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budgets ignored while teams work to get the product right for market testing. Marketing people over-commit and over-promise and engineering and product development people understate and protect their time. Program and project managers try to control and guide, sometimes successfully but often getting in the way of real work. Reporting is spotty and full of half truths hanging on the hope and trust that things will come out OK in the end. Project management offices are seen by project teams as administrative and bureaucratic, often feeding the flames of distrust and management paranoia.

To place a framework of project management systems on this muddling through process is dangerous but necessary because it turns out that some project management tools, e.g., work breakdown structures, schedules, budgets, utilization rate reports, and risk analyses are helpful to project teams. They help to guide day-to-day activity, much like job descriptions help to clarify interdependencies and interrelations of work and product.

New product development is not a science, it is an art. The process in reality does not flow consistently and predictably and does not always respond to traditional management actions such as directing, controlling, and reviewing. The process is driven not by schedules and milestones but by the sheer energy and commitment of people dedicated to change and opportunity. That does not mean that traditional project management tools are not useful to guide the process, just that one cannot fully understand how a successful new product is designed and introduced simply by looking at product development processes and information. This book is grounded on the proposition that while project management can help to guide new product development and deployment, the key drivers of success are leadership and commitment.

A good example of this is the introduction of the plastic sack to grocery stores in the 1980s by Sonoco Products Co. Driven by the vision and energy of a product leader, H. Gordon and the corporate leadership of F. Bennett (Ben) Williams, the Senior Vice President at Sonoco Products Co., plastic sacks were brought to market with little formal planning and scheduling. The initial focus of the company on what it thought would be the major bottleneck, the customer, turned out to be wrong as they began to see that the stores themselves were the biggest obstacle to change. Yet the introduction of this new product was successful against almost any criteria of performance.

Lets look at what happened. Sonoco introduced a new product, Quikmate, into grocery stores in the 1980s. Quikmate was a new plastic sack produced and manufactured to replace paper sacks. Sonoco's experience demonstrates the importance of energetic top entrepreneurial leadership working with a flexible sales force with "sleeves rolled up" to do whatever was needed to prove the benefits of the new product to client stores. The story also illustrates the need to support product development and the drive to marketing a new product with strong company project planning processes when it came to delivering on promises.

Sonoco's plastic (high density polyethylene) grocery sacks were designed and developed to replace the paper sacks which dominated the market up to the 1980s in the United States. The concept originated in Europe; an American businessman acquired a sample in the late 1970s, developed the concept for the US market, and sold it to Sonoco. He patented the product, stayed on with the company to provide the vision for success of the product, drove product introduction and delivery, and grew the business to profitability through the product. Some of those who were involved with the project, such as Sue Harris who was key to marketing the product in the field, testify that without his leadership and inspiration, the product would not have survived the obstacles to success in the field.

Despite the fact that the move to plastic sacks had occurred in many other countries, the US was still behind on this technology at that time. Market surveys had shown that the sacks were clearly better in many ways, easier for customers to carry, more flexible, less costly, easy to store, and reusable. There were environmental issues with the sacks, thus the marketing approach had to deal with not only government regulations but a groundswell of opinion from environmentalists against plastic products in the 1980s.

Confirming the importance of organizational learning, Sonoco learned as it went. Sonoco had not anticipated the major problem in market launch, which turned out to be the most difficult hurdle in the marketing channel—the stores themselves. Sonoco had assumed that the stores and their employees would embrace the change and concentrated their initial market planning on customers. But it worked out that the customers were not the problem. Not only did many store employees have difficulty with the change, some of them actually refused to use the new sacks because early versions were difficult to open and pack. As with most new products, there was tremendous resistance to change.

The market launch was messy and full of disconnects and trial and error. Because the first versions of the sacks were difficult to work with, company sales people including Sue Harris and H. Gordon Dancy, met regularly with development and manufacturing personnel to redesign the sacks and more importantly the dispensing system. Sonoco encouraged communication between field sales, marketing, and manufacturing in order to assure that the product and dispensing system design could change as marketing created useful field data on users and problems.

