion site.

Instructor s Manual with Solutions. Prepared by Tim Kloppenborg and updated by Kate Wells, based on their years of experience facilitating the student learning expe- rience in their own project management classes (undergraduate, MBA, Masters in

xxiv Preface

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Health Informatics, and continuing education on six continents), with teaching in classroom, hybrid, and online formats, each chapter of the instructor’s manual includes an overview of core, behavioral, and technical learning objectives, detailed chapter outlines, teaching recommendations for both classroom and online, and many specific suggestions for implementing community-based projects into your project management class. Solutions are also provided for all of the end-of-chapter content. Microsoft® Word Test Bank. Prepared for this edition by Joyce D. Brown, PMP® and Thomas F. McCabe, PMP® of the University of Connecticut, this comprehen- sive test bank builds upon the original test bank created by Kevin Grant of the Uni- versity of Texas at San Antonio. The test bank is organized around each chapter’s learning objectives. All test questions are consistent with the PMBOK®. Every test item is labeled according to its difficulty level, the learning objective within the text- book to which it relates, and its Blooms Taxonomy level, allowing instructors to quickly construct effective tests that emphasize the concepts most significant for their courses. The test bank includes true/false, multiple choice, essay, and quantita- tive problems for each chapter. Cognero Test Bank. Cengage Learning Testing Powered by Cognero is a flexible, online system that allows you to author, edit, and manage test bank content from multiple Cengage Learning solutions; create multiple test versions in an instant; and deliver tests from your LMS, your classroom, or wherever you want. The Cog- nero test bank contains the same questions that are in the Microsoft® Word test bank. PowerPoint Presentations. Prepared by Kate Wells, the PowerPoint presentations provide comprehensive coverage of each chapter’s essential concepts in a clean, con- cise format. Instructors can easily customize the PowerPoint presentations to better fit the needs of their classroom. Templates. Electronic templates for many of the techniques (student deliverables) are available on the textbook companion website. These Microsoft® Word and Excel documents can be downloaded and filled in for ease of student learning and for consistency of instructor grading.

Student Resources Students can access the following resources by going to www.cengagebrain.com and searching 9781337406451. The companion website for this book has Excel and Word Project templates, data sets for selected chapters, and instructions for how to get access to a trial version of Microsoft Online Professional Trial. (Note that while we are happy to provide instructions for accessing this trial, Microsoft controls that access and we are not responsible for it being removed in the future.)

Acknowledgments A book-writing project depends on many people. Through the last three decades of proj- ect work, we have been privileged to learn from thousands of people, including students, faculty members, co-trainers, co-consultants, co-judges, clients, research partners, trade book authors, and others. Hundreds of individuals who have provided help in research and developing teaching methods are co-members of the following:

PMI’s undergraduate curriculum guidelines development team, PMI’s Global Accreditation Center,

Preface xxv

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Multiple chapters of the Project Management Institute, The Cincinnati and Louisville sections of the Center for Quality of Management, Project Management Executive Forum, and Agile Cincinnati.

We also want to acknowledge the wonderful help of various professionals at Cengage Learning, including Aaron Arnsparger (Sr. Product Manager) and Conor Allen (Content Developer). We also want to thank Charles McCormick, Jr., retired Senior Acquisitions Editor, for his extensive help and guidance on the first and second editions of Contem- porary Project Management.

Other individuals who have provided significant content are Nathan Johnson of Western Carolina University, who provided the Microsoft® Project 2016 material, Joyce D. Brown, PMP® and Thomas F. McCabe, PMP® of University of Connecticut, who revised the test bank and provided additional PMBOK® questions to each chapter, Jim King, who professionally taped and edited videos, and Kathryn N. Wells, Independent Consultant, PMP®, CAPM®, who provided the PowerPoint presentations.

Special thanks are also due to all the people whose feedback and suggestions have shaped this edition of Contemporary Project Management as well as the previous two editions:

Carol Abbott, Fusion Alliance, Inc.

Stephen Allen, Truman State University

Siti Arshad-Snyder, Clarkson College

Loretta Beavers, Southwest Virginia Community College

Shari Bleure, Skyline Chili

Neil Burgess, Albertus Magnus College

Reynold Byers, Arizona State University

John Cain, Viox Services

Robert Clarkson, Davenport University

Nancy Cornell, Northeastern University

Steve Creason, Metropolitan State University

Jacob J. Dell, University of Texas at San Antonio

Scott Dellana, East Carolina University

Maling Ebrahimpour, Roger Williams University

Jeff Flynn, ILSCO Corporation

Jim Ford, University of Delaware

Lynn Frock, Lynn Frock & Company

Lei Fu, Hefei University of Technology

Patricia Galdeen, Lourdes University

Kathleen Gallon, Christ Hospital

Paul Gentine, Bethany College

Kevin P. Grant, University of Texas–San Antonio

Joseph Griffin, Northeastern University

Raye Guye, ILSCO Corporation

William M. Hayden Jr., State University of New York at Buffalo

Sarai Hedges, University of Cincinnati

Marco Hernandez, Dantes Canadian

Stephen Holoviak, Pennsylvania State University

Bill Holt, North Seattle Community College

Morris Hsi, Lawrence Tech University

xxvi Preface

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Sonya Hsu, University of Louisiana Lafayette

Paul Hudec, Milwaukee School of Engineering

Anil B. Jambekar, Michigan Technological University

Dana Johnson, Michigan Technological University

Robert Judge, San Diego State University

David L. Keeney, Stevens Institute of Technology

George Kenyon, Lamar University

Naomi Kinney, MultiLingual Learning Services

Paul Kling, Duke Energy

Matthew Korpusik, Six Sigma Black Belt

Sal Kukalis, California State University–Long Beach

Young Hoon Kwak, George Washington University

Laurence J. Laning, Procter & Gamble

Dick Larkin, Central Washington University

Lydia Lavigne, Ball Aerospace

Jon Lazarus, Willamette University

James Leaman, Eastern Mennonite University

Linda LeSage, Davenport University

Claudia Levi, Edmonds Community College

Marvette Limon, University of Houston Downtown

John S. Loucks, St. Edward’s University

Diane Lucas, Penn State University– DuBois Campus

Clayton Maas, Davenport University

S. G. Marlow, California State Polytechnic University

Daniel S. Marrone, SUNY Farmingdale State College

Chris McCale, Regis University

Abe Meilich, Walden University

Bruce Miller, Xavier Leadership Center

Ali Mir, William Paterson University

William Moylan, Eastern Michigan University

Merlin Nuss, MidAmerica Nazarene University

Warren Opfer, Life Science Services International

Peerasit Patanakul, Stevens Institute of Technology

Joseph Petrick, Wright State University

Kenneth R. Pflieger, Potomac College

Charles K. Pickar, Johns Hopkins University

Connie Plowman, Portland Community College

Mark Poore, Roanoke College

Antonios Printezis, Arizona State University

Joshua Ramirez, PMP, MSM-PM, Columbia Basin College

Chris Rawlings, Bob Jones University

Natalee Regal, Procter & Gamble

Pedro Reyes, Baylor University

Linda Ridlon, Center for Quality of Management, Division of GOAL/QPC

Kim Roberts, Athens State University

David Schmitz, Milwaukee School of Engineering

Sheryl R. Schoenacher, SUNY Farmingdale State College

Jan Sepate, Kimberly Clark

Patrick Sepate, Summitqwest Inc.

Preface xxvii

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William R. Sherrard, San Diego State University

Brian M. Smith, Eastern University

Kimberlee D. Snyder, Winona State University

Tony Taylor, MidAmerica Nazarene University

Rachana Thariani, Atos-Origin

Dawn Tolonen, Xavier University

Nate Tucker, Lee University

Guy Turner, Castellini Company

Jayashree Venkatraman, Microsoft Corporation

Nathan Washington, Southwest Tennessee Community College

Scott Wright, University of Wisconsin– Platteville

And we especially want to thank our family members for their love and support: Bet, Nick, Jill, Andy, Cadence, and Ellie

—Timothy J. Kloppenborg

xxviii Preface

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About the Authors Timothy J. Kloppenborg is an Emeritus Professor of Management at Williams Col- lege of Business, Xavier University. He previously held faculty positions at University of North Carolina Charlotte and Air Force Institute of Technology and has worked temporarily at Southern Cross University and Tecnológico de Monterrey. He has authored over 100 publications, including 10 books, such as Strategic Leadership of Portfolio and Project Management, Project Leadership, and Managing Project Quality. His articles have appeared in MIT Sloan Management Review, Project Management Journal, Journal of Management Education, Journal of General Management, SAM Advanced Management Journal, Information Systems Education Journal, Journal of Managerial Issues, Quality Progress, Management Research News, and Journal of Small Business Strategy. In his capacity as the founding collection editor of portfolio and project management books for Business Expert Press, he has edited 14 books with more in the pipeline. Tim has been active with the Project Management Institute for over 30 years and a PMP® since 1991. He is a retired U.S. Air Force Reserve officer who served in transportation, procurement, and quality assurance. Dr. Kloppenborg has worked with over 150 volunteer organizations, many directly and others through supervising student projects. He has hands-on and consulting project management experience on six continents in construction, information systems, research and devel- opment, and quality improvement projects with organizations such Duke Energy, Ernst and Young LLP, Greater Cincinnati Water Works, Kroger, Procter & Gamble, Tri- Health, and Texas Children’s Hospital. Dr. Kloppenborg has developed and delivered innovative corporate training, undergraduate, MBA, and Executive MBA classes in project management, leadership, teamwork, and quality improvement and he teaches PMP Prep classes. He holds a BS in business administration from Benedictine College, an MBA from Western Illinois University, and a PhD in Operations Management from University of Cincinnati.

Dr. Vittal Anantatmula is a professor in the College of Business, Western Carolina University and a campus of University of North Carolina. He is also the Director of Graduate Programs in Project Management and was a recipient of excellence in teaching and research awards. Dr. Anantatmula is a Global Guest Professor at Keio University, Yokohama, Japan. He is a director and board member of the Project Management Insti- tute Global Accreditation Center (PMI-GAC). He serves on the editorial board of several scholarly journals. At Western Carolina University, he was recognized with the Univer- sity Scholar Award in 2017. He has won several other awards for excellence in both research and teaching.

Prior to joining Western Carolina University, he taught at The George Washington University. He worked in the petroleum and power industries for several years as an electrical engineer and project manager and as a consultant in several international orga- nizations, including the World Bank. Dr. Anantatmula has authored more than 60 pub- lications, five books, and about 50 conference papers. Two of his conference papers received the best paper award. His work has been published in scholarly journals, includ- ing Project Management Journal, Journal of Knowledge Management, Journal of Manage- ment in Engineering, Journal of Information and Knowledge Management Systems, and

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Engineering Management Journal. He received his PhD from The George Washington University and is a certified project management professional.

Kathryn N. Wells holds a master’s degree in Education, as well as degrees in Organi- zational Communication and Spanish. Kate has a passion for teaching, in both academic and corporate settings. In addition to over a decade’s experience in project management education, Kate is a top-producing real estate agent with Keller Williams. Her blend of experience in real estate—including working with many investors—and classroom teach- ing gives her a unique perspective and insights into many components of project man- agement, including Planning, Communication, Stakeholder Management, and Project Control.

In addition to her work on Contemporary Project Management, Kate is the lead author of Project Management Essentials (2015) and co-author of Project Management for Archaeology (2017), both published by Business Expert Press. She has trained and consulted with several organizations around the world and has occasionally been con- tracted to provide translations of project management educational materials (Spanish to English). Some of her clients include the University of Cincinnati, Children’s Hospital of Cincinnati, Givaudan International, and Tec de Monterrey University—where Kate has repeatedly served as visiting faculty at multiple campuses in Mexico. Kate is a certified project management professional (PMP).

xxx About the Authors

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1

ORGANIZE LEAD PERFORMPLAN

P A R T 1

ORGANIZING PROJECTS

Chapter 1 Introduction to Project Management

Chapter 2 Project Selection and Prioritization

Chapter 3 Chartering Projects

Organizing for success in project management includes

several basic frameworks for understanding projects and

tools to select, prioritize, resource, and initiate projects.

Basic frameworks described in Chapter 1 include how

the work of project management can be categorized by

knowledge area and process group, how project success

is determined, and how both plan-driven and adaptive

approaches are frequently used. Chapter 2 describes

how projects are investments meant to help achieve

organizational goals. Tools are demonstrated to select,

prioritize, and resource projects. Chapter 3 describes

how charters are essential to initiating projects and then

demonstrates how to construct each portion of a charter.

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C H A P T E R 1

Introduction to Project Management

I have returned from a successful climb of Mount Aconcagua in Argentina; at 22,841 feet, it is the highest peak in the world outside of the Himalayas. While there, seven other climbers died; we not only survived, but our experience was so positive that we have partnered to climb together again.

During the three decades that I ve been climbing mountains, I ve also been managing projects. An element has emerged as essential for success in both of these activities: the element of discipline. By discipline, I am referring to doing what I already know needs to be done. Without this attribute, even the most knowledgeable and experienced will have difficulty avoiding failure.

The deaths on Aconcagua are an extreme example of the consequences asso- ciated with a lack of discipline. The unfortunate climbers, who knew that the pre- dicted storms would produce very hazardous conditions, decided to attempt the summit instead of waiting. They did not have the discipline that we demonstrated to act on our earlier decision to curtail summit attempts after the agreed-to turn- around time or in severe weather.

CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Define a project and project management in your own words, using characteristics that are common to most projects, and describe reasons why more organizations are using project management. Describe major activ- ities and deliverables at each project life cycle stage. List and define the ten knowledge areas and five process groups of the project manage- ment body of knowl- edge (PMBOK ®). Delineate measures of project success and failure, and reasons for both. Contrast predictive or plan-driven and adaptive or change- driven project life cycle approaches.

BEHAVIORAL OBJECTIVES: Identify project roles and distinguish key responsibilities for project team members. Describe the impor- tance of collaborative effort during the project life cycle.

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I ve experienced similar circumstances in project management. Often I have found myself under pressure to cast aside or shortcut project management prac- tices that I have come to rely on. For me, these practices have become the pillars of my own project management discipline. One of these pillars, planning, seems to be particularly susceptible to challenge. Managing projects at the Central Intelli- gence Agency for three decades, I adjusted to the annual cycle for obtaining fund- ing. This cycle occasionally involved being given relatively short notice near the end of the year that funds unspent by some other department were up for grabs to whoever could quickly make a convincing business case. While some may inter- pret this as a circumstance requiring shortcutting the necessary amount of plan- ning in order to capture some of the briefly available funds, I understood that my discipline required me to find a way to do the needed planning and to act quickly. I understood that to do otherwise would likely propel me toward becoming one of the two-thirds of the projects identified by the Standish Group in their 2009 CHAOS report as not successful. I understood that the top 2 percent of project managers, referred to as Alpha Project Managers in a 2006 book of the same name, spend twice as much time planning as the other 98 percent of project man- agers. The approach that I took allowed me to maintain the discipline for my plan- ning pillar. I preplanned a couple of projects and had them ready at the end of the year to be submitted should a momentary funding opportunity arise.

A key to success in project management, as well as in mountain climbing, is to identify the pillars that will be practiced with discipline. This book offers an excel- lent set of project management methods from which we can identify those pillars that we will decide to practice with the required levels of discipline. I believe that project management is about applying common sense with uncommon discipline.

Michael O Brochta, PMP, founder of Zozer Inc. and previously senior project manager at the Central Intelligence Agency

1-1 What Is a Project? Frequently, a business is faced with making a change, such as improving an existing work process, constructing a building, installing a new computer system, merging with another company, moving to a new location, developing a new product, entering a new market, and so on. These changes are best planned and managed as projects.

Often, these changes are initiated due to operational necessity or to meet strategic goals, such as the following:

Market demand Customer request

PMBOK ® 6E COVERAGE

PMBOK ® 6E OUTPUTS

1.2 Foundational Elements Project Customer Trade-off Matrix

2.4 Organizational Systems Project Success Definition

3.3 The Project Manager s Sphere of Influence

3.4 Project Manager Competencies

3.5 Performing Integration

PMBOK® GUIDE Topics:

Project management introduction Project life cycle Stakeholders Project management process Project integration management

CHAPTER OUTPUTS Customer Trade-off Matrix Project Success Definition

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Technological advance Legal requirements or regulatory compliance Replace obsolete equipment, technology, system, or physical facility Crisis situation Social need

So, what is a project? A project is a new, time-bound effort that has a definite beginning and a definite

ending with several related and/or interdependent tasks to create a unique product or service. The word temporary is used to denote project duration; however, it does not mean that project duration is short; in fact, it can range from a few weeks to several years. Temporary also does not apply to the project deliverable, although project teams are certainly temporary.

A project requires an organized set of work efforts that are planned with a level of detail that is progressively elaborated on as more information is discovered. Projects are subject to limitations of time and resources such as money and people. Projects should follow a planned and organized approach with a defined beginning and ending. Project plans and goals become more specific as early work is completed. The project output often is a collection of a primary deliverable along with supporting deliverables such as a house as the primary deliverable and warrantees and instructions for use as supporting deliverables.

Taking all these issues into consideration, a project can be defined as a time-bound effort constrained by performance specifications, resources, and budget to create a unique product or service.

Each project typically has a unique combination of stakeholders. Stakeholders are people and groups who can impact the project or might be impacted by either the work or results of the project. Projects often require a variety of people to work together for a limited time, and all participants need to understand that completing the project will require effort in addition to their other assigned work. These people become members of the project team and usually represent diverse functions and disciplines.

Project management is the art and science of using knowledge, skills, tools, and tech- niques efficiently and effectively to meet stakeholder needs and expectations. This includes work processes that initiate, plan, execute, control, and close work. During these processes, trade-offs must be made among the following factors:

Scope (size and features) Quality (acceptability of the results) Cost Schedule Resources Risks

When project managers successfully make these trade-offs, the project results meet the agreed-upon requirements, are useful to the customers, and promote the organiza- tion. Project management includes both administrative tasks for planning, documenting, and controlling work and leadership tasks for visioning, motivating, and promoting work associates. The underlying principle of project management discipline is to make effec- tive and efficient use of all resources and it is this principle that influences some of these trade-off decisions. Project management knowledge, skills, and methods can be applied and modified for most projects regardless of size or application.

4 Part 1 Organizing Projects

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1-2 History of Project Management Projects of all sizes have been undertaken throughout history. Early construction pro- jects included the ancient pyramids, medieval cathedrals, Indian cities, and Native American pueblos. Other large early projects involved waging wars and building empires. In the development of the United States, projects included laying railroads, developing farms, and building cities. Many smaller projects consisted of building houses and starting businesses. Projects were conducted throughout most of the world s history, but there was very little documentation. Therefore, there is no evidence of systematic planning and control. It is known that some early projects were accom- plished at great human and financial cost and that others took exceedingly long peri- ods of time to complete. For example, the Panama Canal was started in 1881 and completed in 1914.

Project management eventually emerged as a formal discipline to be studied and practiced. In the 1950s and 1960s, techniques for planning and controlling schedules and costs were developed, primarily on huge aerospace and construction projects. Dur- ing this time, project management was primarily involved in determining project sche- dules based on understanding the order in which work activities had to be completed. Many large manufacturing, research and development, government, and construction projects used and refined management techniques. In the 1980s and 1990s, several software companies offered ever more powerful and easier ways to plan and control project costs and schedules. Risk management techniques that were originally devel- oped on complex projects have increasingly been applied in a simplified form to less complex projects.

In the last few years, people have realized more and more that communication and leadership play major roles in project success. Rapid growth and changes in the information technology and telecommunications industries especially have fueled massive growth in the use of project management in the 1990s and early 2000s. Simultaneously, systems and processes were developed for electronic documentation of the historical data of projects using information systems (IS) and knowledge man- agement tools.

People who are engaged in a wide variety of industries, including banking, insurance, retailing, hospital administration, healthcare, and many other service industries, are now turning to project management to help them plan and manage efforts to meet their unique demands. Project planning and management techniques that were originally developed for large, complex projects can be modified and used to better plan and man- age even smaller projects. Now, project management is commonly used on projects of many sizes and types in a wide variety of manufacturing, government, service, and non- profit organizations.

Further, in today s global economy, geographically dispersed virtual project teams are becoming a familiar entity in many organizations. Managing a project is challenging in the current global economy due to the exponential growth of information technology and ever-increasing market demand that organizations offer products and services effi- ciently and quickly. Understanding the characteristics of global projects for improving global project performance is of critical importance.

The use of project management has grown quite rapidly and is likely to continue growing. With increased international competition and a borderless global economy, customers want their products and services developed and delivered better, faster, and cheaper. Because project management techniques are designed to manage scope, quality, cost, and schedule, they are ideally suited to this purpose.

Chapter 1 Introduction to Project Management 5

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AGILE Throughout this book, we will present concepts and techniques that are either unique toAgile projects or are emphasized more on Agile projects. Many of these ideas can be used to improve practice on traditional projects.

In 2001, a group of thought leaders became frustrated with the use of traditional, plan-driven project management for software projects and as a result, they wrote a doc- ument called The Agile Manifesto.1 The four core values of Agile as shown below are completely consistent with our approach to Contemporary Project Management. Agile will be defined in Chapter 3, but throughout the book, a margin icon will indicate ideas from Agile, and the text will be in color.

Value individuals more than processes. Value working software more than documentation. Value customer collaboration more than negotiation. Value response to change over following a plan.

1-3 How Can Project Work Be Described? Project work can be described in the following ways:

Projects are temporary and unique, while other work, commonly called operations, is more continuous. Project managers need certain soft skills and hard skills to be effective. Project managers frequently have more responsibility than authority. Projects go through predictable stages called a life cycle.

Managing a project requires identifying requirements, establishing clear and achiev- able objectives, balancing competing demands of quality, scope, cost, and time, and meeting customer expectations by making adjustments to all aspects of the project. Due to uniqueness, projects are often associated with uncertainties and unknowns that pres- ent many challenges to managing project work.

1-3a Projects versus Operations All work can be described as fitting into one of two types: projects or operations. Projects as stated above are temporary, and no two are identical. Some projects may be extremely different from any other work an organization has performed up to that time, such as planning a merger with another company. Other projects may have both routine and unique aspects, for example, building a house; such projects can be termed process ori- ented. These projects are associated with fewer unknowns and uncertainties.

Operations, on the other hand, consist of the ongoing work needed to ensure that an organization continues to function effectively. Operations managers can often use check- lists to guide much of their work. Project managers can use project management methods to help determine what to do, but they rarely have checklists that identify all the activities they need to accomplish. Some work may be difficult to classify as totally project or totally operations. However, if project management methods and concepts help one to better plan and manage work, it does not really matter how the work is classified.

Both the projects and the operations are associated with processes. A process is described as a series of actions designed to bring about the consistent and similar result or service. A process is usually designed to improve productivity. Thus, processes are repetitive and pro- duce consistent and similar results, whereas projects are unique: each project delivers results that are distinct from other projects. However, one must remember that project manage- ment discipline includes various processes (planning, risk management, communication

6 Part 1 Organizing Projects

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management, etc.) that facilitate managing projects and product- or service-oriented processes such as scope definition, scope management, and quality management.

1-3b Soft Skills and Hard Skills To effectively manage and lead in a project environment, a person needs to develop both soft and hard skills. Soft skills include the ability to work in teams, interpersonal

skills, communication, conflict resolution, negotiation, and leadership activities. Hard skills can include risk analysis, quality control, scheduling, budgeting, change control, planning other related activities, and project execution. Soft and hard skills go hand in hand. Some people have a stronger natural ability and a better comfort level in one or the other, but to be successful as a project manager, a person needs to develop both, along with the judgment about when each is needed. A wise project manager may pur- posefully recruit an assistant who excels in his area of weakness. Training, experience, and mentoring can also be instrumental in developing necessary skills.

Soft skills such as interpersonal relations, conflict resolution, and communication are of critical importance in managing people. As such, of all the resources, managing human resources presents more challenges. Managing and leading people are the most challenging aspects of a managing a project and the project team. These challenges underline the importance of soft skills.

1-3c Authority and Responsibility A project manager will frequently be held accountable for work that she cannot order people to perform. Projects are most effectively managed with one person being assigned accountability. However, that person often needs to negotiate with a functional man- ager, who is someone with management authority over an organizational unit. 2 Func- tional managers negotiate for workers to perform the project work in a timely fashion. Since the workers know their regular manager often has other tasks for them and will be their primary rater, they are tempted to concentrate first on the work that will earn rewards. Hence, a project manager needs to develop strong communication and leader- ship skills to extract cooperation from functional managers and to persuade project team members to focus on the project when other work also beckons. Often, it is the project manager s responsibility that the work be performed, but at the same time, he or she has no formal authority over the project team members.

1-3d Project Life Cycle All projects go through predictable stages called a project life cycle. A project life cycle is the series of phases that a project goes through from its initiation to its closure. 3 An

organization needs the assurance that the work of the project is proceeding in a satisfac- tory manner, that the results are aligned with the original plan, and they are likely to serve the customer s intended purpose. The project customer is the person or organization that will use the project s product, service, or result. Customers can be internal to the organiza- tion (that is, part of the company performing the project) or external to the organization.

Many different project life cycle models are used for different types of projects, such as information systems, improvement, research and development, and construction. The variations these pose will be explored in Chapter 4. In this book, we will use the follow- ing project stages:

Selecting and initiating starts when an idea for a project first emerges and the proj- ect is selected and planned at a high level, and ends when key participants commit to it in broad terms.

Chapter 1 Introduction to Project Management 7

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AGILE

Planning starts after the initial commitment, includes detailed planning, and ends when all stakeholders accept the entire detailed plan. Executing starts when the plan is accepted, and includes authorizing, executing, monitoring, and controlling work until the customer accepts the project deliverables. Closing and realizing includes all activities after customer acceptance to ensure the project is completed, lessons are learned, resources are reassigned, contributions are recognized, and benefits are realized.

The pace of work and amount of money spent may vary considerably from one life cycle stage to another. Often, the selecting is performed periodically for all projects at a division or corporate level, and then initiating is rather quick just enough to ensure that a project makes sense and key participants will commit to it. The plan- ning stage can become rather detailed and will normally require quite a bit more work. The execution stage or stages are the time when the majority of the hands-on project tasks are accomplished. This tends to be a time of considerable work. Closing is a time when loose ends are tied up and the work level decreases significantly, but realizing benefits from the project occurs over time, may be measured months after project completion, and may be done by people other than those who performed the project. Occasionally, some of these phases overlap with each other, depending on the project complexity, urgency of the deliverable, and ambiguity associated with the project scope.

See Exhibit 1.1 for a predictive or plan-driven project life cycle and Exhibit 1.2 for an adaptive or change-driven project life cycle. The primary difference is that in the first, the product is well understood and all planning precedes all executing, while in the second, early results lead into planning later work. The extreme of pre- dictive is sometimes called waterfall and the extreme of adaptive is sometimes called Agile.

EXHIBIT 1.1

PREDICTIVE OR PLAN-DRIVEN PROJECT LIFE CYCLE WITH MEASUREMENT POINTS

Other Approvals

Closing & Realizing

Administrative Closure

Benefits Measures

Level of Effort

Stage

Stage Ending Gates

Selecting & Initiating

Charter

Selection

Planning

Kickoff

Executing

Project Result

Progress Reports

8 Part 1 Organizing Projects

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Three other points should be made concerning the project life cycle. First, most com- panies with well-developed project management systems insist that a project must pass an approval of some kind to move from one stage to the next.4 In both exhibits, the approval to move from selecting and initiating to planning, for instance, is the approval of a charter. Second, in some industries, the project life cycle is highly formalized and very specific. For example, in the construction industry, the executing stage is often described as the three stages of design, erection, and finishing. Third, many companies even have their own project life cycle model, such as the one Midland Insurance Com- pany has developed for quality improvement projects, as shown in Exhibit 1.3.

EXHIBIT 1.3

MIDLAND INSURANCE COMPANY PROJECT LIFE CYCLE FOR QUALITY IMPROVEMENT PROJECTS

Initiation Planning Execution Close Out

1) De ne Problem

2) Factually Describe Situation

3) Analyze Causes

4) Solution Planning and Implementation

5) Evaluation of Effects

6) Sustain Results

7) Share Results

Source: Martin J. Novakov, American Modern Insurance Group.

EXHIBIT 1.2

ADAPTIVE OR CHANGE-DRIVEN PROJECT LIFE CYCLE WITH MEASUREMENT POINTS

Other Approvals

Closing & Realizing

Administrative Closure

Benefits Measures

Level of Effort

Stage

Stage Ending Gates

Selecting & Initiating

Charter

Selection

Planning Executing

Planning Executing

· · ·

Interim Result

Interim Result

Project Result

Chapter 1 Introduction to Project Management 9

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This book will present examples of company-specific life cycle models, but for clarity will use the predictive or plan-driven model shown in Exhibit 1.1 when describing con- cepts, except when we discuss Agile with the adaptive or change-driven model. In addi- tion to stage-ending approvals, frequently projects are measured at additional points such as selection, progress reporting, and benefits realization, as shown in Exhibit 1.1.

1-4 Understanding Projects Several frameworks that can help a person better understand project management are described below: the Project Management Institute (PMI); the Project Management Body of Knowledge (PMBOK® Guide); methods of selecting and prioritizing projects, project goals and constraints; project success and failure; use of Microsoft Project to help plan and measure projects, and various ways to classify projects.

1-4a Project Management Institute Project management has professional organizations just as do many other professions and industry groups. The biggest of these by far is the Project Management Institute.

The Project Management Institute was founded in 1969, grew at a modest pace until the early 1990s, and has grown quite rapidly since then. As of February 2017, PMI had well over 475,000 members. PMI publishes and regularly updates over a dozen exten- sions, guides, and standards. The best known is A Guide to the Project Management Body of Knowledge (PMBOK® Guide). Definitions in this book that have specific nuances come from the most current edition of PMI standards and guides. Those definitions that are common knowledge are defined in typical terms. PMI has established eight profes- sional certifications, with the most popular being Project Management Professional (PMP)®. Currently, over 650,000 people hold the PMP® certification. To be certified as a PMP®, a person needs to have the required experience and education, pass an exami- nation on the PMBOK® Guide, and sign and be bound by a code of professional con- duct. PMI has also established a second certification Certified Associate in Project Management (CAPM) that is geared toward junior people working on projects before they are eligible to become PMPs. PMI also has established six additional credentials plus multiple practice standards and extensions to the PMBOK® Guide in areas such as pro- gram management, Agile, risk, scheduling, resource estimating, work breakdown struc- tures, earned value management, construction, and government.5

1-4b Project Management Body of Knowledge (PMBOK®) A Guide to the Project Management Body of Knowledge®, known as PMBOK®, consists of three introductory chapters covered collectively in Chapters 1, 2, and 3 of this book; five process groups; 10 knowledge areas; and 49 processes. A project management process group is a logical grouping of the project management processes to achieve specific project objectives. 6 The five process groups, paraphrased from the PMBOK® Guide, are as follows: 1. Initiating define a project or a new phase by obtaining authorization 2. Planning establish the project scope, refine objectives, and define plans and actions

to attain objectives 3. Executing complete the work defined to satisfy project specifications 4. Monitoring and controlling track, review, and regulate progress and performance,

identify changes required, and initiate changes 5. Closing formally complete or close project or phase 7

10 Part 1 Organizing Projects

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The 10 knowledge areas, paraphrased from the PMBOK® Guide, are as follows: 1. Integration management processes and activities to identify, define, combine,

unify, and coordinate the various processes and project management activities 2. Scope management processes to ensure that the project includes all the work

required, and only the work required, to complete the project successfully 3. Schedule management processes to manage timely completion of the project 4. Cost management processes involved in planning, estimating, budgeting, financ-

ing, funding, managing, and controlling costs so that the project can be completed within the approved budget

5. Quality management processes to incorporate the organization s quality policy regarding planning, managing, and controlling quality requirements to meet stake- holder expectations

6. Resource management processes to identify, acquire, and manage resources needed to successfully complete the project

7. Communications management processes to ensure timely and appropriate plan- ning, collection, creation, distribution, storage, retrieval, management, control, mon- itoring, and ultimate disposition of project information

8. Risk management processes of conducting risk management planning, identifica- tion, analysis, response planning, response implementation, and monitoring risk on a project

9. Procurement management processes to purchase or acquire products, services, or results from outside the project team

10. Stakeholder management processes to identify the people, groups, or organizations, that could impact or be impacted by the project, analyze their expectations and impact, and develop strategies for engaging them in project decisions and execution 8

Project Processes There are 49 individual project work processes that are each in a process group and a knowledge area. Exhibit 1.4 shows the general flow of when each process occurs during a project if one reads the chart from left to right. For example, the first two processes are to develop the project charter and identify stakeholders. Both occur during project initiation. The charter development is part of integration manage- ment, while stakeholder identification is part of stakeholder management. These pro- cesses flow from one into another, as shown in the more complete flowchart in the inside back cover of the text. These processes use inputs and create outputs. Many of the outputs are project charts and tools that are used to plan and control the project, as also shown on that complete flowchart. Other outputs are deliverables. A deliverable is any unique and verifiable product, result, or capability to perform a service that is produced to complete a process, phase, or project.9

One should remember that all these processes might not be required for all projects. These PMBOK processes are designed to be all-inclusive and are meant for large and complex projects.

1-4c The PMI Talent Triangle PMI research shows that to be a successful project manager, a person needs to develop knowledge and skills in technical areas, leadership, and strategic business management. The objectives in this book are grouped first with those core skills and knowledge that all project management classes would typically cover. Core objectives are those the authors firmly believe anyone who takes a course in project management should master. The core objectives include those that the Talent Triangle classifies as technical,

Chapter 1 Introduction to Project Management 11

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EXHIBIT 1.4

FLOWCHART OF PMBOK PROCESSES AND MAJOR OUTPUTS

13.1 Identify Stakeholders

INITIATINGKNOWLEDGE AREAS

Integration

Scope

Schedule

Cost

Quality

Resources

Communication

Risk

Procurement

Stakeholders

12.1 Plan Procurement Management

11.1 Plan Risk

Management

10.1 Plan Communications

Management

9.1 Plan Resource

Management

8.1 Plan Quality

Management

7.1 Plan Cost

Management

6.1 Plan Schedule

Management

5.1 Plan Scope

Management

Flowchart of PMBOK Processes and Major Deliverables

4.1 Develop Project Charter

6.5 Develop Schedule

5.2 Collect Requirements

5.4 Create WBS

5.3 Define Scope

PLANNING

4.2 Develop Project Management Plan

6.2 Define Activities

9.2 Estimate Activity

Resources

11.2 Identify Risks

11.3 Perform Qualitative

Risk Analysis

11.4 Perform Quantitative Risk Analysis

11.5 Plan Risk

Responses

13.2 Plan Stakeholders Engagement

6.4 Estimate activity

Durations

7.3 Determine Budget

7.2 Estimate Costs

6.3 Sequence Activities

Section 1.2 Foundational Elements

2.4 Organizational Systems 3.3 The Project Manager’s Sphere of Influence 3.4 Project Manager Competencies Selecting Projects

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11.6 Implement Risk Responses

13.3 Manage Stakeholder Engagement

13.4 Monitor Stakeholder Engagement

EXECUTING MONITORING & CONTROLLING CLOSING

4.3 Direct and Manage Project Work

4.4 Manage Project Knowledge

4.7 Close Project or Phase

6.6 Control Schedule

7.4 Control Costs

5.6 Control Scope

5.5 Validate Scope

8.2 Manage Quality

9.3 Acquire Resources

9.4 Develop Team

9.6 Control Resources

9.5 Manage Team

8.3 Control Quality

10.2 Manage Communications

11.7 Monitor Risks

10.3 Monitor Communications

12.2 Conduct Procurements

12.3 Control Procurements

4.6 Perform Integrated

Change Control

4.5 Monitor and Control

Project Work

KNOWLEDGE AREAS

Integration

Scope

Schedule

Cost

Quality

Resources

Communication

Risk

Procurement

Stakeholders

Benefits Analysis

Realizing Benefits

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behavioral, and strategic. More advanced technical objectives appear in some chapters for professors who wish to teach with a technical approach. More advanced behavioral objectives are also included in some chapters for professors who wish to emphasize the behavioral/leadership aspects of project management.

1-4d Selecting and Prioritizing Projects During the selecting and initiating stage of a project, one of the first tasks leaders must do is to identify potential projects. Ideally, this is accomplished in a systematic manner not just by chance. Some opportunities will present themselves. Other good opportunities need to be dis- covered. All parts of the organization should be involved. For example, salespeople can uncover opportunities through open discussions with existing and potential customers. Opera- tions staff members may identify potential productivity-enhancing projects. Everyone in the firm should be aware of industry trends and use this knowledge to identify potential projects.

Potential projects are identified based on business needs such as capability enhance- ment, new business opportunities, contractual obligations, changes in strategic direction, innovative business ideas, replacing obsolete equipment, or adopting new technology.

Once identified, organizations need to prioritize among the potential projects. The best way to do this is to determine which projects align best with the major goals of the firm. The executives in charge of selecting projects need to ensure overall organizational priori- ties are understood, communicated, and accepted. Once this common understanding is in place, it is easier to prioritize among the potential projects. The degree of formality used in selecting projects varies widely. Regardless of the company s size and the level of formality used, the prioritization efforts should include asking the following questions:

What value does each potential project bring to the organization? Are the demands of performing each project understood? Are the resources needed to perform the project available? Is there enthusiastic support both from the external customers and from one or more internal champions? Which projects will best help the organization achieve its goals?

One of the popular decision tools used to select projects is an evaluation model based on selection criteria; these selection criteria, in turn, are based on project attributes, orga- nizational indices, financial performance attributes, and strategic goals. More sophisticated tools like decision trees, analytical hierarchical process (AHP), expected net present value, and other economic evaluation models are sometimes used for project selection.

1-4e Project Goals and Constraints All projects should be undertaken to accomplish specific goals. Those goals can be described both by scope and by quality. Scope is a combination of product scope and project scope. Product scope is the entirety of what will be present in the actual project deliverables. Project scope is the entirety of what will and will not be done to meet the specified require- ments. Quality is the characteristics of a product or service that bear on its ability to satisfy stated or implied needs. 10 Taken together, scope and quality are often called performance and should result in outputs that customers can be satisfied with as they use them to effectively do their job. From a client perspective, projects generally have time and cost constraints. Thus, a project manager needs to be concerned with achieving desired scope and quality, subject to constraints of time and cost. If the project were to proceed exactly according to plan, it would be on time, on budget, and with the agreed-upon scope and the agreed-upon quality.

14 Part 1 Organizing Projects

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AGILE

However, many things can happen as a project is conducted. Obstacles or challenges that may limit the ability to perform often arise, as do opportunities to exceed original expecta- tions. A project manager needs to understand which of these four goals and constraints (scope, quality, time, budget) should take precedence and which can be sacrificed. The proj- ect manager needs to help the customer articulate how much he wants to enhance achieve- ment of one of these four dimensions. The customer must also state which dimension he is willing to sacrifice, by how much, and under what circumstances to receive better achieve- ment of the other one. For example, on a research and development (R&D) project, a cus- tomer may be willing to pay an extra $5,000 to finish the project 10 days early. On a church construction project, a customer may be willing to give up five extra light switches in exchange for greater confidence that the light system will work properly. Understanding the customer s desires in this manner enables a project manager to make good project deci- sions. A project manager can use a project customer trade-off matrix such as the one in Exhibit 1.5 to reflect the research and development project trade-offs discussed above.

In addition, project plans undergo changes due to uncertainties and unknowns asso- ciated with the project. These changes must be assessed for their impact on cost and duration of the project before implementing them.

From an internal perspective, a project manager also needs to consider two more constraints: the amount of resources available and the decision maker s risk tolerance.

From an Agile perspective, in a given iteration, resources (including cost) and schedule are considered fixed and what can vary is value to the customer.

1-4f Defining Project Success and Failure Project success is creating deliverables that include all of the agreed-upon features (meet scope goals). The outputs should satisfy all specifications and please the project s custo- mers. The customers need to be able to use the outputs effectively as they do their work (meet quality goals). The project should be completed on schedule and on budget (meet time and cost constraints).

Project success also includes other considerations. A successful project is one that is completed without heroics that is, people should not burn themselves out to complete the project. Those people who work on the project should learn new skills and/or refine existing skills. Organizational learning should take place and be captured for future projects. Finally, the performing organization should reap business-level benefits such as development of

EXHIBIT 1.5

PROJECT CUSTOMER TRADE-OFF MATRIX

ENHANCE MEET SACRIFICE

Cost Pay up to $5,000 extra if it saves 10 days

Schedule Save up to 10 days

Quality Must meet

Scope Must meet

Source: Adapted from Timothy J. Kloppenborg and Joseph A. Petrick, Managing Project Qualify (Vienna, VA: Management Concepts, 2002): 46.

Chapter 1 Introduction to Project Management 15

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new products, increased market share, increased profitability, decreased cost, and so on. A contemporary and complete view of project success is shown in Exhibit 1.6.

Project failure can be described as not meeting the success criteria listed in Exhibit 1.6. Many projects are fully successful in some ways but less successful in other aspects. The goal of excellent project management is to reach high levels of success on all mea- sures on all projects. Serious project failure when some of the success criteria are missed by a large amount and/or when several of the success criteria are missed can be attributed to numerous causes. In each chapter of this textbook, more specific possible failure causes will be covered, along with how to avoid them, but some basic causes of failure are as follows:

Incomplete or unclear requirements Inadequate user involvement Inadequate resources Unrealistic time demands Unclear or unrealistic expectations Inadequate executive support Changing requirements Inadequate planning

1-4g Using Microsoft Project to Help Plan and Measure Projects A useful tool to capture and conveniently display a variety of important project data is Microsoft® (MS) Project. MS Project is demonstrated in a step-by-step fashion using screen shots from a single integrated project throughout the book. If you re using the MindTap prod- uct for this book, you have access to short videos demonstrating how to use the software.

1-4h Types of Projects Four ways to classify projects that help people understand the unique needs of each are by industry, size, understanding of project scope, and application.

CLASSIFYING BY INDUSTRY Projects can be classified in a variety of ways. One method is by industry, which is useful in that projects in different industries often have unique requirements. Several industry-specific project life cycle models are in use, and various trade groups and special interest groups can provide guidance.

EXHIBIT 1.6

PROJECT SUCCESS

Meeting Agreements Cost, schedule, and specifications met

Customer s Success Needs met, deliverables used, customer satisfied

Performing Organization s Success Market share, new products, new technology

Project Team s Success Loyalty, development, satisfaction

Source: Adapted from Timothy J. Kloppenborg, Debbie Tesch, and Ravi Chinta, 21st Century Project Success Mea- sures: Evolution, Interpretation, and Direction, Proceedings, PMI Research and Education Conference 2012 (Limer- ick, Ireland, July 2012).

16 Part 1 Organizing Projects

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AGILE

CLASSIFYING BY SIZE Another method of classifying projects is by size. Large pro- jects often require more detailed planning and control. Typically, most of the processes outlined in PMBOK are relevant and applicable for large projects that require a few years and hundreds of project team members for execution. However, even the smallest pro- jects still need to use planning and control just in a more simplified manner. For exam- ple, construction of a multistory building in China would require a highly detailed construction schedule, but even a much simpler construction project of building a one- car garage also needs to follow a schedule.

CLASSIFYING BY TIMING OF PROJECT SCOPE CLARITY A third method of classi- fying projects deals with how early in the project the project manager and team are likely to be able to determine with a high degree of certainty what the project scope will be. For example, it may be rather simple to calculate the cubic feet of concrete that are required to pour a parking lot and, therefore, how much work is involved. At the opposite end of the spectrum, when developing a new pharmaceutical or developing a new technology, very little may be determined in the project until the results of some early experiments are reported. Only after analyzing these early experiment results is it possible to begin estimat- ing cost and determining the schedule with confidence. For such projects, change is con- stant and is caused by uncertainty and unknowns associated with these projects. Consequently, it is important to manage project risks. The planning becomes iterative, with more detail as it becomes available. In the first case, predictive or plan-driven project techniques may work well. In the second case, adaptive or change-driven methods to iter- atively determine the scope and plan for risks may be more important.

Agile methods are increasingly being used when scope clarity emerges slowly.

CLASSIFYING BY APPLICATION For the purpose of this book, we will discuss many types of projects, such as those dealing with organizational change, quality and produc- tivity improvement, research and development, information systems, and construction. Many of these projects include extensive cross-functional work, which contributes to the challenges associated with managing project teams and the triple constraints of scope, duration, and cost. Remember, all projects require planning and control. Part of the art of project management is determining when to use certain techniques, how much detail to use, and how to tailor the techniques to the needs of a specific project.

1-4i Scalability of Project Tools Projects range tremendously in size and complexity. In considering construction projects, think of the range from building a simple carport to building an office tower. In both cases, one would need to determine the wants and needs of the customer(s), understand the amount of work involved, determine a budget and schedule, decide what workers are available and who will do which tasks, and then manage the construction until the owner accepts the project results. It should be easy to see that while both projects require planning and control, the level of detail for the carport is a tiny fraction of that for the office tower. In this book, we first demonstrate concepts and techniques at a middle level and then use a variety of project exam- ples to demonstrate how to scale the complexity of the techniques up or down.

1-5 Project Roles To successfully initiate, plan, and execute projects, a variety of executive, management, and associate roles must be accomplished. Traditional project roles are shown in Exhibit 1.7.

Chapter 1 Introduction to Project Management 17

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In a large organization, a person often fills only one of these roles; sometimes, more than one person fills a particular role. In small organizations, the same person may fill more than one role. The names of the roles also vary by organization. The work of each role must be accomplished by someone. Project managers are successful when they build strong working relationships with the individuals who execute each of these roles.

1-5a Project Executive-Level Roles The four traditional project executive-level roles are the sponsor, customer, steering team, and the project management office. The first executive-level project role is that of sponsor. A modern definition of executive sponsor is a senior manager serving in a formal role given authority and responsibility for successful completion of a project deemed strategic to an organization s success. 11 This textbook expands the sponsor s role to include taking an active role in chartering the project, reviewing progress reports, playing a behind-the-scenes role in mentoring, and assisting the project man- ager throughout the project life, specifically in making critical decisions and supporting the project team.

The second executive-level project role is that of the customer. The customer needs to ensure that a good contractor for external projects or project manager for internal pro- jects is selected, make sure requirements are clear, and maintain communications throughout the project. In many traditional projects, the sponsor carries out the role of customer. On many Agile projects, the customer role is quite significant.

The third executive role is the steering or leadership team for an organization. This is often the top leader (CEO or other officer) and his or her direct reports. From a proj- ect standpoint, the important role for this team is to select, prioritize, and resource pro- jects in accordance with the organization s strategic planning and to ensure that accurate progress is reported and necessary adjustments are made. Another important function of this executive role is midstream evaluation of projects and portfolios to ensure that they stay on track and produce expected results.

The fourth executive-level project role is that of project management office (PMO), which is defined as a management structure that standardizes the project-related gov- ernance processes and facilitates the sharing of resources, methodologies, tools and techniques. 12 The PMO work can range from supporting project managers to control- ling them by requiring compliance to directives in actually managing projects. The PMO supports projects by mentoring, training, and assisting project teams and pro- motes enterprise functions such as developing and augmenting processes, creating and maintaining historical information, and advocating for project management discipline.

EXHIBIT 1.7

TRADITIONAL PROJECT ROLES

EXECUTIVE ROLES MANAGERIAL ROLES ASSOCIATE ROLES

Sponsor Project Manager Core Team Member

Customer Functional Manager Subject Matter Expert (SME)

Steering Team Facilitator

Project Management Office

18 Part 1 Organizing Projects

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AGILE Agile project management roles are shown in Exhibit 1.8. Most of the same work stillneeds to be accomplished in organizations using Agile methods. Some of the work is performed by different people because of the emphasis on empowering teams, and some is performed at different times as requirements and scope emerge gradually instead of just at the project start. Collaborative effort and communication, specifically with the client, are common features of Agile project teams.

On Agile projects, arguably the most essential role is the customer representative sometimes called the product owner. This person ensures that the needs and wants of the various constituents in the customer s organization are identified and prioritized and that project progress and decisions continually support the customer s desires.

In Agile projects, the customer representative role is so continuous and active that we show it as both an executive- and managerial-level role. The customer representative does much of what a sponsor might in traditional projects, but there also may be a des- ignated sponsor (sometimes known as a product manager) who controls the budget. A portfolio team often performs much of the work of a traditional steering team, and a similar office that may be titled differently such as Scrum office performs much of the work of a project office.

1-5b Project Management-Level Roles The most obvious management-level role is the project manager. The project manager is the person assigned by the performing organization to lead the team that is responsible

for achieving the project objectives. 13 The project manager is normally directly account- able for the project results, schedule, and budget. This person is the main communicator, is responsible for the planning and execution of the project, and works on the project from start to finish. The project manager often must get things done through the power of influ- ence since his or her formal power may be limited. The contemporary approach to project management is to lead in a facilitating manner to the extent possible.

Another key management role is the functional manager (sometimes called a resource manager). Functional managers are the department or division heads the ongoing man- agers of the organization. They normally determine how the work of the project is to be accomplished, often supervise that work, and often negotiate with the project manager regarding which workers are assigned to the project.

The third managerial role is that of facilitator. If the project is complex and/or con- troversial, it sometimes makes sense to have another person help the project manager with the process of running meetings and making decisions.

EXHIBIT 1.8

AGILE PROJECT ROLES

EXECUTIVE ROLES MANAGERIAL ROLES ASSOCIATE ROLES

Customer (product owner) Customer (product owner) Team Member

Sponsor (product manager) Scrum Master

Portfolio Team Functional Manager

Project Management/Scrum Office Coach

Chapter 1 Introduction to Project Management 19

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AGILE

AGILE

On Agile projects, the customer representative or product owner works with the team on a continuous basis, often performing some of the work a project manager might on a traditional project. The Scrum Master serves and leads in a facilitating and collaborative manner. This is a more limited, yet more empowering role than the traditional project manager. The functional manager has a similar, but sometimes more limited, role than the traditional department head. Many organizations using Agile also have a coach who acts as a facilitator and trainer.

1-5c Project Associate-Level Roles The project team is composed of a selected group of individuals with complimentary skills and disciplines who are required to work together on interdependent and interrelated tasks for a predetermined period to meet a specific purpose or goal. 14 In this book, these individuals are called core team members. The core team, with the project manager, does most of the planning and makes most of the project-level decisions.

The temporary members who are brought on board as needed are called subject mat- ter experts.

The team members in Agile projects are assigned fulltime as much as possible, so there are few subject matter experts. The teams are self-governing, so they perform many of the plan- ning and coordinating activities that a project manager would typically perform. Small and co-located teams often characterize Agile projects, and they work closely together.

1-6 Overview of the Book Contemporary project management blends traditional, plan-driven, and contemporary Agile approaches. It is integrative, iterative, and collaborative. Project management is integrative since it consists of the 10 knowledge areas and the 5 process groups described in the PMBOK® Guide, and one must integrate all of them into one coherent and ethical whole. Project management is iterative in that one starts by planning at a high level and then repeats the planning in greater detail as more information becomes available and the date for the work performance approaches. Project managers need to balance planning, control, and agility. Project management is collaborative since there are many stakeholders to be satisfied and a team of workers with various skills and ideas who need to work together to plan and complete the project. With these thoughts of integration, iteration, and collaboration in mind, this book has four major parts: Organizing and Initiating Projects, Leading Projects, Planning Projects, and Perform- ing Projects.

1-6a Part 1: Organizing and Initiating Projects Part 1 consists of three chapters that deal with organizing for and initiating projects.

CHAPTER 2 Chapter 2 covers project selection and prioritization. This includes both internal projects, which should be selected in a manner consistent with the strategic planning of the organization, and external projects. It also explains how to respond to requests for proposals.

CHAPTER 3 Chapter 3 discusses chartering projects. The project charter is a docu- ment issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational

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resources to project activities. 15 The charter can further be considered an agreement by which the project sponsor and project manager (and often the project core team) agree at a high level what the project is, why it is important, key milestone points in the sched- ule, major risks, and possibly a few other items. It allows the project manager and core team to understand and agree to what is expected of them.

Finally, Microsoft Project, a tool that facilitates effective project planning, controlling, and communicating, is introduced. Microsoft Project is utilized in eight chapters to dem- onstrate how to automate various project planning and control techniques. The examples and illustrations in this book use Microsoft Project 2016. If a person is using an earlier version of Microsoft Project, there are slight differences. If a person is using a competing project scheduling package, the intent remains the same, but the mechanics of how to create certain documents may differ.

1-6b Part 2: Leading Projects Part 2 consists of three chapters on leadership aspects of projects.

CHAPTER 4 Chapter 4 focuses on organizational structure, organizational culture, project life cycle, and project management roles of the parent organization. The orga- nizational structure section describes ways an organization can be configured and the advantages and disadvantages of each in regard to managing projects. Next covered is the culture of the parent organization and the impact it has on the ability to effectively plan and manage projects. The industry and type of project often encourage managers to select or customize a project life cycle model. The roles covered include executive-, managerial-, and associate-level responsibilities that must be performed. The demands of each role are explained, along with suggestions for how to select and develop people to effectively fill each role, considering both the role and the unique abilities and inter- ests of each person.

CHAPTER 5 Chapter 5 describes how to carry out the project work with a project team in order to accomplish the project objectives. The project manager needs to simultaneously champion the needs of the project, the team, and the parent organization. The project manager manages the people side of the project by effectively using the stages of project team development, assessing and building the team members capability, supervising their work, managing and improving their decision making, and helping them maintain enthu- siasm and effective time management. Project managers guide their team in managing and controlling stakeholder engagement.

CHAPTER 6 Chapter 6 begins by identifying the various project stakeholders, their wants and needs, and how to prioritize decisions among them. Chapter 5 also includes communications planning for the project because poor communication can doom an otherwise well-planned and well-managed project. The information needs of each stake- holder group should be included in the communications plan.

1-6c Part 3: Planning Projects Part 3 includes six chapters dealing with various aspects of project planning.

CHAPTER 7 Chapter 7 shows how to determine the project scope and outline it in the work breakdown structure (WBS). The WBS is deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. 16

Chapter 1 Introduction to Project Management 21

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The WBS is a document that progressively breaks the project down into its compo- nents so that each piece can be described as a deliverable for which one person can plan, estimate the costs, estimate the time, assign resources, manage, and be held accountable for the results. This is a critical document since it is the foundation for most of the other planning and control activities. The chapter ends with instructions on putting a WBS into Microsoft Project.

CHAPTER 8 Chapter 8 deals with scheduling projects. The project schedule is an output of a schedule model instance that presents the time-based information required by the communication plan, including activities with planned dates, durations, mile- stone dates, and resource allocation.17 This chapter starts with background information on project scheduling and then covers construction of schedules by defining activities, determining the order in which they need to be accomplished, estimating the duration for each, and then calculating the schedule. Chapter 8 also includes instructions on how to interpret a project schedule; clearly communicate it using a bar chart called a Gantt chart; and use Microsoft Project to construct, interpret, and communicate proj- ect schedules.

CHAPTER 9 Chapter 9 demonstrates how to schedule resources on projects: determin- ing the need for workers, understanding who is available, and assigning people. All of the techniques of resourcing projects are integrated with the behavioral aspects of how to deal effectively and ethically with the people involved. Resource needs are shown on a Gantt chart developed in Chapter 8, the responsibilities are shown as they change over time, conflicts and overloads are identified, and methods for resolving conflicts are intro- duced. Alternative approaches for creating and compressing schedules are shown. Many of the techniques in this chapter are also shown with MS Project.

CHAPTER 10 Chapter 10 discusses the project budget, which is dependent on both the schedule and the resource needs developed in the previous two chapters. The project budget is The sum of work package cost estimates, contingency reserve, and manage- ment reserve.18 Cost planning, estimating, budgeting, establishing cost control, and using MS Project for project budgets are all included.

CHAPTER 11 Chapter 11 starts with establishing a risk management plan. It covers methods for identifying potential risks and for determining which risks are big enough to justify specific plans for either preventing the risk event from happening or dealing effectively with risk events that do happen. Finally, in risk response planning, strategies for dealing with both positive risks (opportunities) and negative risks (threats) are discussed.

CHAPTER 12 Chapter 12 begins with a discussion of how modern project quality con- cepts have evolved. Then it deals with core project quality demands of stakeholder satis- faction, empowered performance, fact-based management, and process management. The third topic of this chapter is developing the project quality plan. Next, the chapter describes various quality improvement tools for projects.

Since Chapter 12 is the last planning chapter, it concludes with a method of integrating the various sections developed in the previous chapters into a single, coherent project plan. Conflicts that are discovered should be resolved, judgment needs to be applied to ensure that the overall plan really makes sense, and one or more kickoff meetings are normally held to inform all of the project stakeholders and to solicit their enthusiastic acceptance of the plan. At this point, the project schedule and budget can be baselined in MS Project.

22 Part 1 Organizing Projects

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While bits of the project that might have caused delays if they were not started early may already be in progress, the formal kickoff is the signal that the project is under way!

1-6d Part 4: Performing Projects Part 3 includes three chapters that deal with performing the project.

CHAPTER 13 Chapter 13 begins by introducing relevant supply chain concepts such as a supply chain view of projects, the components that form a supply chain, factors to con- sider when dealing with a supply chain, and methods of improving the performance of a supply chain. Make-or-buy analysis and contract types lead the reader through procure- ment planning. Identifying and selecting sellers lead into managing contracts to assure receipt of promised supplies and services according to contractual terms. The chapter ends with advantages and requirements of effective project partnering.

CHAPTER 14 While the project work is being performed, the project manager needs to determine that the desired results are achieved the subject of Chapter 14. Monitor and control project work is defined as the process of tracking, reviewing, and report- ing the progress to meet the performance objectives defined in the project management plan. 19 This starts with gathering performance data already identified during project initiating and planning. The actual performance data are then compared to the desired performance data so that both corrective and preventive actions can be used to ensure that the amount and quality of the project work meet expectations. MS Project can be used for this progress reporting and for making adjustments. Earned value analysis is used to determine exactly how actual cost and schedule progress are compared with planned progress. Overcoming obstacles, managing changes, resolving conflicts, repri- oritizing work, and creating a transition plan all lead up to customer acceptance of the project deliverables.

CHAPTER 15 Chapter 15 deals with finishing projects and realizing benefits. Close project or phase is defined as all the work needed to formally close a project or phase. This chapter includes a section on terminating projects early, in case either the project is not doing well or conditions have changed and the project results are no longer needed, and a section on timely termination of successful projects. Topics include how to secure customer feedback and use it along with the team s experiences to create lessons learned for the organization; reassign workers and reward those participants who deserve recog- nition; celebrate success; perform a variety of closure activities; and provide ongoing sup- port for the organization that is using the results of the project. Finally, after the project deliverables have been used for some time, an assessment should determine if the prom- ised benefits are being realized.

PMP/CAPM Study Ideas Everything in this book is designed to mirror and explain the content in the latest edition the sixth of the Guide to the Project Management Body of Knowledge (PMBOK), the international standard produced by the Project Management Institute (PMI). Not only will the content and questions in this book help you learn the best prac- tices for managing and executing projects, but they will also help you prepare for one of the licensing exams if you choose to pursue a project management credential such as the CAPM or PMP. More information on these and other PMI certifications can be found at www.pmi.org/certifications/types.

Chapter 1 Introduction to Project Management 23

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While either of these credentials can open doors for you professionally, the effort needed to acquire them should not be underestimated. In addition to work and educa- tion requirements (specified at the website noted above), you will need to pass an online test consisting of 150 (CAPM) or 200 (PMP) questions, respectively. PMI does not pub- lish the exact pass rates of either of these tests, but they are designed to be difficult. It will not be enough for you to just memorize knowledge areas, process groups, and inputs and outputs; rather, you will need a solid understanding of each of these in order to answer higher-level thinking questions of a wide variety. In this book, we will provide dozens of questions in each chapter for you to use as a guide.

Summary A project is an organized set of work efforts undertaken to produce a unique output subject to limitations of time and resources such as materials, equipment, tools, and people. Since the world is changing more rapidly than in the past, many people spend an increas- ing amount of their working time on projects. Project management includes work processes that initiate, plan, execute, monitor, control, and close project work. During these processes, trade-offs must be made among the scope, quality, cost, and schedule, so that the project results meet the agreed-upon require- ments, are useful to the customers, and promote the organization.

All projects, regardless of size, complexity, or appli- cation, need to be planned and managed. While the level of detail and specific methods vary widely, all pro- jects need to follow generally accepted methods. PMI is a large professional organization devoted to promoting and standardizing project management understanding and methods. One of PMI s standards, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), is composed of five process groups: initiating,

planning, executing, monitoring and controlling, and closing; along with ten knowledge areas: integration, scope, schedule, cost, quality, resources, communica- tions, risk, procurement, and stakeholders.

To successfully initiate, plan, and execute projects, two more things are needed. One is to understand what project success is and what drives it, along with what project failure is and its major causes. The other is an understanding of the various executive-, managerial-, and associate-level roles in project management. This book is organized to be useful to students who will enter a variety of industries and be assigned to projects of all sizes and levels of complexity. Students will learn how to understand and effectively manage each of these process groups and knowledge areas. Microsoft Project 2016 is used in eight chapters to illustrate how to automate various planning, scheduling, resour- cing, budgeting, and controlling activities. All defini- tions used are from the PMBOK Guide, sixth edition. This book follows a chronological approach through- out a project s life cycle, emphasizing knowledge and skills that lead to project success.

Key Terms Consistent with PMI Standards and Guides The glossary in this book uses terms as defined in various Project Management Institute guides and standards where they are distinct. The glossary also uses commonly understood definitions where terms are standard.

project, 4 stakeholders, 4 project management, 4 soft skills, 7 hard skills, 7 functional manager, 7 project life cycle, 7 project management process group, 10 initiating processes, 10 planning processes, 10

executing processes, 10 monitoring and controlling processes, 10 closing processes, 10 integration management, 11 scope management, 11 schedule management, 11 cost management, 11 quality management, 11 resources management, 11 communications management, 11

24 Part 1 Organizing Projects

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risk management, 11 procurement management, 11 stakeholder management, 11 deliverable, 12 scope, 13 product scope, 13 project scope, 13 quality, 13 sponsor, 16 project management office (PMO), 17

customer, 17 steering or leadership team, 17 project manager, 18 project team, 18 project charter, 19 work breakdown structure (WBS), 20 project schedule, 20 project budget, 20 monitor and control project work, 21 close project or phase, 21

Chapter Review Questions 1. What is a project? 2. What is project management? 3. How are projects different from ongoing

operations? 4. What types of constraints are common to most

projects? 5. What are the three components of the Talent

Triangle? 6. At what stage of a project life cycle are the major-

ity of the hands-on tasks completed? 7. During which stage of the project life cycle are

loose ends tied up? 8. What are the five process groups of project

management? 9. Which process group defines a new project or

phase by obtaining authorization?

10. What are the 10 project management knowledge areas?

11. What two project dimensions are components of project performance?

12. How do you define project success? 13. How do you define project failure? 14. List four common causes of project failure. 15. What are three common ways of classifying

projects? 16. What is predictive or plan-driven planning, and

when should it be used? 17. What is adaptive or change-driven planning, and

when should it be used? 18. What makes someone a project stakeholder? 19. What are the three project executive-level roles? 20. List and describe each of the managerial and

associate project roles.

Discussion Questions 1. Using an example of your own, describe a project

in terms that are common to most projects. 2. Why are more organizations using project man-

agement? If you were an executive, how would you justify your decision to use project manage- ment to the board of trustees?

3. Explain how to scale up or down the complexity of project planning and management tools and what effect, if any, this might have on the project life cycle.

4. List and describe several issues that pertain to each stage of the project life cycle.

5. Put the five project management process groups in order from the one that generally requires the least work to the one that requires the most.

6. Name the 10 project management knowledge areas, and briefly summarize each.

7. Discuss how a project could be successful in terms of some measures yet unsuccessful by others.

8. What does project failure mean? What are some examples?

9. Compare and contrast advantages and disadvan- tages of predictive/plan-driven and adaptive/ change-driven project life cycle approaches.

10. You are given a project to manage. How do you decide whether to use a predictive or adaptive approach?

11. Contrast project managers and functional managers. 12. List as many project roles as you can, and iden-

tify what each one is responsible for in terms of the project.

Chapter 1 Introduction to Project Management 25

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PMBOK® Guide Questions The purpose of these questions is to help visualize the type of questions on PMP and CAPM exams.

1. Which project role provides resources or support for the project, promotes and protects the project at higher levels of management, and takes an active role in the project from the chartering stage through project closure? a. functional manager b. project manager c. project team member d. project sponsor

2. Which PMBOK® Guide Knowledge Area includes those processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully? a. cost management b. scope management c. risk management d. quality management

3. In order to be successful, the project team must be able to assess the needs of stakeholders and manage their expectations through effective communications. At the same time, they must balance competing demands among project scope, schedule, budget, risk, quality, and resources, which are also known as project

. a. plan elements b. deliverables c. constraints d. targets

4. Projects pass through a series of phases as they move from initiation to project closure. The names and number of these phases can vary sig- nificantly depending on the organization, the type of application, industry, or technology employed. These phases create the framework for the project, and are referred to collectively as the . a. project life cycle b. project management information system

(PMIS) c. product life cycle d. Talent Triangle

5. Based on PMI s definition, which of these is a good example of a project?

a. manufacturing a standard commodity b. following policies and procedures for procur-

ing an item c. designing and launching a new website d. using a checklist to perform quality control

6. When would a predictive project life cycle be the preferred approach? a. when the high-level vision has been devel-

oped, but the product scope is not well defined

b. when the environment is changing rapidly c. when the product to be delivered is well

understood d. when the product will be created through a

series of repeated cycles 7. To be effective, a project manager needs to pos-

sess all of the following competencies except .

a. personal effectiveness attitudes, core per- sonality traits, leadership

b. authority power or right granted by the organization

c. performance what project managers can accomplish while applying their project man- agement knowledge

d. knowledge of project management understanding of project management tools and techniques

8. In Adaptive Life Cycles (change-driven or Agile methods), . a. the overall scope of the project is fixed, and

the time and cost are developed incrementally

b. the overall cost is fixed, and the project scope and schedule are developed iteratively

c. the time and cost are fixed, but the scope is developed iteratively

d. change control is very important 9. The two traditional project management

associate-level roles are different in each of the following ways except . a. duration of time spent on project b. ability to work within project constraints c. degree of input contributed to project planning d. skill set

26 Part 1 Organizing Projects

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10. A freelance project manager is brought in by Company X to lead a large, expensive project. This project manager has excellent leadership skills and a strong technical understanding of the project. In order for her to optimize every component of the Talent Triangle, what might be a good activity for the project manager at the start of her time with Company X?

a. familiarize herself with the long-term objec- tives of Company X

b. host an icebreaker for all team members c. attend a seminar on advanced leadership

techniques d. send an email including her résumé to all

SMEs to ensure they are aware of her techni- cal background

I N T E G R A T E D E X A M P L E P R O J E C T S

We will use two example projects throughout all 15 chapters of this book. One will be a construction project suited to mostly traditional project planning and management. The other will be a development project suited more toward Agile project planning and management. In this chapter, we

will introduce both of them. In subsequent chapters, we will choose one to demonstrate techniques and concepts from the chapter and ask leading questions of the other one. We will alternate chapters so professors can choose to use the questions as assignments if they wish.

SUBURBAN HOMES CONSTRUCTION PROJECT

Purchasing a new home is the single largest investment most of us will make in our lifetime. You can either purchase the home from a reputed real estate building company or manage the construction of your home using project management principles that you have mastered. The latter approach can save significant amounts of money over the life of a typical 30-year mortgage. Additionally, it is likely to provide you with one of the most satisfying experiences in your life because you will get an opportunity to see the results of choices you made in building your home.1 However, on the downside, if you manage the project poorly, it also has the potential on many levels to be a disaster.

The experience of managing the construction of a single-family home provides a coherent account of costs, benefits, other considerations related to construction, risks, hazards, and critical decisions. The experience also has the potential for joy if the project is a successful endeavor.

Suburban Homes is a medium-sized, fast-growing con- struction company in the Midwest region of the United States. Due to its significant growth and good reputation for building quality single-family homes and townhomes, the

company decided to expand its business to several Southern states in the United States. However, Suburban Homes rec- ognized the scope for managing resources effectively and efficiently to increase profits. It has decided to formalize proj- ect management practices by developing and implementing standard and promising processes, tools, and techniques. For this purpose, the company was looking for a competent project manager to manage its projects. They hired Adam Smith as their new project manager.

Adam Smith had worked for several years in the construc- tion industry and supplemented his experience with project management education. Consequently, he gained considerable experience and developed expertise in managing construction projects. Adam believes in managing projects by adhering to various project management processes, tools, and techniques. In his new position as the project manager, Adam s primary task is to improve the performance of project management and increase the project success rate.

What advice would you offer to Adam Smith?

1Suprick J. and Anantatmula V. (2010).

Chapter 1 Introduction to Project Management 27

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Semester Project Instructions This book is designed to give your professors the option to have you practice the concepts and techniques from each chapter on a real project. Often, the project chosen will be for a nonprofit group of some kind such as a United Way agency, a church, or a school. The project could, however, be for a company or a part of the uni- versity. The semester project can often be one that sev- eral students will be assigned to work on as a team.

Each chapter provides suggested assignments to practice project management skills on the real or potential project you are using. Depending on the emphasis your professor chooses, you may need to per- form some, most, or all of these assignments. At a min- imum, your professor will probably assign the charter, work breakdown structure, and schedule.

In any case, each of the following chapters prompts you to perform various activities to plan and execute the project. At some point in the first couple of weeks, your professor will probably invite at least one repre- sentative from each organization to your class to intro- duce their project and to meet you. We will call these

persons sponsors and define their role more fully in Chapter 3. Since this first chapter is a broad introduc- tion to project management, your task for the Chapter 1 sample project may be just to familiarize yourself with your new student team, your sponsor, your sponsor s organization, and the overall direction of your project. If you have enough input from your sponsor, your professor may also ask you to create a customer trade-off matrix, as shown in Exhibit 1.6 and/or a definition of success for your project, as in Exhibit 1.7. Your professor also may ask you to answer certain specific and/or open-ended questions concern- ing your newly assigned project.

Subsequent chapters give you more in-depth tools to acclimate you to your project, the organization you will be working for, and the various stakeholders who have an interest in the project. For example, in the next chap- ter, you learn how project selection flows from an orga- nization s strategic planning, and you should seek to learn why this project was chosen and how it supports the strategic goals of the organization.

CASA DE PAZ DEVELOPMENT PROJECT

Casa de Paz is an intentional community supporting the trans- formative journey of recovery for Latina women and their chil- dren. It is a 501(c)(3) nonprofit organization that is just starting. The vision is to create a communal living space for multiple Latina women and their children. The women and their chil- dren also would have access to a variety of service providers in the form of graduate students living in the same building. Two possible buildings have been identified. Some of the many things that need to take place for this vision to become a reality are board and working group structuring, fundraising, accountancy, promotion, website development, community relations development, building purchase and renovation, pro- gram development, legal services, educational advocacy, and English as a Second Language (ESL) tutoring, among others. While every project has trade-offs, success on this project will be measured more on the creation of a safe environment with needed services than on cost and schedule.

