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New Product Launch

You settled  down at a table in the company cafeteria with status reports on three of the projects in the program you were managing. You decided to start with the most problematic of your projects and opened that folder, managing to remove the staple with a knife without stabbing yourself. At a neighboring table, people from sales, marketing, production, engineering and accounting were having an intense, heated discussion. You knew all the managers involved and you’d had each of them as a stakeholder on more than one of your projects. You had at least a productive working relationships with new product launchall of them and two were your close friends.

Join a New Product Launch Meeting

One of the friends spotted you and waved at you to join them. As you took a seat you said, “From the gaiety, I would say you’re planning the holiday parties. Am I right?”
Your friend said, “I don’t make jokes at your project planning meetings. Our new product launch session is every bit as divisive.” Your friend looked around the group, held up his hands to all of them, and said, “I’m not trying to score debating points. I’m just trying to summarize everybody’s position on the new product launch.”
The rest of the group nodded but watched your friend warily.
“Okay,” he said, “my friends from accounting think this new product will lose money. They don’t think we can cover the fixed costs in the first two years. My colleagues from sales and marketing take issue with that. They say this new product could be a home run for the organization. The production managers think the new product is too complex to manufacture with a low defect rate. They are concerned that a high defect rate will cause this product to fail. Warehousing and shipping managers think the transportation costs are going to go through the roof because the salespeople want to promise 24 hour delivery.
You listened carefully and nodded at each of the managers as their position was stated.
Your friend turned to you and said, “Pretend this is a project. How would you address this? What do you call it, stakeholder conflict?”  Project Planning Main Page

New Product Launch as a Project

You laughed and said, “What you have here is a project; I don’t need to pretend it’s one. But it’s a project without a defined scope. The scope is what the product will deliver to the organization; its goal. You’re arguing about various deliverables without any framework to define them. Can I ask a couple of questions?”
All the people at the table looked around a bit uncomfortably and then nodded.
“Okay. Am I correct that the goal of this new project is to generate a positive cash flow for the organization?”
Everyone nodded and a few made faces at the obvious statement.
You continued, “How much cash flow do you need to generate in each of the first five years for this project to be a success?”
A manager from sales said, “That depends on how many units we sell.”
You smiled and asked, “How many units are you committed to selling in each of the next five years.”
He replied, “That depends on the price and the features we can offer our customers. That’s the way sales works.”
“Humor me,” you said. “Tell me how many units you can sell if the product contains a specific set of features and a specific production cost.”
The sales manager shook his head angrily, “You’re asking me to go way out on a limb here.”
You smiled and said, “Well eventually you have to commit to how many units you can sell. That allows everybody else to plan on how many units they have to produce and ship.”
The irritated sales manager looked at you and said, “That’s not how marketing & sales works. We sell as many as we can and everybody else has to adapt.”
There were loud groans from production, engineering, accounting, shipping and warehousing.
“It seems to me,” you said, “that there is some disagreement with that approach. I can see how the volume of your sales is going to have a drastic impact on these other parts of the organization. So it’s reasonable that they want to know what sales level to prepare for.”
The sales manager said, “You don’t understand. This is not project management. We can’t specify in advance how many units we’re going to sell because the market is far too turbulent. And we can’t anticipate all the actions of our competitors.”
“You make your point eloquently,” I replied, “but I’d be surprised if good product development procedures let the marketing and sales people off the hook on hitting a sales target.  Having that data and your commitment to it is the only way to start this new product launch. You don’t have to consider it a project but you must follow certain procedures. Like any business person, you come up with an idea for a new product that you think makes sense for the market. That’s what we call a business case. In that document, you justify this product by making commitments to the following:
  • the number of units you can sell
  • the profits
  • the investment
  • the people resources it requires.

That’s what the executives look at decide whether to approve or disapprove this new product. They’ve got to know it makes sense financially, operationally, and in terns of capacity and human resources. I’d imagine, just like in project management, there are other new product ideas or other investments that the executives have to weigh versus your new product.”

The accountants started clapping first, then the operations manager said, “You mean we’d be able to plan production levels based on a sales forecast?”

