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tional area of the business, he or she must be able to function on the project as a kind of general manager in miniature. It is important to assign an individual whose administrative abilities and skill in personal relations have been convincingly demonstrated under fire.

Experience indicates that it is desirable for senior management to delegate to the project manager some of its responsibilities for planning the project, for resolving arguments among functional departments, for providing problem-solving assistance to functional heads, and for monitoring progress. A general manager, however, should not delegate certain responsibilities, such as monitoring milestone accomplishments, resolving project-related disputes between senior managers, or evaluating the project performance of functional department managers. For the duration of the project, the project manager should also hold some responsibilities normally borne by functional department heads. These include responsibility for reviewing progress against schedule; organizing for. formulating, and approving a project plan; monitoring project cost performance; and, in place of the department heads normally involved, trading off time and cost. Functional department heads, however, should retain responsibility for the quality of their subordinates' technical performance, as well as for matters affecting their careers.

Functional department heads may view the project manager as a potential competitor. By limiting the number of staff on the project team, the problem is alleviated and the project manager's involvement in intrafunctional matters is reduced. Moreover, people transferred out of their own functional departments are apt to lose their inside sources of information and find it increasingly difficult to get things done rapidly and informally.

Because the project manager is concerned with change, while the department head must efficiently manage routine procedures, the two are often in active conflict. Though they should be encouraged to resolve these disputes without constant appeals to higher authority, their common superior must occasionally act as mediator. Otherwise, resentments and frustrations will impair the project's progress and leave a long-lasting legacy of bitterness. Short-term conflicts can often be resolved in favor of the project manager and long-term conflicts in favor of the functional managers. This compromise helps to reduce friction, to get the job accomplished, and to prepare for the eventual phasing out of the project.

Guideline 3: Install Project Controls Though they use the same raw data as routine reports, special project controls over time, cost, and quality are very different in their accuracy, timing, and use. They are normally superimposed upon the existing report structure for the duration of the project and then discontinued. The crucial relationship between project time control and cost control is shown graphically in Figure 3.

The project in question had to be completed in twenty months instead of the twenty and a half months scheduled by a preliminary network calculation. The project manager, who was under strict initial manpower limitations, calculated the cost of the two weeks' acceleration at various stages of the project. Confronted by the evidence of the costs it could save, top management approved the project manager's request for early acceleration. The project was completed two working days before its 20-month deadline, at a cost only $6000 over the original estimate. Without controls that clearly relate time to cost, companies too often crash the project in its final stages, at enormous and entirely unnecessary cost.

Time Control Almost invariably, some form of network scheduling provides the best time control of a project. A means of graphically planning a complex undertaking so that it can be scheduled for analysis and control, network scheduling begins with the construction of a diagram that reflects the interdepend encies and time requirements of the individual tasks that go to make up a project. It calls for work plans prepared in advance of the project in painstaking detail, scheduling each element of the plan, and using controls to ensure that commitments are met.

At the outset, each department manager involved in the project should draw up a list of all the tasks required of his department to accomplish the project. Then the project manager should discuss each of these lists in detail with the respective departmental supervisors in order to establish the sequence in the project in relation to other departments. Next, each manager and supervisor should list the information he or she will need from other departments, indicating which data, if any, are habitually late. This listing gives the project manager not only a clue to the thoroughness of planning in the other departments but also a

34 CHAPTER 1 / PROJECTS IN CONTEMPORARY ORGANIZATIONS

5 months after start of project 10 months

Workers required for 2 weeks' acceleration

20 workers @Sl50/wk. average

40 workers ®$150/wk. average

15 months

150 workers ® $130/wk. average

Stage 4: $168,000

Stage 4: $168,000

5 months after start of project 10 months

20 workers @Sl50/wk. average

15 months

20 months

20 months

700 workers ®$120/wk. average

Figure 3: Cost of two weeks' acceleration at various project stages.

means of uncovering and forestalling most of the inconsistencies, missed activities, or inadequate planning that would otherwise occur.

Next, having planned its own role in the project, each department should be asked to commit itself to an estimate of the time required for each of its project activities, assuming the required information is supplied on time. After this, the complete network is constructed, adjusted where necessary with the agreement of the department heads concerned, and reviewed for logic.

Once the overall schedule is established, weekly or fortnightly review meetings should be held to check progress against schedule. Control must be rigorous, especially at the start, when the tone of the entire project is invariably set. Thus, the very first few missed commitments call for immediate corrective action.

Cast Control Project cost control techniques, though not yet formalized to the same degree as time controls, are no harder to install if these steps are followed. (1) break the comprehensive cost summary into work packages, (2) devise commitment reports for "technical" decision makers, (3) act on early, approximate report data, and (4) concentrate talent on major problems and opportunities.