Casadepazcinci.org

Why Is This Project So Important? Hundreds of thousands of people are fleeing violence in their home countries. In the United States, many of them

come from Latin America. Often, they lack communities for support and integration as they transition from their countries of origin. In addition, many face many obsta- cles to stability and flourishing. How would you put your life back together if you were a mother fleeing vio- lence in your country of origin, and once in a new coun- try, that same violence continues in your new home? Few spaces offer stability and encouragement in such circumstances, much less cultural sensitivities and pro- fessional services to facilitate the transformation to self- sufficiency and success. Casa de Paz/House of Peace is an intentional community that encourages and draws out women s resilience both by meeting them where they are and providing time and space to heal, recover, and grow. Most shelters for women and children are tempo- rary; the average stay is seven to twelve days. Casa de Paz provides up to six months of stability, community, and professional services to support women s growth along a continuum of self-sufficiency matrixes. It is a community that recognizes women s dignity and cele- brates each step toward the realization of their gifts as human beings.

28 Part 1 Organizing Projects

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PROJECT MANAGEMENT IN ACTION

Using Appreciative Inquiry to Understand Project Management

Each project creates a unique product, service, or result that certain stakeholders desire. Project success requires understanding stakeholder require- ments, clarifying project expectations, and agreeing upon project scope. As such, it is imperative to iden- tify relevant stakeholders and to have a constructive engagement with them. One tool that is helpful for allowing such engagement and for navigating through complexities is appreciative inquiry (Al).

What Is Appreciative Inquiry? The principles: Appreciative inquiry (AI) is a positive philosophy for change, wherein whole systems convene to inquire for change (Cooperrider, 2003). AI recognizes the power of the whole and builds on conversational learning that emerges out of the whole. It operates on the belief that human systems move in the direction of their shared image and idea of the future, and that change is based on intentional and positive inquiry into what has worked best in the past. In this sense, AI suggests that human organizing and change are a relational process of inquiry that is grounded in affirmation and appreciation. Typically, the process works its way through the four phases of Dis- covery, Dream, Design, and Delivery (Conklin, 2009).

Implications of AI on Defining Project Scope Project success partially depends upon identifying key stakeholders: eliciting their true wants and needs to

determine project scope; and keeping them appropri- ately engaged throughout the entire project. The early involvement is critical because it lays out clear goals and boundaries of project scope. However, eliciting accurate responses may be difficult, especially since many projects may be planned and conducted in an atmosphere of uncertainty. The ongoing involvement helps to ensure stakeholders know what they will get from the project and will be pleased.

Appreciative inquiry is a tool that may assist proj- ect stakeholders to navigate through their inquiries via positive conversations. For example, a typical process may look like this:

Discovery (What has been?): This phase inquires into and discovers the positive capacity of a group, organization, or community. People are encouraged to use stories to describe their strengths, assets, peak experiences, and successes to understand the unique conditions that made their moments of excellence possible. In this step, stakeholders reflect on the past to recollect instances when they believed they could clearly articulate their true needs and wants; and when their needs and wants were folded into the project scope. Through storytelling, they collectively discover the process of project selection and prioriti- zation and articulate a gauge of project success. As they discuss, they start generating a dense web of understanding an understanding and an apprecia- tion of all their capacities that make moments of excellence possible. Agile projects use a similar method of storytelling to understand user require- ments and ultimately define project scope.

Dreaming (What could be?): Building on the moments of excellence of the participants, this phase encourages the participants to imagine what would happen if their moments of excellence were to become a norm. Participants dream for the ideal con- ditions and build hope and possibility of an ideal future. As people share their stories, the focus of the process now shifts to dreaming of a perfect, desirable state for the stakeholders. Through this journey, the goal should be to enable the participants to build positive energy around their strengths and also to dream about the direction in which they feel comfort- able moving.

Delivery: What will

be?

Discovery: What has

been?

Design: What

should be?

Dream: What

could be?

Chapter 1 Introduction to Project Management 29

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References A Guide to the Project Management Body of Knowledge

(PMBOK® Guide), 6th ed. Exposure Draft (Newtown Square, PA: Project Management Institute, 2017).

Anantatmula, Vittal S., Project Teams: A Structured Developmental Approach, 2016, New York: Business Expert Press.

Chandler, Dawne E., and Payson Hall, Improving Executive Sponsorship of Projects: A Holistic Approach, 2017, New York: Business Expert Press.

Cooper, Robert G., Winning at New Products: Path- ways to Profitable Innovation, Proceedings, PMI Research Conference 2006 (Montreal, July 2006).

Crowe, Andy, Alpha Project Managers: What the Top 2% Know That Everyone Else Does Not (Atlanta: Velociteach, 2006).

Kloppenborg, Timothy J., and Warren A. Opfer, The Current State of Project Management Research: Trends, Interpretations, and Predictions, Project Management Journal 33 (2) (June 2002): 5 18.

Kloppenborg, Timothy J., Debbie Tesch, and Broderick King, 21st Century Project Success Measures: Evo- lution, Interpretation, and Direction, Proceedings,

PMI Research and Education Conference 2012 (Dublin, Ireland, July 2012).

Muller, R., and R. Turner, The Influence of Project Managers on Project Success Criteria by Type of Project, European Management Journal 25 (4) (2007): 298 309.

PMI Lexicon of Project Management Terms Version 3.0, 2015 (Newtown Square, PA).

Project Management Institute, Business Analysis for Practitioners: A Practice Guide, 2015 (Newtown Square, PA).

Project Management Institute, Practice Standard for Scheduling 2nd ed., 2011 Newtown Square, PA).

Project Management Institute, Practice Standard for Work Breakdown Structures 2nd ed., 2006 (New- town Square, PA).

Shenhar, A. J., and D. Dvir, Reinventing Project Management (Boston: Harvard Business School Press, 2007).

https://asq.org/quality-resources/quality-glossary/q, accessed February 6, 2017.

Designing (What should be?): This phase creates design principles that will help the participants real- ize their dream. Participants are encouraged to stretch their imagination to move the system from where it currently is to where the participants want it to be. At this stage, the participants should be encouraged to imagine a perfect world without any constraints. Therefore, if there were no resource constraints, what would the scope of the project look like?

Delivery (What will be?): In this phase, participants are encouraged to think of the various subsystems that should take the responsibility of the design phase to sustain the design from the dream that it discov- ered (Cooperrider et al., 2003, p. 182). In this phase, various stakeholders are encouraged to decide what they will be committing themselves to.

Key Outcome Going through this entire process allows stakeholders to elicit and articulate their expectations from the project. Stakeholders also have a better understand- ing of how their needs and wants link to and lead them to a desirable future state. Finally, in order to sustain their dream, their commitment is clearly artic- ulated. As stakeholders commit themselves to specific endeavors on the project, they will implicitly revisit the opportunities and cost that lay ahead of them, which allows stakeholders to draw a realistic boundary around their commitment to the project.

Projects are temporary and unique and may have shifting boundaries over time. The process of engag- ing stakeholders via appreciative inquiry (AI) is an effective way to address the ambiguity and uncer- tainty in project management.

Source: Rashmi Assudani, Associate Professor and Chair, Department of Management and Entrepreneurship, Williams College of Business, Xavier Uni- versity. Adapted from Conklin, T. A., Creating Classrooms of Preference: An Exercise in Appreciative Inquiry. Journal of Management Education 33 (6) (2009): 772 792. Cooperrider, D. L., D. Whitney, and J. M. Stavros, Appreciative Inquiry Handbook (Bedford Heights, OH: Lakeshore, 2003).

30 Part 1 Organizing Projects

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Endnotes 1. https://www.smartsheet.com/comprehensive-guide

-values-principles-agile-manifesto, accessed Decem- ber 1, 2016.

2. Wikipedia https://en.wikipedia.org/wiki/Functional_ manager, accessed February 6, 2017.

3. PMI Lexicon of Project Management Terms Version 3.0, 2015 (Newtown Square, PA): 9.

4. Robert G. Cooper, Winning at New Products: Pathways to Profitable Innovation, Proceedings (2006).

5. http://www.pmi.org/pmbok-guide-standards/ foundational, accessed February 6, 2017.

6. Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. Exposure Draft. (Newtown Square, PA: Project Management Institute, 2017): 15.

7. Ibid. 8. PMI Lexicon of Project Management Terms

Version 3.0, 2015 (Newtown Square, PA): 7. 9. PMI Lexicon of Project Management Terms

Version 3.0, 2015 (Newtown Square, PA): 7. 10. https://asq.org/quality-resources/quality-glossary/q,

accessed February 6, 2017.

11. Dawne E. Chandler and Payson Hall, Improving Executive Sponsorship of Projects: A Holistic Approach, 2017 (New York: Business Expert Press): 1.

12. PMI Lexicon of Project Management Terms Version 3.0, 2015 (Newtown Square, PA): 13.

13. Ibid. 14. Vittal S. Anantatmula, Project Teams: A Structured

Developmental Approach, 2016, New York: Business Expert Press, 9.

15. PMI Lexicon of Project Management Terms Version 3.0, 2015 (Newtown Square, PA): 5.

16. Project Management Institute, Practice Standard for Work Breakdown Structures 2nd ed., 2006 (Newtown Square, PA): 121.

17. Project Management Institute, Practice Standard for Scheduling 2nd ed., 2011 (Newtown Square, PA): 138.

18. PMI Lexicon of Project Management Terms Version 3.0, 2015 (Newtown Square, PA): 8.

19. Project Management Institute, A Guide to the Proj- ect Management Body of Knowledge (PMBOK® Guide), 6th ed. Exposure Draft. (Newtown Square, PA: Project Management Institute, 2017): 15.

Chapter 1 Introduction to Project Management 31

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C H A P T E R 2

Project Selection and Prioritization

With the development of a new five-year strategic plan, significant financial growth, and a major reorganization, Living Arrangements for the Developmentally Disabled (LADD) found itself overwhelmed with tasks and at a point that required the thought- ful selection and prioritization of projects. Prior strategic plans were largely dictated by the former executive director, created in a silo of sorts. It was through the intro- duction of a new executive director to LADD and complete new leadership at the management level that an opportunity presented itself for new, cross-department collaboration, innovative methods to carry out established practices, and the ability to identify and draw on the strengths of the individual members of the team.

LADD is a medium-sized nonprofit corporation that is mission focused and considered a leader in the field of supporting individuals with developmental dis- abilities. Its efforts reach beyond day-to-day functions and extend in large part to awareness, advocacy, and action. With the sponsorship of a national film festival focused on disabilities and its work in the civic and government sectors at local and national levels, LADD has been able to influence positive change in legisla- tion and the inclusion of people with disabilities at all levels of society.

CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Explain in your own words the strategic planning and portfolio management processes. Describe how to select, prioritize, and resource projects as an outgrowth of strategic planning. From a contractor s viewpoint, describe how to secure projects.

TECHNICAL OBJECTIVES: Compare the strengths and weak- nesses of using financial and scoring models to select projects. Given organizational priorities and several projects, demonstrate how to select and prioritize projects using a scoring model.

BEHAVIORAL OBJECTIVES: Explain the strengths an organization might possess that could improve its ability to perform projects.

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Project selection and prioritization were exactly what LADD needed because they were trying to maintain pace with a large program and revenue growth curve, new leadership at the helm, and federal changes in the way services were to be delivered to those with developmental disabilities. Projects from the strategic plan were scored based on established value sets that included criteria such as if the project met the mission, was financially feasible, or strengthened personal or community relationships.

LADD s strategic plan contains 32 primary goals and many more objectives. The project selection and prioritization process was a key tool to build a frame- work that would inspire agency success over the next five years. It is also anticipated to be a method to reduce program competition and increase under- standing within the management team as occasions for team development and departmental collaboration occur. In the end, each step of the process will lead the agency to achieve its vision of propelling the inclusion and suc- cess of people with disabilities forward with a positive impact throughout the community.

Amy Harpenau, Vice President, Living Arrangements for the Developmentally Disabled.

2-1 Strategic Planning Process One of the tasks of a company s senior leadership is to set the firm s strategic direction. Some of this direction setting occurs when an organization is young or is being revamped, but some needs to occur repeatedly. Exhibit 2.1 depicts the steps in strategic planning and how portfolio management should be an integral part.

2-1a Strategic Analysis The first part of setting strategic direction is to analyze both the external and internal environments and determine how they will enhance or limit the organization s ability to perform. This strategic analysis is often called strengths, weaknesses, opportunities, and threats (SWOT). The internal analysis (elements within the project team s control) consists of asking what strengths and weaknesses the organization possesses. The exter- nal analysis (elements over which the project team has little or no control) consists of asking what opportunities and threats are posed by competitors, suppliers, customers, regulatory agencies, technologies, and so on. The leaders of an organization often need to be humble and open to ideas that are unpleasant and contradictory to their beliefs when conducting this analysis. Performed correctly, a strategic analysis can be very illu- minating and can suggest direction for an organization. An example of SWOT analysis

PMBOK ® 6E COVERAGE

PMBOK ® 6E OUTPUTS

1.2 Foundational Elements Elevator Pitch

Selecting Projects Project Selection and Prioritization Matrix

Project Resource Assignment Matrix

PMBOK® GUIDE Topics:

1.2 Foundational Elements Selecting Projects

CHAPTER OUTPUTS Elevator Pitch Project Selection and Prioritization Matrix Project Resource Assignment Matrix

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for the Built Green Home at Suncadia is shown in Exhibit 2.2. The Built Green Home at Suncadia, Washington, was developed using advanced sustainability concepts and a large degree of stakeholder involvement.

2-1b Guiding Principles Once the SWOT analysis is complete, the organization s leadership should establish guiding principles such as the vision and mission. Some organizations break this step into more parts by adding separate statements concerning purpose and/or values. Often, these sections are included in the mission. For simplicity s sake, they will be trea- ted as part of the mission in this book. It is more important to understand the intent of each portion and achieve it rather than worry about the exact format or names of indi- vidual portions.

VISION The vision is a one-sentence statement describing the clear and inspirational long-term, desired change resulting from an organization or program s work.1 A clear and compelling vision will help all members and all stakeholders of an organization understand and desire to achieve it. Visions often require extra effort to achieve but are considered to be worth the effort. Visions are often multiyear goals that, once achieved, suggest the need for a new vision.

One of the visions most often cited, because it was so clear and compelling, was Pres- ident John F. Kennedy s goal of placing a man on the moon before the end of the 1960s. Kennedy set this goal after Russia launched Sputnik and the United States found itself behind in the space race. His vision was very effective in mobilizing people to achieve it; further, it rapidly transformed a huge suburban area near Houston into a developed and sustainable economic and technology zone.

EXHIBIT 2.1

STRATEGIC PLANNING AND PORTFOLIO ALIGNMENT

34 Part 1 Organizing Projects

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A more recent example was in 2009 when hundreds of community leaders in Cleve- land, Ohio, decided to use a systems approach to guide many interrelated social and eco- nomic efforts in their region. The vision they stated is, Cleveland and other cities throughout Northeast Ohio should be green cities on a blue lake. 2 They continue to use this vision to guide regional leaders as they choose where to invest their time and resources in bettering the region and life for its residents. They also are currently plan- ning their 2019 Sustainable Cleveland Summit.3

Increasingly, companies are incorporating the triple bottom line into their vision statements. This approach emphasizes the social, environmental, and economic health of the company s stakeholders rather than a narrow emphasis only on the economic return for shareholders. This stated desire to be a good corporate citizen with a long- term view of the world can motivate efforts that achieve both economic return for share- holders and other positive benefits for many other stakeholders.

MISSION STATEMENT The vision should lead into the mission statement, which is a way to accomplish the vision. The mission statement includes the organization s core purpose, core values, beliefs, culture, primary business, and primary customers. 3 Several of these sections may flow together in the mission statement and, sometimes, an overall statement is formed with expanded definitions of portions for illustration. The rationale for including each section (either as one unified statement or as separate statements) is as follows:

By including the organization s purpose, the mission statement communicates why the organization exists. By including the organization s core values, a mission statement communicates how decisions will be made and the way people will be treated. True organizational

EXHIBIT 2.2

SWOT ANALYSIS FOR THE BUILT GREEN HOME AT SUNCADIA

STRENGTHS WEAKNESSES

Green building has a buzz

Seattle has a strong green building community support

Strong community support

Growth in green building projects that demon- strate value

Need to provide numbers on green building value

Committed developer and builder

Green building has not reached mainstream

Limited project resources community Distance away from Seattle Green building is perceived to be costly

High cost of green projects

OPPORTUNITIES THREATS

Uniqueness of product

Location

Existing thinking on green building and its niche focus

Community surrounding house Building schedule

Lack of data on green building (wealth) value Community (location)

Rumors

Source: Brenda Nunes, developer, Built Green Home at Suncadia.

Chapter 2 Project Selection and Prioritization 35

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values describe deeply held views concerning how everyone should act especially when adhering to those values is difficult. By including beliefs, a mission statement communicates the ideals for which its lea- ders and members are expected to stand. Beliefs are deeply held and slow to change, so it is quite useful to recognize them, as they can either help or hinder an organiza- tion s attempt to achieve its vision. By including the organization s culture, the mission statement instructs and expects members to act in the desired manner. By including the primary business areas, everyone will know in what business the organization wishes to engage. By identifying the primary customers, everyone will understand which groups of people need to be satisfied and who is counting on the organization. The mission needs to be specific enough in describing the business areas and customers to set direction, but not so specific that the organization lacks imagination.

An example of a vision and mission statement from Cincinnati Children s Hospital Medical Center is shown in Exhibit 2.3.

2-1c Strategic Objectives With the strategic analysis, mission, and vision in place, leaders turn to setting strategic objectives, which should be the means of achieving the mission and vision. For most organizations, this strategic alignment of objective setting occurs annually, but some organizations may review objectives and make minor revisions at three- or six-month intervals. While the planning is normally performed annually, many of the strategic objectives identified will take well over one year to achieve. The objectives describe both short- and long-term results that are desired, along with measures to determine achieve- ment. Organizations that embrace a triple bottom line in their guiding values will have objectives promoting each bottom line, and projects that are selected will contribute toward each. These objectives should provide focus on decisions regarding which

EXHIBIT 2.3

CINCINNATI CHILDREN S HOSPITAL MEDICAL CENTER VISION AND MISSION

Cincinnati Children’s Hospital Medical Center will be the leader in improving child health.

Cincinnati Children’s will improve child health and transform delivery of care through fully integrated, globally recognized research, education, and innovation. For patients from our community, the nation and the world, the care we provide will achieve the best: • Medical and quality of life • Patient and family and • today and in the future.

Source: Cincinnati Children s Hospital Medical Center, http://www.cincinnatichildrens.org/about/mission/, accessed January 9, 2017.

36 Part 1 Organizing Projects

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projects to select and how to prioritize them, since they are an expression of the organi- zational focus. Many writers have stated that for objectives to be effective, they should be SMART that is, specific, measurable, achievable, results based, and time specific. 4 An

example of strategic objectives from The Internet Society is shown in Exhibit 2.4.

2-1d Flow-Down Objectives Once an organization s strategic objectives are identified, they must be enforced. Some objectives may be implemented by work in ongoing operations. However, projects tend to be the primary method for implementing many objectives. If the organization is rela- tively small, leaders may proceed directly to selecting projects at this point. Larger orga- nizations may elect a different route. If the organization is so large that it is impractical for the overall leaders to make all project selection decisions, they might delegate those decisions to various divisions or functions with the stipulation that the decisions should be aligned with the organization s strategic planning that has taken place to this point. Regardless of whether the organization is small and the top leaders make all project selection decisions or whether the organization is large and some of the decisions are cascaded one or more levels down, several methods of project selection may be used.

2-2 Portfolio Management Companies that use a strategic project selection process to carefully align projects with their organizational goals will find they tend to be more successful at completing their pro- jects and deriving the expected benefits from them. Portfolio management is the central- ized management of one or more portfolios to achieve strategic objectives.5 The goal of portfolio management is to achieve the maximum benefit toward the strategic goals of the company. To accomplish this, executives need to identify, select, prioritize, resource, and govern an appropriate portfolio of projects and other work. 6 Governing will be cov- ered in Chapter 14, and all other portfolio management topics will be covered here. Project success at these companies is measured by how much the project contributes to the orga- nization s objectives (business needs) as well as the traditional measures of staying within budget and schedule and achieving the specific technical goals promised at the start of the project to obtain a desired return on investment.

For ease of understanding how various work is related, many organizations utilize an approach of classifying portfolios, programs, projects, and subprojects. Not all companies use all four classifications, but understanding how they are related helps one see where any particular portion of work fits in the organization.

PORTFOLIO EXAMPLE We are a major national health insurance company. Our planning approach starts with creating an inventory of project initiatives, which has been identified by the key business areas. We separate the projects into foundational pillars

EXHIBIT 2.4

INTERNET SOCIETY STRATEGIC OBJECTIVES FOR 2012 2014 PLANNING CYCLE

1. Facilitate and promote policy environments that enable the continued evolution of an open and trusted Internet. 2. Increase the global relevance of collaborative, bottom-up, technical, consensus-based, open standards development. 3. Strengthen Internet Society leadership in Internet Development. 4. Build the visibility and influence of the Internet Society as the trusted source on global Internet issues.

Source: http://www.internetsociety.org/who-we-are/organization-reports-and-policies/internet-society-2015-action-plan, accessed February 7, 2017.

Chapter 2 Project Selection and Prioritization 37

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(operation functions) and develop roadmaps of activities going out six quarters (18 months) as can be seen in Exhibit 2.5. Priority and timing of business need determine which quarter(s) the project initiatives are developed and implemented. The roadmaps also include smaller activities called capabilities that are integrated with the project activi- ties. Each of these foundational pillars aligns with the supporting agile sprint teams and the backlog of activities gets translated into stories within the sprints. A key role is the Product Owner who represents the business area and determines which activities (stories) go into each sprint. There is one Product Owner for each pillar and they are at a Director level within the organization. The product owner must have a complete understanding of the organizations strategy and short-term goals of their respective business area.

2-2a Portfolios Organizations require many work activities to be performed, including both ongoing operational work and temporary project work. Large organizations often have many pro- jects underway at the same time. A portfolio is projects, programs, subportfolios, and operations managed as a group to achieve strategic business objectives. 7 Project portfo- lios are similar to financial portfolios. In a financial portfolio, efforts are made to diver- sify investments as a means of limiting risk. However, every investment is selected with the hope that it will yield a positive return. The returns on each investment are evaluated individually, and the entire portfolio is evaluated as a whole.

Each project in the portfolio should have a direct impact on the organization. Put another way, an organization s leaders should identify the organization s future direction through strategic planning. Then multiple possible initiatives (or projects) can be identi- fied that might help further the organization s goals. The leaders need to sort through the various possible projects and prioritize them. Projects with the highest priority

EXHIBIT 2.5

2017 PROJECT & ROADMAP PLANNING

Carry Over – 121 Projects New Business Care4U Claims Consumer Exp. Finance, Billing and Enroll. Provider Reg/Complince

23 64

9 6 3

10 6

Backlog – 75 Projects New Business Care4U Claims Consumer Exp. Finance, Billing and Enroll. Provider Reg/Complince

n/a 37

9 3

11 13

2

Dashboard Initial Draft Complete

Dashboard Initial Draft Complete

Dashboard In Progress

Dashboard In Progress

Dashboard Not Started

Source: Mark Heitkamp, PMP, MBA and appear after the words business area

38 Part 1 Organizing Projects

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should be undertaken first. Organizations typically try to have a sense of balance in their portfolios; that is, an organization includes in its portfolio:

Some large and some small projects Some high-risk, high-reward projects, and some low-risk projects Some projects that can be completed quickly and some that take substantial time to finish Some projects that serve as efforts to enter new markets and new products or services and some to improve current products

2-2b Programs A program is a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not available from managing them individually. 8

This group of related projects or the program often shares the same goal and requires similar resources.

Program management is defined as applying knowledge, skills, tools, and techniques to meet requirements and to obtain predetermined benefits. It is a systematic approach of aligning multiple components of the program to achieve the program goals while optimizing the integrated cost, schedule, and effort required to execute the program. Programs and program management are of great importance, specifically for the govern- ment and large and multinational corporations.

Programs often last as long as the organization lasts, even though specific projects within a program are of limited duration. For example, the U.S. Air Force has an engine procurement program. As long as the Air Force intends to fly aircraft, it will need to acquire engines. Within the engine program are many individual projects. Some of these projects are for basic research, some are for development of engines, some are for purchasing engines, and a few others are for maintaining and improving the perfor- mance of engines in use. Each project has a project manager, and the entire program has a program manager. While the project managers are primarily concerned with the trade-offs associated with cost, schedule, scope, and quality on their individual projects, the program manager is concerned with making trade-offs between projects for the max- imum benefit of the entire program. To avoid confusion, programs deal with a specific group of related projects, while a portfolio deals with all of an organization s projects. A portfolio can include multiple programs as well as multiple projects.

A program may include components such as portfolios, projects, and subprograms. It is important to understand comparative analysis of projects, programs, and portfolios.

While the leadership group of a company may make portfolio decisions and delegate the program management decisions to a program manager, both portfolios and programs are managed at a level above the typical project manager. For practical purposes, project managers should attempt to understand how both portfolio and program decisions impact their projects and then spend most of their efforts focused on their project.

Some of the unique responsibilities of a program manager are leading program activi- ties in a coordinated way, communicating with internal and external stakeholders, resolv- ing cost, scope, schedule, risk, and quality across all projects with shared governance, and managing external and internal factors such as culture and socioeconomic issues. See Exhibit 2.6 for a comparison of projects, programs and portfolios.

2-2c Projects and Subprojects Just as a program is made up of multiple projects, a large project may be composed of multiple subprojects. A subproject is a part of a larger project organized as a project

Chapter 2 Project Selection and Prioritization 39

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itself to make it easier to plan and manage. If the project is quite large, individuals may be assigned as subproject managers and asked to manage their subproject as a project. Some of those subproject managers may even work for another company. The project manager needs to coordinate the various subprojects and make decisions that are best for the overall project. Sometimes this may require that a particular subproject be sacri- ficed for the greater good of the project. The relationships among a portfolio, programs, projects, and subprojects are illustrated in Exhibit 2.7.

EXHIBIT 2.6

COMPARISON OF PROJECTS, PROGRAMS, AND PORTFOLIOS

PROJECTS PROGRAMS PORTFOLIOS

Scope Defined scope Progressive elaboration

Larger scope Significant benefits

Organizational scope Changes with strategic goals

Change Change is norm Change management

Internal and external changes

Changes due to external and internal environment

Plan Detailed plans High-level program plan Detailed component plan

Create processes Maintain processes

Monitor Project deliverables Progress of program components

Strategic changes, risk Resource allocation

Success Scope quality, cost, time Customer satisfaction

Needs and benefits of the program

Investment performance Benefit realization

Manage Project deliverables Project team

Program staff and PM Vision and leadership

Portfolio staff

Adopted from PMI, Standard for Program Management, 3rd ed. (2013): p. 8.

EXHIBIT 2.7

PORTFOLIO, PROGRAM, PROJECT, AND SUBPROJECT RELATIONSHIPS

Company Portfolio

Program Alpha Program Beta

Project A1

Project A2

Project 3

Subproject 3.1

Subproject 3.2

40 Part 1 Organizing Projects

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Because projects are frequently performed in a fast-paced environment, it is helpful if they can be guided by organizational priorities.

The first step is to carefully align potential projects with the parent organization s goals. While many companies are motivated to align projects with organizational goals for these benefits, an additional reason for companies that sell to the government is that the Federal CIO Roadmap states, CIOs are responsible for maintaining and facilitating the imple- mentation of a sound and integrated IT architecture; monitoring performance of IT pro- grams; using metrics to evaluate the performance of those programs; and modifying or terminating programs or projects. 9 This was introduced in the Sarbanes-Oxley require- ments. All publicly traded companies must now follow certain guidelines that require some sort of financial decision model for selecting projects for execution.

When managers assess the organization s ability to perform projects and then iden- tify, select, prioritize, resource, and govern a portfolio of projects and other work that they believe will help the organization achieve its strategic goals, they are performing portfolio management. While a team of senior executives may conduct many of the port- folio management activities, project managers should understand how their specific pro- jects are aligned with the organization s objectives since they will need to either make or provide input on many decisions.

When organizations consider their entire portfolio of work, they sometimes envision pro- jects as means of developing knowledge that can be capitalized upon in ongoing work pro- cesses to provide profit, as shown in Exhibit 2.8. Furthermore, new knowledge encourages organizations to be creative and develop new project ideas and knowledge-building projects.

In times when the economy is poor, many companies struggle to get enough business. In such an environment, some firms might accept almost any work they can get. Even during bleak economic times, however, one should be careful how internal projects are selected, since selecting one project limits resources (money, people, etc.) available to other projects.

EXHIBIT 2.8

PORTFOLIO OF PROJECTS AND OPERATIONAL WORK PROCESSES

Little Kn Reliable Kn Knowledge ContinuumKnowledge Continuum

Examples: Basic R&D; Customer Research; M&A Due Diligence

Examples: Competitive Strategy; Product Development; Market Entry; Channel Strategy

Inbound Logistics

Operations

Outbound Logistics

Sales and Marketing

Customer Service

Manufacturing

Procurement

Human Resources

Both projects and processes are intertwined to create sustainable value.

Source: Chinta, Ravi, and Timothy J. Kloppenborg, Projects and Processes for Sustainable Organizational Growth, SAM Advanced Management Journal 75 (3) (Spring 2010): 24.

Chapter 2 Project Selection and Prioritization 41

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During good or bad economic times, people should take the same care and prudence with external projects and ensure that they are consistent with the organization s goals.

2-2d Assessing an Organization s Ability to Perform Projects Assessing an organization s strengths and weaknesses is an essential part of aligning projects with the organization. If an organization does not have the right capabilities, a project that may otherwise support organizational goals may be too difficult to successfully complete. Some questions to ask regarding a firm s ability to support projects are as follows:

Do we have the right skills, capabilities, technical knowledge, and resources that are required for potential projects? If we do not have them, can we acquire them easily? Do we have a teamwork attitude, free and open communication, creativity, and empowered decision making? Do we have a clearly defined project management process? Do our associates have the right attitudes, skills, and competencies to use the project management process? Are our leaders at each level willing to take appropriate personal risk? Does senior leadership establish a strong leadership foundation? Do individuals and teams exhibit leadership at their respective levels? Do we monitor and understand our external environment?

2-2e Identifying Potential Projects The second part of aligning projects with the firm s goals is to identify potential projects. In general, some potential projects can be to capitalize upon a strategic opportunity or techno- logical advance. Others may serve a social need, an environmental consideration, a customer request, or a legal requirement. Ideally, this is accomplished in a systematic manner not just by chance. Some opportunities will present themselves to the organization. Other good opportunities will need to be discovered. All divisions of the organization should be involved. This means people at all levels, from frontline workers to senior executives and people from all functional areas need to help identify potential projects. For example, salespeople can uncover many opportunities by maintaining open discussions with existing and potential customers, and operations staff may identify potential productivity-enhancing opportunities as projects. Everyone in the firm should be aware of industry trends. Many industries have trade journals such as Elevator World or Aviation Week and Space Technology that can be reviewed regularly for potential project ideas. One reasonable goal is to identify approxi- mately twice as many potential projects as the organization has time and resources to per- form. The reason is simple: under close examination, some potential projects may not be a good fit. Any company that accepts practically every potential project will probably waste some of its resources on projects that do not support its organizational goals.

Once potential projects are identified, the next step is to develop a brief description of each. The leadership team that will select and prioritize projects needs to understand the nature of the projects they are considering. While the level of documentation different firms require varies greatly, a bare minimum can be called the elevator pitch. This is when a person meets another waiting for an elevator and asks, I hear you are on XYZ Project. What is it all about? The responder may have only a brief time to give a reply before the elevator arrives and must be prepared to answer quickly with simple state- ments about the project work and why it is important to the organization.

The work is often summarized in a brief statement of work, which is a narrative description of products, services, or results to be supplied. 10 Why the project is important

42 Part 1 Organizing Projects

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is often summarized as a business case, which is the benefits of a selected component used as a basis for the authorization of further project management activities. 11

The business case generally includes both why the project is needed and, if the firm uses financial justification as part of project selection, an estimate of costs and benefits. Armed with this elevator pitch, the series of processes that collectively are used to select, prioritize, and initiate projects begins. Selecting and prioritizing are covered next, and chartering is covered in Chapter 3.

METHODS FOR SELECTING PROJECTS The people in charge of selecting projects need to ensure overall organizational priorities are understood, agreed upon, and com- municated. Once this common understanding is in place, it is much easier to prioritize potential projects. The degree of formality used in selecting projects varies widely. In a smaller organization, it can be straightforward. The prioritization should consider criteria derived from project management, finance, and strategic aspects and should include ask- ing questions such as these:

What value does each potential project bring to the organization? Are the demands of performing each project understood? Are the resources needed to perform the project available? Is it feasible to complete the project within the expected time and at the projected cost while managing associated risks? Is the project financially beneficial and compatible with other investment decisions? Is there enthusiastic support both from external customers and from one or more internal champions? Which projects will best help the organization achieve its strategic goals?

There are several different methods of systematically selecting projects. The methods include both financial and scoring models. The primary reason for including financial analysis either to make the project selection decisions directly or to at least assist in the decision making is that, from management s perspective, projects are investments. Therefore, proper selection should yield a portfolio of projects that collectively contribute to organizational success.

Three different approaches are commonly used to ensure both financial and nonfi- nancial factors are considered when selecting projects. First, some organizations use financial analysis as the primary means of determining which projects are selected, and management merely tempers this with informal inclusion of nonfinancial factors. Sec- ond, some organizations use financial models as screening devices to qualify projects or even just to offer perspective; qualified projects then go through a selection process using a scoring model. Third, at still other organizations, financial justification is one factor used in a multifactor scoring model. The common thread in all three of these approaches is that both financial and nonfinancial factors are considered when selecting projects. Let us consider both financial and scoring models. Financial models will be covered in con- cept, but the calculations will not be shown since they are explained in depth in most required finance courses. Scoring models will be covered in both concept and calculation since many students might not have them in another course.

2-2f Using a Cost-Benefit Analysis Model to Select Projects Cost-benefit analysis is a financial analysis tool used to determine the benefits provided by a project against its costs. 12 These models compare expected project costs to expected project benefits. Several models can be used in making project selection decisions.

Chapter 2 Project Selection and Prioritization 43

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NET PRESENT VALUE (NPV) Net present value (NPV) is the most widely accepted model and will be covered first. When using net present value, the analyst first discounts the expected future value of both the project costs and benefits, recognizing that a dollar in the future is worth less than a dollar today. Then the analyst subtracts the stream of discounted project costs from the stream of discounted project benefits. The result is the net present value of the potential project. If the net present value is positive, then the organization can expect to make money from the project. Higher net present values pre- dict higher profits. See the summary in Exhibit 2.9.

BENEFIT-COST RATIO (BCR) A second financial model sometimes used is benefit- cost ratio (BCR). The ratio is obtained by dividing the cash flow by the initial cash out- lay. A ratio above 1.0 means the project expects to make a profit, and a higher ratio than 1.0 is better. The cash flow can be determined for the life of the project using net present or discounted value principles.

INTERNAL RATE OF RETURN (IRR) The third financial model is internal rate of return (IRR). In this model, the analyst calculates the percentage return expected on the project investment. A ratio above the current cost of capital is considered positive, and a higher expected return is more favorable.

PAYBACK PERIOD (PP) The fourth financial model that is sometimes used is the payback period (PP). In this analysis, a person calculates how many years would be required to pay back or recover the initial project investment. The organization would normally have a stated period that projects should be paid back within, and shorter pay- back periods are more desirable.

ADVANTAGES AND DISADVANTAGES OF EACH METHOD Financial models are useful in ensuring that selected projects make sense from both cost and return- on-investment perspectives. These models have weaknesses that need to be understood before they are used. For example, payback period models do not consider the amount of profit that may be generated after the costs are paid. Thus, two projects with a similar pay- back period could look equal, but if one has substantially higher revenue after the payback period, it would clearly be superior. BCR would not be acceptable unless all costs and bene- fits were calculated in present dollars (in which case it is similar to NPV except it is a ratio of benefits to cost instead of the difference between revenue and cost). However, there

EXHIBIT 2.9

FINANCIAL MODELS FOR PROJECT SELECTION

NET PRESENT VALUE (NPV)

BENEFIT-COST RATIO (BCR)

INTERNAL RATE OF RETURN (IRR)

PAYBACK PERIOD (PP)

Calculation PV revenue PV cost Cash flow/Project investment

Percentage return on project investment

Project costs/Annual cash flows

Neutral Result NPV $0 Ratio 1 0 IRR Cost of capital Payback period Accepted length

If used to screen projects or to select projects outright

NPV > Acceptable amount

Ratio > Acceptable amount

IRR > Acceptable amount

Payback period < Acceptable length

If used to compare projects Higher NPV better Higher ratio better Higher IRR better Shorter payback period better

44 Part 1 Organizing Projects

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are benefits and costs that are intangible and cannot be determined in financial terms. IRR and BCRs have problems if used for choosing between mutually exclusive projects because they can favor smaller projects that create less total value for the firm but have high percentage returns. For example, a huge project with a medium rate of return would create a lot of value for a firm but might not be chosen over a smaller project with a higher return if only one can be chosen. Additionally, it is sometimes quite dif- ficult to calculate an IRR if a project has nonconventional cash flows. For the most part, the finance discipline recommends using net present value. The other measures can be calculated to provide perspective on whether a project meets a minimum financial return threshold or to communicate with people who might not understand NPV.

However, none of the financial models ensure alignment with an organization s stra- tegic goals. Therefore, financial analysis, while very useful, is normally not enough.

2-2g Using a Scoring Model to Select Projects In addition to ensuring that selected projects make sense financially, other criteria often need to be considered. A tool called a scoring model helps to select and prioritize poten- tial projects. It is useful whenever there are multiple projects and several criteria to be considered. A few organizations use more complex models such as analytical hierarchy process (AHP) to compare projects, but since many more organizations keep things sim- ple with variations of scoring models, that is what we will cover.

IDENTIFYING POTENTIAL CRITERIA These criteria should include how well each potential project fits with the organization s strategic planning. The criteria may also include such items as risk, timing, resources needed, and so on. A normal practice is for the company s leadership team to jointly determine what criteria will be used to select projects. A list of questions executives may use to develop their list of criteria is shown in Exhibit 2.10.

DETERMINING MANDATORY CRITERIA Once the leadership team agrees on a list of criteria that are important, the next step is to determine whether any of the criteria are man- datory. That is, are there any situations that dictate a project must be chosen regardless of any other considerations? Examples of this include government mandates and clear safety or

EXHIBIT 2.10

EXAMPLES OF PROJECT SELECTION CRITERIA

How well does this project fit with at least one organizational objective?

How many customers are there for the expected results?

How competitively can the company price the project results?

What unique advantages will this project provide?

Does the company have the resources needed?

What is the probability of success?

Are the data needed to perform the project available or easily collected?

Do the key stakeholders agree that the project is needed?

What is the expected return on investment?

How sustainable will the project results be?

How does this project promote (or hinder) our corporate social responsibility?

What risks are there if we do not perform this project?

Chapter 2 Project Selection and Prioritization 45

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security situations. This list of must-do projects should be kept as small as possible since these projects automatically get selected and can crowd out other worthwhile projects.

WEIGHTING CRITERIA Next, the leadership team determines the relative importance or weight of each decision criteria. While more complex methods of determining criteria weights and project evaluations have been used in the past, many firms now use the sim- ple methods described here for determining criteria weights. See Exhibit 2.11 for an example of project evaluations. First, executives determine which criterion is most important and give that a weight of 10. Then they ask how important in comparison each of the other criteria is. For example, if the executives in a consumer products com- pany thought development of new products was most important, it would be assigned a weight of 10. If the customer relations factor was deemed almost as important as new product development, maybe it would be assigned 8. If the factors of supplier relations and probability of project success were each deemed to be half as important as new product development, each would be assigned 5. Perhaps other criteria such as cost reduction, safely, and so forth were also considered but determined to not be as impor- tant. The resulting criteria with weights are shown in Exhibit 2.11 in the top row of the selection and prioritization matrix. Most organizations will decide to use about three to five criteria. Lesser-rated criteria can be used as tiebreakers if needed.

EVALUATING PROJECTS BASED ON CRITERIA Now the leadership team evaluates each project on each criterion. The most efficient and accurate method is to concentrate on one criterion at a time, going down each column in turn. An easy method for this is to rate each project on that specific criterion, with scores ranging from 1 (potential proj- ect has very little or even negative impact on this criterion) to 5 (project has excellent impact on this criterion). The upper-left portion of each cell in the matrix can display the rating, representing how well that project satisfies that criterion.

Once a project has been rated on a specific criterion, that rating should be multiplied by the weight assigned to that criterion and displayed as the weighted score in the main body of each cell. The total for each project should be added across the row. The highest- scoring projects would ordinarily be selected. If several projects have close scores (virtual ties), other criteria or discussion can be used to break the tie. For example, in Exhibit 2.12, there is a virtual tie between Projects A and B.

EXHIBIT 2.11

PROJECT SELECTION AND PRIORITIZATION MATRIX

Project A

Project B

Project C

Project D

55810

46 Part 1 Organizing Projects

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SENSITIVITY ANALYSES Scoring models allow leadership teams to perform sensitiv- ity analyses that is, to examine what would happen to the decision if factors affecting it were to change. Selection criteria may be added or altered. Participants may decide that some criteria are more important than others and weight them accordingly. Missing cri- teria or new alternatives can be added and the decision revisited. For example, if the executive team evaluating the projects in Exhibit 2.12 had a bad experience with an unsuccessful project and decided to reevaluate their decisions with success probability now weighted a 9 for very important, the new project selection and priority matrix would be calculated as shown in Exhibit 2.14.

Decision makers can ensure that they use very solid ratings for each potential project. For example, if one criterion was the number of customers, the marketing department could interview some potential customers to gauge their level of interest.

A company might want to select several projects. If so, the scores from the selection matrix could serve as one method of prioritizing the projects.

EXHIBIT 2.12

COMPLETED PROJECT SELECTION AND PRIORITIZATION MATRIX

Project A

Project B

Project C

Project D

55810

10252450

25151650

15154010

1053220

5

5

1

2

3

2

5

4

5

3

3

1

2

5

3

2

109

106

80

67

EXHIBIT 2.13

REVISED PROJECT SELECTION AND PRIORITIZATION MATRIX

Project B

Project A

Project C

Project D

95810

45151650

18252450

27154010

1853220

5

5

1

2

2

3

5

4

3

5

3

1

5

2

3

2

126

117

92

75

Source: Chris Bridges.

Chapter 2 Project Selection and Prioritization 47

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Selection of projects based on certain criteria is a decision-making process that varies geographically as priorities and thinking styles tend to be different.

Due to cultural differences, learning, and education principles, people think and approach a problem differently; therefore, they also adopt different decision-making styles. This aspect assumes importance due to increased diversity in workplaces that provides an opportunity to work with people from different cultures and countries. Due to these factors, someone might rely more on inductive, deductive, or a combination of these approaches in making decisions. This diversity would influence how people look at a scor- ing model or any other decision-making tool in selecting projects and making project port- folio management decisions. These issues are discussed further in Chapter 15.

2-2h Prioritizing Projects Once all projects have been selected, they will need to be prioritized that is, the deci- sion makers will need to determine which ones will get assigned resources and be sched- uled to begin first. If a company selects several projects for a year (or even for a fiscal quarter), it cannot expect to start all of them at the same time. The scoring models are useful in providing input into the starting order of projects. Most leadership teams will consider the weighted scores of each project as a starting point in assigning resources to projects and determining their start dates. The leadership team members, however, also generally discuss other issues, such as:

The urgency of each project The cost of delaying the expected benefits from various projects Practical details concerning the timing Opportunity costs associated with the project

For example, an important process improvement project may be far less disruptive to perform when the factory is shut down for routine maintenance. One more discus- sion frequently occurs in the prioritizing process if there is a conflict between resource needs for two projects, which one gets the needed resources first? Often, this is left to the project sponsors to iron out; especially for important projects, it may be formally decided by the leadership team. In that way, the probability of the critical project being held up by a misunderstanding is greatly decreased.

Exhibit 2.14 shows how the Alternative Breaks (AB) planning committee at a university ranked spring break projects. This exhibit shows four of the twenty-six projects that were selected for trips. This book will include multiple examples of the AB project to illustrate how various project-planning tools work together. Each trip is a small or subproject, while the combination of all twenty-six trips forms the overall project.

2-2i Resourcing Projects Once all projects have been prioritized, it is time to assign resources to each. Resources can include key personnel such as sponsors, project managers, core team members, and subject matter experts. Resources can also include space, materials, equipment that may be in short supply, and the funds necessary to acquire these resources. The easiest way is to use a resource assignment matrix and begin by assigning resources to the highest-priority projects. Once an individual resource is no longer available, the organization is limited in the number of projects that it can take on during a particular time.

Assigning resources like this requires a prioritized project list such as shown in Exhibit 2.13, a list of resources and how much of each is available, and an estimate of how much of each key resource each project will need. For simplicity s sake, organizations often plan for a fiscal quarter. Exhibit 2.15 shows the same four projects and choices of project

48 Part 1 Organizing Projects

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managers, team members, and the budget for each. Note that while there is enough project manager time to start all four projects, there is neither enough team member time nor enough cash. Therefore, only three projects can be started.

2-3 Securing Projects The discussion above pertains to projects that are internal to an organization. This section deals with projects a company (called the client) wants performed, but for which it may hire external resources (called contractors) to execute significant parts or all of the work. External projects can be viewed either from the perspective of the client company that wants the project to be executed or from the perspective of the contractor company that wants to perform the

EXHIBIT 2.14

ALTERNATIVE BREAKS PROJECT SELECTION AND PRIORITIZATION MATRIX

PROJECT/SELECTION CRITERIA

ACTIVE SERVICE OPPORTUNITY ISSUE ITSELF

ORGANIZATION TO WORK WITH COST

9 10 6 5 Total

New York Vegan Farm 5 45

4 40

3 18

4 20

123

West Virginia Sustainability 4 36

3 30

4 24

5 25

115

Chicago Halfway House 2 18

4 40

4 24

4 20

102

El Salvador Cultural Immersion

1 9

5 50

5 30

1 5

94

EXHIBIT 2.15

RESOURCE ASSIGNMENT MATRIX

PROJECT/RESOURCE PM/DEJI PM/BUD PM/CORY TEAM/ BRADLEY

TEAM/ RAJEEV

TEAM/ LARRY MONEY

Maximum Availability 200 400 300 300 150 150 $30 million

Project List

Project B: PM 240, Team 200, $5M

240 200 $5M

Project A: PM 200, Team 150, $10M

200 150 $10M

Project C: PM 300, Team 150, $14M

300 150 $14M

Project D: PM 150, Team 180, $4M

Remaining Availability 0 160 0 100 0 0 $1M

Chapter 2 Project Selection and Prioritization 49

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work. Client companies may first put prospective external projects through a selection and prioritization process as described above and, if selected, then decide whether to perform the work internally (make) or hire the project to be performed by others (buy). If the decision is to buy, then the client company needs to plan and conduct the procurement.

Contractor companies need to identify potential project opportunities, determine which they will pursue, submit proposals, and be prepared to either bid or negotiate to secure the work. We consider the client company s perspective in Chapter 12, Project Supply Chain Management. We consider the contractor s perspective next.

2-3a Identify Potential Project Opportunities Contractors seeking external projects to perform should pursue this in a fashion similar to that of any company considering internal projects, as described earlier in this chapter in the portfolio alignment section on identifying potential projects. Additionally, since they need to look for projects externally, contractor companies should have representatives at trade shows, professional conferences, and anywhere information on the intentions of potential customers and competitors may surface. Contractor companies should also actively practice customer relationship management by establishing and nurturing per- sonal contacts at various levels and functions. Contractor companies can also practice cus- tomer relationship management by linking information systems to the extent practical so as to identify any useful information concerning potential future projects and improve management of current projects.

2-3b Determine Which Opportunities to Pursue Just as all companies should decide which internal projects to select, as previously described in the methods for selecting projects, most contractor companies are best served by targeting the projects they wish to pursue. Some companies have a policy that they will bid on every potential project, knowing that if they do not bid, they will not be awarded the project. More companies find that if they target their opportunities, their hit rate or probability of securing the work on any given proposal increases. It takes time and resources to put together a good proposal, so it makes sense to increase the acceptance rate by developing a bid/no-bid decision strategy.

Each company has strengths and weaknesses compared to its competitors. Hence, a quick SWOT analysis could be used to decide whether to pursue a potential project,

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50 Part 1 Organizing Projects

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just as a more involved version of SWOT analysis was described earlier and depicted in Exhibit 2.2. Decision makers can also ask how well a potential project will help achieve their objectives. If they determine a project will help achieve their objectives, the next considerations are the cost to pursue the work and the probability of successfully secur- ing the project given the likely competition. A company frequently considers risks both of pursuing and not pursuing a potential project13 Finally, does the company have the capability to perform the work if it is awarded?

2-3c Prepare and Submit a Project Proposal When a firm prepares to submit a proposal, it is really conducting a small project with the primary deliverable of the project being a compelling and complete proposal. The contrac- tor should understand the project s source selection criteria, the basic minimum criteria the sellers have to be fulfilled to get shortlisted. 14 While criteria will vary extensively from one project to another, generally a client will likely want to be convinced that the potential contractor is technically, managerially, financially, and operationally competent. Successful project managers try hard to convince potential clients that they are capable on all four dimensions. A short list of these factors is shown in Exhibit 2.16.

2-3d Negotiate to Secure the Project Negotiation is an approach to redefine an old relationship that is not working effectively or to establish a new relationship. Negotiations should aim at a win-win solution, and the outcome must benefit both the parties involved in negotiations.

Once all proposals have been delivered and evaluated, the client company may elect to either award the project or enter into negotiations with one or more potential contrac- tors. On more routine projects, the contract may be awarded at this point. Further clar- ifications and negotiations may follow for complex projects.

A client company and a contractor company may negotiate the amount of money to be paid for a project. They may also negotiate the contractual terms, schedule, specific personnel to be assigned to work on the contract, quality standards, reporting mechan- isms, and various other items. A project manager may need to make arrangements with potential suppliers to secure the products and services needed to perform the project. All these considerations will be covered in subsequent chapters.

Successful project managers understand that they need to prepare well for negotiations. This starts with a clear understanding of what is most important to their management. Often, it includes fact finding with the client company to understand its needs and abili- ties. Armed with an understanding of both perspectives, a project manager attempts to find a solution that allows the organization to secure the project work with enough profit potential and with the start of a good working relationship with the client. In the end, the client company will select the contractor(s) and award the contract(s).

EXHIBIT 2.16

TYPICAL SOURCE SELECTION CRITERIA

TECHNICAL MANAGEMENT FINANCIAL OPERATIONAL

Technical experience Management experience Financial capacity Production capacity

Needs understanding Project charter Life cycle cost Business size and type

Technical approach Planning and scheduling Cost basis and assumptions Past performance

Risk mitigation Project control Warranties References

Chapter 2 Project Selection and Prioritization 51

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PMP/CAPM Study Ideas You won t see a whole lot of questions on either of these tests pertaining to portfolio or pro- gram management, since these happen at an executive level, beyond the purview of individual projects or project managers. At the same time, it is imperative that you understand the inter- relationship of portfolio and project management, as well as how they relate to an organiza- tion s mission: the mission leads to strategic objectives, and projects are the primary vehicle through which these objectives are achieved.

As with other chapters, make sure you are familiar with the PMBOK terms especially statement of work and business case and be prepared to put them into context with real projects. You will ultimately need to know how to calculate net present value. Finally, be familiar with the common causes of project failure and how to prevent them.

Summary Project selection does not occur in isolation. Ideally, it begins with the organization s strategic planning. This planning begins with a strategic analysis of the organi- zation s internal strengths and weaknesses as well as the external threats and opportunities it faces. The organization should then develop its guiding principles such as mission and vision statements. Most companies will have an annual planning session in which strategic objectives are developed. Larger organizations will con- tinue this effort with one or more levels of planning in which the overall objectives are flowed down to deter- mine objectives that are appropriate for each organiza- tional level.

Once the strategic planning is accomplished, the organization s leadership team engages in portfolio management. The first part is an open and honest assessment of the organization s ability to perform projects. The decision makers need to understand how many resources are available, the organization s overall capabilities, and the capabilities of the indivi- duals who will be assigned to projects. An ongoing portfolio management activity is for everyone in the firm to identify possible opportunities that they feel might help the organization achieve its goals. Each potential project should be described at least by stat- ing in a sentence or two what work is involved and

how it would help the organization achieve one or more of its goals.

Once potential projects are identified and briefly described with statements of work and business cases, they should be put through a process to determine which will be selected and what their relative priorities are. Both financial and scoring models are frequently used to evalu- ate potential projects. Net present value is the preferred financial method, although others are sometimes used. Financial analysis tells the leadership team how much each potential project is worth from a benefits- versus-cost comparison, but it does not tell how each potential project may help to achieve the organization s goals. Scoring models can incorporate various goals and should also be used. Once a project list is selected, the projects need to be prioritized so some can start right away and others can start later.

Contractor companies need to be constantly on the lookout for potential project opportunities. Once potential projects are identified, companies need to decide which ones they pursue. Just as for internal pro- jects, some external projects will be better at helping an organization reach its goals because they are a better fit. The contractor needs to prepare and submit proposals for desired projects and be prepared to follow up and often negotiate in order to secure them.

Key Terms Consistent with PMI Standards and Guides portfolio management, 38 portfolio, 38 program, 38 vision, 38 mission statement, 38 strategic objectives, 38

program management, 38 cost benefit analysis, 38 subproject, 39 statement of work, 42 business case, 42 source selection criteria, 50

52 Part 1 Organizing Projects

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Chapter Review Questions 1. List and describe each step in the strategic plan-

ning process. 2. Name at least four things that a mission state-

ment should include. 3. What does the strategic analysis acronym SWOT

stand for? 4. What is the most widely accepted financial model

for selecting projects? 5. What are some advantages and disadvantages

of using a financial model for selecting projects?

6. What are some advantages and disadvantages of using a scoring model for selecting projects?

7. What are some common reasons for project failure?

8. Who should be involved in identifying potential projects?

9. If there is a conflict between resource needs for two projects, who decides which one gets the needed resources first?

10. In a project scoring model, why is each decision criteria given a weight?

11. What purpose do sensitivity analyses serve in using scoring models to choose projects?

12. If several projects have close scores as the result of a scoring model, what can be done to break the vir- tual tie?

13. Why might a contractor company perform a SWOT analysis prior to bidding on a potential project?

14. Why is it important for a contractor to under- stand the source selection criteria a client uses to decide to whom they will award a project?

15. Name five things that may be negotiated between a client company and a contractor company.

Discussion Questions 1. How might the internal and external parts of a

SWOT analysis affect one another? 2. Describe the interaction between vision and

mission statements. 3. How is a company s portfolio similar to and

different from a financial portfolio? 4. What is the best way for an organization to

prioritize among selected projects? Does it vary among organizations?

5. Why is aligning potential projects with the parent organization s goals the first step in avoiding project failure?

6. Why is it a good practice for organizations to identify twice as many potential projects as they plan to implement?

7. Suppose you are purchasing a new car, and you decide to use a scoring model to decide among four options. What would be your top three criteria, and what would be each criterion s relative weight?

8. Under what circumstances should a selected project take precedence over other selected projects?

9. If you are a contractor looking for project work, why might you decide not to pursue a particular project opportunity?

10. What are the four main areas of competency a client company is looking for in a project man- ager? How can you best demonstrate these com- petencies to a potential client?

PMBOK ® Guide Questions 1. A collection of projects, programs, and opera-

tions managed as a group to achieve strategic objectives is called a: a. process b. portfolio c. subprogram d. life cycle

2. Projects may be undertaken as a result of any of the following strategic reasons except: a. social need b. market demand

c. need to keep workers busy during slow times d. environmental considerations

3. A narrative description of products, services, or results to be delivered by the project is a/an: a. request for information b. business case c. project statement of work d. elevator pitch

4. All of the following statements are true except: a. A portfolio may contain multiple programs

and projects.

Chapter 2 Project Selection and Prioritization 53

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b. A project manager has the discretion to make trade-offs in regard to which programs to pursue.

c. A program manager has the discretion to make trade-offs in regard to which projects to pursue.

d. Projects have a finite timeline, while programs may exist as long as the parent organization does.

5. Which of the following is a financial analysis tool that an organization may use to determine the cost-value of potential projects? a. Payback period (PP) b. Internal rate of return (IRR) c. Net present value (NPV) d. All of the above

6. All projects should be aligned with their organi- zation s strategic plan, which includes the organi- zation s vision, goals, and objectives. Which of these describes an organization s vision? a. Conveys a larger sense of organizational pur-

pose, and is both inspiring and guiding b. Describes short- and long-term results along

with measures to determine if they have been achieved

c. Includes the organization s core purpose, core values, beliefs, culture, primary business, and primary customers

d. Is SMART: specific, measurable, achievable, results-based, and time-specific

7. The best describe(s) why a project is being undertaken. a. statement of work b. business case c. subprojects d. source selection criteria

8. The document that includes the necessary information to determine whether a project is worth the required investment, and is used for decision making by upper management, is called the: a. project scope statement b. project charter c. business case d. case study

9. An organization s vision often includes reference to its social, environmental, and economic health, collectively referred to as the: a. triple bottom line b. business case c. statement of work (SOW) d. net present value (NPV)

10. A business case typically contains information regarding the business need and a financial anal- ysis. Which model divides the cash flow by the initial cash outlay? a. Benefit-cost ratio (BCR) b. Internal rate of return (IRR) c. Net present value (NPV) d. Payback period (PP)

Exercises 1. Complete the following scoring model. Show all

your work. Tell which project you would pick first, second, third, and last. How confident are you with each choice? If you lack confidence regarding any of your choices, what would you prefer to do about it?

2. Complete the following scoring model. Show all your work. Tell which project you would pick first, second, third, and last. How confident are you with each choice? If you lack confidence regarding any of your choices, what would you prefer to do about it?

Project A

Project B

Project C

Project D

4610

4

3

2

1

3

2

4

3

5

3

3

4

Project A

Project B

Project C

Project D

3710

1

3

5

2

3

5

4

3

4

3

3

1

54 Part 1 Organizing Projects

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3. Pretend you are on the leadership team for a phar- maceutical company that is in a difficult financial situation due to patents that have expired on two of your most profitable drugs. Brainstorm a list of criteria by which you would select and prioritize projects. Weight the criteria.

4. Pretend you are on the leadership team of a manufacturing company that is currently chal- lenged by low-cost competition. Brainstorm a list of criteria by which you would select and pri- oritize projects. Weight the criteria.

I N T E G R A T E D E X A M P L E P R O J E C T S

SUBURBAN HOMES CONSTRUCTION PROJECT

Suburban Homes, like any other real estate company, has many strategic directions to pursue to expand the company operation and increase revenue and profits. To explore and pursue various investment opportunities that would eventually translate into projects, the company developed strategic directions to suc- cessfully invest in real estate. It identified six options for portfolio project management. They are investments in purchasing land for future development, communities for single-family homes, multifamily properties, small-scale apartment buildings, large- scale apartment complexes, and commercial investments.

1. Purchasing land in areas that have potential for future growth makes sense, as the cost of land tends to be sub- stantially cheaper 10 20 years before it is turned into a developed suburban area. At an appropriate opportunity, the land can be improved to add value, or it can be leased or rented to create cash flow. Further, the land can be divided and parts of it can be sold for a profit. However, this option requires a vision for future growth and devel- opment and consequently, risks are also associated with this strategic direction.

2. Building single-family homes in suburban areas is one of the best and most popular strategic directions for growth for companies like Suburban Homes. Most of the clients who are interested in a quality life and view their home as an investment prefer buying single-family homes. Clients realize that it is easy to rent, sell, and finance.

3. Small multifamily properties usually consist of two to four units. They also present similar advantages that are asso- ciated with a single-family home such as easy financing and being a wise investment option for clients while pro- viding a good residence for their family.

4. Small apartment buildings usually consist of 5 to 50 units for clients to reside in. They are more popular among those who prefer urban areas and a busy social life.

Clients are usually unmarried or married with no children. These properties can be more difficult to finance because they rely on commercial lending standards. For this invest- ment option, Suburban Homes must look for investment opportunities closer to densely populated areas, and the investor must provide parking areas.

5. Large apartment complexes require that you include pools, a gym, tennis courts, and parking facilities, in addition to other attractions that lure people to choose the complex as a residence. Such a complex requires full-time staff to manage the property, provide safety and security, and pro- vide good customer service. These properties can be very expensive to purchase. However, this investment option provides steady revenue flow.

6. Commercial investment, in its truest sense, is an invest- ment for growth and diversity in a portfolio. The aim of this investment is to lease the property for business. Size, style, and purpose also vary. Clients could range from small business owners to large malls and mega office complexes. This investment option offers a consis- tent cash flow. However, occupancy would depend largely on the local economy and could prove to be risky. Further, investments are of higher magnitude and Suburban Homes is seriously considering this option after establish- ing steady growth in the residential market and improving their financial stability and growth.

Given these six options, Suburban Homes has approached you to develop a project selection model to maintain a balanced portfolio.

Reference https://www.biggerpockets.com/real-estate-investing/strate- gies-niches

Chapter 2 Project Selection and Prioritization 55

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Semester Project Instructions Your instructor may bring example projects to class and facilitate the assignment of students to the vari- ous project teams. Alternatively, your instructor may ask you to identify potential projects. Therefore, you may or may not be involved in project selection. If your instructor has each student bring in a project idea, you will first need to create your elevator pitch to describe tersely what work is involved in your project and why it is important. Then you and a small team will likely need to select one of the potential projects using a scoring model. Unlike the criteria for selecting among projects in a typical organization, for your class, you may use criteria that will help you learn. You may want to include size and complexity criteria so the project is involved enough for you to benefit by using many of the

techniques in this book, but small enough so you can do the work in a reasonable amount of time. Finally, you may need to identify resources to accom- plish the project using a resource matrix.

Regardless of whether your project is student or fac- ulty generated, one of the first things you should do when assigned to a project is to learn about the company or other organization that wants the project to be com- pleted. Why did they select this project? Is it a must- do project or did it get chosen over other competing projects? By understanding what makes the project so important, you will make better decisions and will be more motivated through the term. If your project is a must-do project, explain why. If it is not a must-do

project, explain how it was selected. Explain where it fits in priority with other work of the organization.

CASA DE PAZ DEVELOPMENT PROJECT

Casa de Paz is an ambitious project with several dimensions to it. There is a shelter that provides six-month housing for families, along with professional services to support a process of healing and transformation. There is a support group for women that serves residents and nonresidents alike.

The early meetings for Casa de Paz include seeking volun- teers to serve on the board and the three main working groups. Then a facilitated meeting is being held to determine the minimal viable product (MVP) to build. This is an open and operating facility. Some of the features that are needed include a director, staff, a building, remodeling the building, funding, a website, programming, and volunteers. Organiza- tional responsibilities also must be defined. An important question is: What can Casa de Paz do quickly without waiting for other things to happen? What are some of the things they need to do concurrently? How many projects can each of the groups (the board and the three working groups) realistically begin right away?

Armed with the answers to these questions, each of the probable projects should have an elevator pitch:

What is included and why is it important? Then the most critical few projects can be selected, resourced, and chartered.

An example of an elevator pitch is: There is a need to acquire a building and there is competition for both buildings under consideration. One building is more attractive than the other as the cost is considerably less although the number of families served would be less.

Another elevator pitch is the need for website develop- ment. A fledgling website exists, but there are so many communication, fundraising, volunteer soliciting, and other possible uses of the website that early development is attractive. The elevator pitch could answer the following questions:

Why is enhancing the website so important? How can the website help us do other work we desire to perform? Where are we now? What do we want?

56 Part 1 Organizing Projects

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PROJECT MANAGEMENT IN ACTION

Prioritizing Projects at LADD LADD s project prioritization process introduced at the start of this chapter brought along a few sur- prises. It was not a clean and quick process. With a staff of seven directors in the room, all with varying levels of experience and understanding, many con- versations transpired requesting clarification and explanation on why peers used criteria to rank pro- jects higher or lower than the overall average. The wall of the board room was covered with paper that contained projects, numbers, and many markings that could be deciphered only by those involved in the process. Some directors provided unsolicited advice as to why their program s project deserved higher marks. Such requests were generally met with equal banter, advocacy for one s own project, and

ultimately ended in a fruitful discussion that resolved any discord.

As projects were scored and then ranked, the outcomes were not always predictable. A project such as the film festival emerged as the top priority because it was so closely linked with the scored cri- teria of generating revenue and having a large com- munity impact. Creating an infrastructure for IT needs was last because it would cost a significant amount of money and have no direct return for the individuals LADD supports. From the process, it was evident that a small handful of projects were nonne- gotiable and would require completion in order to establish a base for other larger, more impactful projects.

Ultimately, the leadership team was able to create a plan of action that is scheduled to accomplish all of the objectives outlined in the strategic plan in a delib- erate, organized manner within the five-year timeline. LADD s leadership team members assumed the title of project manager for the majority of projects. They will work across departments, employing the strengths of many and be held accountable to their peers weekly when the prioritization plan is reviewed at the direc- tor s meeting.

Although in its infancy, LADD has taken the top- ranked 12 projects and broken down quarterly expected outcomes for each. The outcomes may be revenue based and focused on generating income for the organization or task based with a method of planning and implementation. Whatever the method, program managers are held responsible for the project being supervised, and project progress will be reported directly to LADD s board of directors. Such a framework allows for accountability all the way through the organizational structure and a con- clusively better service provision for those who LADD supports.Exhibit 2.16 illustrates the prioritiza- tion process with the highest ranked projects selected by LADD and shows the five criteria used to do so.

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Chapter 2 Project Selection and Prioritization 57

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References A Guide to the Project Management Body of Knowledge

(PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, 2017).

Barclay, Colane, and Kweku-Muata Osei-Bryson, Toward a More Practical Approach to Evaluating

Programs: The Multi-Objective Realization Approach, Project Management Journal 40 (4) (December 2009): 74 93.

Brache, Alan P., and Sam Bodley-Scott, Which Impera- tives Should You Implement? Harvard Management Update, Article reprint no. U0904B (2009).

Cannella, Cara, Sustainability: A Green Formula, 2008 Leadership in Project Management 4: 34 40.

Caron, Franco, Mauro Fumagalli, and Alvaro Riga- monti, Engineering and Contracting Projects: A Value at Risk Based Approach to Portfolio Balanc- ing, International Journal of Project Management 25 (2007): 569 578.

Chinta, Ravi, and Timothy J. Kloppenborg, Projects and Processes for Sustainable Organizational Growth, SAM Advanced Management Journal 75 (2) (Spring 2010): 22 28.

Cooper, Robert G., Winning at New Products: Path- ways to Profitable Innovation, Proceedings of PMl Research Conference 2006 (Newtown Square, PA: Project Management Institute, 2006).

Daft, Richard L., Management, 9th ed. (Mason, OH: South-Western Cengage Learning, 2010).

Eager, Amanda, Designing a Best-in-Class Innovation Scoreboard, Technology Management (January February 2010): 11 13.

Evans, R. James, and William M. Lindsay, Managing for Quality and Performance Excellence, 8th ed. (Mason, OH: South-Western Cengage Learning, 2011).

State of Federal Information Technology, https://cio. gov/wp-content/uploads/filebase/cio_document_ library/CIO-Council-State-of-Federal-IT-Report- January-2017(12).pdf, accessed April 14, 2017.

Kenny, John, Effective Project Management for Stra- tegic Innovation and Change in an Organizational Context, Project Management Journal 34 (1) (March 2003): 43 53.

Kloppenborg, Timothy J., Arthur Shriberg, and Jayashree Venkatraman, Project Leadership (Vienna, VA: Management Concepts, 2003).

Kloppenborg, Timothy J., and Laurence J. Laning, Strategic Leadership of Portfolio and Project Man- agement (New York: Business Expert Press, 2012).

Labuschagne, Les, and Carl Marnewick, A Structured Approach to Derive Projects from the Organiza- tional Vision, Proceedings of PMI Research

EXHIBIT 2.16

LADD PROJECT SELECTION AND PRIORITIZATION MATRIX

PROJECT MISSION (10)

FINANCE (9)

WORKFORCE (8)

RELATIONSHIPS (8)

COMMUNITY (7) TOTAL

Film Festival 40 36 32 32 35 175

Expand meaningful community-inclusion activities

50 27 32 40 21 170

Develop Victory Parkway site

50 36 16 40 28 170

Implement vacation/ respite services

40 36 24 24 35 168

Health and Wellness Program

50 18 40 32 21 161

58 Part 1 Organizing Projects

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Conference 2006 (Newtown Square, PA: Project Management Institute, 2006).

Milosevic, Dragan Z., and Sabin Srivinnaboon, A Theoretical Framework for Aligning Project Man- agement with Business Strategy, Project Manage- ment Journal 37 (3) (August 2006): 98 110.

Organizational Project Management Maturity Model Knowledge Foundation, 2nd ed. (Newtown Square, PA: Project Management Institute, 2008).

PMI Requirements Management: A Practice Guide (New- town Square, PA: Project Management Institute 2016).

Practice Standard for Work Breakdown Structures, 2nd ed. (Newtown Square, PA: Project Management Institute, 2006).

Reginato, Justin, and C. William Ibbs, Employing Busi- ness Models for Making Project Go/No Go Decisions, Proceedings of PMI Research Conference 2006 (New- town Square, PA: Project Management Institute, 2006).

Senge, Peter, Bryan Smith, Nina Kruschwitz, Joe Laur, and Sara Schley, The Necessary Revolution: How Individuals and Organizations Are Working Together to Create a Sustainable World (New York: Broadway Books, 2008).

Smallwood, Deb, and Karen Furtado, Strategy Meets the Right Projects at the Right Time, Bank Systems & Technology 46 (4) (June July 2009): 34.

The Standard for Portfolio Management, 3rd ed. (New- town Square, PA: Project Management Institute, 2013).

The Standard for Program Management, 3rd ed. (New- town Square, PA: Project Management Institute, 2013).

Steffey W. R., and V. Anantatmula, International Projects Proposal Analysis: Risk Assessment Using Radial Maps, Project Management Journal 42 (3) (2011): 62 74.

Wheatley, Malcolm, Beyond the Numbers PMNetwork 23 (8) (August 2009): 38 43.