You nodded at all of them and said, “Right. This is the project management world. New project launches aren’t begun without first being justified. Most importantly, the people who want the project need to make commitments to the benefits the project will produce. They have “skin in the game.” That’s what makes the business case process so worthwhile. Once you get agreement on the scope of the new product (the project), I’d be happy to help you break it down into the production costs, delivery costs, personnel costs and so on. All of them will be part of your network of product deliverables.”

You looked around the table at their approving faces.

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Project Management Maturity in Organizations

The project management maturity in an organization is an important guidepost for its project managers. In some organizations this process leads to bureaucratic procedures, endless documentation and paperwork. These waste a great deal of time and have no beneficial impact on their project success rates. In other organizations, the project management processes mature by becoming leaner and more efficient. They positively and substantially contribute to the project success rate. Careful executive management of four elements of an organization’s project management process is the key to taking the efficient path versus to the bureaucratic one. Let’s discuss each of these elements.

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Project Management Maturity: The Project Management Office (PMO)

The concept of a project management office is initially sold in the organization as a way to gather data and make it available for faster and easier decision-making. Another benefit may be consistency in the way the organization’s project managers manage. A third benefit can be allocating resources to projects based on the executives’ prioritization of projects. What that means is that the most important projects get first call on scarce resources and lower priority projects have to wait.  Project Management Office Main Page
At the start, the project office can have a positive influence on the organization’s project success rates. However, in most of the 300 organizations we have worked on their project management processes, the project management office’s value quickly declines. The people in the PMO want to tightly control the organization’s projects. They often insist on monitoring the work of the project managers by adding additional forms, procedures and meetings. But the PMO staff frequently fails in their most important function with is to build the organization’s project archives. These archives should contain the data, plans and lessons learned from completed projects. Although the process doesn’t sound too exciting, the resulting benefit definitely is. In as little as six months, the project archives can save project managers significant amounts of time, avoid mistakes and improve quality. The PMs can use and/or modify the project plans and data from similar projects rather than starting from scratch. On larger projects, they may also use the risk analysis and the stakeholder management analysis to save a great deal of time. Project Lessons Learned Main Page

Project Management Maturity: Estimating Database

The single biggest benefit of the project archives is in improving the accuracy of the cost and duration estimates. The archives contain data on how much work/cost the project tasks required.  Every professional firm and consulting organization maintains an archive of data on previous projects. They know they can’t make money if their estimates are inaccurate. That’s why they invest substantial sums in organizing the project archives. Organizations that are consistently successful with projects always have an archive of completed projects because it makes their project managers more efficient and saves them from making the same mistakes again.

As that data accumulates, it becomes easier for project managers with a new assignment to find similar projects or parts of previous projects that are similar to parts of the new one. This allows project managers to use analogous estimating techniques based on real historic data to create more reliable and accurate estimates. Analogous Estimating Video 
Unfortunately, the people who tend to drift into the project management office function find archiving of data boring, so they pay little attention to it. The archive has little value if no one spends a modest amount of time organizing and referencing the data from previous projects.

Project Management Maturity: Consistency Without Bureaucracy

It is astounding how quickly project management offices turn into generators of new forms and new procedures. They want to control the project and they need data to do it. But quite often that’s not forthcoming from the project managers. We often hear project managers ask their project sponsors, “Do you want me to do the project or finish all this damn paperwork?”
While the archived plans and estimating database are a tremendous help to project managers, a steady stream of new forms and procedures is not. PMOs tend to generate lots of new forms because that’s how they get the information they think they need. However, some fine tuning and automation of the weekly status report process can provide all the information the PMO and project managers need without additional paperwork.project management maturity

Project Management Maturity: Periodic Assessments

Organizations need to examine how their project management processes are maturing. They should do the following:

  • Ensure that the individual project managers’ skills and techniques are keeping pace with current practice
  • Ensure that project sponsors understand their role and how to direct the project managers who work for them
  • Assess the value of the company’s project archives and ensure they’re saving time and improving accuracy.

You can assess where your organization is positioned in this project management maturity process. Look at two metrics in addition to the aspects of the project processes listed above. First, look at the density of projects in the organization. How many people are working on multiple projects? That tells you about the level of contention for resources by on-going projects. The second metric is the project failure rate and the trends in that failure rate. Are they increasing or decreasing?

