CEO Presentation

In February 1982, the new vice president and general manager made a presentation to his executive staff outlining the strategies he wished to see implemented to improve productivity:

Our objective for the next twelve months is to initiate a planning system with the focus on strategic, developmental, and operational plans that will assure continued success of WCE and support for our broad objectives. Our strategy is a four-step process:

• To better clarify expectations and responsibility

• To establish cross-functional goals and objectives

• To provide feedback and performance results to all employees in each level of management

• To develop participation through teamwork

The senior staff will merely act as a catalyst in developing long- and short-term objectives. Furthermore, the senior staff will participate and provide direction and leadership in formulating an integrated manufacturing strategy that is both technology-and human-resources-driven. The final result should be an integrated project plan that will:

• Push decision making down

• Trust the decision of peers and people in each organization

• Eliminate committee decisions

Emphasis should be on communications that will build and convey ownership in the organization and a we approach to surfacing issues and solving problems.

In April 1982, a team of consultants interviewed a cross section of Wynn personnel to determine the ''pulse" of the organization. The following information was provided:

• "We have a terrible problem in telling our personnel (both project and functional) exactly what is expected on the project. It is embarrassing to say that we are a computer manufacturer and we do not have any computerized planning and control tools."

• "Our functional groups are very poor planners. We, in the project office, must do the planning for them. They appear to have more confidence in and pay more attention to our project office schedules than to their own."

• "We have recently purchased a $65,000 computerized package for planning and controlling. It is going to take us quite a while to educate our people. In order to interface with the computer package, we must use a work breakdown structure. This is an entirely new concept for our people."

• "We have a lack of team spirit in the organization. I'm not sure if it is simply the result of poor communications. I think it goes further than that. Our priorities get shifted on a weekly basis, and this produces a demoralizing effect. As a result, we cannot get our people to live up to either their old or new commitments."

• "We have a very strong mix of degreed and nondegreed personnel. All new, degreed personnel must 'prove' themselves before being officially accepted by the nondegreed personnel. We seem to be splitting the organization down the middle. Technology has become more important than loyalty and tradition and, as a result, the nondegreed personnel, who believe themselves to be the backbone of the organization, now feel cheated. What is a proper balance between experience and new blood?"

• "The emphasis on education shifts with each new executive. Our nondegreed personnel obviously are paying the price. I wish I knew what direction the storm is coming from."

• "My department does not have a database to use for estimating. Therefore, we have to rely heavily on the project office for good estimating. Anyway, the project office never gives us sufficient time for good estimating so we have to ask other groups to do our scheduling for us."

• "As line manager, I am caught between the rock and the hard spot. Quite often, I have to act as the project manager and line manager at the same time. When I act as the project manager I have trouble spending enough time with my people. In addition, my duties also include supervising outside vendors at the same time."

• "My departmental personnel have a continuous time management problem because they are never full-time on any one project, and all of our projects never have 100 percent of the resources they need. How can our people ever claim ownership?"

• "We have trouble in conducting up-front feasibility studies to see if we have a viable product. Our manufacturing personnel have poor interfacing with advanced design."

• "If we accept full project management, I'm not sure where the project managers should report. Should we have one group of project managers for new processes/products and a second group for continuous (or old) processes/products? Can both groups report to the same person?"

The Trophy Project

The ill-fated Trophy Project was in trouble right from the start. Reichart, who had been an assistant project manager, was involved with the project from its conception. When the Trophy Project was accepted by the company, Reichart was assigned as the project manager. The program schedules started to slip from day one, and expenditures were excessive. Reichart found that the functional managers were charging di-

rect labor time to his project but working on their own "pet" projects. When Reichart complained of this, he was told not to meddle in the functional manager's allocation of resources and budgeted expenditures. After approximately six months, Reichart was requested to make a progress report directly to corporate and division staffs.

Reichart took this opportunity to bare his soul. The report substantiated that the project was forecasted to be one complete year behind schedule. Reichart's staff, as supplied by the line managers, was inadequate to stay at the required pace, let alone make up any time that had already been lost. The estimated cost at completion at this interval showed a cost overrun of at least 20 percent. This was Reichart's first opportunity to tell his story to people who were in a position to correct the situation. The result of Reichart's frank, candid evaluation of the Trophy Project was very predictable. Nonbelievers finally saw the light, and the line managers realized that they had a role to play in the completion of the project. Most of the problems were now out in the open and could be corrected by providing adequate staffing and resources. Corporate staff ordered immediate remedial action and staff support to provide Reichart a chance to bail out his program.