Zhang, Weiyong, Arthur V. Hill, Roger G. Schroeder, and Keyin W. Linderman, Project Management Infrastructure: The Key to Operational Performance Improvement, Operations Management Research 1 (1) (September 2008): 40 52.

http://en.wikipedia.org/wiki/Triple_bottom_line, accessed February 2, 2010.

http://www.gcbl.org/about, accessed March 12, 2013. http://www.bia.ca/vision.htm, accessed March 5, 2013. http://ocio.os.doc.gov/s/groups/public/@doc/@os/

accessed February 7, 2017. @ocio/@oitpp/documents/content/prod01_002082.pdf,

accessed March 6, 2013. https://topnonprofits.com/examples/vision-statements/,

accessed January 9, 2017. http://www.sustainablecleveland.org accessed February

7, 2017. http://www.ecowatch.com/cleveland-a-green-city-on-a-

blue-lake-1882095827.html, accessed January 9, 2017. http://www.internetsociety.org/who-we-are/organiza-

tion-reports-and-policies/internet-society-2015- action-plan, accessed February 7, 2017.

http://pmzilla.com/proposal-evaluation-techniques- source-selection-criteria accessed February 7, 2017.

Endnotes 1. https://topnonprofits.com/examples/vision-statem

ents/, accessed January 9, 2017. 2. http://www.sustainablecleveland.org accessed Feb-

ruary 7, 2017. 3. http://www.ecowatch.com/cleveland-a-green-city-on

-a-blue-lake-1882095827.html, accessed January 9, 2017.

4. Lussier, Robert N., and Christopher F. Achua, Lead- ership: Theory, Application, Skill Development, 4th ed. (Mason, OH: Thomson South-Western, 2010): 425.

5. PMI Standard for Portfolio Management, 3rd ed. (2013): 190.

6. Kloppenborg, Timothy J., and Laurence J. Laning, Strategic Leadership of Portfolio and Project Manage- ment (New York: Business Expert Press, 2012): 21.

7. PMI Standard for Portfolio Management, 3rd ed. (2013): 190.

8. PMI Standard for Program Management, 3rd ed. (2013): 178.

9. Federal_CIO_Roadmap-[2010.07.02].pdf, p. 4, accessed February 7, 2017.

10. PMI Practice Standard for Work Breakdown Structures, 2nd ed. (2006): 121.

11. PMI Requirements Management: A Practice Guide (2016): 77.

12. PMI Business Analysis for Practitioners: A Prac- tice Guide (2015): 207.

13. Steffey, W. R., and V. Anantatmula, Interna- tional Projects Proposal Analysis: Risk Assess- ment Using Radial Maps, Project Management Journal 42 (3) (2011): 62 74.

14. http://pmzilla.com/proposal-evaluation-techniques -source-selection-criteria, accessed February 7, 2017.

Chapter 2 Project Selection and Prioritization 59

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C H A P T E R 3

Chartering Projects

Planning a project is similar to putting together a large puzzle. If you were to dump a 1,000-piece puzzle on a table, you would probably not start the detailed planning right away by comparing two pieces randomly to see if they fit. You

would likely take several preliminary steps. Some of these steps might include turning the pieces so the picture side was visible on each, sorting outside pieces so you could form the boundaries, studying the picture on the box, and sorting by color so you could match pieces more easily. (A few more-organized people may like to count and make sure that there are, indeed, 1,000 pieces.) These prelimi- nary steps make the detailed planning of the puzzle much easier and more effi- cient. If completing projects is analogous to putting puzzles together, then project charters are the initial steps. Initiating a project requires some preliminary actions, including understanding the needs and concerns of stakeholders, most critically the project sponsor.

Ball Aerospace & Technologies Corp., Systems Engineering Solutions provides a wide range of air, space, and counterspace engineering and professional ana- lytic services. At Ball, we increase stakeholder buy-in by addressing and thinking about things up front; with an agreed-upon charter, this gives the project team

CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Describe what a project charter is and why it is critical to project success. List the various ele- ments of a charter and why each is used. Create each section of a charter for a small sample project using given project information.

TECHNICAL OBJECTIVES: Initialize a project in Microsoft Project and set up a milestone schedule.

BEHAVIORAL OBJECTIVES: Work with a team to create a complete charter for a real project and present it to a sponsor for ratification. Negotiate with the project sponsor to develop a realistic and achievable project charter.

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some guidance to effectively plan and execute the effort. In addition, by going through the chartering process, stakeholders take ownership in the project.

At Ball, our project sponsors are typically U.S. government customers, and we provide work for them on a contractual basis. They provide funding and broad direction for our efforts, and we go through a formal proposal process for all our projects. Project sponsors provide initial statements of work or objectives defin- ing their goals for the task and then select among several proposals from inter- ested companies such as Ball to fulfill their requirements. The chosen company is then under an official formal contract to complete the project. This is, in effect, a pre-chartering process.

Typically, after an effort is under contract, a kickoff meeting is scheduled to review the objectives of the project between the project sponsor and the chosen company. This is part of the initiating stage, where stakeholders review and approve the following as part of the project s charter:

Overall project objectives Contrast between technical approach as written in the company s proposal for execution and sponsor expectations Milestones, checkpoints, and potential payment plans Success criteria and schedule Identification of key stakeholders and risks Processes for executing, monitoring, controlling, and overall management of the project

There are a number of things to consider when initiating a project and generat- ing a project charter. These serve as pieces of the overall puzzle of managing and executing a project. A little pre-work in initiating the project goes a long way, with increased goodwill and understanding from the project sponsor, clear tasks and goals for the project team, and a single way forward toward achieving the pro- ducts and services of the project.

Lydia Lavigne, Ball Aerospace

This chapter describes what a project sponsor, manager, and team need to understandto quickly initiate a project. The project then proceeds into planning, and the ele- ments of a charter are planned in as much detail as needed. Chapters 5 through 11 describe project planning.

11.2 Identify Risks

11.3 Perform Qualitative

Risk Analysis

6.5 Develop Schedule

13.1 Identify Stakeholders

Stakeholder Register

11.5 Plan Risk

Responses

4.4 Manage Project Knowledge

Lessons Learned Register

4.1 Develop Project Charter

Project Charter Assumptions Log

PMBOK® GUIDE Topics:

4.1 Develop project charter

4.4 Manage project knowledge

6.5 Develop schedule 13.1 Identify

stakeholders 11.2 Identify risks 11.3 Perform qualitative

risk analysis 11.5 Plan risk responses

MAJOR DELIVERABLES Project Charter Assumptions Log Stakeholder Register Lessons Learned Register

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3-1 What Is a Project Charter? For a project manager, team member, or project sponsor, one of the first and most important project management concerns is a project charter. This short document (usu- ally about three pages) serves as an informal contract between the project team and the sponsor (who represents both senior management of the organization and the outside customer, if there is one).

From a behavioral perspective, the project charter reflects a common understanding and collaboration between the project sponsor and the project manager. Negotiation skills of the project manager also play an important role in developing the project charter.

Since a charter is like a contract, it is helpful to remember what a contract is. First, it is an agreement entered into freely by two or more parties. Second, one party cannot arbitrarily change it. Third, there is something of value in it for each party. Finally, it is a living document that can evolve with changing conditions if both parties agree and receive something of value for making the change. The charter signing represents the transition from the high-level project initiation stage into the more detailed project plan- ning stage. See Exhibit 3.1 for a review of the project life cycle.

The project charter is the deliverable that grants a project manager the right to con- tinue into the more detailed planning stage of a project. This may include only permis- sion to plan the project, permission to make decisions that would slow the project if delayed (such as ordering long-lead materials or hiring special workers), or permission to plan and perform the entire project in the case of a small, simple project. Officially, a charter is drafted by either project manager or sponsor and then negotiated; however, as projects are often conducted in a more collaborative fashion, some organizations are assigning core team members early enough that they can help draft the charter. Also, early input from key stakeholders may be considered.

While either party (the sponsor or the project manager) can write the rough draft, more often than not, the project manager writes the draft charter. Ideally, then, the proj- ect manager and the sponsor candidly discuss each part of the charter. Like a contract, the people who sign a charter are wise to ensure that they understand and agree to all of it. Unlike a contract, however, both parties feel obligated to the spirit (as opposed to the letter) of the charter since the project details have not yet been worked out and specifics will certainly change.

Thinking of a charter like a contract means that both the project manager and the sponsor sign the charter willingly and strive to make the project successful. When core team members have helped write the charter rough draft, they may also sign the charter. If the project man- ager feels bullied into making a change, it is not a free choice. However, the sponsor may legitimately need to insist on receiving the project results more quickly or make some other

EXHIBIT 3.1

PROJECT LIFE CYCLE

Approval: CharterSelection Kickoff Project BenefitsAdministrative closure realizedresultTo proceed

62 Part 1 Organizing Projects

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change to the project. In the spirit that one party cannot arbitrarily change a contract, the sponsor would not just tell the project team, I need the project a month sooner and you get no more resources and no relief from any other work responsibilities. Rather, if the project must change, the sponsor needs to consider herself or himself to be a partner with the project team in determining how to accomplish the change.

3-2 Why Is a Project Charter Used? The four major purposes for a charter are to:

1. Authorize the project manager to proceed 2. Help the project manager, sponsor, and team members, if any are already assigned,

develop a common understanding 3. Help the project manager, sponsor, and team members commit to the spirit of the project 4. Quickly screen out obviously poor projects

First, a project charter is a document that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities. 1 Many project managers do not have the authority to commit resources without a charter. This gives the project and the project manager offi- cial status within the parent organization.

Second, everyone involved in the upcoming project needs to develop a common understanding of what the project entails. This includes at least the broad justification for the project, how it aligns with the goals of the parent organization, determination of what is included and excluded in the project scope, rough schedule, success measures, major risks, rough estimate of resource needs, and stakeholders. On larger and more complex projects, additional understanding may be required at this point. Small, simple projects may use a simplified single-page charter. Once everyone has a common under- standing of clear project goals, several additional benefits occur:

Teamwork develops. Agreement, trust, communication, collaboration, and commitment among the spon- sor, project manager, and project team develop. The project team does not worry if management will accept a decision and can focus on the project plan. The sponsor is less likely to unilaterally change the original agreement.2

Third, each person needs to personally and formally commit to doing their level best to achieve the agreed-upon project results even when things do not go as planned. It is a moral duty of all the project team members to commit to the shared goals articulated in the charter. This formal commitment often helps a person decide to keep working hard on a project when things are not going well.

Fourth, a charter is used to quickly screen potential projects to determine which appear to be poor choices. Needless to say, a charter is much quicker to put together than a full, detailed project plan and schedule. If by constructing a charter it is determined that the project is likely to fail, much planning time (and therefore money) will be saved.

Remember, the charter helps all project stakeholders. Charters are often publicly shown to many individuals beyond the project team and sponsor for communication. The culture of some companies is more trusting, competitive, focused on time, preoccu- pied with details, and so on than at other companies. Therefore, charters used in differ- ent industries and companies have somewhat different elements and formats.

Chapter 3 Chartering Projects 63

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3-3 When Is a Charter Needed? Project methods can be scaled from very simple to very detailed. Consequently, a project charter can vary in its length from one-page to multiple pages. A project manager wants to use details that are adequate enough to develop a common understanding and agree- ment between the project manager and the project sponsor.

TriHealth has developed both full and mini charters, for large and small projects, respectively. They have also developed the decision matrix shown in Exhibit 3.2 to help people determine if a full charter, mini charter, or no charter is needed.

EXHIBIT 3.2

PROJECT CHARTER DECISION MATRIX

Project Name Date When an improvement, change, or new program is going to be implemented, it is important to first determine whether or not it is a project. If it is a project, TriHealth has specific tools that should be used to guide the planning and implementation. In general, a project is a temporary endeavor undertaken to create a unique product, service, or result. If your project impacts more than one department, requires expertise or resources beyond your own department, or could affect the operations in another area, the standardized templates should be used. Answering the questions below with a check will help you determine what types of tools are needed for your project. Evaluate where the majority of your checks lie and use the most appropriate tool.

Resources Little or no monies, supplies, or change in resources

Requires moderate resources

Requires significant and/or additional FTEs

Multidisciplinary 1 discipline involved/ impacted

2 3 disciplines involved/ impacted or more than one site

More than 3 disciplines involved/impacted

Complexity Little complexity Moderate complexity; affects care delivery

Very complex

Technology Involvement

No technology changes IS consult needed IS resources assigned

Approvals None needed Approval by immediate supervisor

Executive-level approval

Potential Risk Level

Minimal impact on customer

Moderate impact on customer

Significant impact on customer

Staff Commitment Involvement of 2 3 people for solution

Small team needed to generate solutions

Requires large team of multiple departments for improvement

Communication and Education

Simple communication plan or unit-based educa- tion only

Moderate communication plan; requires education across departments

Complex communication/ education plan with various media

Metrics Requires at least a one-time follow-up check

Improvement will be tracked

Baseline and ongoing tracking of data

If the majority of your checks lie in this area:

No charter needed Complete a mini charter Complete a full project charter

Source: TriHealth.

64 Part 1 Organizing Projects

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3-4 Typical Elements in a Project Charter The following sections list some of the typical key elements in a project charter. While the intent of most of these sections is included in many charters, some project teams combine sections or leave out a few of them. Furthermore, while the term charter is a widely used stan- dard, some organizations use other names such as project request, project submission form, or project preplanning form. As long as the four purposes of a charter (authorization, understand- ing, commitment, and screening) are accomplished, the exact format and title are negotiable. Typical charter elements and the question each element answers are shown in Exhibit 3.3.

The charter should be short enough so that the project team and sponsor (and any other interested stakeholder) can examine it carefully to ensure they understand and agree. One to four pages in total is generally about the right length.

3-4a Title The existence of a meaningful project title is critical. In an organization with a number of projects, the title can be used to quickly identify which project is being referenced.

3-4b Scope Overview The scope overview and business case sections are the high-level what and why of the project. They are sometimes considered to be the elevator speech that a person would use if given a very short amount of time, such as a one-floor elevator ride, to describe their project. Sometimes, an additional background statement is helpful.

The scope overview is the project in a nutshell: a high-level description of what needs to be accomplished and how it will be done. What needs to be accomplished can be described as the product scope, all the characteristics that must be present in the actual project deliverables or as requirements, each of which is an attribute that needs to be present in order to satisfy a contract, client, or other stakeholder. How it will be done is the project scope, the entirety of what will and will not be done to meet the specified

EXHIBIT 3.3

CHARTER ELEMENTS AND QUESTIONS ANSWERED

CHARTER ELEMENT ANSWERS THE QUESTION

Scope overview What?

Business case Why?

Background Why?

Milestone schedule When?

Success criteria What?

Risks, assumptions, and constraints Whoa!

Resources How much?

Stakeholders Who?

Team operating principles How?

Lessons learned How?

Signatures and commitment Who?

Chapter 3 Chartering Projects 65

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requirements. The scope overview quickly describes the project work and results. The scope overview is used to distinguish between what the project will and will not do. It is used to help prevent scope creep, which is an incremental increase in the work of a project without corresponding adjustments to resources, budget, or schedule. The scope overview can be considered to define project boundaries. It states what is included and what is not at least at a fairly high level.

Quantifying the scope, such as 15 touch points will be included, helps everyone to better understand the project s size. If a project could be compared to an animal, the scope overview briefly describes both the size and features so one can tell if it is a rabbit or an elephant. By understanding what is included and what is not, the project team is more likely to accurately estimate cost, resource, and schedule needs and to understand and handle project risks.

3-4c Business Case The business case is the project purpose or justification statement. It answers the ques- tion why? and helps all parties understand the purpose of the project. A business case is used to justify the necessity of the project. It should clearly tie the project to the orga- nization s strategy and explain the benefits the organization hopes to achieve by autho- rizing the project or the strategic goals it meets.

Depending on the organization, a business case can either be just the rationale for the project, or it can also include high-level estimates of the costs and benefits of the project. A business case may also include emotional and ethical reasons for performing the proj- ect. A well-written business case should persuade decision makers to support the project and inspire the project team members and key stakeholders to work hard toward suc- cessful completion of the project.

3-4d Background Many people are quite busy and prefer short statements that can be quickly reviewed. Key project stakeholders should know enough about the project after reviewing the short scope overview and business case statements, as these statements will provide all of the information they need to know. Some other stakeholders may need more details to understand the rationale and purpose behind these statements. A more detailed back- ground statement may be helpful in these cases.

Unlike the first two statements, which should be limited to about two to four sen- tences each, the background statement can be any length. The background statement is purely optional develop one only when it is necessary.

3-4e Milestone Schedule with Acceptance Criteria The milestone schedule is a high-level plan that indicates a few significant accomplish- ments that are anticipated over the life of the project. It divides the project into a few (about three to eight) intermediate points or milestones whose completion can be veri- fied. The team estimates a date when they expect to complete each milestone. A mile- stone schedule should list major milestones and deliverables that the project team especially wants to ensure are completed both on time and to the satisfaction of key deci- sion makers. The milestone schedule is considered very useful for communicating with the key stakeholders who are not actively involved with the project.

A deliverable as defined in Chapter 1 is a unique and verifiable product, result, or capabil- ity to perform a service that is required to be produced to complete a process, phase, or project. 3 Requirements of a deliverable are often translated into specifications so that the deliverable can be validated, qualified by measurable conditions, and bounded by constraints.

Sometimes, milestones occur right before the approval of a large expenditure. At other times, they occur at completion of a critical design, a key deliverable, or a major

66 Part 1 Organizing Projects

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AGILE

accomplishment of the scope. It is helpful to identify the relatively few milestones and key deliverables in the project that the team and sponsor wish to check closely.

Adding a column for acceptance criteria factors to the milestone schedule helps the project team understand who will judge the quality of the deliverable associated with each milestone and what criteria will be used for that determination. Acceptance criteria stipulate which conditions must be met in order for the deliverables to be approved.

Acceptance criteria are like the project s vital signs. A paramedic would check pulse, breath- ing, maybe skin color, and body temperature immediately when answering a 911 call. Other tests are not as critical and may be performed, just not immediately. It is important to identify the vital signs for the project. Project success is easy to measure after the project is complete. The equally important, but often more challenging, decision is how to measure success while the project is progressing so there is still time to make changes if necessary.

Another way to understand acceptance criteria is to understand how a key stakeholder such as the sponsor, customer, or end-user is going to determine if the deliverables created are of good enough quality to accept. Since some of the milestones are often preliminary (drafts, prototypes, concepts, outlines, etc.), it is helpful to have the same person who will judge the final project deliverables judge them at the intermediate milestones. By doing this, the decision maker is much less likely to state at the end of the project, No, that is not what I meant. Including advance understanding of criteria is similar to the old saying that a trial lawyer never asks a question without knowing how the witness will answer. An astute project manager never turns in a deliverable without knowing how it will be judged. An example of a milestone schedule is shown in Exhibit 3.4.

One key concept in Agile projects is that something of value will be delivered at each iteration. Something of value for IT projects means working software. For other projects, it still refers to something the user can use not just documentation. An agreement is reached during iteration planning on the definition of done meaning exactly how each feature and function must perform. This is comparable to deliverables with accep- tance criteria for each milestone as just described.

3-4f Risks, Assumptions, and Constraints A risk is an uncertain situation that could negatively or positively affect the project if it occurs. Assumptions are suppositions made during project planning that are treated as correct or factual, though they have not been proven. Project teams frequently identify, document, and validate assumptions as part of their planning process. Assumptions

EXHIBIT 3.4

MILESTONE SCHEDULE EXAMPLE

MILESTONE DATE WHO JUDGES ACCEPTANCE

1. Existing facility 9-19-16

2. Site visit/audit 9-22-16 PM/Customer Site data verified

3. Design and approval 10-22-16 Customer Customer approval

4. Equipment deliverables 12-2-16 Engineering & Manufacturing B.O.M. check

5. Project execution 1-6-17 Installation & Customer Commissioned

6. System turnover 1-13-17 Customer System throughout of 35,000 cases per day

Chapter 3 Chartering Projects 67

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generally involve a degree of risk. A constraint is anything that limits the implementa- tion of a project.

Taken together, assumptions and constraints are what could cause project problems. They are included with risks so that all of the key participants sponsor, project manager, and core team are aware in advance of what could prevent them from successfully completing the project. While it is unrealistic to believe that the team can think of every single thing that could go wrong, the more comprehensive this section is, the more likely the team is to uncover problems before they occur and while there is time to easily deal with them.

If an assumption turns out to be false, it becomes a risk. A constraint that limits the amount of money, time, or resources needed to successfully complete a project is also a risk. Some organizations, especially for small projects, group all risks, assumptions, and constraints together, while others handle each as a separate char- ter section. The most important point is not how each is managed, but that each is managed.

Project managers and teams should look at risks for three reasons. First, any negative risk that is a threat that may inhibit successful project completion (to the satisfaction of stakeholders, on time, and on budget) needs to be identified. And, if it is a major risk, a plan must be developed to overcome it. Second, a positive risk is an opportunity to com- plete the project better, faster, and/or at lower cost or to capitalize upon the project in additional ways, and a plan should be developed to capitalize upon it. Third, sometimes there is more risk to the organization if the project is not undertaken and this provides additional rationale for doing the project.

For each major negative risk identified, an owner is assigned responsibility. Then one or more response plans are normally developed to either lessen the probability of the risk event from happening in the first place and/or to reduce the impact if the risk event should materialize. Sometimes, transferring the risk to a third party makes sense. The goal is not to eliminate all risk, but to reduce the risk to a level that decision makers deem acceptable.

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68 Part 1 Organizing Projects

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3-4g Resource Estimates Remember that executives consider projects to be investments. The scope overview and busi- ness case sections of the charter describe the return expected, while the resources section describes what will be invested. These sections collectively help decision makers determine if the project is worth approving. Resources include the workers, tools, equipment, and anything else needed in order to execute your project. Since executives consider projects to be invest- ments of resources, they will want a rough estimate. This can be an estimate of the amount of staff time, equipment, or materials that are in short supply, and/or the amount of money that is required. Since there is only very general understanding of the project at this point, any budget will also be approximate and should be stated as such by calling it a preliminary budget and including the level of confidence one has in the estimate; this is often expressed in per- centage terms (such as plus or minus 50 percent) regarding the accuracy of the estimate.

On some internal projects, the pay for the associates who work on the project often comprises much of the expense. Frequently, however, at least a few expenses are incurred. It is helpful to identify which expenses the project manager can authorize and which the sponsor needs to control.

3-4h Stakeholder List Project success is partially dictated by identifying and prioritizing stakeholders, managing robust relationships with them, and making decisions that satisfy stakeholder objectives. Therefore, it is good practice to identify and prioritize stakeholders early in a project.

3-4i Team Operating Principles Team operating rules or principles are sometimes established to enhance team perfor- mance. The goal is to increase team effectiveness and ensure that all parties are aware of what is expected. Team operating principles that are especially useful are those that

The key players of a project show their commitment to the project by signing the commitment section of the charter.

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Chapter 3 Chartering Projects 69

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deal with conducting meetings, making decisions, accomplishing work, and treating each other with respect. This concept is further elaborated on as a Team Charter in Chapter 5 because some organizations will choose to create a separate team charter instead of including team operating principles in their project charter.

3-4j Lessons Learned While every project is unique, a great deal can be learned from the successes and failures of previous projects and turned into practical advice. Lessons learned represent the knowledge acquired by the project team throughout the project planning and execution, including things that should be replicated and things that should be avoided on future projects. To ensure that lessons learned are used, a sponsor should only sign a charter authorizing the project to begin when at least one or two good, specific lessons from the successes and/or failures of recently completed projects are included. This essentially forces the new project manager and team to look at the organization s lessons learned repository to find applicable learnings. A lessons learned register is an accumulation of the knowledge gained during previous projects selection, planning, and executing that can be easily referenced to help with planning and executing future projects. These lessons could be stored in a dedicated database, on a shared drive, or in a less formal manner. The database should be intuitive to use, and it should be easy to retrieve relevant information. It is important for new project teams to learn together; otherwise, they risk repeating mistakes from previous projects.

3-4k Signatures and Commitment The commitment section of the charter lists who is involved and sometimes describes the extent to which each person can make decisions and/or the expected time commitment for each person. This is where the project sponsor, project manager, and perhaps core team members publicly and personally show their commitment to the project by signing the char- ter. By formally committing to the project, the key players are more likely to keep working hard during difficult periods and see the project through to a successful conclusion.

3-5 Constructing a Project Charter It is wonderful if the sponsor can work with the project manager and possibly core team members who have been preassigned to construct the charter. The sponsor, however, as a busy executive, often does not have time to be present for the entire chartering period. In those cases, it is very helpful if the sponsor can create the first draft however crude of the scope overview and business case. A sponsor s ability to tell the project manager and core team concisely what the project is and why it is important gets the team off to a good start. If the sponsor wants the team to consider any important constraints, assumptions, risks, or other factors, she can help the team by pointing that out up front.

Sometimes, on an especially important project, the organization s leadership team may draft more than just the business case and scope overview statements. If the leadership team feels something is very important, they can save everyone time by just stating it up front. Like- wise, if the sponsor knows he or she will only approve a charter with one of the elements writ- ten a particular way, he or she should tell the team that up front. Otherwise, the project manager, possibly with the core team, most frequently writes much of the rough draft.

3-5a Scope Overview and Business Case Instructions When possible, the first draft of these two sections should be provided by the sponsor or the leadership team. One to four sentences for each is enough but it needs to be in

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writing. Many teams find that, because these are the what and why of the project, it is easier to work on them at the same time. Teams often brainstorm key ideas and then craft the parts on which they agree into smooth-flowing statements. If the sponsor pro- vides a first draft of these sections, the project manager and core team carefully dissect it to ensure they both understand and agree. The project manager and team frequently propose refinements on the original draft.

Scope overview and business case examples are depicted in Exhibit 3.5.

3-5b Background Instructions The project manager and team decide whether this optional section is necessary for their project as they construct the scope overview and business case. If the scope overview and

EXHIBIT 3.5

SCOPE OVERVIEW AND BUSINESS CASE EXAMPLES

PHASE II MULTICENTER TRIAL SCOPE OVERVIEW This project will initiate a Phase II multicenter clinical trial at Cincinnati Children s Hospital Medical Center (CCHMC). The trial will be conducted at five medical centers in the United States to investigate the safety and efficacy of an investigational drug s abil- ity to improve cognitive functioning and quality of life in pediatric patients with Tuberous Sclerosis Complex. The project is a follow-up study of a Phase I clinical trial conducted at CCHMC.

ONLINE TUITION REIMBURSEMENT PROJECT SCOPE OVERVIEW This project will design, develop, and implement an online tuition reimbursement system that will provide employees with a self- service tool to submit a request for tuition reimbursement payment. This project will incorporate a workflow process that will do the following:

Move the request to the appropriate personnel for approval. Alert the employee of any additional items necessary for processing the request/ Upon approval, send the request to payroll for final processing. Notify the employee of payment processing.

DEVELOPMENT OF A BIOLOGICAL RESEARCH SPECIMEN SHIPPING CENTER PROJECT BUSINESS CASE The purpose of this shipping center is to provide professional shipping services and supplies for CCHMC employees who are responsible for shipping biological specimens as part of research. This shipping center will improve compliance, streamline ship- ping processes, enhance research productivity, reduce time and money invested in employee training, and reduce potential liability for noncompliance.

ESTABLISHING A SECOND PULMONARY FUNCTION TESTING (PTF) LAB PROJECT BUSINESS CASE An additional PTF lab will enhance patient access by:

Decreasing wait times and Providing a convenient location close to primary care appointments.

It will also improve patient outcomes by assisting in: Diagnosis, Accurate assessment, and Chronic management of pediatric lung disease.

In addition, establishing a PFT lab will increase revenue by: Increasing availability of PTF and Increasing community referrals for PFT.

Source: Cincinnati Children s Hospital Medical Center.

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business case seem detailed enough for all important stakeholders, an extra background section may not be needed. If necessary, the team probably brainstorms ideas and then combines them into a single smooth statement. An example of a background statement for a project to start a new co-op business is shown in Exhibit 3.6.

3-5c Milestone Schedule with Acceptance Criteria Instructions The first step in the iterative process of developing a project schedule is to define major milestones. This section of the charter can be developed most effectively by focusing on why you are doing a project before diving into all of the details. A method of depicting all of this information so it is simple to understand is to set up a four-column table with Mile- stone, Completion Date, Stakeholder Judge, and Acceptance Criteria heading the columns. An example of a milestone schedule with acceptance criteria for a project converting to a centralized electronic record system for a major research hospital is shown in Exhibit 3.7.

SIX STEPS IN CONSTRUCTING A MILESTONE SCHEDULE The most effective way to construct the milestone schedule with acceptance criteria is to use the six-step proce- dure described below. Identifying the end points first (Steps 1 and 2) helps project teams avoid the problem of sinking into too much detail too quickly. Note that dates are the final item to be identified. It is unethical for a project manager to agree to unrealistic dates. Even though the milestone schedule is not very detailed, it is the first time a team thinks through how the project will be performed and how long it will take at each point. This allows a bit of realism in the schedule.

Step 1 The first task is to briefly describe (in three or four words) the current situa- tion that requires the project and place this description in the first row of the milestone column. The current state may be a shortened version of the business case. The starting point for many projects is either something that exists, but does not work as well as desired, or a desire exists for something completely new. However, the starting point for some projects is the ending point of a previous project. Keep the description very short, and it will form an effective starting place. In Exhibit 3.7, the problem was paper records that were not centralized.

Step 2 Once the current state is agreed upon by the project manager and team, skip to the desired future state. Describe the project (or phase if there will be future phases) at its successful completion in three or four words. Put this description in the last row of the milestone column. It is hard for many core teams to distill this to the ideal three or four words, but keeping it concise helps the team develop a better understanding of what is

EXHIBIT 3.6

BACKGROUND SECTION EXAMPLE

Interfaith Business Builders is an organization of diverse Cincinnatians that develops and promotes community-based, employee-owned and -operated cooperative businesses (co-ops). Our co-ops cre- ate new jobs and ownership opportunities for low-income people in sustainable local businesses. Members of IBB come from a variety of faith and social backgrounds, share a passion for social jus- tice and the empowerment of people, and value community, cooperation, opportunity, and solidar- ity. Our cooperatives are businesses that follow these seven principles: voluntary and open membership; democratic member control; members economic participation; autonomy and inde- pendence; education, training, and information; cooperation among cooperatives; and concern for community.

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truly most important. If the current project is a phase of a larger project, also write briefly what the final successful result of the last future stage will be. In Exhibit 3.7, the desired future state is to have records centralized and available in electronic form, and the ultimate goal is for seamless information flow throughout the organization. More work will need to be completed beyond this project to reach that ultimate goal. Since contemporary project management is often iterative, many projects are part of a larger goal.

Step 3 Next, describe the acceptance criteria for the final project deliverables (at the future state). What stakeholder(s) will judge the deliverables, and on what basis? Exactly how will they become confident that the project results will work as desired? These sta- keholders will almost always demand a demonstration of project results. The project team wants to understand what that demonstration will be at this early point so they can plan to achieve it. Note that there very well could be multiple stakeholders and mul- tiple methods of ensuring the project results are satisfactory. At this point, strive to iden- tify the most important stakeholders and acceptance criteria. Place these in the bottom row of the third and fourth columns. In Exhibit 3.7, the sponsor wants a representative from each department to show they can enter and retrieve pertinent data.

Step 4 Now, go back to the milestone column. Determine the few key points where quality needs to be verified. On most small to medium-sized projects, approximately three to eight intermediate points are satisfactory. Start by identifying the three most important

EXHIBIT 3.7

MILESTONE SCHEDULE WITH ACCEPTANCE CRITERIA EXAMPLE

COMPLETION DATE MILESTONE STAKEHOLDER JUDGE ACCEPTANCE CRITERIA

Current state: Paper, noncentralized records

Needs assessment 28-Feb Ops management List of needed features

Hardware selection 15-Apr Ops management, CIO Hardware choice with contract

Vendor selection 30-May Ops management Vendor choice with contract

Installation and configuration 15-Jul Application specialist, IS department head

Functional software in test environment

Conversion 31-Aug Application specialist, IS department head

All files converted

Testing 15-Oct Application specialist, IS department head

Sign off on test

Training 30-Nov Ops management, HR Sign off on training

Future state: Electronic, centralized records

30-Nov Sponsor Ability to enter and retrieve information from all departments

Ultimate goal Seamless information flow throughout organization

Chapter 3 Chartering Projects 73

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AGILE

intermediate points, and add more if necessary. If you need to identify considerably more major deliverables at this point, you might consider splitting your project into phases and concentrate on the first phase for now. Satisfactory completion of each milestone will be determined by how the sponsor and other stakeholders will judge your performance. They should be in enough detail so stakeholders are comfortable with your progress, yet not so detailed that you feel micromanaged. The project in Exhibit 3.7 has seven milestones.

On Agile projects, the first iteration is planned as a milestone with acceptance criteria just as described above. Rather than have a defined set of milestones, an agile charter after the first milestone is more of a general roadmap of the product. Subsequent mile- stones and acceptance criteria are determined on a just-in-time (JIT) basis.

Step 5 Now, for each milestone, determine who the primary stakeholder(s) is and how he or she will judge the resulting deliverable. Remember, these are intermediate deliverables, and often it is not as easy to determine desired performance. One idea to keep in mind: if practical, ask the person who will judge the overall project results at the end to judge the intermediate deliverables also to make sure you are on the right track. Quite a few different stakeholders will judge various milestones in the project in Exhibit 3.7.

Step 6 Finally, determine expected completion dates for each milestone. Do not be overly optimistic or pessimistic. You will be at approximately the right level of detail if you have a milestone somewhere between every one and six weeks on many projects. Obviously, there will be exceptions for especially large or small projects. Most of the milestones in the project in Exhibit 3.7 are about six weeks apart.

Some companies that perform many projects use templates to guide their project teams through chartering and other activities. An example of a template for the mile- stone schedule and acceptance criteria for a Six Sigma project is shown in Exhibit 3.8.

EXHIBIT 3.8

SIX SIGMA MILESTONE SCHEDULE AND ACCEPTANCE CRITERIA TEMPLATE

Measure

Analyze

Improve

Control Future State

Current Situation Define Problem in operational terms

Customers and metrics identified Project schedule and assignments

Causal relationships defined Data gathering procedures approved Sufficient data gathered

Potential variables identified; Root causes statistically proven

Problem resolution ideas gathered Solution evaluated and confirmed Solution implemented

Standards, procedures, training in place

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3-5d Risks, Assumptions, and Constraints Instructions First, the project manager (possibly with core team members, sponsor, and/or key stake- holders if available) should brainstorm all the things that could pose a risk to the project schedule, budget, usefulness of any project deliverables, or satisfaction of any project stakeholder. This is the process of risk identification. All of the risk processes will be covered in more detail in the risk planning chapter. Constraints that limit choices and unproven assumptions can be identified. Assumptions are especially important when a cross-functional team is performing the project because some team members may make vastly different assumptions based upon the manner in which work is normally accom- plished in their respective departments. The brainstorming often works very well with each team member writing one risk, constraint, or assumption per Post-it Note. On large, complicated projects, risks, assumptions, and constraints may form separate sec- tions of a charter. An assumptions log is often created as a living document to record all assumptions and the findings of whether they proved to be true or false. However, in this book, we deal with them together. From this point forward, all risks, assumptions, and constraints are simply referred to as risks.

Either the project manager or one of the team members can then act as a facilitator and assess one risk at a time. Risks can be assessed on probability of occurring and impact if realized. Both dimensions can be shown with a simple continuum of low to high using a flip chart or marker board. The team can agree to assess each risk at any point on the continuum. It works best if one dimension is considered at a time. For example, first ask how likely the risk event is to occur. Only after this is answered, ask how big the impact will be if it happens.

After all risks are assessed, the team needs to decide which of the risks should be con- sidered major risks. That is, which are important enough to require a formal response plan with someone assigned responsibility? The other, more minor risks are not formally considered further in the charter, but they very well may get more attention in the plan- ning and executing stages. This is the process of qualitative risk analysis.

The project team constructs a table depicting each major risk, with its contingency plan and owner. This is the process of planning risk responses.

Examples of risk assessment and major risk response planning for a hardware upgrade project in an Irish factory are shown in Exhibits 3.9 and 3.10, respectively.

3-5e Resources Needed Instructions Armed with the milestone schedule, the project manager and team may be prepared to make crude estimates of the project budget and other resource needs such as people, equipment, or space. It is imperative to describe how the estimates were developed and the level of confidence the team has in them, such as this is a rough order of magnitude estimate only based upon the milestones, and the true project cost could range from 25 percent below this to 75 percent above it. On many projects, especially those with cus- tomers internal to the organization, a budget is not established. However, a limit of spending authority for the project manager is often developed. An example of resources needed for a project is shown in Exhibit 3.11.

3-5f Stakeholder List Instructions Stakeholders are all the people who have an interest in a project. They can be internal or external to the organization, be for or against the project, and have an interest in the project process and/or the project results. The project manager and team begin by iden- tifying all stakeholders and determining which are most important. They next ask what

Chapter 3 Chartering Projects 75

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EXHIBIT 3.10

RISK RESPONSE PLANNING EXAMPLE

RISK EVENT RISK OWNER RISK RESPONSE PLAN(S)

Hardware inadequate Edie 1. Techs revise existing hardware 2. Replace hardware

Associates do not have skills to perform key functions

Padraig 1. Train existing associates 2. Hire additional people

Key resource not available Ute 1. Identify external resources to fill need

EXHIBIT 3.9

RISK ASSESSMENT EXAMPLE

Minor risks below the line

Major risks above the line

Hardware inadequate

Associates do not have the skills to

perform key functions

Key resource not available

EXHIBIT 3.11

RESOURCES NEEDED ESTIMATE

MONEY PEOPLE OTHER

Marketing $10,000 Project Manager, 250 hours 1 Dedicated Conference Room

Core Team Members, 500 hours

AV and Communica- tions $5,000

Internal Consultant, 100 hours

Miscellaneous $5,000 Data Analyst, 100 hours

Focus Group Participants, 50 hours

Total $20,000 Total 1,000 hours 1 Room

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interest each stakeholder has in the project. A stakeholder list example for a clinical research project is shown in Exhibit 3.12. This is the process of identifying stakeholders, and the resulting list is the start of a stakeholder register. Both will be described in more detail in the stakeholder chapter.

3-5g Team Operating Principles Instructions The project manager and team will decide what project team operating principles they will use. The operating principles establish how meetings will be conducted, how deci- sions will be made, how work will get done, and how everyone will treat each other with respect. Exhibit 3.13 is an example of team operating principles.

3-5h Lessons Learned Instructions Each project by definition is at least somewhat different from any other project. That said, there are many commonalities in how projects can be planned and managed. A project manager and team need to consider what has worked well and what has worked

EXHIBIT 3.12

STAKEHOLDER LIST EXAMPLE

STAKEHOLDER PRIORITY INTEREST IN PROJECT

Institutional Review Board Key Unexpected problems, progress

Food and Drug Administration Key Serious adverse events, progress

Site Principal Investigators Key Protocol, safety reports, changes

Pharmaceutical Company (Customer) Other Serious adverse events, progress

Research Subjects (Patients) Other Purpose of study, risks and benefits, protocol

EXHIBIT 3.13

TEAM OPERATING PRINCIPLES EXAMPLE

1. Team members will be prepared with minutes from previous meeting, agenda, and project updates.

2. Meetings will normally last for up to 90 minutes. 3. Team members will rotate the role of recorder. 4. Each team member will be responsible for setting his or her own deadline. 5. In the event that a team member cannot have his or her assignment complete by

the expected date, he or she must notify the team leader prior to the due date. 6. The team leader will be responsible for drafting the minutes from the previous

meeting and the agenda for the next meeting within 48 hours. 7. Decisions will be made by:

Team leader on ____ issues. Consensus on ____ issues. Delegation on ____ issues.

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poorly on previous projects when starting a new one. A sponsor is wise not to sign a project charter authorizing work until the project manager and team show they have learned lessons from recently completed projects. One easy way to accomplish this is to have each project report lessons learned at key reviews and at project completion and to have the lessons available to all in a lessons learned knowledge base. The project man- ager and team can then look at the lessons until they find at least a couple that can help them on their project. These lessons are included in the charter. The more specific the lessons, the more likely the team will find them useful. Exhibit 3.14 is an example of project lessons learned.

3-5i Signatures and Commitment Instructions The project sponsor, manager, and team members sign the charter to publicly acknowl- edge their commitment. Sometimes other key stakeholders also sign. An example of a charter signature section is shown in Exhibit 3.15.

EXHIBIT 3.14

PROJECT LESSONS LEARNED EXAMPLE

All parties are responsible for defining and following the project scope to avoid scope creep.

All parties should share good and bad previous experiences.

Aligning team roles to sponsor expectations is critical.

Keep sponsor informed so sponsor stays committed.

Identify any possible changes as soon as possible.

Use weekly updates on project progress to avoid unpleasant schedule surprises. Review previous events for specific lessons.

EXHIBIT 3.15

CHARTER SIGNATURE EXAMPLE

Anne E., Sponsor Signature Date

Signature Date

Karen H., Project Leader Signature Date

Jim B., Team Member Signature Date

Charlie H., Team Member Signature Date

Mitch N., Team Member Signature Date

Katie S., Team Member

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3-6 Ratifying the Project Charter The project manager and team formally present the project charter to the sponsor for approval. In some organizations, the leadership team is also present for this meeting. The sponsor (and leadership team members, if present) ideally is supportive, but also ready to ask questions regarding any part of the charter. These questions are for both clarification and agreement. Once all questions are satisfactorily answered including any agreements regarding changes the sponsor, project manager, and core team all sign the project charter and feel bound by it.

Project managers are generally held more accountable for performance than they have the responsibility to direct people to perform. Because of this, project managers must negotiate. Here, we discuss how they need to negotiate a project charter with their spon- sor. Later in the book, we discuss how they often need to negotiate with functional man- agers for the particular people they wish to have work on the project; with customers concerning schedule, budget, scope, and a myriad of details; and with sponsors, suppli- ers, SMEs, and core team members.

Nobody loves a project as much as the project manager does. However, a project manager must remember that negotiations will be smoother if she realizes that everyone with whom she negotiates has their own set of issues and goals.

Regardless of the negotiation size or complexity, the six-step process shown in Exhibit 3.16 can serve as a guide.

The negotiation process is based on the project manager and the sponsor attempting in good faith to reach a solution that benefits both useful deliverables for the sponsor and a manageable process for the project manager.

Step 1 involves advance fact finding to determine what is needed from the negotia- tion. This includes seeking to understand both what the sponsor is likely to want and how he or she may act during the negotiations.

Step 2 is for the project manager to understand the bottom line. What is the mini- mum acceptable result? Just as when buying a car, a project manager needs to under- stand when to walk away. This can vary a great deal depending on how much power each party has. The sponsor is likely to have more power. However, project managers need to understand that if they have the power and take advantage of their negotiation partner, that partner may not work with them on a future project. Therefore, the goal is not to always drive the hardest bargain, but to drive a fair bargain.

Step 3 is for the project manager to understand the underlying needs of the sponsor and to share his or her own needs. This is not a 10-second political sound bite that says take it or leave it. This is developing a real understanding of each other s needs. Once

both parties understand what the other really needs, various creative solutions can be developed. This is the essence of Step 4.

Step 5 consists of the process and strategies of the negotiation itself. It is helpful to keep in mind the ultimate goal while focusing on the many details of information sharing, trading of concessions, and exploring possible solutions. Step 6 is actually a reminder to reach an agreement and then to document that agreement.

3-7 Starting a Project Using Microsoft Project Microsoft (MS) Project is a software application designed to aid project managers in the planning, execution, and assessment of projects. It allows the project manager to track project tasks, set milestones, create corresponding schedules, and administer resources and budgets. Throughout the text (Exhibit 3.16), various MS Project processes will be demonstrated in a series of tutorials using the textbook s running Suburban Homes

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Construction Project as a basis. A fully functioning demonstration version of MS Project 2016 is available for download from Microsoft.

3-7a MS Project 2016 Introduction MS Project 2016 is part of the Microsoft Office family; therefore, much of the basic interface and interaction with the software should seem familiar. You will find the unique aspects of the application in the project-specific tools and visuals the software provides the project manager. When you first open MS Project, you have the option to create a new (blank) plan, open a recently used or saved plan, or start a plan based on a template. The following overview showcases the visible features of the main MS Project interface once a blank project has been created.

1. Ribbon As with other Microsoft Office applications, the ribbon bar along the top of the interface contains the controls (or access to controls) used to develop and manipulate your project data. Controls are logically grouped in the following tabs:

FILE includes familiar commands such as Open, Save, Print, and Options. TASK, RESOURCE, and PROJECT tabs allow task, resource, and project data entry and adjustment. REPORT offers a variety of customizable visual and print reports of project data. VIEW offers multiple ways to visualize your project data, including Calendar, Gantt Chart, Network Diagram, Resources, and Teams. A split (or combina- tion ) view is also available, providing two different types of data displays at once. FORMAT displays formatting controls that apply to the current active view. The For- mat tab header (above the tab) identifies the currently active view (e.g., Gantt Chart).

2. Quick Access Toolbar As with other Microsoft Office applications, this customizable area allows you to create shortcuts to regularly used commands.

3. Project Schedule Details View Pane(s) Below the ribbon is the project data view pane that displays information about the project. MS Project offers several different views, but the default setting is a split, dual display of the project Timeline and Gantt

EXHIBIT 3.16

NEGOTIATION PROCESS

STEP EXPLANATION

1. Prepare for negotiation. Know what you want and who you will negotiate with.

2. Know your walk-away point. Determine in advance the minimum you need from the negotiation.

3. Clarify both parties interests. Learn what the other party really wants and share your true interests to determine a common goal.

4. Consider multiple options. Brainstorm multiple approaches even approaches that solve only part of the issue.

5. Work toward a common goal. Keep the common goal in mind: seek and share information, make concessions, and search for possible settlements.

6. Clarify and confirm agreements. Agree on key points, summarize, and record all agreements.

Source: Adapted from Aldag, Ramon J., and Loren W. Kuzuhara, Mastering Management Skills: A Manager s Toolkit (Mason, OH: Thomson South-Western, 2005): 129 132; and Baldwin, Timothy T., William H. Bommer, and Robert S. Rubin, Developing Management Skills: What Great Managers Know and Do (Boston: McGraw-Hill, 2008): 307 318.

80 Part 1 Organizing Projects

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Chart views in an upper and lower pane. Although both are visible, only one view is active (indicated by a colored view name label on the far-left end of the view pane). The active view can be changed in the View tab or with the View Shortcut buttons.

Timeline View: The Timeline View shows you the big picture of your project schedule. Milestones or other key activities can be marked and highlighted in the timeline to help better visualize the project. Gantt Chart View: The Gantt Chart is a commonly used tool to represent a proj- ect schedule. Once a list of project task details is inputted into the table on the left-hand side of the view, horizontal bars populate the right side to graphically represent each task against a calendar along the top of the view.

4. Zoom Slider The zoom slider is useful in any view that contains calendar data. It quickly changes the timescale by sliding left or right.

5. View Shortcuts View Shortcuts provides a quick switch from the active view to five different views: Gantt Chart, Task Usage, Team Planner, Resource Sheet, and Report.

6. Scheduling Mode selector Scheduling Mode reports the default scheduling mode (manual or automatic) for each new task. To change it, click Control and choose the desired setting from the list (a change only applies to the active schedule). See the next section for more on Scheduling Mode.

3-7b Setting up Your First Project There are two scheduling modes in MS Project 2016: Auto Scheduled and Manually Scheduled. Auto scheduling calculates the project s running schedule based on task start and finish dates, as well as other changes you might make in the future. Manually Sched- uled is the default setting, but we will change that immediately to take advantage of the

EXHIBIT 3.17

CHAPTER CHAPTER TITLE MS PROJECT PROCESS

3 Chartering Projects Introduce MS Project 2016; Set up a project; Create a milestone schedule

7 Scope Planning Set up a work breakdown structure (WBS)

8 Scheduling Projects Set up schedule; Build logical network diagram; Understand the critical path; Display and print schedules

9 Resourcing Projects Define resources with calendars; Assign resources, including modifications; Find and resolve over-allocations

10 Budgeting Projects Develop project budget

12 Project Quality Planning and Project Kickoff

Baseline the project plan

14 Determining Project Progress and Results

Update and report on project schedule

15 Finishing Projects and Realizing Benefits Close projects

Chapter 3 Chartering Projects 81

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program s automatic scheduling powers. To change the scheduling mode, do the follow- ing (Exhibit 3.18):

7. With a blank, new project open, click File tab>>Options>>Schedule. 8. In the Scheduling options for this project section:

Change the dropdown to All New Projects Change the New tasks created option to Auto Scheduled

9. Click OK.

Note: This action sets all future projects you may start in MS Project to Auto Sched- uled. These options allow you to change this setting on a project-by-project basis, or you can simply click the Scheduling Mode Selector shortcut on the left-hand side of the bottom status bar and choose your desired scheduling method.

3-7c Define Your Project Next, you need to define your project by entering the following information:

1. Set the project start date (Exhibit 3.19) Click Project tab>>Project Information In the dialog box, enter your project s start date (e.g., Mon 10/16/17) Click OK; you ll notice Timeline View has updated with your start date!

2. Enter identifying information about the project (Exhibit 3.20). Click File tab

EXHIBIT 3.18

SET AUTO SCHEDULE

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

82 Part 1 Organizing Projects

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On the right-hand side of the screen, click Project Information>>Advanced Properties. In the Summary tab, enter Suburban Park Homes in the Title box Add other information as needed for future reports Click OK

3. Generate a Project Summary task row (Exhibit 3.21) Creating a Project Summary task row gives you another overview of the entire

project in the top row of the Gantt Chart view Click File tab>>Options>>Advanced On the Advanced page, scroll to the Display options for this project section Click the checkbox for Show project summary task Click OK; you ll notice a new summary row at the top of the Gantt Chart table!

3-7d Create a Milestone Schedule You will now create a milestone schedule that will capture significant deliverable comple- tion dates and be viewable in your Gantt Chart view.

Click the Gantt Chart view to make it active Enter the milestone names from the Suburban Park Homes project in the Task Name cells below the Project Summary row (You can find milestone information from the project on page 91.) In the Duration cells, use the up/down arrows to set each milestone s value to zero

EXHIBIT 3.19

SET PROJECT START DATE

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

Chapter 3 Chartering Projects 83

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For each milestone row: a. Double-click the milestone name to activate the Task Information dialog box

(Exhibit 3.22) b. Click the Advanced tab; change the Constraint type to Must Finish On c. In the Constraint date box, enter the milestone date d. Click OK

Your milestone schedule in the Gantt Chart view should now look like the example in Exhibit 3.23.

Now, we will add milestone markers to the summary row so the key project dates will remain easily visible as the Gantt Chart task list expands.

Right-click the Suburban Park Homes summary task row>>Information On the General tab, check the Hide Bar and Rollup boxes Click OK (Exhibit 3.24) Hold the Shift key and click your first task row>>click the last task row Now all tasks should be selected Right-click on the selected group>>Information On the General tab, check the Rollup box until a checkmark appears Click OK (Exhibit 3.25)

EXHIBIT 3.20

ENTER IDENTIFYING INFORMATION

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

84 Part 1 Organizing Projects

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EXHIBIT 3.21

CREATE A SUMMARY ROW

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

EXHIBIT 3.22

TASK INFORMATION DIALOGUE

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

Chapter 3 Chartering Projects 85

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You will now see that the summary row bar has disappeared and been replaced with mile- stone markers. We need to make them stand out a bit more and have the date (Exhibit 3.26).

Select the Suburban Park Homes summary task row Click Format Tab>>Format>>Bar Styles In the Bar Styles dialog box, click the Rolled Up Milestone style In the Bars tab, change the Type to solid; change the color to blue (or your choice!) Click the Text tab, click Right (or Left if you prefer!), choose Finish from the drop-down Click OK

EXHIBIT 3.23

SUBURBAN PARK HOMES MILESTONE SCHEDULE

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

EXHIBIT 3.24

SUMMARY TASK DIALOGUE

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

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Your milestone schedule in the Gantt Chart view should now look like the example in Exhibit 3.27.

EXHIBIT 3.25

MULTIPLE TASK INFORMATION DIALOGUE

EXHIBIT 3.26

BAR STYLES DIALOGUE

Chapter 3 Chartering Projects 87

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PMP/CAPM Study Ideas Whether you are studying for the CAPM or PMP exam, you will likely see many questions pertaining to the order in which processes occur and deliverables are produced throughout the lifecycle of a project. In this chapter about the project charter, it is important to remem- ber that the various subdeliverables and processes are all encompassed within the Initiating phase. In fact, it is the ratification of the project charter that allows us to proceed from the Initiating to the Planning phase.

In other words, even though the charter and its components represent a high-level project plan, you should think of this as the preplanning because it is still in rough-draft form and will be significantly expanded upon during the Planning phase. So, if you plan to sit for one of these tests, make sure you know the logical order of the steps involved in creating a charter, but also keep in mind that every single one of these precedes the more-detailed processes to come.

EXHIBIT 3.27

UPDATED SUBURBAN PARK HOMES MILESTONE SCHEDULE

Summary The project charter is a vital document since it enables the project sponsor and project manager to reach mutual understanding and agreement on the project at a high level. Often, core team members who have been preassigned and sometimes a key stakeholder or two sign also sign the charter. All parties can commit to the intent of the charter with confidence. Charters typi- cally include sections such as a scope overview, business case, milestone schedule, acceptance criteria, risks, and signatures. Many charters include additional sections.

The sponsor or leadership team might write the rough draft of the business case and scope overview, but the project manager and core team typically write the rough draft of the majority of the charter. Once the

draft is written, the sponsor meets with the project manager and core team to go over the charter in detail both to ensure understanding and to reach agreement.

The charter, by signaling commitment on the part of the team and authorization on the part of the spon- sor, is the document that completes the project initiat- ing stage. Once the charter is complete, the project team can usually turn their attention to planning the details of the project. The first detailed behavioral plan- ning topics that deal with the project team, other sta- keholders, communication, and leadership form the next book module: Leading Projects. The other detailed planning topics tend to be more technical and form the third book module: Planning Projects.

Key Terms Consistent with PMI Standards and Guides project charter, 63 requirements, 65 scope creep, 66

milestone schedule, 66 acceptance criteria, 67 risk, 68

88 Part 1 Organizing Projects

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assumptions, 68 constraint, 68 resources, 68

lessons learned, 70 assumptions log, 75 lessons learned register, 70

Chapter Review Questions 1. What is a charter? 2. Describe what an effective charter should

accomplish. 3. How is a charter like a contract? How is it different

from a contract? 4. How long should a typical charter be? 5. Signing the charter marks the transition between

which two project stages? 6. Who generally writes the rough draft of a

charter? 7. Give three reasons for using a charter. 8. What are some typical elements of a charter? 9. What is scope creep and how can it be prevented?

10. When would a background section be helpful?

11. On most small to medium-sized projects, how many intermediate milestones should be identi- fied in the charter?

12. What types of resources might be included in a resources-needed section of a charter?

13. Name three reasons project managers and teams should look at risk.

14. Why should each contingency plan have an owner who is responsible for it?

15. What are the four columns of the milestone schedule?

16. With whom might the project manager and project team need to negotiate when creating the charter?

17. What is the primary difference between Auto and Manually scheduled settings in Microsoft Project?

Discussion Questions 1. Identify the purpose of each element in a project

charter. 2. Explain how a charter helps secure both formal

and informal commitment. 3. How are risks, assumptions, and constraints related? 4. If you are a project manager and have the choice

of forming your core team before or after charter approval, which would you do and why?

5. List and describe at least four lessons you have learned from previous projects. Relate how each is valuable in planning a new project.

6. In your opinion, what are the three most impor- tant items in your project charter? How did each help you initiate your project better?

7. Give an example of how an incorrect assumption could become a risk.

8. Briefly summarize the process of creating a mile- stone schedule.

9. How are project scope and product scope similar and different?

10. Upon seeing the rough draft of your charter, your project sponsor asks you to move the finish date up by two months. What do you do?

11. What are the greatest advantages to using a com- puterized scheduling program like Microsoft Project?

PMBOK ® Guide Questions 1. Which of the following is not a purpose of an

approved project charter? a. formally authorizes the existence of a project b. provides detailed information about financial

resources c. helps the team and sponsor develop a founda-

tional understanding of project requirements d. provides project manager with authority to

apply organizational resources to the project

2. Adding to the project after it has already begun without making adjustments to time, cost, or resources, is known as: a. scope creep b. risk c. milestones d. acceptance criteria

3. It is inconvenient and time consuming for employees to walk across campus every day to

Chapter 3 Chartering Projects 89

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eat lunch, which is why we need an employee lunchroom in our building is an example of: a. project scope b. business case c. milestone schedule d. constraint

4. What information does the project charter con- tain that signifies how the customer or user of the final product, service, or result will judge the deli- verables, in order to determine that they have been completed satisfactorily? a. high-level project risks b. measurable objectives and acceptance criteria c. high-level project boundaries d. project assumptions

5. The project charter should include factors that are considered to be true, real, or certain without proof or demonstration. These are known as . a. risks b. assumptions c. high-level requirements d. objectives

6. The signing of the project charter represents all of these except: a. a formal acknowledgment of the sponsor s

commitment to the project b. the formal approval of the detailed project

schedule c. authorization to transition from the high-level

project initiation stage into the more detailed project planning stage

d. the organization s commitment to apply resources to the project

7. What project charter component documents sig- nificant points or events in the project and, per the author, may be developed most effectively when combined with other information such as acceptance criteria? a. network diagram b. Gantt chart

c. stakeholder management strategy d. summary milestone schedule

8. You are the project manager. Upon presenting your charter to your sponsor, she requests several changes. What do you do? a. Agree to all the changes in order to make your

sponsor happy. b. Refuse to change the charter, since that would

be unfair to your team. c. Have your team vote on whether or not to

make the changes and go with the will of the majority.

d. Negotiate with your sponsor to see how you can best accommodate her requests without agreeing to unreasonable expectations.

9. The charter is the primary deliverable of a pro- ject s phase. a. Selecting b. Initiating c. Planning d. Executing

10. According to the PMBOK, the rough order of magnitude for the summary budget within the project charter is . a. 100% to 200% accuracy b. 25% to 75% accuracy c. 5% to 10% accuracy d. none of the above

11. After identifying potential project risks, the proj- ect team should then . a. develop risk response plans for all identified

risks. b. wait for the sponsor to conduct a risk

assessment. c. move on to other components of the charter,

since identifying risks is the only risk-related activity in the initiating phase.

d. assess each risk based on probability and likely impact, and then create a risk response plan for each major risk.

Exercises 1. Consider a major team project for a class. Write

the scope overview and business case sections of a charter.

2. Write the business case and scope overview sections of a project charter for a project in which your com- pany is considering buying out another company.

3. You are part of a student team that is going to host a picnic-style party as a fundraiser event for a deserving local nonprofit. Develop a milestone schedule with acceptance criteria for this event. Include between four and eight milestones.

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4. You are part of a student team that has volun- teered to host an alumni event at a recently reo- pened museum in the downtown part of your city. The event has the twin purposes of estab- lishing contacts with long-lost alumni and raising awareness of the newly reopened museum. Brain- storm the potential risks for this, quantify them both according to probability and impact, assign responsibility for each major risk, and create one or more contingency plans for each major risk.

5. You are part of a student team that is hosting a number of inner-city junior high and high school students from several nearby cities at your campus for a weekend. The primary purpose is to encour- age them to attend college and, second, to attend

your college. Identify as many stakeholders as pos- sible for this project, prioritize them, and list the interests each has in your project.

6. You have started a project working with your peers at your rival college to create a cross- town help-out. You want to encourage many people in the community to contribute a day s work on a Saturday for various community pro- jects. You have a rather heated rivalry with this other college. Create a comprehensive set of team operating principles to use on this project. Which of these principles is most important and why? Do you expect any of them to be difficult to enforce and why? What do you plan to do if some of them do not work?

I N T E G R A T E D E X A M P L E P R O J E C T S

SUBURBAN HOMES CONSTRUCTION PROJECT

Scope Overview Building a single-family, partially custom-designed home as required by Mrs. and Mr. John Thomas on Strath Dr., Alpharetta, Georgia. The single-family home will have the following features:

3,200 square-feet home with 4 bedrooms and 2.5 bathrooms Flooring hard wood in the first floor, tiles in the kitchen and bathrooms, carpet in bedrooms Granite kitchen countertops, GE appliances in the kitchen 3-car garage and external landscaping Ceiling 10 in first floor and vaulted 9 ceilings in bedrooms

Business Case Suburban Homes is in the business of constructing high- quality homes at an affordable cost with luxury options to pro- vide quality of life for families. The business strategy is to use the best construction technologies and practices to enhance productivity and increase profits, while offering cost-effective and best-value homes for all its customers simultaneously. The current project, Suburban Park Homes, is aimed to expand business operations in Georgia.

Milestone Schedule and Deliverables CM Construction Manager; PM Project Manager

Milestone Completion Date Stakeholder Judge Acceptance Criteria

Approval of final drawing and all the options 2nd January Client PM and the client to approve

Land preparation, landscape, and foundation 15th January CM PM and CM approval

External work completion and utilities hookup 3rd April CM PM and CM approval

Internal and external finish work and painting 10th May CM PM and CM approval

County clearance and Certificate of Occupancy 30th May CM County Inspectors and PM

Financial settlement and handover of home 21st June PM, Client Design Specifications approval by PM and the client

Chapter 3 Chartering Projects 91

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Risks

Project Risks Risk Owner Contingency Plans

County approval and permissions

Suburban Homes, PM

None

County Property Taxes hike

Client, Suburban Homes

Document as con- tract clause

Traffic congestion Client, County, DMV

None

Resources Required Funding: the client, underwriters, and Suburban Homes People: Suburban project management team, contractors, subcontractors, and skilled labor Equipment: construction equipment, tools, and machinery Material: building materials, appliances, landscaping, shrubs, and trees

Stakeholders

Stakeholders Interest in Project

Primary: The client Suburban Homes County Officers

Overall project cost, time, quality Overall project cost, time, quality, success criteria Adherence to the county standards

Others: Contractors Suppliers Utility companies

Timely payment of invoices Business expansion, profits Adherence to laws, business expansion

Team Operating Principles Commitment to project schedule: Project team and contrac- tors will complete their assigned work as per schedule. Progress Meetings: Construction team meetings sched- uled on Mondays at 8 a.m. every week and as demanded by work progress. Members should prepare for these meetings with information required for review. Communication: Regular updates of status, reporting issues, and weekly progress reports.

Lessons Learned Team participation in developing project schedule is critical. Transparent communication is encouraged for resolving issues. Conflicts must be reported to the construction manager immediately. County laws and utility standards must not be compromised.

Commitment Sponsor Department/Organization Signature

Project Manager Department/Organization Signature

Core Team Members Department/Organization Signature

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Semester Project Instructions Determine one member of your student project team to be the primary contact with the project sponsor (the manager or executive who came to class when projects were announced). The sponsor is also the customer representative. This sponsor was encouraged by your professor to come with a draft of the business case and scope overview sections of the charter, but some sponsors probably did a better job than others. You need to ensure that you understand these statements and how they fit with the organization s goals.

Then, your student team needs to draft the remain- der of the charter with as much help as you can get from the sponsor and/or other people at the organization.

Once the charter is in rough-draft form, submit it for comments to your professor. Armed with the professor s suggestions, you can present it to your sponsor and any other people your sponsor chooses. Often, this may involve a leadership team, department heads (functional managers), and/or project team members. One differ- ence on this project is that your student team will likely do most of the planning and only part of the execution, while members of the organization for whom you are planning the project will need to complete the execution. Therefore, you need to consider how you will transition responsibility over to the parent organization near the end of the class.

CASA DE PAZ DEVELOPMENT PROJECT

Questions for Students to Answer: 1. Given the information provided in Chapter 2 on how

this project was selected, create scope overview and business case sections for a charter.

2. If you were the project manager, what expertise would you like from the sponsor, stakeholders, or core team members to create a milestone schedule with accep- tance criteria?

3. Work with at least two other people and brainstorm pertinent risks. Assess them to determine which you believe are major risks, and develop at least one response for each major risk.

4. Who are the key stakeholders for this project and what is the interest of each? Which stakeholders have the most power?

PROJECT MANAGEMENT IN ACTION

Information Systems Enhancement Project Charter

The following charter was used when a nonprofit agency formed a project team to upgrade its informa- tion systems. Comments on the left side give advice

from a communications perspective regarding how to write a project charter, and comments on the right side offer suggestions regarding the content of each section.

Chapter 3 Chartering Projects 93

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DESIGN PRINCIPLES

Headings: Headings facilitate scanning by identifying information covered in each section.

Heading descriptions should accurately indicate the information that follows.

Lists: Listing techniques help readers remember key details of a message.

Numbers, bullets, and other ordering devices promote retention and improve visual design.

Lists are best limited to five points so they do not look overwhelming to readers.

Lists are written in parallel structure, with the first word of each item having the same grammatical form, such as all nouns, all verbs, or all -ing words.

CONTENT PRINCIPLES

Scope Overview: The scope overview defines the major deliverables. It sets project boundaries by clarifying what is included and, sometimes, what is not included.

Business Case: The business case defines project objectives and why they are important to the parent organization.

Milestone Schedule:

The milestone schedule shows the project starting point, a few major mile- stones, and the ending point.

Acceptance Criteria Factors: These identify which stakeholder will judge the acceptability of each milestone and what criteria they will use.

PROJECT CHARTER: INFORMATION SYSTEMS ENHANCEMENT PLAN

Scope Overview This team will implement a new information system based on a needs assessment of person- nel of the agency. The project team will detail technological issues, as well as upward, down- ward, and lateral communications issues within each department and recommend software pack- age options for each program area. The sponsor will select a vendor, and the project team will oversee implementation.

Business Case Objective The agency needs to overhaul its information systems to increase productivity for staff, and create additional learning opportunities for clients. It is estimated that 20 percent more clients will be served with the new system.

MILESTONE

COM- PLETION DATE

STAKE- HOLD- ER JUDGE

ACCEP- TANCE CRITERIA

Outdated facility, poor productivity

Start 1/6/18

Staff survey 1/31/18 Sponsor Discussion with depart- ment heads

Software recomm- endations

3/14/18 Opera- tions Manager

All areas included, pilot results

Vendor selected

3/28/18 Sponsor Best meets qualifications

Technology in place

5/9/18 Project Manager

System test demonstration

Updated facility, productivity improved

5/30/18 Sponsor Two-week data reports from department heads

94 Part 1 Organizing Projects

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DESIGN PRINCIPLES

Tables: Use tables to organize complex information into an easy-to-follow column and row format.

Design tables so they make sense when read independently of the text.

Use table headings that reflect logical groupings of information.

Phrase column language so it is in parallel structure.

Character Formatting: Use character formatting, including boldface, italics, underlines, and centering to highlight headings.

Use character formatting hierarchically. Boldface, underlines, and all caps are best for major headings. Use fewer or less dramatic techniques for subheadings.

Type Size and Face: Use 10-, 11-, or 12-point type for most documents. People who have poor vision often prefer larger type.

Use a conventional typeface, such as Arial, Times Roman, or Palatino.

White Space:

Use white space to separate document sections attractively and to improve readability.

Page Breaks:

When possible, complete entire sections on the same page. Redesign documents where one or two lines of text from a section run onto the next page.

Major Risks

Resources Needed This project will require the project manager to spend 50% of her time and the lead user and 3 core team members 25% of their time for 5 months. The budget estimate is $45,000.

Stakeholder List

CONTENT PRINCIPLES

Project Risks and Assumptions:

This section identifies major risks and how the team will either reduce their probability of happening and/or their impact if they do occur. One person is assigned responsibility for each risk.

Resources Needed:

This is an estimate of the money, personnel, and other resources expected to be needed.

Stakeholder List:

Identifies those individuals and groups who have an interest in either the project process and/or results.

RISK RISK OWNER RESPONSE PLANS

System may not work properly

Technical lead

Define top defect and focus on it exclusively until fixed.

Implementa- tion may cost too much

Accountant Identify areas of cost reduction and added funding.

Lack of sponsor buy-in

Project Manager

1. Conduct staff survey to identify most- needed capabilities.

2. Understand sponsor requirements.

STAKEHOLDER INTEREST IN PROJECT

Board Sponsor Department Heads

Overall cost and overall project success Overall project success, resource needs; Impact on their department, resource needs

Lead user New work methods, productivity increases

Chapter 3 Chartering Projects 95

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References A Guide to the Project Management Body of Knowledge

(PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, Inc., 2017).

Altwies, Diane, and Frank Reynolds, Achieve CAPM Exam Success: A Concise Study Guide and Desk Ref- erence (Ft. Lauderdale, FL: J. Ross Publishing, 2010).

Assudani, Rashmi, and Timothy J. Kloppenborg, Managing Stakeholders for Project Management

Success: An Emergent Model of Stakeholders, Journal of General Management 35 (3) (Spring 2010): 67 80.

Evans, James R., and William M. Lindsay, The Man- agement and Control of Quality, 8th ed. (Mason, OH: Cengage, 2011).

Johnson, Craig E., Meeting the Ethical Challenges of Leadership (Los Angeles: Sage, 2009).

CONTENT PRINCIPLES

Operating Principles:

Operating principles indicate agreement on deadlines, meetings, decision making, and how participants will treat each other with respect.

Lessons Learned:

This section highlights specific learnings from previous similar projects that will help the team copy good practices and avoid problems.

Commitment:

Project principals signal agreement in principle to the project, recognizing that some of the specifics will probably change when the detailed planning is complete.

DESIGN PRINCIPLES

Sentences: To express complex ideas effectively and to make ideas easy for readers to understand, compose most sentences to be 15 25 words long.

Simple Language: So all readers understand your language easily, substitute short, action- oriented, easily understood words for long, unfamiliar, and unpronounceable words.

Team Operating Principles Commitment to timetable. The project manage- ment team members will complete their assigned work on time. Regularly scheduled project team and sponsor- ship meetings. Project team meetings will be held every Saturday at 4:15 p.m. The team will also communicate via e-mail as required. Spon- sorship meetings with the agency staff will be held bimonthly and as-needed. Timely communication. The project manage- ment team will communicate status, issues, and questions with agency via e-mail or conference call weekly. Project actions will be distributed to the team every Monday. Majority rule. The project management team will negotiate and resolve issues on a majority-rule basis.

Lessons Learned Agreeing on project scope is a key preliminary project planning activity. Maintaining project goals and timeline requires open communication and quick issue resolution. Understanding roles and responsibilities facil- itates smooth teamwork and timely project completion.

Commitment

Sponsor Project Manager

Lead User Core Team Member

Core Team Member Core Team Member

96 Part 1 Organizing Projects

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Kloppenborg, Timothy J., and Laurence J. Laning, Strategic Leadership of Portfolio and Project Man- agement (New York: Business Expert Press, 2012).

Kloppenborg, Timothy J., and Joseph A. Petrick, Managing Project Quality (Vienna, VA: Manage- ment Concepts, Inc., 2002).

PMI Lexicon of Project Management Terms Version 3.0 (Newtown Square, PA: Project Management Insti- tute, Inc., 2015).

Skilton, Paul F., and Kevin J. Dooley, The Effects of Repeat Collaboration on Creative Abrasion, Acad- emy of Management Review 35 (1) (2010): 118 134.