Project Management Maturity: Implementing a Project Management Process

As organizations strive to improve their project performance and become consistently successful, one of the least expensive steps that produces significant benefits is implementing a project management process. This requires the project sponsors and project managers to agree on the steps and templates to be used as well as the data elements to be archived.  The use of archived data and template have the largest impact and start paying benefits in a few months. Other elements can be added to the project management process to achieve consistency in status reporting, scheduling, variance reporting and change control.

You can learn more about using an effective project management process in our online project management courses. You 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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Project Feasibility – Video

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Many organizations require project sponsors and their project managers to prepare a project feasibility assessment of new projects before they are authorized to proceed. Organizations can call them by different names but the project feasibility assessment is part of the project approval process. It’s basically a justification for the project. The review by management committees is the only way organizations can bring project initiation under control. The organization suffers if people can start a project and use company resources without upper management review and approval. The lack of control over initiation makes it exceedingly difficult for those organizations to deliver strategic level projects. We call them “pachyderm projects” because their benefits to the organization are huge. Very often an organization cannot deliver a pachyderm project because so many resources are tied up on less valuable categories of projects.

Project Feasibility: Project Categories

The “pachyderm projects” are the highest category because they are strategic for the organization.

The “puppy projects” are the lowest category. Organizations that can’t control project initiation have very large letters of puppy projects. They consume up to 40% of the available project resources. Some of the puppy projects have value; others have none. The only way to restrict the size of the annual litter of puppy projects is to make the sponsoring executive justify the project with a feasibility assessment and a cost-benefit analysis. When we help organizations install these processes, it’s amazing how two thirds of the puppy projects vanish because there is no positive cost benefit.

The second category is the “pig projects.” These are large efforts that drift from one poorly defined scope to another never addressing the business need for which they were started. The feasibility study gives executives the ability to control pig projects by identifying the original benefits they were supposed to produce and the cost of producing them.
Feasibility studies are a key tool in organizations that need to be successful with their projects. These feasibility studies may include a business case with very formal documentation of the quantified benefits and costs of the project. The business case may also include return on investment, return on assets and payback period calculations among others.

Watch this video about a new project manager needing to gather project feasibility study information and present it to executives to justify a project. Two experienced project managers guide this new project manager in all the steps to justify the project, including creating a business case and doing a feasibility study. The project manager encounters political roadblocks and difficulty in gathering data. But in the end, the project feasibility study is accepted and the project is approved by the management committee.

Assess Project Feasibility

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Project Launch – Video

Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon

Project launch, also called project initiation, is a critical phase of every project. If it is not done properly, the odds of the project’s success drop significantly. The purpose of the launch/initiation meeting is to build team member and stakeholder enthusiasm for the project. The project manager must also communicate the key strategic issues for the organization that this project will address.

Project Launch Video Synopsis

This video starts with the project sponsor calling the meeting to order and giving a brief description of what the project will produce.  The sponsor makes threats to the project team about what will happen if they finish late. He also argues with one of the key team members about the special packaging that will be required for the new product.  As the sponsor and the team member start to argue, the project manager interrupts and suggests a way out of the problem.

The sponsor then threatens punishment if the project is late. The project manager steps in and explains to the sponsor that his threats and attempts to lower the team’s estimates will not make the project finish on time or early.  The project manager wins the debate but the angry sponsor may take up the issue with the VP.

In this video, watch how the project manager politely but firmly stood up to a terrible sponsor.  She knew she had to stop the sponsor’s bad behavior during the project launch/initiation phase. If she didn’t, it would continue throughout the entire project and lead to failure.  She took responsibility for the project’s performance but would not commit to a completion date without a clear scope statement and information about the resources available for the project. She did a great job defending the team members to the sponsor but she made it clear that their assignments would be stated as measurable business results.

At the end of the video, watch private interviews with the project manager and team members and learn how they felt about what happened during the launch meeting.

Project Phases Main Page

”Project

You can learn the steps in a proven project methodology from launch through planning, scheduling, tracking and reporting in our online project management basics courses. You work privately with an expert project manager who is your instructor and coach. You control the schedule and pace and have as many phone calls and live video conferences with them as you wish. Take a look at the course in your specialty.

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