Project Stakeholders

Managing Project Stakeholders

As you move ahead in your project management career, you advance from managing small project teams who may share a common superior and work in the same department. The scope of those projects is aimed at providing something that project sponsor wants. They may be the only project stakeholder. After some project successes, you’re managing projects that involve larger teams drawn from multiple departments as well as vendors and contractors from outside organizations. Now you must spend more of your time managing the project stakeholders.  Stakeholders Main Page

Project stakeholders are a very large and diverse group. They may include:

  • department managers who are lending you resources
  • departments that are performing important tasks on your project, like develop a computer program or constructing office facilities
  • departments that may use the product of the project and have a major stake in its features, characteristics and performance
  • organizations that may be affected by the performance of or the results from your project
  • individuals within or external to your organization who will provide certain kinds of expertise that you don’t have on your project team.

In sum, stakeholders are an important and diverse group. They often have a powerful influence on the success or failure of your project. That’s why you need to spend a great deal of time identifying people who are affected, positively or negatively, by your project. You must communicate with them and keep them posted on the progress of the project, or at least those parts and deliverables in which they are interested.

The other reason you must identify stakeholders early and continuously is because you do not want to be surprised by new project requirements a month before the completion date. You seek out these stakeholders and gather their requirements so you can determine if the requirements should be included or excluded. That reduces the likelihood of unpleasant surprises later on.

Project Stakeholder Register

Experienced project managers always keep a stakeholder register to identify the more significant stakeholders and their requirements.  The stakeholder register serves several purposes. First, it guides your communications with stakeholders. Obviously all stakeholders are not equally important. As an example, those managers who are lending you resources for your project should receive lots of communication about your use of their people and the issues they care about. Stakeholders who are the primary beneficiaries of your project deliverables also require regular communication and cultivation. You must ensure that these people continue to support the project. Finally, any stakeholder who has a requirement should be tracked and notes kept on the nature of their requirement and what happens to it.

Don’t Ignore Project Stakeholders

As a project manager, you must let others be part of your project in order to succeed. Project StakeholdersSome people may want to block your project and prevent it from accomplishing its goals in terms of scope, cost, duration, and risk. These project stakeholders are often people you did not identify during your planning phase. However, it is very important to include in your plan a general strategy to deal with them during execution. We can call them the known unknown stakeholders. We know that we will meet them at some point, but we do not know who are they.

These project stakeholders might be an individual, a government agency, an organization, or a group of people. They attack the project and try to affect the project dimensions, scope, duration, cost, and risk. The challenge is how to plan for a risk if you do not know when it will occur. The best approach is to have a general strategy to deal with known unknown stakeholders. The project stakeholder might want some befits such as recognition, or to be part of the success, get training, or they are having some trouble with one of your team members, etc. The price you might pay is not too high.

Your strategy to deal with the known unknown project stakeholders should specify a small percent of the project’s duration or cost as a risk response. During the project execution phase, you should discover theses kind of stakeholders and identify their intentions. Some of them who are not too dangerous to your project, can just be ignored. Some of them may have inaccurate ideas about the project or about some of the project members. You should reassure these people and try to include them in your project success by recognition, invite them to a party, or give them (or their staff) free training. Some of these stakeholders, however, have the power to hurt your project. So you should communicate with them frequently. Keep them updated on the project’s progress to facilitate its execution.

Project Cash Flow

Making Sure the Project Cash Flow Will be There

Just as project managers must secure the availability of the project team members and the materials or equipment required for the tasks, they must also secure the project cash flow availability. While some contractors will wait until the completion of the project to receive payment, others must be paid when they have finished their assignment. Still other contractors may require periodic payments during the course of the work. Some materials and equipment may be available within the performing organization but other equipment must be leased or rented. And materials must be ordered from suppliers who have their own payment terms.

Your experience managing projects may be limited to projects done within an organization where the people, materials and equipment are all available from different departments in the organization. In that situation, these cash flow issues don’t arise. so you don’t have to read this article.

