Project Risk Management

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

You should spend some time doing Project Risk Management even if your project is small.  Let’s say your boss is the sponsor and your project has just two team members. That means you will be completing tasks as well as performing project manager duties.  Most projects are small like this but you still should perform some Project Risk Management on them. Risk Management Main Page

Now you shouldn’t tell anyone that you are starting the Project Risk Management process. That will make them think you’re going to waste time doing fancy mathematics, having all kinds of useless meetings and generating worthless paperwork. But you’re not going to do that fancy, expensive stuff. You’re just going to do simple risk management so you can solve some problems early in the project. In fact, risk management lets you solve some problems before they start.

This early problem solving begins during the planning phase. Let’s say your project is to reorganize the department’s supply room. First you identify the problems (risks) that may affect the project. Then you think about how likely each of those problems is to occur and what the damage will be if they do. The ones that are likely to seriously affect the project are the ones you should do something about. Next, you analyze the identified problems and think about how you might avoid each one. In other words, you think about how you might dodge them completely.

Project Risk Management – Early Problem Solving 

For example, when you think about the problems your supply room project will face, you come up with two of them that are likely to occur and will have a big impact if they do. The first problem is that people may not keep the supply room well-organized after you finish the cleanup. The second problem is that it will take people longer to find what they want than it does now because the supplies will probably be in different places. Let’s tackle each of these problems (risks) separately.

The first risk comes down to making sure that the new organization of supplies is maintained. You and your two project team members discuss possible incentives for the people who stock the supply room shelves. You believe you can avoid this problem if you involve the staff in the design of the supply room and hold them accountable for maintaining it. The three of you agree on that task and you add it to the project plan.

You go on to the second risk of people not being able to find the supplies they want because the supplies have been moved to different locations. You certainly don’t want complaints about your reorganization. So you discuss what would make it easy for people to find things. You finally agree to place the high-volume supplies, the ones that are needed most often, near the entrance to the supply room. After you’ve included the supplies that cause two-thirds of the trips to the supply room, you agree to organize the remaining items by category (paper products, writing instruments, clips and staples, etc.).

project risk managementThe amount of risk management you do depends on the size of your project. On a very small project, the risk management effort might be completed over a lunch with the project manager, the sponsor and some team members. Here’s what that discussion will do:

  1. Identify the risks the project faces
  2. Assess the likelihood of the risk occurring and the size (magnitude) of its impact on cost and duration if it occurs
  3. Develop risk responses to avoid or reduce the impact of the risk.

Project Risk Management Steps

Here are the steps you can follow for your project risk management process. You may do some or all of them, depending on the size and complexity of your project.

  1. You and the team members begin by reviewing the list of identified risks, both positive and negative. That list is called the risk register. Then each person assigns a rating of high, medium or low to the likelihood (probability) of each risk occurring and the size (magnitude) of the impact if it does.
  2. You gather and correlate the individual assessments of probability and magnitude and calculates the average for each risk in the risk register.
  3. You and the team members review the average ratings and select those risks that are important enough to justify a response. This is called qualitative risk analysis.
  4. You present the qualitative risk analysis to the project sponsor. The goal is to obtain their approval to plan responses to the risks.
  5. You and the team members develop risk responses for the positive and negative risks. For positive risks, you design the response to increase the probability and/or the magnitude of the beneficial impact. For negative risks, the response should decrease the probability or magnitude of the adverse impact.              Risk Responses
  6. You present the recommended risk responses along with an analysis of their impact on the project’s cost, schedule and budget. For the risk responses that the sponsor approves, the project manager makes changes to the project plan, schedule and budget to reflect those risk responses.

Summary of Project Risk Management

Even on small projects, risk management helps you identify and solve problems before you begin work. This increases your project success rate, which helps you advance your career.

You can learn more about managing risks 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.

At the beginning, when you and Dick talk to design your program and what you want to learn, you will select case studies that fit the kind of projects you want to manage. Chose you course and then select the which specialty case study from business, or marketing,  or construction, or healthcare, or consulting.  That way your case studies and project plans, schedules and presentations will fit your desired specialty.