Sonoco teams attended trade shows, held customer focus groups, conducted surveys, and promoted the product during the formative years. It took many months of work and promotional activity to get the first breakthrough, with a grocery chain called Luckys. Luckys committed to the product in its stores on a handshake and despite the urge of company managers and lawyers to write a contract to solidify the sale, the company kept the commitment informal.

Later, more success with the Kroger chain management and others brought product sales up to a breakeven point in the mid-1980s, a point at which the company could begin to see return on their investment. In the end the product was successfully introduced and became part of the mainstream grocery system in the late 1980s and beyond.

As with any new product, success led to competition. Sonoco's experience with the growth cycle of the product and dispensing system is also useful to understand as it relates to how marketing and product support work. While their product was patented, Sonoco eventually faced fierce competition from domestic and foreign manufacturers in quality and price. So as the product matured, Sonoco lost some of its market share.

It is also interesting that Sonoco financed the process despite the drawbacks and problems because the company was committed to gaining market share. With a less energetic leadership team behind the product, Sonoco could well have dropped the product because of the unanticipated delays in selling its early production lots and gaining longer-term contracts. The key was an energetic and charismatic leader and sales force linked into company management at any time they needed support.

Production was a challenge in the early years until the German equipment and manufacturing process the company used could be tailored to the US product and marketing process. Marketing had to communicate back directly to engineering and manufacturing to adjust to customer feedback and needs in the field.

Those who worked in this environment admit that they often "winged it" in the early years. They hired a bunch of new college grads to test and train stores in the field. They came up against packing problems and had to come up with designs in product racks for delivering the product that worked for store employees. They were not driven by formal marketing plans and documents; the key here is that once a product is introduced into the chaotic and unpredictable marketplace, it is the personal relationships and capacity to adapt to quickly changing market factors that lead to success. Sonoco also provided incentives to the sales team so that they knew they would share in the benefits of successful introduction of the product. But in the end it was not incentives; it was the excitement of success!

As we will see in similar experiences at Universal Avionics, Inc., covered later, the Sonoco Products story confirms that to be successful in new product market launch initiatives, a company must have a value-added product that meets customer needs, a dedicated and hard working sales force with total access to top management when necessary, and most importantly, an energetic leader who knows the business and is willing to sacrifice to achieve success.

In successful new product programs and companies, business associates are not risk averse. They know and feel that their professional careers are enhanced by generating new ideas and opportunities in their domain, but they also know that their advancement is not solely determined by the success of a new product. This frees them from the fear of communicating bad news, if necessary, or terminating a project midstream because it makes no sense in the market. The best ideas for new products come from leaders and those who do the day-to-day work of the company, from market research, and from new product teams that are inspired by visionary leadership.

This target organizational environment for this successful process is a culture of new ideas, the organizational tone generated at the top that encourages a free flow of feedback into and out of the company on current products, opportunities, services, the competition, customers, and market operations. This does not happen naturally or easily because new ideas are not always welcomed in companies that focus on developing and marketing current products and services. New ideas tend to challenge the current way of doing business—they change processes and strongly held paradigms.

New Organizational Structure for New Products

We live in a global economy in which the turnaround of structural and technological change is rapid and sometimes unpredictable. Business processes are changing even as we speak, and traditional jobs and work settings are becoming virtual, e-driven, and mobile. This atmosphere of change creates the need to structure the organization so that (1) people can create new products before they are anticipated by the customer, marketplace, or competition, and (2) the company can design, develop, and produce new products better, faster, and cheaper, and get them to market. Development life cycles have gone from years to months to days.

Traditional ways of organizing around product lines, markets, or geographic locations do not seem to encourage new thinking about products in a broader context. How does a company re-organize to avoid being captured by narrow views of the customer determined by traditional organizational structure? The answer is that organizing around processes appears to be helping successful twenty-first century businesses to generate creative thinking. It is in a process framework that companies can best see their customers in a system. Processes can describe various systems and interactions that lead to product success, thus encouraging people to think in terms of process domain and giving them a better chance of coming up with new processes and products to serve customers.