Endnotes 1. PMI Lexicon of Project Management Terms

Version 3.0, 2015: 13. 2. Kloppenborg, Timothy J., and Joseph A. Petrick,

Managing Project Quality (Vienna, VA: Manage- ment Concepts, Inc., 2002): 39.

3. PMI Lexicon of Project Management Terms Ver- sion 3.0 (Newtown Square, PA, 2015): 7.

Chapter 3 Chartering Projects 97

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2

ORGANIZE LEAD PERFORMPLAN

P A R T 2

LEADING PROJECTS

Chapter 4 Organizational Capability: Structure, Culture, and Roles

Chapter 5 Leading and Managing Project Teams

Chapter 6 Stakeholder Analysis and Communication Planning

Leading for success in project management includes

leading the parent organization that is conducting the

project, leading the project team, and leading the various

stakeholders who care about the project in one way or

another. Chapter 4 deals with the parent organization

giving ideas about how the organizational structure,

organizational culture, project life cycle model, and roles

of various players impact a project. Chapter 5 includes

acquiring, developing, and leading the project team.

Chapter 6 includes engaging stakeholders, managing

communications, and running project meetings.

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C H A P T E R 4

Organizational Capability: Structure, Culture, and Roles

We implement project management best practices for the purpose of increasing the likelihood for project success. Formerly, as an executive, I was responsible for establishing, operating, and evolving a national project management office (PMO) for one of the nation s largest print/mail and electronic outsourcing firms. Organizational structure, culture, roles and responsibilities of project partici- pants, and project life cycle standard processes and tools were critical influen- cers to achieving project success. As there is no single way to implement project management, how we chose to address each influencer shaped the way projects were managed. A snapshot of our approach follows:

From an operations perspective, there was a strategic need to implement a centralized approach to project management. Through a number of mergers and acquisitions, 10 geographically dispersed operation centers were servicing a broad range of expanding customer needs. As a result, two key factors were at play. One: the customer base was growing from regionally based to nationally based customers. Two: the best-of-the-best operations technology needed to be leveraged across all centers. Structurally, the decision was made to consolidate

CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Compare and contrast the advantages and disad- vantages of the functional, project, strong matrix, balanced matrix, and weak matrix methods of organization; describe how each operates and when to use each. Relate how an organiza- tion s structure influ- ences the implementa- tion of its strategic plan. Describe organizational culture elements that are helpful in planning and managing projects and demonstrate how to overcome organizational culture elements that hinder project success. Describe different proj- ect life cycle models and distinguish when each is appropriate.

BEHAVIORAL OBJECTIVES: Describe the duties, motivations, and chal- lenges of each of the executive, managerial, and team roles in projects and list important attri- butes for selecting each. Given a project situation, explain ethical behavior consistent with PMI s Code of Ethics and Professional Conduct. Predict the impact of orga- nizational structure and associated culture on indi- vidual and team behaviors. Predict the impact of organizational structure and associated culture on individual and team performance.

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operation centers to three, geographically in the East, Central, and West. This meant that internal and external projects that applied nationally could no longer be managed at a regional level using only regional resources. A new type of proj- ect manager was needed to manage national resources using a standardized set of practices. Creating a matrixed project organization to serve the functional orga- nization was the first phase.

PMBOK ® 6E PRIMARY OUTPUTS

1.2 Foundational elements Life Cycle and Development Approach

2.4 Organizational systems

3.4 Project manager competencies Leader Roles and Responsibilities

4.2 Develop Project Management Plan

4.7 Close Project or Phase

4.1 Develop Project Charter

4.3 Direct and Manage Project Work

4.4 Direct and Manage Project Work

4.6 Perform Integrated Change Control

4.5 Monitor and Control Project Work

PMBOK® GUIDE Topics:

1.2 Foundational elements

2.4 Organizational systems

3.3 The project man- ager s sphere of influence

3.4 Project manager competencies

4.1 Develop project charter

4.2 Develop project management plan

4.3 Direct and manage project work

4.4 Manage project knowledge

4.5 Monitor and control project work

4.6 Perform integrated change control

4.7 Close project or phase

CHAPTER OUTPUTS Life Cycle and Devel- opment Approach Leader Roles and Responsibilities

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Ensuring the culture would accept and support these changes was critical to success as change is not easy and resistance was anticipated. Senior manage- ment buy-in was essential and plans were implemented to dialogue, collaborate, and communicate the benefits of a PMO throughout the organization. The PMO s first mission was to establish national project management standards and manage a select few strategic national projects with a limited set of project managers. Proof of concept was key to continued buy-in. Clear roles and responsibilities for executive sponsors, project managers, and project team members were collabora- tively established. Standard processes and tools used by the project teams were jointly developed. Training occurred from the executive suite to project managers and project team members. As time progressed, project success rates increased and the PMO responsibilities were expanded to include the project management of all strategic operational projects and new customer implementations. Career paths for regional project managers were established. Selected regional project managers were promoted and trained to be national project managers. The organi- zational structure changed with selected regional project managers reporting to the national PMO. The executive sponsorship roles continued to evolve along with standard processes and practices to facilitate new responsibilities. In Improving Executive Sponsorship of Projects: A Holistic Approach, additional insight on each influencer, considerations, pitfalls, and tips for project management implementa- tion approaches can be found.1

Dawne E. Chandler, PhD, PMP

C hapter 2 dealt with organizational issues of strategic planning, selecting, and resour-cing projects. Chapter 3 details how to initiate a project usually by composing and ratifying a charter. This chapter introduces both project leadership and project planning. Leadership in this chapter includes organizational structure and culture along with roles of all key project participants. Planning is introduced in the selection of the project life cycle approach and introduction to the concept of a project plan. Both project leadership and planning lead to project success, as shown in Exhibit 4.1. Effectively leading project team members and other stakeholders leads to a foundation of respect and trust, which, in turn leads to project success. Effective project planning lays the groundwork for effective project execution, monitoring, control, and closeout, which also lead to project success.

EXHIBIT 4.1

DETERMINANTS OF PROJECT SUCCESS

102 Part 2 Leading Projects

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4-1 Types of Organizational Structures Contemporary companies choose among various methods for establishing their organi- zational structure. Organization structure is often developed by grouping people together based on criteria such as functional or technical skills or long-term activities. The struc- ture size and complexity increase with the increase in the number of employees. The structure is the way in which an organization divides its people into distinct tasks to achieve coordination among all these groups. Organizational structure can be considered to include work assignments, reporting relationships, and decision-making responsibility. Each method of structuring organizations has strengths and weaknesses. In this section, we will investigate various organizational methods and the impact of each on managing projects. The advantages and disadvantages of each organizational form are discussed in the following sections and then summarized in Exhibit 4.5.

4-1a Functional A functional organization is an organizational structure in which staff is grouped by areas of specialization and the project manager has limited authority to assign work and apply resources. 2 This is the traditional approach in which there are clear lines of authority according to type of work. For example, all accountants might report to a head of accounting, all marketers report to a head of marketing, and so on. An organizational chart for a functional organization is shown in Exhibit 4.2. Note that everyone in the organization reports up through one and only one supervisor. That supervisor is the head of a discipline or function (such as marketing).

The functional manager generally controls the project budget, makes most project decisions, and is the primary person who coordinates project communications outside the functional areas by contacting his or her peer functional managers.

ADVANTAGES One advantage of the functional form of organization is called unity of command all workers understand clearly what they need to do because only one boss is

EXHIBIT 4.2

FUNCTIONAL ORGANIZATION

Marketing VP Operations VP Finance VP Services VP

Chapter 4 Organizational Capability: Structure, Culture, and Roles 103

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giving them instructions. Communication is vertical and clearly established. Another advantage is that since all workers in a discipline report to the same supervisor, they will have an opportunity to interact frequently and can learn readily from each other and keep their technical skills sharp. Having the same supervisor also acts as a motivating factor for several employees to maintain and improve their technical expertise. A third advantage is that workers know that when they finish work on a project, they will still have a job because they will continue to report to the same functional manager. For small projects that require most of the work from one department, the functional organization often works well, both because of the advantages already stated and because the functional man- ager can share resources among various small projects and centrally control the work.

DISADVANTAGES That said, the functional form of organization can slow down com- munications when multiple functions need to have input. It also can be challenging from a technical standpoint if input is required from multiple disciplines. The functional manager is probably quite good within his or her domain, but may have less understanding of other dis- ciplines. However, in small organizations where most people have been forced to understand multiple areas, this may be less of an issue. Coordination between departments is frequently conducted at the manager level as the functional managers have a great deal of decision- making authority. This often means communication needs to first travel up from an employee at a low level in the structure to the manager, then across from one functional manager to another manager, and then down from the manager to an employee at a low level who will be working on it. This can become more complex when organizations have multiple levels of hierarchy within functional divisions and a chain of command must be fol- lowed. In short, coordination in a functional organization is complex and time consuming. These long communication channels often make for slow decision making and slow response to change. Integration becomes difficult and it may lead to frustration and a decrease in moti- vation and innovation. Also, decisions will tend to favor the strongest functional group or division. For these reasons, some organizations choose other forms of organization.

4-1b Projectized The exact opposite form of functional organization is the projectized organization, which is defined as group employees, collocated or not, by activities on a particular project. The project manager in a projectized structure may have complete, or very close to complete, power over the project team. 3 In this organizational form, the larger organization is bro- ken down into self-contained units that support large projects, geographies, or customers. Most people in the organization are assigned to a project and report upward through the project manager, as can be seen in Exhibit 4.3. While the structure of the two organiza- tional charts appears similar, the reporting manager is a project manager instead of a func- tional manager. The project manager has extensive authority for budgets, personnel, and other decision-making issues in this organizational structure. This provides adequate time for the project manager to make decisions. Projectized organization structure provides an opportunity to maintain expertise on a given project.

ADVANTAGES The advantages of the projectized organizational form are very differ- ent from the advantages of the functional form. Because people from different functions now report to the same project manager, traditional department barriers are reduced. Since the project manager is responsible for communications, response times and deci- sion making tend to be swift. All workers understand clearly what they need to do because only one boss the project manager is giving them instructions.

Projectized organizational structures often utilize the technique of co-location, which is an organizational technique in which the project team members are moved to

104 Part 2 Leading Projects

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alternate locations (either full time or only for parts of days) to allow them to better work with one another, and on the project in general. 4 This co-location often results in enhanced project team identity as well as trust, collaboration, coordination, strong customer focus, and effective integration of effort on the project.

DISADVANTAGES However, this organizational form also has disadvantages. Team members are often assigned to just one project, even if the project only needs part of their time, which leads to idle time. This can be costly because project team members are retained during and even after completing the project. Since the project manager is in charge and the team may be physically located on-site rather than with the rest of the organization, some projects tend to develop their own work methods and disregard those of the parent organi- zation. While some of the new methods may be quite useful, project teams not watched closely can fail to practice important organizational cultural norms, or accepted practices, and they sometimes fail to pass the lessons they learn on to other project teams. Team members who are co-located, while learning more about the broader project issues, often do not keep up their discipline-specific competence as well. Team members sometimes worry about what they will do when the project is completed, which leads to adverse motiva- tional, morale, and security issues. In short, motivating people could become a challenge.

4-1c Matrix Each of the extreme strategies already described (extreme in the sense that either the functional manager or the project manager has a great deal of authority) has strong advantages, but also significant weaknesses. In an attempt to capture many of the advan- tages of both, and to hopefully not have too many of the weaknesses of either, many organizations use an intermediate organizational strategy in which both the project man- ager and the functional manager have some authority and share other authority.

This intermediate strategy is the matrix organization, which is any organization in which the project manager or project team leader actually shares responsibility for the project with a number of individual functional managers. 5 A matrix organization is shown in Exhibit 4.4. Note that project team members report to both functional and

EXHIBIT 4.3

PROJECTIZED ORGANIZATION

Project Manager 1 Project Manager 2 Project Manager 3 Project Manager 4

Chapter 4 Organizational Capability: Structure, Culture, and Roles 105

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project managers. This is a clear violation of the unity-of-command principle; however, it is necessary to enjoy the benefits of a matrix organization. In short, the hoped-for ben- efit of a matrix structure is a combination of the task focus of the projectized organiza- tional structure with the technical capability of the functional structure.

ADVANTAGES Matrix organizations have many advantages, which is why an increas- ing number of companies are using some variation of them today. One advantage is that because both project and functional managers are involved, there is good visibility into who is working where, and resources can be shared between departments and projects. This reduces possible duplication a major advantage in this age of lean thinking in busi- ness. Since both types of managers are involved, cooperation between departments can be quite good. There is more input, so decisions tend to be high quality and are better accepted. This is a major issue since enthusiastic support for controversial decisions often helps a project team work through challenges. Since people still report to their functional manager, they are able to develop and retain discipline-specific knowledge. Since the vari- ous disciplines report to the same project manager, effective integration is still possible. Because people report to both the project manager, who is responsible for capturing les- sons learned, and to the functional manager, who is responsible for how the work in a function is performed, lessons learned can be shared effectively between projects. Further- more, policies and procedures for each project can be set separately. The project manager can commit resources and respond to changes, conflicts, and project needs quickly.

Yet another advantage of the matrix form is its flexibility. The amount of decision- making authority can be shared in whatever manner is desired. When the functional managers have relatively more power, it is almost like a functional organization. This is the way many organizations start evolving by giving project managers a bit more decision-making authority. This is called a weak matrix since the project managers have less authority than the functional managers. The next step in the progression is a bal- anced matrix in which project managers and functional managers have about equal

EXHIBIT 4.4

MATRIX ORGANIZATION

Marketing VP Operations VP Finance VP Services VPManager of Project Managers

Project Manager 1

Project Manager 2

Project Manager 3

Project Manager 4

106 Part 2 Leading Projects

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power. Finally, a strong matrix is one where the project managers have more power than functional managers. This is more similar to a projectized organizational form. The pro- gression of forms is shown in Exhibit 4.5.

DISADVANTAGES The matrix organizational form has drawbacks as well. Some people claim that having two bosses (both a functional manager and a project manager) is a disad- vantage. This problem certainly needs to be managed because the two managers may each try to do what they think is best for their project or department and may give conflicting advice. Dual responsibility and accountability can be demotivating for some people. How- ever, this is common territory for most people. Most students take multiple classes per term. Most companies have multiple customers. Having to balance competing demands can be difficult, but it is often the norm. Since more people are providing the necessary input, there are more sources of conflict, more meetings, and more challenges to control. Decisions may not get made as fast. Also, priorities are likely to change routinely.

Firms need to consider which organizational structure is best for them so they can capitalize on its advantages and mitigate its disadvantages. These decisions can change over time. Exhibit 4.6 summarizes a comparison of organizational structures.

Note that in a matrix organization, a new role is inserted in the organizational chart that of manager of project managers. Sometimes this person leads an office called the project management office (PMO). This does not mean that other organizations cannot have a PMO. In some organizations, an additional manager will be in the reporting chain between the project managers and the person in charge (shown as the president). In other matrix organizations, the project managers report directly to the person in charge. For simplicity, this chart shows each function with four workers and each project with four team members. In reality, some functions may have more workers than others, and some projects may have more team members than others. In fact, some people may only report to a functional manager since they are not currently assigned to a project, and others may report to more than one project manager since they are assigned on a part-time basis to multiple projects. Those people will have more than two supervisors.

While both project managers and functional managers have certain authority in any matrix organization, the extent of this authority can vary substantially. Often, the project manager has authority to determine what work needs to be accomplished and by when. The functional manager often retains authority to determine how the work is accom- plished. Sometimes, the two managers will negotiate to determine which workers will be assigned to the project. While both hopefully want the best for the overall organiza- tion, each has specific responsibilities. For example, the functional manager with several workers reporting to her wants each employee to have enough work but not be over- loaded. She also wants all workers to grow in expertise. The project manager, on the other hand, wants the best workers for the project so she can be more assured of deliv- ering good results. In a case like this, when they negotiate, the project manager may want the best resource (who is already busy), but the functional manager may offer the least experienced resource (who is available).

EXHIBIT 4.5

PROGRESSION OF ORGANIZATIONAL FORMS

ORGANIZATIONAL FORM FUNCTIONAL WEAK MATRIX BALANCED MATRIX STRONG MATRIX PROJECTIZED

Who has power? FM almost all FM more Equally shared PM more PM almost all

Chapter 4 Organizational Capability: Structure, Culture, and Roles 107

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One other source of potential conflict between the project and functional managers deals with performance reviews. Often, the functional manager is tasked with writing performance reviews, yet some workers may spend a great deal of their time on projects. If the project managers are not allowed to provide input into the performance reviews, some project team members will work harder to please their functional managers and the projects can suffer. One project manager offers ideas regarding performance reviews in Exhibit 4.7.

Closely related to the organizational structure is another organizational decision that needs to be made that of organizational culture. Project managers are not often part of the executive group that decides on organizational structure or organizational culture,

EXHIBIT 4.7

360-DEGREE PERFORMANCE REVIEWS

In some organizations, the functional manager performs a 360-degree evaluation. This appraisal style requires that the functional manager seek feedback from a representative sample of the staff who have worked with that project team member to provide feedback on a 360-degree form. Being appraised by your peers or team members on a given project is considered best practice because they ve observed the individual in action in the trenches. Many large organizations use this appraisal technique, since in large and/or complex organizations some staff rarely see their direct supervisor or manager, depending upon their function in that organization.

Source: Naomi J. Kinney, CPLP, principle consultant, Multilingual Learning Services.

EXHIBIT 4.6

ORGANIZATIONAL STRUCTURE COMPARISON

FUNCTIONAL MATRIX PROJECTIZED

Who makes most project decisions?

Functional manager Shared Project manager

Advantages Good discipline-specific knowledge Easy for central control Effective for shared resources One boss Clear career path for professionals

Flexible Easy to share resources Good cooperation between departments More input for decisions Wide acceptance of decisions Good discipline-specific knowledge Effective integration on project Increased knowledge transfer between projects

Break down department barriers Shorter response time Quicker decisions One boss Enhanced project team identity Customer focus Effective integration on project

Disadvantages Slow communication between departments Slow response to change Slow decision making

Two bosses Many sources of conflict More meetings Slow reaction time Hard to monitor and control

Duplication of resources Rules not always respected Potential lessons learned can be lost Discipline-specific knowledge can slip Less career continuity for project team members

Source: Adapted from Richard L. Daft, Management, 9th ed. (Mason, OH: South-Western Cengage Learning, 2010): 250 255; and PMBOK® Guide, 21 26.

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but they certainly need to understand how these decisions impact reporting relation- ships, decision-making methods, and commitment for their projects.

4-2 Organizational Culture and Its Impact on Projects

Just as project managers need to understand the structure of the parent organization, they also need to understand the culture of the parent organization if they are to communicate effectively. Organizational culture consists of values, social rituals, symbols, work ethics, organizational behavior, beliefs, and practices that are shared among members of the orga- nization and are taught to new members. Values serve as a moral compass to guide us and provide a frame of reference to set priorities and determine right or wrong. 6 Values are implemented through social rituals such as meetings, training, and ceremonies, along with symbols such as work layout and dress code.7 Collectively, these can informally:

Motivate the ethical actions and communications of managers and subordinates; Determine how people are treated, controlled, and rewarded; Establish how cooperation, coordination, collaboration, competition, conflict, and decision making are handled; and Encourage personal commitment to the organization and justification for its behavior.8

Once a project manager understands the culture of the parent organization, he can determine how to best foster the culture within his project. Many projects are completed cooperatively between two or more parent organizations, or one organization (a contractor) will perform the project for the other organization (a client). Whenever more than one par- ent organization is involved, the project manager needs to understand the culture of each well enough to facilitate effective project communications and decision making.

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Chapter 4 Organizational Capability: Structure, Culture, and Roles 109

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4-2a Culture of the Parent Organization When a project manager studies the culture of the parent organization, she needs to ask the following questions:

What is the corporate culture in general? What are the ascribed values? Are there standard project management practices and policies? How is the organization viewed by others in terms of being true to its values? How does the organization like to communicate internally and externally? How well does the organization support project management specifically?

TYPES OF POWER One framework that is helpful in understanding a corporate culture distinguishes the following four types of culture according to what is the most powerful motivator:

1. Power culture 2. Role culture 3. Task culture 4. Personal culture

Power cultures exist when the supervisor exerts a great deal of economic and political power and everyone tries to please the boss. Those in formal authority control competi- tion, conflict resolution, and communication.

Role cultures motivate everyone to understand and closely follow their appointed roles. Reliable workers follow formal designations of responsibility with utmost respect for regulations and laws.

In task cultures, it is more important to get the job done than to worry about who does the work or who gets credit. Hallmarks of task cultures are skill-based assignments, self-motivated workers, and more deference paid to knowledge than to formal authority.

In personal cultures, people show genuine interest in the needs of workers, consider worker development as critical to the organization s success, and display an attitude that collaboration is satisfying and stimulating.9

Many organizations will have one dominant culture modified by at least one of the other types. An astute person will look not only for what people say when trying to understand the culture but also will look for actions, decisions, symbols, and stories that guide behavior.

A variety of organizational culture characteristics make project success more likely. These characteristics include appreciation for project management; formal recognition for project management; collaboration to meet organizational goals; engagement of stake- holders; desire to provide value to customers; teamwork across cultures; integrity; trust; transparency; insistence on continual learning; knowledge management practices that are tied to individual and organization learning; and provision of appropriate rewards and rec- ognition. Recent research has added the following organizational culture themes as helpful in achieving project success: vision-led, egalitarian, goal-oriented, timely and effective com- munication, and flexible leadership with rapid decision making.10

MIDLAND INSURANCE COMPANY Midland Insurance Company espouses its values by giving every employee the One Pager that lists the organization s mission, strategic imperatives, and core values. The CEO will often pull his One Pager out at meetings and expects everyone else to do likewise. In talk and in action, Midland tries to live out the core values that comprise its organizational culture. Exhibit 4.8 shows Midland s culture.

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4-2b Project Cultural Norms While some of the project team s culture is dictated by that of the parent organization, effective sponsors and project managers can do many things to promote good working cultural norms within the project. Many times, participants on a project might not have worked together previously and may even come from parts of the organization (or out- side organizations) that have historically been rivals. The sponsor and project manager need to understand organizational politics and work to develop cooperation both within the core project team and among the various groups of project stakeholders. A project team charter helps to formalize this process and set expectations specifically for existing team members and inducting new team members.

When the project sponsor and manager are determining how to create the project cul- ture, ethics should be an important consideration. One aspect of an ethical project culture is to determine how people should act. Project sponsors and managers learn that they need to act in the best interests of three constituencies: (1) the project itself attempting to deliver what is promised, (2) the project team encouraging and developing all team members, and (3) the other project stakeholders satisfying their needs and wants. Ethical project managers make decisions so that one of the three constituencies does not suffer unfairly when satisfying the other two. One list of behaviors adapted from the PMI Code of Ethics and Professional Conduct tells project managers to exhibit the following:

Responsibility take ownership for decisions. Respect show high regard for ourselves, others, and resources. Fairness make decisions and act impartially. Honesty understand the truth and act in a truthful manner.11

The other aspect of an ethical culture is how people actually act. Every project has dif- ficult periods, and the measure of project ethics is how people act at those times. The proj- ect manager needs to show courage both in personally making the right decisions and in creating an atmosphere in which others are encouraged to make the right decisions. An ethical project culture in which people know how to act and have the courage to do so yields better ideas; when a spirit of mutual trust prevails, everyone participates with their ideas and effective partnering relationships within and beyond the project team.

4-3 Project Life Cycles All projects go through a predictable pattern of activity, or project management life cycle, which we refer to as project life cycle. Project planning teams use project life cycle models because various types of projects have differing demands. A research and development (R&D) project may require a certain test to be performed before manage- ment approves the expenditure of large amounts of cash, while the manager of a quality improvement project may need to document how the work is currently performed before

EXHIBIT 4.8

MIDLAND INSURANCE COMPANY VALUES

Integrity Win/Win Team Humility Strong Work Ethic

Creativity Propriety Sharing/Caring Personal Growth

Source: Martin J. Novakov, American Modern Insurance Group.

Chapter 4 Organizational Capability: Structure, Culture, and Roles 111

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it makes sense to experiment with a new method. The major types of project life cycle models, while differing in details, have some things in common:

They all have definite starting and ending points. They involve a series of phases that need to be completed and approved before pro- ceeding to the next phase. The phases generally include at least one initiating, one planning, one closing, and one or more executing phases. The various life cycle models are all frequently adapted based on how they align with the organizational culture and language.

We will now look at several models that represent those used in improvement, research, construction, and Agile projects. We introduce the Agile approach to project management immediately after its life cycle model. In the remainder of the book, we will deal with the generic, plan-driven model that includes selecting and initiating, planning, executing, and closing and realizing benefits, as shown in Exhibit 4.9. We will post an Agile icon in the margin wherever we highlight how the Agile or adaptive approach is different.

4-3a Define-Measure-Analyze-Improve-Control (DMAIC) Model Many firms use projects to plan and manage quality and productivity improvement efforts. Various models are used for these improvement efforts. While these models appear to be somewhat different, they all strive to use facts to make logical decisions and to ensure that the results are as desired. The Six Sigma approach to quality improve- ment (a popular current approach explained in Chapter 11) uses the DMAIC model. A simple version of this model is shown in Exhibit 4.10.

EXHIBIT 4.9

GENERIC PROJECT LIFE CYCLE MODEL

Approval: to proceed

Charter Kickoff Project result

Administrative closure

EXHIBIT 4.10

DMAIC MODEL

Approval: to proceed

Problem statement

Fact gathering defined and facts collected

Root causes identified and statistically proven

Solution implemented

Methods in place to maintain improvements

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AGILE

4-3b Research and Development (R&D) Project Life Cycle Model Many organizations use project management techniques to organize, plan, and manage research and development efforts. These can vary in length from as much as a decade for taking a new pharmaceutical product from idea to successful market introduction to as little as a few weeks to reformat an existing food product and deliver it to a client. Some R&D project models are complex and have many phases because of huge risks and demanding oversight; yet some are much simpler. One simple R&D model adapted from defense development projects is shown in Exhibit 4.11.

4-3c Construction Project Life Cycle Model Just as in other project applications, since construction projects differ greatly in size and complexity, a variety of project life cycle models are in use. A generic construction proj- ect life cycle model used for design build projects is shown in Exhibit 4.12.

4-3d Agile Project Life Cycle Model One type of model increasingly used in information systems and some other projects allows for incremental plans and benefits. These approaches have been variously called iterative, incremental, adaptive, or change driven. While Agile is the umbrella name, some of the specific approaches are called SCRUM, XP, Crystal, EVO, phased delivery, rapid pro- totyping, and evolutionary. While these models may start like other project life cycle mod- els, they provide short bursts of planning and delivery of benefits in multiple increments during project execution. A generic Agile project life cycle model is shown in Exhibit 4.13.

EXHIBIT 4.11

R&D PROJECT LIFE CYCLE MODEL

Approval: to proceed

Opportunity analysis

Business case Proven concept Prototype First lot and hand off

EXHIBIT 4.12

CONSTRUCTION PROJECT LIFE CYCLE MODEL

Phase Pre-Planning Design Procurement Construction Start Up

Approval to proceed

Scope definition and execution strategy

Procurement and construction documents

Materials and services

Facilities and processes

Production attainment

Source: Adapted from James D. Stevens, Timothy J. Kloppenborg, and Charles R. Glagola, Quality Performance Measurements of the EPC Process: The Blueprint (Austin, TX: Construction Industry Institute, 1994): 16.

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4-4 Agile Project Management In this section, we introduce several basic ideas from Agile. In subsequent chapters, we will explain some of them in more detail. In many situations, project managers find the most useful method takes good practices from both plan-driven and change-driven approaches, just as the matrix form of organizing takes good ideas from both functional and projectized organizations.

4-4a What Is Agile? Agile is a form of adaptive or change-driven project management largely reacting to what has happened in the early stages of a project rather than planning everything in detail from the start. Documentation is minimal early in the project but becomes pro- gressively more complete. To understand Agile, one needs to know both the methods and the mindset of Agile practice. For the methods, a project vision is developed and shared early often as part of a charter. Project teams plan in short bursts (generally of one to four weeks), often called sprints or iterations. The details are planned for the upcoming iteration and very little change is allowed during it. Products are defined and delivered one iteration at a time with an output that has business value successfully delivered at the end of each iteration. Then the next iteration is planned. The mindset is empowering, engaging, and openly communicating as detailed as follows.

4-4b Why Use Agile? Traditional plan-driven project management works well in many situations, but if the scope is hard to define early in the project and/or when much change is expected, an Agile approach often works better. For these ill-defined and rapidly changing projects, Agile pro- ponents claim to decrease time, cost, and risk while increasing visibility and innovation.

4-4c What Is an Agile Mindset? While much has been written about Agile, starting with the Agile Manifesto, a simplified version of the mindset needed to successfully plan and manage Agile projects boils down to four key ideas:

1. Satisfy the customer by placing emphasis on outputs that fulfill their needs. 2. Engage all participants through empowerment, cooperation, and knowledge sharing.

EXHIBIT 4.13

AGILE PROJECT LIFE CYCLE MODEL

Production release

Product backlog

Incremental Implementation

Charter

Project Envisioning

Requirements Gathering

Plan Replan Test

Develop Close

Sprint

Plan Replan Test

Develop Close

Sprint

Plan Replan Test

Develop Close

Sprint

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3. Facilitate that engagement through servant leadership and visible and continual communication.

4. Keep things simple with a sustainable pace or cadence and emphasis on process improvement.

4-4d What Are the Key Roles in Agile Projects? All Agile roles are more collaborative than confrontational. Arguably the most essential role is the customer representative sometimes called the product owner. This person ensures that the needs and wants of the various constituents in the customer s organi- zation are identified and prioritized and that project progress and decisions continually support the customer s desires. The customer representative does much of what a sponsor might in traditional projects and also works with the team on a continuous basis, often performing some of the work a project manager might on a traditional project.

The scrum master serves and leads in a facilitating and collaborative manner, empha- sizing the need to facilitate and remove obstacles. The scrum master is a more limited, yet more empowering role than that of a traditional project manager. The team members in Agile projects are assigned full time and co-located as much as possible. The teams are self-governing, so the team now accomplishes many of the planning and coordinating activities a project manager would typically perform.

4-4e How Do You Start an Agile Project? An Agile project should start with a charter, as any other project should. This high-level agreement between the product owner, scrum master, and empowered team will help share the compelling project vision, create commitment, uncover risks, identify stake- holders, ensure common understanding of success criteria, and establish working agree- ments and ground rules as needed. Often, the first iteration is used to determine the product to be built and prioritize the most valuable work for the next iteration.

4-4f How Do You Continue an Agile Project? Perhaps the easiest way to understand the process of running an Agile project is to visu- alize the four types of meetings (often called ceremonies) used:

1. Iteration planning meetings have the product owner share the highest value-added output he or she would like the team to work on next, along with a definition of what done or quality completion is. The project team then commits to how much output it can deliver in the iteration. This meeting may include backlog grooming, which is reprioritizing the work, or backlog grooming may be conducted in a separate meeting.

2. Daily stand-up meetings are often held for 15 minutes early in the morning and each team member shares the previous day s accomplishments, the plans for the current day, and any issues. Problem solving is not done in these team meetings, but if one teammate can help another, the two talk off-line afterward.

3. Demonstration meetings are held at least once per iteration where the team demon- strates usable product. Only a completed, usable product is shown.

4. Retrospective meetings are held at the end of each iteration where the project team, scrum master, product owner, and possibly other key stakeholders openly share what worked well and what could work better by making a change of some sort. The goal is to improve the work processes.

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4-4g What Is Needed for Agile to Be Successful? Experienced and motivated team members are needed because one hallmark of Agile is self-managed teams. Without experience and willingness to be a cross-functional team member, the teams would likely flounder. A key stakeholder, often called the product owner or customer, needs to commit to frequent and detailed meetings, as described above, with the development team both for initial chartering and requirements gathering, but also for ongoing prioritization and evaluation. Trust between the client and contrac- tor (or user and developer) is needed because the details of the requirements and scope are initially unknown. Trust is also needed as the client needs to prioritize to get maxi- mum value, given time and resource constraints, and the project team needs to commit to creating certain working output during each iteration.

4-5 Traditional Project Executive Roles Projects do not exist in a vacuum. They exist in organizations where they require resources and executive attention. Projects are the primary method that organizations use to reach their strategic goals. As such, a variety of players need to be involved at the executive, managerial, and associate levels, as shown in Exhibit 4.14. Especially in small organiza- tions, one person may perform more than one role. For example, a sponsor may perform some or all of the activities normally expected from the customer. The four project exec- utive roles are the steering team (ST), the sponsor, the customer, and the chief projects officer (CPO), often known as the project management office (PMO).

4-5a Steering Team In small to medium-sized organizations, the steering team (sometimes known as the executive team, management team, leadership team, operating team, or other titles) often consists of the top person in the organization and his or her direct reports. They should collectively represent all of the major functions of the organization. In larger organizations, there may be steering teams at more than one level. When that occurs, the steering teams at lower levels are directed and constrained by decisions the top- level steering team makes. Some organizations divide the duties of the steering team by creating project review committees and delegating tasks to them. In any event, the duties of the steering team revolve around the following five activities:

1. Overall priority setting 2. Project selection and prioritization 3. Sponsor selection 4. General guidance 5. Encouragement

EXHIBIT 4.14

TRADITIONAL PROJECT EXECUTIVE, MANAGERIAL, AND ASSOCIATE ROLES

EXECUTIVE LEVEL MANAGERIAL LEVEL ASSOCIATE LEVEL

Steering Team (ST) Functional Manager (FM) Core Team Member

Sponsor Project Manager (PM) Subject Matter Expert (SME)

Customer Scrum master

Chief Projects Officer (CPO) Facilitator

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The steering team generally sets overall organizational priorities with the CEO. This is a normal part of strategic planning, as described in Chapter 2. Once the overall organi- zational goals have been set, the steering team agrees on the criteria for selecting projects and then selects the projects the organization plans to execute during the year. Once the overall project list is complete, they determine the relative priorities of the projects to determine which will start first.

Simultaneously, the steering team often helps the CEO decide who will sponsor potential upcoming projects. In turn, the steering team often helps the sponsor select the project manager. In some cases, the steering team even gets involved in deciding which critical team members will be on the project. This is especially true if very few people in the organization have highly demanded skills. The steering team can decide which project these people will work on as part of the prioritizing effort.

Guidance from the steering team includes feedback during formal reviews as well as informal suggestions at other times. Since steering teams understand how important project success is in achieving organizational objectives, they normally demand to have formal project reviews. These can occur either at set calendar times or at a project mile- stone, which is a significant point or event in the project. 12 At these formal reviews, the steering team can tell the project team to continue as is, to redirect their efforts in a specific manner, or to stop the project altogether.

In terms of informal suggestions, it is very empowering to project participants if the steering team members ask how the project is going and offer encouragement when they run into each other in the normal course of work. It shows project participants that their work is important and has high visibility in the organization.

4-5b Sponsor We defined a sponsor in Chapter 1 as a senior manager serving in a formal role given authority and responsibility for successful completion of a project deemed strategic to an organization s success. 13 In this sense, the sponsor is normally an individual who has a major stake in the project outcome. Sponsors often perform a variety of different tasks that help a project, both in public and behind the scenes. Major sponsor responsibilities are shown by project stage in Exhibit 4.15. The sponsor for major projects is often a member of the steering team. On smaller projects, the sponsor may hold a lower position in the organization. The interaction indeed, the partnership of the sponsor and proj- ect manager is critical to project success.

As a member of the steering team, the sponsor should understand the corporate strat- egy and be prepared to help with project selection and prioritization to link each project explicitly with organizational strategy.14 Sponsors should pick the project manager and core team (sometimes with help from the project manager and/or others). Sponsors should mentor the project manager to ensure that person understands his role and has the skills, information, and desire to successfully manage the project.

In the previous chapter, we discussed chartering. Sponsors ideally take an active role in chartering the project by creating a first draft of the business case and scope overview state- ments for the project. If a sponsor does not take time for this, the project manager needs to ask questions to elicit this business case and scope overview information. Then the sponsor should insist that a milestone schedule, preliminary budget, risk identification, assessment cri- teria, communication plan, and lessons learned be developed by the project manager and team. In this way, the sponsor sets performance goals and establishes priorities.15 The sponsor then either personally approves the charter or takes the charter to the steering team for approval.

As the project progresses, the sponsor helps behind the scenes by obtaining resources, removing roadblocks, making high-level decisions, and interfacing between the project core team and the executive team. Sponsors often share their vision for the project with

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various stakeholders. When providing staff, sponsors ensure they are adequate in number and skill. This may include training. It may also include negotiating for staff. Sponsors often let their project managers arrange this training and negotiate for resources. How- ever, the sponsor needs to make sure that both are satisfactorily completed.

Once again, sponsors with experienced project managers may merely need to ensure their project managers have the means in place to monitor and control their projects. Large projects with many stakeholders often have formal kickoff meetings. The sponsor s presence demonstrates corporate commitment. Sponsors represent the customer to the project team. The sponsor must ensure that several important customer-related tasks are performed as follows:

All customers (stakeholders) have been identified. Their desires have been uncovered and prioritized. The project delivers what the customers need. The customers accept the project deliverables.

Again, the project manager should do much of this, but the sponsor is also responsi- ble for its completion. While sponsors represent their projects, they also represent the larger organization. As such, they often should be one of the first persons to determine the need to stop a project that is no longer needed or is not performing adequately. Finally, after the project results have been used for a period of time, the sponsor should make sure the expected results have been achieved.

So, who makes a great sponsor? In addition to having a major stake in the project outcome and fulfilling the responsibilities described above, the following general beha- viors and temperaments are desirable:

Excellent communication and listening skills Ability to handle ambiguity Ability to self-manage Approachability Collaborative attitude Responsiveness16

EXHIBIT 4.15

SPONSOR RESPONSIBILITIES BY STAGE

STAGE SPONSOR RESPONSIBILITIES

Overarching Provide resources, manage stakeholder relationships, deliver results

Selecting Identify, select, prioritize projects

Initiating Select and mentor project manager, charter project

Planning Meet key stakeholders, ensure planning

Executing Nurture key stakeholders, ensure communications, ensure quality

Closing Ensure stakeholder satisfaction, closure, and knowledge management

Realizing Ensure benefits are achieved and capability is increased

Source: Adapted from Timothy J. Kloppenborg and Laurend J. Laning, Strategic Leadership of Portfolio and Project Management (Business Expert Press, New York 2012): 47; Timothy J. Kloppenborg, Debbie Tesch, and Chris Manolis, Project Success and Executive Sponsor Behaviors: Empirical Life Cycle Stage Investigations, Project Management

Journal (February/March, 2014): 15 17; and Timothy J. Kloppenborg and Debbie Tesch, How Effective Sponsors Influence Project Success, MIT Sloan Management Review (Spring 2015): 28 30.

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4-5c Customer While the specific demands of the customer role are spelled out here, understand that some or all of this role may be carried out by the sponsor particularly for projects inter- nal to a company. When a busy customer buys something, it may be tempting to just place an order and have it delivered. That process is fine for an off-the-shelf item or for a trans- actional service. However, when it is a one-of-a-kind project, hands-off ordering does not work. The question then becomes: What does a customer need to do to ensure the desired results? Exhibit 4.16 shows a list of seven tasks a customer can do before and during a project to enhance the probability of success. The customer performs three of these tasks independently and the other four jointly with the project manager. The three customer- only project tasks are prioritizing the project need, carefully selecting a good contractor, and killing the project if necessary. The four joint tasks are writing and signing the project charter, developing clear and detailed requirements, setting up and using project control systems, and conducting a great project kickoff meeting.

INDEPENDENT TASKS The first requirement is to prioritize each project. The knowl- edge that one particular project is the highest priority for a company should be

EXHIBIT 4.16

CUSTOMER TASKS ON PROJECTS

INDEPENDENT TASKS JOINT TASKS WITH PROJECT MANAGER

1. Prioritize project 2. Select good contractor 3. Kill project if needed

1. Write and sign charter 2. Develop clear requirements 3. Use control system 4. Conduct kickoff meeting

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Chapter 4 Organizational Capability: Structure, Culture, and Roles 119

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communicated, and that project should be tackled by the A team. A related prioritiza- tion question is: Do we need this project so badly right now that we are willing to start it even without the skilled personnel, resources, or technology on hand that would improve the probability of successful completion? If so, ensure this particular project gets top bill- ing. If not, consider delaying it. A third prioritizing decision that needs to be made repeatedly is what project requirements must be satisfied first so the project team is working on what matters most to the customer.

The second customer task is to carefully select a competent and honest contractor to perform the project. All of the important joint tasks are much easier with the right con- tractor, the probability of success goes up, and everyone s stress level goes down.

The third customer task is to determine whether to pull the plug on a troubled project. This could happen right at the start if the project appears to be impractical. It could happen during detailed planning when the requirements, schedule, budget, risks, or other aspects indi- cate trouble. More often, it occurs during project execution when the project progress does not live up to the plan. A customer needs to decide when to stop throwing good money after bad.

JOINT TASKS WITH PROJECT MANAGER The first joint task for customers and project managers is to create and ratify the project charter. The charter is a broad agreement concerning the project goals, rationale, risks, timeline, budget, approach, and roles even though all of the details have yet to be determined. The charter should help to identify projects that appear risky or otherwise impractical from the outset. These projects should either be scrapped, or a different approach should be used. If the project looks promising, both the contractor and the customer normally sign the charter and feel morally bound to its spirit.

Once the charter is signed, the contractor and customer need to develop detailed requirements. Some of the challenges many customer companies face are differing project expectations among the members of the organization. Somehow, the conflicting desires of multiple people in the customer s organization must be combined into one set of requirements that will be provided to the people who will perform the project work. Senior customer representatives and project managers frequently work together to determine the requirements.

The customer and the contractor often collaborate on the setup and use of several project control systems. One of these is a communications plan (which is explained in Chapter 6). Since the customer is often the recipient of communications, he needs to tell the contractor what he needs to know, when he needs to know it, and what format will be most convenient. This should include regular progress reports. Second is a change control system (explained in Chapter 7). Most projects will have multiple changes. A method must be created to approve potential changes, document their impact, and ensure that they are carried out as agreed. Third is a risk management system (explained in Chapter 11). Customers should work with developers to brainstorm possible risks, consider how likely each risk is to occur, measure a risk s impact should it happen, and develop contingency plans. The customer needs to ensure that effective communications, change management, and risk management systems are used.

Customers must help plan and participate in a project kickoff meeting. This meeting should be widely attended, give everyone involved in the project a chance to ask ques- tions, and be used to build excitement for the project.

Customers get what they pay for on projects, but only when actively involved in key activities. Customers have the sole responsibility of prioritizing their own needs, selecting a contractor to perform their project, and terminating a project that is not working. Cus- tomers and contractors share the responsibility for crafting and agreeing to a project charter, articulating requirements, developing and using project control systems, and conducting an informative and energetic project kickoff.

120 Part 2 Leading Projects

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4-5d Chief Projects Officer/Project Management Office Organizations need to have one person who owns their project management system and is responsible for all the people who work on projects. While different companies use different titles for this position (such as project director or manager of project man- agers), we will use the title chief projects officer (CPO). Just as companies size and com- plexity vary greatly, so does the role of CPO. Large companies frequently have a project management office (PMO). The PMO performs the CPO role. At small companies, the CPO role may be performed informally by the CEO, who also juggles many other time demands. Companies in the medium-size range may find it useful to appoint an execu- tive who already has other responsibilities as the CPO. Ensuring projects are planned and managed well is so central to the success of most companies that a highly capable individual is normally assigned this responsibility.

To be effective, the CPO must consider organizational enablers for project success: these include standardized supporting processes such as approvals and appointments; standardized execution guidance such as performance assessment criteria and templates; well-defined responsibility systems such as sponsor and project team roles; and a mature organizational structure that fosters cooperation and joint problem solving.17

So, what are the responsibilities of the chief projects officer? They include ensuring that the company s steering team:

Identifies potential projects during strategic planning Selects a manageable set of projects to be implemented Prioritizes effectively within that set Ensures enough resources (people, money, and other resources) are available to per- form the projects Selects appropriate project sponsors and teams Charters the project teams Monitors and controls the implementation of the projects Rewards the participants Celebrates the results of successful projects!

If that is not enough, the CPO also ensures that each individual serving on a project:

Receives the training he or she needs Captures lessons learned from completed projects Uses lessons learned from previous projects on new projects Uses templates and standards when appropriate

4-6 Traditional Project Management Roles The manager-level roles in traditional projects include the functional manager, project manager, and facilitator.

4-6a Functional Manager Functional managers are often department heads. Projects come and go, but departments generally remain. Functional managers have a large role in deciding how the project work in their functional area is done. Functional managers and project managers may negotiate who will be assigned to work on the project.

Generally, top management in an organization needs to decide how the relative decision-making power in the organization is divided between project managers and functional managers. Organizations that are new to formalized project management often start with functional managers having more power. Often, this changes over time until project managers for big projects have relatively more power.

Chapter 4 Organizational Capability: Structure, Culture, and Roles 121

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4-6b Project Manager The project manager is the focal point of the project. He or she spends a large amount of time communicating with everyone who is interested in the project. The project manager leads the planning, execution, and closing of the project. This person ideally should be a flexible, facili- tating leader. Since project managers are responsible for the project schedule, they have a large role in deciding when project activities need to be accomplished. Project managers are trusted with delivering project results needed by their parent organizations. As such, project managers need to be worthy of that trust by possessing both integrity and necessary skills.

DESIRED BEHAVIORS Exhibit 4.17 shows a few of the behaviors project managers can develop first in regard to integrity and then in regard to each of the 10 project man- agement knowledge areas needed to successfully plan and manage projects. This book describes some of the factual knowledge project managers need to acquire to become proficient. Project managers also need to acquire experiential knowledge by practicing

EXHIBIT 4.17

DESIRED PROJECT MANAGER BEHAVIORS

INTEGRITY: A PM demonstrates integrity by making honest decisions, protecting people, defend- ing core values, leading major change, honoring trust, showing respect, establishing a culture of honesty, and displaying total commitment to project and people.

INTEGRATION: A PM is an effective integrator by leading the chartering process, coordinating assembly of a detailed and unified project plan, balancing the needs of all stakeholders, making logi- cal trade-off decisions, and keeping focus on primary objectives.

SCOPE: A PM deftly handles project scope by obtaining a deep understanding of stakeholder wants and needs, determining true requirements, learning if proposed changes are essential, stopping unnecessary scope creep, and demonstrating needed flexibility.

TIME: A PM is an effective scheduler by leading schedule development, understanding resource and logic limitations, understanding the project life cycle, focusing on key milestones, and making schedule decisions while being aware of cost and scope issues.

COST: A PM maintains cost control by developing an accurate understanding of project scope, determining reliable cost estimates, controlling all project costs, and calculating and honestly report- ing all variances in a timely and transparent manner.

QUALITY: A PM achieves project quality by learning customer expectations and how they relate to organizational objectives, insisting project decisions are based upon facts, utilizing lessons learned, ensuring effective work processes are used, and leading testing.

HUMAN RESOURCES: A PM effectively handles human resource issues by leading in a facilitating manner when possible and forcefully when needed, attracting and retaining good workers, develop- ing a self-directed project team, and creating a sense of urgency.

COMMUNICATIONS: A PM displays good communications by listening and speaking well, advo- cating the project vision, maintaining enthusiasm, focusing attention on key issues, establishing order, working through conflict, seeking support, and openly sharing.

RISK: A PM effectively deals with project risk by openly identifying risks and opportunities, hon- estly evaluating each, developing avoidance strategies when practical and mitigation strategies when needed, and courageously recommending needed actions.

PROCUREMENT: A PM effectively procures needed goods and services by accurately documenting all requirements, identifying and fairly considering all potential sellers, proactively managing con- tracts and relationships, and ensuring all deliveries.

STAKEHOLDER: A PM deals effectively with stakeholders by robustly identifying all who are interested in the project, asking probing questions to understand their desires, and ensuring someone on the project team maintains effective relationships with each.

122 Part 2 Leading Projects

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these behaviors on projects. Not all project managers will become equally adept at each behavior, but an understanding of the behaviors exhibited by excellent project managers is a great way to start. Remaining chapters in this book elaborate on these behaviors. Collectively, all of these skills make for a great, well-rounded project manager.

COMMUNICATION CHANNELS Envision a bicycle wheel, as shown in Exhibit 4.18. The project manager is like the hub, and the spokes are like the many communication channels the project manager needs to establish and use with project stakeholders. While there are many project manager requirements, some of the technical needs can probably be delegated, but every project manager needs integrity, leadership, and communications skills.

CHALLENGES Project managers deal with several challenges. One is that they often have more responsibility than authority. This means they need to persuade people to accomplish some tasks rather than order them to do so. Project managers can create inter- esting and challenging work assignments for their team members. Many people find this stimulating. Project managers can more effectively attract followers when they display high integrity and the ability to get the job done. This includes both technical ability and com- munications ability. Project managers primarily deal with networks of people both within and outside their parent company. An effective project manager knows how to get to the source of the networks. A challenge for project managers is determining how networks function within certain organizational cultures. This is why organizational culture is so important. What are the networks within the organization? How do people work, commu- nicate, and problem solve beneath the function of their job titles?

A rookie project sponsor and rookie project manager should not be assigned to the same project. While the sponsor normally mentors the project manager, when a sponsor is new, some of the mentoring may go the other way just as a master sergeant may help a new lieutenant learn about leading troops.

JUDGMENT CALLS Due to the very nature of projects each one having a unique set of stakeholders, output, and project team project managers cannot always follow a cook- book approach in how they manage. They must develop judgment. Exhibit 4.19 lists some judgment calls that project managers need to be prepared to make on a frequent basis.

COMPETENCIES BY PROJECT STAGE Just as sponsor demands vary by project life cycle stage, so do those of project managers, as shown in Exhibit 4.20.

PROJECT LEADERSHIP Many people have become convinced that project managers need to provide leadership in various ways. Knowing the tools and techniques of project management and even knowing the content of the PMBOK Guide is useful, but not enough to be a great project manager. A dozen of the more common leadership chal- lenges faced by project managers are shown in Exhibit 4.21. Anther way to understand

EXHIBIT 4.18

PROJECT MANAGER COMMUNICATION CHANNELS

Project Manager Stakeholders

Chapter 4 Organizational Capability: Structure, Culture, and Roles 123

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leadership demands of project managers is to consider the core competencies at a glance shown in Exhibit 4.22.

4-6c Facilitator Some project management situations require facilitation because the situation is so com- plex and/or because the opinions are so varied. Sometimes, the workers on a project need to expand their thinking by considering the many possibilities (possible projects, approaches, risks, personnel, and other issues). Other times, the workers on the project

EXHIBIT 4.19

PROJECT MANAGER JUDGMENT CALLS

A few general questions project managers need to ask themselves is when to:

Act versus analyze Lead versus follow Lead versus administer Repeat versus change Change expectations versus accept them Take over versus let the team perform Focus on the big picture versus focus on details Focus on technical versus focus on behavioral Focus on short term versus focus on long term Promote order (control) versus promote innovation (freedom) Allow (constructive) conflict versus discourage (destructive) conflict Focus communications inside the project versus focus communications outside Demonstrate optimism versus demonstrate pessimism Advocate for the project versus accept termination Focus on project goals versus organizational, personal, or team member goals Enhance, maintain, or accept changes in scope, quality, cost, and schedule

EXHIBIT 4.20

PROJECT MANAGER COMPETENCIES BY PROJECT LIFE CYCLE STAGE

STAGE COMPETENCY

Initiation Effective questioning/generating feedback Persuasiveness/Marketing/Selling Listening skills Vision oriented/articulate the business problem Consensus building

Planning Project management skills and knowledge Consensus building Technical skills/theoretical knowledge

Implementation Ability to get along/team player Results oriented Truthful/honest

Close Writing skills Share information and credit Pride in workmanship/qualitytruthful/honest

Source: Gregory J. Skulmoski and Francis T. Hartman, Information Systems Project Manager Soft Competencies: A Project-Phase Investigation, Project Management Journal (March 2010): 61 77.

124 Part 2 Leading Projects

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EXHIBIT 4.21

A DOZEN PROJECT LEADERSHIP CHALLENGES

General Project Leadership

Provide situational and shared leadership Develop trust Manage and negotiate conflicts Manage political, social, cultural, and ethical issues

Team Leadership

Develop high-performing project teams Participate in self-organizing project teams Overcome team-building obstacles Facilitate team decision making

Stakeholder Leadership

Engage all stakeholders Influence stakeholder behavior Maintain effective multidirectional communications Deal with changes in the environment and within the project

Source: Adapted from unpublished discussion of Project Management Executive Forum meeting, October 10, 2106, Cincinnati, OH.

EXHIBIT 4.22

AGILE PROJECT LIFE CYCLE MODEL

Decision maker, lead by example, have integrity

Strategic thinker, company goals

Skills training, ongoing education

PMI Certification: PMP®, CAPM®

Different size projects & complexity

Stakeholders, project teams, communicator

Goal setting, results driven, be accountable

Finance, customer & internal needs

PM terminology, PM best practices

Program Mgmt, Agile, other PMI certifications

Virtual teams, global projects

Motivate, inspire, reward and recognize

Ask questions, active listener, follow-through

Industry, market Sales skills, continuous improvement

Industry and technical certifications

Diversity in viewpoints, backgrounds, teams, cultures

Relationship builder, influencer, get buy-in

Project leader and business leader

Competition, trends

Project close-out: use Lessons Learned

Volunteer projects, contribute your expertise

Proven success on projects and teams

Maximize everyone’s strengths

Core Competencies

Experience

Certification

Knowledge

Business

Leadership

Developed by Connie Plowman, PMP, based on her experiences as a hiring manager, practitioner and instructor. connie@plowman.us www.linkedin.com/in/connieplowman

PASSION

People

Source: Connie Plowman, PMP, Chief Operating Officer (retired), PMI Eric Jenett Project Management Excellence Award Recipient

Chapter 4 Organizational Capability: Structure, Culture, and Roles 125

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AGILE

need to focus their thinking by selecting from many options (a project, an approach, a contractor, or a mitigation strategy). Most project managers and sponsors can and do facil- itate many meetings. However, the project manager may prefer to focus on the content of a meeting and enlist a facilitator to help focus on the process of the meeting. In these situations, an outside facilitator may be useful. Often, a disinterested sponsor or project manager (one who works on other projects, but not on this one) is used when a facilitator is needed. Sometimes, the chief projects officer or an outside consultant is used to facilitate.

4-7 Traditional Project Team Roles The team- or associate-level roles in projects are core team members and subject matter experts (SMEs).

4-7a Core Team Members Core team members are the small group of people who are on the project from start to finish and who jointly with the project manager make many decisions and carry out many project activities. If the project work expands for a period of time, the core team members may supervise the work of SMEs who are brought in on an as-needed basis. Ideally, the core team is as small as practical. It collectively represents and understands the entire range of project stakeholders and the technologies the project will use. It is generally neither necessary nor useful to have every single function represented on the core team, since that would make communication and scheduling meetings more diffi- cult. Also, if every function is represented directly, team members tend to fight for turf.

The ideal type of core team member is one who is more concerned with completing the project (on time, with good quality, and on budget, if possible) than with either per- sonal glory or with only doing work in his or her own discipline. He or she does what it takes to get the project done.

4-7b Subject Matter Experts While core team members are typically assigned to the project from start to finish, many pro- jects also have a specific and temporary need for additional help. The necessary help may be an expert who can help make a decision. It may be extra workers who are needed at a busy time during the life of the project. Some extra help may be needed for as little as one meeting; other extra help may be needed for weeks or months. These extra helpers are often called subject matter experts (SMEs) since they are usually needed for their specific expertise.

SMEs are brought in for meetings and for performing specific project activities when nec- essary. A project could have almost any number of SMEs, depending on its size and com- plexity. SMEs are not on the core team but still are essential to the project. SMEs may be on a project for a long time and thus be almost indistinguishable from core team members.

However, SMEs may spend only a little time on a particular project and, therefore, may not relate strongly to it. At times, it is a struggle to get them scheduled and com- mitted. Typically, a project manager would have a newly assigned SME read the project charter and the minutes from the last couple of meetings before discussing the project with him. It is a balancing act to ensure that the SME understands what she needs to do and how important it is, without spending a great deal of time in the process.

4-8 Role Differences on Agile Projects Agile project management roles are shown in Exhibit 4.23. Most of the same work still needs to be accomplished in organizations using Agile methods. Some of the work is

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performed by different people as there is an emphasis on empowering teams, and some is performed at different times as requirements and scope emerge gradually instead of just at the project start. Collaborative effort and communication specifically with the cli- ent are common features of Agile project teams.

On Agile projects, arguably the most essential role is the customer representative sometimes called the product owner. This person is responsible for the return on investment earned by the project and accepting or rejecting acceptance of deliverables at the end of each iteration. The customer representative ensures that the needs and wants of the various constituents in the customer s organization are identified and pri- oritized and that project progress and decisions continually support the customer s desires. In Agile projects, the customer representative role is so continuous and active that we show it as both an executive- and managerial-level role. The customer repre- sentative does much of what a sponsor might in traditional projects, but there also may be a designated sponsor (sometimes known as a product manager) who controls the budget. The customer representative or product owner works with the team on a con- tinuous basis, often performing some of the work a project manager might on a tradi- tional project.

A portfolio team often performs much of the work of a traditional steering team and a similar office that may be titled differently, such as scrum office, performs much of the work of a project office.

The scrum master serves and leads in a facilitating and collaborative manner. In effect, this is a project manager who serves and leads in a collaborative, facilitating manner. This is totally consistent with contemporary project management since many individuals do much better work when they actively plan rather than have work assigned to them. The scrum master guides team members as they prioritize tasks and removes obstacles to their progress. This is a more limited, yet more empowering role than the traditional project manager. In this book, we consider the scrum master to be the project manager.

The functional manager (sometimes called a resource manager) has a similar, but sometimes more limited, role than the traditional department head. Many organizations using Agile also have a coach acting as a facilitator and trainer.

The team members in Agile projects are assigned full time as much as possible, so there are very few subject matter experts. The teams are self-governing, so the team now accomplishes many of the planning and coordinating activities a project manager would typically perform. Small and co-located teams often characterize Agile projects and they work closely together. They organize themselves and exhibit significant matu- rity. They create their own estimates and report to each other daily. The same mem- bers should be on the team for the entire project or at least for an entire iteration,

EXHIBIT 4.23

AGILE PROJECT ROLES

EXECUTIVE ROLES MANAGERIAL ROLES ASSOCIATE ROLES

Customer (product owner) Customer (product owner) Team Member

Sponsor (product manager) Scrum Master

Portfolio Team Functional Manager

Project Management/Scrum Office Coach

Chapter 4 Organizational Capability: Structure, Culture, and Roles 127

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although the team can change from one iteration to the next. The members should be co-located and assigned to the project full time for the duration of the iteration.

PMP/CAPM Study Ideas When it comes to studying for the CAPM or PMP exams, make sure you know the Proj- ect Management Code of Ethics & Professional Conduct (referenced on p. 111 of this chapter) inside and out. This is one of the few things not found in the PMBOK® Guide itself but can be accessed directly from the PMI website. While only eight pages long, this code generally shows up multiple times on either test, thus providing a great deal of bang for your buck in terms of studying.

In this chapter, we highlight the fact that a project s life cycle is often industry-specific or even unique to an organization. Regardless, PMI has identified five generic Process Groups, representing the stages that are typical of most projects. These include Initiation, Planning, Executing, Monitoring & Controlling, and Closing. You will be expected to know these in a great deal of detail, including inputs and outputs of each stage; into which process group and knowledge area each of the 49 individual processes fit; and how these processes interact with one another. This flow is shown graphically in the inside back cover of this book to help you visualize it. This will require a tremendous amount of studying and should not be underestimated.

Summary Projects are accomplished either within an organization or between multiple organizations when different firms work together. Project managers are more effective if they under- stand the impact the organization has on the project. In contemporary society, different organizations choose dif- ferent organizational structures because they feel there is an advantage in their unique circumstances. While many are still officially organized in a traditional functional man- ner, an increasing number of organizations have at least informal matrix relationships. The days of having only one boss are gone for many workers and especially for many project managers. Each form of organization has strengths and challenges with respect to projects.

Organizations also have a culture the formal and informal manner in which people relate to each other and decisions are made. The hierarchical approach with the boss having supreme authority has long vanished in many places. Many organizations today use a more col- laborative approach some much more than others. Whatever the approach, project managers need to

understand it and the impact it creates on their project. Project managers and sponsors need to create a culture in their project that is consistent with, or at least can work effectively with, that of the parent organization. Both organizational structure and culture can become more complicated if more than one organization is involved in the project and if they differ in these respects.

Projects follow a predictable pattern or project life cycle. Many industries have typical project life cycles, but they vary greatly. A project manager needs to at least understand what project life cycle model is used at her organization and often needs to select or modify the project life cycle to the specific demands of the project.

Multiple executive-, managerial-, and associate-level roles need to be performed in projects. The project manager is a central role and the subject of this book. Project managers need to understand the other roles and relate effectively to them, regardless of whether their project is being conducted using a traditional, Agile, or hybrid approach.

Key Terms Consistent with PMI Standards and Guides functional organization, 102 projectized organization, 104 co-location, 105

matrix organization, 105 agile, 114 milestone, 117

128 Part 2 Leading Projects

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Chapter Review Questions 1. Describe how a strong (project) matrix is differ-

ent from a weak (functional) matrix. 2. Which organizational structure is often used for

small projects that require most of their work from a single department?

3. List advantages and disadvantages of functional, projectized, and matrix forms of organization.

4. What is co-location, and why is it used? 5. What are organizational values, and why should

a project manager be aware of them? 6. List and describe four different types of corporate

culture. 7. If more than one parent company is involved in a

project, why is it important for the project man- ager to understand the culture of each?

8. The project manager and sponsor need to act in the best interest of which three constituencies?

9. According to the PMI Code of Ethics and Profes- sional Conduct, project managers need to exhibit which four behaviors?

10. In your own words, describe an ethical project culture.

11. What are some characteristics of almost all proj- ect life cycles?

12. What does the DMAIC model acronym stand for? When is this type of model used?

13. What distinguishes an Agile project life cycle model from other types of life cycle models?

14. For what five activities is the project steering team responsible?

15. Who should select the project manager and the core team?

16. Who is responsible for ensuring that the steering team completes its tasks?

17. What types of control systems should a customer and contractor work together to set up and utilize?

Discussion Questions 1. Marissa Mayer, former CEO of Yahoo!, sparked a

national debate when she insisted that all her employees be physically present for work. Debate the merits of co-location, including its advan- tages and disadvantages.

2. Identify each of the four organizational culture types with respect to power, and the strongest motivator for each type. In which organizational cultures do you feel most and least comfortable working? Why?

3. List and describe at least four organizational cul- ture characteristics that increase the likelihood of project success. Why is each characteristic helpful?

4. Explain multiple methods through which project managers can lead by example.

5. Define your personal project code of ethics.

6. Brainstorm techniques that effective project lea- ders can use to resolve ethical conflicts on projects.

7. You work for a software company. What benefits do you achieve by utilizing an Information Sys- tems project life cycle model as opposed to other project life cycle models?

8. If a project will be divided into many phases, which life cycle model would you recommend using to plan it? Why?

9. Describe a possible imbalance between a project manager s authority and responsibility. What impact might it have on a project?

10. Is it important to choose a member from every impacted function of a project for the core team? Explain why or why not.

PMBOK ® Guide Questions 1. All of the following are characteristics of a pro-

jectized organization except: a. Decision making is streamlined. b. Coordination is the responsibility of project

managers. c. Functional managers have the majority of

authority. d. Focus is on the customer.

2. Characteristics of an organizational culture can have a major impact on a project s success. All of these are attributes of an organizational cul- ture except: a. motivation and reward systems b. risk tolerance c. code of conduct d. financial control procedures

Chapter 4 Organizational Capability: Structure, Culture, and Roles 129

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3. organization structures can be clas- sified as weak, balanced, or strong, depending on the relative level of influence between the func- tional manager and the project manager. a. Silo b. Matrix c. Composite d. Projectized

4. A hierarchical organization where each employee has one clear superior, and staff are grouped by areas of specialization and managed by a person with expertise in that area is known as a: a. composite organization b. functional organization c. projectized organization d. weak matrix organization

5. In an Agile life cycle model, . a. the scrum master controls the team b. detailed planning precedes execution c. customer requirements are gathered early in

the project d. the team is self-directed

6. The project sponsor s responsibilities during the executing stage include: a. reviewing and signing the project charter b. signing off on the detailed project plan c. ensuring communications with key

stakeholders d. producing project status reports

7. Group phenomena that evolve over time and include established approaches to initiating and planning projects, the acceptable means for

getting the work done, and recognized decision- making authorities are referred to as: a. organization structures b. roles and responsibilities c. project culture (norms) d. vision and mission

8. Customer responsibilities on a project might include all of the following except: a. perform the work of the project to achieve its

objectives b. advise on project requirements c. review and accept project deliverables d. participate in status or kickoff meetings

9. The Chief Projects Officer s or PMO s responsi- bilities might include: a. signing the project charter b. ensuring enough resources are available to

perform the project c. working with the team to create a project

schedule and budget d. promoting the project at the executive level of

the organization 10. PMI s Code of Ethics and Professional Conduct is

a guide for project management practitioners that describes the expectations that they should hold for themselves and others. Which of these is not one of the desired behaviors and basic obli- gations referenced by the code of conduct? a. fairness b. honesty c. authority d. respect

Exercises 1. Given a scenario, select a preferred organiza-

tional structure and justify your selection. 2. Describe examples of ethical (or nonethical) behav-

ior as outlined in PMI s Code of Ethics and Profes- sional Conduct exhibited on a project in the news.

3. Describe, with examples, how a project manager on a project you have observed did or did not

exhibit desirable project manager behaviors as described in Exhibit 4.17.

4. Briefly describe how the sponsor of your project is or is not displaying appropriate life cycle specific behaviors as described in Exhibit 4.15.

I N T E G R A T E D E X A M P L E P R O J E C T S

SUBURBAN HOMES CONSTRUCTION PROJECT

Suburban Homes, once a medium-sized company, is rapidly ex- panding its business to southern states and is focused on main- taining its status as the fastest-growing construction company in

the Midwest region of the United States. Its significant growth and good reputation for building quality single-family homes and townhomes presents both challenges and opportunities.

130 Part 2 Leading Projects

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Semester Project Instructions For your example project, describe the organizational structure of the agency or company for which you are planning the project. Describe as many of the organiza- tional culture attributes as you can. List, by name, as many of the project executive, management, and team roles as you can identify. Be sure to assign roles to your- self and your classmates if you are doing the project as a

team. How do you anticipate that the organizational structure, culture, and role assignments help or hurt your ability to successfully plan this project? Describe the project life cycle model that is used in the organization and if one is not currently used, describe the life cycle model you plan to use and tell why it is appropriate.

CASA DE PAZ DEVELOPMENT PROJECT

First, the organizational structure for Casa de Paz is in a sepa- rate document. We still need names of individuals who are volunteering for each working group. For this book, we will list names by first name and initial of last name to protect privacy.

How do you envision this organization operating? Casa de Paz has a strong ethos of community, rooted in values of human dignity and a recognition that all of us thrive better in an atmosphere of mutual respect and care. Every subset of the community, from board members to staff to volunteers and affiliates to residents, communicates care and respect in their interactions with one another. Other behavioral norms stem from both these values and the vulnerability of the popu- lation we serve. Given the need, at times, for the organization to respond rapidly to serious, stressful, even life-threatening situations, board members, working group members, and even volunteers need to maintain confidentiality, think carefully, use discretion, and behave in a trustworthy manner.

For each project selected, we will have one person from the board serve as sponsor (product owner) and one person from the respective working group serve as project manager

(scrum master). The product owner for multiple products is sometimes referred to as a product manager. This person is Gillian A. The chair of the board and the scrum master for the entire effort is ___.

Since Casa de Paz is a 501(c)(3) nonprofit organization, part of the culture is voluntary. One challenge from a project man- agement perspective is to get people to commit to completing certain work according to schedule when many have other full- time jobs. Helping the project teams make team decisions may be relatively easy. The pillars of PMI s Code of Ethics and Pro- fessional Conduct of responsibility, respect, fairness, and hon- esty should be very well accepted and valued.

An Agile approach makes the most sense for this project as many of the requirements are poorly understood at the start and many things are changing rapidly such as having two buildings to consider with competition for both such that a third building might need to be found. Also, in Agile, we ask for commitment. If the team cannot commit to the body of work for the iteration, the plan is changed. The commitment is made at the team level at the start of the iteration.

Suburban Homes is considering various options to expand its operations while retaining its focus on managing resources effectively and efficiently to increase profits:

Given the nature of its projects, Suburban Homes is con- sidering either a projectized or matrix organization struc- ture. However, a functional organization structure has not been ruled out. With its focus on maintaining high quality in its construction tasks and end-product (home for the customer) as well as quality assurance in implementing project management pro- cesses, the company is actively considering a combination

of the DMAIC model with a traditional project life-cycle approach. Organization culture plays an important role in sustaining and promoting efficiency. The culture, in turn, is influenced by the organization structure. Suburban Homes is highly committed to employee development and functional exper- tise through training, mentoring, and collaborative learning.

Which type of organization structure is more suitable as Suburban Homes opens new offices in other states? What is your advice to the company to address all these issues com- prehensively and coherently?

Chapter 4 Organizational Capability: Structure, Culture, and Roles 131

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PROJECT MANAGEMENT IN ACTION

Project Leadership Roles at TriHealth

TriHealth is a company that manages several large hospitals and a variety of other health organizations, such as physical fitness facilities and nursing services. Due to the company s increasing size and complexity, TriHealth leadership decided they needed to formally define roles of project executive sponsor, project leader, performance improvement consultant, core team member, and subject matter expert. These roles are shown as follows.

Project Executive Sponsor Initiating Stage

Empower Project Leader with well-defined char- ter, which is the overarching guide Clearly define expected outcomes Demonstrate commitment to and prioritization of project Definedecision-makingmethods andresponsibility sponsor/project leader/team Partner with Project Leader to identify obstacles, barriers, and silos to overcome

Planning Stage Ensure Project Leader understands business con- text for organization Ensure Project Leader develops overall project plan Assist Project Leader in developing vertical and horizontal communication plan Demonstrate personal interest in project by invest- ing time and energy needed Secure necessary resources and organizational support

Executing Stage Communicate and manage organizational politics Visibly empower and support Project Leader ver- tically and horizontally Build relationships with key stakeholders Actively listen to and promote team and project to stakeholders Remove obstacles and ensure progress of project Ensure goals are met and stakeholders are satisfied

Closing Stage Ensure closure; planned completion or termination Ensure results and lessons learned are captured and shared Ensure assessment of related applications or opportunities Ensure any necessary next steps are assigned and resourced Recognize contributions and celebrate completion Negotiate follow-up date(s) to assess project status

Project Leader All of the roles listed are the ultimate responsibility of the Project Leader. However, in the development of the charter, the Sponsor and the Project Leader will have a discussion about the Project Leader role. At that time, the individuals will determine if the Project Leader needs additional assistance or skills to facili- tate the project success and which of these responsi- bilities need to be delegated to others with expertise in those areas.