Project Cash Flow Forecast

Having contractors stop work because they haven’t been paid or suppliers refuse to deliver necessary items because they haven’t been paid is the kind of mistake good project managers don’t make. These project managers always develop a forecast of the project cash flow. This can be developed in an Excel spreadsheet but the easier way is to use project schedule software. Professional-level software gives you the ability to forecast the cost of contractors and materials directly from your project schedule. As an example, from the schedule you could identify the materials that have been delivered, the equipment that has been leased and the professional or consulting fees the project will have incurred at the end of each month. Having this data allows you to discuss the project cash flow requirements before consultants or vendors have gone unpaid and stopped work. Cost Benefit Analysis Main Page

Project Cash Flow Problems

Executives who are owners of the project should approve the cost benefit analysis, the project plan and the required cash flow before work starts on the project. If that doesn’t occur, problems like this one will arise. During the execution stage, the PM submits a request to pay a supplier. The finance manager replies that there is no cash! project cash flowThe project manager argues that the executives approved the project budget. The finance manager agrees that is true but he cannot reserve all funding amounts at one time. As a result, this problem affects the entire project duration. This is an example of not planning for cash flow during the project planning phase. The PM should have gotten the finance manager’s  commitment about payments.

Project Cash Flow Plan

All receivables and payables during the project’s life cycle should be planned and secured. The project manager should plan for the cash flow on a monthly basis, as shown below, and get the finance manager’s approval.

Cash Flow Project Plan
Period 01-JUN-2013 To 30-JUN-2013
“The Whole Amount must be reserved from the beginning of the month to the End” Item IN OUT
Purchasing HW $40,000
Training Courses $15,000
JUN Payment $55,000

The project manager should also create an actual cash flow document and compare it with the planned cash flow each month. The cash flow project plan should be secured and if either the project manager or finance manager wants to modify it, they should ask for a change request. That is  because the change will affect the project dimensions, scope, duration, budget, and risk. By adding this cash flow plan to the project management plan,the project manager reduces the risk and enhances the organization’s project management performance culture.

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Strategic Vision vs. Project Myopia

Too often project managers get lost in the minutia and don’t have strategic vision for the project. They don’t see the big picture of how the project deliverables will affect the organization as a whole. In our work with over 300 organizations, this is one of the biggest concerns that client executives have about project managers. That is particularly true of project managers with an engineering or software orientation. The executives’ concern is that the project manager does not see the customer or the product or the larger organization. Instead they dive headfirst into the barrel of technical details.

It’s important to understand your project’s role in the organization’s top level strategy for reaching its goals. Strategic visionThis is true whether you’re assuming ownership of a project that’s underway or starting one from scratch,  Without that strategic vision, your project runs the risk of satisfying its own ends but disappointing the organization and/or the sponsors that supported it.  And that’s not a good thing.

Sources of Strategic Vision

So how do you apply strategic vision at the project level and see the big picture?  As a project manager, you need to have a good grasp of your organization’s long-term goals.  Your project charter should provide that linkage and you may want to clarify that in the project plan by directly describing how the project’s desired outcome supports the strategic goal(s).  If this connection is not made or isn’t clear, you may be only a few well-intended—but unfortunate—decisions away from providing results that don’t meet the project sponsor’s intent.

Questions to Gain Strategic Vision

You should ask yourself the following simple questions and keep them in mind as you execute your project. They will help you maintain that strategic vision and keep your project on track.

1.  Exactly how does my project support the organization’s strategic goals?  How do the project’s requirements and deliverables relate to the strategic goals?  Consider how much flexibility the deliverables can bear before they no longer support the goal(s).  You may even establish a threshold beyond which the project should be reassessed and/or revised.

2.  How will my project’s success be determined?  Success criteria should be spelled out in your scope statement.  If set correctly, success criteria directly support the desired business outcome of your project. By extension, they support the sponsor’s strategic goals.  If you must adjust success criteria due to approved requirements changes, make sure this linkage to success criteria, desired business outcome, and strategic goals remains intact.

3.  Where does my project fit in the organization’s strategic activities?  View your project from the outside. From a broad, strategic perspective, how does your project align with other projects addressing the same or related goals?  There are both benefits to be gained and pitfalls to be avoided from this exercise.  For example, you may discover the potential for synergy with another project, or at least opportunities for mutual support of a strategic goal.  But you may also discover redundancy or interdependencies that must be acknowledged and dealt with.  At a minimum, you will gain valuable insight into the tactical role your project plays in supporting the overall strategic goals of the organization.

4.   What is the long-view of my project?  As project managers, we often become mired in the here-and-now issues that demand our immediate attention.  Without meaning to, we may lose the ability to see our project in the long-term and not recognize when we have strayed from our core purpose.  It is important, maybe even critical, to allow yourself time now and again to look far downrange and make sure that the course you are on isn’t leading to the wrong destination.