New Products and Outsourcing

To get new ideas into the process, sometimes it pays to outsource creativity and front-end new product development to capture domains that the company itself cannot create. Outsourcing can increase the capacity of the company to see new processes and products differently; outsourcing increases the chances of successful new product introductions. This conclusion must be conditioned, however, on the presumption that the relationship with outsourced partners is more than a simple contract; that indeed the partner is a committed, long-term associate in a given market, and therefore can be trusted to act in the interest of the partnership.

Organizational Learning

We have also seen that successful new product rollouts occur in organizations that learn and document their insights and processes. These organizations grow and mature. Organizational learning refers to a measurable process within a company or agency that captures insights, experiences, and lessons learned, and has an understanding of their customer domains. These organizations use this learning to get a leg up on the competition. New product development effectiveness seems to improve when the company brings experience and insight to creative people. This results in a powerful combination of individual and team creativity joined with company insights into particular development and market domains. As an example, Microsoft, Inc. seems to have developed that synergy between the organization and the professional that creates the conditions for new product success in their particular domain.

Seven Key Strategies

There are seven key strategies in assuring that the company or agency creates a culture of ideas. Company leadership must:

1. State that new product development and opportunity generation are the business.

2. Remove barriers to the generation of new ideas.

3. Provide a system of information and feedback on current products and services.

4. Create a positive, perhaps virtual place for new ideas to incubate.

5. Generate a flexible process of filtering, evaluating and transitioning new ideas into a portfolio and new product development process.

6. Manage and control new product development and marketing.

7. Create real success stories to demonstrate that new ideas can produce products, that grow the business.

State that new product development is the business

Corporate leadership must articulate the importance of new product development as the core of the business,that makes it grow. This priority must be seen in every decision and action taken by the management

Remove barriers

Removing barriers to the generation of new ideas involves eliminating the fear of failure and providing inspirational leadership, incentives and organizational platforms for good ideas on new products and services. Employees, associates, and stakeholders see opportunity in their day-to-day work settings simply because they see what works, what doesn't, and what would work in specific situations to produce new product or service opportunities. They see opportunity and risk on one screen. These opportunities include process improvements that could substantially improve company efficiency and effectiveness, product improvements that could enhance marketing and sales, and service improvements that could help sustain product life and longer-term customer relationships. But these opportunities will not surface to management and company leadership unless employees are encouraged to generate them as an integral part of their jobs and without fear of rejection.

Promote return on creativity

Company people need to know and feel that there is a return on creative solutions to market and customer needs, and that the business places a high priority on new ideas that can return profits and margins. They should know that assessing the return on creativity is the objective of a new product development process, and that employees will be rewarded for coming up with new concepts that create business value. On the other hand, employees should also know that if the return is judged not to be worth the cost of development and marketing, the decision to terminate a product midstream will not reflect on those who came up with the idea.

Management should encourage thinking "out of the box." Thomas Kuhn referred to paradigms in his classic, The Structure of Scientific Revolutions. He said that paradigms are traditional concepts or structured views of the world that restrict scientists (and people in general) from seeing new data that does not agree with the prevailing mindset. Paradigms operate to filter out information so that strongly held concepts are not challenged, but rather are continuously confirmed despite data and information to the contrary. New product ideas test and challenge paradigmatic, locked-in views of a product, service, or market in a company or agency, and thus often face difficult challenges. Management cannot see the potential success of a product because it is inconsistent with their paradigm for the company. To avoid paradigmatic barriers, management must allow new concepts to see the light of day outside the normal chain of command, and outside the operating systems of the company.

