Project Management MBA 570 Summer 2011

WHAT IS A PROJECT?

Definition Project a series of jobs usually directed toward some major output and requiring a significant period of time to perform

PMI Definition “A temporary endeavor undertaken to create a unique product or service” Project Management Institute, 2000

Factors Leading to the Increased Use of Project Management: Compression of the product life cycle Global competition Knowledge explosion Corporate downsizing Increased customer focus Small projects that represent big problems

Why the emphasis on project management? Many tasks do not fit neatly into business- as-usual. Need to assign responsibility and authority for achievement of organizational goals. Need to succeed and prosper!

Growth in PMP Certification 2,800

Characteristics of Projects Unique Specific Deliverable Specific Due Date

Other Common Characteristics of Projects Multidisciplinary Conflict Complex Part of Programs

1. Lack of Project Manager Authority Why Some Projects Fail……… Five Reasons for Failure 1. Lack of Project Manager Authority “I must be a mushroom. They keep me in the dark, feed me manure, and then they can me.” 2. Lack of team participation “If workers were smart, they’d be managers. Why ask them anything? After all, I’m the boss.” 3. Bad reporting “Reports are just useless paperwork and an irrelevant management requirement. I fill out the form and then forget the form.”

Why Some Projects Fail……… Continued 4. Lack of people skills “I don’t thank people just for doing a good job. Doing a good job is what they get paid for.” 5. Unrealistic goals and schedules “Your mission, should you decide to accept it…if caught or killed, the Secretary will disavow any knowledge…”

Three Reasons for Success …..and Others Succeed Three Reasons for Success 1. Committed teamwork “If anything goes bad, I did it. If anything goes semi-good, then we did it. If anything goes real good, then you did it. That’s all it takes to get people to win football games.” – Paul “Bear” Bryant 2. SMART Goals With Real Consensus “Specific, Measurable, Agreed-Upon, Realistic, and Time-Specific.” 3. Use of project management tools as a means, not an end. “We have 562 pages of charts and graphs and still don’t have a clue!”

Business Failures The construction industry is the largest single employer of the country’s work force, it makes a major contribution to the gross national product, and yet suffers one of the highest annual business failure rates in the country. Studies have shown that the number of failures in the construction industry is much higher than it should be. The reason for the high failure rate is not because owners of companies do not have the technical skills required for construction but because owners have not developed adequate business management skills or techniques.---in particular; communication skills!

Failure to qualify for loans Excessive growth Most business failures occur within the first three years of operation with the major reason being a lack of planning. Some of the other reasons which lead to business failure are: Insufficient working capital Failure to qualify for loans Excessive growth Borrowing money from relatives and friends Company officers taking a too large of a salary Purchase or lease of expensive vehicles as status symbols Not keeping adequate accounting records Poor project estimating as a result of: a. not knowing the cost of material b. under estimating labor costs c. not understanding overhead or general conditions d. inadequate profit margins Loss of owner or key person Too many projects starting at the same time

PROJECT MANAGEMENT VS. GENERAL MANAGEMENT

Skill Requirements for Effective Project Management Conflict Resolution Creativity and Flexibility Ability to Adjust to Change Good Planning Negotiation win-win versus win-lose

Key Elements of Negotiations Each party in the negotiation must believe they have achieved. In other words, both must feel they are or were successful. Do not forget the other party is a human being and needs to feel the other side cares. Fairness is essential to success. Both you and your opponent must perceive that you were treated fairly. (You will know whether you were fair in your treatment of the other person.) A deal is a deal! You need to honor your side of the agreement and the other side must honor theirs. The essence of negotiations is to do business again. Both parties must win.

Universal Truths The sum and substance or so-called “Universal Truths of Negotiations” are as follows: Everything is negotiable, We negotiate continually, The process is predictable, Information is crucial to success, and Time constraints affect the outcome.

Rules For Negotiating Teams When you are negotiating with two people; Sit where you can watch both. When you have two people on your team; Sit apart so you “speak with two voices.” When you have a large group opposing their small group; Keep your group together for the appearance of power. When they have a large group opposing your small group; Intermingle to diffuse their power.

WHAT IS MANAGED? THE THREE GOALS OF A PROJECT

The Iron Triangle Time Cost Scope

Performance, Cost, and Time Project Targets

To Put A Man On The Moon The year 1962 “We commit this nation to put a man on the moon and return him safely to this earth by the end of this decade, and to do the other things, not because they are easy but because they are hard.” The triple constraint project has begun.

The Three Constraints Are Time constraint: How long do you have? Budget constraint: How much can you spend? Performance criteria: What results must your project achieve to meet its purpose? Project: Put a man on the moon Time: constraint: By the end of the decade. Performance: Safe return to Earth Budget: Unknown

Old Joke You can have it fast. You can have it cheap. You can have it good. Pick any two!