5.  Do I truly understand my project’s cause and effect relationships?  By dwelling too much on low level management of daily project operations, it’s easy to miss or underappreciate cause and effect relationships that stretch beyond that myopic perspective.  Problems you’re dealing with today may have roots far in the past, maybe even preceding your appearance in the project.  As a project manager with “strategic vision,” you’ll have the ability to step back and understand the full scope of that relationship. That will allow you to address it appropriately.

Project Due Date Trap – Video

The project due date trap occurs when the boss will only talk about the project’s due date. They want a commitment to that date without defining what they want the project to deliver.

Dick Billows, PMP
Dick Billows, PMP
Dick’s Books on Amazon

This project due date trap is deadly for a project manager. What draws you into this trap is fear of the boss’ anger. You are certain that your career will be over if you don’t commit to their due date. So you don’t even ask some reasonable questions.  Project Planning Main Page

Experienced project managers have learned how to deal with the executives who set the project due date trap. They have learned that a project manager won’t be fired for refusing to commit to a due date. But a project manager could be fired for failing to hit a due date or budget they have committed to meet The first step is getting the sponsor to clearly define the project scope. The scope includes the major deliverables the project must produce and their acceptance criteria. Without that information, the project manager cannot estimate a realistic due date and commit to it. So the project is doomed.

Project Planning Blunders - Plucking Due Dates Out of the Sky

Project Due Date Don’ts

The wrong way to do project planning is to start by identifying the first task you’re going to do on the project, then the second, then the third and so on. This “to do” list approach is easy because it doesn’t require much thinking. But it has major downfalls. Project managers who use this approach tend to include a lot of good, but unnecessary, requirements. They don’t limit the plan to include only what they must do to deliver the result the boss wants. So they waste lots of time and resources. And since they don’t know exactly what the boss wants, they can’t decide what to do to deliver it. They end up adding things to the project later on that they suddenly discover are vital. This “to do” list approach to project planning gets off to a fast start but ends up with projects that take longer and cost more than they should.

Project Best Practices

Long-term success requires that you learn project management best practices. Those are the skills you need to deliver the project scope on time and within budget. For small projects, a five-step methodology is enough. Here are the steps:
Project Due Date Trap

  1. Project planning – focus on a clear scope and a deliverable-oriented project plan. Create the work breakdown structure by working from the scope statement down to individual team member assignments. Clearly define the deliverables that are required to reach the project’s end result.
  2. Assigning work to the project team – focus on giving them a crystal-clear understanding of what you expect them to produce before they start work. The deliverables must be measurable.
  3. Estimating – focus on how much work it will take to produce each deliverable. It’s always best to have the team member who is going to do the work take part in this estimating process.
  4. Tracking progress against the plan and spotting variances – use project management software and status data from your team members to stay on top of your project. Anticipate problems when they are small and before they impact the entire project.
  5. Designing corrective action and reporting status – design corrective action when you find problems. Clearly report problems and solution options to the project sponsor for their approval.

Learning a simple methodology like this will help you be successful on the vast majority of projects most organizations do.

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Overconfidence in Project Management

Most successful professionals have a great deal of confidence. This is particularly true of project managers.  They have climbed the technical ladder to reach the project manager position and a few successes may have elevated them in the eyes of management above the other project managers.  This can cause overconfidence which is a situation ripe for disaster. A project manager who is overconfident in his/her project strategy, technical solutions, time and cost estimates is dangerous. That overconfidence leads to assuming too many risks at too high a level. A humble project manager is a much better bet for project success. The humble PM doesn’t decide that risk management is unnecessary because he’s a great problem solver and firefighter. That’s just foolish.

Consequences of Overconfidence in Project Management

Overconfidence in project management has lots of consequences some good, some bad. Overconfidence affects a project and their managers in lots of ways:
1. When PMs make commitments on completion dates
2. When team members make estimates for their tasks
3. When engineers commit to making a solution work.
What do I mean when I say overconfidence? Project Manager Skills Main Page

A few days ago, I was having a conversation with a friend who studied Overconfidencepsychology. We touched on overconfidence, an especially interesting topic regarding common human behavior and decision making. It appears that there is scientific consensus documented in hundreds of research studies. They call it the better-than-average effect. The majority of us humans are much more likely to overestimate our level of skills, or be overly optimistic regarding our future, rather than underestimate.
This reminded me of common mistakes in project management. Mistakes mainly related to wrong estimation, overly optimistic assumptions and neglected risk management. As I do not have the research or hard quantitative data, I can share my personal experiences and opinion on how overconfidence can significantly lower the probability of success for project. To be entirely fair, sometimes it can have a positive result in motivating the team toward an above average performance.