Providing information and feedback

How do leaders and their employees generate new ideas for products and services, and what does the system of feedback look like? Sometimes, as in the Sonoco case, top management becomes the driver of a new product. In other cases, the energy will come from the middle of the organization. The system of feedback is a visible and working channel for employee ideas through email, suggestion forms, project reporting, and hard copy recommendations from every level of the organization. If the system is not visible and working—and taken seriously by management—it will quickly die of its own weight.

Barriers are removed by enabling fresh views of the marketplace. The process begins with empowering people to be themselves, and to openly communicate with each other on improvements and opportunities they see. Further, employees are invested and engaged in the company's success because they own it, either literately or figuratively.

Creating a virtual place for new ideas

New product and service ideas often incubate in the organization before they can be conceptualized and defined. This incubation process requires a place—a Website or physical office—that represents the company's incubation laboratory. This is where ideas are placed for initial review and development by a staff of associates whose primary responsibility is to incubate new ideas from within the company.

Generating a filtering process

These ideas are filtered, evaluated, and transitioned by marketing staff into potential product characteristics and features and new project definitions. This would include risk assessment and response, using a risk matrix to categorize new concepts and identify their risks, impacts, probabilities, severity, and contingencies. We provide more on the transition from idea to product in Chapter 4.

Demonstrating successful ideas

There is nothing like making success visible to all. In other words, good companies and agencies publicize new product successes as stories and reports in company newsletters and other media, making sure that all company people see that the process of generating, developing, and marketing new products works to grow the business. Work hard to create those stories if you don't have any. The Sonoco success story was visible to all the employees early; they saw and felt the winning attitude that generated success.

Organizational Agility

Organizational agility is the metaphor for responsiveness and energy. Sonoco was flexible when it had to align itself with the issues and values of store employees who initially rejected the plastic sack concept. Leadership creates this attribute by injecting excitement and purpose into the company, and empowering its employees to take action on the spot. This process begins with ownership, leadership, and management, which must be trusted to articulate a new product mission and integrate the mission into the fabric of the company. Management walks the talk by reinforcing the value of innovation and creativity.

Creative intelligence and new products

What kinds of people generate new product ideas, and how are these people encouraged by their organizational environments? If we could answer this question, we would be closer to knowing how to increase the probability that a certain company, group, or individual is more capable of producing new products than others. Howard Gardner has researched and written about multiple intelligences, including the intelligence associated with creativity and new products.

In his book, Intelligence Reframed: Multiple Intelligences for the 21st Century, Howard Gardner (Basic Books, 1999) states on page 116:

My definition of creativity has revealing parallels with, and differences from, my definition of intelligence. People are creative when they can solve problems, create products, or raise issues in a domain in a way that is initially novel but is eventually accepted in one or more cultural settings. Similarly, a work is creative if it stands out at first in terms of its novelty but ultimately comes to be accepted with a domain. The acid test of creativity is simple: In the wake of putatively creative work, has the domain subsequently been changed?

The essential point is that creative people seem to be able to be creative in certain domains, those they know something about, certain frameworks of thinking in which they intellectually reside. Further, Gardner asks not who or what is creative, but where creativity is. What kinds of environments encourage creativity and allow those who are creative to "dwell in their domains?" Three elements seem to join to produce an environment for creative thought:

■ An individual creator with his or her talents, ambitions, and personal foibles

■ A domain of accomplishment that exists in the culture

■ The field, a set of individuals or institutions that judge the quality of works produced in that culture

Companies that identify creative people in their hiring policy and create organizational cultures that enable creative people to work in their domains have the best chance of generating new product ideas. Sometime leaders must combine with creators to assure that new ideas survive and then move to product concepts and prototypes. This is the reason that project managers must lead processes, while creators must think and act in their domains. A software engineer with in-depth experience in designing embedded software in electronic instrumentation is in a domain few others populate. But new ideas about embedded software are going to come from that engineer, not his or her project manager. It is the process of being able to spot good ideas and turn them into new products that characterizes good project management. After ideas are generated and preserved through aggressive leadership and management systems, then we have the powerful integration of creativity and leadership to introduce new products in the market.