  1. 101 Project Management Basics
  2. 103 Advanced Project Management Tools
  3. 201 Managing Programs, Portfolios & Multiple Projects
  4. 203 Presentation and Negotiation Skills
  5. 304 Strategy & Tactics in Project management

Project Team Ground Rules

Project team ground rules are a necessity. Almost all project teams have frequent meetings and even more frequent communication in various forms. If the project manager doesn’t set ground rules for these meetings and communications, a significant amount of time is lost. Together, the project manager and team identify and formulate the ground rules that members of the team should follow when they interact. These rules cover video conferences, in person-meetings and telephone conferences. The ground rules can cover a wide range of team member and project manager behavior.ground rules

Project Team Ground Rules: Examples

The ground rules may include the “completed staff work” concept. That approach to meetings aims at substantially reducing the amount of time the team members waste when people at the meeting are not ready to discuss the topics. The completed staff work concept is based on an agenda. Anybody can add an item to the agenda. The only requirement is that they distribute materials to all the team members before the meeting. That allows everyone to come ready to discuss the issue. Another rule is that you cannot raise an issue at the meeting that was not on the agenda with preparatory materials distributed. These rules help avoid bad decisions being made when people have not had time to thoroughly consider the issues.

Other ground rules may deal with interpersonal conflict. As an example, a ground rule may prohibit discussing work issues on previous projects. Other rules may bar personal criticisms, (“you’re very stubborn”) versus criticizing behavior (“you would not listen to my side of the problem”).

It is very easy to get carried away with too many ground rules. You don’t want people to have to consult a lengthy document to decide how to handle an interpersonal situation. The ground rules should fit on one side of one piece of paper. Remember, the goal is to avoid wasting time in meetings or making bad decisions because people are  unprepared or rushed to make a decision.

Project Team Ground Rules: Project Meeting Scenario

A status report meeting I participated in some months ago lasted 2 hours. Approximately 20 people attended, including the project team, test leaders, team leaders, PMO staff, etc. The meeting had many elements that are considered best practices. They included the following:

  • all attendees sent the PM their issues before the meeting
  • the agenda was distributed before the meeting
  • no other issues were brought up in the meeting

Long story short, it went something like this. Each person went through the status report covering their work stream, what they did, what they were going to do, issues, risks, decisions to be made, etc. I noticed that after the first 30 minutes, some of the attendees lost interest. After one hour, most were either checking their phone or chatting about something with the person next to them. You can imagine how the situation was after 2 hours.

I share this example to make the point that following what are considered best practices does not mean you are efficient or effective. In the above example, if you calculate 20 people * 2 Hrs = 40 Hrs (40/8 =5PD) of effort for a single status meeting.  One meeting a week adds up to 260PD a year, which is a significant effort.

Project Team Ground Rules: The 30 Minute Meeting

Below is an approach that has worked for me. I call it the 30 minute meeting.

  1. Schedule important meetings early in the day. A meeting is a pit-stop (as in Formula One racing) where all the team members must get the overall picture. It must be kept short and to the point.
  2. The core of a status meeting is the status report. Prepare it beforehand. I like to prepare a presentation vs. a written document.
  3. A picture (or better a chart) shows no more than 1,000 words. The PM must give the bigger picture, showing all relevant charts in perspective. That includes the actual, planned, and forecast.
  4. All topics that are on track don’t need to be discussed one by one. They are only referenced in the status report (preferably in a chart). Include all the details in the appendix for the people who want to read it on their own time.
  5. Deal with topics that need bilateral attention outside the meeting. Time is precious so nobody is allowed to waste it. The PM must ensure the status meeting is not a place for everyone to dump their issues and problems.
  6. Keep it short and keep it clean. Be brave to exclude from the meeting all less relevant content. A short and to the point meeting is too important to be sacrificed for side topics.

Finally, a PM needs to keep the right balance of management overhead and actual work product in their meeting ground rules. My rule of thumb for overhead is not to exceed 10% of the total efforts. This approach to status report meetings works for me. It leaves the team energized, their attention sharp through the entire meeting and minimizes the management overhead.

