Prime

P.M. SALARY $95,000 CONTRACT: $25MM

P.M. SALARY $65,000 SUBCONTRACT:$2MM

FIGURE 10-2. Multiple project sponsors.

P.M. SALARY $65,000 SUBCONTRACT:$2MM

FIGURE 10-2. Multiple project sponsors.

In some industries, such as construction, the project sponsor is identified in the proposal, and thus everyone knows who it is. Unfortunately, there are situations where the project sponsor is "hidden," and the project manager may not realize who it is, or know if the customer realizes who it is. This concept of invisible sponsorship occurs most frequently at the executive level and is referred to as absentee sponsorship.

There are several ways that invisible sponsorship can occur. The first is when the manager who is appointed as a sponsor refuses to act as a sponsor for fear that poor decisions or an unsuccessful project could have a negative impact on his or her career. The second type results when an executive really does not understand either sponsorship or project management and simply provides lip service to the sponsorship function. The third way involves an executive who is already overburdened and simply does not have the time to perform meaningfully as a sponsor. The fourth way occurs when the project manager refuses to keep the sponsor informed and involved. The sponsor may believe that everything is flowing smoothly and that he is not needed.

Some people contend that the best way for the project manager to work with an invisible sponsor is for the project manager to make a decision and then send a memo to the sponsor stating "This is the decision that I have made and, unless I hear from you in the next 48 hours, I will assume that you agree with my decision."

The opposite extreme is the sponsor who micromanages. One way for the project manager to handle this situation is to bury the sponsor with work in hopes that he will let go. Unfortunately this could end up reinforcing the sponsor's belief that what he is doing is correct.

The better alternative for handling a micromanaging sponsor is to ask for role clarification. The project manager should try working with the sponsor to define the roles of project manager and project sponsor more clearly.

The invisible sponsor and the overbearing sponsor are not as detrimental as the "can't-say-no" sponsor. In one company, the executive sponsor conducted executive-client communications on the golf course by playing golf with the customer's sponsor. After every golf game, the executive sponsor would return with customer requests, which were actually scope changes that were considered as no-cost changes by the customer. When a sponsor continuously says "yes" to the customer, everyone in the contractor's organization eventually suffers.

Sometimes the existence of a sponsor can do more harm than good, especially if the sponsor focuses on the wrong objectives around which to make decisions. The following two remarks were made by two project managers at an appliance manufacturer:

• Projects here emphasize time measures: deadlines! We should emphasize milestones reached and quality. We say, "We'll get you a system by a deadline." We should be saying, "We'll get you a good system."

• Upper management may not allow true project management to occur. Too many executives are "date-driven" rather than "requirements-driven." Original target dates should be for broad planning only. Specific target dates should be set utilizing the full concept of project management (i.e., available resources, separation of basic requirements from enhancements, technical and hardware constraints, unplanned activities, contingencies, etc.)

These comments illustrate the necessity of having a sponsor who understands project management rather than one who simply assists in decision-making. The goals and objectives of the sponsor must be aligned with the goals and objectives of the project, and they must be realistic. If sponsorship is to exist at the executive levels, the sponsor must be visible and constantly informed concerning the project status.

Committee For years companies have assigned a single individual as the sponsor

Sponsorship for a project. The risk was that the sponsor would show favoritism to his line group and suboptimal decision-making would occur. Recently, companies have begun looking at sponsorship by committee to correct this.

Committee sponsorship is common in those organizations committed to concurrent engineering and shortening product development time. Committees are comprised of middle managers from marketing, R&D, and operations. The idea is that the committee will be able to make decisions in the best interest of the company more easily than a single individual could.

Committee sponsorship also has its limitations. At the executive levels, it is almost impossible to find time when senior managers can convene. For a company with a large number of projects, committee sponsorship may not be a viable approach.

In time of crisis, project managers may need immediate access to their sponsors. If the sponsor is a committee, then how does the project manager get the committee to convene quickly? Also, individual project sponsors may be more dedicated than committees. Committee sponsorship has been shown to work well if one, and only one, member of the committee acts as the prime sponsor for a given project.

When to Seek Help During status reporting, a project manager can wave either a red, yel low, or green flag. This is known as the "traffic light" reporting system, thanks in part to color printers. For each element in the status report, the project manager will illuminate one of three lights according to the following criteria:

• Green light: Work is progressing as planned. Sponsor involvement is not necessary.