Leads negotiation with Sponsor for charter definition. Collaborates with Sponsor to clarify expectations. Provides direction to the team with integrity, lead- ership, and communication skills. Facilitates productive meetings and supports the team s decisions. Prepares the high-level work plan and timeline. Champions the project on the management level and with the staff. Leads the implementation of the project. Manages project flow, including agenda setting, meeting documentation, and coordination of team assignments. Develops implementation, education, and com- munication plans for the project. Responsible for the team and project progress and proactively intervenes to promote team and project success. Identifies, communicates, and facilitates the re- moval of barriers to enable successful project completion.

132 Part 2 Leading Projects

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Supports the team with tools and methodologies to accomplish goals. Facilitates collection and analysis of data. Leads the team in developing a plan to sustain the change and monitor effectiveness. Leads the team in developing recommended next steps. Closes project with Sponsor and ensures lessons learned are captured. Establishes with Sponsor the dates for post- project checkup and overall measurable effective- ness of project.

Performance Improvement Consultant If the Sponsor and the Project Leader determine additional support/expertise is needed, a Performance Improvement Consultant can provide the following expertise:

Provides direction to the Project Leader in estab- lishing targets and a measurement and monitor- ing system. Mentors the Project Leader on leading the team through the project management process. Collaborates with the Project Leader to prepare a work plan and timeline for the project. Proactively intervenes to promote team and project success based on teamwork and interactions. Assists the Project Leader in identifying, commu- nicating, and removing barriers to enable suc- cessful project completion. Assists in the researching, best practices, and benchmarking. Coaches the Project Leader on the development and implementation of a comprehensive commu- nication, education, and change management plan. Provides the Project Leader support in ensuring regular communication with the Sponsor and Stakeholders. Offers expertise to the team with tools and meth- odologies to accomplish goals.

Collaborates with the Project Leader on the collec- tion and analysis of data. Ensures a system-wide perspective is considered and downstream effects analyzed. Provides change management education and assists the Project Leader in developing key strat- egies for successful change management. Provides coaching to the Project Leader on key strategies for successful planning, implementa- tion, and sustainability of the project.

Core Team Member Takes responsibility for the success of the team. Attends meetings for duration of the project. Actively participates in team meetings. Understands the entire range of the project. Actively participates in the decision-making process. Supports the team s decisions. Completes outside assignments. Carries out many of the project activities; pro- duces deliverables on time. Provides testing or validation of decisions being made by the team. Provides data collection and reporting. Participates in the communication, education, implementation, and evaluation of the project. Gathers input from the areas they represent, if appropriate. Shares team decisions and plans throughout the project. May work directly with Stakeholders or Subject Matter Experts.

Subject Matter Expert Not a core team member of the team. Participates in demonstrations/presentations and/ or team meetings, as needed. Carries out project activities as assigned; pro- duces deliverables. Responsible for supplying requirements. Provides input to the team or complete activities based on a specific expertise he or she possesses that is essential to the project.

Source: TriHealth.

Chapter 4 Organizational Capability: Structure, Culture, and Roles 133

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References A Guide to the Project Management Body of Knowledge

(PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, 2017).

Ahsan, Kamrul, Marcus Ho, and Sabik Khan, Recruiting Project Managers: A Comparative

Analysis of Competencies and Recruitment Signals from Job Advertisements, Project Management Journal (December 2013): 36 54.

Aldag, Ramon J., and Loren W. Kuzuhara, Mastering Management Skills (Mason, OH: Thomson South- Western, 2005).

Andersen, Erling S., Understand Your Project s Character, Project Management Journal (December 2003): 4 11.

Aronson, Zvi H., Aaron J. Shenhar, and Peerasit Pata- nakul, Managing the Intangible Aspects of a Proj- ect: The Affect of Vision, Artifacts, and Leader Values on Project Spirit and Success in Technology- Driven Projects, Project Management Journal (February 2013): 35 58.

Blomquist, Tomas, and Ralph Muller, Practices, Roles and Responsibilities of Middle Managers in Pro- gram and Portfolio Management, Project Manage- ment Journal (March 2006): 52 66.

Chandler, Dawne, and Payson Hall, Improving Execu- tive Sponsorship of Projects: A Holistic Approach (New York, NY: Business Expert Press, 2016).

Chandler, Dawne E., and Janice L. Thomas, Does Executive Sponsorship Matter for Realizing Project Management Value? Project Management Journal (October/November 2015): 46 61.

Cobb, Charles G., At Odds? PMNetwork (May 2012): 26 27.

Collyer, Simon, Culture, Communication, and Lead- ership for Projects in Dynamic Environments, Project Management Journal (December/January 2017): 111 125.

Collyer, Simon, Clive Warren, Bronwyn Hemsley, and Chris Stevens, Aim, Fire, Aim Project Planning Styles in Dynamic Environments, Project Manage- ment Journal (September 2010): 106 121.

Crawford, Lynn, Developing Organizational Project Management Capability: Theory and Practice, Project Management Journal (August 2006): 74 86.

Daft, Richard L., Management, 9th ed. (Mason, OH: South-Western Cengage Learning, 2010).

Gale, Sarah F. The Evolution of Agile, PMNetwork (January 2012): 28 33.

Johnson, Craig E., Meeting the Ethical Challenges of Leadership: Casting Light or Shadow, 3rd ed. (Thousand Oaks, CA: Sage Publications, Inc., 2009).

Kloppenborg, Timothy J., and Debbie Tesch, How Executive Sponsors Influence Project Success, MIT Sloan Management Review (Spring 2015): 27 30.

Kloppenborg, Timothy J., and Laurence J. Laning, Strategic Leadership of Portfolio and Project Man- agement (New York: Business Expert Press, 2012).

Kloppenborg, Timothy J., Deborah Tesch, and Chris Manolis, Project Success and Executive Sponsor Behaviors: Empirical Life Cycle Stage Investigations Project Management Journal (February/March 2014): 9 20.

Laufer, Alexander, et al., What Successful Project Managers Do, MIT Sloan Management Review (Spring 2015): 43 51.

Lussier, Robert N., and Christopher F. Achua, Leadership: Theory, Application, and Skill Development, 4th ed. (Mason, OH: South-Western Cengage Learning, 2010).

Millhollan, Chuck, and Michelle Kaarst-Brown, Les- sons for IT Project Manager Efficacy: A Review of the Literature Associated with Project Success, Project Management Journal (October/November 2016): 89 106.

Ortiz-Marcos, Isabel, et al., Competency Training for Managing International Cooperation Engineering Projects, Project Management Journal (April 2013): 88 97.

Practice Standard for Scheduling, 2nd ed. (Newtown Square, PA: Project Management Institute, 2011).

Rath, Tom, and Barry Conchie, Strengths-Based Lead- ership: Great Leaders, Teams, and Why People Follow (New York: Gallup Press, 2008).

Skulmoski, Gregory J., and Francis T. Hartman, Information Systems Project Manager Soft Com-

petencies: A Project-Phase Investigation, Project Management Journal (March 2010): 61 77.

Stevens, James D., Timothy J. Kloppenborg, and Charles R Glagola, Quality Performance Measurements of the EPC Process: The Blueprint (Austin, TX: Construction Industry Institute, 1994): 16.

Wikipedia, http://en.wikipedia.org/wiki/New_pro- duct_development, accessed May 28, 2010.

Wen, Qi, and Maoshan Qiang, Enablers for Organi- zational Project Management in the Chinese Con- text, Project Management Journal (February/March 2016): 113 126.

134 Part 2 Leading Projects

Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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http://www.pmi.org/About-Us/Ethics/~/media/PDF/ Ethics/ap_pmicodeofethics.ashx, Project Manage- ment Institute Code of Ethics and Professional Conduct, accessed May 22, 2013.

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Atlassian, Have we met: Four Agile Ceremonies Demystified, accessed April 14, 2017.

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Endnotes 1. Chandler, Dawne, and Payson Hall. Improving Exec-

utive Sponsorship of Projects: A Holistic Approach (New York, NY: Business Expert Press, 2016).

2. PMI Lexicon of Project Terms, 2015, 4. 3. http://www.whizlabs.com/blog/projectized-orga-

nization/, accessed February 7, 2017. 4. http://project-management-knowledge.com/defi-

nitions/c/co-location/, accessed February 7, 2017. 5. http://project-management-knowledge.com/defi-

nitions/m/matrix-organization/, accessed Febru- ary 7, 2017.

6. Johnson, Craig E., Meeting the Ethical Challenges of Leadership: Casting Light or Shadow, 3rd ed. (Thousand Oaks, CA: Sage Publications, Inc., 2009): 89.

7. Aronson, Zvi H., Aaron J. Shenhar, and Peerasit Patanakul, Managing the Intangible Aspects of a Project: The Affect of Vision, Artifacts, and Leader Values on Project Spirit and Success in Technology-Driven Projects, Project Manage- ment Journal (February 2013): 51.

8. Adapted from Erling S. Andersen, Understand Your Project s Character, Project Management Journal (December 2003): 4 11; and Ramon J. Aldag and Loren W. Kuzuhara, Mastering Man- agement Skills (Mason, OH: Thomson South- Western, 2005).

9. Adapted from Erling S. Andersen, Understand Your Project s Character, Project Management Journal (December 2003): 4 11.

10. Collyer, Simon, Culture, Communication, and Leadership for Projects in Dynamic Environ- ments, Project Management Journal (Decem- ber/January 2017): 111.

11. PM1 Code of Ethics and Professional Conduct, http://www.pmi.org/-/media/pmi/documents/ public/pdf/ethics/pmi-code-of-ethics.pdf, accessed January 23, 2017.

12. Practice Standard for Scheduling, 2nd ed. (New- town Square, PA: Project Management Institute, 2011): 134.

13. Chandler, Dawne E., and Payson Hall, Improving Executive Sponsorship of Projects: A Holistic Approach (New York: Business Expert Press, 2017): 1.

14. Chandler, Dawne E., and Janice L. Thomas, Does Executive Sponsorship Matter for Realiz-

ing Project Management Value? Project Man- agement Journal (October/November 2015): 47.

15. Kloppenborg, Timothy J., and Debbie Tesch, How Executive Sponsors Influence Project Suc-

cess, MIT Sloan Management Review (Spring 2015): 28 29.

16. Chandler, Dawne E., and Payson Hall, Improving Executive Sponsorship of Projects: A Holistic Approach (New York, NY: Business Expert Press, 2016): 83 88.

17. Wen, Qi, and Maoshan Qiang, Enablers for Organizational Project Management in the Chi- nese Context, Project Management Journal (Feb- ruary/March 2016): 121.

Chapter 4 Organizational Capability: Structure, Culture, and Roles 135

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C H A P T E R 5

Leading and Managing Project Teams

Gallup Consulting is a global research-based consultancy, specializing in employee and customer management. Our goal is to take discoveries in behav- ioral economics and apply them to management and business problems. Every organization has an enormous, but largely untapped, potential for breakthrough improvements in productivity through leveraging how human nature drives busi- ness performance. This unrealized potential can be measured and managed to improve performance.

Our consulting work is managed as a series of projects. At the start of each client engagement, project leaders gather the high-level information required to identify the client s problems and possible remedies, while understanding any constraints that will affect project success over the long term. The resulting project charter is a business case for the project and a description of how Gallup will add value to the client s organization. Codifying these commitments also helps in enumerating the roles and responsibilities of the project team members.

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CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Describe stages of team development and strategies to move teams through the project life cycle. Describe characteris- tics of a high- performing project team; assess your individual and team capability; and describe how your team can improve. Describe methods of project team decision making and the circum- stances in which each is likelytobemosteffective.

BEHAVIORAL OBJECTIVES: Explainhowtoutilize the project team relation- shipandprocessground rules to improve it. Describe types of project manager power and when each is appropriate. Describe typical sources of project conflict along with the steps in a conflict- resolution process, styles of handling conflict, and steps in a negotiation process. Summarize how to develop high- performance traditional and virtual teams.

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Staffing a team is critical to project success. Our research shows that there are three keys to being an effective project leader:

1. Knowing and investing in your own strengths and the strengths of your project team.

2. Getting people with the right talents on your team. 3. Satisfying the four basic needs of those who follow your leadership: trust,

compassion, stability, and hope.

By strength, I mean an ability to provide consistent, near-perfect perfor- mance in a specific activity. The first step to building strength is to identify your greatest talents the ways in which you most naturally think, feel, or behave. Strengths are created when your naturally powerful talents are combined with learnable skills, such as how to put together a project budget. Gallup has studied more than 6 million people, and we have found that individuals have much more potential for growth and productivity in areas of great talent than areas of weakness.

A strengths-based approach improves team cohesion and generates better results. We have found that high-performing teams are more likely to match indi- viduals talents to assigned tasks and emphasize individual strengths versus seniority in making personnel decisions. High-performing teams also have lea- ders who meet the needs of trust, compassion, hope, and stability.

We have found that while each team member has his or her own unique strengths, the most successful and cohesive teams possess a broader array of strengths. A tool like the Clifton StrengthsFinder® is useful for helping team members identify the ways they can best contribute to the team s goals. Our research shows that the 34 StrengthsFinder themes naturally cluster into these four groups:

1. Executing making things happen 2. Influencing reaching a broader audience 3. Relationship building holding the team together 4. Strategic thinking focusing on all the possibilities

The student website describes these strengths from a project management perspective and tells you how to discover your own unique strengths.

Jim Asplund, Gallup Consulting

9.2 Estimate Activity

Resources

9.3 Acquire Resources

9.6 Control Resources9.1 Plan Resource

Management

RACI Team Charter

Resource Requirements

9.4 Develop Team

9.5 Manage Team

Team Assignments

Team Assessments

4.2 Develop Project Management Plan

PMBOK® GUIDE Topics:

Acquire project team Develop project team Manage project team

CHAPTER OUTPUTS Team charter Resource requirements Team assignments Team assessments

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An experienced project manager envisions project performance as two related activi-ties. First, people must perform their roles in completing work activities according to the plan. Performance by people is the topic of this chapter. Second, data must be collected and used to determine the project progress and results. Data collection and determining project progress as measured in schedule, cost, quality, and risk terms are the subject of Chapter 14. While determining progress and results is conducted largely in parallel with people performing the project, the two are covered in separate chapters to emphasize exactly what needs to be done in each.

“Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources.”1 Chapters 7 to 15 of this book deal primarily with planning, organizing, and executing the project. This chapter deals mostly with managing and leading project teams. While certain aspects of both management and leadership are necessary in deal- ing with project teams, in the contemporary approach to projects, the project manager works collaboratively with the project team to the extent possible while continually push- ing to reach project goals. “Leadership is the influencing process of leaders and followers to achieve organizational objectives through change.”2

To further elaborate on the focus of this chapter, management is generally focused on traditional functions such as planning, organizing, and controlling. In this chapter, man- agement is concerned with making decisions and working in teams to improve opera- tional efficiency and effectiveness. Leadership, on the other hand, is about providing direction, motivating, and guiding people and teams to realize their potential and achieve challenging organizational goals.

This chapter starts with acquiring the project team up to the point that team mem- bers have been successfully brought on board to the project. The second section deals with various activities needed to develop the project team’s capability—many of which require leadership from the project manager. The third section includes several consid- erations for the project manager when managing the performance of the project team. The fourth section covers how to develop effective relationships within the core project team. The fifth section presents issues about conflict and resolution that occur when dealing with both team members and stakeholders. Finally, the concluding section details actions to develop virtual teams.

5-1 Acquire Project Team Acquire project team is “the process of confirming human resource availability and obtaining the team necessary to complete project assignments.”3 Chances are the core team has already been assembled, as it is very helpful to have the core team together for planning—and even earlier, for chartering a project. However, on some projects, some core team members may be added later. Also, on many large projects, subject matter experts (SMEs) may be added during the early stages. This section deals with the timing of assigning a project team member (preassignment), securing the needed and desired team members (negotiation), and successfully adding them to the project team (on- boarding).

It is not necessary for the project manager to always have an opportunity to select the project team members. However, she is still responsible for their performance. Likewise, in certain organizational settings, the project manager may not have total authority over the team member, but she still is accountable for all individuals’ and the team’s performances.

138 Part 2 Leading Projects

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5-1a Preassignment of Project Team Members Generally, it is helpful for a project to assign both core team members and SMEs as early as possible for various reasons. One reason is that people often do not like to be told what they must do, but are usually enthusiastic if they get a chance to help in creating a project plan. Therefore, it is good for motivational purposes to include the implemen- ters in planning. A second reason is that when the people who will perform the work help to plan it, many more details may be considered and the resulting plans are often more realistic. Yet another reason to assign project team members early is to be sure they will be dedicated and be available when needed. For external projects, it is a common practice to list specific workers who will be assigned to a project team in the proposal, and occasionally they must be approved by the client. If the project is secured, it is help- ful to bring the workers onto the project as quickly as possible.

The downside to bringing SMEs on board before they need to complete project activ- ities is that it could be expensive. For a highly paid expert, this decision can be substan- tial and impractical. Another problem with bringing people on board early is that they may first be committed to finishing work on a previous project and may not devote the necessary attention to the new project. Regardless of how early you bring a person on a project, it is helpful to keep communications open with the prospective team member and his or her boss so they understand when the person is needed. This is especially critical if the project has a tight deadline and/or if the organization is using critical chain project management.

5-1b Negotiation for Project Team Members Depending on the norms of the organization, a project manager may need to negotiate with the functional manager and/or a prospective team member directly to secure his or her services for a project. The functional manager (perhaps called a department head or line manager) has the responsibility of running his or her department. For example, the head of accounting is responsible for how the accounting function is performed. She wants to keep all of her workers busy, but not too busy, and wants all of her workers to progress in their capability.

The functional manager may see this project as a good opportunity for some on- the-job training to help a newer employee gain experience. The project manager, on the other hand, wants the “best” resource for his or her project. The best resource may already be busy. Wise project managers often develop good relationships with functional managers to have leverage in negotiating for a good worker. Functional and project man- agers may look at the situation from the perspective of the department or project, respec- tively, and have different ideas of who is the appropriate person to work on the project.

A project manager cannot expect to have the best resource from every department (unless perhaps the project is the highest priority project for the company). The func- tional manager may sometimes need to agree to a different resource from what he or she prefers. In short, most projects have a combination of experienced and inexperienced resources. If a project manager finds all functional managers are only offering inexperi- enced people, he should probably ask his sponsor for support.

In many organizations, project managers also need to persuade workers to work on their project. For experienced project managers, reputation goes a long way. A project manager can earn a reputation of being a good boss by caring for team members, help- ing people develop, and assisting them in securing interesting work and promotions at the end of a project. It is important to align individual aspirations and goals with project goals to get the best results from everyone on the project team.

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Many employees campaign hard to work for a great project manager and avoid a poor project manager. When negotiating with a potential team member, a project man- ager wants to sell the project to the person. Of course, strong technical skills are impor- tant for SMEs and are helpful for core team members. However, especially for core team members, it may be more critical to be an excellent generalist and skilled at communica- tion and making decisions. Many core team members need to deal with a variety of issues beyond their discipline and focus on making trade-offs that key stakeholders demand.

Sometimes, it is necessary to recruit project team members from outside of the parent organization. Tatro, Inc., uses this strategy, as described in Exhibit 5.1.

5-1c On-Boarding Project Team Members The ideal time to bring team members and even a few SMEs on board, is when the proj- ect charter is being written. When that is not possible, the first thing a project manager might do is share the charter and the meeting minutes with the new member and then have a one-on-one discussion with that person. There are several purposes for this dis- cussion. The first is to ensure that the new person understands the project at a high level and is enthusiastic about being part of it. The second is to learn about the person’s per- sonal and professional aspirations. The most effective and happy workers are those who understand how their personal goals and project goals are aligned. Does he or she want to experience the joy of working on something new, travel, training, new coworkers, and so on? What unique strengths does he or she already bring to the project, and what strengths does he or she want to further develop? At this point, the project man- ager can accomplish the third purpose of the talk, which is to assign the new team mem- ber to specific activities and develop a plan for personal improvement. Exhibit 5.2 illustrates how one consulting company that has many projects acquires and on-boards resources.

EXHIBIT 5.1

TATRO, INC., STRATEGY FOR RECRUITING PROJECT TEAM MEMBERS

Tatro, Inc., is a designer and builder of high-end landscape projects. Its strategy is to retain its core strengths of securing contracts, designing exceptional landscapes, and managing projects with demanding clients. It subcontracts most other work, but wants to be very careful that the work is done as well as possible. Tatro understands it needs to have self-motivated workers who are very presentable to discriminating clients. Tatro primarily relies on recommendations to identify potential workers. To screen potential workers, Tatro performs extensive background checks. It examines pre- vious work performed by the worker, talks to previous clients, and attempts to ensure the worker’s finances will allow him or her to be stable.

At that point, it attempts to recruit these proven workers. Chris Tetrault, president of Tatro, Inc., states that he uses a combination of four strategies to recruit, as follows:

1. Pay well. 2. Pay quickly. 3. Provide signature projects for the workers to showcase their skills. 4. Try to get them to like me.

Source: Chris Tetrault, President, Tatro, Inc. Reprinted with permission.

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5-2 Develop Project Team Develop project team is “the process of improving the competencies, team member interaction, and overall team environment to enhance project performance.”4 Developing a highly effective project team requires the following six activities from the project man- ager. Note these six activities build upon each other and are overlapping.

5-2.1.1 Understand stages of project team development. 5-2.1.2 Understand characteristics of high-performing project teams. 5-2.1.3 Assess individual member capability. 5-2.1.4 Assess project team capability. 5-2.1.5 Build both individual and team capability. 5-2.1.6 Establish team ground rules (team charter).

EXHIBIT 5.2

ACQUIRING AND ON-BOARDING RESOURCES AT ATOS-ORIGIN

Resources are the most important assets of a consulting company. It becomes very important to nurture them, utilize them effectively, and at the same time make money for the company. At Atos-Origin (a leading IT consulting company), a structured process is followed to manage resources. Resource skills, credentials, and travel preferences; the business unit to which the resource belongs; a summary of projects worked on; and so forth are maintained in a searchable database. Utilization (amount of time a resource is used on projects) is tracked on at least a weekly basis. Resource availability (amount of time each resource is idle or is available for client projects) is also tracked and published to a large group of managers to keep in mind for upcoming assignments.

A central resource manager is responsible for tracking and managing resource utilization. If any member of the management team has an open requirement, the resource manager is first notified of the requirement, so that work can begin on tracking the right person for the role. Resource managers from each business unit meet regularly to discuss staff availability and open positions.

Weekly meetings are held with senior management teams to understand the open staffing require- ments. As a first fit, internal available resources are aligned (based on the skills required, time frame of the project, and whether the role aligns with a person’s career preferences) with open positions. Since Atos-Origin is a global organization, this helps the company to increase utilization of the indi- vidual resource and of the group as a whole. If existing resources are not available or do not fit into the assignment, a requisition to hire new resources is completed, and the job is posted for recruitment.

Atos-Origin considers three different types of external hires: full-time employees (the preferred option), hourly employees (work on an hourly basis; the option used when the project is for a short period of time or when the right resource does not want to accept a full-time offer), and subcontractors (contracting with other companies; the option used sometimes to mitigate resource risks).

The new resource who is hired is on-boarded to the company in a structured fashion, and the same process for managing the person’s utilization and availability is followed. This structured process has helped reduce attrition, increased internal transfer of resources, helped individual resource growth, and increased the company’s profitability.

Source: Rachana Thariani, PMP, Atos-Origin.

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5-2a Stages of Project Team Development Project teams typically go through a predictable set of stages as they work together. By effectively using project tools and developing trust and understanding within their teams, project managers can greatly diminish some of the negative aspects of project team development stages. While almost all teams go through these stages, the duration of each stage varies for each team, based on various factors such as familiarity among the team members, corporate culture, uncertainties and unknowns associated with the proj- ect, and the urgency of the project. Consequently, some teams get “stalled” in an early stage and do not progress. Some get further along and then have a setback. Setbacks for project teams can also come from losing or gaining core team members or SMEs, changes in project requirements, quality problems with project deliverables, or other rea- sons. The good news for a team that suffers a setback is that because they worked through the team development stages once, they can probably work through the stages more quickly the second time. The bad news is that they do need to work their way through.

Each stage of team development has its own challenges. For a project manager to suc- cessfully help a team develop, he or she should be aware of how team members feel and what behaviors they frequently attempt at each stage. People have a tendency to be friendly with people who have similar values, while differences are often seen as a threat that may affect collaboration and lead to undesirable attitudes and behaviors. This behavioral issue presents challenges in managing teams, specifically global project teams, where diversity and cultural differences are the norm.

Exhibit 5.3 presents information about behavioral characteristics of the team during each stage of team development and ideas for managing them.

In learning about and using some of the project management tools that are described throughout this book, one can implement quite a few of the strategies for team

EXHIBIT 5.3

• Low familiarity among the team • Individual roles not clear • Emphasis on collective goals

• Interdependence of members • Manage differences and conflict • Focus on consensus-building

• High mutual trust • High commitment • Self-managed team

• Participation & empowerment • Commitment to team goals • Roles and Responsibilities

1. Forming

2. Storming

4. Performing

3. Norming

Source: Anantatmula, Vittal, Project Teams: A Structured Development Approach, Business Expert Press, 2016: 12.

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development. For example, when a team works together to create a good charter, they rapidly work through the project-forming stage and often begin to develop the openness, understanding, and trust that help make their storming stage faster and easier. Informa- tion regarding the issues, behaviors, and strategies associated with each stage is displayed in Exhibit 5.4.

Understanding the stages of development that project teams typically progress through is a basis for project goal attainment and project team development. For exam- ple, if a project manager of a new team wants to help his or her team progress through the stages without too much trouble, he or she can look at the top and bottom rows of Exhibit 5.4. New members often feel a combination of excitement about being picked for the new team and concern that the work may be difficult. The project manager can help the new team develop team-operating methods early—when they construct the project charter. Having the team decide how they will work together helps establish workable methods and simultaneously helps the team members start to know and trust each

EXHIBIT 5.4

PROJECT TEAM PROGRESSION THROUGH DEVELOPMENT STAGES

FORMING STORMING NORMING PERFORMING ADJOURNING

Team member relationship issues

Feel excitement, yet skepticism

Feel resistance, yet longing to commit to project

Feel part of team and believe project will succeed

Feel close to teammates and understand teammates

Feel strong attach- ment to team and feel loss when team disbands

Team members attempt to

Understand expec- tations, activities needed, and power structures

Jockey for power, ask many ques- tions, and estab- lish dubious goals

Accept team mem- bers, hold open discussions, and es- tablish team norms

Improve self, pre- vent and solve problems, and ex- pand beyond offi- cial role

Complete project on high note, maintain relationships with teammates, and seek next challenge

PM strategies to promote organization needs

Develop business case and acceptance criteria in charter

Develop stake- holder analysis, communication plan, budget, and quality plan

Manage trade-offs per stakeholder de- sires, include spon- sor in talks, and conduct audit

Share applied learnings with or- ganization and report progress to stakeholders

Secure customer acceptance of deli- verables, honestly appraise team members, and pro- vide ongoing sup- port to users

PM strategies to promote project needs

Develop scope overview, milestone schedule, risks, and learnings in charter

Develop scope statement, WBS, schedule, and risk register

Add SMEs as need- ed, authorize work, and improve work processes

Monitor and con- trol project ac- cording to plan and update plans as needed

Test project deli- verables and secure team member en- dorsement of them

PM strategies to promote team member needs

Develop team op- erating methods and commitment in charter, and help members build relationships

Clarify each member’s role, encourage all to participate, and determine team ground rules

Personalize each member’s role, col- laborate when pos- sible, and assess and build members and team capability

Capture applied learnings and im- prove meeting and time management

Celebrate success, reward team mem- bers, and help team members secure follow-on work

Source: Adapted from Barbara J. Streibel, Peter R. Sholtes, and Brian L. Joiner, The Team Handbook, 3rd ed. (Madison, WI: Oriel Incorporated, 2005): 6–8.

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other. Once the initial forming is over, it is common for teams to “storm”—that is, to feel more stress as they begin to understand how big and difficult the project appears upon closer scrutiny. Some of the team members may want to participate in the project performance yet may resist committing fully. The project manager may work with the team to help ensure that everyone understands and accepts their respective roles. Fur- ther, when each team member understands the other members’ roles, they can see how the project will be accomplished. The project manager can continue to encourage all team members to actively participate and to refine the team operating methods into ground rules if necessary.

Once a project team weathers the storming period, the members often are relieved because they start to believe they will be successful. Continued team building can help a team to refine its ability to perform. As team members are encouraged to collaborate and build capability, the team moves to a higher level, which is often called the performing stage. Not every team reaches this level. However, it is very satisfying for the teams that do because the team members realize and increase their potential. Also, this level is a valuable milestone at which lessons learned can be realized and used to help improve other project teams. Finally, project teams disband when the project is over. If the proj- ect has been successful, team members often feel both excited about facing new chal- lenges and sad about leaving a satisfying experience and good friends. Project managers should use celebration, rewards, and appropriate follow-on work to guide the team through this last stretch.

5-2b Characteristics of High-Performing Project Teams Once a project manager understands the typical stages of team development, it is time to understand the characteristics of high-performing project teams. These characteristics, which are an elaborate expansion of the performing column in Exhibit 5.4, reflect the ideals toward which a project manager tries to guide his or her team.

Teams eager to become high performing often create and use a team charter to enhance their effectiveness. A team charter presents information about how members are expected to collaborate in the activities of the project and participate in making deci- sions. Specifically, team members work in concert with one another. The team charter also specifies professional performance and the personal behavior of the team members to achieve harmony, teamwork, team spirit, and dedication.

Developing a team charter promotes collaboration and synergy among the team members and leads to better team performance. The team charter describes group norms, which are either written or unwritten rules that dictate behaviors and expecta- tions of the team members. The charter guides team members regarding work ethics, honesty, integrity, respect, conflict management, decision making, and communication protocols. It is preferred for a project team to develop a team charter to improve its per- formance by defining norms for common understanding and agreement, as shown in Exhibit 5.5.

This chain of high-performing project team characteristics is shown in Exhibit 5.6. Remember, this is the ideal. Many project teams perform well and exhibit some, but not all, of these characteristics. Nevertheless, a conscientious project manager keeps these characteristics in mind and strives to help his team develop each one.

The characteristics of high-performing project teams start with the personal values of individual team members. While a project manager can and should strive to improve upon these values, it is far easier if team members are recruited with a good start on the following values:

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High need for achievement Understanding and acceptance of personal responsibility Commitment to self-development and self-directed behavior Ability to put project needs before their own needs within reason Willingness to consider alternative views and to change Personal commitment to the project

EXHIBIT 5.5

PROJECT TEAM CHARTER

• Reporting/Processes • Elemental Data Reporting • Responsibilities and Assignments • Set Consequences of Nonconformance • Timeliness (Attendance as Well as Delivery) • Work Hours

• Time Spent • Obligations • Reporting • Deliverables • Knowledge Sharing • Tracking (Plan vs. Actual)

• Civility • Meeting Protocols • Social Graces • Decision Protocol • Receiving/Offering Assistance

• Cooperative Stance • Honest Communication • Conflict Recognition • Negotiations • Teamwork

• Demeanor • Communication • Conflict management • Negotiation

• Trust • Team Spirit • Harmony • Cohesiveness • Rare major conflicts • Commitment

Source: Anantatmula, Vittal, Project Teams: A Structured Development Approach, Business Expert Press, 2016: 136–139.

EXHIBIT 5.6

CHARACTERISTICS OF HIGH-PERFORMING PROJECT TEAMS

Personal Rewards

Project Results

Feelings for Each Other

Personal Values

Behavior Methods

Communication Methods

Project Methods

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AGILE

The personal values can be enhanced by utilizing the following effective team behav- ior methods:

Team members are selected to represent the right skill mix. Team members help each other. Team members demonstrate a constant focus on improvement. Team members use effective time management, including for meetings. Team members strive for innovation with few formal procedures. Team members capture, share, and use lessons learned.

The personal values can be further improved by practicing the following beneficial communications methods:

Information is freely and widely shared within and beyond the team. All important topics are openly discussed. Conflict over approaches is valued, but personal conflict is discouraged. Potential problems are proactively reported. Teams conduct frequent debriefings and reflect to collectively learn. Barriers to communication are overcome.

Project managers can certainly use some of the following project management meth- ods to further the team development:

Agree on common goals and objectives for the project. Jointly plan the project. Use the charter to guide joint decision making. Work together to accomplish activities. Proactively identify and solve problems. Hold each other mutually accountable with individualized feedback.

Using effective team, communications, and project management methods leads to development of the following appropriate feelings that team members can begin to hold toward one another:

Recognizing how interdependent they are Being flexible on how each contributes to the project Being willing to share risks with teammates and having tolerance for minor mistakes Understanding, appreciating, liking, and trusting each other Sharing in strong project leadership

This chain leads to two favorable outcomes. The first set of outcomes is personal rewards that each team member is likely to receive such as the following:

Enjoyment of their work High spirit and team morale Pride in being part of the team Satisfaction in project accomplishments

The other set of favorable outcomes includes the following strong project results:

Persevering despite challenges Producing high-quality results Consistently meeting or exceeding stakeholder expectations.5

In addition to these characteristics, agile teams are often described as being self- managed, focused on project goals, strong communicators, able to decide quickly, more

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responsible, and willing to trust their instincts once they understand their sponsor. The result is that these team members are more satisfied, flexible, and accommodating.

Traditional projects use distributed work teams and more specialists and adopt a process-oriented approach. On the other hand, teams on agile project typically employ co-located teams to manage rapid changes and increments. However, agile teams can be in multiple locations. Further, agile teams require motivated members with a higher level of commitment. Agile teams have these seven desirable traits:

Question everything Focus on innovation Fail their way to success Communicate thoughts and ideas Deliver value Change incrementally Connect with their purpose6

The Agile project team members are also responsible for regularly checking for devia- tions and should be capable of detecting aspects of the project that violate the specifications.

5-2c Assessing Individual Member Capability Synergy results in a team having a collective capability that exceeds the sum of individual capabilities. Conversely, if team synergy is absent, the collective capability would fall short of individual capabilities put together. More often than not, individual team mem- bers with high capability can effectively be developed into a strong team. So, what capa- bilities should project team members possess? Five types of useful project team member capabilities are as follows:

1. Activity-specific knowledge and skills 2. Personal planning and control 3. Personal learning 4. Organizational understanding 5. Interpersonal skills and sensitivity

The first three capabilities are necessary for a person to be a strong individual per- former, and the last two capabilities help a person become a valuable team player. While all five are useful, if a project manager wants to develop a strong project team, the last two capabilities may be more important. Too many teams have not achieved the expected success because team members were content with their individual performance.

The first type is activity-specific capability. If a team member is responsible for a spe- cific function such as managing the construction of a stone wall, he or she should under- stand in detail what needs to be accomplished to create a desirable stone wall. If she will personally build the wall, she also needs the skills to do so. A second desirable capability is personal planning and control, for example, setting personal goals, accomplishing work as planned, and managing time wisely. Regarding the third capability, project team members should desire to continually improve and invest effort in their personal improvement. Learning should never stop.

The fourth useful capability is understanding the organizational structure, culture, and roles and using that knowledge to support the project manager in accomplishing project activities. This involves knowing the informal methods and networks within the parent organization. If the project is being performed for a client, it can also include knowing

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how things work within the client’s organization. The last useful team member capability is interpersonal skills and sensitivity. This includes skills such as active listening, effective speaking, and conflict management. It also includes possessing emotional intelligence and having sensitivity toward others who have different personalities or backgrounds.

5-2d Assessing Project Team Capability When assessing project team capability, the project manager should remember that his or her responsibilities are to simultaneously support the parent organization, the project, and the project team. These three are intertwined in many ways. While much has been written concerning teams, Exhibit 5.7 summarizes the success factors of project teams. Note the related chapter number and specific topic where this book gives guidance to help achieve each success factor. Many practices of good project management (and good organizational management) help a project team to excel, just as many team suc- cess factors help a project team deliver desired project and organizational results.

For example, the project charter covered in Chapter 3 is helpful in achieving many of the project team success factors. The entire project charter is a basis for more detailed project planning and for understanding project objectives. Working together to develop, sign, and distribute the charter greatly aids in communications and commitment. Spe- cific sections of the charter also help teams develop successfully as they realize shared goals and challenges. The team operating methods section helps guide team member behaviors as they resolve conflicts, the applied learnings help create a stimulating work environment, and the acceptance criteria help team members understand when they sat- isfy project stakeholders.

Following is a brief description of why each project team success factor listed in Exhibit 5.7 is useful:

1. Project teams with strong leadership are more likely to be successful. Leadership can occur at every level within a project team. Each member performs better by under- standing both his or her own role and those of all the other executives, managers, and associates that are part of the team. Part of project team leadership is the project culture nurtured by the sponsor and project manager.

2. Effective team leadership can lead to mutual trust, respect, and credibility among all parties.

3. This, in turn, can lead to the cross-functional cooperation and support that help guide a project through turbulent situations.

4–5. Project managers have many project tools to guide a team—charters, stakeholder analysis, communications plans, scope statements, WBSs, schedules, and kickoff meetings. Collectively, they help to create clarity and active support for the project. It is difficult to overestimate the impact that effective communication has on proj- ect teams. When people are not given information, they must guess. Proactive proj- ect managers realize that developing and implementing an effective two-way communication plan is a major key to their teams’ success.

6–8. The next three project team success factors—skills, objectives, and behaviors—apply specifically to the team. Assembling the right blend of skills and experience for the project team can be quite challenging. This is especially true in the current work environment of cost-control measures. One option for project managers is to staff the project with a combination of experienced and inexperienced members because it often costs less to include an inexperienced person in the project team. An expectation

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EXHIBIT 5.7

PROJECT TEAM SUCCESS FACTORS

PROJECT TEAM SUCCESS FACTORS CPM CHAPTER TOPIC

1 Team leadership in setting direction and project culture

4 Project management roles, organization, and project cultures

2 Mutual trust, respect, and credibility among team members and leaders

4 Project management roles

6 Build relationships

5 Develop project team

3 Cross-functional cooperation, communication, and support

3 Project charter

6 Communications planning

4 Clear project plans created by team and sup- ported by organization

3 Project charter

6 Stakeholder analysis

7 Scope and WBS

8 Activity schedule

12 Kick off project

5 Effective communications including feedback on performance

6 Communications planning

6 Information distribution

14 Report progress

15 Secure customer acceptance

6 Team skills and experience appropriate and adequate

9 Resource projects

5 Acquire and develop project team

14 Manage overloads and resolve resource conflicts

7 Clearly defined and pursued project and team objectives

3 Project charter

14 Direct and manage project execution

8 Use of task and relationship behaviors to resolve conflicts and problems

3 Team operating methods

6 Build relationships, meeting management

11 Risk planning

9 Stimulating work environment with opportu- nities for improvement and learning

3 Applied learnings

14 Process improvement

15 Capture and share applied learnings

10 Opportunity for team and personal recognition when project satisfies stakeholders

3 Acceptance criteria

15 Celebrate success

Source: Adapted from Hans J. Thamhain, “Team Leadership Effectiveness in Technology-Based Project Environments,” Project Management Journal 35 (4) (December 2004): 38–39; and Roy C. Herrenkohl, Becoming a Team: Achieving a Goal (Mason, OH: Thomson South-Western, 2004): 9, 25.

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can be set for the more experienced person to mentor the junior person. This pro- motes organizational learning as well as achieving the project’s goals at a lower cost. Many project teams include a section in their charter on team operating methods. This section often spells out methods of decision making, meeting management, and demonstrating professionalism. While working through staffing decisions, an astute project manager may recognize people in two categories: task oriented or people ori- ented (relations). Both types are necessary, and the project manager will have to man- age a balance by developing or recruiting team members.

9–10. When the first eight project team success factors are adequately accomplished, the last two are often realized. These last two—stimulating work and opportunity for recognition—have shown the strongest correlation to successful project performance as perceived by senior managers.6 People work hard and enthusiastically if they find their work stimulating and believe they will be rewarded for it. Appropriate and sin- cere recognition can often be at least as powerful a motivation as monetary rewards. Project managers can use their creativity to reward all who merit it.

All 10 of these project team success factors can be influenced by a project manager. Many of the success factors require some early work, such as the project charter, and some require continuing work as the project progresses. A new project manager can ask questions to determine to what extent his project team currently displays each of these success factors. Then he will be ready to build the team’s capacity upon this base.

5-2e Building Individual and Project Team Capability Project managers have many tools at their disposal for developing individuals and teams. Many of the methods can be used together and reinforce each other. Seven methods that many project managers find useful are as follows:

1. Demonstrate personal leadership. 2. Utilize project management tools. 3. Demand situational leadership. 4. Create a desirable team identity. 5. Teach personal responsibility. 6. Develop understanding and respect. 7. Use a learning cycle.

PERSONAL LEADERSHIP A good way for project managers to build the capability of their team is to start by being an effective leader. An effective leader creates and shares a strong vision for the project. Leading by example gives team members a model to follow. A project manager leads by balancing the demands of the parent organization, the project, and the team members. In this context, the project manager is a team member—but one who treats herself and all the other team members in a respectful manner. The project manager must use the highest levels of honesty and ethics. This includes never stating any- thing that is false, but also not giving any false impressions. This can cause a bit of extra work or conflict in the short term, but it is the only appropriate behavior and pays great dividends in the long run by encouraging (and even demanding) everyone else to do what is right. Transparency in communication and action and aligning both are critical and will set an example for the rest of the team and instill trust among all team members.

PROJECT MANAGEMENT TOOLS Project managers can use project management tools to develop focus and cohesion among team members. For example, the charter

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helps a team to start quickly and collectively. The WBS, schedule, and other project management tools each help to focus the team in explicit ways. Specifically, the WBS is the best tool for project integration and assimilation of the project team to work toward specific goals and shared outcomes.

SITUATIONAL LEADERSHIP Depending on the team’s initial capability, a project manager may need to start as a strong individual leader, but the goal is to develop mul- tiple leaders on the project team. In fact, in a great project team, leadership is situational; that is, each member may have a leadership role in certain circumstances and follower roles in other situations. In areas in which a junior team member has specific knowledge, he or she should ensure that everyone understands the situation. Even a junior team member is often expected to lead in certain situations. Furthermore, during the initial stages of team development, the project manager assumes the roles of directing and monitoring team activities, but those change to supporting and facilitating roles once the team moves to the performing stage.

DESIRABLE TEAM IDENTITY Another way to build team capacity is to create a desir- able team identity. Frequently, the project manager and sponsor start thinking about this even before they recruit the first team members. People want to be associated with a win- ner. If people believe that a project is vital to the organization and that the work is profes- sionally stimulating, they want to be part of the team. Depending on the organization, some teams give detailed thought to the project name and “brand.” Military organizations and sports teams often do well in developing and maintaining team identity by associating themselves with pride and prestige. Uniforms demonstrate this identity externally.

RESPONSIBILITY Project team members need to understand they all have three responsibilities. The first is to complete their individual work on time, on budget, and correctly as specified in the WBS dictionary. Second, they must complete their joint work responsibilities with teammates on time, on budget, and according to the plan. Third, each team member is responsible for improving work methods. Everyone needs to improve his or her personal work and work with the team to jointly improve the proj- ect team’s capabilities.

UNDERSTANDING AND RESPECT Project team members need to develop under- standing and trust in each other to develop team capability. Understanding other team members starts with understanding oneself. A self-aware individual is more effective in establishing relationships by better appreciating and valuing the contributions of others and being willing to learn from them. One method of understanding both oneself and others better is to use StrengthsFinder and to realize how each individual strength can be productively applied on projects, as shown on the student website. As team members understand one another and develop interdependence, they are naturally able to under- stand and develop interdependence beyond the project team. Since most projects have multiple stakeholders, this ability to connect at many levels is vital to team development.

LEARNING CYCLE Building project team capability can be envisioned as a learning cycle in which the team uses creativity to jointly develop and consider alternative approaches while striving to learn at each point in the process. This learning cycle can be easily understood using the plan-do-check-act (PDCA) model. The project team capa- bility building cycle is shown in Exhibit 5.8.

Project team capacity building is performed in the context of planning and executing project work. Project teams can pass through this capability-building cycle repeatedly as

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they progressively learn how to work better together to reach their project goals. Free and open communications along with a willingness to challenge each other are impor- tant because the project team may need to unlearn or give up past behaviors in favor of new approaches that might be more effective.

In the “plan” step, project teams are challenged with using lessons learned from previ- ous projects to drive their improvement efforts. These lessons need to be compared to the emerging requirements for the project that the team learns from methods such as gather- ing requirements, meeting with customers, brainstorming risks, and holding design reviews. Further, historical data from Earned Value Management (EVM) of previously exe- cuted projects, which provide actual and realistic data, can improve accuracy of cost and time estimates of the current project, specifically for similar or identical WBS elements.

In the “do” step, the project team then uses this knowledge to develop shared mean- ing and potential approaches that they may use. The team uncovers assumptions, brain- storms alternative approaches, and often develops rolling wave plans so the results of early work will give the information needed to create good plans for later work.

In the “check” step, the project team evaluates the potential approaches and selects one. They can use techniques such as piloting new technology, creating a subject matter expert panel for recommendations, conducting feasibility studies, and reviewing the problem with key stakeholders to obtain a clear decision.

In the “act” step, the project team finishes the planning, carries it out, and gathers data regarding it. This data can be verified with the planned data for continuous improvement of the planning process of scope, cost, and time. Simultaneously, the team seeks acceptance beyond their team through articulating the project’s business case, involving key stakeholders, proactively communicating according to plans, and not act- ing until enough support is in place.

The cycle then repeats. Project teams that are serious about improving their capability repeat this cycle quickly within project stages, at key milestones, and from project to

EXHIBIT 5.8

PROJECT TEAM CAPABILITY BUILDING CYCLE

Use lessons from previous projects to drive learning

Develop shared meaning and approaches

Evaluate approaches and select desired approach

Enact approach and gain broader commitment

P

DC

A

Source: Adapted from Peter Senge, Richard Ross, Bryan Smith, Charlotte Roberts, and Art Kleiner, The Fifth Disci- pline Fieldbook: Strategies and Tools for Building a Learning Organization (New York: Doubleday, 1994): 59–63.

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project. The improved capacity of one project team can be shared with other projects through lessons learned and sharing core team members and SMEs with other projects.

5-2f Establishing Project Team Ground Rules Project teams often create a brief set of operating principles in their charter as described in Chapter 3. For small teams performing simple projects, these principles are enough to guide their behavior. This is especially true if the company has a track record of success with teams. However, many managers understand that more specific ground rules can help prevent many potential problems that some project teams encounter. Ground rules are acceptable behaviors adopted by a project team to improve working relationships, effectiveness, and communication. Therefore, many times, the simple set of operating principles is expanded into a broader set of ground rules.

Exhibit 5.9 lists a dozen of the most frequent topics that project teams choose to create ground rules to cover. Note the topics are classified as either dealing primarily with pro- cess issues or primarily with relationship issues. Note also that there is more than one way to implement each ground rule. Also listed in Exhibit 5.9 are two strengths from the stu- dent website that might be used in very different ways to accomplish each ground rule— and other strengths could be applied as well—each in its own unique manner.

RELATIONSHIP TOPICS The relationship topics both help the team make better deci- sions and help project team members feel valued. People who feel valued often work with much more enthusiasm and commitment.

Encourage Participation The first relationship topic is to encourage balanced partici- pation. This balance can include drawing out an introverted person and asking a

Select team members with a variety of strengths to ensure balanced participation.

m oo

db oa

rd /A

la m

y St

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Ph ot

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talkative person to let another individual speak. Balance can mean ensuring that all func- tions are given the opportunity to provide input. Balanced participation can also mean sharing leadership roles. The project manager certainly needs to be a leader, but each project team member can provide leadership in certain situations.

Discuss Openly and Protect Confidentiality The second relationship topic is to encourage open discussion. When some topics are off limits for discussion, sometimes important issues are not raised, and poor decisions are made. Closely related to open dis- cussion is the issue of protecting confidentiality. People should have trust that a sensitive issue will not be repeated outside of the project team. It is hard to work effectively together if team members are concerned that important issues could be shared inappropriately.

Avoid Misunderstandings Since projects are often staffed by people from different functions and even different companies, there is a strong potential for misunderstand- ings. Both the person stating something and the person listening have a responsibility to avoid potential misunderstandings. Many active listening techniques are useful for this purpose, such as summarizing what was said, asking the listener to restate what was conveyed, or asking for an example.

Develop Trust The fifth relationship topic is to develop trust. Each project team member has two responsibilities to establish trust. First, one should always be worthy of the trust of his or her teammates. This means accomplishing work as promised, communicating trans- parently, and being completely truthful always. Part of being truthful may be expressing in advance a concern about the ability to do certain work due to reasons such as skills, knowl- edge, or time constraints. The second responsibility is to trust his or her teammates unless and until one proves unworthy of trust. Many people live up to the expectations of others.

EXHIBIT 5.9

A DOZEN GROUND RULE TOPICS FOR PROJECT TEAMS

RELATIONSHIP TOPICS PROCESS TOPICS

1. Encourage participation. Consistency Includer

1. Manage meetings. Achiever Discipline

2. Discuss openly. Communication Intellection

2. Establish roles. Arranger Individualization

3. Protect confidentiality. Deliberative Relator

3. Maintain focus. Command Focus

4. Avoid misunderstandings. Connectedness Harmony

4. Consider alternatives. Analytical Strategic

5. Develop trust. Belief Responsibility

5. Use data. Context Input

6. Handle conflict. Adaptability Empathy

6. Make decisions. Activator Restorative

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By practicing the highest ethical standards and expecting the same from other team mem- bers, a project manager can expect most team members to demonstrate their trustworthi- ness. That does not mean that you trust an inexperienced person naively to figure out how to perform a complex task independently. Common sense must be exercised in assigning work and determining the level of support required for everyone in the team.

Handle Conflict The final relationship ground rule topic is how to handle conflict. Con- flict can bring out creative discussion and lead to better methods and solutions if the conflict is confined to a technical or task issue. However, conflict that becomes personal can be destructive and demotivating. Therefore, conflict over ideas is often encouraged (up to a point), while personal conflict is often settled by the concerned individuals off the project. The project manager may get involved and/or may bring in a neutral third party if necessary to resolve people-related conflicts. Conflict management is covered later in this chapter.

PROCESS TOPICS Process topics include how a project team works together as they gather data, meet, and make important project decisions.

Manage Meetings The process topic regarding meeting management is introduced in Chapter 6 in the context of improving and documenting meetings. Special applications of meeting management are covered in Chapter 12 for kickoff meetings and Chapter 14 for progress reporting meetings.

Establish Roles The second process topic is to establish roles. People are usually assigned to a project team in the role of project manager, core team member, or subject matter expert. Within the team, however, it is often helpful to assign roles regarding items such as who plans a meeting, who watches the time, and who records the minutes. One important principle with these role assignments is to try to help everyone feel val- ued. A person who is constantly assigned to perform unpleasant tasks may not feel as important or as motivated to contribute. Another part of assigning roles is to assign tasks to project team members between meetings. Each worker is then responsible for completing their assignments and to report if these assignments are not completed as planned. However, it is good practice to follow up with the members between meetings to ensure that project tasks are completed as planned.

Maintain Focus Project managers and the team are often under pressure to complete the project below the budget and ahead of schedule. Therefore, project managers need to ensure that the team stays focused. A periodic review of actual progress using the project plan and project documents to resolve disagreements regarding decisions can help greatly. The project charter and the plan remind the team what they are trying to accom- plish and why. Another means of maintaining focus is referring to the stakeholder anal- ysis and the trade-off decisions that the key stakeholders have indicated. The key with focus is to spend the most time and energy on important issues and to delegate, post- pone, or ignore less important issues.

Consider Alternatives The fourth process-oriented ground rule topic is to always con- sider at least two alternative approaches before proceeding. It is amazing how many project teams simply agree with the first suggestion that someone makes. A team that invests as little as a couple of minutes of time can ensure that they have considered alternative approaches. Quite often, a much better idea emerges from a second or third suggestion than from the first one. Also, many times a project team decides to combine the better parts of two alter- natives. This consideration of alternatives not only often yields a better approach, but it also often results in better commitment because more people’s ideas were considered.

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For example, in a project to install a suite of equipment at a customer’s site, a final site investigation revealed that a major piece of equipment was not functional. One answer was to expedite the shipment of a duplicate piece of equipment, while a compet- ing alternative was to use overtime labor and consultants to refurbish the onsite equip- ment. Both alternatives were expensive, and neither looked very promising. However, upon further discussion, it was determined that one section of the equipment was the primary concern, so a new section could be airfreighted in and the workers onsite could install it. This hybrid alternative proved to be far less expensive and more practical than either alternative that the panicked team first considered.

Use Data The fifth process-oriented ground rule topic is to always use data when pos- sible. Gather the facts instead of arguing over opinions. In meetings, make the data visi- ble to everyone on the team so that all can use it to help make informed decisions. It is possible that a team will generate more alternatives if the data is presented in meetings because it promotes constructive discussions and synergy. Many of the quality tools listed in Exhibit 14.9 help the project team to gather, organize, prioritize, and analyze data for making informed decisions.

Make Decisions The final process-related topic is decision making. Project decisions can be made in several different ways. Adherence to the other ground rule topics will help regardless of which decision-making method is chosen. Methods that project teams often use to make decisions include the following:

The project manager or sponsor makes the decision. One or two team members recommend or make the decision. The project team uses consensus to make the decision. The project team votes to make the decision.

On some issues, the project sponsor or project manager retains the right to make a decision. Sometimes, this is because a decision needs to be made quickly or it takes higher authority. A sponsor or project manager may also ask for input from the team and then make the decision. While this is often a good idea, that person should be very careful to tell the team up front that he or she still intends to make the decision. Otherwise, the team members who provided input may feel that their ideas were not considered.

Project managers may choose to delegate a decision to one or two team members— either members of the core team or SMEs. This strategy works well when not enough information or time is available at the current meeting and the decision needs to be made before the following meeting. Decisions that primarily impact one or two members rather than the entire project team are ripe for delegation. Delegating to two team mem- bers has the secondary benefit of their getting to know each other better and working well together for the rest of the project duration. A variation on this delegation strategy is to ask one or two team members to investigate and recommend a solution on which the team can decide at the next meeting. Over the course of a project, most team mem- bers will probably get the chance to make certain decisions.

Consensus is wonderful, but reaching it requires a time-consuming technique. True consen- sus means each person actively supports the decision—even if it is not his or her first choice. The team tells stakeholders that after discussion they understand the decision that was made is the best one for the project. To reach this true consensus, each person needs to be able to artic- ulate what he or she believes is important in the decision and why. Creative approaches may need to be developed when none of the original ideas pleases everyone. Consensus is helpful when significant commitment is necessary to implement the decision. Consensus also might involve cultural issues, so it is important to include everyone in making decisions.

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One final method that project teams might use to make decisions is to vote. This is often a poor choice since the losers of the vote may not be very enthusiastic and may not support implementation of the choice wholeheartedly. Another method may be better than standard voting. A straw vote—that is, a test for agreement—is a method by which a team may take a nonbinding vote. If most of the team agrees, then it may not take long to drive toward consensus. If many members do not agree, then delaying the decision, gathering more data, or agreeing to let one person make the decision may be in order.

5-3 Manage Project Team Manage project team is “the process of tracking team member performance, providing feedback, resolving issues, and coordinating changes to optimize project performance.”7

When managing the project team, a project manager uses various forms of power to get team members to prioritize and commit to project work. Project managers are often called upon to either assess members’ performance or to at least provide input for the performance assessments.

5-3a Project Manager Power and Leadership Since project managers often rely on people who do not report directly to them to perform some of the project work, they need to use various forms of power to encourage people to perform. Types of power available to project managers are shown in Exhibit 5.10.

EXHIBIT 5.10

TYPES OF PROJECT MANAGER POWER

TYPE OF POWER BRIEF DESCRIPTION WHEN USED

Legitimate Formal authority based upon user’s position

Asking people to perform within their job description

Reward Persuading others based upon giving them something

If team members perform well and if negotiating for resources

Coercive Punishing others for not performing

Only when needed to maintain disci- pline or enforce rules

Referent Persuading others based upon personal relationship

Frequent since project managers often lack legitimate power based upon position

Expert Persuading others based upon your own knowledge and skills

When others respect your opinions

Information Control of information Frequent, as a large part of a project manager’s role is to convey information

Connection Informal based upon user’s relationships with influential people

When working with project sponsors and when negotiating for resources

Source: Adapted from Robert N. Lussier and Christopher F. Achua, Leadership: Theory, Application, Skill Develop- ment, 4th ed. Mason, OH: South-Western Cengage Learning, 2010: 110–117.

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LEGITIMATE POWER Project managers often may not have authority over the project team members, although they are responsible and accountable for their performance. Therefore, project managers often have less legitimate power than other managers. How- ever, to the extent that project managers can ask team members to perform certain activ- ities, they should do so. In contemporary project management, a project manager often has a core team to help plan and manage major parts of the project. These core team members are probably the people the project manager can instruct to perform certain activities, but he or she would be better served when it is possible to ask them to plan the activities. The old axiom is true: people tend to support the things they helped to create.

REWARD AND COERCIVE POWER Reward and coercive power are opposites of each other. Not all rewards cost money. In fact, stimulating work is one of the most powerful rewards. Enticing people to perform well so they can be assigned to more interesting and/or challenging work helps the team member, the immediate project, and the organi- zation. While reward power is the preferred method, there are times when a person is not performing and a threat, or coercion, may be necessary. This is especially true if most members of the project team are performing and one or two members are not. People who work hard value teammates who also work hard and are often upset when some members do not contribute their share.

REFERENT POWER Referent power is when a project team member works for the proj- ect manager out of personal desire. Project managers sow the seeds for referent power when interviewing candidates for their project team. If the project manager takes the time to understand the personal motives of each team member, he or she can create desir- able opportunities for each. Individual project managers who remember the adage “no one loves your project as much as you do” use their referent power by continuing to describe their project’s purpose in ways that appeal to each individual worker’s desires. Many suc- cessful project managers work hard to develop both friendships and respect with their team members. Loyalty must go both ways. If a team member believes a project manager has his or her best interests at heart and will advocate for him or her, then that team mem- ber is more likely to demonstrate loyalty to the project manager by working hard.

EXPERT POWER Generally, people want to succeed in whatever they do. Project man- agers can tap into this desire by using expert power. If a project manager has a reputa- tion for success and can convince others that he or she understands enough of the project management technology and politics to successfully guide the project, then peo- ple will be more inclined to work hard on the project. They will be convinced that their efforts will pay off and that they will have a chance to learn and grow professionally.

INFORMATION POWER Information power is something that project managers want to use, but not in a coercive manner. While information is power, withholding or dis- torting information is unethical. A project manager’s responsibility is to ensure that whoever needs certain information receives it in a timely manner, in a form they can understand, and with complete honesty and accuracy. That does not mean sharing con- fidential information inappropriately. It does mean empowering the core team to distrib- ute information promptly and accurately according to the communication plan. This gives the core team more knowledge power.

CONNECTION POWER The very reason for having executives sponsor projects is because the sponsor frequently has more legitimate power than the project manager. Project managers can use the power of the sponsor when necessary. A project manager who

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frequently asks the sponsor to intervene looks weak. On the other hand, a project manager who does not ask for the sponsor’s help when it is really needed lacks judgment. Project managers can create many champions for their project by continuing to expand their con- tacts with important people and by continuing to talk about the importance of their project.

5-3b Assessing Performance of Individuals and Project Teams The second aspect of managing project teams is assessing the performance of both indi- viduals and the project team. Goals of performance assessments include administrative uses such as rewards and promotions and professional development such as determining areas for improvement and training. In many organizations, a large percentage of people dread performance assessments. Many people do not enjoy giving honest feedback— particularly about shortcomings. Also, many people do not like to receive constructive feedback. However, for both reward purposes and to improve performance, honest assessments are needed. Performance assessment can be both informal and formal. Proj- ect managers often perform informal assessments by observing, asking questions, and providing suggestions. This improves performance if it is done regularly, as timely and specific feedback is most effective.

Formal performance assessments are often the primary responsibility of the manager toward people who directly report to him. In many organizations, this is a functional man- ager. However, because many project team members spend significant time on a project, the project manager is often asked to provide input for the formal performance assessment. The ideal situation for this input is when the team member helped participate in the project plan- ning and is judged by how his or her work corresponds to the planned work. Many project team members may work on several projects during the formal assessment period. When that is the case, the projects where they spent the greatest time would ideally count the most toward their performance rating. On some large projects, a project manager may seek input from other team members regarding the team member’s performance.

5-3c Project Team Management Outcomes A variety of outcomes may result from managing the project team, such as the following:

Morale changes ”Quarter-mile stones” to “inch stones” Staff changes Training needs Discipline Role clarification Issues Lessons learned

MORALE CHANGES Many projects have periods that are difficult, when work demands are high and milestones to celebrate are few. During these times, the project manager needs to remember that the way he or she wields power, communicates, appraises prog- ress, and generally manages can enhance or detract from the morale of all involved. Con- tinuing to reinforce the project’s purpose, encouraging and supporting workers, and trying hard to understand their concerns can go a long way toward boosting morale.

QUARTER-MILE STONES TO INCH STONES When constructing the project charter, the team developed a list of milestones that could be used to measure progress. On some projects, that is enough detail against which performance can be measured. On other

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projects, however, more details are needed. Perhaps these greater details could be consid- ered “quarter-mile stones”—giving the ability to check progress more frequently. When assessing the performance of individual workers, if one individual worker consistently does not perform well, the project manager may decide that more detailed oversight is necessary. This could result in “yard, foot, or inch stones,” depending on the level of oversight deemed necessary. Hopefully, for most projects and most workers, this addi- tional oversight will not be necessary. It takes time and effort that could be spent on other productive activities. However, a wise project manager is not going to let a project get derailed because of one worker who is not performing well.

STAFF CHANGES Poor appraisals, insufficient progress, conflict, necessary reassign- ments, or other causes may warrant staff changes on a project. When this occurs, wise project managers treat everyone with respect and recognize that changes are happening. When new people are added, they are given a formal introduction to the team and pro- vided information about the project.

TRAINING NEEDS In the course of performance appraisals, training needs are some- times identified. Project managers should keep the immediate project needs along with the training needs in mind as they approve training.

DISCIPLINE Performance on some projects is so poor that employees need to be disci- plined. While coercive power is often considered a last resort, it should be used at times. Proj- ect managers must ensure that prior warnings of poor performance are issued to a struggling team member so that person has an opportunity to make amends. Specific behaviors or lack of progress are documented, the need for the discipline is explained clearly, and specific improve- ment strategies are developed to reduce the chance that further discipline will be needed.

ROLE CLARIFICATION Sometimes, progress may be lacking because of misunder- standings in responsibilities or miscommunication. In those cases, the project manager can clarify roles of all impacted employees by detailing their roles in completing WBS tasks, responsibilities toward other team members and the project, and what is expected of them in terms of project tasks and professional behavior.

ISSUES AND LESSONS LEARNED Many project managers keep issue logs. These serve as living documents of issues that arise while managing the project and the project team. As issues are raised, they are added to the log, and once they are resolved, they are deleted. The resolved issues sometimes make good lessons learned if they can help future project teams avoid similar problems. These lessons can be documented and stored for easy retrieval in a lessons-learned knowledge base.

5-4 Relationship Building Within the Core Team Project sponsors and managers who wish to create highly productive workplaces ensure that core team members understand what is expected of them, have the chance to do work they are well suited to perform, receive appropriate recognition, have good cowor- kers, have their opinions considered, and have opportunities to grow and develop.8 The sponsor and the project manager ideally begin by asking one another about personal expectations regarding the project and project goals such as specific capabilities of the project deliverables. Both the project manager and sponsor may have individual motives also. It is helpful to disclose and acknowledge these personal goals to each other.

The project manager, in turn, asks each core team member what he or she personally wants from being involved in the project. These conversations not only help the project

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manager understand priorities but also understand motivations. For example, core team members may want to participate in a stimulating experience, gain new skills, or earn a promotion. Understanding these motivations will make it easier for the project manager to address them. Aligning individual aspirations with project goals in determining indi- vidual roles and responsibilities is desirable and productive.

The project manager can encourage open and transparent communication such as keeping people informed, demonstrating that everyone’s input is valued, personally shar- ing feelings, and respecting confidentiality. She should set the expectation that all team members practice these habits.

Joint establishment of project meeting agendas helps in building relations because all team members feel their concerns are addressed, and they develop a greater sense of ownership in meetings. When members get to share in meaningful project learning, they feel their insight is valued. Frequent celebration of small successes helps project team members share the enjoyment of working on a project, which in turn helps them stay committed to successful project completion.

One other key relationship-building activity that needs to start early and continue throughout the project is concerned with appropriate decision making and problem solv- ing. The project manager and core team need to understand who makes each type of project decision and how those decisions are made. One consideration is that people involved in making decisions tend to support them. Decisions made by groups tend to take longer, and projects are often pushed for time. Some decisions are best made by a single expert, while others are best made by a group that represents various points of view. Each project team will need to determine who will make which types of decisions. Exhibit 5.11 gives general advice that can be applied in making this determination.

5-5 Managing Project Conflicts Projects create unique outputs, work with diverse stakeholders, are represented by team members from various functions and even different companies, and frequently operate in a matrix environment. These factors, along with scope, time, and cost constraints, con- tribute to potential conflicts. Many project management initiating and planning tools exist to reduce destructive aspects of conflict, at least partly. This section discusses differ- ent ways to view conflict, along with various styles and approaches for dealing with it. This section also introduces a project conflict-resolution process model.

In dealing with task-related conflicts, project charters are meant to help the project core team, project manager, and sponsor understand many aspects of the project at a high level and head off potential conflict between individuals. Several components included in charters,

EXHIBIT 5.11

PROJECT DECISION-MAKING GUIDE

PERSON/METHOD WHEN

Sponsor decides Project manager decides Functional manager decides Core team discusses and project manager decides Core team consensus Delegated to one or two team members to recommend Delegated to one or two team members to decide

Critical decision, large monetary stake, “big picture” needed Time is critical, no need for other input “How” functional work is done Team input is useful Buy-in is critical Needs to be investigated, team input useful Needs to be investigated, team input not needed

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for example, assumptions, risks, roles, responsibilities, and acceptance criteria are examples of potential sources of conflict. Stakeholder analysis and communications planning can iden- tify needs and desires of many others who will be impacted by either the process of perform- ing the project or a deliverable of the project. These tools help to identify and deal with potential sources of conflict among the broader stakeholders. The more-detailed planning tools such as the WBS, schedule, and budget help to identify other conflict sources.

People-related conflicts can be effectively addressed by developing a team charter, as discussed in Section 5-2b of this chapter. Everyone comes with unique experience, knowledge, IQ, and personality type and these differences can be a source of conflict. A team charter helps to define norms, attitudinal preferences, work ethics, and responsibil- ities for all team members. Adherence to team charter elements promotes mutual under- standing and conflict resolution.

5-5a Sources of Project Conflict Some conflicts on projects are useful; other conflicts can be destructive. Conflict over ideas on how to proceed with a project can lead to more creative approaches. Conflict over how to complete a project with a tight schedule can also be positive. Competition for ideas on how to best handle a project activity has the potential for generating more innovative and successful approaches and can be highly stimulating work. However, when conflict becomes personal, it can often become negative. These types of conflict need to be handled with care. A few typical sources of project conflict are shown in Exhibit 5.12. Generally, it is better to deal with conflict on projects promptly—or even proactively. Conflicts do not get better with time! This is especially true for projects with significant pressure to stay on schedule or on budget (in other words, many projects).

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Virtually all studies have determined that relationship conflict can be detrimental to project team success. When people spend time and emotional energy arguing, they have less energy to work on the project. Also, when people have personal conflicts to the point where they really do not like each other, they often feel less committed to the project and to their team.

Task conflict is a bit more complicated. A certain amount of task conflict can encour- age people to consider alternative approaches and to better justify decisions. Up to that point, task conflict can be useful. However, beyond a certain point, when people spend a great deal of time arguing over task-type issues, conflict takes away from the project team’s progress and camaraderie. The timing of task conflict can also make a difference on whether it helps or hurts the project. The best times to discuss different options are during the initiating stage, when high-level approaches are being decided, and during the plan- ning stage, when more detailed decisions are being made. However, once the plans are made, a project team needs to be a bit more careful because prolonged discussions during the executing periods of the project can lead to schedule slippage and cost overruns.

In general, conflict occurs due to incompatible goals and differences in thoughts or emotions among the team members. It is a common experience with any team or a group of highly skilled and exceptionally creative individuals to interpret facts and events differently. The project manager must capitalize on this intellectual diversity using effec- tive communication techniques and debates to identify the most appropriate resolution.

5-5b Conflict-Resolution Process and Styles Once a project manager recognizes that a conflict exists, if it is a task conflict, he or she tries to utilize it to develop a better solution. If it is a relationship conflict, he or she tries to resolve it before it escalates. A project manager can use the six-step project conflict- resolution process, making sure to pay attention both to the tasks and relationships needed at each step.

Six-Step Project Conflict-Resolution Process

1. Understand the conflict. 2. Agree on conflict-resolution goals. 3. Identify causes of the conflict. 4. Identify potential solutions for the conflict. 5. Pick the desired conflict solution. 6. Implement the chosen solution.

First, the project manager and the team investigate the situation: What are the signs of the conflict? Is it specific to a certain stage in the project? Does each party in the conflict

EXHIBIT 5.12

TYPICAL SOURCES OF PROJECT CONFLICT

RELATIONSHIP SOURCES TASK SOURCES

Roles and responsibilities Lack of commitment Communications failure Different personalities Stakeholder relationships Personal motives of participants Energy and motivation Next project assignment Individual rewards

Stakeholder expectations Unique project demands Money and other resources Technical approach Priorities Differing goals of stakeholders Task interdependencies Schedule Risks

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understand it the same way? If not, they need to ask clarifying questions, summarize how the other person has stated the problem, and confirm that they have a common understanding.

Next, ensure that all parties agree on what a successful conflict resolution would be. While there are often conflicting goals on projects, all stakeholders typically want useful deliverables on time and on budget. Use the project goals as a basis for what the solution needs to cover.

Many conflicts have multiple causes, such as those shown in Exhibit 5.12. Identify potential causes and then verify which cause(s) are contributing to the conflict.

The next step is to identify potential solutions to the conflict. This is clearly a time where creativity and mutual trust are helpful. It is important to focus on the conflict issue and not the person. Also, potential solutions should be considered based on their value and should not be evaluated based on the person who suggests a solution.

The fifth step is deciding how to resolve the conflict. There are five general styles for resolving project conflict, as depicted in Exhibit 5.13.

The collaborative style is preferred for important decisions that require both parties to actively support the final decision. However, collaboration requires both parties to develop trust in each other and, therefore, often takes longer than the other styles. Therefore, each style in 5.13 has its value in dealing with project conflicts.