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Project Duration

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

Managing project duration to make sure the sponsor and stakeholders are happy is the number one challenge for most project managers. Many executives think the most important metrics are the project duration and the finish date. Sometimes they are the only measures the sponsor and stakeholders ask about.

Project Duration: Why Do Stakeholders Manage Only Dates?

In a date-driven project world, the project managers have usually given the stakeholders nothing else that is measurable. Here’s why:

  • The scope statement is three pages of mush with no metrics
  • No one cares about cost because the project managers don’t measure it
  • There’s no data on hours because the project managers don’t gather it
  • Risk is not managed and most projects don’t bother to identify even the major risks
  • No one tracks the hours of work used by the project because everyone figures the people would be paid anyway.

It’s no wonder the stakeholders only pay attention to dates.

Project Duration: What Tools Do You Need?

Project managers must have tools to handle requests to finish earlier, increase the deliverables or that cut the costs. Tools like critical path analysis are an essential weapon in your tool kit when dealing with these requests.  The tasks on the critical path control the project’s duration.  Stakeholders need to learn they can’t arbitrarily make changes to critical path tasks, their resources, or deliverables and keep the same finish date.  The best way to illustrate that fact is to model the change and show them the impact on the finish date. See Project Schedule & Software Main Page

A skillful project manager doesn’t try to prevent all the changes requests that come up during the initiation and planning phases. They will also arise once you begin to execute the project plan. Those requests usually result in increases to cost or changes to scope so they are difficult to manage. There is a right way and a wrong way to manage these requests. Unfortunately, project managers often handle requests to finish earlier the wrong way. They try to prevent any change to the project plan. Simply denying requests triggers a great deal of conflict. That results in unhappy users or customers who simply go over the project manager’s head.

Project Duration: Model the Impact of Changes

The better way to handle these requests is to welcome change requests. Then you model the changes in the project software and show the stakeholders the impact on the finish date. Next you lead a discussion about the impact of implementing the duration or scope changes. These changes usually include increasing the resources on the project team which often increases the cost of those resources. Models showing the impact of the changes give the stakeholders information they need to make informed decisions. The project sponsor also has this information to use when the change requests come to them for approval or denial.

You can learn all the skills for managing project duration and change requests in our project management courses. Take a look at the courses in your specialty.

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Project Disasters – Comedy Video

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

Project DisastersIt takes a lot of work to make a project disaster as bad as this one. Our 4PM.com cast members show you how in a Project disasters comedy video about how to screw up a project.

The PMs and team members are preparing their failed project for a big project status meeting. You’ll see micro-managing PMs frantically hiding problems and berating team members for finishing early. Other team members point fingers at each other while sleazy executives maneuver for their political advantage.  Whacked-out IT staff members use a million phony excuses about why the system is late.  While the Human Resources people back-stab the Sales people to avoid blame for a  pointless employee survey. You’ll see all the things NOT to do on a project.

You’ll also see how the PM deals with the inept executive sponsor of the project, Mr. Lonegan. He starts more projects than the organization can possibly finish. His projects never have a clearly defined scope so the project managers and team members have to guess about what they think Mr. Morgan wants the project to deliver.  Because the project managers are not sure what Mr. Lonegan wants, they make very vague assignments to their team members. That way they can’t be blamed but the team member can.

The final icing on Mr. Lonegans’s disastrous cake is the red hot anger he directs toward any project manager or team member who admits to being late. Mr. Lonigan probably convinces himself that he is a dynamic leader with very high standards. In truth, Mr. Lonegan is a complete failure as a project sponsor. And he drags down and rest of the organization with him.

These characters may remind you of some of the people on your projects and the interpersonal challenges they give you. If you remember characters or situations from your experience, share them with others in the blog.

If you have outrageous examples of how to screw up a project, send them to us in a comment and we’ll try to work them into the next episode of 537 Ways to Screw Up a Project.