Risk and New Product Development

Creating a culture of ideas involves not only surfacing new ways of inducing demand, e.g., creating new needs through new products, but also encouraging innovative ways to overcome risks. Overcoming risks creates product success. The process of risk management is critical in creating culture of ideas because as new ideas surface, so must potential risks and opportunities.

Educating associates on the relationship between risk, opportunity, and new product development helps to open the process of generating ideas. Ideas for new products automatically create risks because the process of taking a new product or service through concept, design, development, market launch, and support is expensive and time consuming. Yet opportunity is linked with new products because these products can generate new markets, and because a company's success in marketing a new product before the competition creates opportunity.

Risk: The organizational culture issue

Successful new product development requires the individual management of risk and business opportunity. Each participant has to understand that business is grown on new products with inherent risk. The offset to risk is hard work, informed decisions, flexibility, and the capacity to stop a new product process when appropriate.

Although risk is traditionally seen as an analytic activity (identifying and assessing risks in the project task structure, and applying decision trees, sensitivity analysis, and probabilities), the essence of risk management is the way the organization treats risk and the way you and your team think about a new product project. The challenge for the organization is to teach and train project leaders and team members to think in terms of risk, and to internalize the risk management and opportunity generation process into their daily routines. The assumption behind this approach is that risk management is "something I want my people to do in the normal course of their work," not "something I want a specialist to do later in the project as a separate exercise." Risk is a way of visualizing the project and its successful outcomes, and seeing potential pitfalls. You can't see risks if you are not looking for them, and you can't see opportunity without addressing risk and contingency.

So the successful management of risk is usually the product of a successful organization that has instilled into its people the importance of careful planning. Careful planning involves a core competence—the capacity to define uncertainty and risk, integrate risk identification and assessment into program and project planning, and build and sustain a support system for risk management that provides essential information when it is needed. But how does an organization build risk into its daily work, and how do executives use their leadership and institutional leverage to further good risk management as a part of creating a culture of ideas?

A culture of risk management competence

The successful risk management organization has five basic competencies:

■ Active training and development in risk planning and management and how risk relates to opportunity

■ Strong linkage between corporate planning and project planning, particularly between business analysis of threats and opportunities, and analysis of project risk

■ Deep project experience in its industry

■ Capacity to document project experience and "learn" as an organization

■ Strong functional managers who address product quality as a risk reduction issue

Link corporate and new product planning

Strong ties between corporate strategic planning, including market analysis, and project planning and production ensure that the business "sees" its new product risks early in its planning. The business is then able to anticipate and dimension the risks it will face in designing and implementing projects that carry out its business plans. For instance, a telecommunications firm that performs SWOT analysis in its field may uncover potential threats to marketing new, breakthrough products in telecommunications cable technology. Planning broad marketing strategies and contingencies at the corporate level to address these potential breakthroughs (opportunities created from analysis of threats) helps the business support its selected projects that involve such new cable systems.

When risks and opportunities are fully aired and a project management system can control specific project costs, it is often possible to interest venture capitalists in financing specific new products, earmarking funds for particular new product enterprises.

Training and development in risk

Training and development programs that address risk identification, assessment, and response can help build professional competence in handling risk issues in real projects. Such training would include a curriculum in:

■ Building a work breakdown structure (WBS)

■ Identifying risks in the WBS

■ Producing a risk matrix

Project experience

A company that "sticks to the knitting," as Tom Peters and Robert Waterman called it in In Search of Excellence (Harper and Row Publishers, 1983) is in a better position to recognize and offset risk simply because its workforce is likely to have a better handle on the technology and process risks inherent in its core business. Whenever a business departs fundamentally from its core competency areas, it stands to experience unanticipated problems, which develop into high-impact and high-severity risks. Successful new products evolve typically from the company's basic "knitting," and not from product and market areas outside company competency.