The final step is to implement the chosen solution. For a major conflict, this could be almost like a mini-project plan with activities identified and responsibility assigned. It is vital to include communication of the solution to all concerned parties.

5-5c Negotiation Negotiation is about redefining an old relationship that is not working effectively or establishing a new relationship.9 Negotiation is the most commonly used process and the first step to resolve a dispute, a difference, or a conflict.

Project managers are generally held accountable for more performance issues than they have responsibility to direct people to perform. Because of this, project managers must negotiate. As stated earlier in this chapter, they often need to negotiate with func- tional managers for the people they wish to have on the project team. Project managers

EXHIBIT 5.13

STYLES OF HANDLING PROJECT CONFLICT

STYLE CONCERN FOR SELF

CONCERN FOR OTHERS WHEN APPROPRIATE FOR PROJECTS

Forcing/ Competing

High Low Only when quick decision is necessary, we are sure we are right, and buy-in from others is not needed

Withdrawing/ Avoiding

Low Low Only when conflict is minor, there is no chance to win, or it is helpful to secure needed information or let tempers cool

Smoothing/ Accommodating

Low High Only when we know we are wrong, it is more important to other party, or we are after something bigger later

Compromising Medium Medium Only when an agreement is unlikely, both sides have equal power, and each is willing to get part of what they want without taking more time

Collaborating/ Problem Solving

High High Whenever there is enough time, trust can be established, the issue is important to both sides, and buy-in is needed

Source: Adapted from Richard L. Daft, Management, 9th ed. (Mason, OH: Southwestern Cengage Learning, 2010): 519–520; Ramon J. Aldag and Loren W. Kuzuhara, Mastering Management Skills: A Manager s Toolkit (Mason, OH: Thomson South-Western, 2005): 416–419; and PMBOK® Guide 240.

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often need to negotiate with customers and other key stakeholders concerning schedule, budget, scope, and a myriad of details. They also often need to negotiate with sponsors, suppliers, SMEs, and core team members.

Nobody is as committed to or involved with a project as much as the project man- ager. However, a project manager must remember that negotiations will be smoother if she realizes that everyone she negotiates with has their own set of issues and goals.

Many of the project management tools discussed thus far in this book, such as char- ters, stakeholder analysis, communication plans, schedules, budgets, and change control, make negotiations easier. Several of the soft skills discussed in this book, such as involv- ing your team in planning, treating everyone with respect, keeping communications open, and establishing trust, also simplify negotiations. The issues project managers need to negotiate can greatly vary in size and complexity. For example, many small issues can involve day-to-day scheduling issues. On the other hand, the entire set of proj- ect deliverables with accompanying schedule and budget are often negotiated.

Regardless of the negotiation size or complexity, the six-step process shown in Exhibit 5.14 can serve as a guide.

The negotiation process is based on the project manager and the other party attempting in good faith to reach a solution that benefits both—in other words, a win-win solution. Project managers need to be vigilant, however, because not everyone they must negotiate with takes that same attitude. Smart project managers recognize that their reputation is based on how they act in all situations. Therefore, even when negotiating against someone who plays hardball, it is still wise to stay ethical and keep emotions in check.

Step 1 involves advance fact-finding to determine what is needed from the negotia- tion. This may include checking with the sponsor and/or other stakeholders and deter- mining the impact that various settlements may have on the project. It also includes seeking to understand both what the other party is likely to want and how he or she may act during the negotiations.

Step 2 is for the project manager to understand the bottom line. What is the minimum acceptable result? Just as when buying a car, a project manager needs to understand when to walk away. This can vary a great deal depending on how much power each party has. Project

EXHIBIT 5.14

NEGOTIATION PROCESS

STEP EXPLANATION

1. Prepare for negotiation Know what you want and who you will negotiate with.

2. Know your walk-away point Determine in advance the minimum you need from the negotiation.

3. Clarify both parties’ interests Learn what the other party really wants and share your true interests to determine a common goal.

4. Consider multiple options Brainstorm multiple approaches—even approaches that only solve part of the issue.

5. Work toward a common goal Keep the common goal in mind: seek and share information, make concessions, and search for possible settlements.

6. Clarify and confirm agreements Agree on key points, summarize, and record all agreements.

Source: Adapted from Ramon J. Aldag and Loren W. Kuzuhara, Mastering Management Skills: A Manager s Toolkit (Mason, OH: Thomson South-Western, 2005): 129–132; and Timothy T. Baldwin, William H. Bommer, and Robert S. Rubin, Developing Management Skills: What Great Managers Know and Do (Boston: McGraw-Hill, 2008): 307–318.

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managers need to understand that if they have the power and take advantage of their nego- tiation partner, that partner may not work with them on a future project. Therefore, the goal is not to always drive the hardest bargain, but to drive a fair bargain. It is worth mentioning that if one party has more power than the other party, even if it is only a perception, negoti- ation may not be the right option until the inequality issue is addressed.

Step 3 is for the project manager to understand the underlying needs of the other party and to share his or her own needs. This is not a 10-second political sound bite that says, “Take it or leave it.” This is developing a real understanding of each other’s needs.

Step 4 is to create multiple options. This is easy once both parties understand what the other party really needs because various creative solutions can then be developed that help to satisfy those underlying needs.

Step 5 consists of the process and strategies of the negotiation itself. It is helpful to keep in mind the ultimate goal while focusing on the many details of information shar- ing, trading of concessions, and exploring possible solutions.

Step 6 is actually a reminder to reach an agreement and then to document that agree- ment. A consultant friend of mine often says: we have reached a violent agreement” when people essentially have agreed, but keep talking. Clarify and document your agreement.

5-6 Communication Needs of Global and Virtual Teams

As organizations change more rapidly, more projects are conducted with member from various parts of the larger organization, various organizations, and even various parts of the world. These teams draw from a wider pool of talent, but can pose added challenges.

5-6a Virtual Teams In contemporary project management, project managers use less-onerous command and control than they might have a few years ago. This trend is even more pronounced with global and virtual teams. A virtual team is also sometimes known as a distributed team. They rarely meet in person, but rely on communications technology. When project teams operate in a virtual mode, many of the following characteristics are present:

Team members are physically dispersed. Time boundaries are crossed. Communication technologies are used. Cultural, organizational, age, gender, and functional diversity are present.10

5-6b Cultural Differences Cultural patterns differ in various parts of the world, so project team members need to be more sensitive as to how their actions are interpreted. For example, in some cultures, making eye contact signifies that you are paying close attention. In other parts of the world, however, eye contact is considered rude; in these cultures, people may look slightly downward in deference to authority. When people do not have face-to-face con- tact, they do not have the opportunity to see and learn from a person’s body language. Project managers working with global and virtual project teams need to be especially mindful of the increased need for communications using methods other than face to face. Reading comprehension and listening skills are valuable for virtual teams.

Cultural differences make communication challenges more difficult. The various meth- ods regarding charter development described in Chapter 4, along with stakeholder analysis and communications planning in this chapter, are even more critical on virtual and global

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teams partially due to cultural differences. The more unusual a team is, the more critical charters and communications vehicles become. Exhibit 5.15 lists some of the extra com- munications challenges posed by virtual and global project teams. Note that each project management need has a specific and increased challenge—for example, the third need, relationship building, needs more time since people do not have the advantage of full face-to-face communication. Project managers and teams can enhance stakeholder satis- faction by learning the cultural ethics and values of all their stakeholders, working hard to establish trust, and ensuring that they use fast and reliable information systems.

5-6c Countries and Project Communication Preferences It is helpful if the project team members can meet each other face to face, even one time. While this can be expensive, it may be much less expensive than poor performance on the project. Sometimes, the core project team is assembled to write and approve the proj- ect charter. The core team members then get to know each other and are inclined to give each other the benefit of doubt in case of any misunderstandings. Another method that is frequently used is to confirm meetings and calls with quick meeting minutes or e-mail follow-ups. By documenting any decisions, it is easier to remember what happened and to uncover lessons learned when the project is complete.

While abundant differences exist among people from various countries, the method and timing of project communications are of interest here. For example, Ralf Mueller and J. Rodney Turner studied how cultural differences impact preferred modes of project management communication.11 They examined how collectivism versus individualism, along with the extent individuals in various cultures accept unequal power and ambigu- ity, impact project communications preferences. The results show that country prefer- ences can be shown in four categories with common preferences on frequency and type of communications for each group.

PMP/CAPM Study Ideas While PMI absolutely recognizes the importance of the “soft skills” regarding management and communication, you shouldn’t expect to see many—if any—questions directly from the lists in this chapter. Rather, you will be expected to understand the best practices we describe and to apply them to mock situations. One type of question you will see in many guises has to do with change requests. Whether a customer, sponsor, or team member requests a change, if you have already completed your project management plan, any change must go through a change request process. In other words, it may be your natural instinct to want to

EXHIBIT 5.15

INCREASED CHALLENGES FOR VIRTUAL AND GLOBAL PROJECT TEAM

PROJECT MANAGEMENT NEED INCREASED CHALLENGES

1. Initiate project 1. More unique project needs 2. Understand stakeholders 2. More difficult to understand 3. Build relationships 3. Needs more time 4. Determine communications needs and methods 4. More unique needs, more reliance on electronic means 5. Establish change control 5. More facilitating than directing 6. Manage the meeting process 6. Less nonverbal clues, interest may wander 7. Control issues 7. With less group interaction, harder to identify

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please the person making the request—especially if the change seems small—but the best practice/correct answer will always be to go through the change control process (more infor- mation on this is provided in Chapters 7 and 14).

Other test questions you may see from this chapter include the stages of team development—forming, storming, norming, performing, and adjourning—and both cap- turing and utilizing lessons learned.

Summary While the project core team is ideally assembled early in the project to participate in chartering and planning the project, SMEs are commonly assigned as needed. Project managers try to secure the services of these important people as early in the project as possible. This often involves negotiating with the functional managers to whom the SMEs report. When new project team mem- bers arrive, they need to be on-boarded; that is, they need to understand the project and start to develop working relationships with their new team members. Experienced project managers ensure that the new members under- stand project goals but also share their personal goals so that both can simultaneously be achieved.

Teams progress through typical stages of develop- ment. High-performing project teams share a number of characteristics. Project managers can use understand- ing of these stages and characteristics to guide their team to better performance. They do this by assessing indi- vidual and team capabilities and developing strategies to improve both. The project team often develops team operating principles in the charter. Many teams expand

upon these with more specific team ground rules. The ground rules are tailored to the unique needs of the project situation, but generally include both rules for improving relationships among team members as well as improving the process of how the team works.

The project manager must manage the human side of his project. This involves utilizing appropriate forms of power in managing the project team to obtain desired results. Project teams also need to manage and control stakeholder engagements through understanding their expectations, delivering on those expectations, and com- municating effectively. Projects are ripe for many kinds of conflict. Constructive conflict over ideas often yields better approaches, but destructive conflict that gets per- sonal needs to be headed off when possible and dealt with when it occurs. Many good project management practices and techniques are helpful in channeling con- flict in constructive directions. Project managers also need to utilize many general conflict reduction techni- ques not only within the project team, but also with and between various stakeholders.

Key Terms Consistent with PMI Standards and Guides management, 138 leadership, 138 acquire project team, 138 develop project team, 141

manage project team, 157 negotiation, 164 virtual teams, 166

Chapter Review Questions 1. What is the potential downside to bringing in

project workers too early in the project? 2. Why is it often necessary for project managers to

persuade workers to be part of the project team? 3. When is the best time to on-board core team

members? 4. What are the five stages of team development? 5. During which stage do team members often feel

close to one another and have a good under- standing of how to work together?

6. List two personal values of individual team mem- bers that contribute to a high-performing team. List two team behaviors that can enhance these personal values.

7. What are the two favorable outcomes of fostering a high-performing project team?

8. During all five stages of team development, is it important that the project manager keep in mind the needs of which three groups?

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9. Why might it be helpful to bring out the charter when people are arguing over a decision?

10. What is meant by the term ground rules? Give examples.

11. Under which circumstances might a project manager or sponsor retain the right to make a project decision?

12. What are the benefits of delegating a decision to one or two team members?

13. When might consensus be the best decision- making strategy?

14. power is the ability to persuade others based upon the project manager’s personal knowledge and skills.

15. power should be used by a project manager when she is asking her team members to perform a task within their job description.

16. power should only be used in instances in which it is necessary to maintain discipline.

17. In order to manage stakeholders’ expectations, a project manager needs to understand the stake- holders’ assumptions. Which document(s) can help with this?

18. The collaborative style for handling conflict has a(n) concern for self and a(n) concern for others.

19. Why is it important for project managers to have one-on-one discussions with their core team members?

20. What is a virtual team? 21. Name three increased challenges for a global

and/or virtual team. 22. Why is it helpful for a virtual team to meet in

person at least once?

Discussion Questions 1. You are a project manager leading an IT develop-

ment project. Halfway through your project, you realize you need to hire an additional worker in order to complete the project on time. How will you convince your project sponsors to authorize the hire? How will you on-board your new worker?

2. Describe how to use project documents to help a team progress through the stages of development.

3. How can a project manager promote the needs of the organization during the norming phase?

4. How can a project manager promote the team members’ needs during the forming stage?

5. Describe in your own words what a high- performing project team can do.

6. Describe, in your own words, what you believe are the four most important characteristics of high-performing project teams. Tell why you believe each is so critical, explain how they are related to each other, and give at least two spe- cific suggestions for each.

7. Assess your individual capability for project teamwork. Tell why you feel you are strong in certain capabilities, and give strategies for improv- ing in areas you feel you need to develop.

8. What is meant by the term situational leader- ship? How can you apply this as a project manager?

9. Describe the three responsibilities of project team members.

10. Pick the four ground rule topics for project teams that you believe are the most important. Tell why you believe each is so critical, explain how they are related to each other, and give at least two specific suggestions for each.

11. Using examples, describe how a project manager can use active listening. Why is this useful?

12. Describe each method of decision making a proj- ect team may use. Using examples, tell when each is most appropriate.

13. In your opinion, why is it necessary for the proj- ect manager to assess the performance of both individual team members and the project team as a whole?

14. List several characteristics of a project that can often result in creating conflict.

15. Give an example of when a conflict would be beneficial to a project and an example of when conflict would be harmful to a project.

16. You are working for a multinational organization and need to relay information to Japan. Which communication method would you choose to use and why?

17. Give as many examples of cultural differences as you can, using information from this text and your own experiences.

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PMBOK® Guide Questions 1. is the process of “confirming human

resource availability and obtaining the team nec- essary to complete project activities.” a. Plan Human Resource Management b. Acquire Project Team c. Develop Project Team d. Manage Project Team

2. All of these are stages of team development except: a. adjourning b. storming c. learning d. performing

3. establish(es) clear expectations regarding acceptable behavior by project team members, and may cover topics such as protect- ing confidentiality, establishing trust, and han- dling conflict. a. The employee handbook b. Ground rules c. Management by objectives d. Personnel directives

4. The objective of the process is to improve competencies, team member interaction, and overall team environment to enhance project performance. a. Plan Human Resource Management b. Acquire Project Team c. Develop Project Team d. Manage Project Team

5. All of these are techniques for managing project conflicts except: a. smooth/accommodate b. withdraw/avoid c. collaborate/problem solve d. none of the above

6. A document used to manage points of discussion or dispute that arise during projects, in order to monitor them and ensure that they are eventually resolved and added to lessons learned, is called a(n) . a. risk register b. stakeholder register c. SWOT analysis d. issue log

7. Which of these is not a challenge of working on global and virtual teams? a. competencies b. language c. time zones d. culture

8. An output of the process Develop Project Team, an evaluation of the team’s success in achieving project objectives for schedule, budget and qual- ity levels, is called team . a. project performance review b. performance assessments c. annual review d. work performance reporting

9. Which of the following steps is not part of the six-step project conflict-resolution process? a. Identify causes of conflict b. Identify potential solutions c. Determine which teammate was in the wrong d. Understand the conflict

10. The sources of most project conflicts can be grouped into those related to and those related to . a. relationships; tasks b. technical skills; budget c. personalities; deadlines d. schedule; risks

I N T E G R A T E D E X A M P L E P R O J E C T S

SUBURBAN HOMES CONSTRUCTION PROJECT

Suburban Homes, a medium-sized, fast-growing construction company, has an ambitious plan to expand its business to several southern states in the United States as a result of its significant growth and good reputation for building quality single-family homes and townhomes.

As a project manager, Adam Smith worked for several years in the construction industry and supplemented his experience with project management education. From his ini- tial realization that managing projects successfully requires implementation of various project management processes,

170 Part 2 Leading Projects

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Semester Project Instructions Assess your project team’s capability. Develop a strat- egy to improve your team’s capability. Develop ground rules to use on your project.

As a team, audit one of the other project teams in your class and have them audit your team. Develop an improve- ment strategy for that team based on the audit results.

Brainstorm situations for your project for which each source of power makes sense.

Identify what you have done to manage and con- trol stakeholder engagement and how you know the current level of satisfaction that your stakeholders feel. Identify issues you may need to negotiate and determine the style you will use to handle the conflict and your expectations at each step of the negotiation process.

CASA DE PAZ DEVELOPMENT PROJECT

Questions for students to answer: 1. What actions do you suggest to help the project team

through the stages of team development? 2. What would you want to see in a team charter for this

development project?

3. Construct a RACI chart with major tasks you see and the type of person you feel should do each.

4. List types of decisions that will need to be made and the appropriate person, group, or method for each, for example, individual team member, team collectively, scrum master, and product owner.

tools, and techniques, Adam recognized the importance of building project teams composed of well-trained staff. From his experience managing a few projects in the Midwest and based on the lessons learned from these projects, it was evi- dent to Adam that Suburban Homes did not place a strong emphasis on people-related factors and team development. Adam recognized the scope for improvement in managing and developing high-performance teams and decided to act on this knowledge immediately.

Adam s primary task was to improve the performance of project management and increase the project success rate, so he wanted to address project team selection and the team development processes. Further, he realized that employee turnover and the expansion of the business in southern states led Suburban Homes to recruit more employees. Many of these new recruits have prior experi- ence in the construction industry. In addition, the workforce now represents different work cultures, attitudes, commit- ment, and work ethics.

Adam recognized the immediate need to manage human resources effectively and efficiently. He decided to formalize

project team selection, development, and management so that all the locations in the Midwest and South will have sim- ilar team management philosophy and practices. To achieve these purposes, Adam has considered the following:

1. Train project managers as leaders. Also, project managers must be trained to identify talent, select project team members, and nurture their growth.

2. Develop a team charter so that all the team members are aware of performance expectations, professional behavior, and other team norms. The charter should also help in training newly recruited employees to improve productivity, collaboration, coordination, communications, and conflict resolution.

3. Develop a conflict management plan and prepare guide- lines for all employees to identify and manage conflicts.

4. Design and implement a decision-making protocol for all the projects and in all locations.

5. Develop norms for high-performing teams.

You are hired as a consultant to develop the above five deliverables.

Chapter 5 Leading and Managing Project Teams 171

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PROJECT MANAGEMENT IN ACTION

Centralizing Planning and Control in a Large Company after Many Acquisitions

The restaurant chain where I work was founded over 50 years ago. Through internal growth and external acquisitions, this company has become a Fortune 500 company. The company recently decided to centralize merchandizing, retail operations control, advertising, and sales planning for the enterprise.

Human resources (HR) and other support organizations needed to improve their performance to support this massive change. Cycle times were too long, service quality was too low, and internal customers frequently complained about corporate functions. HR started its transformation by creating a process improvement team to lead toward a process-driven structure with work drivers identified to establish staffing levels. A new HR vice president had a vision for the operation, and her leadership was critical to make anything happen.

Up to this point, process engineering had only been applied to manufacturing and distribution operations. The culture for process engineering, proj- ect management, and change management was gen- erally immature in the company. This was declared to be the biggest change to our HR function in 35 years. A vice president was assigned to make the HR transi- tion happen.

The project manager assigned to this project immediately interviewed the various management members of the HR organization and the retail opera- tions transition team. He created a project charter to define the scope, objectives, problem statement, out- comes expected, benefits, team members, and inputs for this project. This project manager interviewed all senior staff members for their insights.

A communications plan was drafted because this change directly touched several hundred persons and indirectly many tens of thousands. The company is a very large distributed organization with many global operations. Therefore, a great deal of collaboration was required to create the buy-in needed. A confer- ence was held for all HR leaders to begin developing this needed buy-in.

In preparation for the conference, the project man- ager created the following high-level WBS:

1. Planning the HR Transformation 2. Initiating the Project 3. Planning the Workshops 4. Stakeholder Analysis 5. Communications Plan 6. Planning the Project 7. Executing the Plan 8. Holding the Workshops 9. Identifying Opportunities for Improvements

10. Obtaining the VOC (Voice of Customer) 11. Creating the Foundational Communications 12. Initial Launch 13. Executing the Implementation Plan 14. Sustaining the Transformation

A schedule was created that reflected all the WBS elements needed to perform this massive organiza- tional change initiative, driven by process analysis and by meeting all the relevant PMI PMBOK® guide- lines for project management good practices. This project schedule covered the elements of a plan to gather Voice of the Customer information and per- form workshops for the identified Centers of Excellence:

1. The business processing center 2. Total reward systems 3. Administration systems 4. Workforce planning systems 5. Talent management systems 6. Systems and data management 7. Training and development

The project schedule included all the communi- cations needed to create synergy toward an agreed- upon solution. At the end of the first conference, we had a core team meeting of five leaders. The job of the core team was to define a vision for the orga- nization, a mission statement for the operation, and an elevator speech that defined the project s objec- tives and could be repeated in less than 45 seconds

172 Part 2 Leading Projects

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to a novice on the topic. This team s efforts gave us great clarity regarding what we were trying to accomplish.

Next, we brought in over 100 HR professionals from around the company for a series of workshops. An agenda and handouts were created to drive the workshops. During the workshops, artifacts were created to define the as is and to be process states. These models were built in Supplier, Input, Process, Output, Customer (SIPOC), and organization deployment process maps. In addition, we created organization structures to support the future-state process maps. Once we designed structures, we built job description documents and measurement plans for the new and old processes. The processes modeled impacted all HR operations. We needed to know where the work would be accomplished. We started the detailed organization chart reviews. We needed to know where the work was done, and by how many persons, today. Then we could start to estimate how many resources might be needed in a future state by location and by element of work.

We evolved a framework of principles to drive the project forward, which included:

Streamline every process using the lean Six Sigma tools. Focus on quality, speed, and cost while delivering improved value.

Take transactions out to a service center where a lower cost is achieved. Drive all outside agreements toward negotiated service level agreements. Consider multiple alternatives for the sourcing of needed services. Improve the client-facing organization. Build Centers of Excellence that deliver improved value. Push employee support closer to them while leveraging consolidated service center capabilities.

Monthly HR leader conference calls, weekly status reports, preliminary design sessions, corporate staff

design sessions, and follow-up conferences for leaders were all part of the high-touch, high- communications approach to this project. We expect the many automation initiatives, headcount reduc- tions, vendor outsourcing efforts, and in-sourcing of transactions to a wholly owned service center to deliver millions of dollars of cost reductions across the company. We promoted lean and improvement ideas continually to the leadership. We have collected field- based best practices and have moved into a phase to validate these practices. Once validated, these best practices will be rolled out to all operations. We com- municate by posting everything to a SharePoint site for all to see. We also use e-mail communications and have many one-on-one telephone calls.

We are now presenting the new design for imple- mentation and are getting buy-in. We continue to involve others and to learn what will meet their needs and so far we are spot on with high accep- tance. At one time, we thought all regions were dif- ferent, and they are, but their processes and structures are nearly 80 percent the same. We have reached agreement that one common process is acceptable to all regions asked. This is a major breakthrough. We also have had concessions from labor relations regarding its role and from those regions that were already down the road on a couple key position implementations.

The team concepts that were applicable to this project were as follows:

Recognize the Forming, Storming, Norming, and Performing stages. Create a strong vision to rally the team. Ask the customers of the process for requirements. Have consistent sponsorship of the project. Respect, empower, and engage everyone in a change initiative. Respect differences and leverage the value of diversity. You cannot overcommunicate so communicate. Make everything an open book.

Source: William Charles (Charlie) Slaven, PMP.

Chapter 5 Leading and Managing Project Teams 173

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References A Guide to the Project Management Body of Knowledge

(PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, 2017).

Aldag, Ramon J., and Loren W. Kuzuhara, Mastering Management Skills: A Manager s Toolkit, 1st ed. (Mason, OH: Thomson South-Western, 2005).

V. Anantatmula, Project Teams: A Structured Develop- ment Approach (Business Expert Press: New York, NY, 2016).

Baldwin, Timothy T., William H. Bommer, and Robert S. Rubin, Developing Management Skills: What Great Managers Know and Do (Boston: McGraw-Hill, 2008).

Chen, Hua Chen, and Hong Tau Lee, “Performance Evaluation Model for Project Managers Using Managerial Practices,” International Journal of Project Management 25 (6) (2007): 543–551.

Daft, Richard L., Management, 9th ed. (Mason, OH: Cengage South-Western, 2010).

Dayan, Mumin, and Said Elbanna, “Antecedents of Team Intuition and Its Impact on the Success of New Product Development Projects,” Journal of Product Innovation Management 28 (S1) (2011): 159–174.

Fleming, John H., and Jim Asplund, Human Sigma (New York: Gallup Press, 2007).

Herrenkohl, Roy C., Becoming a Team: Achieving a Goal, 1st ed. (Mason, OH: Thomson South-Western, 2004).

Herzog, Valerie Lynn, “Trust Building on Corporate Project Teams,” Project Management Journal 32 (1) (March 2001): 28–35.

Kloppenborg, Timothy J., and Joseph A. Petrick, “Leadership in Project Life Cycles and Team Char- acter Development,” Project Management Journal 30 (2) (June 1999): 8–13.

Kloppenborg, Timothy J., Arthur Shriberg, and Jayashree Venkatraman, Project Leadership (Vienna, VA: Management Concepts, Inc., 2003).

Lee-Kelley, Liz, and Tim Sankey, “Global Virtual Teams for Value Creation and Project Success,” International Journal of Project Management 26 (1) (2008): 51–62.

Liu, Li, and David Leitner, “The Antecedents and Effect of Ambidexterity in the Management of Complex Engineering Projects,” Proceedings Project Man- agement Institute Research and Education Confer- ence 2012, July 2012, Limerick, Ireland.

Lussier, Robert N., and Christopher F. Achua, Leader- ship: Theory, Application, Skill Development, 4th ed. (Mason, OH: South-Western Cengage Learning, 2010).

Melkonian, Tessa, and Thierry Picq, “Opening the Black Box of Collective Competence in Extreme Projects: Lessons from the French Special Forces,” Project Management Journal 41 (3) (June 2010): 79–90.

Merla, E., The Agile Minded Professional: 7 Habits to Agility Success, Project Management Institute, 2011.

Mueller, Ralf, and J. Rodney Turner, “Cultural Differ- ences in Project Owner–Project Manager Commu- nications,” Innovations Project Management Research 2004 (Newtown Square, PA: Project Man- agement Institute, 2004): 403–418.

Opfer, Warren, “Building a High-Performance Project Team,” in David I. Cleland, ed., Field Guide to Project Management, 2nd ed. (Hoboken, NJ: John Wiley & Sons, 2004): 325–342.

Owen, Jill, et al., “The Role of Leadership in Complex Projects,” Proceedings Project Management Insti- tute Research and Education Conference 2012, July 2012 Limerick, Ireland.

Pellerin, Charles J., How NASA Builds Teams: Mission Critical Soft Skills for Scientists, Engineers, and Project Teams (Hoboken, NJ: John Wiley & Sons, 2009).

PMI Code of Ethics and Professional Responsibility, http://www.pmi.org/About-Us/Ethics/~ /media/PDF/Ethics/ap_pmicodeofethics.ashx, accessed June 12, 2013.

Rath, T., and B. Conchie, Strengths-Based Leadership: Great Leaders, Teams, and Why People Follow (New York: Gallup Press, 2008).

Senge, Peter, Richard Ross, Bryan Smith, Charlotte Roberts, and Art Kleiner, The Fifth Discipline Field- book: Strategies and Tools for Building a Learning Organization (New York: Doubleday, 1994).

Schlenkrich, Lara, and Christopher Upfold, “A Guide- line for Virtual Team Managers: The Key to Effec- tive Social Interaction and Communication,” Electronic Journal Information Systems Evaluation 12 (1) (2009): 109–118.

Streibel, Barbara J., Peter R. Sholtes, and Brian L. Joiner, The Team Handbook, 3rd ed. (Madison, WI: Oriel Incorporated, 2005).

174 Part 2 Leading Projects

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Thamhain, Hans J., “Team Leadership Effectiveness in Technology-Based Project Environments,” Project Management Journal 35 (4) (December 2004): 35–46.

_____, “Influences of Environment and Leadership on Team Performance in Complex Project

Environments,” Proceedings, Project Management Institute Research and Education Conference 2010.

Wagner, Rodd, and Gale Muller, Power of 2: How to Make the Most of Your Partnerships at Work and in Life (New York: Gallup Press, 2009).

Endnotes 1. Daft, Richard L., Management, 9th ed.

(Mason, OH: Southwestern Cengage Learning, 2010): 5.

2. Lussier, Robert N., and Christopher F. Achua, Leadership: Theory, Application, Skill Develop- ment, 4th ed. (Mason, OH: South-Western Cen- gage Learning, 2010): 6.

3. PMBOX® Guide 526. 4. PMBOK® Guide 537. 5. Adapted from Herrenkohl, Roy C., Becoming a

Team: Achieving a Goal (Mason, OH: Thomson Southwestern, 2004): 185 and 216–217; Opfer, Warren, “Building a High-Performance Project Team,” in David I. Cleland, ed., Field Guide to Project Management, 2nd ed. (Hoboken, NJ: John Wiley & Sons, 2004): 326–327; and Melk- onian, Tessa, and Thierry Picq, “Opening the Black Box of Collective Competence in Extreme Projects: Lessons from the French Special Forces,” Project Management Journal 41 (3) (June 2010): 79–90.

6. Merla, E., The Agile Minded Professional: 7 Habits to Agility Success, Project Management Institute, 2011.

7. Thamhain, Hans J., “Team Leadership Effective- ness in Technology-Based Project Environ- ments,” Project Management Journal 35 (4) (December 2004): 39.

8. Adapted from Herzog, Valerie Lynn, “Trust Building on Corporate Project Teams,” Project Management Journal 32 (1) (March 2001): 33– 34; and Kloppenborg, Timothy J., and Joseph A. Petrick, “Leadership in Project Life Cycles and Team Character Development,” Project Manage- ment Journal 30 (2) (June 1999): 11.

9. Anantatmula, Vittal, Project Teams: A Structured Development Approach (Business Expert Press: New York, NY, 2016).

10. Adapted from Schlenkrich, Lara, and Christo- pher Upfold, “A Guideline for Virtual Team Managers: The Key to Effective Social Interaction and Communication,” Electronic Journal of Infor- mation Systems Evaluation 12 (1) (2009): 110.

11. Mueller, Ralf, and J. Rodney Turner, “Cultural Differences in Project Owner–Project Manager Communications,” Innovations Project Manage- ment Research 2004 (Newtown Square, PA: Proj- ect Management Institute, 2004): 403–418.

Chapter 5 Leading and Managing Project Teams 175

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C H A P T E R 6

Stakeholder Analysis and Communication Planning

Humans are social animals who engage with each other in complex ways, espe- cially in artificial environments such as organizations and projects. Inexperienced project managers can become buried in the control of the project plan s tactical aspects and miss the more strategic components like stakeholder engagement and effective communication. Ultimately, successful delivery of a project is about both managing the tangible outputs (which are generally easily and objec- tively measured (time, cost, and project deliverables) and leading others through the more strategic and intangible outcomes (relations, power, influence, motiva- tion, interests, etc.). Traditionally, measures of success focus on scope, time, cost, and quality to determine the success of the project as an entity. However, a more accurate measure of success also considers the longer-term outcomes delivered by what your project stimulated to happen after it was complete.

For example, the Sydney Opera House was a disaster as a project, but it made highly significant contributions to the culture, identity, meaning, and belonging of the Australian nation well beyond being a failed project, and there are many other examples like this in human history. Equally, there are project successes that

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CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Enumerate, describe, and prioritize each set of stakeholders for a project. List each section of a project commu- nications plan and describe the role each plays. Build a communica- tions matrix for a real project. Develop strategies for stakeholder management.

BEHAVIORAL OBJECTIVES: Tell how to build project relationships and why they are important for communications. Develop a project communications management plan for a real project. Plan, conduct, and improve project meetings.

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only make negative contributions to society. This is because your stakeholders have varying perceptions of the worth of the project.

Stakeholders and your communications with them are highly subjective aspects of projects and more difficult to manage than some of the hard skills dis- cussed in earlier chapters. As such, these aspects are often not managed with anywhere near the time and thought investment of the tangible aspects of a proj- ect. And while not every project manager (PM) needs to be a skilled wordsmith or a psychologist (though these would, in fact, be very useful skills for a PM to have), the PMBOK ® is now starting to build more content around these aspects of leading and managing projects, and there is increasing literature acknowledg- ing the importance of the soft skills required to be a successful project man- ager. Capable project managers invest effort to create and maintain informed stakeholder engagement matrices and insightful communications plans. They know whom to engage at what stage of the project (including critical stake- holders before the project starts, at times), at what frequency, and through what medium to secure optimal results. They then implement this plan and adjust as circumstances change. In essence, this is the art of project management.

One effective and fun way a PM can accelerate the development of their stakeholder engagement and communication skills is to use metaphor reflections developed by Arthur Shelley. This approach uses animals to represent behaviors and stimulate constructive conversations about interactions between people. The Organizational Zoo describes a set of 27 characters that collectively represent the most common behaviors in the Zoo (that is, your team, project, organization, or community). They are easy to remember (one for each letter of the alphabet, plus one double ), and the cartoon characters help to make the conversation fun. Team members profile themselves and their stakeholders in order to under- stand what they are like and how they should engage with them. Because we all have considerable prior knowledge of animals, understanding is intuitive, and the tool makes it easy to quickly assess our behavioral environments. It is clear a

10.2 Manage Communications

10.1 Plan Communications

Management

Communications Matrix

Agendas Minutes Issues Log Meeting Evaluation

Lessons Learned Register and Retrospectives

13.3 Manage Stakeholder Engagement

13.2 Plan Stakeholder Engagement

Stakeholder Engagement Assessment matrix

13.4 Monitor Stakeholder Engagement

13.1 Identify Stakeholder

Stakeholder Register

4.2 Develop Project Management Plan

4.4 Manage Project Knowledge

PMBOK® GUIDE Topics:

Identify stakeholders Plan stakeholder engagement Manage stakeholder engagement Monitor stakeholder engagement Plan communications management Manage communications

CHAPTER OUTPUTS Stakeholder register Stakeholder engage- ment assessment matrix Strategies for manag- ing different stakeholders Communications matrix Meeting agenda Meeting minutes Issues log Meeting evaluation

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mouse does not approach a lion in the same way it would approach a dog, and a lion leader is different from an eagle.

In projects, the use of creative tools such as metaphor and reflective conversa- tions is becoming more common and makes a significant contribution to success and the learning experiences of those involved. The free online profiler can be used for project team activities and to discover more about your own inner animals.

www.organizationalzoo.com/profiler Copyright Arthur Shelley, 2013

Image artist John Szabo

6-1 Identify Stakeholders Projects are undertaken because someone needs the project’s output. A project must sat- isfy its users and their needs to be successful. Several things can complicate this goal. First, there may be multiple users, and each may have different wants and needs. Second, often end-users may not fully understand what they want because they do not know what alternatives may be available. Third, the customer who pays for the project may not be the actual person or group who uses the project deliverable or outcome, and the customer may not fully understand the end-users’ needs. Fourth, when someone else is

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178 Part 2 Leading Projects

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paying for the project, some users will ask for many project outcomes that are expensive or time consuming to deliver. Finally, many stakeholders, in addition to the users of a project’s outcomes, have an interest in the project. Project managers need to first under- stand their stakeholders, build relationships with them, and then develop a communica- tions management plan for managing them.

6-1a Find Stakeholders One way to understand who stakeholders are is to ask, “Who will use, will be affected by, or could impact this project?” The answer includes users of the project results and others who may have some changes forced upon them by the project outcomes. It also includes people and groups who might choose to influence the project in some way. We use the identify stakeholders process to determine the people, and groups, who might impact or be impacted by some aspect of our project. Stakeholders include people who:

Work on the project Provide people or resources for the project Have their routines disrupted by the project Monitor regulations, laws, and standards of practice at local, county, state, and fed- eral levels

Another way to identify stakeholders is to determine whether they are internal to the organization performing the project or external to it. Examples of project stakeholders based on these categories are shown in Exhibit 6.1. Note that there are potentially more types of stakeholders affected by the process of performing the project than by the proj- ect results and more external than internal stakeholders.

Project managers and project core teams (often in consultation with the project spon- sor) can use the examples in Exhibit 6.1 to find possible project stakeholders. This can be done using a brainstorming technique. Classic rules of brainstorming apply—initially, the emphasis is on generating a long list of potential stakeholders in the first column of a

EXHIBIT 6.1

EXAMPLES OF PROJECT STAKEHOLDERS

INTERNAL EXTERNAL

Affected by Project Process Owner Sponsor Project Manager Functional Managers Competing Projects Financing SourceProject Core Team Subject Matter Experts Employees Stockholders

Suppliers Partners Creditors Government Agencies Special Interest Groups Neighbors Client Professional Groups Media Taxpayers Union Competitors

Affected by Project Result Internal Customer Sponsor Users

Client Public Special Interest Groups

Chapter 6 Stakeholder Analysis and Communication Planning 179

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chart without evaluating and analyzing them. It may be easy to construct this chart on a large work surface such as a whiteboard or flip chart. Another suggestion is to be spe- cific; identify stakeholders by name when possible.

For each potential stakeholder, list the various project processes and results in which he or she might have an interest. Consider financial, legal, and emotional interests of potential stakeholders. The project charter can be useful here. Many stakeholders have an interest in multiple aspects of a project. Once the stakeholders and their interests have been listed, they may be combined into like groups with the same interests.

6-1b Analyze Stakeholders Stakeholder analysis is a stakeholder identification technique composed of gathering and evaluating information to determine whose interests should be emphasized through- out the project. The first part of stakeholder analysis is to prioritize the stakeholders. Prioritization is important because on many projects, there are too many stakeholders to spend a great deal of time with each. While it is important not to ignore any stake- holder, it also makes sense to concentrate on those who are most vital. Stakeholders are frequently prioritized based upon level of:

1. Power—ability to get others to do something 2. Legitimacy—perception that their actions are appropriate 3. Urgency—time sensitivity and legitimacy of claim1

Some organizations use additional criteria such as interest, influence, and impact. Some organizations only use two or three criteria; others may use up to six. Each aspect used can be rated on a simple scale of 1 to 3, with 3 representing the highest priority. For the first aspect, power, a stakeholder who could order the project shut down or changed in a major way would be a 3, and a stakeholder who could not change the project much would be a 1. The other aspects can be analyzed in a similar fashion. The scores from the aspects are added to form a total prioritization score.

We will use an example of an African university that changed its entire curriculum to a modular approach—a major change project. This large university was in danger of clo- sure because of failed quality ratings and public criticism of its performance. Major improvements were required. The newly appointed vice chancellor decided to modular- ize all the courses offered by the university, which allowed the students to “pick and mix” topics and create courses that better suited their needs. This change impacted every part of the university, and it was not a popular decision. The appropriate engage- ment of stakeholders was crucial. One of the major challenges to the modularization pro- gram was the shift in power base from academic management (the deans of faculty) to the academic registry. In Exhibit 6.2, you can see that the academic registrar scores highly in every line. This shift in power was always going to meet resistance, and the program manager would need to carefully consider the positions of the three key stake- holder groups to find an appropriate strategy.

By determining who the stakeholders are and what each group wants, project man- agers effectively:

Set clear direction for further project planning, negotiating, and execution Prioritize among competing objectives Learn to recognize complex trade-offs and the consequences of each Make and facilitate necessary decisions Develop a shared sense of risk Build a strong relationship with their customers

180 Part 2 Leading Projects

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Lead associates, customers, and suppliers with empowering style and principles Serve as good stewards of the resources of both the parent and customer organizations

The project team should next select the top 10 to 15 stakeholders for emphasis in the remainder of their planning. The stakeholders with the highest total scores are often con- sidered to be key influencers for the project. The project manager and the core team should also plan to periodically review this prioritized list of stakeholders, as the relative importance may change as the project progresses, especially if the project goals are not clear at the outset. While from a practical standpoint, project managers need to be espe- cially attentive to the top stakeholders, the enlightened “management for stakeholders” approach also encourages project managers to ensure that interests of all the stake- holders, including less powerful ones, are considered.2 This approach of giving prefer- ence to the most important stakeholders while recognizing needs of all stakeholders requires judgment, and the advice of the sponsor is often helpful.

One additional consideration is that various stakeholders often have competing inter- ests. For example, the client may want the work done quickly, while the accountant is worried about cash flow. Exhibit 6.3 itemizes how different types of stakeholders fre- quently define project success. Another consideration is that each project was selected to support a specific business purpose and that purpose should help determine the rela- tive importance of various stakeholders.

It is not necessary that all stakeholders favor the project. Competitors in the business, public interest groups, voluntary organizations that promote environmental sustainability and, occasionally, a segment of end-users may oppose the project and its execution. The project manager must identify them and monitor their actions closely.

EXHIBIT 6.2

MODULAR COURSES: STAKEHOLDER IDENTIFICATION AND PRIORITIZATION MATRIX

VICE CHANCELLOR

DEANS OF FACULTY (*)

ACADEMIC REGISTRAR: LECTURERS: (*)

STUDENT SUPPORT STUDENTS

What Is Important to This Stakeholder

Power 3 3 3 2 1 1

Interest 3 1 2 1 2 2

Influence 1 3 2 2 1 1

Impact 3 2 3 1 1 1

Urgency 2 1 2 1 1 1

Legitimacy 2 1 3 3 1 3

Total: 14 11 15 9 7 6

Priority (Key or Other):

Key Key Key Secondary Other Other

(*) Lecturers and the deans are unlikely to be homogeneous in their views—more information is needed to identify groupings and interest areas. For this case, we have kept it simple. Source: Louise Worsley.

Chapter 6 Stakeholder Analysis and Communication Planning 181

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If the project team developed the stakeholder identification and prioritization matrix without their sponsor, now would be a good time to share it with the sponsor and ask for feedback. Chances are good the sponsor will want to make some adjustments before the team continues with the stakeholder management plan. Sponsors are especially useful in helping to sort out conflicting priorities. Typically, when a conflict exists, external paying customers and top management are considered to be highly important stake- holders. The project team primarily considers these top stakeholders while they:

Develop a communications plan (later in this chapter) Define the scope of the project (see Chapter 7) Identify threats and opportunities (see Chapter 11) Determine quality standards (see Chapter 12) Prioritize among cost, schedule, scope, and quality objectives (see Chapter 12)

6-1c Document Stakeholders The primary output of the “identify stakeholders” process is a stakeholder register. The stakeholder register is a repository of information regarding all project stakeholders. Teams use it to develop strategies to either capitalize upon stakeholder support or to miti- gate the impact of their resistance. The stakeholder register provides input to relationship building with the various stakeholders and helps determine their requirements. In turn, these requirements serve as the basis of developing project scope. The stakeholder register is a living document that changes as needed. A stakeholder register often is in the format of a matrix. In the stakeholder register shown in Exhibit 6.4, we start to evaluate the interests of the different stakeholder groups. Sometimes referred to as the WIIFT

EXHIBIT 6.4

MODULAR COURSES: PROJECT STAKEHOLDER MATRIX

STAKEHOLDER INTEREST IN PROJECT PRIORITY SUPPORT/MITIGATION STRATEGIES

Vice Chancellor Make major improvements in university services and avoid government intervention.

Key Consult on target improvement areas—use his power to support key and difficult changes.

Deans of Faculty Protect against changes that could influence their power base. Reduce detrimental impact on faculty activities.

Key Work with nominated representatives to identify and seek out solutions to barriers to change. Establish and communicate wins for faculties.

Academic Registrar (AR)

Develop the power base of AR—demand and obtain quality improvements on courses across the university.

Key Increase visibility and power of AR. Increased visible support for AR regarding resources and political support from senior management.

Lecturers Be kept informed of impacts upon them. Reduce or resist changes that are considered negative to them.

Secondary Identify supportive champions. Create, test, and deliver carefully considered communica- tion strategy.

Student support Be able to prepare and train staff on how to roll out new schemes to current and prospective students.

Other Help student support guide staff through process—develop training programs and online web support.

Students University shows signs of improvement and ensures students’ needs are considered.

Other Set up consultation and communication groups. Keep informed.

Source: Louise Worsley.

Chapter 6 Stakeholder Analysis and Communication Planning 183

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(what’s-in-it-for-them), this analysis can be used to help identify where there may be com- mon areas of interest between the groups, and note that what made this particular pro- gram complex was the absence of common ground. Strategies would need to be sought to change positions or reduce the impact of the behaviors of some of the groups.

6-2 Plan Stakeholder Engagement Project teams plan stakeholder engagement both by creating a tool called a stakeholder engagement assessment matrix and by planning to build relationships with the stakeholders.

6-2a Creating a Stakeholder Engagement Assessment Matrix Project teams create a stakeholder engagement plan to define how they will effectively engage stakeholders in planning and performing the project based on the analysis of the stakeholders’ needs, wants, and impacts. A primary tool used in this plan is the stakeholder engagement assessment matrix. This matrix typically includes a first col- umn showing the stakeholders. For each stakeholder, additional columns may repre- sent how much they are currently supporting or opposing the project, where you would like them to be, barriers to their changing, and strategies you may employ to move them. Strategies for powerful and supporting stakeholders may include accepting their ideas, compromising, or offering them trade-offs, while strategies for opponents might entail doing the minimum possible or fighting their demnds.3 It is not uncom- mon to think that the best one can do with opposing stakeholders is to help move them to a neutral position, while those who are unaware of or neutral toward the proj- ect may be turned into supporters.

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184 Part 2 Leading Projects

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Exhibit 6.5 identifies both the current and target positions of the stakeholder groups. The greater the change in position, the greater the risk and the greater the engagement effort required. Student Services had a relatively unimportant position in the old system but would be critical to the new modularized operation. Significant expenditure was anticipated in this area. It is of interest to note that the initial analysis (see Exhibit 6.4) had identified this group as “other stakeholder.” As the nature and impact of changes become clearer, they can alter the relative importance of different groups. Stakeholder positions and stakeholder strategies must be reevaluated through- out the project.

6-2b Planning to Build Relationships with Stakeholders Project managers and teams seek to develop strong working relationships with important stakeholders. This is an ongoing process throughout the life of the project. In fact, the project manager normally continues to nurture the relationship even after the project is completed to increase the chances of securing future project work and to maintain good will with the external stakeholders. In building relationships both within the project core team and with other stakeholders, project managers need to remember that mutual respect and trust greatly enhance the prospect of project success. Therefore, relationship-building activities that lead to respect and trust should be planned and carried out carefully.

EXHIBIT 6.5

MODULAR COURSES STAKEHOLDER ENGAGEMENT ASSESSMENT MATRIX

STAKEHOLDER CURRENT POSITION

TARGET POSITION BARRIERS TO CHANGE STRATEGY

Vice Chancellor Leading Leading Competing day-to-day priorities Ensure engagement is ‘efficient’ and effec- tive. Consider extending role of deputy Chancellor to cover for some day-to-day activities.

Deans of Faculty Resistant Neutral, Supportive, or Leading

Some Deans more powerful than others (relates to student numbers and academic ratings). ‘Power owners’ are very influential.

Consider each Dean’s WIIFT individually. Consider strategies for individuals as well as the group.

Academic Registrar (AR)

Supportive Leading Competing day-to-day priorities—lack of leadership skills.

Engage deputy, provide skills and mentorship.

Lecturers Unaware to neutral

Neutral or supportive

Very large group with veto power through unionized actions.

Involve HR and legal department to evalu- ate all changes that may impact lecturers. Identify supportive champions and stake- holder groupings for engagement.

Student support Neutral Leading Not considered important by academic staff—services currently limited and not highly rated.

Provide consultancy support to team to re- design and promote new services (includ- ing student website).

Students Unaware Neutral Very large group. Student repre- sentative council not well resourced or highly valued by students.

Set up consultation and communication groups. Keep informed. Consider use of social media.

Chapter 6 Stakeholder Analysis and Communication Planning 185

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AGILE A principal idea in Agile is that relationships with stakeholders need to be based uponcollaboration, communication, and trust. Analyzing stakeholder information helps the Agile team understand them better and leads to effective relationship building. It makes more sense for Agile as client interaction is continuous and desirable throughout the project life cycle.

Typically, relationship-building activities are most effective when they are used in the process of planning a project. Project relationship-building activities (described more fully below) that are especially useful include the following:

Share individual motives. Encourage open communication. Jointly establish agenda. Use shared learning. Regularly celebrate success. Share enjoyment of project. Use appropriate decision-making and problem solving.4

Establishing a positive relationship early with all key stakeholders is vital for two rea- sons. First, it helps create a desire on the part of stakeholders to give positive support to the project—or at least refrain from disrupting the project. This early building of a coali- tion of supporters and engagement of opposition can help to positively shape the social and political context of the project and lead to success.5 Second, it serves as the commu- nications foundation for the project. The remainder of the project planning and execu- tion are greatly enhanced by effective communication channels with key project stakeholders.

The sponsor, project manager, and core team can establish powerful and meaningful relationships with key stakeholders by delivering on all promises, always providing fair treatment, creating a sense of pride by association, and even helping the stakeholder develop a passion for the project.6 This starts by learning what motivates each stake- holder. The old saying “What is in it for me?” describes what each stakeholder wants, and that is what the project team needs to understand. Stakeholders who feel threatened can disrupt a project during its process and are less likely to perceive that they receive project benefits in the end. Unhappy stakeholders are a sign of project failure. On the other hand, stakeholders can be treated as partners right from the start of planning by speaking their language and providing them opportunities to participate. Here are some things that customers (one of the primary stakeholders) value most from a contractor who is performing the project:

A sincere invitation to early and continued involvement Responsiveness Transparency Reliability7

These stakeholders are more likely to take ownership in the project by educating the project team about their needs and making timely project decisions. Consequently, sta- keholders are more likely to feel that their expectations are in line with the project team’s plans. They are more likely to go beyond merely inspecting results and writing checks. Further, they may participate early and often when their input is meaningful and they feel that the project is successful. The important thing for project managers to remember is that developing respect and trust among all project stakeholders is a goal that must be

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started early and continued throughout the project. Stakeholder relations and engage- ment are just as critical to project success as the more technical planning and should demand equal attention from project managers.

6-3 Manage Stakeholder Engagement Manage stakeholder engagement is a process of the project team communicating and working with stakeholders to satisfy their needs (and additional desires, when possible), handle issues quickly, and encourage active stakeholder participation throughout. This process can be visualized as shown in Exhibit 6.6, with managing on the left and moni- toring on the right.

The first part of managing stakeholder engagement—understanding stakeholder assumptions—was performed while creating the charter (Chapter 3), along with the stake- holder register and stakeholder engagement assessment matrix discussed earlier in this chapter. The requirements matrix, which will be developed in the following chapter, is also helpful in understanding stakeholder assumptions. Different stakeholders may hold very different assumptions concerning the project at the outset, and these assumptions form the basis of their expectations. Therefore, the project manager clarifies the assump- tions, challenges and negotiates some of them, and uses them in project planning.

These clarified assumptions are then stated as expectations regarding project deli- verables, features of the product, timelines, costs, quality measures, and generally how the project manager and team will act. Next, the stakeholders have a chance to agree or challenge the expectations before committing to them. The expectations are then documented.

EXHIBIT 6.6

MANAGING AND MONITORING STAKEHOLDER ENGAGEMENT

Understand Stakeholder Assumptions

Clarify Stakeholder Assumptions

Achieve According to Stakeholder Assumptions

Adjust Strategies as

Needed

Reconfirm Stakeholder Expectations

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Chapter 6 Stakeholder Analysis and Communication Planning 187

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AGILE

During project execution, the team works toward satisfying these expectations. This involves work between project meetings to complete assigned activities and to quickly resolve problems that have surfaced. Concurrent with the achievement of expectations is the continual recommitment to the expectations. One method that project teams can use to reconfirm expectations is to share planning documents, such as schedules, with stakeholders. The team informs the stakeholders that all the planning documents reflect the team’s understanding of what has been asked to do. It is what the team is expected to achieve and be judged against.

Some stakeholders may identify further expectations when they see everything spelled out. Project managers often hold informal conversations with various stake- holders to ensure that they fully understand and agree with all of the planning details. Finally, as project teams report progress to stakeholders, additional expectations emerge. When additional expectations emerge, they need to be considered in terms of the project’s formal change control process and, if accepted, the project plan will be revised and these additional expectations would become additional project activities to be performed. All of the activities related to managing engagement increase support from those stakeholders who favor the project and decrease resistance from other stakeholders.

6-4 Monitor Stakeholder Engagement Monitor stakeholder engagement is the process of engaging stakeholders and managing relations with them effectively. The vertical box on the right in Exhibit 6.6 shows three things a project manager must monitor throughout the process of managing stakeholder expectations: relationships, communications, and lessons learned. Through honest and ethical behavior, the project manager and project team must build trust with all project stakeholders. They need to continually manage effective two-way communications with all stakeholders as described in the communications plan. This includes a true willing- ness to encourage stakeholders to ask probing questions, as that is an effective way to develop confidence with some stakeholders. Finally, they should use lessons learned from previous projects and previous phases of the current project. Armed with trusting relationships, effective communications, and methods to overcome some problems from previous projects, the team is prepared to adjust strategies and plans as needed to control stakeholder engagement.

On Agile projects, stakeholders need to be educated about their roles; alerted in advance concerning changes; and request early and continuous feedback. These are all excellent methods to use on any project.

6-5 Plan Communications Management The project team should next create the communications management plan. This plan considers stakeholders’ information desires and guides the project communications. It needs to be a living document that adapts to changing project needs.

6-5a Purposes of a Project Communications Plan Projects face many challenges, including technical, cost, and schedule difficulties. Failure to manage any of them well can throw off a project. Perhaps the most common

188 Part 2 Leading Projects

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challenge to project success is communication. Many projects require a group of people to work together who have not done so before. Projects may involve people from various functional areas that all have their own unique challenges. Sometimes, people from mul- tiple companies may end up working together on projects. All projects are unique and therefore they have a different set of stakeholders. “Communication leads to cooperation, which leads to coordination, which leads to project harmony, which leads to project success.”8

6-5b Communications Plan Considerations A myriad of considerations must be kept in mind when creating a communications plan. A project team can develop a workable communications plan, use it, and improve it as the project progresses. Some factors that Fiesta® San Antonio organizers considered when creating a project communication plan are shown in Exhibit 6.7. These factors apply to all project communications. Therefore, we discuss these factors first and then explain who provides information needs to the project team and to whom the team needs to supply information.

PURPOSE COLUMN The first column in Exhibit 6.8 instructs a project team to con- sider the purpose for each communication. Without good use for the communication, it makes no sense to develop it. A project manager must use effective communications to set and manage expectations of all stakeholders as well as to ensure that project work is completed properly and on time. Communications from stakeholders are necessary in

EXHIBIT 6.7

FIESTA SAN ANTONIO COMMUNICATION PLAN NEEDS

In August 2012, the Institute of Texan Cultures, a museum specializing in Texas culture and diver- sity, forged a partnership with the Fiesta® San Antonio Commission to produce a series of exhibi- tions showcasing the traditions of Fiesta®, San Antonio’s premiere festival. Fiesta® is an annual 10- day festival of over 100 events and 5 large parades. The festival draws 3.5 million visitors. It is tradi- tion for Fiesta® events to commission new medals each year to give to event-goers to wear and trade throughout the festival.

The museum’s leadership team convened with the Fiesta® San Antonio Commission’s executive director at the end of August to assemble a project management plan. The parties identified sta- keholders who would be impacted by the project. They prioritized stakeholders by influence, and divided responsibilities for developing and maintaining relationships with each of those stakeholders.

The following challenges were anticipated:

It would take time for the 120 Participating Member Organizations (PMOs) to reach their members and assemble a full collection of medals to loan to the museum. Some PMOs might be offended if their medals were not displayed more prominently than other PMOs. The museum would be engaging the same PMOs to support future exhibitions, so it was critical to maintain positive relationships.

It was clear that a comprehensive communications plan would need to be implemented to estab- lish lines of communication, nurture relationships, and manage the flow of information between stakeholders.

Source: Aaron Parks, Institute of Texan Cultures

Chapter 6 Stakeholder Analysis and Communication Planning 189

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authorizing work, determining requirements, uncovering and resolving issues and assumptions, and receiving feedback on project progress and results. Different stake- holders often have conflicting desires; effective communications are necessary to under- stand and resolve these differences. Communications to stakeholders are necessary to help them make good decisions (by understanding options and risks), assure them of adequate understanding and project progress, enable them to fully commit to the project, and be ready to accept project deliverables. Yet another communication purpose is to plan and manage escalation of issues that cannot be handled in a timely manner by the project manager. Wise project managers determine in advance how soon an issue will be escalated to the sponsor and/or other decision makers. Finally, communications plans ensure that at project conclusion, meaningful lessons can be documented to benefit future projects.

A project manager develops trust with her core team and other stakeholders partly by using open and transparent communications to the extent possible. However, she needs to respect all promises of confidentiality and to use good judgment on what is or is not appropriate to share.

STRUCTURES COLUMN The second column suggests that when an organization has adequate existing communication structures, it should use them! There is no need to reinvent every document and, indeed, it would be confusing and costly to do so. Many stakeholders in organizations are accustomed to a particular method of communications, and using that method will make it easier for them to understand you. When no exact organizational model is available for a specific communication, one can use a template, which is still easier than creating an entirely new type of document.

EXHIBIT 6.8

PROJECT COMMUNICATIONS PLAN CONSIDERATIONS

PURPOSES STRUCTURES METHODS TIMING

Authorization Existing organizational forms (reuse)

Push methods: Project life cycle

Direction setting Project specific:

Instant messaging Charter

Information seeking Templates (adapt)

E-mail Project plan

Status reporting: Unique (create)

Voice mail Milestones

Schedule Text Output acceptance

Cost Pull methods: Project close-out

People Shared document repositories Routine time

Risk Intranet Daily—member

Issues Blog (repository) Weekly—core team

Quality Bulletin boards Monthly—sponsor

Change control Interactive methods: As needed—others

Approval of project outputs Telephone—teleconferencing

Escalation Wikis

Lessons learned VOIP/videoconferencing

Groupware

190 Part 2 Leading Projects

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Using any of the three choices, project teams need to maintain version control on all of their communications. One easy method is to end the file name of every document with six numbers representing year, year, month, month, and day, day. For example, an early version of this chapter was saved on February 1, 2017, and the file name given was “Chapter 6 Stakeholder Analysis and Communication Planning 170201.” The advantage of a simple system is that the files can still be easily found by their descriptive named titles, but they can also be sorted easily by the last date they were updated.

METHODS COLUMN The third column in Exhibit 6.8 deals with methods of commu- nicating. Projects rely on “push” methods in which communications are sent or pushed; “pull” methods where communications are posted either on paper or in electronic form and interested stakeholders need to take the initiative to receive the communication; and interactive methods in which communications flow in multiple directions. A typical proj- ect communication plan will utilize a variety of these methods.

TIMING COLUMN The fourth column is a reminder that a project team needs to con- sider timing issues when developing a project communications plan. Communications typically are delivered according to one of three types of timing schedules. First is the project life cycle, with communications typically needed at the end of each major stage in the project and upon completion of each major project deliverable. The second timing schedule follows a more formal organizational structure. Project progress is often reported at regularly scheduled meetings. Meetings at the frontline level are usually more frequent than reports to higher levels within the organization. The third timing scheme is on an as-needed basis. Many times, a stakeholder wants to know a certain fact about a project and cannot wait until the next formal meeting or report. Project teams need to keep themselves up to date so they can handle the as-needed requests.

6-5c Communications Matrix At this point, project teams will normally assemble a project communications matrix. This matrix lists the following information:

The communications needs of each project are unique and, therefore, the assignment of communications responsibilities will vary widely from project to project. A partially completed project communications matrix for the Modular courses program is shown in Exhibit 6.9. This identifies the information needs of the program team and the stake- holders. Various methods of communication are proposed, depending on the purpose of the communication and the constraints within which the stakeholder engagement must take place. It won’t be possible to meet with the program board every day, so weekly meetings, supplemented by short one-on-one stand-ups with the Vice Chancellor are planned. It was decided to create a program board made up of key decision makers—to

Who does the project team need to learn from? What does the team need to learn from this stakeholder? Who does the project team need to share with? What does this stakeholder need to know? When do they need to know it? What is the most effective communications method for this stakeholder to

understand? Who on the project team is responsible for this communication? (the owner)

Chapter 6 Stakeholder Analysis and Communication Planning 191

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serve as an important communication and decision-making conduit for the program. The actual communication plans impact the scope of the project. For example, having a program newsletter adds to the scope—the effort and costs of the project. In complex projects, the communications plan can form a major proportion of the project scope.

Stakeholders want to know how much work has been successfully delivered (accep- tance tests passed) and how much work is remaining. Project team members use the information to motivate and improve their performance. Sponsors use the information to strategically understand if the project team will complete all work on time and within budget. Other stakeholders may share the sponsors’ overall concern but want details of work that concerns their functions. While these communication needs are common on all projects, Agile projects have unique reports such as velocity, burn-down charts, run- ning tested features, and earned business value.9

6-5d Manage Project Knowledge If a company does extensive project work and uses project management capability as an organizational strength, it is important to keep developing expertise in it. One way to develop and expand expertise is to capture and reuse the knowledge developed. Knowl- edge can be defined as insights derived from information and experience. Knowledge also is “a conclusion drawn from information after it is linked to other information and compared to what is already known.”10 Ironically, knowledge will remain dormant, and not very useful, until it is reflected in future actions. Manage project knowledge is the process of using and developing knowledge to help improve both the current project and the capability of the organization.

To increase knowledge and the successful use and reapplication of it, organizations often create a lessons learned knowledge base. For this database to be useful, it is important to

EXHIBIT 6.9

MODULAR COURSES – PROJECT COMMUNICATIONS MATRIX

STAKEHOLDER PROJECT INFO. NEEDS

STAKEHOLDER INFO. NEEDS METHODS TIMING

Program Board (Vice Chancellor)

Direction, strategy, budget, authorizations

Status—progress and SH positions

Scheduled board meetings, cir- culated minutes, one-on-ones with Vice Chancellor

Weekly and as needed Daily 15-min. stand-up with Vice Chancellor

Deans of Faculty Concerns, WIIFT Plans, changes to practices affect- ing their staff

Program newsletter, across- faculty workshops, informal one-on-ones consultation

Every 2-3 weeks depending upon concerns.

Academic Registrar (AR)

Requirements Resource com- mitments, status

Workshops with team, e-mails Frequent in early stages then timed to delivery points.

Lecturers Concerns Plans, changes to practices affect- ing them

Program newsletter, presenta- tions, e-mails

Monthly

Student support Requirements Resource com- mitments, status

Workshops with team, e-mails Frequent in early stages then timed to delivery points

Students Concerns Changes to enrollment procedures

Social media, e-mails, presentations

E-mail and meetings

192 Part 2 Leading Projects

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communicate project successes and failures from all aspects of the project process. Captured throughout the life of the project, recommendations to improve future performance can be based on technical, managerial, and process aspects of the project. In addition, part of the project closeout process should include facilitating a lessons learned session for the entire project, especially on unsuccessful projects. Remember, “people learn, not organizations. … Knowledge is created and exchanged through trusted relationships and social interaction.”11

6-6 Manage Communications Manage communications includes all the work associated with the project communica- tions plan, starting with planning for it; generating it; organizing and sharing it; and, finally, storing and disposing of it. In order to successfully communicate the right project informa- tion to the right stakeholders, in the right format, at the right time, several things must hap- pen. First, all of the information required to develop the project communications management plan should be assessed and obtained. Then, while the project is under way, the project manager and team need to determine any additional information needs not already uncovered, establish an information retrieval and distribution system, collect infor- mation on executed work and work in progress, and then report progress to all stakeholders.

6-6a Determine Project Information Needs Many stakeholder information needs were identified during communications planning, such as authorization to proceed, direction setting, status reporting, and approval of out- puts. Often, other information needs arise during project execution. All needs must be han- dled accurately, promptly, and in a manner that balances effectiveness with cost and effort.

Communicate accurately—Accurate communications means not only being factually honest but also presenting information in a manner that people are likely to inter- pret correctly. Communicate promptly—“Promptly” means providing the information soon enough so that it is useful to the recipient to facilitate timely decisions. Communicate effectively—Effectiveness is the extent to which the receiver opens, understands, and acts appropriately upon the communication.

It is very easy to just copy everyone on an e-mail, but that is neither convenient nor effective for some people. Face-to-face communication tends to be the most effective, the telephone less so, and e-mail and formal reports even less. It is in the project manager’s best interest to communicate effectively since the information provided allows stake- holders to make decisions, understand real challenges, remain motivated, and believe that the project is in control.

6-6b Establish Information Retrieval and Distribution System Project information can be retrieved from many different sources. It can also be distrib- uted via many systems. Project management software such as MS Project is frequently used for schedule information and sometimes for cost and human resource information. Project managers use many methods of communicating. In this information age, project managers need to keep three things in mind with communications:

1. Target the communications. More is not better when people are already overloaded. 2. Many methods are available, and the choices change rapidly. Use new methods if use-

ful, but do not discard proven methods just for the sake of change.

Chapter 6 Stakeholder Analysis and Communication Planning 193

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AGILE

3. Projects often have many stakeholders who need specific information. Use your com- munications plan and always keep asking if there is any other stakeholder in need of upward, downward, or sideways communications.

Tatro, Inc., uses a hosted project management page on its website that clients can access with a password to witness project progress from anywhere in the world on a 24/7 basis. It displays photos that show actual progress for the client to view.

One specific and important skill that project managers can use to retrieve information is active listening. Active listening requires focus on what the person is saying. The active listener can ask clarifying questions and paraphrase to ensure that he or she understands exactly what is meant. Making eye contact and using body language that shows eagerness encourage the speaker to continue. An effort to simultaneously understand both the meaning of the message and the hidden emotions helps the receiver to understand the full message. Recognize that many speakers are not especially skilled in communications, so paying more attention to their message than their style of delivery also helps. Often, a project manager can successfully end the conversation by orally confirming what he or she just heard and by following up with an e-mail for documentation.

6-6c Project Meeting Management Planning and conducting projects require a variety of meetings, such as meetings to:

Establish project plans Conduct the project activities Verify progress Make decisions Accept deliverables Close out projects

Meetings are an important process on projects since many important decisions are made at meetings and much time of expensive project personnel is invested in meetings.

One common feature of Agile projects is the “stand-up meeting.” These short (15 minute or less) meetings are often held at the start of each day with no comforts such as coffee or chairs. Each project team member briefly states what she accomplished the previous day, what she plans to accomplish this day, and what obstacles may challenge her.

Project meetings should be conducted as efficiently and effectively as possible. One way to improve the project meeting process is to apply the simple and effective plan- do-check-act (PDCA) model.

PDCA MODEL The idea behind process improvement with the PDCA is that any pro- cess practiced repeatedly, focusing on reusing and adapting things that worked well and avoiding things that did not work well, improves over time. Exhibit 6.10 depicts the PDCA model as it is applied to project meetings. Each of the four sections will be explained in more detail in the following sections, but, in short, this model gives advice on how to do the following for meetings:

P Plan: prepare an advanced agenda to guide the meeting D Do: conduct the meeting and write meeting minutes C Check: evaluate the meeting and A Act: perform in-between meeting tasks.

194 Part 2 Leading Projects

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PROJECT MEETING AGENDA TEMPLATE When applying the PDCA improve- ment model specifically to improving project meetings, the first step is planning the project meeting in advance. The project manager assures that the agenda is prepared and distributed ahead of time. If a project team is meeting often, this advance agenda

EXHIBIT 6.10

PDCA MODEL APPLIED TO PROJECT MEETINGS

prepare advance agenda

conduct meeting, write minutes evaluate meeting

perform in-between

meeting tasks

Source: Adapted from Timothy J. Kloppenborg and Joseph A. Petrick, “Meeting Management and Group Character Development,” Journal of Managerial Issues (Summer 1999): 168–172.

w av

eb re

ak m

ed ia

/S hu

tte rs

to ck

.c om

Chapter 6 Stakeholder Analysis and Communication Planning 195

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preparation may be done at the end of the meeting for the next meeting. That way, everyone understands beforehand what will be covered in the upcoming meeting and will have the opportunity to prepare for the meeting. The agenda also can be helpful in deciding whether to invite a particular subject matter expert (SME) or other guest to the meeting. A project meeting agenda template is shown in Exhibit 6.11.

The top part of the agenda contains meeting logistics. The second item on the tem- plate is the meeting purpose. If a project manager cannot state in a sentence why he wants to conduct a meeting, perhaps the meeting is not necessary. The main body of the agenda has three columns. First is a list of the topics. This starts with a quick review of the agenda, because projects often move quickly, and this provides an opportunity to add or delete an item from the agenda. Also, it helps busy people rush- ing from another meeting to manage their time and focus on relevant agenda items. The major topics of the meeting are listed next in the order in which they will be covered. Often, remaining items from previous meetings or other urgent matters top the list. However, a project manager wants to be sure to cover the most important matters, even if they may not have the same sense of urgency. The second-to-the-last item on the standard agenda is the meeting summary. The project manager sum- marizes major decisions that were made as well as work assignments that were distrib- uted. This helps people remember what they agreed to do. The final item on the agenda is an evaluation of the meeting. This is explained in the check step of the PDCA model.

The second column lists the person responsible for each topic on the agenda. Typi- cally, the project manager takes care of the meeting start and close, but individual project team members may be assigned specific action items. When people know in advance that they are responsible for an action item, they are more likely to be prepared. Additionally, if the advance agenda is available for key stakeholders to see, some of the stakeholders may contact the responsible person in advance to provide input. This is a good way to keep stakeholders engaged.

The third column is a time estimate for each item. While the project manager does not need to be a slave to the clock, recognition of how long team members are in

EXHIBIT 6.11

PROJECT MEETING AGENDA TEMPLATE

Project Team PlaceTimeDate

Topic 1

Topic 2

Topic 3

Review agenda

Summary

Meeting evaluation

2 min

2 min

5 min

196 Part 2 Leading Projects

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meetings and how many items are accomplished goes a long way. People are more likely to attend a meeting if they are sure it will end on time.

PROJECT MEETING MINUTES TEMPLATE The second step in the PDCA process— “do”—means to conduct the meeting and to capture minutes as the meeting is con- ducted. Many project teams rotate the role of minutes taker so each team member feels equal. A template for taking project minutes is shown in Exhibit 6.12.