Ranking the Triple Constraint Try identifying and then ranking the Triple Constraints for the following project.. Project: The Smithsonian National Air and Space Museum, the world’s most popular museum, was a Federal government project accomplished ahead of schedule and under budget. The goal of the project was to build a world-class aviation and space museum for a budget of $30 million and open it on July 4, 1976. 1. Identify the Triple Constraints. Project: Performance criteria: Budget constraint:

Ranking the Triple Constraint Rank the Triple Constraints. Driver: Middle constraint: Weak constraint:

THE LIFE CYCLES OF PROJECTS

The Project Life Cycle

An Alternate Project Life Cycle

Confronting Uncertainty – The Management of Risk

What uncertainties are encountered in project management? Time required to complete a project Availability of key resources Cost of resources Timing of solutions to technological problems Actions taken by competitors Actions taken by clients

Can uncertainty surrounding projects ever be eliminated? No, but it can be managed

THE PM’S ROLES

Facilitator Manager-As-Supervisor Versus Manager-As- Facilitator Systems Approach Versus Analytical Approach suboptimization Must ensure project team members have appropriate knowledge and resources Micromanagement

Communication Paths Between a Project’s Parties- At-Interest Communicator Communication Paths Between a Project’s Parties- At-Interest

Virtual Project Manager Geographically Dispersed Projects Communication Via email Web telephone video conferencing “Never let the boss be surprised!”

THE PM’S RESPONSIBILITIES TO THE PROJECT

Three Overriding Responsibilities Acquiring Resources getting necessary quantity and quality can be key challenge “irrational optimism” Fighting Fires and Obstacles Leadership and Making Trade-Offs

Negotiation, Conflict Resolution, and Persuasion Necessary to meet three overriding responsibilities

SELECTION OF A PROJECT MANAGER

Key Criteria Credibility - The PM is believable technical credibility administrative credibility Sensitivity - Politically Astute and Aware of Interpersonal Conflict Leadership, Style, Ethics - Ability to Direct Project in Ethical Manner

The Key To Productivity FACILITATION The Key To Productivity in the Workplace

-TO MAKE EASIER (Webster’s 11th Collegiate Dictionary) FACILITATE -TO MAKE EASIER (Webster’s 11th Collegiate Dictionary)

VS. GROUP DECISION MAKING THE MENTAL ASPECT INDIVIDUAL VS. GROUP DECISION MAKING THE MENTAL ASPECT

INDIVIDUAL VS. GROUP DECISION MAKING COMMUNICATION PROBLEMS

FACILITATORS ARE PROCESS MANAGERS The Facilitator is like an orchestra leader. She or he must keep everyone on the same sheet of music playing the same note, in the same beat, all at the same time. FACILITATORS ARE PROCESS MANAGERS

GOOD FACILITATORS ARE NEUTRAL SERVANTS OF THE TEAM THEY DO NOT EVALUATE OR CONTRIBUTE IDEAS OF THEIR OWN MANAGING PROCESS IS YOUR ONLY JOB

“ --from My Tao, by R.W. Russell Put your energies into guiding rather then ruling. The more unobtrusive you lead, the more people will grow and learn to use their powers wisely. Make your aim as a leader to be unnoticed and eventually unneeded!” “ --from My Tao, by R.W. Russell

Common Meeting Problems & The Facilitator’s Role SEPARTING ROLES: LEADER (Facilitator, Leader, and Member) Leader Participant Traffic Cop

Which Role(s) would you give up; keep? Can you be Captain, Coach, Quarterback, Referee, and Cheerleader all at the same time?! Which Role(s) would you give up; keep?                                                                                      

THE FACILITATOR IS THE MEETING CHAUFFER He/She is the Neutral Servant of the group. With the basic decision making process and the specific “road maps,” proper facilitation will help you avoid potholes and detours, and get you where you want to go in an efficient, effective manner.

KEY FACILITATIVE BEHAVIORS ACTIVE BEHAVIORS Things You Can Do To Intervene and Get Things Back on Track When They Start To Go Wrong Check for agreement Recycle to last level of agreement Play dumb Say what is going on Maintain/regain focus Use team memory Avoid process battles * Enforce process agreements Constantly encourage Accept/legitimize/deal or defer Be non-defensive Use body language Don’t talk too much Boomerang *

Facilitating Comments Remember to do the little “Sesame Street” commercials to constantly educate the team/group on process. There’s no one right way to solve problems; we can try lots of different tools. Which do you want to try first? You can only do one thing at a time. It’s OK to disagree. People don’t stick to agendas they haven’t agreed upon. Having timeframes can keep up on track. People don’t feel understood unless they get a response. You can’t solve two problems at once; which do you want to work on? If you can’t agree on the problem, you won’t agree on the solution.