Learning organization

A learning organization as Peter Senge describes it, is an organization that learns from its experiences by documenting risk impacts and contingencies, and does not reinvent the wheel each time it plans and implements a project. This means that lessons learned from past project experiences are incorporated in documentation and then embedded in training programs so that project managers learn from past experiences. Communication is open in such organizations, leading to a process by which project experiences are "handed down" to next generation project teams.

Functional managers

The existence of strong functional management ensures that the basic functional competency of the company in areas such as engineering or system development is backed up by technology leaders in the field. Key processes, e.g., product development, are documented, and product components are controlled through disciplined configuration systems. This means the risks of product quality failures that result from product component variation are minimized, simply because the company can replicate products and prototypes repeatedly for manufacturing and production without variation.

Building the Culture

Organization culture can be defined as the prevailing standard for what is acceptable in work systems, work performance, and the work setting. A risk management culture can be defined as the prevailing standard for how risk is handled. Organizations with a strong risk management culture have policies and procedures that require its workforce to go through disciplined risk planning, identification, assessment, and risk response project phasing. But employees are encouraged to take on risks with a positive attitude.

A mature organization does not treat risk management as a separate process, but rather embeds the risk process into the whole project planning and control process. Risk is an integral part of the thinking of its key people. In the same way that the quality movement matures to the point that quality assurance and statistical process control processes become institutionalized into the company rubric, risk assessment tools and response mechanisms become an indistinguishable part of a company mosaic in a mature organization.

Sustaining the culture of risk management is considered a major function of corporate leadership in the risk-planning phase. Although most organizations do not enter the risk-planning phase as a distinct step in the project planning process, best practice addresses potentially high-risk tasks, assigns probability implicitly to the process, and develops optional contingencies that may or may not be documented in a formal risk matrix. This is typically not a mysterious, mathematical process, but rather an open, communicative process in which key project stakeholders, team members, and the customer talk about uncertainty and identify key "go or no go" decision points. They often know where the key risks are in the project process because the project itself is grounded in addressing a risk that the customer is facing.

A good example of a strong risk management culture is found at the Keane Company.

Keane's risk process

Keane, Inc. a leading information technology firm, connects and integrates risk with cost and schedule estimating, e.g., identifying project risks and determining actions to minimize the impact on the project and to improve project estimates. In other words, Keane thinks in terms of risk as a guide for cost estimating, scheduling, and defining mitigation actions. There is an initial process that takes much of the guesswork out of estimating. Keane established a set of guidelines, techniques, and practices to pin down estimates and ensure that customers and stakeholders clearly understand associated risks. Keane emphasizes communication on the relationship between a given project estimate (project schedule and cost estimate) and how the estimate has handled risks and risk mitigation. Their experience is that project success does not depend as much on completely mitigating risk as it does on communicating risk up front so that stakeholders can make judgments and decisions along with the project team as things happen.

In building the culture for risk management, Keane suggests that its project cost estimators:

■ Make sure they know the difference between negotiating and estimating. Estimating is the calculation of schedule and cost given the tasks at hand; negotiating is working out the differences between the estimate and a customer or client schedule and cost.

■ Understand the variations in technical skill and how those variations can impact estimates.

■ Be objective about your own work.

■ Anticipate the need for precision, understand the timing for "order of magnitude," ballpark estimates, versus the need for more detailed budget and definitive estimates.

■ Look at untracked overtime in building estimates from past work.

Keane advises its people to ask "who is at risk?" before you ask "what is at risk?" because the issue of risk is framed by those who are affected by it, not by some arbitrary quantitative formula. Different project stakeholders have different perspectives on risk and estimates, and indeed their perspectives change during the life of the project. It is best that risk assessment be guided by those who will suffer the consequences of risk and who will bear some or all of the cost of risk mitigation.

The role of the project planner/manager is to provide the process with parametric data to measure project and product performance. This is because the person asking for such data is going to use the estimate to make critical business decisions. For instance, if a client for a new information system is facing the possibility that the new system cannot handle the estimated user load during peak periods, that client must make a decision to either limit the user universe or upgrade the system. So the estimate of risk is key to the client decision process, and will affect client success.