The results were not at all what Reichart had expected. He no longer reported to the project office; he now reported directly to the operations manager. Corporate staff's interest in the project became very intense, requiring a 7:00 a.m. meeting every Monday morning for complete review of the project status and plans for recovery. Reichart found himself spending more time preparing paperwork, reports, and projections for his Monday morning meetings than he did administering the Trophy Project. The main concern of corporate was to get the project back on schedule. Reichart spent many hours preparing the recovery plan and establishing manpower requirements to bring the program back onto the original schedule.

Group staff, in order to closely track the progress of the Trophy Project, assigned an assistant program manager. The assistant program manager determined that a sure cure for the Trophy Project would be to computerize the various problems and track the progress through a very complex computer program. Corporate provided Reichart with twelve additional staff members to work on the computer program. In the meantime, nothing changed. The functional managers still did not provide adequate staff for recovery, assuming that the additional manpower Reichart had received from corporate would accomplish that task.

After approximately $50,000 was spent on the computer program to track the problems, it was found that the program objectives could not be handled by the computer. Reichart discussed this problem with a computer supplier and found that $15,000 more was required for programming and additional storage capacity. It would take two months for installation of the additional storage capacity and the completion of the programming. At this point, the decision was made to abandon the computer program.

Reichart was now a year and a half into the program with no prototype units completed. The program was still nine months behind schedule with the overrun projected at 40 percent of budget. The customer had been receiving his reports on a timely basis and was well aware of the fact that the Trophy Project was behind schedule. Reichart had spent a great deal of time with the customer explaining the problems and the plan for recovery. Another problem that Reichart had to contend with was that the vendors who were supplying components for the project were also running behind schedule.

One Sunday morning, while Reichart was in his office putting together a report for the client, a corporate vice president came into his office. "Reichart," he said, "in any project I look at the top sheet of paper and the man whose name appears at the top of the sheet is the one I hold responsible. For this project your name appears at the top of the sheet. If you cannot bail this thing out, you are in serious trouble in this corporation." Reichart did not know which way to turn or what to say. He had no control over the functional managers who were creating the problems, but he was the person who was being held responsible.

After another three months the customer, becoming impatient, realized that the Trophy Project was in serious trouble and requested that the division general manager and his entire staff visit the customer's plant to give a progress and "get well" report within a week. The division general manager called Reichart into his office and said, "Reichart, go visit our customer. Take three or four functional line people with you and try to placate him with whatever you feel is necessary." Reichart and four functional line people visited the customer and gave a four-and-a-half-hour presentation defining the problems and the progress to that point. The customer was very polite and even commented that it was an excellent presentation, but the content was totally unacceptable. The program was still six to eight months late, and the customer demanded progress reports on a weekly basis. The customer made arrangements to assign a representative in Reichart's department to be ''on-site" at the project on a daily basis and to interface with Reichart and his staff as required. After this turn of events, the program became very hectic.

The customer representative demanded constant updates and problem identification and then became involved in attempting to solve these problems. This involvement created many changes in the program and the product in order to eliminate some of the problems. Reichart had trouble with the customer and did not agree with the changes in the program. He expressed his disagreement vocally when, in many cases, the customer felt the changes were at no cost. This caused a deterioration of the relationship between client and producer.

One morning Reichart was called into the division general manager's office and introduced to Mr. "Red" Baron. Reichart was told to turn over the reins of the Trophy Project to Red immediately. "Reichart, you will be temporarily reassigned to some other division within the corporation. I suggest you start looking outside the company for another job." Reichart looked at Red and asked, "Who did this? Who shot me down?"

Red was program manager on the Trophy Project for approximately six months, after which, by mutual agreement, he was replaced by a third project manager. The customer reassigned his local program manager to another project. With the new team the Trophy Project was finally completed one year behind schedule and at a 40 percent cost overrun.

Leadership Effectiveness (A)

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