Examples of Overconfidence in Project Management

Here are two examples if overconfidence in project management that I will touch on.
The first is a project responsible to deliver a system for managing a lending process. It had an original estimation to finish in 9 months. Instead, it finished after 2 years. Clearly, in the eyes of the sponsor, stakeholders and steering committee, it was labeled a disaster. The worst part was that every time the team reported a status they asked only for 1 more month deadline extension. This presented, in their view, a realistic plan to finalize the scope. They worked an average of 12 hours a day, but the end result was a disappointment. The project for the next years became the benchmark of what could be done wrong. In another country of the same bank with almost the same project scope, they had an estimation of 3 years. They finished 2 months ahead of time and were praised for the achievement.

The second example is a project related to credit risk. The benchmark for projects with a similar scope in other counties was 1.5 years. The local project pulled it together in 7 months. How? Practically without sleeping and keen will to stay to their commitment. This is again an example of overconfidence, yet the team this time succeeded. The project was praised and it became one of their strong assets for promotions and their CV.
Even though, I believe that the more generic effect of overconfidence is the first example, the second is a possible scenario as well. A team can be energized, especially if they are the source of the estimations (bottom-up), to achieve  against-the-odds results.

What can a project manager do to manage these phenomena? First it is important to know that people are subject to unbalanced decisions, or estimations, usually on the upper side. It can be addressed as one part of risk management plan. When applicable, it helps to have industry standards for the resources and duration needed for specific tasks. An example are the benchmarks regarding software development productivity and duration. These benchmarks then compare to the bottom-up estimates. It is normal to expect some degree of deviation, yet if the difference is more than 30%, it is worth digging and understanding a bit deeper.

Apart from the risks it brings, overconfidence may as well be a tool used to comply with external constrains, which require an above-the-average performance. A committed team is more motivated to stay to the commitment. If committed, even when the team is required to deliver above its normal productivity levels, it is more likely to do so.
No cookbook and easy way exists to deal with overconfidence; it is rooted in our being. Yet I believe that acknowledging it and putting triggers and actions in place to mitigate and/or make use of it may became the difference between success and failure.

If you are interested, you can check out an interesting article on the topic: The Overconfidence Problem in Forecasting, NY Times, author: RICHARD H. THALER . Some other researchers are Camerer and Lovallo 1999, Hoelzl and Rustichini 2005, Koszegi 2006, Chuang and Lee 2006.

Project Portfolio Management Software

More money and time gets wasted trying to automate project portfolio management (multiple projects) than on any other project management tool. The reason for the waste is that decision-makers lose sight of the purpose of portfolio management. Other agendas, purposes and goals take over and lead to all the waste and kill the effort. These killers include:

  • giving everyone access to all the project data
  • giving the accountants earlier control of expenditures
  • improving the communications between project team members and project managers
  • letting the sponsor spot problems before the project manager see them

The process of project portfolio management should have these objectives:

  • Managing the utilization and availability of people working on projects
  • Allocating resources to projects based on their priority as set by management
  • Reallocating resources based on new projects, change requests and variances
  • Tracking actual results versus the plan and distributing the results to managers and project managers

Project Portfolio Management: Software Selection

Searching for the best project portfolio management software can be a daunting task. Many choices exist and many people have their own requirements. But there’s one piece of advice I always use in these situations. It’s the answer answer of my university professor when asked whether there is a best programming development language out there.project portfolio management

“The best tool does not exist. The better tool is the one that serves you best in the situation at hand.”

There are a rapidly growing number of tools currently available to help organizations manage projects. Some are provided by big market names, others are cloud-based services or open source. Project Schedule & Software Main Page

I will not talk about comparing the tools; I do not have such knowledge. My point today is to tell you a story of how we have used simple tools to achieve our short term and mid-term goals. And we got rid of the added complexity of an off-the-shelf software.

In 2008 we had to work with many parallel projects in a matrix organization with resources shared among several projects. Demand, especially for specialized resources, had increased steadily over the preceding years. At the point when the demand outgrew the capacity, the lack of a proper portfolio and resource management methodology became obvious and painful. We had issues with over-promising, managing priorities, impact analysis of changes, and the snowball effect of delays in all the projects sharing the same resources.

