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 cancelled. 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 descoping 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.
Previously we stated that the executives, when functioning as a sponsor, should maintain an as-needed posture. The exception to this when the executive must act a champion and be actively involved on project on a daily basis.
Executive champions are needed for those activities that require the implementation of change, perhaps even a cultural change, and often with speed. An example of this would be the implementation of a corporate methodology for project management. Executive champions are needed to "drive" the implementation of project management from the top down to the bottom of the organization. Executive champions can accelerate the acceptance of the methodology because their involvement implies executive-level support and interest.
The executive champion must provide the guidance pressure and drive for the organization to develop a strategic competency in project management. This is shown in Figure 10-3. The executive champion must be the driving force behind each of the boxes in Figure 10-3 such that the organization will surpass maturity to the point where the organization's project management capabilities become a sustained competitive weapon.
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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.