• Yellow light: A potential problem may exist. The sponsor is informed but no action by the sponsor is necessary at this time.

• Red light: A problem exists that may affect time, cost, scope, or quality. Sponsor involvement is necessary.

Yellow flags are warnings that should be resolved at the middle levels of management or lower.

If the project manager waves a red flag, then the sponsor will probably wish to be actively involved. Red flag problems can affect the time, cost, or performance constraints of the project and an immediate decision must be made. The main function of the sponsor is to assist in making the best possible decision in a timely fashion.

Both project sponsors and project managers should not encourage employees to come to them with problems unless the employees also bring alternatives and recommendations. Usually, employees will solve most of their own problems once they prepare alternatives and recommendations.

Good corporate cultures encourage people to bring problems to the surface quickly for resolution. The quicker the potential problem is identified, the more opportunities are available for resolution.

A current problem plaguing executives is who determines the color of the light. Consider the following problem: A department manager had planned to perform 1000 hours of work in a given time frame but has completed only 500 hours at the end of the period. According to the project manager's calculation, the project is behind schedule, and he would prefer to have the traffic light colored yellow or red. The line manager, however, feels that he still has enough "wiggle room" in his schedule and that his effort will still be completed within time and cost, so he wants the traffic light colored green. Most executives seem to favor the line manager who has the responsibility for the deliverable. Although the project manager has the final say on the color of traffic light, it is most often based upon the previous working relationship between the two and the level of trust.

Some companies use more than three colors to indicate project status. One company also has an orange light for activities that are still being performed after the target milestone date.

The New Role As project management matures, executives decentralize project spon-

of the Executive sorship to middle- and lower-level management. Senior management then takes on new roles such as:

• Establishing a Center for Excellence in project management

• Establishing a project office or centralized project management function

• Creating a project management career path

• Creating a mentorship program for newly appointed project managers

• Creating an organization committed to benchmarking best practices in project management in other organizations

• Providing strategic information for risk management

This last bullet requires further comment. Because of the pressure placed upon the project manager for schedule compression, risk management could very well become the single most critical skill for project managers. Executives will find it necessary to provide project management with strategic business intelligence, assist in risk identification, and evaluate or prioritize risk-handling options.

Managing Scope Creep Technically oriented team members are motivated not only by meeting specifications, but also by exceeding them. Unfortunately, exceeding specifications can be quite costly. Project managers must monitor scope creep and develop plans for controlling scope changes.

But what if it is the project manager who initiates scope creep? The project sponsor must meet periodically with the project manager to review the scope baseline changes or unauthorized changes may occur and significant cost increases will result, as shown in Situation 10-1 below:

Situation 10-1: Pine Lake Amusement Park. After six years of debate, the board of directors of Pine Lake Amusement Park finally came to an agreement on the park's new aquarium. The aquarium would be built, at an estimated cost of $30 million and, between fundraising and bank loans, financing was possible.

After the drawings were completed and approved, the project was estimated as a two-year construction effort. Because of the project's complexity, a decision was made to have the project manager brought on board from the beginning of the design efforts, and to remain until six months after opening day. The project manager assigned was well known for his emphasis on details and his strong feelings for the aesthetic beauty of a ride or show.

The drawings were completed and a detailed construction cost estimate was undertaken. When the final cost estimate of $40 million was announced, the board of directors was faced with three alternatives: cancel the project, seek an additional $10 million in financing, or descope (i.e., reduce functionality of) the project. Additional funding was unacceptable and years of publicity on the future aquarium would be embarrassing for the board if the project were to be canceled. The only reasonable alternative was to reduce the project's scope.

After two months of intensive replanning, the project team proposed a $32 million aquarium. The board of directors agreed to the new design and the construction phase of the project began. The project manager was given specific instructions that cost overruns would not be tolerated.

At the end of the first year, more than $22 million had been spent. Not only had the project manager reinserted the scope that had been removed during the descop-ing efforts, but also additional scope creep had increased to the point where the final cost would now exceed $62 million. The new schedule now indicated a three-year effort. By the time that management held its review meetings with the project team, the changes had been made.

The Executive Champion Executive champions are needed for those activities that require the implementation of change, such as a new corporate methodology for project management. Executive champions "drive" the implementation of project management down into the organization and accelerate its acceptance because their involvement implies executive-level support and interest.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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