We established the Project Portfolio Management role to streamline the process. The process we designed established a work pipeline matching the PMI project phases. All the new project requests were queued at the start following initiation, planning, work-in-progress, quality control/management and close out. On the other side, we created the catalog of resources and skills in order to calculate the “supply.” This would serve as our supply-demand chain. The available free capacity would be shared with the senior management to help the decision-making for new projects and approval of changes.

The first question from the portfolio team was, “What tool do we use to manage this complex process?” We started to use MS Project. As it came out, rolling out a brand new, still unstable process, directly into a complex tool was not such a good idea. I think the tool is a good one but instead of helping us move faster, it was getting in the middle. Instead of focusing on the process, we were spending our energy on discussing the technology. It became a source of excuses and justification for failure. We heard things like, “I could not do my work because the tool is not good.”

After 4 months, we made the decision to drop the system for the time being and focus hard on the process. To tackle the need for reports and KPI’s, a simple Microsoft access database was created. It contained all the milestones of the projects, their interdependence and the assigned resources. We kept information in the portfolio database only to the level of the WBS and milestones, not to the full details of a project plan. It meant more manual work, but it was a simple tool, flexible and adaptable to the fast changes of the process. And it left no room for excuses. The tool, together with the process and the maturity of the team, kept improving and growing.

Today we are using commercial software to manage single projects but our capacity for planning, portfolio management is still running on a custom developed system. It has evolved much from the first version but is still simpler and more flexible compared to the commercial systems we have evaluated. It incorporates our specific requirements for reporting, risk management, internal workflow, organization structure, approvals, status reports, escalation, etc.

As a final note, technology is very important, but in the end it has to serve you, not the opposite. And it’s a technology guy who says this.

Project Meeting Agenda

As a Project Manager on any size project, one of your most important tasks is to regularly communicate with your team by following this project meeting agenda.  It is a very simple set of rules that tell your team members and stakeholders what to be ready to discuss and what decisions they should be prepared to make. It will train the attendees at your project meetings to look at the materials you send them prior to the meeting and come prepared for the discussions and decisions. It will substantially reduce the amount of wasted time in a project meeting. If you also enforce the discipline of limiting the conversation to topics on the agenda, you further gain in the efficiency of the meeting.

project meeting agendaThe term “communication” certainly implies a dialogue, so conducting regular meetings with your project team to discuss issues, status, priorities, direction, etc., is not just a good idea. It’s a genuine opportunity for information to be exchanged between you and your team members.  Effective teams are enabled by a solid communication plan that offers every team member multiple channels for receiving and sharing information important to the project.

One of the easiest ways for a Project Manager to facilitate the flow of information is the Project Team Meeting (aka, Project Staff Meeting, Project Status Meeting, or any of several other names it might go by).  While team members will always complain about meetings (it seems to be necessary for camaraderie), a well-managed project meeting is something they will privately look forward to.  Why?  If done right, the project meeting clears confusion, addresses priorities, provides direction, and updates everyone on project status.  A poorly managed project meeting—or worse, none at all—squanders time and opportunity, and can do more harm than good for morale and motivation.

Project Meeting Agenda Tips

Here are some simple tips from experience to keep your project meetings on target:

Schedule regular meeting times.  Project team members may have a tough time juggling their activities, so meetings that are scheduled regularly (e.g., every Monday at 8:00 a.m.) provide members a chance to work around scheduling conflicts and make an effort to participate.

Don’t be afraid to cancel a meeting that isn’t needed.  If the content doesn’t warrant it, don’t have a meeting just because it’s on the schedule. That a waste of everyone’s time. Your team members will appreciate your consideration and they’ll be more willing to make the effort to attend meetings that are scheduled, knowing you believe it’s important.

Agenda in advance.  Distribute an agenda in advance whenever possible.  This does two things:  (1) It forces you, as the project manager, to think the meeting through.  Is it worthy?  Can it wait?  Is the agenda sufficiently meaty to warrant a team meeting, or will an email do?  And, (2) it alerts team members to topics that may be important to them and may help them choose between working on a task or attending the meeting.

Keep the meeting short.  Most of the tips being offered here are intended to make your meetings something your team wants to attend.  And keeping meetings crisp, meaningful, and as brief as possible will encourage that response.  You will need to find that sweet spot between too short to be useful and too long to retain their attention.