…Continuation of Facilitating Comments It’s your team/group/meeting. Terrific! You’re all terrific! Gee, you all look tired/sad/unhappy…. I’m feeling frustrated – what about you…? Let’s review the Team Memory and see if we can get back on track. Are you discussing what to do, or how to do it? Could we slow down; I don’t think everyone is clear on what the problem is? It’s not the role of the facilitator to solve your problems. Let’s freeze and look at our process. It’s good to share information, not evaluates right/wrong. We need to remember where we are in the P-S process. Go slow now to go fast later.

KNOW WHERE YOU’RE GOING COPY, CUT, AND CARRY FACILITATIVE BEHAVIORS FACILITATOR CONTRACT Boomerang Maintain/Regain focus Play dumb Say what’s going on (say the unsayable) Check for agreement Avoid process battles Enforce process agreements Accept/Legitimize/Deal or Defer Be non-defensive Use body language Use the Team Memory Try to stay neutral Not contribute my ideas Manage process (be meeting “chauffeur”) Focus team energy on the task Defend you from personal attack Make process suggestions Need your help to keep in role It’s your meeting KNOW WHERE YOU’RE GOING PAVE THE WAY DEFINE YOUR ROLE

Planning the Project

If a Problem Occurs During a Project Is It Most Likely Due to: A) Poor Execution B) Poor Planning

Two Extremes “Ready, Fire, Aim” “Paralysis by Analysis” No planning Too Much planning

THE CONTENTS OF A PROJECT PLAN

Elements of Project Master Plan Overview brief description of project deliverables Milestones or significant events expected profitability and competitive impact intended for senior management Objectives detailed description of project’s deliverables project mission statement

Elements of Project Master Plan continued General Approach technical and managerial approaches relationship to other projects deviations from standard practices Contractual Aspects agreements with clients and third parties reporting requirements technical specifications project review dates

Elements of Project Master Plan continued Schedules outline of all schedules and milestones Resource Requirements estimated project expenses overhead and fixed charges Personnel special skill requirements necessary training legal requirements

Elements of Project Master Plan concluded Evaluation Methods evaluation procedures and standards procedures for monitoring, collecting, and storing data on project performance Potential Problems & Required Project History list of likely potential problems

THE PLANNING PROCESS

PM’s First Job Understand the expectations that the organization has for the project. Identify who among senior managers has a major interest in the project. Determine if anything about the project is atypical.

THE WORK BREAKDOWN STRUCTURE

Simple Approach for Creating the WBS Gather Project Team Provide Team Members with Pad of Sticky-Notes Team Members Write Down all Tasks They can Think of. Sticky-Notes Placed and Arranged on Wall

A Partial WBS (Gozinto Chart) for an Annual Tribute Dinner Project

Basic Steps to Construct the Project Action Plan Identify and arrange all activities in successively finer detail by level List type and quantity of all resources required for each activity Show activity predecessors and task duration Show all project milestones following their predecessor activities Identify individual or group assigned to perform activity and have ‘sign off’

What is the job to be done? What is the purpose of the job? Details of a job can be analyzed by asking the following questions and writing down the answers: What is the job to be done? What is the purpose of the job? What are the activities within the job? What is the purpose of each activity? Could the job be done another way? Is every listed activity necessary? Who does the work? Who could do it better?

Details of a job can be analyzed by asking the following questions and writing down the answers: Where is the work done? Could it be done somewhere else more economically? When is the work done? Would it be better to do it some other time? How is the work done? Could more efficient methods be used?

Budgeting the Project

Budgets are plans for allocating organizational resources to project activities. forecasting required resources, quantities needed, when needed, and costs Budgets help tie project to overall organizational objectives. Budgets can be used as tool by upper management to monitor and guide projects.

METHODS OF BUDGETING

Top-Down Budgeting Based on collective judgements and experiences of top and middle managers. Overall project cost estimated by estimating costs of major tasks Advantages accuracy of estimating overall budget errors in funding small tasks need not be individually identified

Bottom-Up Budgeting WBS or action plan identifies elemental tasks Those responsible for executing these tasks estimate resource requirements Advantage more accurate in the detailed tasks Disadvantage risk of overlooking tasks

The Impact of Budget Cuts Two project life cycles

Three Basic Causes for Change in Projects Errors made by cost estimator about how to achieve tasks. New knowledge about the nature of the performance goal or setting. A mandate.