How to Screw Up Project: Status Reports

 

Project Stakeholder Management

Project stakeholder management includes identifying and dealing with the executives, managers,
Dick Billows, PMP
Dick Billows, PMP
CEO 4pm.com
Dick’s Books on Amazon
employees, customers, contractors and users who will be affected by the deliverables your project produces. The list of stakeholders also includes people who will be lending resources to your project team and helping you gather requirements. In the beginning of your project manager career when your projects are for your boss, the only stakeholders you need to be concerned about are the boss and your team members. The boss is playing the role of all the other stakeholders.  Stakeholders Main Page
But as your carer advances and your projects get larger, there are more stakeholders and some may not work in the same organization you do. In fact, you will spend a great deal of time trying to discover all your stakeholders. Then you’ll gather their requirements so you’re not surprised by new stakeholders with new requirements two weeks before your project was going to be finished.

Project Stakeholder Management: First Step

Many project managers start their first day of a job with a new organization uncertain about  the project stakeholder landscape. That landscape is filled with new players and expectations. Enthusiastic with their bag of skills and eage to add value to their new organization, many PM’s find themselves encountering potential land mines that could derail their efforts.  Instead of taking a step back and doing a proper assessment of both the internal and external environments and their role, they rush full speed ahead to affect change. It is at these times that PM’s need to do a proper assessment about the culture and politics of their new home organization.

project stakeholder managementProject Stakeholder Management: Identify the Key Players

The first step toward effective project stakeholder management is to assume the position of a sponge. Soak up as much information as you can to learn and understand how the organization runs and does business. Treat it like a project engagement with a thorough initiation stage. The objective is to understand the key players and their expectations and position those expectations within the organization’s unique culture. You should identify the key stakeholders who will be critical to enabling you to add value to the organization’s efforts.

Project Stakeholder Management: Create a Plan

Then you will develop a project stakeholder management plan to effectively consult and engage all the key project stakeholders. Their support will be critical to your efforts to enhance the organization’s project management processes. Too often new PMs try to affect change too quickly without looking at the bigger picture. You must plan out the steps you will take. It’s important to be acutely aware of the different power dynamics within the organization. You must assess the best way to influence those dynamics to achieve the best project outcomes for your organization.

Project Stakeholder Management: Execute the Plan

Execute the plan and determine how you will enhance your effectiveness by having a feedback loop to make corrections along the way. During this step, it will be important to be agile and adaptable. Things may change constantly, so it’s important to be able to adapt quickly to any changes and/or new information.

Monitor and influence your engagement with all project stakeholders but specifically the key players. They have the power to make or break your efforts. You need to understand their expectations and manage them effectively. This can only be achieved through proper monitoring. The objective is to influence their engagements in your project to achieved the desired outcomes.

To be effective as a project manager, you must understand that you are a critical change agent. That requires you to be aware of the political and cultural dimensions of your role. Ignoring these critical success factors can be costly to your projects and detriment to your career.

 

You can learn proven project stakeholder management tools and techniques 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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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 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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Cut Project Duration – Video

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

Project managers often receive demands to cut the project duration. Sometimes these demands come weekly or even daily. There’s a right way and a wrong way to handle requests to cut the project duration. If you handle it incorrectly, the stakeholder will go over your head to the sponsor or a senior manager. Those superiors will arbitrarily change the project duration without giving you additional resources to help you finish the work faster.

Cut Project Duration: The Wrong Way

You’ll see how this happens in the first part of the video where the project manager handles the request poorly. That error leads to what truly will be a Project from Hell.  Project Schedule & Software Main Page

Project Due Date - Finish Earlier

Cut Project Duration: The Right Way

In the second half of the video, you’ll see how the project manager properly handle requests to cut the duration. He doesn’t flatly refused to change the duration. Instead, he gives the stakeholders choices and options for finishing earlier. Each one is feasible and leaves the project manager with a plan that is achievable. Modeling those choices requires the right kind of project schedule and a thorough understanding of techniques like critical path, fast tracking and crashing the project plan. These tools are available in project management software. You enter the data to model options and tell the stakeholders what it will cost to finish one week earlier, two weeks earlier, etc.

You should present each option as a trade-off like, “I can finish two weeks earlier if I have one more engineer for three weeks.” Notice the trade-off has two sides; the positive side of finishing earlier and the negative side of needing more people. Skilled project managers present a number of options for cutting the duration. And they go out of their way to try to accommodate the stakeholder’s requests. However, every option has a trade-off. Here are some examples:
– spending more money to finish early
– adding more people to finish early
– lowering the project scope to finish early.
You give the stakeholders several choices; each of which preserves the feasibility of the project. That’s the key to correctly handling duration reduction requests. You don’t resist changes or try to argue against making them. On the contrary, you’re willing and eager to discuss possible options for finishing early. But each of the options you present has a trade-off that you modeled in the project management software.