6-6d Issues Management The project minutes mirror the agenda to the extent that both refer to the same meeting. The top part of the minutes form is logistics, just as in the agenda. The four primary types of information captured in a project meeting are:

1. Decisions made 2. New issues surfaced and old issues resolved 3. Action items agreed to 4. An evaluation of the meeting

DECISIONS AND ISSUES First, any decisions that were made should be documented. Second, any new issues that surfaced or existing issues that were resolved should be recorded. An issue is a situation that requires a decision to be made, but one that the team cannot make now, usually either due to needing information or more time. An issues log is a dynamic repository of information regarding both open issues and those that have been resolved. Issues logs benefit a project in at least two ways. First, when an important issue—but not one that can be solved in the immediate meeting—is intro- duced, the project manager can add it to the open issues and not spend time on it in the

EXHIBIT 6.12

PROJECT MEETING MINUTES TEMPLATE

Resolved Issues

New Issues

Project Team TimeDate

Chapter 6 Stakeholder Analysis and Communication Planning 197

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AGILE

current meeting when more pressing matters need to be settled. Second, the issues log ensures that important issues are not forgotten. An issues log template is shown in Exhibit 6.13.

ACTION ITEMS The third type of project information is action items. Each of these is a task that one or more members of the project team agree to perform by a specific date. These are recorded, and the project manager reminds the team at the end of each meet- ing what each member agreed to do.

EVALUATION The final item to be recorded on the project meeting minutes is an evaluation of both good points from the project meeting that the team would like to repeat or at least adapt and poor points from the meeting that the team would like to avoid or perform in a different manner in the future. An experienced team can collect these points in a minute or two; the time they save in future meetings often pays great dividends. An easy way to capture these evaluations is a Plus-Delta template, as shown in Exhibit 6.14.

On Agile projects, this evaluation is called retrospectives.

When assessing the project meeting with a Plus-Delta method, a project manager can simply draw the form on a flip chart or marker board. Then, each person is asked to offer his opinion on at least one aspect of the meeting that either was good (+) that she would like to see repeated or one thing that was poor ( ) and could be overcome in future meetings. The key to making this work for the project manager is how she responds to any deltas. If the project manager responds defensively, the team members may not want to offer further suggestions.

EXHIBIT 6.13

PROJECT ISSUES LOG

OPEN ISSUES

NAME DATE OPENED ORIGINATOR POTENTIAL IMPACT PROGRESS

CLOSED ISSUES

NAME DATE OPENED ORIGINATOR HOW RESOLVED DATE CLOSED

198 Part 2 Leading Projects

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Finally, the “act” part of the PDCA cycle for project meetings is for every team mem- ber to complete the action items they promised and for the project manager to commu- nicate with the team members to make sure nothing is holding them back from their commitments. Wise project managers keep active but informal contact with team mem- bers between meetings to ensure action items are completed on time. When all steps of the PDCA cycle are applied to project meetings, the meetings improve; the team mem- bers gain satisfaction; and the project makes better progress.

PMP/CAPM Study Ideas There is a great deal of overlap between Project Communications Management and Proj- ect Stakeholders Management. Each edition of the PMBOK makes changes with and between these two groups, so be sure you are using the sixth edition if you are studying for one of the PMI certification tests. Besides developing the project charter—which is like a mini pre-plan that gives the project manager and team the authority to begin plan- ning in more detail—the only other activity that takes place during the Initiating Process Phase is Identify Stakeholders.

The main work of the next phase—the Planning Process Group—is creating the Proj- ect Management Plan. The project management plan is the aggregate of plans from each of the ten knowledge areas, including the Communications management plan and Stake- holders Management Plan. As always, you will need to be familiar with the inputs, tools and techniques, and outputs that go into each.

EXHIBIT 6.14

PROJECT MEETING PLUS-DELTA EVALUATION TEMPLATE

Summary Projects frequently have many diverse stakeholders. Some stakeholders do not know exactly what they want, and different stakeholders sometimes want dif- ferent things. The project manager and sponsor need to build effective working relationships with the project team and stakeholders. When good relationships are

built and maintained, the project team can enjoy the trust that is so helpful in successfully completing the project.

Armed with the stakeholder analysis and the project charter, a project team is ready to create a communica- tions management plan. One important component of

Chapter 6 Stakeholder Analysis and Communication Planning 199

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this plan is the communications matrix. This is the document that answers these questions:

Who needs to know something about the project? What does each need to know? When do they need to know it? What format is easiest for them to receive and understand the information? Who is responsible for sending it?

Other important aspects of a project communica- tions management plan include managing and improv- ing meetings; managing and escalating issues; and capturing and using lessons learned.

Once stakeholders have been analyzed and communi- cations are planned, the project team can get into more detailed planning of scope, schedule, resources, budget, risks, and quality—the topics of the next six chapters.

Key Terms Consistent with PMI Standards and Guides identify stakeholders, 179 stakeholder analysis, 180 stakeholder register, 183 plan stakeholder engagement, 184 stakeholder engagement plan, 184 stakeholder engagement assessment matrix, 184 manage stakeholder engagement, 186 monitor stakeholder engagement, 197

plan communications management, 188 communications matrix, 191 knowledge, 192 manage project knowledge, 192 manage communication, 193 issue, 197 issues log, 197

Chapter Review Questions 1. List three reasons why understanding stakeholders

is important to successful project management. 2. What is the difference between an internal and

external stakeholder? 3. Which three criteria should you consider when

prioritizing stakeholders? 4. When should relationship building between the

project manager/other core team members and important stakeholders occur?

5. What are some ways to build relationships within the core team?

6. What are some ways to build relationships with key stakeholders?

7. What are some important functions of commu- nication from stakeholders?

8. What are some important functions of commu- nication to stakeholders?

9. In order to manage stakeholders’ expectations, a project manager needs to understand the stake- holders’ assumptions. Which document(s) can help with this?

10. What is the difference between “push” and “pull” methods of communication? Give examples of each.

11. What are three types of project communications timing schedules?

12. What six columns should a communications matrix contain?

13. Why is it so important to capture lessons learned in a knowledge database?

14. List the items that go into a project team meeting agenda and tell the purpose of each.

15. Describe an Agile “stand-up” meeting.

Discussion Questions 1. A new grocery store is being erected that

will demolish a neighborhood basketball court. Who would be some internal stakeholders? Who would be some external stakeholders?

2. With a few of your classmates, conduct an Agile stand-up meeting and briefly discuss the three meeting components mentioned in this chapter.

3. Think of a recent project you completed and choose three stakeholders. Prioritize them, using the six-criteria model.

4. In your opinion, what is the single most impor- tant component of building relationships within a project team? Why?

200 Part 2 Leading Projects

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5. In your opinion, what is the greatest benefit of having good communication between the project team and project stakeholders? Why?

6. Imagine you are the project manager of a team tasked with building a new hotel. When brain- storming project communication plan considera- tions, what would you list under “purposes”?

7. Using the same scenario as question 6, which timing schedule would you choose to use for each communication? Why?

8. Create a project meeting agenda for an upcoming project (or class) meeting you have.

9. Give an example of a time you have used push, pull, and interactive communication methods. Why did you choose the method you did based on the circumstances?

10. Betty, a project manager, sent out agendas before an upcoming meeting to everyone involved. During the meeting, she got a team member to take minutes. After the meeting, Betty followed up with team members to check on their prog- ress. Evaluate Betty’s actions using the PDCA model. What, if anything, could she have done better?

PMBOK ® Guide Questions 1. The “component of the project management plan

that describes how project communications will be planned, structured, and monitored” is the: a. communication model b. communications management plan c. stakeholder register d. organizational breakdown structure

2. In order for a new grocery store to be erected, a neighborhood basketball court located on the building site will have to be demolished. The neighborhood children who liked to play basket- ball there could be considered . a. subject matter experts b. internal stakeholders c. external stakeholders d. customers

3. A common method of prioritizing stakeholders is based on the stakeholders’: a. legitimacy b. power c. urgency d. all of the above

4. The components of a project communications management plan should typically include the purpose of the communication, structure (for- mat, content, etc.), methods or technologies to be used, and : a. work performance data b. time frame and frequency c. stakeholder priorities d. lessons learned

5. Most project meetings are formal, planned events between project stakeholders. Effective meetings typically have a purpose, a prearranged time and

place, a list of attendees and their roles, and an agenda with topics and issues to be discussed. After the meeting, are circulated. a. refreshments b. business cards c. meeting minutes d. lessons learned

6. The “project document that includes the identifi- cation, assessment, and classification of project stakeholders” is called the . a. stakeholder engagement matrix b. organizational breakdown structure c. stakeholder register d. weighted scoring model

7. A document used to manage points of discussion or dispute that arise during projects, in order to monitor them and ensure that they are even- tually resolved and added to lessons learned, is called a(n) . a. risk register b. stakeholder register c. SWOT analysis d. issue log

8. One of the key responsibilities of a project man- ager is to manage stakeholder expectations. It is important for the project manager to have inter- personal or “soft” skills that include: overcoming resistance to change, resolving conflict, active lis- tening, and . a. displaying confidence b. subject matter expertise c. ability to command and control d. building trust

Chapter 6 Stakeholder Analysis and Communication Planning 201

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9. The process of communicating with stakeholders and working with them to meet their expecta- tions, address issues as they occur, and obtain their continued commitment to the success of the project is called . a. Manage Stakeholder Engagement b. Monitor Stakeholder Engagement c. Monitor Communications d. Manage Project Team

10. The communication method that is used for large audiences or large volumes of information and requires recipients to access the content at their own discretion, is called communication. a. push b. pull c. synchronous d. interactive

CASA DE PAZ DEVELOPMENT PROJECT

In this chapter, the first thing we need to do is understand who our stakeholders are and the importance of each set of stakeholders. The initial look at stakeholders is shown in the matrix below.

Once we have our stakeholder priority matrix, we will ask each stakeholder what they want from this project. We will then use that information to develop a commu- nications matrix showing for each stakeholder what they need to know from the project team and what they need to share with the project team, along with the most effective methods and times for these communications

to take place and who on the project team is respon- sible for each communication. We will also develop meeting agendas, minutes, issues logs, and meeting evaluations.

In Agile, the role of communication with stakeholders is much more formalized to enable the team to focus on the work. The product owner is the primary contact for all stake- holders and acts as a buffer between stakeholders and team members while the iteration is under way. The ceremonies in some Agile approaches act as a time for the stakeholders to see the progress and make comments.

I N T E G R A T E D E X A M P L E P R O J E C T S

SUBURBAN HOMES CONSTRUCTION PROJECT

Suburban Homes realizes the importance of maintaining excellent relations with all its key stakeholders. Among the stakeholders are clients who purchase homes, local law enforcement agencies, potential buyers, county and state agencies for real estate development, environmental regula- tory agencies, both local and federal, community leaders, contractors, subcontractors, local construction material sup- pliers, and the list goes on.

Suburban Homes decided to build a new community of 120 homes in a suburb of Atlanta. It has acquired 15 acres of land for this purpose. It also has submitted a preliminary plan to the local county government for approval.

Suburban Homes is thinking of hiring a consultant for developing a stakeholder management plan and

communication plan. For its stakeholder management plan, they would like to identify all the stakeholders and develop a stakeholder register. Further, it is considering selection of at least six key stakeholders for a detailed analysis of a priori- tization matrix, as shown Exhibit 6.2, and to develop a stake- holder matrix, as shown in Exhibit 6.4.

As a consultant to Suburban Homes, you are asked to develop a stakeholder engagement plan (Exhibit 6.5) and a comprehensive stakeholder management plan after develop- ing the stakeholder prioritization matrix and stakeholder matrix, as shown in Exhibits 6.2 and 6.4, respectively.

Using the stakeholder management plan, the company has also requested you to develop a communication plan that makes use of Exhibits 6.8 and 6.9.

202 Part 2 Leading Projects

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Semester Project Instructions Do each of the following for your project:

Develop a stakeholder analysis. Identify as many stakeholders as you can using Exhibit 6.1. List sta- keholders by name and title where possible. Prioritize the listed stakeholders, as shown in Exhibit 6.2. Specifically identify each stakeholder’s interests, as shown in Exhibit 6.4. Recognize that some stake- holders may have an interest in multiple aspects of the project process or results. Describe the activities you are using to build rela- tionships with your stakeholders.

Create a stakeholder engagement matrix like Exhibit 6.5. Develop a communications matrix like Exhibit 6.9. Be sure to use considerations in Exhibit 6.8 for ideas regarding purpose, structures, methods, and timing for each communications need. Document a project meeting with an advance agenda, meeting minutes, issues log, and Plus- Delta form of evaluation like Exhibits 6.11 through 6.14.

Stakeholder Prioritization Project: Casa de Paz

Stakeholder Power Legitimacy Urgency Total

Parish Council 5 5 4 14

Casa de Paz Staff 5 5 4 14

Board Members 5 5 3 13

Community Council 3 5 4 12

Casa de Paz Volunteers 2 4 4 10

Residents/Future Residents of Casa de Paz 1 5 4 10

Members of Phoenix Support Group 1 5 4 10

Donors 2 3 4 9

Student Interns 2 4 2 8

Su Casa (who also serves sme community 1 5 1 7

YWCA 1 5 1 7

Protective Services 1 5 1 7

1 5 1 7

Chapter 6 Stakeholder Analysis and Communication Planning 203

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PROJECT MANAGEMENT IN ACTION

Project Communication Planning for a Distributed Project

During an IT rollout of servers, clients, networking equipment, and a central data center involving a range of subcontractors at each of the roughly 50 regional schools, the original communication plan showed:

Original communication plan

After being appointed PM for rollout and implementation, I noticed that this was far from enough and needed to be amended.

Revised communication plan

Main contractor

Subcontractor 1

Subcontractor 2

Subcontractor N

School 1

School 2

School N

Joint edu association or

administration union

Subproj 1

Subproj 2

Subproj 50

Joint edu association or

administration union

School 1

School 2

School N

Team Team

Team

Team

Team

Team

Team

Team

Team

Co re

te am

Main contractor (bundling crafts and trades)

Subcontractor 1

Subcontractor 2

Subcontractor N

204 Part 2 Leading Projects

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First of all, two on-site visits at each location were introduced in order to

1. get to know the location and the people involved and

2. make sure all environmental preconditions agreed upon had been properly set up.

For each location, there were between 5 and 20 people involved who all needed special information (depending on their role), thus multiplying the planned effort of communication considerably. How- ever, the still early discovery of the complex stake- holder situation also facilitated a degree of fast- tracking and intensifying the cooperation, which was essential to finalize the project in quality, time, and budget, despite several buffer-consuming events, with very favorable media coverage and proper proj- ect close, which otherwise would have been impossible.

Apart from the headmaster and IT teacher, what other roles did we discover ?

All teachers whose classrooms were involved (receiving equipment, have to move/exchange fur- niture, rearrange the room). Caretaker (usually the one who knew about walls, wires, changes to the building, and the construc- tion history where there were no drawings available). Owner of the building (community, private owner, society). Sponsor for each individual school (who had to agree to a detailed plan and a float sum of money. This was quite a topic since originally it was thought that a float lump sum of money could be spent on the whole project moving money between sites according to need. The need differed greatly since a newly build school (concrete/steel) poses a whole different range of tasks as compared to 150-year-old converted cas- tle schools with thick walls (think of wireless LAN, think of protection of historical monuments = no drilling of holes anywhere and a long analysis and certificates for every little change to the build- ing, think of moist or even wet intended server locations). The schools all had preferred local partners for elec- tricity (dedicated electrical phases for 19 server, power supply and network equipment, ideally dry

and ventilated and cool, usually a small moist place with no air flow at all like a broom closet of the Harry Potter type in Privet Drive). Structural fire protection authority (they had seri- ous words for the people who suggested drilling through a bulkhead firewall). Regional politicians who support the improve- ment of learning environments. Media who supported the project in terms of regional development and marketing the initiative to improve education and bring up-to date learn- ing facilities also to the more rural areas. And not to forget the neighborhood and espe- cially the parents (in particular, the ones less IT enthusiastic) who needed a good portion of con- vincing that this was something big and essential to their kids development and future chances.

What finally saved the project? 1. Initial core team brainstorming and proper stake-

holder analysis (no matter whether according to PMI, IPMA, or PRINCE2, list them all, check their expectation, interests, influence, power, degree of potential support, and involvement).

2. Two alternative Meetings informing all interested parties (obligatory to certain stakeholders and open to the public and invited media), so everyone KNEW, everyone received a roughly 50-page hand- out with detailed plans and intentions, involvement of all relevant parties, order of steps, phases of progress, ways of communication, etc.

3. A short pilot consisting of 8 schools, 2 schools of every one of the 4 different types (primary/ small, secondary/middle, gymnasium/large, special needs) helped us group the remaining location in mixed regional groups for each rollout team. Scheduling the whole procedure was a challenge because due to different sizes and varying numbers of equipment, totally different buildings, etc., there was no chance to cut everything into weekly time boxes à la sprints in Agile scrum. Instead, every team had their own stream of tasks, consisting of nearly the same steps, however, with independent underlying amounts of effort.

4. At virtually every first on-site visit, someone unex- pected played a vital role (relevant for interdepen- dency of activities, e.g., schedule, cost, resources, communication, risks, basically the whole range of

Chapter 6 Stakeholder Analysis and Communication Planning 205

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References A Guide to the Project Management Body of Knowledge

(PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management Institute, 2017).

Aaltonen, Kirsi, et al., “Stakeholder Dynamics During the Project Front-End: The Case of Nuclear Waste Repository Projects,” Project Management Journal 46 (6): 15–41.

Alderton, Matt, “What’s Your Number?” PMNetwork 26 (12) (December 2012): 48–53.

Anantatmula, Vittal, and Michael Thomas, “Managing Global Projects: A Structured Approach for Better Performance,” Project Management Journal 41 (2) (April 2010): 60–72.

Assudani, Rashmi, and Timothy J. Kloppenborg, “Man- aging Stakeholders for Project Management Success: An Emergent Model of Stakeholders,” Journal of General Management 35 (3) (Spring 2010): 67–80.

Badiru, Adedeji B., Triple C Model of Project Man- agement: Communication, Cooperation, and Coor- dination (Boca Raton, FL: CRC Press, 2008).

Basten, Dirk, Georgios Stavrou, and Oleg Pankratz, “Closing the Stakeholder Expectation Gap: Manag- ing Customer Expectations Toward the Process of Developing Information Systems,” Project Manage- ment Journal 46 (6): 70–88.

Bourne, Lynda, and Derek H. T. Walker, “Visualizing Stakeholder Influence: Two Australian Examples,” Project Management Journal 37 (1) (March 2006): 5–21.

Daft, Richard L., Management, 9th ed. (Mason, OH: South-Western Cengage Learning, 2010).

Eskerod, Pernille, Martina Huemann, and Claudia Ringhofer, “Stakeholder Inclusiveness: Enriching Project Management with General Stakeholder Theory,” Project Management Journal 46 (6): 42–53.

Fleming, John H., and Jim Asplund, Human Sigma (New York: Gallup Press, 2007).

Goodpasture, John C., Project Management the Agile Way: Making It Work in the Enterprise (Fort Lau- derdale, FL: J. Ross Publishing, 2010).

Kloppenborg, Timothy J., and Joseph A. Petrick, “Leadership in Project Life Cycles and Team Char- acter Development,” Project Management Journal 30 (2) (June 1999): 8–13.

Kloppenborg, Timothy J., and Joseph A. Petrick, “Meeting Management and Group Character Development,” Journal of Managerial Issues (Sum- mer 1999): 140–159.

Montoya, Mitzi M., Anne P. Massey, Yu-Ting Caisy Hung, and C. Brad Crisp, “Can You Hear Me Now? Communication in Virtual Product Development Teams,” Journal of Product Innovation Management 26 (2009): 139–155.

Montoya, Mitzi M., Anne P. Massey, and Vijay Khatri, “Connecting IT Services Operations to Services Marketing Practices,” Journal of Management Information Systems 26 (4) (Spring 2010): 65–85.

PM topics), we (the project core team on whistle- stop tour, usually four to five people) explained everything we said at the two kickoff meetings again, answered more questions, and made clear that local support according to schedule was vital, and deliberately failing to meet deadlines meant moving down the list and along the time line.

5. During the second on-site meeting, we checked the preconditions ready and if so delivery and setup

of IT equipment were approved, if not another school from further down the list was invited to move up if they met the criteria.

6. Every piece of equipment had a checklist, all func- tions were tested and ticked off by a technician and a school representative reporting status green,

which automatically approved the final steps includ- ing training of staff on-site by the same technicians who worked on-site the 1 2 weeks beforehand.

Bear in Mind: 1. Have a plan. You need to follow a systematic

approach throughout the project. 2. Employ structured Information. 3. Pilot what you do. 4. Communicate face to face on site. 5. Have clear rules. 6. Have a realistic time line, including buffers for all

sorts of risks and additional stakeholder involve- ment wherever necessary.

Source: Martin Kontressowitz.

206 Part 2 Leading Projects

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Mueller, Ralf, and J. Rodney Turner, “Cultural Differ- ences in Project Owner–Project Manager Commu- nications,” Innovations Project Management Research 2004 (Newtown Square, PA: Project Man- agement Institute, 2004): 403–418.

Patanakul, Peerasit, Bookiart Iewwongcharien, and Dragan Milosevic, “An Empirical Study of the Use of Project Management Tools and Techniques across Project Life-Cycle and Their Impact on Project Success,” Journal of General Management 35 (3) (Spring 2010): 41–65.

Shelley, Arthur, KNOWledge SUCCESSion: Sustained Performance and Capability Growth Through Stra- tegic Knowledge Projects (New York: Business Expert Press, 2016).

The Standard for Program Management, 3rd ed. (New- town Square, PA: Project Management Institute, 2013).

Turkulainen, Virpi, Kirsi Aaltonen, and Paivi Lohikoski, “Managing Project Stakeholder Communication: The Qstock Festival Case,” Project Management Journal 46 (6) (December 2015/January 2016): 74–91.

Yang, Rebecca, Yaowu Wang, and Xiao-Hua Jin, “Sta- keholder’s Attributes, Behaviors, and Decision- Making Strategies in Construction Projects: Impor- tance and Correlations in Practice,” Project Man- agement Journal 46 (6): 74–90.

Young, R. Ralph, Steven M. Brady, and Dennis C. Nagle, Jr., How to Save a Failing Project: Chaos to Control (Vienna, VA: Management Concepts, 2009).

Endnotes 1. Turkulainen, Virpi, Kirsi Aaltonen, and Paivi

Lohikoski, “Managing Project Stakeholder Communication: The Qstock Festival Case,” Project Management Journal 46 (6) (December 2015/January 2016): 76.

2. Eskerod, Pernille, Martina Huemann, and Claudia Ringhofer, “Stakeholder Inclusiveness: Enriching Project Management with General Stakeholder Theory,” Project Management Journal 46 (6): 45.

3. Yang, Rebecca, Yaowu Wang, and Xiao-Hua Jin, “Stakeholder’s Attributes, Behaviors, and Decision-Making Strategies in Construction Pro- jects: Importance and Correlations in Practice,” Project Management Journal 46 (6): 78–79.

4. Bourne, Lynda, and Derek H. T. Walker, “Visu- alizing Stakeholder Influence: Two Australian Examples,” Project Management Journal 37 (1) (March 2006): 5–21.

5. Aaltonen, Kirsi, et al., “Stakeholder Dynamics Dur- ing the Project Front-End: The Case of Nuclear

Waste Repository Projects,” Project Management Journal 46 (6): 28.

6. Adapted from John H. Fleming and Jim Asplund, Human Sigma (New York: Gallup Press, 2007): 97.

7. Basten, Dirk, Georgios Stavrou, and Oleg Pank- ratz, “Closing the Stakeholder Expectation Gap: Managing Customer Expectations Toward the Process of Developing Information Systems,” Project Management Journal 46 (6): 76.

8. Badiru, Adedeji B., Triple C Model of Project Man- agement: Communication, Cooperation, and Coor- dination (Boca Raton, FL: CRC Press, 2008): 29.

9. Alderton, Matt, “What’s Your Number?” PMNet- work 26 (12) (December 2012): 48–53.

10. Daft, Richard L., Management, 9th ed. (Mason, OH: South-Western Cengage Learning, 2010): 631.

11. Shelley, Arthur, KNOWledge SUCCESSion: Sus- tained Performance and Capability Growth Through Strategic Knowledge Projects (New York: Business Expert Press, 2016): 18.

Chapter 6 Stakeholder Analysis and Communication Planning 207

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3

ORGANIZE LEAD PERFORMPLAN

P A R T 3

PLANNING PROJECTS

Chapter 7 Scope Planning

Chapter 8 Scheduling Projects

Chapter 9 Resourcing Projects

Chapter 10 Budgeting Projects

Chapter 11 Project Risk Planning

Chapter 12 Project Quality Planning and Project Kickoff

Planning is a large and critical part of project manage-

ment. Planning may be largely completed before much

executing work begins in traditional project manage-

ment, in a completely iterative fashion using Agile, or

somewhere in between in a hybrid environment. Project

planning tends to be collaborative with many people

involved and integrative in that many factors need to be

considered. That said, we cover the various aspects of

planning in distinct chapters to clarify what needs to be

done in each. Chapter 7 shows how to plan the scope by

collecting requirements and creating work breakdown

structures. Chapter 8 shows how to create and commu-

nicate project schedules. Chapter 9 follows closely by

resourcing projects and dealing with overloaded workers

and the frequent need to compress schedules.

Chapter 10 shows how to create a time-phased project

budget that will be used for control. Chapter 11 covers

details of identifying, assessing, and dealing with a myr-

iad of project risks. Finally, Chapter 12 deals with quality

planning and with integrating all parts of the schedule

into a single coherent whole.

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C H A P T E R 7

Scope Planning

You re browsing a favorite retailer s website and you notice the onscreen recom- mendations are just right for you. The site seems to know what you ve bought before. This great customer service is enabled by the retailer s web intelligence solution from Teradata.

Teradata is the world s largest company focused solely on enterprise data ware- housing and analytic solutions. The simple web-shopping scenario is just one exam- ple of how our customers use information to improve their relationship with you.

So what does this have to do with project scope management? In this example, the retailer purchased a Teradata solution that included hardware, software, and a consulting project for the implementation. Teradata implemented this project based on our experience and a methodology built upon a foundation of scope management.

We can manage scope in various ways ranging from traditional waterfall to Agile approaches to deliver the right solution in an effective manner.

The first step in project scope management is to mutually agree on what the project will deliver, or in the case of Agile, what we will focus on. In our example, the retailer needed to integrate data from their web analytics software, an in-house customer relationship system, and other sources. They also had require- ments for reports and the technical integration with their IT infrastructure. The

CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Describe the planning of scope manage- ment, collecting requirements, and defining scope processes. Create a require- ments traceability matrix, project scope statement, and change request form. Describe a work breakdown structure (WBS) and its impor- tance to project planning and control. Compare different methods of develop- ing a WBS.

TECHNICAL OBJECTIVE: Create a WBS, including work packages and a numbering system for the code of accounts, both by hand and using MS Project.

Ra w

pi xe

l.c om

/S hu

tte rs

to ck

.c om

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Teradata team elicited requirements in a way that uncovered what the customer really needed.

Projects often use a statement of work (SOW) or similar document to outline the high-level scope. In a Teradata project, this is part of our customer contract. We then elaborate on more detailed requirements in a traceability matrix. This ensures all requirements tie end to end from the contract through project testing and cus- tomer acceptance. The time spent up front in requirements management pays divi- dends during project testing and customer acceptance, where discovering unknown requirements is much more time consuming and expensive.

Teradata follows traditional project management practice to develop a work break- down structure (WBS) as the basis for a detailed project schedule and resource plan. We typically use Microsoft Project as a scheduling tool; a plan based on the WBS makes it easy to track and communicate the status of each deliverable.

Finally, the entire set of requirements is managed under change control. This is an important process, because the team must balance control and flexibility. We also must meet (or agree to change) the project cost and schedule para- meters. Our project manager facilitates an analysis of the technical, schedule, and cost impact, and then all parties reach an agreement on how to proceed.

This simple example illustrates how the Teradata project methodology builds upon a foundation of scope management to deliver exactly what the customer needs in the most efficient manner. An effective scope management approach fosters open communications and sound decision making to ensure all parties get the business value expected from the project.

Mike Van Horn, Teradata

7-1 Plan Scope Management Once all the stakeholders for a project have been identified, the project team members develop a scope management plan, assess project requirements, develop the project’s scope, and create a work breakdown structure (WBS). These are the scope planning processes that will be covered in this chapter. When planning scope, it is also wise to plan for changes. While this is not technically part of scope planning, it will also be covered in this chapter because accurate assessment of the client’s requirements can minimize scope changes, and, to that extent, scope planning is an effective means to control changes to the project.

The flow of scope planning is illustrated in Exhibit 7.1. The boxes represent the proj- ect work processes involved, and the documents shown before and after the boxes repre- sent major inputs needed to perform the processes as well as major outputs created by the work processes. Documents covered in previous chapters (Charter in Chapter 3 and Stakeholder Register in Chapter 6) are needed inputs for the first two processes.

4.2 Develop Project Management Plan PM Plan Baselines

5.5 Validate Scope

5.6 Control Scope

5.4 Create WBS

Scope Baseline with WBS

5.3 Define Scope

5.2 Collect Requirements

Requirements Documents

5.1 Plan Scope Management

Scope Statement

PMBOK® GUIDE Topics:

Plan scope management Collect requirements Define scope Create WBS

CHAPTER OUTPUTS Requirements documents Scope statement Scope baseline with WBS

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AGILE

The first scope process, plan scope management, is the process of developing a plan that includes the total scope of what needs to be done and what is excluded from the project, implementation and validation of the scope, and control deviations from the scope statement. The product scope describes features and functions of a project out- come such as product, and, in some cases, service or result. The project team also needs to determine the project scope, which is the work required to be performed for delivering a product, service, or result with the required features and functions. Together, the product scope (the outputs the team will deliver to its customers) and the project scope (the work they need to perform to create the project’s outputs) form the total scope. In other words, the project team members determine what they will do to ensure they have identified and organized all the project work so they can use it as the basis of all other planning activities and then as the basis for executing and controlling the proj- ect work. For many projects, the client or the end user may not be concerned about the project scope and may be interested only in the product scope.

The priority of the product in Agile is more significant than in traditional project man- agement. The outcome, or the product, will drive the elaboration of the project. The end state of the product is not predetermined. In Agile, we flip the 80/20 proposition on its head and focus on the product 80 percent of the time and the project 20 percent. While this model will not work in all project scenarios, it does work in projects in which the main product is a creative, virtual result. Agile aligns to the needs of the customer. How- ever, if an intermediary is managing scope and cost, the project manager needs to main- tain alignment and remain focused on delivering value through the product.

7-2 Collect Requirements A requirement is a condition or capability needed by a user to solve a problem or achieve an objective that satisfies a standard, a specification, or any other formally docu- mented need.

Collect requirements is a systematic effort to understand and analyze stakeholder needs to define and document these needs and requirements with a focus on meeting project objectives. The first step in collecting requirements is to ensure that the project team is clear on the project objectives. This could be accomplished by reviewing the

EXHIBIT 7.1

SCOPE PLANNING FLOW

Plan Scope Management

Scope Management Plan

Stakeholder Register

Charter Collect Requirements

Define Scope

Create WBS

Perform Integrated Change Control

Approved Changes and Updates

Scope Baseline with WBS

Scope Statement

Requirements Traceability Matrix

212 Part 3 Planning Projects

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AGILE

project charter—particularly the “why” section that justifies the project. The project team members then may describe in more depth what each believes the expected project ben- efits are and/or what problems the project is attempting to overcome. On simple pro- jects, this may not take a lot of time. On complex projects, a project manager may choose to use idea generation, grouping, and/or cause-and-effect techniques to make sure that everyone on the project team understands why the project is being conducted. Understanding broad project objectives will help in making more-detailed decisions later. This also reinforces the project’s importance and may help motivate team members and other stakeholders during challenging periods in project execution. It is especially useful with multifunctional, virtual, and global project teams. Finally, a clear understanding of the project’s objectives helps if the project plan needs to be revised at some point.

Collecting requirements is the same no matter what type of project approach you undertake; however, in more iterative projects, the documentation of the requirement is normally much less formal. Agile leverages the progressive elaboration mindset that allows for the project to unfold before the implementation team. This works best when the expected outcome is unclear or customers may change their mind once they see the initial product.

7-2a Gather Stakeholder Input and Needs The second step is to gather input from the various project stakeholders. Needs assessment begins with a high level of understanding of the client needs during the project inception. A project manager is assigned and more detailed requirements assessment is done after a project’s core team is selected. This core team size would depend on the nature of the proj- ect and the number of disciplines required to plan and execute the project.

When a project manager and team listen closely to both internal and external customers, they understand better both what their needs are and what risks and issues may confront them during the project. Successful project managers know that for a project outcome to be useful to the project’s customers, the customers need to be able to use the output to better serve their own customers in turn. In other words, end-users of the project deliverable, the product of the project, and their needs must be integral to the list of requirements.

The methods of developing deep understanding of customers and their needs vary extensively from one industry to another. The traditional methods of obtaining and doc- umenting requirements are many, such as:

Meetings with key stakeholders Interviews Focus groups Questionnaires Surveys Observations Prototypes Industry standards Reference documents, Market analysis Competitive analysis Requests from the client Standard specifications

For example, in new product development projects, teams often use voice of the cus- tomer (VOC) techniques to elicit the benefits and features the customers want out of the

Chapter 7 Scope Planning 213

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project expressed in the customer’s language. Teams using VOC try to understand the customer by not only asking questions but also by placing themselves in the customer’s situation. If a project team is designing a new system that is to be used in the field, the team member should get down in the mud with the mechanic and hand the mechanic repair tools to see from the mechanic’s point of view how the new system will be used.

Requirements can be classified as functional/technical and nonfunctional. The first category is usually the focus of needs assessment exercises and is centered on perfor- mance of the deliverable—such as the mechanic’s needs just described. The second cate- gory includes requirements such as scalability, reliability, maintainability, and testability.

Once captured, these customer wants and needs are then stated in operational terms that the people performing the project work can use to plan that work. If the customer wants blue food coloring in a food item, the project team developing the item needs to know the precise desired shade of blue, the quality grade, the tolerance for color varia- tion, and how the blue color may interact with other ingredients.

The project manager wants to understand how a project’s success will be determined from the customer’s perspective. The best way to gain this understanding (and to begin building a strong relationship with customers) is to directly ask customers. The project leaders can ask the customer(s) to specify how they will judge the quality of the project based on both functional and nonfunctional requirements.

On an information systems project, the team may use a joint application design (JAD) session to elicit customer requirements. This is often a facilitated session in which users of the software should articulate their preferences regarding how the software should work. The project manager and the team often send their understanding of the project objectives and deliverables in advance to all the users so that they are better prepared to discuss their needs and provide clarifications. Only one group of users is normally in this meeting at a time, while the project manager and the technical workers are in the session for its duration. Each possible feature of the system should be discussed. If the system is large and complicated, the amount of time that can be spent per item may be scheduled. Users often wish to talk in depth about how they want to use the system, while develo- pers often want a detailed discussion about how they plan to create the feature. To avoid sinking into too much detail, the project manger can ask the users to start with only a high-level description of their reasons for the requested feature and then guide the dis- cussion with the following five questions:

1. What do we not understand about the feature? 2. What is the business reason for the feature? 3. What is the impact of not providing this feature? 4. What action items need to be accomplished if we do this? 5. What impact will this have on other features of the project or elsewhere?

Exhibit 7.2 lists requirement along with other related information such as acceptance criteria for each requirement, which can be either high level or very detailed (using speci- fication in measurable terms). The requirement type suggests whether the requirement is functional, nonfunctional, or needed by a particular stakeholder. The traceability matrix also includes the status of the requirement, its priority, and who is responsible for the requirement.

On some types of projects, the customers can provide their ideas using one of the techniques above, and the project team can be confident that the customers’ wants and needs have been captured. On other projects, once the customers’ viewpoint is captured, it makes sense to create a model or prototype of some sort so the customers can decide if their wishes have been fully and accurately captured. Often, this extra step helps the

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customers become more fully vested in the project and creates a strong working relation- ship that is helpful when difficulties arise during project execution.

It is helpful to list requirements and their supporting information in a requirements traceability matrix such as that shown in Exhibit 7.2.

EXHIBIT 7.2

REQUIREMENTS TRACEABILITY MATRIX

ID REQUIREMENT ACCEPTANCE CRITERIA TYPE STATUS

STAKE- HOLDER GROUP(S) PRIORITY OBJECTIVES

1 The BA must be able to customize the information collected for requirements

Stakeholder Approved BA Must PO#1

1.1 The system shall allow for renaming of requirement attributes

1. BA can rename an existing field 2. Field displays new name on input

forms 3. Field dispalys new name on reports

Functional Approved BA Must PO#1

1.2 The system shall allow new requirement fields to be identified

1. BA can add a new field 2. BA can set field attributes 3. BA can indicate field lookup values 4. Custom field available for input 5. Custom field available for reports

Functional Approved BA Should PO#1

1.3 The system shall allow for lookup of allowable fields for a requirements attribute

1. BA can enter custom list of lookup value

2. Lookup fields can be provided from an external system through data interface

Functional Approved BA Should PO#1

2 The BA must be able to provide different reports for different audiences

Stakeholder Approved BA, Team, Sponsor, Stakeholders

Must PO#1

2.1 The system shall include a base set of standard reports.

Reports include 1. Requirements Traceabilty Matrix 2. Business Requirements

Documents

Functional Approved BA, Team, Sponsor, Stakeholders

Must PO#1

2.2 The system shall allow a business analyst to filter reports based on various requirement attributes

1. BA can filter report based on a. Type b. Stakeholder c. Status d. Priority e. Objective

Functional Approved BA Must PO#1

2.3 The system shall provide an option to download data to an Excel supported file so the BA can customize

1. BA can select to extract data to an Excel supported file

2. Extracted data is formatted as a tabular data set with no row breaks

Functional Proposed BA Should PO#1

2.4 The system shall allow for customization of reports to include filtering and displayed fields.

1. BA can selected fields to include or exclude in resulting report

2. BA can filter report (see 2.2.1)

Functional Approved BA Should PO#1

PO#1 – Project Objective #1 – “record, manage, communicate, and update requirements so that requirements can be captured once and then managed and communi- cated efficiently” Priority uses MoSCoW – Must be include in release (mandatory), Should be included in release (highly desired), Could be included in release (nice to have), Won’t be included in release (out of scope)

Source: Vicki James, PMP, CBAP, PMI-PBA, CSM.

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AGILE

When requirements are complete, each requirement needs to be:

Traceable back to the business reason for it Identified with the stakeholder(s) who need it Unambiguous Qualified by measurable conditions Validated for its value and completion Bounded by constraints Prioritized according to value, cost, time risk, or mandate so trade-off decisions can be made if needed

Once these requirements are developed, they are translated into specifications, as shown in Exhibit 7.3.

There are several differences in gathering stakeholder input in Agile. In an Agile proj- ect, the Product Owner is the interface to the product stakeholders and is responsible for aligning stakeholders to priorities and capabilities. Agile focuses on delivering value to the customer quickly, so feedback can get to the development team quickly. This eliminates waste. Agile further assumes that the people doing the work know how to do the work, and requirement writers are not qualified to tell them how to do that work. At every iteration, the delivered product should be ready for use, if the customer would choose to do so. As you can see, this would not work for a building that does not have windows, so the type of project in which you engage will start to take shape as you see the outcome being requested. In Agile, we are more likely to produce a color of blue that seems to make sense to the team and get feedback. The goal is not to be right: it is to get feedback. In a more Agile environment, there is only the judg- ment of how well the product works. The customer ideally would not get involved in how the product is created. Creating a model or prototype described above is analo- gous to Agile delivering working software every few weeks to get feedback. If all is well, we keep going; if not, we pivot and deliver more. In Agile, the requirements are captured in a product backlog. The product manager prioritizes them on an ongoing basis. They are delivered in short iterations and reviewed with the stakeholders on a normal cadence.

EXHIBIT 7.3

REQUIREMENTS TRANSLATED INTO SPECIFICATIONS

REQUIREMENTS SPECIFICATIONS

Unambiguous—not subject to interpretation

Complete—nothing left out Consistent—no conflicts, which also means no duplication Modifiable—amenable to change Traceable—to a customer need Verifiable—means provided to verify the requirement

Unique set—each stated only once

Normalized—should not overlap Linked set—shows relationships Complete—nothing left out Consistent—no conflicts Bounded—specifies nonnegotiable constraints Modifiable—amenable to change Configurable—traceable changes Granular—right level of abstraction

Adopted from: IEEE 1233

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7-3 Define Scope Define scope is the process of translating stakeholder needs and requirements into detailed specifications of the project outcomes and products. Essentially, the project scope statement includes three things regarding the total scope. First, the team needs to determine both what they will deliver to the project stakeholders at the end of the project and what they need to deliver along the way to ensure they will be successful in the end. These are the deliverables—the product scope. For example, if a final project deliverable is a new computer program, intermediate deliverables may include an outline of what will be included and a prototype. Second, the team should decide what work needs to be accomplished to create the deliverables. This is the project work statement—the project scope. Third, the team needs to determine what will limit or influence the project work— such as exclusions, constraints, and assumptions.

7-3a Reasons to Define Scope Scope definition is an important part of project planning because all other planning is based on the project scope. While the requirements collected represent the customers’ statement of what they need, the defined scope is the project team’s response—asking the customer, “If we provide this, will it solve your problem?” It is impossible to estimate how much a project will cost, how many (and what type of) workers will be needed, how long a project will take, what risks are involved, or what quality standards will be invoked without first understanding what work is included in the project.

Scope definition also is vital in preventing scope creep. Scope creep happens for two common reasons. First, if the scope is not clearly defined and agreed upon, it is easy to add additional work (scope creep) to the project with or without realizing that more time and resources (additional cost) will be required. Second, sometimes when a project is going as planned, a customer is so excited that he or she asks an innocent-sounding question: “Can the project output also do … ?” The person performing the project work is often flattered and agrees without understanding the implications of making this change. In con- temporary business, pleasing the customer is desirable. However, the best time to gain cus- tomer understanding is when the project team is defining the scope—not while executing the project scope work.

7-3b How to Define Scope Scope definition can vary greatly from one project to another. For a small, routine con- struction project, it may be quite simple to determine what project outputs will be cre- ated and what work is involved in creating them. On other projects, such as one large company acquiring another, it may be very difficult to determine the total amount of work that needs to be accomplished. Regardless of how easy or difficult it may be to define scope and despite industry-specific methods that may be helpful in doing so, all project teams need to complete each part of this process.

LIST DELIVERABLES AND ACCEPTANCE CRITERIA The first step is to list project deliverables. The requirements elicited from the customer often lead to some of the final deliverables. Project teams need to understand that there are often multiple deliverables. For example, if a project entails constructing a house, the homeowners probably want not only the house but also documentation on systems within it, perhaps an explanation (training) on how to use certain items such as an innovative thermostat, and a warranty procedure. The project team also needs to list intermediate deliverables—those things that need to be developed while making progress to complete the project. Some of

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AGILE

these were probably listed in the charter, but others may not yet be identified. Then the project team needs to determine the acceptance criteria for each deliverable.

ESTABLISH PROJECT BOUNDARIES The second step in defining scope is to estab- lish the project boundaries. Think of the project boundaries as the sidelines on an ath- letic field. By understanding what is in play and what is not, athletes know clearly when to play and when to stop. Likewise, project team members need to know which tasks should be executed and which tasks need not be executed.

The first part of the boundary definition is to decide which features and work elements are included (in scope) and which are excluded (out of scope). Collectively, clients and end users often request far more features and work than a project is originally planning to deliver or can deliver. Therefore, the team needs to know and decide what is included and what is not. Usually, the sponsor makes decisions regarding larger scope decisions, but the project manager and team still have many detailed scope decisions to make.

The second part is to manage expectations regarding any project. The project team members need to understand the constraints imposed on the project. If the work must be delivered by a certain date or if only limited resources are available, the project may be constrained, and the team should be careful to promise only what it can deliver. In planning, people make assumptions about dates, times, and availability of resources; for example, a shipment of required materials will arrive by the date the supplier promised. These assumptions should be stated. If an assumption proves to be false, it frequently increases the project risk and may also limit the project scope.

CREATE A SCOPE DESCRIPTION The final step is to create a scope description. This description briefly states the work that needs to be accomplished to create the proj- ect deliverables.

A project scope statement guides the project team during subsequent planning and execution. For some very small projects, a well-developed project charter could also serve as a scope statement. On most projects, a scope statement needs to be developed prior to development of the WBS. An example scope statement for the Alternative Breaks project is shown in Exhibit 7.4.

7-3c Defining Scope in Agile Projects

Agile strives to use smaller iterations to get feedback because understanding the desired outcome tends to evolve as the customers see the work being done by the team.

Humans tend to be poor estimators, and the more unique the project, where volumes of reliable data are not available for making estimates, the harder it is to be predictable. In construction, for example, there are software packages that help estimate how long it will take to hang drywall or run electrical wire. However, in more creative endeavors like cre- ating software, there is little documented knowledge of how long a project will take. This is where the adage to underpromise and overdeliver becomes words to the wise.

With Agile projects, the project manager is challenged with conflicting aspirations and actions between finalizing the scope specifications and maintaining flexibility to modify them to meet changing business needs or adding new requirements of stake- holders. Agile scope definition is a complex process as the scope is not clear to either the project team or the client. The project manager and the project team must demon- strate greater adaptability to frequently changing scope and employ iterative or phased planning of scope. Consequently, Agile projects present more flexibility.

On Agile projects, the scope definition starts with large chunks of work; for example, we want to be able to take credit card payments on a website. This large feature, and

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EXHIBIT 7.4

SCOPE STATEMENT

ALTERNATIVE BREAKS PROJECT SCOPE STATEMENT

Scope Description: This project will educate groups of 12 students on social justice issues, send them out to perform direct service on the issues, and provide reflective opportunities throughout the process. Key deliverables with acceptance criteria (product scope):

KEY DELIVERABLES ACCEPTANCE CRITERIA

Project plan Secured housing,Agreement with organization

Fundraising Adequate money

Education Syllabus

Reorientation Digital archives

Trip itself Return safely, pre- and post-evaluation

Exclusions: No alcohol, drugs, or romances; ratio number of trips to student population

Constraints: Van holds only 12 people—11 students and one faculty or staff; number of highly qualified site leaders

Assumptions: Service builds active citizens; international trips add more value than expense; a trip is better with a staff or faculty member.

Source: Chris Bridges.

Chapter 7 Scope Planning 219

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there will be many of them for a fully functioning website, will be broken down into stories and prioritized later. The team creates “personas,” which are fictional people who repre- sent user types. These personas provide information about what they will do with the proj- ect deliverables and how they will benefit. These user stories define scope and functionality. Acceptance tests will also be agreed upon during the scope definition phase by describing the way project deliverables will be tested and how they should prove work- able. At the project outset, the overall scope is only defined at a high level, and a backlog of possible work is identified. The customer representative (sometimes called the owner) prioritizes the scope based upon business need, value, cost, and risk. The team then com- mits to the amount of work they can perform in the first iteration. As the project pro- gresses, the scope is described more specifically and is documented more closely. The level of documentation is less important and takes a secondary role. The primary measure of success in an Agile project is working software. The Agile method for defining scope is primarily applicable when the project scope is unclear or poorly defined.

7-4 Work Breakdown Structure (WBS) After scope definition is complete, the project manager will have a greater clarity about project work and milestones as compared to the high-level understanding of the project when the project charter is defined (discussed in Chapter 3). The milestones defined in the project char- ter are not necessarily accurate due to lack of complete understanding of the total project work. It is important to note that the project charter must be seen as an authorization docu- ment with accuracy of estimates (cost and time) in the range of + 50 percent. With the defini- tion of scope, more details about the project are available to develop WBS and new milestones.

A detailed understanding of the project scope and work to be performed must be simpli- fied for execution, and it is essential to divide the total work into smaller and manageable elements. A tool that is used on virtually all traditional projects is the WBS. To understand this tool, we will first define it, tell why it is important, show several common formats to use when constructing one, and then demonstrate the steps required to construct a WBS.

7-4a What Is the WBS? The WBS is, or should be, a uniform, consistent, and logical method for dividing the project into small, manageable components to manage project scope and for planning, estimating, and monitoring (Rad and Anantatmula, 2009). It is a project planning tool that is defined as the concept of hierarchical decomposition for transforming the project scope into deliverable work elements at the highest level. Its composition continues until it facilitates managing these work elements effectively. The WBS helps develop an optimum project schedule and cost estimates at the work element level.

The WBS is a tool that project teams use to progressively divide the deliverables of a proj- ect into smaller and smaller pieces. The project team members start by identifying the major deliverables to be created and by continuously asking: “What are the components of this deliverable?” The WBS is not a list of work activities, an organizational chart, or a schedule. The WBS is a framework that is used as a basis for further planning, execution, and control.

The WBS also is an important project planning tool that uses the concept of hierar- chical decomposition for transforming the scope into deliverable work elements. Typi- cally, the WBS is created after the scope is defined on large projects. In contemporary project management, particularly on small and middle-sized projects, the WBS may be created concurrently with the scope statement.

The WBS is normally developed by listing deliverables—major deliverables first and then progressively smaller ones until the team feels that every deliverable has been

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identified. Managers of smaller projects sometimes perform another process concurrent with WBS development: defining activities and milestones. Define activity is a project planning process that identifies and determines specific actions to develop and deliver the project outcomes, such as products, services, or results. Many people find that work activities can be easily defined once the various deliverables are itemized. To clearly dis- tinguish between the work processes of WBS development and activity development, WBS development is covered in this chapter, and activity development is covered as part of project scheduling in the next chapter. Developing the WBS and defining the activities form an example of how two separate work processes are sometimes performed together (especially on small or simple projects) and sometimes separately (especially on large or complex projects).

7-4b Why Use a WBS? The reasons for using a WBS are many. Planning projects requires discipline and visibil- ity. A properly developed WBS encourages a systematic planning process, reduces the possibility of omission of key project elements, and simplifies the project by dividing it into manageable units (Rad and Anantatmula, 2009).

A WBS can be used as a pictorial representation of project deliverables. By using a systematic process for creating a WBS, project team members can ensure that they

Framing a house is a major deliverable in a house project.

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include all deliverables that are required to be created. Deliverables that are not planned, but need to be, often add to schedule delays and budget overruns.

The WBS provides a framework of common reference for all project elements, for specific tasks within the project, and ultimately for better schedules and better estimates. It is the basis for all subsequent planning of such important functions as schedule, resources, cost, quality, and risk. It also serves as an outline for integrating all these plan- ning elements. The WBS is easily modified and thus can handle the changes that often occur on projects. The impact of these changes is then shown in the schedule, budget, and other control documents. If a problem occurs during project execution, the WBS is helpful in understanding exactly where and why the problem occurred. This helps to diagnose problems, manage the quality of the project deliverables, and keep all the other facets of the project on schedule while the isolated problem is fixed.

The WBS is also helpful in project communications. Typically, many stakeholders contrib- ute to developing the WBS, and this effort helps them understand the project. Further, it clearly shows the importance of each work element, why it is required, and how it is inte- grated with project deliverables. In a nutshell, the WBS presents the entire scope of the project and serves as an excellent communication and integration tool. Software such as Microsoft Project enables a WBS to be shown in its entirety to people who need to understand the details, but it also allows project details to be hidden so that others can see the big picture.

7-4c WBS Formats There are various formats for constructing a WBS, but they all have the same purpose. The overall project is considered the first level, as shown in Exhibit 7.5. In this example, a WBS for a house is presented in the indented outline format.

The second level in this example depicts major deliverables from the house project, namely the house in its framed state, when it is wired, and when it is drywalled. This second level is indented one tab. Note that a section is included for the work of planning and managing the project.

A WBS usually has one or more intermediate levels, which generally represent items that need to be created to produce the final deliverables, such as drafts, prototypes, and designs. These are frequently called interim deliverables. All levels of the WBS with at least one level

EXHIBIT 7.5

HOUSE WBS IN INDENTED OUTLINE FORMAT

HOUSE

Project Management

Framed House – Framing Contractor – Wood – Assembled Frame

Wired House – Wiring Contractor – Wiring – Installed Wiring

Drywalled House – Drywall Contractor – Drywall – Hung Drywall

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below are considered summary levels. The completion of summary-level elements is based upon completion of all levels underneath. For example, in Exhibit 7.5, the house would not be framed until the framing contractor, wood, and assembled frame interim deliverables were complete.

Exhibit 7.5 used the indented outline format for the WBS method, but other methods are sometimes used. Another method is the hierarchical or “org chart” (short for organizational chart, which it resembles) method. A third method is called free format because the facilitator is free to draw it in any manner. The same house project shown in Exhibit 7.5 in indented outline format is shown in Exhibit 7.6 in org chart format and in Exhibit 7.7 in free format.

EXHIBIT 7.6

WBS IN ORG CHART FORMAT

EXHIBIT 7.7

WBS IN FREE FORMAT

Framing Contractor

Wood

Assembled Frame Wiring Contractor Wiring

Installed Wiring

Drywall Contractor

Drywall

Hung Drywall

Project Manage- ment

Chapter 7 Scope Planning 223

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A marker board or flip chart can be used to develop all these methods and also offers plenty of room to add additional elements as the scope is revised. The WBS method using indented outlines can easily be imported into MS Project. Teams using the org chart or free format methods for WBS generally translate them into the indented outline format for input into software.

7-4d Work Packages The house example above has only three levels as follows:

1. The first level, or project title level 2. One intermediate level, or summary level 3. The lowest level, or work package level

This process of dividing the deliverable items is continued until the project has been divided into manageable, discrete, and identifiable items requiring simple tasks to com- plete. A practical rule is to keep dividing the project until it no longer can be divided realistically. This point may differ from project to project. The lowest level is known as a work package.

In a WBS, an element at the lowest level is called a work package, which is usually the work component at the lowest level of the WBS for which cost and duration can be estimated and managed. Work packages are the basis for all subsequent planning and control activities. Exhibit 7.8 shows a WBS in org chart format with work packages in solid boxes.

One frequently asked question when breaking the deliverables into work packages is how small is small enough. The answer is, “It depends.” In Exhibit 7.8, work packages occur at levels 3, 4, and 5. The work package is the point from which:

Work activities are defined The schedule is formed

EXHIBIT 7.8

WBS DEPICTING WORK PACKAGES

PM

Project

AB CD EF

Level 1

2

3

4

5

Source: Kevin P. Grant, UTSA.

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Resources are assigned Many of the control features are developed

Work packages need to be detailed enough to facilitate further planning and control. If they are too detailed, the burden of tracking increases. The project manager needs to feel confident that the work to create the work package can be assigned to one person who can estimate the schedule and cost and can be held responsible for its completion. However, the work package may require multiple resources (including more than one person) to complete it.

If the work is composed of a single deliverable that is well understood, it is clear how the deliverable will be judged for quality and completeness, and the assigned workers have proven credentials, then the work package may not have to be too detailed. On the other hand, if the deliverable and/or how it will be judged for its completion are poorly understood, and the assigned worker or workers are yet to be proven reliable, a more detailed work package may make sense.

For ease of communication and comprehension, work packages and other components of a WBS are usually stated in very few words; one should avoid verbs and instead use adjectives to describe WBS elements at all levels. A WBS component is a work element that is part of the WBS at any level. The phrases or words to describe WBS elements should not be repeated. However, because the names are typically short, there is still the potential to get confused by exactly what is included in a work package or WBS compo- nent. Therefore, WBS components are often defined further using a WBS dictionary. A WBS dictionary is a document that provides detailed information about each work pack- age by providing details about the associated deliverable, activity, scheduling information, predecessor, successor, person responsible for it, resources required, and associated risks. An example of a WBS dictionary entry with detailed information for a work package is shown in Exhibit 7.9. Note that some of this additional information such as activities, resource assignments, effort, and cost will be described in subsequent chapters.

EXHIBIT 7.9

WORK PACKAGE DETAIL

Project: Expansion to Full Scale Production Work Package: Assembly Hardware Test

Description: Plan, conduct, evaluate, and report results of tests to ensure proper function of the assembly hardware.

Deliverable(s): Test results summary.

Input(s): Assembly hardware prototype

Activities Resource Expected Duration

Cost

Prepare test plan Production Analyst 8h $ 720

Conduct test Production Analyst 16h 1,440

Evaluate test results Production Analyst 6h 540

Prepare test results summary Production Analyst 8h 720

$3,420

Source: Kevin P. Grant, UTSA.

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7-4e How to Construct a WBS The information for a WBS is drawn primarily from the project objectives statement, and from historical files containing planning information of past projects. When a proj- ect team needs to construct a WBS, it needs to include in its planning team a subject matter expert (SME) who understands how each segment of the work will be accom- plished. Teams approach this task in two ways. The first approach is that teams include only the core team members and plan the WBS as in as much detail as they can. At that point, different core team members are assigned to identify and seek the SMEs to plan the remaining details. In the second approach, teams invite the SMEs to the WBS plan- ning meeting right from the start and utilize their input throughout the WBS develop- ment. Often, the choice of how to include SMEs is determined by the size and complexity of the project and by the cultural norms of the company.

The planning team uses a top-down approach in creating the WBS. This is easy to start when the type of project is familiar and at least some members of the planning team are likely to understand the general flow of work. If the project is similar to past projects, either a template or the WBS from a previous project can be used as a starting point. Then, using this template or WBS, the project team would identify additional project needs for inclusion and irrelevant elements of the previous project for deletion. Templates and previous examples can save teams a great deal of time, but caution must be exercised because each project is unique.

Sometimes, however, a project is so unique and different from previous projects that the team finds it useful to jump-start the WBS construction by brainstorming to identify a list of project deliverables to help to understand and develop the overall structure of the project WBS. However, once the overall structure is understood, the team proceeds with the typical top-down approach for the remainder of the WBS development.

IDENTIFY MAJOR DELIVERABLES The team defines the project deliverables by reviewing the project planning completed thus far. The team members review the project charter, requirements traceability matrix, and scope statement to define the project’s major deliverables. Remember that while many projects may have a primary deliverable such as a house, almost all projects have additional deliverables such as documentation and customer support. These could include training, service, or other means of helping the customer use the project’s products effectively.

One of the first decisions is how to organize the second level of the WBS. (Remember, the first level is the overall project.) As defined earlier, the WBS is, or should be, a uni- form, consistent, and logical method for dividing the project into small manageable com- ponents. WBS development is viewed as the process of grouping all project elements into several major categories, normally referred to as level one; each of these categories will itself contain several subcategories, normally referred to as level two. Alternately, and more accurately, development of a WBS involves dividing the project into many parts that, when combined, would constitute the project deliverable. This process of dividing the deliverable items is continued until the project has been divided into manageable, discrete, and identifiable items requiring simple tasks to complete.

Three methods are shown in Exhibit 7.10. One method is by project phase, with the second level being the signing of a contract, building the foundation, and framing the house. Alternatively, the second level can be organized by design components (deliverable-basis), such as kitchen, bedrooms, and bathrooms. Finally, the second level can be organized by work function (resource-basis). A house project organized this way might have carpentry, plumbing, and electrical as second-level elements.

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Organizing by project phase (schedule-basis) has the advantage of using the mile- stones in the project charter as an organizing principle. It also facilitates rolling wave planning. Rolling wave planning is a planning technique of identifying and defining the work to be completely accomplished in the near term and planning the future work at a higher level. In other words, once the near-term work is complete, the next phase of the project is planned in detail. In essence, it is an iterative process. If the planners of the project in Exhibit 7.10 used rolling wave planning, the work associated with the contract would be planned in detail immediately, and work for the foundation and framing might only be planned at a high level at first with more detail worked out as the project team worked on the contract. Rolling wave planning allows a team to get a quick start on a project—especially one in which details of later phases may depend on the results of work performed during early phases. Rolling wave planning helps a project team avoid either of two extremes. One extreme is to never start doing anything because the plan is not yet com- plete, which is also known as analysis paralysis. The opposite extreme is not planning at all because of fear that planning will take too long; this is known as ready, fire, aim.

Organizing by either phase or design components/deliverables helps to focus commu- nications on project deliverables and their interactions. Organizing by work function allows the functions to focus on their specific activities, but often does not promote cross-functional discussion. Handoffs of work from one group to another are not always as smooth. Therefore, if a project manager decides to organize the WBS by work func- tion, extra care needs to be taken in establishing interfunctional communications.

Of the three approaches, the most generally useful, and the most difficult, method for developing a WBS is to use design components/deliverables as the basis of the break- down of the project. It is also known as a deliverable-based WBS. The deliverable-basis, or design-basis, is developed by looking at the project from the client’s perspective and not from the project execution perspective. Further, it makes sense to all key stake- holders and facilitates easy communication.

In this deliverable-basis or design-basis mode, the project is divided into individual dis- tinct components that ultimately comprise the project, such as hardware, software, physical structure, concrete foundation, or steel roof. This deliverable-based WBS division can be based on product, function, or physical location of the deliverable (Rad and Anantatmula, 2009). The deliverable basis of WBS development is far superior to the other bases because it is customer focused and easy to facilitate during project execution.

Note that one additional second-level item is shown on all three methods—that of project management. This includes the work of planning and managing the effort and

EXHIBIT 7.10

WBS ORGANIZATION EXAMPLES

PROJECT PHASE DESIGN COMPONENTS/ DELIVERABLES

WORK FUNCTION/ SUBPROJECT

Project Management

Contract

Foundation

Framed House

Project Management

Kitchen

Bedrooms

Bathrooms

Project Management

Carpentry

Plumbing

Electrical

Chapter 7 Scope Planning 227

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includes preparing documents, attending meetings, integrating diverse portions of the project, handling communications, and so on. Since much of the work involved in proj- ect management is the level of effort, this section may not be decomposed. If the work of managing the project is left out, it is more likely that the project will not be completed on time and within the budget.

It is very important to understand that, in many cases, the client is not concerned about the intricacies of project execution or project management activities. From a cli- ent’s perspective, the focus is only on what is delivered as the project outcome. So, proj- ect management is not typically included in a deliverable-based WBS. However, there are exceptions to this rule. For large and mega projects, programs, and federal government contracts, it is possible that the client is interested in project management activities and project progress reports. In such cases, including project management in the WBS may be sensible, even in a deliverable-based WBS.

DECOMPOSE DELIVERABLES Once the major deliverables have been defined, it is time to break them into smaller deliverables or components. This is called decomposi- tion, a method of dividing the project scope into many parts that, when combined, would constitute the project deliverable. It is the process of breaking down the project scope until it has been divided into manageable, discrete, and identifiable components requiring simple tasks to complete.

The team members can use the top-down approach, asking what all the components of each major deliverable are. Alternatively, the team members may use a bottom-up approach by brainstorming a list of both interim and final deliverables that they feel need to be created. Each deliverable can be written on an individual Post-it Note. These deliverables are then assembled on a large work space where team members group the smaller deliverables either under the major deliverables that have been previously identi- fied or into additional related groups that are then headed by major deliverables.

CONTINUE UNTIL DELIVERABLES ARE THE RIGHT SIZE At this point, the WBS has been formed and can be reviewed for completeness. Once it is determined to be complete, the team can ask if the deliverables at the lowest level need to be divided fur- ther for planning and control as described above. For example, in the new car develop- ment project in Exhibit 7.11, level-two components, such as product design, are at too high of a level to plan and control. Therefore, at least one more level should be included. If some of those components, such as Product Goals, are still too broad, yet another level would need to be developed.

REVIEW At this point, several things should be considered to ensure that the WBS is structured properly. One consideration with WBS construction is the parent-child con- cept. The higher level is considered the parent and the lower-level elements are consid- ered children. For example, in Exhibits 7.5, through 7.7, “Framed House” is a parent to the children: “framing contractor,” “wood,” and “assembled frame.” “Framed House,” in turn, is a child to “HOUSE.” The framed house component is not complete until all of its children components are complete. The team asks if, once these elements are com- plete, the framing is complete. In an effort to simplify the WBS, where only one child element for a parent exists, you would not break it down. In fact, a good rule of thumb is to have somewhere between three and nine child elements for each parent. The fewer levels a WBS has, the easier it is to understand.

To avoid confusion, each component in the WBS needs to have a unique name. Therefore, two similar components may be draft report” and final report,” instead of merely calling each “report.” The team also assigns a unique number to each component.

228 Part 3 Planning Projects

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In one common numbering system, the number for a child item starts with the number assigned to its parent and adds a digit. An example of a WBS with components num- bered is shown in Exhibit 7.12.

Different organizations sometimes develop their own unique variations of project plan- ning and control techniques. Exhibit 7.13 describes the manner in which a large, complex organization (the U.S. Central Intelligence Agency) combines stakeholder analysis with WBS.

7-5 Establish Change Control A baseline is the approved project plan mainly consisting of scope, schedule, and cost. It is not normally altered unless a formal change control request is approved for modifying these plans. The project team looks at the scope statement and WBS to ensure complete- ness and seeks to validate the scope by verifying it with the sponsor, customers, and/or other stakeholders. Simultaneously, the project team can be planning other aspects of the project such as schedule, resources, budget, risks, and quality. Once all these plans are complete and any impacts to scope have been accounted for, it is time to baseline the scope statement and the entire project plan. This is discussed in more detail at the end of the planning stage (Chapter 12).

Most projects are planned and conducted in an environment of uncertainty. Projects are planned with assumptions based upon the best information available to the project team, but many things can change during the course of a project. Therefore, project teams deal with change by establishing and using a change control system that entails processes to receive and review change proposals and accept or reject them after evaluating their impact on project scope, cost, and schedule. In essence, it is a system of managing and controlling changes and modification to the project plan and

EXHIBIT 7.11

PARTIAL WBS OF CAR DEVELOPMENT PROJECT

Car Development Project Project Management

Product Design Product Goals

Concept Design

Modeling Design

Vehicle Integration

Engineering Feasibility

Detailed Engineering Design

Performance Development

Regulatory Certification

Process Development

Prototype

Production Materials Procurement

General Materials Procurement

Trial Manufacture

Chapter 7 Scope Planning 229

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EXHIBIT 7.12

LIBRARY PROJECT WBS WITH COMPONENTS NUMBERED

LIBRARY PROJECT

1. Project Management

2. Facility Needs

2.1 VISION STATEMENT

2.2 STAKEHOLDER INPUT

2.3 OPTIONS

3. Building Proposal

3.1 RECOMMENDED SIZE AND SCOPE

3.2 SITING

3.3 COST RATIONALE

4. Building Approval

4.1 VP OF FINANCE APPROVAL

4.2 PRESIDENT APPROVAL

4.3 BOARD APPROVAL

5. Staff Education

5.1 LITERATURE REVIEW

5.2 LIBRARY VISITS

5.3 SUPPLIER INPUT, PROCESS, OUTPUT, CUSTOMER ANALYSIS

5.4 TRAINING

6. Fundraising

6.1 POTENTIAL DONOR LIST

6.2 RELATIONSHIP BUILDING WITH POTENTIAL DONORS

6.3 EDUCATION OF POTENTIAL DONORS

6.4 DONATIONS

6.5 FOLLOW-UP WITH DONORS

7. Building Documents

7.1 FACILITY AND SITE SPECIFICATIONS

7.2 SCHEMATIC DESIGNS

7.3 DEVELOPMENT PLANS

7.4 CONTRACT DOCUMENTS

8. Building Construction

8.1 ARCHITECT

8.2 CONTRACTORS

8.3 CONSTRUCTION

8.4 FURNISHINGS

9. Building Acceptance

9.1 BUILDING AND GROUNDS ACCEPTANCE

9.2 BUILDING OCCUPANCY

9.3 BUILDING DEDICATION

9.4 WARRANTY CORRECTIONS

230 Part 3 Planning Projects

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project deliverables. Uncontrolled change is known as scope creep. Sometimes, the effects of scope creep are so bad that a well-started project can run into serious trouble.

The critical aspect of a change control system is the method of documenting changes. Each potential change to a project is normally documented by some sort of change request, which is a written request or a formal proposal to propose changes to any proj- ect planning component such as a document, project deliverable, or baseline (scope, cost, and time).

This means every change to a project needs to be formally proposed. The potential change is then either accepted or not. If it is accepted, the project plans are changed to reflect the impact of the change. Most people quickly understand the need to docu- ment major changes, but some resist the effort it takes to document small changes. The impact of many small changes is like the old saying, “killed by a thousand small cuts.” Many small changes individually have small impacts on a project, but collec- tively they have a major impact. Project managers need to create an expectation that all changes be formally documented using a simple change request form so all team members will document proposed changes. A simple change request form is shown in Exhibit 7.14.

Change request forms typically include several sections. The top section lists basic information to track the change request to the project and to the person who submit- ted it. The second section contains two simple statements describing the change and why the change is needed. The third section details the impact expected from the potential change. This can vary in length from a simple check and comment section, as in Exhibit 7.14, to an extremely involved description of potential impact on complex system projects such as designing an aircraft. In complex projects, small changes can

EXHIBIT 7.13

STAKEHOLDER ANALYSIS AND WBS AT THE CIA

At the CIA, where I created and run our agency-wide project management training and certification program, I come in contact with large numbers of dedicated project managers. With enrollment averaging about 2,500 students per year, I encounter a work- force with a broad spectrum of experiences, skills, and expectations. One of the more prevalent expectations is associated with stakeholder analysis and communication; employees invariably feel that they pretty much know most or all they need to know in this area and may even begrudge somewhat the three days associated with our Project Communications Management course. What they discover are the shortcomings in their appreciation for and knowledge about project communications. Using a five- point Likert scale, we have every student perform a self-assessment of their communications proficiency prior to and after the class. To the students’ surprise, proficiency increases average a full point; student feedback virtually always includes statements to the effect that they didn’t realize just how much more effective they can be in project management by investing more in the proj- ect communications area.

The organizational chart plays a central role in how the CIA approaches the analysis of stakeholders. Employees learn through classroom exercises to use the organizational chart as a roadmap for identifying the stakeholders. As they march through the branches in this chart, they make conscious decisions about whether the function represented by the title or box on the chart or whether the individual performing that function is a stakeholder. Once they have identified the stakeholders and performed the associated stake- holder analysis, they then turn to the WBS to help with the planning and implementation of the communications tasks that follow. In fact, communications for the types of projects undertaken at the CIA have taken on such importance that we advocate it be placed at the first level of WBS decomposition alongside equally important components such as project management. For projects of suffi- cient size, a full-time leader is often assigned to the communications component; the scope of their duties includes communications within the project as well as communications outside the project.

Source: Michael O’Brochta, PMP, director, PPMC Program, CIA.

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sometimes have catastrophic impacts. Finally, there should be a space for the change to be approved. Regardless of the complexity and format, the most important consideration is that potential changes must be submitted and documented whether they are approved or not.

7-6 Using MS Project for Work Breakdown Structures (WBS)

As you have likely realized, the WBS is one of the most important and powerful project planning tools available to the project manager. It is one of the key building blocks on which all further project activities are based. By creating a WBS in MS Project, the proj- ect manager lays the foundation for automating many other planning and communica- tion tools the software has to offer. Complete the following steps to set up a WBS in MS Project.