Make your meetings relevant and timely.  If you have the same agenda every week, you are transmitting “nothing new” before the meeting even starts.  Work hard to make your meetings fresh by covering current issues and priorities, achievements, and near-term goals.  Don’t dwell on topics of limited interest but try to tailor your discussions so everyone on the team can be engaged.  Keep the team apprised of milestones and deliverables so that each person can connect their work with the project’s major schedule points.

Encourage dialogue.   Your team members need to feel that project meetings are intended to exchange information, not just receive it.  Of course, as a project manager you’ll have your own objectives for the meeting, but some of those should be to:

  • clear the air on team concerns or issues
  • provide a forum for good ideas
  • seek group consensus on problems and solutions.

If the team senses that your meetings are simply a device for you to dictate policy or direction, you are setting the stage for larger problems that develop when communication becomes one-sided. While you want to encourage dialogue, don’t let the meeting get diverted into narrow subject areas of limited interest to your team members, or pass over an important topic so fast that its significance is missed.  Finding that balance between sufficient depth and breadth is an art form that will take some time to develop but your team will appreciate it.

Provide status, concerns and near-term focus.  Your meetings may be the only opportunity for some team members to fully understand the overall status of the project and their contribution to it.  A software developer, for example, may not have a clear concept of her role in delivery of the first article that occurs months later.  Providing a periodic “big picture” status review recalibrates the team and allows each member to appreciate his/her own contribution, as well as that of other team members.  In discussing status, focus on the near-term and use the opportunity to discuss your concerns and priorities with your team.

Acknowledge successes, address problem areas, and reinforce the rules.  Public recognition of your team’s successes can pay huge dividends in commitment and respect.  When your team does good work, both individually and collectively, and it is recognized, they are motivated to maintain that higher standard.  Never pass up an opportunity to compliment a team member who has earned it. The return is far greater than the investment.  But your meetings are also a great opportunity to address team problem areas or performance issues. You should have established your operating rules in the project plan.  If you’re having a problem with the team complying with the rules, your meetings are the best way to personally and directly remind team members why they exist.

Make sure information is disseminated.  There are two very good reasons for designating someone to capture notes from your meetings.  First, you can be assured some members of your team simply will not be able to be present. Leaving them out of the information loop can start a cascade of problems if they aren’t aware of changes in how the project is to be executed and its products delivered.  Second, because project plans are only current on the day they’re prepared, your meeting notes may quickly become an archive of real-time decisions and direction that the team can refer to.

Learn how to implement an effective project meeting agenda in our online project management basics courses. You work privately with a expert project manager and practice running meetings in live online conferences, just the 2 of you. You control the course schedule and pace and have as many phone calls and live video conferences with your instructor as you wish. Take a look at the course in your specialty.

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Project Sponsor Role – Video

The project sponsor role is the most important one. It’s more important than the project manager or project team member or project stakeholder. Why is the sponsor role so important? Because of the accountabilities that go along with it. These are:
  1. Set the goal of the project in measurable terms with acceptance criteria
  2. Secure funding from the organization for the project
  3. Secure the organization’s approval to proceed with the project and expend people and financial resources
  4. Approve the project plan and then approve any changes to that plan.

However, in many organizations the role of the sponsor is not clearly defined and executives who start projects are not held accountable for the results. This project sponsor failure is what accounts for organizations that have 70% of their projects fail.

Getting Executives to Fulfill the Project Sponsor Role

Oftentimes one of the biggest challenges on a project is getting the project sponsor role played properly.  What the sponsor is supposed to do is issue a statement of work defining the business result the project should produce. Then the sponsor should get organizational approval to use resources to get the project done. Later in planning, the sponsor should work with the projecproject sponsor rolet manager and some of the stakeholders to define the high-level requirements. Those are the roles the sponsor should play during planning. Project Sponsor Main Page

Now let’s talk about a situation that happens all too frequently. The sponsor requested movement on an initiative without any clear scope or deliverables. Instead, he wanted the project manager to assess the initiative’s performance and provide him with a clear understanding of the performance measurement/reporting implications surrounding the initiative. No background information was provided and the project manager’s attempts to have a meeting to discuss his needs were met with avoidance and delay tactics. Instead, the sponsor insisted that the project manager be held accountable for meeting the undefined deliverables.

The project manager was requested to provide 2-3 scenarios: “the Ferari, the Cadillac and the Toyota Corolla” options to meet the initiative’s performance monitoring requirements. No opportunity was provided to clarify expectations. To the project manager, this request violated all the best practices about good project management and was a recipe for project failure. 