Scheduling the Project

PERT AND CPM NETWORKS

History Late 1950s Program Evaluation and Review Technique (PERT) U.S. Navy, Booz-Allen Hamilton, and Lockeheed Aircraft Probabilistic activity durations Critical Path Method (CPM) Dupont De Nemours Inc. Deterministic activity durations

The Language of PERT/CPM Activity task or set of tasks use resources Event state resulting from completion of one or more activities consume no resources or time predecessor activities must be completed

The Language of PERT/CPM continued Milestones events that mark significant progress Network diagram of nodes and arcs used to illustrate technological relationships Path series of connected activities between two events

The Language of PERT/CPM concluded Critical Path set of activities on a path that if delayed will delay completion of project Critical Time time required to complete all activities on the critical path

A Sample Set of Project Activities and Precedences

Stage 1 of a Sample AON Network

Stage 2 of a Sample AON Network

A Completed Sample AON Network

A Sample Problem for Finding the Critical Path and Critical Time

Stage 1 of a Sample Network

A Complete Network

Information Contents in an AON Node

The Critical Path and Time for Sample Project

Calculating Activity Slack Slack or Float LST - EST = LFT - EFT = Slack

An MSP Version of PERT/CPM Network

THE GANNT CHART

A Gantt Chart of a Sample Project

A Gantt Chart of Sample Project Showing Critical Path, Path Connections, Slack, EST, LST, EFT, and LFT

A Gantt Chart of a Day Care Project Showing Expected Durations, Critical Path, Milestone, and Resource Requirements

A Progress Report on a Day Care Project Showing Actual Progress Versus Baseline

Gantt Chart – Don’t Manage Your Project Without It Because the Gantt Chart is such a traditional tool and appears so simple on the surface, it doesn’t always get the respect it deserves as a project management tool. Here are some of the uses of a Gantt Chart. Management reports. The simplicity and visual strength of a Gantt Chart makes it the ideal tool to use when you’re reporting to someone who doesn’t know project management. Testing the Time constraint. When you’re doing preliminary project planning and have numerous parallel tasks, you often don’t know how long the project will take in calendar time. The Gantt Chart will show you. Allocating resources. The Gantt Chart helps you to allocate and track resources and identify conflicts.

Gantt Chart – Don’t Manage Your Project Without It What-If analysis. You can explore many options visually and determine which one(s) are best for your project. Resource management. The “Resource Gantt Chart” works both in controlling resources on a single project and in managing resources across projects in a multiple project environment. Tracking progress. The “Tracking Gantt Chart,” which you’ll explore later, allows you to compare actual project performance to plan, shows you the consequence of tasks not finishing on their assigned times, and gives you a tool to explore options.

Changing Views of Quality Past Present Quality is the responsibility of blue-collar Quality is everyone’s responsibility, workers and the direct labor employees including white-collar workers, working on the floor. indirect labor force, and the overhead staff Quality defects should be hidden from the Defects should be high-lighted and Customers (and possibly management) brought to the surface for corrective action Quality problems lead to blame, faulty Quality problems lead to cooperative justification, and excuses solutions

Changing Views of Quality Past Present Corrections-to-quality problems should be Documentation is accomplished with minimum documentation essential for “lessons learned” so that mistakes are not repeated Increased quality will increase project costs Improved quality saves money and increases business Quality is internally focused Quality is customer focused Quality will not occur without close People want to produce quality supervision of people products Quality occurs during project execution Quality occurs at project initiation and must be planned for within the project

“How to Create a “Miracle on Demand” Experienced project managers sometimes look like miracle workers. They bring in a project that seems impossible, and solve problems that others can’t. They have learned to think like project managers—and to use the tools of project management effectively. As you read and practice the tools provided, you’ll learn some of the secrets for looking like a miracle worker yourself. Your projects are full of hidden resources and opportunities. Every project has hidden resources that can solve many of your problems. Proper planning will help you uncover those resources and use them properly. These resources go by strange names—resource slack, weak constraint flexibility, control point identification. You’ll learn how to uncover and use them as you read this. Resources are scarce—so don’t waste the ones you have. Remember: You waste a resource if you don’t know it’s there in the first place.

How to Create a “Miracle on Demand” When you need one great idea, start with several ideas. The tools of brainstorming are an important resource for project managers. Don’t go it alone; get input and fresh ideas from other sources. When you’re overstressed and over-anxious, racing your brain for insights and solutions, you don’t think at top capacity. Allow your project team to carry some of the creative load; it helps you –and it improves their moral at the same time. Take the time to plan and to set goals. Thousands of projects fail each year because their managers didn’t do the preliminary steps in the right order, especially defining and planning. Make sure you know what the goal of the project is; make sure you understand the work; make sure you have a plan. Then start the work. You wouldn’t go to the target practice and shout, “Ready! Fire! Aim!” Don’t take that attitude with your projects.

Ten Golden Rules of Project Management Don’t bite off more then you can manage Get your ducks in a row Plan for Murphy Don’t put off until tomorrow Delegate, delegate, delegate CYA (Document) Keep your team in the loop Measure success Have a flexible strategy Learn from your mistakes