7-6a Set Up a WBS in MS Project Setting up a WBS in MS Project has five basic steps:

1. Understand the WBS definitions and displays. 2. Enter project deliverable and work package elements.

EXHIBIT 7.14

CHANGE REQUEST FORM

ORIGINATOR: PROJECT #:

Date

Description of Change:

Why needed:

Impact on project scope:

Impact on deadline dates:

Impact on budget:

Impact on quality:

Impact on risk:

Impact on team:

Date approved:

Project manager Sponsor Customer

_______________ _______________ _______________

232 Part 3 Planning Projects

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3. Create the outline of your WBS. 4. Insert a WBS code identification column. 5. Hide (or show) the desired amount of detail in the WBS.

STEP 1: UNDERSTAND THE WBS DEFINITIONS AND DISPLAYS MS Project refers to WBS task elements as summary tasks, tasks, and subtasks and displays them in an indented outline table format:

Summary tasks are the main or interim WBS deliverables and are displayed in bold font. Subtasks are all the tasks that make up the deliverables (work packages) and are indented below their parent summary task. WBS tasks can also be viewed in Gantt views with different graphical shapes:

For instance, a summary task might also be a milestone that you would want to denote graphically in your Gantt chart (typically a diamond in MS Project). You will see these graphical representations in future tutorials.

Exhibit 7.15 shows a Gantt table view of a WBS in MS Project. Note that MS Project codes the overall project (Suburban Park Homes) as level zero, not level one. The task durations have not been defined at this point and show “1 day?” for all tasks. If you are following along in MS Project, you will notice “Start” and “Finish” columns to the right of the Duration column that also have not been defined. The Start and Finish col- umns are not shown in the following exhibits for clarity’s sake.

STEP 2: ENTER WBS ELEMENTS (TASKS) In Exhibit 7.16, you will see WBS task elements added to the existing Suburban Park Homes project milestone list (from Chapter 3). In this WBS example, the existing milestones will double as the main deliver- ables (summary tasks). Enter these WBS elements to your project as follows:

1. In the Task Name field, select the row below where you want the new row to be (after making your selection, holding the SHIFT key and selecting a different row will high- light all rows between the two selections and result in that number of blank rows being inserted in the next step).

2. Click Task Tab>>Insert Group>>Task. a. Alternatively, you can Right-Click>>Insert Task.

3. You will see a new row (or rows if you added multiple) with the words <New Task> in the Task Name field. Click on <New Task> and enter the name of the desired WBS element (you may have to delete <New Task> before typing in your new task name).

4. Repeat these processes as needed to enter additional tasks between the Suburban Park Homes milestones until your WBS looks like Exhibit 7.16.

STEP 3: CREATE THE OUTLINE FOR YOUR WBS You now need to set up the out- line structure of the WBS to show summary tasks and subtasks (deliverables, interim deliverables, and work packages). To do this, use the Indent and Outdent controls shown in Exhibit 7.17 (Task Tab>>Schedule Group>>Green Arrows).

1. Click the Task Name field of the row to be indented. 2. Task Tab>>Schedule Group>>Indent Task (right Green Arrow).

a. The task element above the indented task(s) becomes a summary row as indi- cated by a bold font.

Chapter 7 Scope Planning 233

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b. Indenting a summary row will also indent its lower-level items. c. Multiple rows under a summary row can be indented (or outdented) at the same

time by Shift-Click selecting all of them before clicking the Indent control. 3. Clicking Task Tab>>Schedule Group>>Outdent Task (left Green Arrow) will simi-

larly decrease indentation of the selected row(s) or summary task. 4. Indent to create deliverables, interim deliverables, and work packages until your WBS

resembles the outline shown in Exhibit 7.15.

STEP 4: INSERT WBS CODE IDENTIFIER COLUMN MS Project can automatically assign identifier codes to all your WBS tasks. WBS codes allow the Project Team to easily categorize and communicate information about project tasks in the WBS. In this example, WBS codes will be assigned in a new column to the left of the Task Name column:

1. Right-click the Task Name column heading and click Insert Column. 2. A drop-down list appears in a new column.

EXHIBIT 7.15

GANTT CHART VIEW THREE-LEVEL WBS

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

234 Part 3 Planning Projects

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3. From the drop-down list, choose WBS, as shown in Exhibit 7.18. a. A WBS code column is now in place. b. Resize the column to conserve space.

4. Right-click the Task Mode column heading and click Hide Column. 5. Your result should look like Exhibit 7.19.

EXHIBIT 7.16

ENTER SUMMARIES (DELIVERABLES)

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

EXHIBIT 7.17

INDENT AND OUTDENT CONTROLS ON THE TASK TAB

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

Chapter 7 Scope Planning 235

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STEP 5: HIDE (OR SHOW) SUBTASKS DETAIL Some stakeholders will not want or need to see the lower levels of WBS detail (particularly in large, complex projects with lots of WBS detail). You can easily “roll-up” (or “un-roll”) subtasks underneath their parent summary task to hide (or show) detail. To display the appropriate level of detail, complete one or both of the following steps:

Click the tiny triangle before the task name of any summary task to hide underlying detail (all details will be “rolled-up” under the summary task). Click the tiny triangle again to show underlying detail (all details “un-roll” under the summary task and are again visible).

In Exhibit 7.20, the underlying detail for the “Land preparation, landscape, and foun- dation” deliverable and the “Framing” interim deliverable summaries has been hidden.

EXHIBIT 7.18

READY TO INSERT SELECTED WBS COLUMN

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

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PMP/CAPM Study Ideas It has been said that the discipline of project management lends structure to common sense. Nowhere is this more true than with scope planning. If you can remember to con- duct your planning with the end goal in mind, many of the processes and activities in this chapter will seem intuitive. Another way of saying this is that you will work back- ward from the outcome you desire (a successful product and/or project).

Begin by identifying what it would take for your product—and your project—to be successful. Be sure to include your customers and end users in making this determina- tion (“Collect requirements”), as well as subject matter experts who can speak to the technical expertise needed and the feasibility of the project plan. Identify the final deli- verables, as well as any important interim deliverables.

EXHIBIT 7.19

WBS COLUMN INSERTED

Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.

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Discussing these deliverables and what it will take to produce them is a good chance for the team to further “define scope,” or determine what is included—and not included—in your project.

Once you have the main deliverables, you will use the process of decomposition to break them down into smaller pieces, thus creating a Work Breakdown Structure. It is important to remember that the WBS deals with things, not activities (though on a very small project, these may be planned concurrently). The lowest level of the WBS is the “work package,” which is small enough that it can be easily planned and overseen by one person.

To be sure, this is an oversimplification of everything that goes into planning scope, and you will need to be fluent in all the activities and processes in this chapter in order to pass a CAPM or PMP test. But it can be helpful to remember that there is an organiz- ing structure to all this work—one that begins with the end result in mind.

EXHIBIT 7.20

HIDE OR SHOW UNDERLYING DETAIL

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Summary Once a project is formally approved by a sponsor rati- fying its charter, it is time for detailed planning. While project planning is iterative, normally the first steps are to identify stakeholders, plan communications, and determine what will be created on the project. Project teams start this process by asking customers what end- of-project deliverables they want. From the customers’ response, the planning team can determine both what interim deliverables need to be created and what work needs to be performed to create all of the deliverables. Just as important as determining what will be produced during the project is determining what will not be pro- duced. These boundaries of what will and will not be included constitute the project’s scope.

Once the scope is defined, it can be organized into a work breakdown structure (WBS). A WBS is used to progressively decompose the project into smaller and smaller pieces until each can be assigned to one per- son for planning and control. The WBS serves as a basis for determining the project schedule, budget, personnel assignments, quality requirements, and risks. As those other functions are planned, items are commonly identified that should be added to the WBS.

Some teams create their WBS by hand using the org chart or free format methods, while others directly type their WBS into project scheduling software such as Microsoft Project.

Key Terms Consistent with PMI Standards and Guides plan scope management, 212 requirement, 212 collect requirements, 212 define scope, 217 define activity, 221 work package, 224 WBS component, 225

WBS dictionary, 225 rolling wave planning, 227 baseline, 229 decomposition, 228 change control system, 229 change request, 231

Chapter Review Questions 1. What is the first step in developing a project

scope management plan? 2. What three tasks comprise the “define scope”

process? 3. For a construction project, the house is the

deliverable, and how-to instruc- tion sheets are deliverables.

4. Why is scope definition important? 5. What are two common causes of scope creep? 6. What does the acronym WBS stand for? 7. What are the advantages of using a WBS?

8. List three ways of organizing a WBS. 9. The lowest level of the WBS is known as a(n)

. 10. What is a WBS dictionary used for? 11. What is rolling wave planning? 12. What is uncontrolled change known as? 13. Why do project teams use change control

systems? 14. List the major sections that should be included in a

change request form, and tell why each is important. 15. What is a project baseline?

Discussion Questions 1. Are the product scope and project scope ever

the same? Cite examples to support your answer.

2. Create a template of a change request form. What sections did you include and why?

Chapter 7 Scope Planning 239

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3. Compare the strengths and weaknesses of the three formats of constructing a WBS: indented outline, organizational chart, and free format.

4. Give an example of scope creep from one of your own projects or from a project that has made the news in recent years.

5. What are the advantages of completing the “define activity” process after creating the WBS?

6. Describe the roles various executives, managers, and associates play in scope planning.

7. You are the project manager in charge of expanding a popular restaurant. How could you use voice of the customer (VOC) techniques to gain insight into your stakeholders?

8. Identify two projects your company or school will be performing in the future. Which one do you think will have a more detailed WBS? Why?

9. The sponsor for a project you have been managing sends you an e-mail that he would like to make a small change to the project. What is your response and why?

10. A potential client wants you to be project man- ager for the construction of a new house, but she is vague about the details. List a few questions you could ask her to gain a better understanding of the scope of the project.

PMBOK ® Guide Questions 1. The process where project deliverables and proj-

ect work are subdivided into smaller and smaller pieces is called . a. collect requirements b. define scope c. plan scope management d. create WBS

2. The project scope baseline consists of the approved versions of three of the four documents listed below. Which of these documents is not included in the project scope baseline? a. project scope statement b. project charter c. work breakdown structure (WBS) d. WBS dictionary

3. Which of the following statements about a work package is true? a. It requires the work of the entire project team. b. It is the responsibility of the project manager. c. It is the lowest level of the WBS. d. It consists of a single activity.

4. During WBS creation on a large, complex proj- ect, the product and project deliverables are broken down into progressively lower levels of detail. Once the WBS has been defined at the second or third level of detail, whose input is essential in order to break down the work further? a. sponsor b. subject matter experts

c. internal stakeholders d. external stakeholders

5. Which of the following is not a common method for organizing a WBS? a. free format b. indented outline c. hierarchical d. cross-functional

6. A “component of the project management plan that describes how the scope will be defined, developed, monitored, controlled, and verified” is the . a. project statement of work b. requirements management plan c. scope management plan d. WBS dictionary

7. A grid that links product requirements from their origins (e.g., business reason needed, stakeholder who requested them) to the deliverables that satisfy them is referred to as a . a. network diagram b. Gantt chart c. requirements traceability matrix d. stakeholder register

8. Which of these is not a component of a Project Scope Statement? a. summary budget b. project deliverables c. acceptance criteria d. project exclusions or boundaries

240 Part 3 Planning Projects

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9. The key output of the scope planning process is an approved version of the scope baseline. After this baseline is established, it can be referenced during project execution in order to . a. staff the project properly with the right skill

sets b. link requirements back to their origins c. communicate with stakeholders effectively

d. identify changes in scope that will go through formal change control procedures

10. The process of breaking the WBS into smaller and smaller deliverables is called: a. decomposition b. functional design c. detailed specifications d. value engineering

Exercises 1. Create a requirements traceability matrix like

Exhibit 7.2 for a project in which you plan an event on your campus.

2. Create a scope statement like Exhibit 7.3 for a proj- ect in which you plan an event on your campus.

3. Construct a WBS in indented outline format like Exhibit 7.11 for a project in which you plan an event on your campus. Be sure to number each row. Also, construct the same WBS in MS Project like Exhibit 7.18.

I N T E G R A T E D E X A M P L E P R O J E C T S

SUBURBAN HOMES CONSTRUCTION PROJECT

Refer to the project charter from Chapter 3. The initial scope as identified in the project charter is mentioned below:

Building a single-family, partially custom-designed home as required by Mrs. and Mr. John Thomas on Strath Dr., Alpharetta, Georgia. The single-family home will have the following features:

3,200 square-feet home with 4 bedrooms and 2.5 bathrooms Flooring hard wood in the first floor, tiles in the kitchen and bathrooms, carpet in bedrooms Granite kitchen countertops, GE appliances in the kitchen 3-car garage and external landscaping Ceiling 10 in first floor and vaulted 9 ceilings in bedrooms

Summary Milestone Schedule Approval of final drawing and all the options: 02 January 2017 Land preparation, landscape, and foundation: 15 January 2017 External work completion and utilities hookup: 03 April 2017 Internal and external finish work, appliances, and painting: 10 May 2017 County clearance and Certificate of Occupancy: 30 May 2017 Financial settlement and handover of the property: 21 June 2017

High-Level Assumptions and Constraints List of options are limited and cost of the house would vary based on options selected Client must choose one model among the models offered Seven-year warranty for structure and two-year warranty for finishing components

When this charter was developed, Suburban Homes did not have complete information on all the customer requirements and needs and complete understanding of the project. The company realizes that the milestone schedule is not accurate and will be subject to changes.

Tasks to Complete You are asked to obtain requirements from the client. To do so, Suburban Homes requests that you develop a Requirements Template that will capture all the needs of the client. Then, Suburban Homes will have complete information to develop a scope plan. Develop a scope statement along with inclusions, exclu- sions, assumptions, and constraints. Develop a deliverable-based (design-focused) Work Break- down Structure (WBS) for this project.

Chapter 7 Scope Planning 241

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Semester Project Instructions For your example project, create the following:

1. Scope management plan to direct your efforts 2. Requirements traceability matrix like Exhibit 7.2 to

understand customer desires 3. Scope statement like Exhibit 7.3

4. Change request form like Exhibit 7.13 5. WBS first using either the free format or the org

chart format like Exhibits 7.5 and 7.6 6. WBS in MS Project like Exhibit 7.18

CASA DE PAZ DEVELOPMENT PROJECT

Note that this is a larger project and from this point forward in the book, we will focus on the features and the work for the Promotion and Community Relations Working Group only. The Development and Fundraising Working Group and the Program Development Working Groups are concur- rently performing similar planning and executing of the proj- ect. The work within each group is planned and executed primarily by the team members with the project manager (scrum manager) removing roadblocks and coordinating between groups.

The Promotion and Community Relations Working Group needs to:

1. Document the requirements needed by the users of the project deliverables.

2. Determine what work will be included and what will be excluded.

3. Organize everything into a product backlog that can be used for all subsequent planning.

These three actions can be accomplished in a facilitated meeting by first asking the question: To open on time on Octo- ber 1, what are the three to five most important things that need to be created? To make it easier for your practice, the project team chose the following five features of the project:

Features of the Project:

Website

Location/building

Partnerships/sponsors

Communication methods

Joint venture (between university and Casa de Paz)

Now, for each feature, what details do you believe need to be accomplished to create the features? These are the stories. The features and supporting stories form the scope of this project and will be in the backlog until selected for work in a given iteration.

PROJECT MANAGEMENT IN ACTION

Work Breakdown Structure Template

This WBS for an industrial complex presents a deliverable-oriented approach to developing it by employing a consistency in the division basis for each level of the WBS. Usually, we can develop a deliverable WBS using function, product, or physical location.

However, within a level of WBS, we must employ only one of these to develop WBS into the next level. The first-level division basis is physical as an industrial complex is divided into a powerhouse, factory, office, and grounds. The division basis for the second level of

242 Part 3 Planning Projects

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References 1233-1998 – IEEE Guide for Developing System

Requirements Specifications, http://ieeexplore.ieee. org/document/741940/.

A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 5th ed. (Newtown Square, PA: Project Management Institute, 2013).

Caudle, Gerrie, Streamlining Business Requirements: The XCellR8 Approach (Vienna, VA: Management Concepts, Inc., 2009).

Collyer, Simon, Clive Warren, Bronwyn Hemsley, and Chris Stevens , “Aim, Fire, Aim—Project Planning Styles in Dynamic Environments,” Project Management Journal (September 2010): 41 (4): 106–121.

Fister Gale, Sarah, “The Evolution of Agile,” PMNetwork 26 (1) (January 2012): 28–33.

Hass, Kathleen B., Don Wessels, and Kevin Brennan, Getting It Right: Business Requirement Analysis Tools and Techniques Structures (Vienna, VA: Management Concepts, Inc., 2008).

Haugan, Gregory T., Effective Work Breakdown Structures (Vienna, VA: Management Concepts, Inc., 2002).

Howard, Dale, and Gary Chefetz, What’s New Study Guide Microsoft Project 2010 (New York: Chefetz LLC dba MSProjectExperts, 2010).

Hunsberger, Kelley, “Change Is Good: For Agile Projects, Redefining Scope Isn’t Such a Creepy Thing,” PMNetwork (February 2011) 25 (2): 48–53.

Miller, Dennis P. Building a Project Work Breakdown Structure: Visualizing Objectives, Deliverables, Activities, and Schedules (Boca Raton, FL: CRC Press, 2009).

Project Management Institute Practice Standard for Work Breakdown Structures, 2nd ed. (Newtown Square, PA: Project Management Institute, 2006).

Rad, Parviz, and Vittal Anantatmula, Integrated Project Planning (Berkeley Heights, NJ: Project Management Excellence, 2009).

Rad, Parviz, and Vittal Anantatmula, Project Planning Techniques (Vienna, VA: Management Concepts, Inc., 2005).

Turk, Wayne, “Scope Creep Horror: It’s Scarier than Movie Monsters,” Defense AT&L (March–April 2010): 53–55.

Warner, Paul, and Paul Cassar, “Putting Together a Work Breakdown Structure,” in David I. Cleland, Field Guide to Project Management, 2nd ed. (Hoboken, NJ: John Wiley & Sons, 2004).

the Powerhouse is a functional basis as it is divided into a steam-generation system, electrical-generation system, and electrical-transmission system. The divi- sion basis for the second level of the Factory is a product basis as it is divided into receiving equipment, processing equipment, and packaging equipment. The second level of WBS for the Office is a physical basis as it is divided into first floor, second floor, and third floor. Finally, the division basis for Grounds is again a product-basis division as it is divided into shrubs and trees, lawn, walkways, and a parking lot. This WBS is focused on the what aspect of the project and not on how we execute the project. Essentially, this WBS is

developed from the client s perspective and not from the project team s perspective, which is focused on how the project is likely to be executed (schedule- oriented WBS).

Vittal Anantatmula, PMP, PhD.

Chapter 7 Scope Planning 243

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C H A P T E R 8

Scheduling Projects

Scheduling and Agile The need to comply with government regulations by mandated deadlines does not change when a company switches from waterfall to Agile. And Agile organizations still suffer by not having enough time to deliver what s been requested at a reasonable cost. But I ve worked with people who mistakenly think Agile makes project manage- ment principles irrelevant. Or that the Agile methodology is incompatible with con- cepts like Schedule, Scope, and Cost. Communicating with team members and sponsors with those beliefs has been quite challenging for me as a project manager.

One of my colleagues tells organizations they have these options for manag- ing a project s triple constraint no matter what methodology is used Agile, waterfall, or hybrid:

Scope-driven: deliver what is requested no matter how long it takes (Sched- ule) or how much it Costs Schedule-driven: meet the deadline by Delivering whatever Scope you can within the budget (Cost)

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CHAPTER OBJECTIVES

After completing this chapter, you should be able to:

CORE OBJECTIVES: Describe five ways in which a project s schedule is limited and how to deal with each. Use the activity on node (AON)method to develop a project schedule. Identify the critical path using both the two- pass and enumeration methods, and identify all float. Depict a project sched- ule on a Gantt chart by hand, showing the criti- cal path and all float.

TECHNICAL OBJECTIVES: Describe how to adjust a project s sequence logic using leads, lags, and alternative dependencies. Build and display the logical network dia- gram showing critical path and all float with MS Project 2016. Depict a project sched- ule on a Gantt chart using MS Project 2016, showing the critical path and all float.

BEHAVIORAL OBJECTIVES: Describe potential pro- blems in estimating time accurately and how to overcome them. Resolve potential scheduling conflicts.

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Investing as many resources as needed (Cost) to deliver the Scope Cost-driven: deliver whatever Scope you can until the budget is exhausted. Your Schedule ends when the money runs out.

I ve been on projects companies decided should be schedule-driven, but team members delivered as though they were scope-driven and sponsors monitored like they were cost-driven. In these circumstances, I ve had to keep reminding people what option was chosen for the project, and why, throughout its duration, sometimes years. And this communication has been vitally important to manag- ing the schedule.

Agile has made some of my projects easier to schedule and others a lot more difficult! With a software manufacturer using a single team for each of its products, the developers themselves took more ownership of the schedule. On the job, they learned how to estimate activities better and apply dependen- cies, leads, lags, and float within their daily stand-ups. The teams were on the same iteration cycles, so ceremonies like sprint retrospectives naturally became milestones in the project schedule, on cadences familiar to the folks doing the work.

But I ve also been on projects where Agile, waterfall, and hybrid teams from different organizations were dependent on one another to deliver results. Not only did the varying methodologies and terminologies hamper scheduling but our Agile teams iteration cycles also were completely different. So once we d identified activities, sequenced them, identified mandatory dependen- cies and figured out whether they were FS, FF, SS, or SF, there were gaps caused by teams varying iterations that extended schedule duration with no corresponding benefits. And that was just in the planning stage: different geo- graphic locations, vocabulary, iterations, and systems made the schedule vir- tually unmanageable because communicating changes to it was nearly impossible. Luckily, everyone decided to align on a common iteration cycle, which went a long way toward solving our problems. But that is not always possible.

Investing team members in a project s schedule beyond just completing their own activities has always been a challenge for me, but Agile has made that even tougher. People feel they are succeeding as long as they make incremental prog- ress every day, but they can do that while our team still fails to meet the sched- ule. That s why continuing to study this chapter, and discussing its content with other project managers, is important to me.

Carol A. Abbott, PMP

4.2 Develop Project Management Plan

Network

Schedule Baseline

Duration Estimates

Activity List Milestone List

PM Plan Baselines

6.1 Plan Schedule Management

6.3 Sequence Activities 6.5 Develop

Schedule 6.2 Define Activities

6.4 Estimate Activity Durations

PMBOK® GUIDE Topics:

Develop project man- agement plan Plan schedule management Define activities Sequence activities Estimate activity durations Develop schedule

CHAPTER OUTPUTS Activity list Milestone list Network Duration estimates Schedule baseline

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8-1 Plan Schedule Management As is true of other project planning knowledge areas, planning for time is iterative. A project manager and team usually develop as much of the schedule as they can based upon the information in the work breakdown structure (WBS). The communication plan, requirements traceability matrix, and scope statement are often either complete or at least in draft form at this point. Once a project is scheduled, the budget can be formu- lated, resource needs can be identified and resources assigned, risks can be identified and plans developed to deal with the identified risks, and a quality management plan can be created. In many projects, these are not all treated as discrete activities, and some of them may be performed together. However, for clarity, each of these planning processes will be described individually.

The building blocks of a project schedule are activities. An activity is “a component of project scope work performed during the course of a project.”1 For activities to be useful as schedule building blocks, they should have the following characteristics:

Clear starting and ending points Tangible output that can be verified Scope small enough to understand and control without micromanaging Resources, other costs, and schedule that can be estimated and controlled A single person who can be held accountable for each activity (Often more than one person is required to complete the work; however, one person should be responsible.)2

Since activities represent work that needs to be performed, they should be listed in a verb-noun format, such as “prepare budget,” “build frame,” “test code,” “transmit infor- mation,” “analyze data,” and “develop plan.” Each activity should be clearly differentiated from other activities, so it is often helpful to write the activities in verb-adjective-noun format, such as “write draft report” and “write final report.”

The Project Management Institute (PMI) has divided project time management into the following seven work processes.

1. Plan schedule management—arranging how to develop, manage, execute, and con- trol the project schedule

2. Define activities—a project planning process that identifies and determines specific actions to develop and deliver the project outcomes, such as products, services, or results

3. Sequence activities—determining the predecessor and successor relationships among the project activities

4. Estimate activity durations—the process of approximating the number of work per- iods needed to complete individual activities with estimated resources3

5. Develop schedule—the process of analyzing activity sequences, durations, resource requirements, and schedule constraints to create the project schedule4

6. Control schedule—the process of regulating changes to the project schedule5

Planning schedule management, defining activities, sequencing activities, estimating activity durations, and part of developing schedules will be covered in this chapter. The remainder of developing schedules will be discussed in Chapter 9 (Resourcing Project Activities). Chapter 14 (Determining Project Progress and Results) will focus on control- ling the schedule.

246 Part 3 Planning Projects

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8-2 Purposes of a Project Schedule Projects are undertaken to accomplish important business purposes, and people often want to use the project results as quickly as possible. Many specific questions such as the following can be answered by having a complete and workable schedule:

When will the project be complete? What is the earliest date a particular activity can start, and when will it end? What activity must begin before which other activities can take place? What would happen if a delivery of material were one week late? Can a key worker take a week of vacation the first week of March? If one worker is assigned to do two activities, which one must go first? How many hours do we need from each worker next week or month? Which worker or other resource is a bottleneck, limiting the speed of our project? What will the impact be if the client wants to add another module? If I am willing to spend an extra $10,000, how much faster can the project be completed? Are all of the activities completed that should be by now? How many resource types are required, and are they available? How much time and effort are required from each resource? What time constraints is the project likely to encounter?

8-3 Historical Development of Project Schedules Throughout history, projects have been performed, but many early projects such as cathe- drals in Europe took decades or longer to complete. As competition drove the need for more rapid completion, systematic methods were developed for scheduling projects.

In the 1950s, two project scheduling methods were developed: program evaluation and review technique (PERT) and critical path method. The critical path method (CPM) is “A technique used to determine the amount of scheduling flexibility (float) on various logical network paths in the project schedule network, and to determine the minimum total project duration.”6

Both CPM and PERT were founded on the concepts still in place today of identifying activities, determining their logical order, and estimating the duration for each. Networks representing the activities were developed and the schedule calculated. Each of the tech- niques also boasted a capability the other did not possess.

PERT was developed in the Navy’s Special Program Office because the Navy was develop- ing the large and complex Polaris Weapons System. To complete it as quickly as possible, many activities needed to be worked on simultaneously. Furthermore, many aspects of the Polaris used unproven technology. There was considerable uncertainty regarding how long some of the new technology would take to develop. PERT enabled project managers to esti- mate the most likely amount of time needed to complete a project, and the level of confidence in completing it in a particular time. This has proven to be useful in research and develop- ment projects involving individual activities that are hard to estimate precisely. How uncer- tainty in project schedules is handled by PERT will be discussed more in Section 8.9.

CPM was developed in the Engineering Services Division of DuPont. DuPont needed to plan large projects when it built and refurbished enormous plants. Planners using CPM estimated the time for each individual work activity using a single time estimate. The focus was on understanding the longest sequence of activities, which determined how long the project would take. CPM enabled project managers to ask what-if ques- tions such as “If the project needs to be finished three weeks early, which activities should be speeded up and how much will it cost?” This proved to be useful in the

Chapter 8 Scheduling Projects 247

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construction industry where delays such as rain and other weather-related issues often necessitate the acceleration of a project.

PERT and CPM originally used a method for displaying the work activities called activity on arrow (AOA) or arrow diagramming method (ADM), in which schedule activities are represented by arrows and connected at points called nodes. Because it is often confusing to draw an accurate AOA network, this method is rarely used today. The more common method used today is called activity on node (AON) or the precedence diagramming method (PDM). AON or PDM is “a technique in which the scheduled activities are represented by nodes and are graphically linked by one or more logical relationships to show the sequence in which the activities are performed.”7 A small project schedule is shown in Exhibit 8.1 with work activities A through D connected by arrows showing logical relationships (A must be complete before B and C can begin and both B and C must finish before D can begin).

The basic logic of these techniques still serves as the backbone of many project sche- dules today. However, other advances have added to scheduling capability, and since computers have become much more powerful and easier to use, they’ve allowed many additional features to be added to project schedules. Another trend is that with many organizations operating in a “lean” mode, resource limitations rather than just the logical order of activities are a major determinant of project schedules.

8-4 How Project Schedules Are Limited and Created There is generally a trade-off among the three constraints—scope, cost, and schedule— and the project should have flexibility to manipulate at least one of these three con- straints. Project schedules sometimes get higher priority over scope and cost when it is a time-constrained project. In addition to these constraints, the project schedule is con- straints by other factors. One way to understand project schedules and how they are con- structed is to understand that five factors may limit how fast a project can be completed:

1. Logical order 2. Activity duration 3. Resource availability 4. Imposed dates 5. Cash flow

The first factor is the logical order in which activities need to be completed. For example, one needs to dig a hole before cement can be poured in it. This is covered in the section on sequencing activities.

EXHIBIT 8.1

AON FORMAT SCHEDULE EXAMPLE

A

B

C

D

248 Part 3 Planning Projects

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AGILE

The second factor is how long each individual activity will take to complete. This is discussed in the section on estimating activity duration. It includes methods for esti- mating durations, problems with estimates, and remedies to those problems. The third factor is how many key resources are available at specific times in the project. For example, if six rooms were available to be painted at the same time, and fewer than six painters were available, progress would be slower. This is dis- cussed in Chapter 9 in the section on resource availability. The fourth factor is imposed dates. For example, a project working on a government contract may not be able to start until the government’s new fiscal year, which starts on October 1. The fifth and final factor is cash flow. Projects may not start until the budget is approved, but progress may also be slowed until enough revenue arrives to cover expenses. This is covered in Chapter 10.

Because project schedules are limited by these five factors, creating a realistic schedule is an iterative process. A common method of developing the schedule is to do the following:

1. First, identify all of the activities and then determine the logical order by creating a network diagram.

2. Once the order is determined, make an estimate of the time required for that activity. 3. Then assign resources to each activity, and if an assigned resource is not available

when the activity is scheduled, make an adjustment of some type. The schedule can be computed with all of this information.

4. Next, it is time to compare the emerging schedule with any imposed dates and cash flow estimates.

Any inconsistencies may cause the team to adjust the schedule. Other factors often need to be considered, such as quality demands and risk factors. When all of these have been planned, the final schedule can be approved.

The pressure to complete a project as quickly as possible is often great. The sponsor or customer may try to dictate a schedule before anyone knows whether it is feasible or not. Before agreeing, the project manager must first understand what makes sense in terms of a schedule before she is in a position to know whether to accept a sponsor’s suggestions or to argue about why it may be impractical. A project manager has the eth- ical responsibility to determine a schedule that is possible to achieve, persuade all stake- holders that the schedule makes sense, and then see to it that the project is delivered according to that agreed-upon schedule.

The remainder of this chapter and the other planning chapters describe in detail how to plan for each of these, culminating in an approved schedule and project plan that all stake- holders believe is reasonable. The project manager is then accountable to deliver the project on schedule. That project delivery is the essence of the final three chapters of this book.

In Agile projects, schedules are created by first considering the product backlog to be accomplished. The overall project schedule may be developed only at a high level. Within an iteration, the team will consider how much uncertainty and complexity exist in the out- puts they plan to create. At this detailed level, the number of team members as resources is often the primary limitation to the schedule, but logical order may also be considered.

8-5 Define Activities The first process in developing a project schedule is to define all of the work activities. The last row or the lowest level of a WBS represents the work packages or the lowest-

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level deliverables. Now is the time to ask: “What work activities must be completed to create each of the project deliverables?” Exhibit 8.2 shows a WBS with the deliverables identified by numbers 1 through 9, and Exhibit 8.3 shows the same project with the activities required to create the deliverables listed. Notice that project management is the first section of the WBS and that each row in both exhibits has a unique number. The number of each activity shows the deliverable it helps to create. For example, activity 4.2, contact local bands, is needed for higher-level deliverable 4. entertainment.

As teams define activities, they need to be careful not to omit any work elements. It is a good idea to have someone on your project team play devil’s advocate to challenge the team to identify additional activities. It is better to identify activities that need not be accomplished than to forget activities that will need to be added later. The team may think all of the activities have been identified; however, when the next process is performed—activity sequencing—it may become obvious that some activities have been forgotten. Another activity can always be added later. Remember, the schedule will not be approved until all of the related planning is in place. It is better to discover a missing activity in the later stages of planning than after the schedule is approved. Activities that need to be added after the final schedule is approved will add time and money to the project, perhaps driving it over budget and causing it to fall behind schedule.

If the project being planned is similar to previous projects, the team can look at those projects both for defining activities and for other planning that follows. Some organiza- tions have templates or checklists for certain types of projects or certain project deliver- ables that can be used as a starting point in defining activities. Regardless of the starting point, team members should keep on asking how the project at hand is different from pre- vious ones. Often, a new project includes a few unique activities that need to be included.

In addition to the activity list, the project milestones should be listed. A milestone is an important point in a project schedule that the project sponsor and manager want to use as a checkpoint. A few major milestones are often identified in the project charter, but quite commonly more milestones are identified during project schedule planning. Common mile- stones include completion of a major deliverable, completion of a critical activity, or the time just before a large amount of money needs to be committed to the project. A team may also decide to put a milestone at a merging point in the project schedule where multiple activities need to be complete before any further progress can be made. The common denominator in each of these decisions is to identify a few key points in the life of a project at which man- agement can determine if the project is progressing as planned.

A milestone list is shown in Exhibit 8.4. Note that the line numbers assigned to the milestones are one greater than the line numbers of the activities that must be completed

EXHIBIT 8.2

WORK BREAKDOWN STRUCTURE WITH DELIVERABLES ONLY

COLLEGE FUNDRAISER PROJECT

1. Project Management 2. Location 3. Information 4. Entertainment 5. Safety 6. Parking 7. Food 8. Sanitation 9. Volunteers

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for each milestone. For example, the milestone “Information needs finalized” (item 3.6) represents the point in time that all of the information-related activities (items 3.1 through 3.5) are completed. For clarity, items 3.1 through 3.5 have been imported from Exhibit 8.3 and set in a lighter font. Notice also that the verb choice on the milestones is past tense, such as “confirmed,” “finalized,” and so on. This indicates that the activities leading up to each milestone must be complete.

EXHIBIT 8.3

WORK BREAKDOWN STRUCTURE WITH ACTIVITY LIST ADDED

COLLEGE FUNDRAISER PROJECT

1. Project Management 2. Location

2.1 CONTACT UNIVERSITY FOR PERMISSION

2.2 DETERMINE IDEAL LOCATION TO MEET CAPACITY

2.3 DETERMINE ALTERNATIVE LOCATION IN CASE OF INCLEMENT WEATHER 3. Information

3.1 PROVIDE TEAM INFORMATION

3.2 PRODUCE PRE-EVENT ADVERTISEMENTS

3.3 DISPLAY WELCOME SIGNS AT ALL ENTRANCES

3.4 SET UP SIGN-IN TABLE

3.5 DISPLAY SIGNS WITH RULES 4. Entertainment

4.1 FIND INFORMATION ABOUT LOCAL NOISE ORDINANCES

4.2 CONTACT LOCAL BANDS

4.3 SET UP STAGE, SPEAKERS, FUN BOOTHS 5. Safety

5.1 DETERMINE LIGHTING NEEDS

5.2 CONTACT LOCAL FIRE DEPARTMENT (EMS)

5.3 CONTACT LOCAL POLICE DEPARTMENT

5.4 OBTAIN PERMISSION TO USE WALKIE-TALKIES

5.5 COORDINATE FIRST AID BOOTH 6. Parking

6.1 FIND ADEQUATE LOTS TO ACCOMMODATE CAPACITY

6.2 COORDINATE SHUTTLE SERVICE FROM LOTS TO SITE

6.3 RESERVE SPECIAL PLACES FOR HANDICAPPED 7. Food

7.1 CONTACT FOOD/BEVERAGE VENDORS FOR CONCESSIONS

7.2 MAKE GOODIE BAGS FOR CHILDREN

7.3 ORDER SUFFICIENT WATER 8. Sanitation

8.1 PROVIDE TRASH RECEPTACLES

8.2 PROVIDE ADEQUATE NUMBER OF PORTA-JOHNS

8.3 COORDINATE POST-EVENT CLEAN-UP

8.4 PURCHASE PAPER PRODUCTS AND SOAP 9. Volunteers

9.1 RECRUIT VOLUNTEERS

9.2 PRODUCE A MASTER VOLUNTEER ASSIGNMENT LIST

9.3 MAKE NAMETAGS FOR ALL VOLUNTEERS

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EXHIBIT 8.4

WORK BREAKDOWN STRUCTURE WITH MILESTONE LIST

COLLEGE FUNDRAISER PROJECT

1. Project Management 2. Location

2.4 LOCATION CONFIRMED 3. Information

3.1 PROVIDE TEAM INFORMATION 3.2 PRODUCE PRE-EVENT ADVERTISEMENTS 3.3 DISPLAY WELCOME SIGNS AT ALL ENTRANCES 3.4 SET UP SIGN-IN TABLE 3.5 DISPLAY SIGNS WITH RULES 3.6 INFORMATION NEEDS FINALIZED

4. Entertainment 4.4 BAND CONTRACT SIGNED 4.5 ENTERTAINMENT ARRANGED

5. Safety 5.6 SAFETY REQUIREMENTS COMPLETED

6. Parking 6.4 ALL PARKING NEEDS ARRANGED

7. Food 7.4 FOOD AND BEVERAGES READIED

8. Sanitation 8.5 ALL SANITATION NEEDS IN PLACE

9. Volunteers 9.4 VOLUNTEERS PREPARED

iS to

ck .c

om /w

ra gg

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AGILE On Agile projects, typically the product owner and the team agree on what work will becompleted in an iteration, and the team then identifies all of the work activities for that iteration. The team commits to the body of work for the iteration, without having the how worked out in detail yet.

8-6 Sequence Activities Once the activities have been identified, it is time to determine the logical order in which they can be accomplished. This process is called sequence activities and it entails deter- mining the predecessor and successor relationships among the project activities. This sequencing activity is routinely performed for traditional (waterfall) projects and per- formed for each iteration of Agile projects. A common method of determining this sequence is to put each defined activity on a Post-it Note and to display them on a large work space (whiteboard, several flip chart sheets on a wall, etc.). The activities that are expected to be accomplished early in the project can be placed on the left por- tion of the work surface, those activities expected to be accomplished midway in the project near the middle, and those expected to be last on the right. Then, one person can serve as a facilitator by asking, “What activity or activities can be started right away and do not depend on any others?” Once one or more of these initial activities have been identified, the facilitator asks, “What activity or activities can we start now?” The initial activity is called a predecessor activity, which is “The schedule activity that determines when the logical successor activity can begin or end.”8 The following activity is called a successor activity, which is “the schedule activity that follows a predecessor activity, as determined by their logical relationship.”9 The facilitator then places the successor activ- ity after its predecessor and draws an arrow to show the relationship, such as finish- to-start. Four types of relations are possible, and the default relation is finish-to-start. The team continues with this analysis until all activities have been placed on the work surface with arrows showing the predecessor–successor relationships. At that time, the team should mentally go through the network to ensure that no “dead-ends” are present where the chain of arrows from the project start to end is broken.

Exhibits 8.5 and 8.6 illustrate sequencing activities with the simple example of upgrading a product. The activities are identified in Exhibit 8.5, and their sequence is shown in Exhibit 8.6. The first activity is to determine the product features. As soon as that is done, two other activities can be performed.

This product upgrade example illustrates the basic logic of showing predecessor– successor dependency relationships. Dependencies can be either mandatory or discretion- ary. A mandatory dependency is “a logical relationship between activities that that must happen—usually due to a physical or legal demand.” A discretionary dependency is “a logical relationship between activities that is considered desirable, usually based upon expe- rience or best practice.” A mandatory example is “the hole must be dug before concrete

EXHIBIT 8.5

ACTIVITY LIST FOR PRODUCT UPGRADE PROJECT

Determine product features Acquire prototype materials Produce prototype Design marketing campaign Design graphics Conduct marketing Perform sales calls

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can be poured into it,” and a discretionary example is “past experience tells us it is better to delay designing product graphics until the marketing plan is complete.” The team needs to include all of the mandatory dependencies and use its judgment on which discretionary dependencies to include. Most teams include no more dependencies than necessary since more dependencies give the project manager fewer choices as the project progresses.

8-6a Leads and Lags Exhibit 8.6 shows the most common type of logical dependency, finish-to-start (FS), which is “a logical relationship where initiation of work of the successor activity depends upon the completion of work of the predecessor activity.”10 In this example, the market- ing plan must be completely designed before the graphics design starts. However, maybe the graphics design could start five workdays before the marketing campaign design is complete. This could be modeled as a lead, which is “a modification of a logical relation- ship that allows an acceleration of the successor activity.”11 With this lead of five work- days, the arrow connecting design marketing campaign and design graphics would still represent a finish-to-start relationship, only with a five-day overlap during which time people could work on both activities. Leads are helpful if a project needs to be completed quickly since they show how a successor activity can be overlapped with its predecessor instead of waiting until the predecessor is completely finished.

Perhaps in the example, the salespeople are more effective if the design graphics are completed 10 days before they start performing sales calls so they have extra time to bet- ter understand the graphics. This could be shown by a lag, “a modification of a logical relationship that directs a delay in the successor activity.”12 In this example, the arrow connecting design graphics and perform sales calls would still represent a finish-to-start relationship, only with a 10-day gap during which no one could work on either activity.

EXHIBIT 8.6

NETWORK FOR PRODUCT UPGRADE PROJECT

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AGILE

8-6b Alternative Dependencies Other types of relationships exist besides finish-to-start, including the following:

Finish-to-finish (FF) is “the logical relationship where completion of work of the suc- cessor activity cannot finish until the completion of work of the predecessor activity.”13

For example, perhaps the graphics could be designed while the marketing campaign is being designed, but could not be completed until the marketing campaign is completed. Start-to-start (SS) is “a logical relationship where initiation of the work of the suc- cessor schedule activity depends upon the initiation of the work of the predecessor schedule activity.”14 For example, perhaps the graphics design could not start until the design marketing campaign started. Start-to-finish (SF) is “the logical relationship where completion of the successor sched- ule activity is dependent upon the initiation of the predecessor schedule activity.”15 This is the least used relationship. An example is for a project to replace an old system where the new capability must be started before the old one is completely discontinued.

On Agile projects, the sequencing is performed at a high level for the entire project or for the product release (often three to six months). Then for each iteration, the team develops the sequence by which the detailed activities of that sequence need to be completed.

8-7 Estimate Activity Duration You can begin estimating activity durations once the activities have been defined and sequenced. Estimating activity durations is the process of approximating the number of work periods needed to complete individual activities with estimated resources. Duration is “the total number of work periods (not including holidays or other nonwork periods) required to complete a schedule activity … usually expressed as workdays or workweeks.”16

It makes sense to identify the people who will work on each activity as soon as possi- ble since they often have the most knowledge about how to actually do the work and how long it will take. Also, the length of time to perform an activity is often dependent upon who will do that work. We discuss resource assignments in Chapter 9.

When estimating how long activities are expected to take, each activity should be evaluated independently. All assumptions and constraints made when estimating should be documented since a change in one of these assumptions could change the estimate. For the first estimate of each activity, a normal level of labor and equipment and a nor- mal workweek should be assumed. If overtime is planned right from the start, the project manager is unlikely to have much flexibility if the schedule needs to be accelerated. For each activity, the output to be created and the skill level required to perform the work should be identified. Any predetermined completion date can be disregarded at this point. Negotiation with a customer or supplier may be necessary, but the project man- ager needs to understand what is reasonable under normal circumstances before entering those negotiations. When a past project is being used as a guide, it is preferable to use actual time to perform the activities and not the estimated or planned time. Additional suggestions for creating good estimates include the following:

Ensure the WBS is complete. Do not include anything outside the WBS in the estimate. Clearly identify each activity. Include appropriate contingencies. Use relevant and sufficient data. Include all relevant stakeholders in making estimates.

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Conduct an independent review. Revise the estimate if there is a major project change.17

Exhibit 8.7 is a continuation of the product upgrade example with the times estimated for individual activities. Note that the estimated times in this example are in workdays. It is impor- tant to keep time estimates in the same unit of measure, be it hours, days, weeks, or another increment of time. Exhibit 8.8 includes suggestions for creating realistic time estimates.

When using the actual time from a previous project, adjust the estimate up or down based upon size, familiarity, and complexity differences.

8-7a Problems and Remedies in Duration Estimating Many factors can impact the accuracy of activity duration estimates. A list of potential problems, remedies for those problems, and the chapter in which each is discussed is

EXHIBIT 8.7

ACTIVITY DURATION ESTIMATE EXAMPLE

TIME ESTIMATE IN WORKDAYS ACTIVITY NAME

5 Determine new product features

20 Acquire prototype materials

10 Produce prototype

10 Design marketing campaign

10 Design graphics

30 Conduct marketing

25 Perform sales calls

EXHIBIT 8.8

SUGGESTIONS FOR CREATING REALISTIC TIME ESTIMATES

1. Verify all time estimations with the people doing the work. Or, even better, have the people doing the work provide the initial estimates of the activity completion time.

2. Estimate times of completion of work without initial reference to a calendar. Just consider how long you believe each activity will take under normal working conditions.

3. Make sure all time units are identical: workdays, work weeks, months (consider time off for company holidays), or another measure. 4. Some people tend to estimate optimistically. Keep in mind the following time constraints:

Unexpected meetings Learning curves Competing priorities Vacation Resources or information not available on time Inaccuracy in work instructions Interruptions Emergencies and illness Rework

5. Contrary to point 4, some people estimate pessimistically in order to look good when they bring their project or activities in under budget and under schedule. Try to develop an understanding of the estimator’s experience along with their optimistic or pessimistic tendencies and try to encourage balance in estimates.

6. Don’t initially worry about who is going to do the work, and don’t worry about the mandatory deadline. Figure out a realistic estimate first, and then figure out what to cut later.

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shown in Exhibit 8.9. These techniques are not mutually exclusive. Many organizations use several of them; however, few organizations use them all. It is important for business stu- dents to be aware of these techniques and their potential benefits, since some companies use each. Many companies customize the mechanics of how they use these techniques.

EXHIBIT 8.9

ACTIVITY DURATION ESTIMATING PROBLEMS AND REMEDIES

POTENTIAL ACTIVITY DURA- TION ESTIMATING PROBLEM REMEDY CHAPTER

Omissions Refining scope and WBS

Checklists, templates, devil’sadvocate

Lessons learned

7

8

15

General uncertainty in estimate Rolling wave planning

Reverse phase schedule

Learning curve

Identify and reduce sources of uncertainty

Manage schedule aggressively

7

9

8

11, 12

14

Special cause variation Risk analysis

Resolve risk events

3, 11

14

Common cause variation PERTMonte Carlo

Project buffer

8

8

9

Merging (multiple predecessors) Milestones

Reverse phase schedule

Feeding buffer

Manage float

3, 8

9

9

14

Queuing Staggering project start dates

Resource leveling

Resource buffer

2

9

9

Multitasking Prioritizing projects

Carefully authorize start of noncritical activities

2

9, 14

Student syndrome (starting late) Float

Critical path meetings

8

14

Not reporting early completion of rework

Project culture

Project communications

Contract incentives

Project leadership

Progress reporting

4

6

13

5

14

Source: Adapted from Larry Leach, “Schedule and Cost Buffer Sizing: How to Account for the Bias between Project Performance and Your Model,” Project Management Journal 34 (2) (June 2003): 44.

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AGILE

8-7b Learning Curves The concept behind learning curves is simple: The more times a person performs an activity, the better and faster he or she becomes. This concept can be utilized for activity duration estimating, as the rate of improvement can be studied and predicted. Therefore, on types of projects where certain activities are performed many times, a project planner can predict how long it will take each time to perform the activity. The rate of improve- ment can vary widely depending on many factors, such as:

How much the culture of the organization stresses continual improvement How much skill is involved in the activity How complex that activity is How much of the activity is dependent on the worker versus dictated by the pace of a machine If there is frequent job rotation

The amount of time necessary to perform an activity is calculated based upon a rate of improvement that occurs every time the number of repetitions doubles. For example, if the learning rate is 80 percent and the first time the activity was performed (by pro- ducing the first unit), it took 100 minutes, then after doubling the number of units pro- duced, the second unit would require 80 minutes. To double the repetitions again, the fourth unit would require 64 minutes. The time estimates for each time the activity is performed can be found in learning curve tables such as the one shown in Exhibit 8.10. Notice that the rate of learning is very important since more rapid learning leads to much faster performance times for successive times an activity is performed.

For consumers, one result is rapidly declining prices when an industry has a steep learning curve. People expect prices to decline for new electronics and other consumer items. As a project manager, you also need to plan for the amount of learning that may take place. Further, as a project manager, you need to create and sustain the environ- ment that encourages and expects rapid learning so you can always become more competitive.

On Agile projects, duration estimates improve with each iteration and as early iterations are completed. Armed with more specific knowledge of how long certain activities take, later iterations can be estimated more accurately. Project managers can use velocity of progress to estimate how much work will be accomplished in each iteration. Velocity is “the sum of the estimates of delivered (i.e., accepted) features per iteration … measured in the same units as feature estimates, whether this is story points, days, ideal days, or hours that the team delivers.”18

EXHIBIT 8.10

LEARNING CURVE TABLE

ACTIVITY 60% 70% 80% 90%

1 100 100 100 100

2 60 70 80 90

4 36 49 64 81

8 21.6 34.3 51.2 72.9

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8-8 Develop Project Schedules All the scheduling processes discussed thus far must be completed even if you use Micro- soft Project or another scheduling tool. At this point, you have defined, sequenced, and estimated the duration for all the schedule activities. Now is the time to use all of this information to develop a project schedule. Once the schedule is developed based upon this information, resource needs and availability and cash flow constraints often extend the proposed schedule, while imposed date constraints often suggest the need for sched- ule compression.

The first major task in developing the project schedule is to identify the critical path, which is “the sequence of schedule activities determining the duration of the project. Generally, it is the longest path through the project.”19 Because it is the longest sequence of activities, the critical path determines the earliest possible end date of the project. Any time change to an activity on the critical path changes the end date of the entire project. If the project manager changes an activity on the critical path to start at a later date, then the whole project will end at a later date. If the amount of work for an activity on the critical path is increased, then the project will be delayed and it will end at a later date. If, on the other hand, an activity on the critical path is performed faster than planned, the entire project could be completed sooner. The critical path gets its name not because it is the most critical in terms of cost, technical risk, or any other factor, but because it is most critical in terms of time. Since virtually everyone wants to complete projects at the promised time, the critical path gets a great deal of attention.

The two methods for determining the critical path are the two-pass and enumeration methods. Each uses the same activity identification, duration estimate, and activity sequencing data but processes the data in a different manner. While both determine the critical path, each also determines other useful information.

8-8a Two-Pass Method The two-pass method is used to determine the amount of slack or float each activity has. To perform this method, two logical passes should be made through the network. The first pass is called the forward pass. The forward pass is “the calculation of the early start and early finish dates for the uncompleted portions of all network activities.”20 On the forward pass, the project team starts at the beginning of the project and asks how soon each activity can begin and end. If the project is being scheduled with software, actual calendar dates are used. Often, when calculating the schedule by hand, a team starts at date zero. In other words, the first activity can begin after zero days. To envision this, consider Exhibit 8.11, where all of the previously determined information has been displayed.

A legend is shown in the lower-right corner of Exhibit 8.11. This explains each bit of information that is displayed for each activity. For example, the first activity name is “Determine new product features.” The estimated duration for this activity is five days. This activity is coded with the letter A. The four corners of each block display four important times for each activity:

Early start date (ES)—“the earliest possible point in time on which uncompleted portions of a schedule activity can start, based upon the schedule network logic, the data date, and any schedule constraints.”21

Early finish date (EF)—“the earliest possible point in time on which uncompleted portions of a schedule activity can finish, based upon the schedule network logic, the data date, and any schedule constraints.”22

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Late start date (LS)—“the latest possible point in time that a schedule activity can start, based upon the schedule network logic, the project completion date, and any schedule constraints.”23

Late finish date (LF)—“the latest possible point in time when a schedule activity can finish based upon the network logic, the project completion date, and any constraints.”24

“Determine new product features,” for example, has an early start time of zero since it can begin as soon as the project is authorized.

FIRST OR FORWARD PASS The first pass is then used to calculate the early finish, which is the early start plus the estimated duration (ES + Duration = EF). In this case, 0 + 5 = 5 means the activity “Determine new product features” can be completed after five days. (The zero for the first activity means it can start after zero days—meaning at the beginning of the first day.) Each activity that is a successor can start as soon as its pre- decessor activity is complete. Therefore, the next two activities can each start after five days. (That means at the start of the sixth day.) To calculate the early finish for each of these activities, add its duration to the early start of 5, for early completion times of 25 and 15, respectively. The difficult part of calculating the first pass comes when an activity has more than one predecessor. For example, “Perform sales calls” cannot begin until all three preceding activities (“Produce prototypes,” “Design graphics,” and “Conduct

EXHIBIT 8.11

TWO-PASS EXAMPLE SCHEDULE SET UP

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marketing”) are complete. Therefore, its early start is 45. This is true even though “Pro- duce prototypes” and “Design graphics” have earlier finish times, because “Conduct mar- keting” cannot be completed until day 45. The later time is always taken. The results of the first pass are shown in Exhibit 8.12. Note that the earliest the entire project can be completed is 70 workdays.

SECOND OR BACKWARD PASS The second pass is sometimes called the backward pass. The backward pass is “the calculation of late finish dates and late start dates for the uncompleted portions of all schedule activities. Determined by working backward through the schedule network logic from the project’s end date.”25 When performing the backward pass, teams start at the end and work backward, asking, “How late can each activity be finished and started?” Unless there is an imposed date, the late finish for the last activity during planning is the same as the early finish date. In our example, we know the earliest we can finish the entire project is 70 days, so we will use that as the late finish date for the last activity. If the activity “Perform sales calls” must end no later than 70 and it takes 25 days, then it must start no later than day 45. In other words, calculate the late start by subtracting the duration from the late finish (LF duration = LS). The confusing part of calculating the second pass is when there is more than one successor. In Exhibit 8.13, one place this occurs is at the first activity, “Determine new product features,” since two activities are immediate successors. Enough time must be left for all of the successors, so whichever one must start soonest dictates the late finish

EXHIBIT 8.12

SCHEDULE EXAMPLE FIRST PASS COMPLETE

Chapter 8 Scheduling Projects 261

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date of the predecessor. In this example, “Design marketing campaign” must start no later than after day 5; therefore, five days is the late finish for the first activity.

FLOAT AND THE CRITICAL PATH Once both passes are complete, the early and late start dates for every activity and the amount of time the entire project will take to com- plete are known. However, the team also wants to know the critical path. This is calcu- lated easily by first determining each activity’s float (sometimes float is called slack). Float can be total float, which is “the amount of time a schedule activity may be delayed from its early start date without delaying the project end date”26 or free float, which is “the amount of time a schedule activity can be delayed without delaying the early start of immediately following schedule activities.”27 A project manager wants to know how much float each activity has in order to determine where to spend her time and atten- tion. Activities with a great deal of float can be scheduled in a flexible manner and do not cause a manager much concern. Activities with no float or very little float, on the other hand, need to be scheduled and managed very carefully.

Float is calculated by the equation Float = Late start–Early start (Float = LS ES). The critical path is the sequence of activities from start to finish in the network that have no float. In Exhibit 8.14, activities A, D, F, and G have no float and, therefore, create the critical path. It is typical to mark the critical path in red and/or in boldface to call atten- tion to it. Activities B, C, and E each have float and are not on the critical path. If

EXHIBIT 8.13

SCHEDULE EXAMPLE SECOND PASS COMPLETE

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activity B is delayed, it will delay the start of activity C; therefore, activity B has total float. While activity B can be delayed up to 10 days without delaying the entire project, any delay to activity B would delay the start of activity C. On the other hand, activities C and E can be delayed by 10 and 20 days, respectively, without causing any other activity to be delayed. Therefore, their float is free float—impacting neither the overall project nor any activity in it.

Project managers carefully monitor the critical path activities. They also closely watch activities with little float—think of these as “near-critical” activities. A project with many activities that have little float is not very stable. Even small delays on near-critical activi- ties can change the critical path. Project managers can sometimes “borrow” resources from an activity with plenty of float to use first on an activity that is either already criti- cal or nearly critical. Chapter 9 discusses resource scheduling in detail.

8-8b Enumeration Method The second method of determining the critical path is the enumeration method. To com- plete this, we list or enumerate all of the paths through the network. The advantage of this method is that since all of the paths are identified and timed, if a team needs to compress the project schedule, they will know both the critical path and the other paths that may be nearly critical (or those with very little float). It is imperative to keep track of both critical and near-critical paths when compressing a schedule. In Exhibit 8.15, three paths are

EXHIBIT 8.14

TWO-PASS COMPLETE SCHEDULE EXAMPLE

Chapter 8 Scheduling Projects 263

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identified, and the total duration for each is calculated. ADFG is the critical path with an expected duration of 70 days, just as was determined with the two-pass method. Now, how- ever, we also know that path ABCG is expected to take 60 days (10 fewer than the critical path), and path ADEG is expected to take 50 days (20 fewer than the critical path).

8-9 Uncertainty in Project Schedules On some projects, it is easy to estimate durations of activities with confidence. On others, so many uncertainties exist that managers have far less confidence in their ability to accurately estimate. However, project managers still need to tell sponsors and clients how long they believe a project will take and then be held accountable for meeting those dates. One common strategy for handling this potential problem is to construct the best schedule possible and then manage the project very closely. A different strategy is to esti- mate a range of possible times each individual activity may take and then see what impact that has on the entire schedule. PERT and Monte Carlo are two methods some- times used for this strategy.

EXHIBIT 8.15

ENUMERATION METHOD EXAMPLE SCHEDULE

Path ABCG ADEG

Total Duration 60 50

264 Part 3 Planning Projects

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8-9a Program Evaluation and Review Technique Program evaluation and review technique (PERT) was developed during the 1950s to better understand how variability in the individual activity durations impacts the entire project schedule. To use PERT, a project team starts by sequencing the activities into a network, as described in Section 8.6 earlier in this chapter. However, instead of creating one time estimate to complete each activity, they create three estimates: optimistic, most likely, and pessimistic. For example, the first activity, “Determine new product features,” will most likely take five days, but it could take as little as four days if everything works well and as long as 12 days if a variety of things interfere. The person scheduling the project then calculates the estimated time to perform each activity as shown in Exhibit 8.16 using the following equation:

Estimated time Optimistic 4 Most likely Pessimistic

6 Therefore, for the first activity, the estimated time

4 4 5 12 6

6

The primary advantage of PERT is that it helps everyone realize how much uncer- tainty exists in the project schedule. When people use single time estimates, sometimes there is a tendency to believe that the estimates foretell exactly what will happen. On many projects, a great deal of uncertainty exists, and PERT helps to make it visible. In addition to making the overall uncertainty more visible, calculations often show that the expected time is actually longer than the most likely time; if many things go very well on an activity, generally only a little time can be saved, but if many things go terribly wrong, a great deal of time can be lost.

However, using PERT involves difficulties. First, it is often hard enough to create one estimate of how long an activity will take, so it takes even more effort (and therefore money) to create three estimates. Second, there is no guarantee of how good any of the three estimates are. In other words, it is not necessarily the case that a three-point esti- mate of an activity would be more accurate than a single duration estimate. Third, PERT can underestimate the risk of a schedule running long because it does not accurately address when two or more activities need to be completed before a third one can begin.28

EXHIBIT 8.16

PERT TIME ESTIMATE EXAMPLE

ACTIVITY OPTIMISTIC MOST LIKELY PESSIMISTIC EXPECTED

Determine new product features

4 5 12 6

Acquire prototype materials

16 20 30 21

Produce prototype 8 10 12 10

Design marketing campaign

9 10 14 10.5

Design graphics 6 10 20 11

Conduct marketing 28 30 50 33

Perform sales calls 20 25 30 25

Chapter 8 Scheduling Projects 265

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Since PERT highlights uncertainty in project duration, its logic is useful to project man- agers. However, since it has some problems, only a few project managers actually use it to calculate and monitor project schedules. Some project managers informally use three time estimates for a few key activities on the critical path to get a sense for the amount of uncertainty and to better understand the activities that need close monitoring. Other proj- ect managers who want to understand the potential variation use Monte Carlo simulation. Students of project management need to be aware that both PERT and Monte Carlo simu- lations are sometimes used to help understand uncertainty in project schedules.

8-9b Monte Carlo Simulation Monte Carlo simulation is “a computerized mathematical technique that allows people to account for risk in quantitative analysis and decision making that furnishes the deci- sion maker with a range of possible outcomes and the probabilities with which they will occur.”29 Monte Carlo is more flexible than PERT, in that an entire range of possible time estimates can be used for any activity or the project itself. The project schedule is calculated many times (perhaps 1,000 or more), and each time, the estimate for a partic- ular activity is generated based upon the likelihood of that time as determined by the project manager. For example, suppose a project manager estimated that for a particular activity, there was a 10 percent chance of taking five days, a 30 percent chance of taking six days, a 40 percent chance of taking seven days, and the remaining 20 percent chance of taking eight days. Then, for each 100 times the computer generated a project schedule, when it came to that activity, 10 times it would choose five days, 30 times it would choose six days, 40 times it would choose seven days, and 20 times it would choose eight days. The output from the computer would include a distribution of how often the project would be expected to take each possible length of time. Many other possible outputs can also be generated from Monte Carlo simulations.

One advantage of Monte Carlo analysis is the flexibility it provides. This allows more realistic estimates. Another advantage is the extent of information it can provide regard- ing individual activities, the overall project, and different paths through the project that may become critical.

A disadvantage of Monte Carlo is the amount of time necessary to estimate not just a most likely duration for each activity, but an entire range of possible outcomes. Another disadvantage is that special software and skill are necessary to effectively use Monte Carlo. This disadvantage is not as large as it once was because more software is available and most students are learning at least the fundamentals of simulation in statistics or operations courses.

A project manager needs to decide when some of the more specialized techniques are worth the extra effort for a project. The old saying that a person should spend $100 to save $1,000, but should not spend $1,000 to save $100, applies. If the savings on a project from using techniques such as learning curves, PERT, or Monte Carlo are significant, project managers should consider using one of them. If not, they should create the best estimates possible without the specialized techniques, incorporate risk management by carefully identifying and planning for specific risks as discussed in Chapter 11, and man- age the project schedule very carefully as discussed in Chapter 14.

These specialized techniques are sometimes used in research and development (R&D) projects. However, some R&D projects do not need this level of sophistication. Exhibit 8.17 shows an actual R&D project schedule used by D. D. Williamson of Louisville, Kentucky, when a Chinese customer asked it to develop a new product somewhat different from any it had previously developed. Once D. D. Williamson decided to take the job, it developed

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and communicated the project schedule to all stakeholders both in its company and the cus- tomer’s company within the first week.

Australian researchers have discovered that two primary causes of late delivery of IT projects are variance in time to complete individual work activities and multiple depen- dencies for some activities. Suggestions for overcoming these two problems are shown in Exhibit 8.18.

EXHIBIT 8.17

NEW PRODUCT DEVELOPMENT SCHEDULE IN CHINA EXAMPLE

Week one—Request is received from the customer for a product that is darker than anything we have in our current offering. Our sales manager forwards the request to our VP sales and our R&D department. A quick review of the potential price versus cost of materials is completed by the VP sales (with finance input), and the product is deemed saleable at an acceptable margin.

Week two—A trial cook in our “baby cooker” is conducted by our R&D department. Within two attempts, a product that is within the customer-requested specs is produced. An additional trial is conducted to quickly check repeatability. The trial product is express shipped to the customer and to our China facility for comparison purposes.

Week three—The formulation and related instructions for cooking are communicated to our China operations with a “red sheet” process. China has anticipated the receipt of this red sheet and is able to schedule time in production within a week.

Week four—The initial red sheet production is successful and passes the specification tests in China and in Louisville.

Week five—Customer confirms purchase order and the first shipment is sent. The product contributes significantly to the reven- ues and profitability of the China facility. Success!

Key factors—Strong communication between all the players and a clear understanding of the customer expectations up front.

Source: Elaine Gravatte, D. D. Williamson.

EXHIBIT 8.18

INITIATIVES TO IMPROVE ON-TIME SCHEDULE DELIVERY

CAUSE OF LATE DELIVERY INITIATIVE EXPLANATION

Activity variance Increase activity transparency

Increase user participation

Reduce project size

Manage expectations, e.g., set realistic goals by drawing from “outside views” Use packaged software

Allows for better planning

Ensures that the product delivered meets the user needs

Ensures that estimates for tasks are more accurate

Mitigates optimism bias and misrepresentation

Provides a standard within which to develop the system

Activity dependence

De-scope

Improve requirements definition

Reduce activity coupling

Stage projects (incremental develop- ment or iterative development)

Reduces the number of dependencies Ensures that there is no confusion over what is to be developed and when If activity links are reduced, then dependencies exert less influence

Reduces delay bias by minimizing multitasking, merging, queuing (i.e., reduces the dependencies)

Source: Vlasic, Anthony and Li Liu, “Why Information Systems Projects Are Always Late,” Proceedings Project Man- agement Institute Research and Education Conference 2010 (Oxon Hill, MD, July 2010).

Chapter 8 Scheduling Projects 267

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8-10 Show the Project Schedule on a Gantt Chart The discussion in this chapter so far has been how to determine the project schedule. While this is necessary, it can be confusing to show people a network diagram. A tool for communicating a project schedule that is much easier to understand is a Gantt or bar chart. A Gantt chart is a horizontal bar chart that shows each work activity on a separate line with the bar placed from the early start date to the early finish date for each activity on a timescale. It is not uncommon to use Gantt chart for small projects.

The simplest Gantt charts show a bar for each activity stretched out over a time line. Many stakeholders also want to see which activities are critical and the amount of float noncritical activities have. Therefore, critical activities are normally shown in red or bold- face, noncritical activities are normally shown in blue or normal face, and the amount of float is shown in a muted or thin line out to the late finish of each noncritical activity. The units of time are the units the project team used in creating the schedule, whether that is hours, days, weeks, or another unit of measure. A Gantt chart is shown in Exhibit 8.19. It is easy to understand when each activity should be performed. However, the basic Gantt chart does not show other useful information such as predecessor–successor relationships, late start dates, and so forth. These can all be easily displayed on a Gantt chart that is developed using scheduling software such as Microsoft Project. The instructions for using MS Project to create and print Gantt charts are covered in the following section.

8-11 Using Microsoft Project for Critical Path Schedules

As you begin to work with schedules, remember there are five major elements affecting project completion: logical order (or sequence) of project tasks, duration of each task, the number of resources available when needed to complete those tasks, imposed dates, and cash flow. When building schedules in MS Project, you will find it helpful to keep these limitations in order. In the following tutorial, we’ll determine the sequence of tasks before coming up with durations for them. Since the bottom line for many stakeholders is often “How long is this going to take and how much will it cost me?” you may find more success if you allow decision makers to focus on determining the sequencing order of tasks first, rather than how long each activity will take.

Keep in mind that we are continuing with the Suburban Parks Home project from the tutorial in Chapter 7 (if you have not completed that tutorial, this one will not make

EXHIBIT 8.19

GANTT CHART EXAMPLE

0 10 155 20 25 30 35 40 45 50 55 60 65 70

Determine new product features

Acquire prototype materials

Produce prototype

Design marketing campaign

Design graphics

Conduct marketing

Perform sales calls

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much sense). First, we will inspect the project calendar to make any adjustments neces- sary. Next, steps to develop the network diagram will be explained. Finally, the critical path will be discussed as well as how to view and manage the developing schedule.

8-11a Set up the Project Schedule Setting up the project schedule begins with ensuring the correct start date for the project is set, and then defining your organization’s working days, hours, and holidays.

SET (OR UPDATE) THE PROJECT START DATE In the Chapter 3 tutorial, we set the start date for the project. Often that time can change once planning begins and needs to be updated. To do that:

1. Click Project Tab>>Project Information 2. Set the start date to 12/4/17 3. Click OK

DEFINE YOUR ORGANIZATION S WORKING AND NONWORKING TIMES MS Project’s calendar system defines working and nonworking time. The calendar system consists of a default project calendar and a resource calendar for each resource. The project calendar refers to what you think of as a normal calendar: the working and non- working dates for a project, including holidays. The resource calendar pertains to the resources of a project—that is, the people, equipment, space, or materials used in a proj- ect. In this tutorial, we are focused on the project calendar (the resource calendar will be addressed in a future tutorial).

To avoid unrealistic project schedules, you must ensure your organization’s working and nonworking times are defined in the project calendar (as well as resource vacations in resource calendars). The default project calendar has all days, except Saturday and Sunday, defined as eight-hour working days. The working hours during the day are 8:00 to 12:00 and 1:00 to 5:00. By default, no holidays are defined and must be defined as nonworking days. All project calendar content is copied into all resource calendars. Resource calendars are used to block out vacation days and other resource-specific non- working days. Resource calendars are then used to determine when a resource assign- ment can be scheduled. If there are no resource assignments, the project calendar is used to determine scheduling.

Use the following steps to change a working day to nonworking in the Suburban Parks Home project, as shown in Exhibit 8.20. The legend explains the different shadings on the calendar days. To open the project calendar:

1. Click Project Tab>>Change Working Time 2. Make sure “Standard (Project Calendar)” is selected in the “For calendar:” box 3. Use the scroll bar to the right of the calendar to find the date you want to edit 4. Click on the date you want to edit 5. Click the Exceptions Tab in the table below the calendar, then click an empty row 6. Enter a description for the nonworking day in the Name column 7. Click another cell in the same row (or Tab) to review the results 8. Repeat these steps until all nonworking days are defined as in Exhibit 8.20

a. You can also type your nonworking days into the table and set the Start and Finish dates without clicking on them in the calendar

9. Deleting a row restores the default working hours for that day 10. Click OK to close the project calendar options

Chapter 8 Scheduling Projects 269

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To change the working time for a day, as shown in Exhibit 8.21:

1. Select the day and enter a description in the table below the calendar 2. Click the Tab key to fill the Start and Finish dates 3. Click Details… 4. Choose the “Working Time radio button and modify the “From:” and “To:” values

in the table 5. To eliminate one set of work times (such as afternoon), select those times and click

the delete key so only morning times are working 6. Click OK twice

8-11b Build the Network Diagram and Identify the Critical Path We will now begin to build the network diagram for the Suburban Parks Home project. The steps to create a network diagram in MS Project are as follows:

1. Enter tasks and milestones 2. Edit the timescale 3. Understand and define task dependencies 4. Assign task duration estimates

EXHIBIT 8.20

STANDARD CALENDAR WITH TWO HOLIDAYS PLUS A HALF DAY AND A WORKING SATURDAY

Source: Microsoft product screen shots reprinted with permission from Microsoft Corporation.

270 Part 3 Planning Projects

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