Managing a fast-moving $15 million project can be difficult for even the most experienced top manager. For a first-line supervisor the job of running a

$500,000 project can be equally difficult. Neither manager can make sound decisions unless cost dimensions of the job are broken down into pieces of comprehensible size. Figure 4, which gives an example of such a breakdown, shows how major costs can be logically reduced to understandable and controllable work packages (usually worth $15,000 to $25,000 apiece on a major project), each of wh'ch can reasonably be assigned to a first-line manager.

Almost withoijt exception, experience shows, 20 percent of the project effort accounts for at least 80 percent of the cost to which the company is committed. With the aid of a detailed cost breakdown and current information on cost commitment, the project manager is able, even after the project is underway, to take people off less important activities in order to concentrate more effort where it will do the most good in reducing costs. One company cut its product introduction costs by over $1 million in this way between the dates when the first print was released and the first machine assembled.

Quality Control Experience with a wide variety of projects—new-product introductions, mergers, plant constructions, introduction of organizational changes, to name a few—indicates that effective quality control of results is a crucial dimension of project success. Quality control comprises three elements: defining performance criteria, expressing the project

Project level Rwponiibility Management level

Project level Rwponiibility Management level

and others

Figure 4: Breakdown of project cost responsibility by management level.

and others

Figure 4: Breakdown of project cost responsibility by management level.

objection in terms of quality standards, and monitoring progress toward these standards.

The need to define performance criteria, though universally acknowledged, is generally ignored in practice. Such quality criteria can, however, be defined rather easily, that is, simply in terms of senior executives' expectations with respect to average sales per salesperson, market penetration of a product line, ratio of accounts to production workers, processing time for customer inquiries, and the like, if possible, these expectations should be expressed quantitatively. For example, the senior executive might expect the project to reduce emergency transportation costs from 15 percent to 5 percent of total shipping costs.

Since achievement of these quality goals is a gradual process, the project manager should review progress toward them with the general manager monthly or quarterly, depending on the length of the project. Sometimes there will be little noticeable change; in other cases major departures from expectations will be apparent. Here, as in the case of time and cost controls, the importance of prompt action to assure that the objectives will be met cannot be overemphasized.

Managing the Human Equation

The typical new project manager finds adjustment to this anomalous new role painful, confusing, and even demoralizing. Lacking real line authority, he or she must constantly lead, persuade, or coerce former peers through a trying period of change.

Too often, in these difficult early weeks, the project manager receives little support from senior management. Instead, he or she may be criticized for not moving faster and producing more visible • results. Senior managers need to recognize that naming and needling the project manager is not enough. By giving support at the start, bringing a broad business perspective to bear on the overall project plan, and giving the project manager freedom in the details of the doing, senior executives can greatly enhance the prospects of success.

Another critical point comes at the conclusion of the project, when its results are turned over to the regular organization and the project manager and team must return to their permanent assignments. By virtue of the interfunctional experience gained under pressure, the project manager often matures in the course of a project, becoming a more valuable manager, but may have trouble slowing down to a normal organizational pace. The routine job is likely to seem less attractive in terms of scope, authority, and opportunity to contribute to the business. Even the best project manager, moreover, can hardly accomplish given project objectives without antagonizing some members of management, quite possibly the very executives who will decide his or her future. In one instance, a project manager who had brought a major project from the brink of chaos to unqualified success was let go at the end of the project because, in accomplishing the feat, he had been unable to avoid antagonizing one division manager. Such difficulties and dissatisfactions often lead a retired project manager to look for a better job at this time, in or out of the company.

To retain and profit by the superior management material developed on the fertile training ground of the project, senior executives need to be aware of these human problems. By recognizing the growth of project managers, helping them readjust to the slower pace of the normal organization, and finding ways to put their added experience and matured judgment to good use, the company can reap a significant side benefit from every successfully managed project.

This part of the text begins our formal analysis of project management. Chapter 2 takes the first step in project initiation: evaluating and selecting projects for implementation. That chapter also includes a short discussion of project proposals and their preparation. What is certainly a critically important task in the management of projects, the selection of a project manager, is treated in Chapter 3. The significance and nature of the project manager's role, responsibilities, and desirable personal characteristics are described in detail. Chapter 4 continues with a dis cussion of the advantages and disadvantages of several different forms of project organization. The nature and formation of the project staff are also briefly covered.

Chapter 5 opens the subject of project planning. Preparation of the fundamental planning document is covered, and some of the tools needed to organize and staff the numerous project tasks are described and illustrated through examples. Finally, Chapter 6 treats the most often used and least-discussed skill of an effective project manager, negotiation.

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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