In the end, the work was not completed because the sponsor did not make themselves available to clarify the scope and requirements for the initiative. The project manager documented everything and followed PMI best practice procedures. Stakeholder involvement was critical for this project to be successful and that was lacking from the beginning.

This experience emphasizes the importance of holding sponsors accountable for the work they assign to project managers.  Project managers need to be constantly vigilant about not starting work on projects without clarity up-front on the scope and measure of success for the projects. Failure to do that will result in project managers being held accountable for something that is just a figment of someone’s imagination. Consequently, their professionalism is compromised. Productive discussions are required upfront to define and clarify project deliverables and key stakeholder involvement is critical. You need to follow best practices procedures and get clarity upfront. You must also hold the sponsor accountable for clarity about expectations and deliverables. Anything less is a recipe for failure.

Project Sponsor Role: Authority With Accountability

Unfortunately many organizations tolerate executives who enjoy initiating projects. This is particularly true when they are not accountable for the end results that the financial and resource expenditures should produce. That creates situations where project managers are unjustifiably blamed for the failure and the organization wastes significant resources. The only sure fix is to control the initiation of projects so the sponsor commits to producing the business benefit that is the basis for the project being authorized to begin.


How to Estimate Project Cost and Duration – Video

Project managers must know how to estimate project cost and duration. The first questions a sponsor or boss always asks about a project are:

Dick Billows, PMP
Dick Billows, PMP
Dick’s Books on Amazon
  • How long will it take?
  • How much it will cost?
  • When will you finish?

They might ask that after just 5 minutes of discussion about a new project. Whenever you hear those questions, you need to keep your mouth shut while you formulate a carefully worded answer.  Those executives not only want the data on cost and duration but they will regard your answer as a commitment.  They will carve any numbers you mention in stone. They will take them as a rock solid commitment about when you’ll finish the project and how much you will spend to deliver the results.

You need to become adept at using project estimating techniques and even more adept at presenting your estimates. You also need to learn the first lesson of estimating which is to keep your mouth shut.  The reason that estimates are so tricky is that every estimate has risk and uncertainty until all the work is complete. Because of that uncertainty, you need to present estimates in ways that communicate that the estimate is not a commitment to finish the project in precisely 171 days. Instead of saying 171 days, you say you estimate the project will take between 150 and 195 days.  Executives will always take the lower number in that range. That’s why you should always present estimates in writing. That way the higher number, 195 days, is also on the document, just in case the executives and project sponsor forget.

The Right and Wrong Way to Estimate Task Duration

When Do You Estimate Project Cost and Duration?

Another issue is that you do estimates of cost and duration at different points in the project lifecycle. You make the first estimates during project initiation. These first estimates, done before the scope and deliverables are clearly defined, are obviously the riskiest ones to make. It is a difficult situation because the executive wants precise numbers to rely on and you want to hedge the estimate as much as possible. The best practice is to state duration and cost estimates in ranges which, during initiation, are usually + or – 50%. As an example, during initiation you might give an order of magnitude estimate of a duration between 100 and 150 days and a cost of between $15,000 and $20,000.

Needless to say, the wide ranges of those estimates do not satisfy executives. However, initiation is the time of greatest uncertainty about the project and only a foolish project manager would commit to a precise date or budget.

You continue to estimate project cost and duration at several points; during project planning, and every week while the project team is executing the plan. The amount of uncertainty in the estimates decreases as planning is complete and you execute more of the project plan. The estimates at initiation may be plus or minus 50% but by the time the project is half-complete, the ranges of the estimates might be plus or minus 5%.

The Right and Wrong Way to Estimate Task Duration

What Techniques Do You Use to Estimate Project Cost and Duration?

There are three principal project estimating techniques that project managers use to prepare their cost and duration estimates.

Estimate Project Cost and Duration Technique #1: Analogous Estimating

The first technique is called analogous estimating and it is based on information from prior projects that are similar to the current project. At its simplest, these analogous estimates use the duration and cost data of previous projects or phases within those projects. You make adjustments up or down for the relative difficulty of the current project.

Estimate Project Cost and Duration Technique #2: Parametric Estimating

The second project estimating technique is parametric estimating. You use published data about how much work, duration and cost particular tasks take. As an example, we might find public information stating that painting an interior wall with an 8-foot high ceiling requires 1.3 hours per 100 feet of wall surface. Using that reference source, you make the duration and cost estimates for the current project using this data from similar type projects.

