Current Practices In Project Management

Some of the practices we see in project management are nothing less than bizarre. By analogy, it is like doctors scheduling surgery in a hospital, regardless of whether or not the operating room is available. Imagine having 10 doctors show up on the same morning, all with prepped patients. No one person "owns" the operating room schedule. The operating room support staff report to different supervisors.

The supervisor decides that she doesn't want to have any surgeon be mad at her, so she instructs the operating room staff to multitask in order to assist all surgeons in the operating room. All surgeons will have access to the precious resource, the operating room table, and the one anesthesiologist and the one surgical assistant, but only for 15 minutes at a time.

Surgeon #1 begins surgery, but must relinquish the table to Surgeon #2 after 15 minutes. Surgeon #2 must relinquish to Surgeon #3 after 15 minutes, etc. Surgeon #1, who could perform his surgery in 1 hour dedicated time, is now stuck for 10 to 15 hours, trying to keep the patient stable. Each time a surgeon is given the precious resource, the operating room table, he struggles to remember how far along he had gotten in his last 15-minute slot, several hours earlier. Fifty percent of the 15-minute time slot is wasted just in getting restarted.

If this already sounds ridiculous, good! We are just scratching the surface of how projects are actually managed in organizations today.

The surgeons cannot afford to waste their time. They are a precious resource. So, in between their 15-minute time slots, they rush out of the operating room to do other important tasks. Sometimes, they become so preoccupied with another task, they do not even make it back to the operating room in time and miss their surgical slot completely. The surgery takes even longer. The surgeons also waste half their time going to and from the operating room, switching tasks.

Senior management of the hospital comes under pressure. They paid a lot of money to build the hospital. The operating rooms are the most precious resource of the hospital. The flow of patients through the hospital, and through the operating rooms, determines how much money will flow through the hospital. And the flow of patients is dreadfully short of what is needed to keep the hospital afloat.

The hospital is being squeezed by insurance companies, HMOs, etc. who are all demanding to pay less money for the same procedure. Senior management cannot hire more surgeons and cannot build more operating rooms.

Reports to senior management make everything seem wonderful, when, in fact, the financial situation is getting worse and worse. The hospital sets up a Surgery Management Office (SMO), to gather information and help patient flow. The first thing the SMO does is demand that everyone fills out detailed time sheets to help ensure full utilization of all resources. Various reports claim that the operating rooms and the surgeons are almost 100% utilized. Yet the revenue flow is decreasing. How can this be? While it is true that the operating rooms are heavily utilized on paper, the truth is that half of the utilization is bad multitasking, moving patients on and off the operating room tables. This activity generates no revenue. The SMO reports are not helpful in pointing out this flaw.

To increase revenues, senior management instructs the surgeons to initiate more surgeries per month. Their false belief is that if they initiate more surgeries, they will complete more surgeries. Another false belief is that if all resources are busy doing important work, then the organization's goals will be met.

Faithfully, the surgeons obey and the following month the picture is worse. Fewer surgeries are completed. Rework is increasing. Scrap (a bad word in a hospital) is increasing. The surgeons are complaining constantly that they are having fights with each other over the allocation of the operating room.

Senior management listens but would really like their staff to solve these problems themselves. Aren't they adults? Can't they get along with each other? Why do we, senior management, have to constantly be the referees?

The pressure increases and the executives declare that cost is too high. Procedures are taking too long. Surgeons are allocating too much time to each procedure. Supporting resource time is too high. Much of the focus is on cost and cost reduction. Schedules and budgets are cut across the board.

The following month, the executives are extremely unhappy, but are having great frustration in deciding what action to take. The surgeons did drive down the average cost and time per procedure. There was an average 1.5% cost reduction and a 3% time reduction per procedure. Yet the total operating expenses of the hospital did not change one penny. No surgeons or staff quit or were fired. The depreciation expenses of the hospital did not change. The revenues of the hospital did not get any better. In fact, they decreased.

The surgeons used the distortions of cost accounting to make the reports look favorable. Even though the time allocated by surgeons on their time sheets to the actual surgery was decreased, the hospital is still paying them the same salary. So the hospital expenses did not change.

The hospital is now in a crisis. Senior management decides they must take control of the details. They jump in and refocus the SMO to help prioritize surgical schedules, so that the most lucrative surgeries have access to the precious resource — the operating room table — for a full two hours at a time. Finally, some surgical procedures are flowing nicely to completion. The cash flow crunch is over. Senior management breathes a sigh of relief and moves on to "more important tasks." Within a few weeks, the situation has deteriorated again, and senior management must intervene.

The refocusing of the SMO helped to alleviate the symptoms of the problem, but did not get rid of the disease, the root problem. Without executive support and new SMO procedures, the surgeons' behavior reverts back to scheduling surgeries, regardless of the capacity of the system to handle it.

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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