You learn all of those skills and how to use project management software to identify ways to cut the duration in our project management basics courses. Take a look at the course in your industry specialty.

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Project Change Control – Video

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

When project managers handle project change control badly, it irritates stakeholders and cause overruns on budget and duration. Fighting all changes doesn’t work and neither does accepting all of them. We’ll discuss the mistakes project managers make on change orders. Then we’ll review a methodology for doing it the right way.

On many projects, the project manager faces a never-ending stream of additions and changes.  These begin five minutes after the sponsor approves the project plan and continue until five minutes before they accept the last deliverable.  Watch this video of a typical change control process.

Project Budget - How To Handle Budget Cuts

A Project Change Control Story …

Walking out to the company parking lot, you ran into the executive who was the sponsor on your current project.  The sponsor said, “The project is really coming along well but I do need to add a couple of things.” They handed you a page from a yellow notepad with 35 items on it.  You knew it was time to exercise project change control. But the sponsor continued, “These items are really vital to what we’re trying to achieve on our project.” How to Manage Change Order Requests

You looked down at the paper and replied “We couldn’t possibly make any additions at this point.  The due date and budget are in danger now. If we keep adding things we’ll be way over.”

The sponsor said, “But these are critical! Without these additions, this whole project will certainly fail.”

You responded, “I think the project will contribute a great deal even without these items.”

The sponsor disagreed, “These were really part of the original requirements.  You must have missed them.”

You replied, “I’m sorry but these items were definitely not on the original list of requirements you signed.”

The sponsor grew re-faced and retorted, ”These were part of the business plan for customer service.  I don’t care what was on that long list of technical mumbo jumbo you designed.  It was just geek talk that none of us understood!” Scope Change Video

You looked back down at the list and tried to calm the sponsor by saying, “Anyway, these seem to have limited business value.”

The sponsor barked, “I’m the one running this operation and I know what’s necessary. And the items on the list are essential if we’re going to maintain competitive levels of customer satisfaction.”

You took a deep breath, “We will be late if we add anything.”

The sponsor took a breath, smiled and said, “These items really won’t take much work. So they should only hurt the schedule or the budget a little.  I know you can squeeze them in.”

Project change controlYou frowned, “That is not the case.  We will have overruns. They won’t be my fault because these items were never in the approved requirements.”

The sponsor snapped, “If you won’t add these items to the project schedule, I’m going to bump this problem up the line to the VP.”

Project Change Control with Several Endings…All Bad

At this point, the project change control story could have several endings. Why Is a Scope Change Process Needed?

1. In the first ending, you said, “OK your satisfaction is my goal.  We will figure out a way to squeeze these in and not finish too late. But these must be the last changes we make or we’ll have a disaster! “

The sponsor gave his solemn promise, “Absolutely! These are the last changes.” (If you’re naive enough to believe that, you can forget about project change control.)

The next week the yellow sheet of paper had 47 additions, the project finished 3 months late and you took the blame.

2. In the second ending you refused to add the additional requirements.  Five hours later your boss called and angrily said, “The senior VP just chewed me out about my project managers not being responsive to our management team. Why are you stirring up trouble with your sponsor? We need his support!”

You started to explain about the changes to scope and the boss interrupted saying, “Add the damn changes…just get these people off my back.” You started to agree just as the boss slammed the phone in your ear.

The next week the yellow sheet of paper had 47 additions, the project finished 3 months late and you were blamed.

3. In the third ending, the boss listened as you said, “I’m trying to be customer-oriented but those changes could set us back a couple of months and cost lots of money.”

The boss said, “Give me a memo on exactly how much later and how much more it will cost so I can show the vice president.”

You thought for a long moment and said, “Well, it’ll take quite a bit of time to put that together.”