Estimate Project Cost and Duration Technique #3: Bottom-Up Estimating

The third project estimating technique is bottom-up estimating where you meet with the people who will be doing the work and develop estimates based on their judgment. These bottom-up estimates have many advantages. One is that they are usually more accurate because the team members have experience doing the tasks. The other is that the team members have some commitment to the estimates because they helped develop them.

You can learn proven techniques for estimating cost and duration in our online project management courses. You’ll work privately and individually with a expert project manager. You control the schedule and pace and have as many phone calls and live video conferences as you wish. Take a look at the course in your specialty.

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Critical Path Tasks


People who manage projects, either full-time as a project manager or part-time as a department manager, know that the critical path is the longest path of tasks in a project. It determines the duration of the entire project. They also know which of the tasks in the project are Critical Path Tasks. But knowing the definition and actually using it to finish your projects earlier are two entirely different things.

How to Manage Critical Path Tasks

When you actively manage critical path tasks you can do these important things:
  • find ways to shorten the duration of the project without increasing costs or risks
  • quickly identify variances you don’t have to do anything about
  • spot places where you can decrease the assigned resources and make better use of them elsewhere.

To actively manage the critical path tasks, you need to identify which tasks in your project are on the critical path. You also need to know how much slack (float) the no-critical tasks have.  The slack number tells you how many days the task can slip before it becomes a critical path task and increases the project’s duration. You can shift resources off tasks with significant slack and move them onto critical path tasks. That should shorten the duration of the project without adding costs or risks. This fine tuning or optimizing of the project plan takes minutes and can yield important decreases in the project duration.

Identifying the plan variances you have to do something about is as valuable as identifying variances where you don’t have to do anything. Obviously a variance or slippage on a critical path task is going to ripple all the way through the project and affect your finish date. However, if you have a variance of 3 days on a task that has 13 days of slack , you don’t need to be terribly concerned. You want to make sure that the 3 day variance is not symptomatic of a larger problem. But if, for example, it is a minor error in the estimate then you don’t need to take time to solve the problem because you still have 10 days of slack left on that task. This allows you to use under-estimating as a teaching tool with the team member when it occurs on a non-critical path task.

Additionally, you can look at tasks with slack as a pool of available resources. Let’s look at a simple example. If we have a task with 21 days of slack and three team members assigned to it, you might be able to reduce the staffing by one or two team members. If their skill sets are compatible, you can add those people to a critical path task during the weeks when they were scheduled to work on the task with all the slack. Obviously, this kind of fine-tuning depends on staff compatibility. You’re not going to transfer two engineers to a task that requires a graphic artist. But moving available resources gives you the ability to shorten the duration without increasing the project’s risks or costs.

Critical Path Tasks – A Real Example

As an IT project manager in the planning phase of a system upgrade project, I had been trying to write a perfect plan for managing the critical path activities. There was a task in the critical path called “Final Upgrading System on the Live Server.” The duration of this task was two days and users could not work during that task execution. Project Schedule & Software Main Page

I spoke to the upgrading implementer who said during those two days we would enable the backup system on the backup server and have it ready for users to enter their daily work. However, he added, users must redo their work transactions on the live production system once it is ready. Redoing transactions might require users to work more hours to enter the backlog. I was thinking about utilizing the weekend to finalize this task. I contacted the HR manager, explained the issue and asked for a solution. The HR manager suggested paying overtime for the implementers. I said overtime was a bad idea for managing projects because it increases the budget. The PM methodology does not recommend it. But I suggested talking with implementers and asking them to work an additional two days, then letting them add two days to a future weekend so that they could go for long weekend vacation. We would  count the business hours they work during the weekend. The HR manger thought it was a good idea. I got approval & commitment from their direct manager, the HR Manager, and the functional Department Manager. I documented all these commitments.

Consequently, the project plan was executed successfully within its planned budget, duration, scope and risk. Users did not redo their data entry work load and implementers went for a long weekend vacation. The case was uploaded as a project lesson learned.

Learn how to use the critical path tool to quickly identify problems, efficiently use resources and cut the project duration in our online project management basics courses. You work privately with a expert project manager via live online video conferences, phone calls and e-mails. You control the course schedule and pace and have as many phone calls and live video conferences with your instructor as you wish. Take a look at the course in your specialty.

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