Keane integrates cost and risk to better understand how risk affects project schedules. By training its people to identify risks from broader business and industry data, and to schedule risk planning and management activity into the project baseline schedule, the company delivers an important message to its people.

Risk analysis and mitigation

Keane sets the organizational tone for risk mitigation in its book entitled, Productivity management: Keane's project management approach for systems development:

One way to approach a project realistically is to consider risks. Evaluating the risks should be an inherent part of estimating—the risk that the project will take longer, cost more, or require more effort than planned. The existence of risk is the reason an estimate is necessary in the first place. But every project possesses multiple variables, and when supplying an estimate, you should also apply a risk factor.

The Keane book involves a story about risk:

One fall morning, a facility of ours shut down as a result of snakes moving into an underground electrical junction box, thinking they had found a comfortable winter hybernation spot. Their squirming caused an electrical short and small explosion that brought down the entire communication linkage.

There is no way that we could have been aware of the potential of this snake situation, and it therefore falls in the category of uncertainty. Snake interference is not a variable considered in the management of a project. If, however, we view the snakes from the standpoint of "might our communications facilities go down during the course of this project?" then we have risk. We can make a statistical evaluation of how likely some unforeseen event is and estimate the dollar and time impact of that occurrence.

Addressing risk with scenarios

Keane, Inc. is a good example of aprojectized company that uses risk scenarios to get its project teams to anticipate risks in the planning process. The company encourages the development of issue or scenario statements that pose potential problems—variations from the plan—in a project, and generate queries about the issue. For instance, Keane might encourage a project manager developing a new project information system to build the following question into an early project review session:

After we develop and build this new project information system, what interface, platform, and network compatibility challenges is the customer going to experience with the system? What options will we have, and what is the likelihood of these challenges becoming insurmountable?

Performance incentives

Any organization building a risk-based culture must provide incentives for integrating risk into the project planning and control process. The incentive for handling risk is top management support and resources. Top management support comes when project management identifies and anticipates business risks that save the company time and money. Project managers who manage risks effectively are likely to be more successful in acquiring additional resources because they tend to have backup and contingency plans ready when risks occur.

The Johari Window

One of the major risks in any project is the tendency of its key project decision makers—especially the project manager—to overestimate what they know and underestimate what they don't know. The risk is that key people will take risks, but not manage risk. This means that the beginning of good risk management is the ability to know what the organization and its people can do, and what they cannot do.

The field of organizational behavior contributes a tool called the Johari Window (Figure 1-1) that is helpful when analyzing the personal tendencies of leaders and marketing project managers to "take risks."

The Johari Window, named after its inventors, Joseph Luft and Harry Ingham, is one of the most useful models that describe the process of human interaction and behavior. The four-paned "window" divides personal awareness into four different types, as represented by its four quadrants: open, hidden, blind, and unknown. The lines dividing the four panes are like window shades, which can move as an interaction progresses.

The following sections show the thinking process of a typical project manager when testing their grasp of what they know.

The open quadrant. The "open" quadrant represents things that I know about myself, and that others know about me. For example, I know my name, and so do you, and you know some of my interests. The knowledge that the window represents can include not only factual information, but my feelings, motives, behaviors, wants, needs, and desires... indeed, any information describing who I am.

The risk here is that what is open to some coworkers may not be open to the customer or a project sponsor. It is important that a project manager get to know the customer, key sponsors, or stakeholders as people. The focus is customer expectations; if there is an open process on expectations, the chances of managing risk are high.

The blind quadrant. The "blind" quadrant represents things that you know about me, but of which I am unaware. For example, we could be eating at a restaurant, and I may have unknowingly gotten some food on my face. This information is in my blind quadrant because you can see it, but I cannot. If you tell me that I have something on my face, the window shade moves to the right, enlarging the open quadrant's area.

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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