Jamal’s Musings – Where to Find a Project Manager for Our Enterprise (Multidepartmental) Project?

I once taught a one-day project management workshop for a group of executives of a large international bank. The people present in the room were the CEO, COO, CMO, CIO, VP of HR and the CFO. We started discussing how the projects that only ten years ago were pure IT initiatives now have grown and span across the entire organization and involved resources from every department. An interesting exchange took place between me and the CEO of the company:

CEO: Yes, all you are saying about the importance of project management is very interesting, but we have decided long ago that our organization simply can’t assign a project manager to run an enterprise project.

Me: How so?

CEO: Well, here is our logical chain of thought. The project manager must be a technical expert in the domain of his project. Our projects, as was mentioned earlier, span across multiple departments including, finance, accounting, payments, risk, HR, marketing, etc. Since we can’t find a person who would be an expert in all these domains (frankly, I don’t think such person even exists in the entire world), we can’t have a project manager assigned to the project. We will have to rely on the departments coordinating the activities among themselves …

Me: OK, I understand you reasoning … With you permission, can we look at this problem from a different perspective?

CEO: Sure!

Me: Do you think that the people sitting in this room are qualified to run your company?

CEO: (surprised) Of course! Every one of the executives present here has my full vote of confidence!

Me: Let us start with you then. What is your background?

CEO: Sales and marketing.

Me: Which implies you can’t be considered an expert in the areas of finance, accounting, payments, risk and IT, right? So, using your logic, how can you run the company if you are not an expert in all these areas?

CEO: But I have specialists in all those areas reporting to me and I rely on their expert opinions when making decisions …

Jamal's Musings – The Role of Psychology in Project Scope Management

 

Another field that is utilizing the latest developments in psychology is - surprising to many people - e-commerce. We all shop on the Internet for books, clothing, tools and electronics but very rarely do we realize how the site designers manage to manipulate and direct us using subtle but very powerful psychological tricks. Here are some of them:

 

  • "Buy" and "Add To Cart" buttons - ever noticed how large and colorful they are? Do you really think it is just a design quirk of the user interface specialist? And yet it has been proven that color, size and even irregular shape have a proven, measurable impact on products added to cart, checkout initiation and checkout completion.

 

  • Free Shipping vs. Savings - do you think that $10 in money saved is always better than $6.99? The conventional answer to that question is "yes", but a professor from Wharton School of Business found that consumers preferred free shipping worth $6.99 in savings over a $10 discount on the product. And smart e-commerce retailers take full advantage of this irrational behavior.

 

  • Lump Sum vs. Distributed Payments - by the same token, when offered to buy a warranty for additional $15, most of the customers declined that offer. But guess what they did when they were offered to pay $2 per month for the next 12 months for the same warranty?

 

  • Usage of "Will" - the e-commerce psychologists argue that the following statement "Shampoo X will calm itching and will reduce redness" is much inferior to "Shampoo X calms itching and reduces redness". Some peculiar processes in our brains forces us to believe the second type of statement way more than the first one.

 

As was mentioned earlier, this technique could probably be quite useful in software and product development, although it is possible to employ it on certain multidisciplinary projects as well.

 

Article - Do You Consider Company’s Internal Resource Costs When Prioritizing Projects?

 

Whenever I either teach my “Project Portfolio Management Masterclass” or consult on project portfolio management initiatives I like to surprise the senior executives with a seemingly innocent question:

Oh, by the way, do you consider your internal company resources to be free?

After the angry noise in the audience finally subsides, one of the executives – usually in a voice full of emotion – replies to me:

Of course not! Our employees are the main and the most valued asset at this organization!

Knowing that the trap is set and the victims are completely unaware as to what really awaits them, I ask the next innocuous question:

So, in that case, do you include the cost of internal resources when assessing the feasibility of your projects?

As a rule, about 90% of the time my question is greeted by a complete silence. The executives exchange glances attempting to comprehend the meaning of my question and finally answer something to the effect of,

“Uhm, no, not really … They are considered to be a fixed rather than a variable cost”

In order to analyze this problem, let us consider two scenarios. In the first one we have to choose between projects A and B. For simplicity let us assume that the only factor of importance in this case is the return on investment (ROI), one of the most uncomplicated financial formulas.

Project A should generate revenue of $1,000,000. The external (direct) cost of this project is $500,000 (e.g. purchase of materials and equipment).  In addition the company should expect to “invest” about 200 man-months of their internal resources, but since we are not considering the internal employee costs, the overall impact of this factor on the total project budget is zero (see Figure 1).

Project B is also expected to generate $1,000,000 in revenues, but the external cost is expected to be $750,000. Also, the human investment is estimated to be 5 man-months. But again, since the “internal employee” costs are ignored, the overall impact of this factor is also zero.

News - "Project Scope Management" book (with free Google Preview) is now available at the CRC Press website!

My second book "Project Scope Management: A Practical Guide to Requirements for Engineering, Product, Construction, IT and Enterprise Projects" is now available on the CRC Press website!