The boss grunted in exasperation and said, “I need something to show the vice president today.  So you’d better just add the changes they want and have everybody work harder. Use your leadership skills.”

The next week the yellow sheet of paper had 47 additions, the project finished 3 months late and you were blamed for not exercising project change control.

Why Does Bad Project Change Control Happen Over and Over Again?

It happens because project managers lack the tools to exercise project change control. One key to project change control success is project planning that develops quantifiable acceptance criteria for the project scope and each major deliverable. These are not technical specs but measured business outcomes in the customer/user ’s organization.  Those acceptance criteria with metrics are the foundation of project change control. That kind of scope definition lets you win the argument about whether changes are necessary for project success.  That type of scope metric makes the argument about what was and what was not included go away.  Everybody knows what was originally included. Then you aren’t arguing the merits of a change or whether it’s a good or bad idea (you will always lose those). Instead, you are discussing whether or not you can achieve the scope without including the change.

The second key to successful scope and project change control is using a software tool that allows you to quickly quantify the impact of a change.  You can use the software to quickly estimate, and then model, exactly what effect a change will have on the project’s cost and duration.  With this modeling capability, the conversation with your customer/user is quite different.  Let’s see how it goes using both these tools for project change control.

Project Change Control the Right Way 

The customer stepped into the your cubicle and said, “The project is really coming along well but I need to add a couple of things.”  They handed you a page from a yellow notepad with 35 items on it and then continued, “These items are really vital to what we’re trying to achieve on our project.”

You looked down at the paper and said, “These are great ideas. OK, let’s quantify the added work and the added time.” The customer’s first item was additional training for customer service reps so they could discuss three new products with customers.  You said, “We would have to change the training achievement from “Customer reps can answer questions about 37 products accurately 90% of the time,” to ’40 products.’ I’ll ask the trainer to give me an estimate of the hours required for the change.” You called the trainer who gave you a rough estimate of 12 additional hours of prep time on the new products and 15 additional hours of class time.

While you were writing, the customer said, “It should only take a few more minutes. Anyway, I thought these new products were in the original specs.”

You pulled out the plan for the deliverables and said, “No, here is the trainer’s work package we used for the estimate. It has 37 products.”

The customer agreed the new product training was not covered in the original project scope and plan.

You commented, “If you want to eliminate three of the original products, it would be a wash.”

The customer responded, “No, we need all 40.”

You said, “The trainer says that will add 27 hours of their time and the class itself will be longer for the attendees. You opened the project schedule on your PC and entered the additional hours. Then you leaned back and said, “As you can see, these changes would add 7 days to the project duration and would increase our costs by more than $16,000.”

The customer was surprised at the cost and said, “But these are necessary. They are good and worthwhile additions.”

You smiled and said, “I’m sure they are very good ideas or you wouldn’t have brought them to me.  But our question has to be; can we hit our project’s measured achievement of, “Customer reps can answer questions about 37 products accurately 90% of the time” without them? They clearly expand the project scope and I will need to add extra time and money to accomplish what you want.  That’s how project change control works.”

The customer said, “Well, I want you to include these items in the project or I will escalate the problem to the senior VP.”

You smiled again and said, “That’s appropriate because in our project change control process, it is the senior VP’s role to approve changes of this size. We have the data now so let’s go speak to the VP. We’ll ask if she is willing to expand the scope and add the cost and duration of your change.  But I’ll be honest with you. I don’t think we need any of these changes to hit the original scope we committed to for this project.  It’s nothing personal. I’m just trying to exercise project change control.”

A Consistent Project Change Control Methodology

You need the right tools to do project change control correctly and that means a consistent methodology. The methodology begins with the initial planning of the project and gives the you tools and processes to identify the measured business achievements the customer/user wants the project to produce. This is not just the technical specifications.  The project change control methodology guides you step-by-step through the development of a dynamic schedule and budget.  Those tools allow you to quickly calculate the impact of a change order so you can exercise project change control.  This methodology is also used in status reporting. You do the same modeling to calculate the impact of the corrective actions that are needed to solve variances.

You can learn a methodology to effectively manage project change control in our Project Management Basics course. It is private online training where you have as many video conferences and phone calls with your instructor as you need.