Incomplete or missed requirements, omissions, ambiguous product features, lack of user involvement, unrealistic customer expectations, and the proverbial scope creep can result in cost overruns, missed deadlines, poor product quality, and can very well ruin a project. Project Scope Management: A Practical Guide to Requirements for Engineering, Product, Construction, IT and Enterprise Projects describes how to elicit, document, and manage requirements to control project scope creep. It also explains how to manage project stakeholders to minimize the risk of an ever-growing list of user requirements. Read more

 

Read the first several dozen pages of the book for free via Google Books Preview 

 

Here is what Max Wideman, one of the first project management gurus had to say about my second creation:

The book unites the best practices of scope management from the fields of traditional project management, information technology, software development, engineering, product development, architecture, construction, and multidisciplinary projects. It is based on the most advanced and popular works by prominent authors and contains the latest advances in project scope management. It also concentrates on the hands-on practicality of tools and techniques rather than focusing on their academic prominence. Best of all, Jamal’s book is easy to read and uses informal, nonacademic language to explain all the key points.

—R. Max Wideman, P. Eng., FCSCE, FEIC, FICE, FPMI

 

And finally, the full table of contents for you perusal:

Project Scope Management book

Jamal's Musings - The Story of One Word That Destroyed A Project

 

I remember one instance when I was teaching my “Project Management Masterclass” for the executive team of a North American port authority. The purpose of this class was to introduce this group of people to the core fundamentals of the project management science and convince them to seriously consider implementing this methodology at their organization.

This workshop has been highlighted by many interesting discussions and even heated arguments about the domain of project management, the value of planning and the role of the project manager. However the most interesting – at least in my humble opinion – exchange took place when I started describing the “dos” and “don’ts” of requirements gathering and analysis:

Me: When documenting requirements the project manager should always make sure that words like “fast”, “acceptable”, “efficient”, “flexible”, etc. do not appear in project management documentation.

COO: And why not?

Me: Well, you see, although these words are perfectly acceptable in “normal life”, they are considered to be ambiguous in the domain of project management …

COO: And?

Me: OK, let me share a very simple example with you. For instance, if the requirement states, “The car shall be fast”, it can later be misunderstood by the project stakeholders. Some of them will think 100 km/hour is fast enough, while others will insist on a speed of 300 km/hour. And yet, another group will ask for a speed of 500 km/hour. This will most likely create an unnecessary confusion and lead to conflict in the middle of the execution stage of the project.

COO: But we always use these words in our documents!

CEO: (interrupting the COO) Do you, guys, remember what happened on our recent “New Cruise Ship Terminal” project? We claimed in the project charter that we would build a state-of-the art facility and let that word slip into all other documents …

Me: And what happened?

Project Management in History - Monumental Budget Busters

Damningly described as ‘hell on wheels’, ‘malice in blunderland’, and ‘a field of dreams’; welcome to a run-down of some of the world’s most eye-wateringly over-budget projects.

For ease of comparison all costs have been corrected for inflation and converted into US dollars.

Monumental Budget Busters - Hubble Space Telescope

Monumental Budget Busters - Graph View

Monumental Budget Busters - Grid View

For a full and interactive version of the article please click here.

About the Author

Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East.  Read Jamal’s Blog @ www.thinktankconsulting.ca

News – Travelling to Baku, Azerbaijan

 

 

Hi all,

Just wanted to let you know that I will be heading to Baku, Azerbaijan to continue my works on the troubled project recovery for one of the international companies located there. I should have full access to my e-mail and LinkedIn, so if you need to contact me, please drop me a note at info@thinktankconsulting.ca. Furthermore, my local number in Baku will be +994 51 728 9797. 

Cheers

Jamal

Guest Article - PMP Exam Myths - True or False?

There are many myths related to the PMP® Exam and exam process. In this article we are going to bust six common myths; you need a specific percentage to pass the PMP® Exam, there is authorized training material for the PMP® Exam, passing the PMP® Exam will always lead to a higher salary, the exam application audit process uses profiling, you need to memorize the ITTOs, and you need 35 PDUs to take the PMP® Exam.

News - “Project and Portfolio Management Masterclass” in London, UK – 13-14-Nov-2014

 

Hi all,

Just wanted to let you know that I will be teaching my 2-day “Project and Portfolio Management Masterclass” in London, UK in partnership with Marcus Evans on 13-14-Nov of this year. Here is a high-level outline of the class:

  • How to Deliver Exceptional Project Results
  • The Art of Estimation
  • Are we Supposed to Negotiate on Projects?
  • How to Define Project Scope?
  • Customer Walkthroughs, Technical Inspections and Peer Reviews
  • Why Should You Manage Scope and Customer Expectations?
  • How to Maximise a Portfolio Value?
  • How to Balance Your Portfolio?
  • How to Link Portfolio to Strategy
  • How to Implement Project Portfolio Management?

The detailed course outline can be accessed here (note you will be taken to the Marcus Evans website). For a detailed course brochure and registration information click here.

Let me know if you have any questions @ jmoustafaev@gmail.com

Cheers,

Jamal

 

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Contact me if you have any questions regarding the article or our services at info@thinktankconsulting.ca