The Bare-Boned Truth About Change Management

 

As we address the May theme, of Change Management, there are many elements…

OUCH! What the heck was that? A dart with Sodium Pentathol?  Well, I’m kind of up against my deadline, so I’ll go ahead and see how far I can go before my writing degenerates into meaninglessness (Detractors! DO NOT post comments along the lines of “too late!”).

As I was saying, the main elements involved in Change Management have to do with a commonly-accepted aspect of project management, that no project is completed on-time, on-budget, with the original scope intact. There seems to always be unanticipated events that occur while the contractor is pursuing the scope, events that even the most advanced risk management-type (or least advanced – there really isn’t much difference) can’t anticipate. So, what happens when these unanticipated events – also known as “reality” – occur?

Well, the contractor typically prepares a document to change the scope, cost, and/or schedule baselines. entitled Baseline Change Proposals (BCPs), Baseline Change Notices (BCNs), or whatever, and their purpose is generally the same: to notify the customer that something has changed, it’s gonna take more money and time, and would you please sign your name on to this form so we can keep working?

Generally speaking, though, the nominal approach that most buyers use, that of awarding the contract to the lowest bidder, pretty much invites the nefarious tactic of “low-balling” the contract. This is where the less-than-virtuous proposing contractor deliberately bids a price below what they believe they can execute the scope, relying on the Change Management process to alter the cost and/or schedule baseline to get to a point where the work is actually profitable. Most buyers are aware of this tactic, which leads them to perform the management of baseline changes with a scrutiny that would put Sherlock Holmes to shame.

A version of this buyer/contractor conflict exists in many markets. Right out of my undergraduate work I lived with two roommates, one of whom was a Porsche mechanic. It didn’t matter if the customer came in for something as innocuous as an oil change – all of the mechanics employed at this shop were expected to find other “problems” requiring attention. Usually, the way to manage this effect at the car shop would be to have the member of the family who spent the most time as shade-tree mechanic do the negotiating with the service manager, so that marginally superfluous work, or repairs that should wait, could be declined.

Over on the project management side, though, much of the change management process is often tied up with the establishment and maintenance of certain reserve accounts, Management Reserve and Contingency being the most notorious. When these reserve accountants were first popularized, they had a specific function associated with them. Management Reserve (MR) would be established after the Performance Measurement Baseline had been set, and was created by the project manager issuing a request of each of her Control Account Managers to give back some of the budget (usually around 5%) that they had been originally allocated. If the CAMs neared the end of their part of the work, and needed the 5% back, then it was usually okay. Optimally, the CAMs would find a way to complete the work at a 5% savings; however, if some of them needed more than the 5% they had originally pushed back, then the whole of the project would not be automatically in an overrun condition.

However, the management of MR has been ruined (strikethrough) made weaker by the modern practice of re-defining it. Rather than have it serve a function, it is now often defined by who controls it, rendering it impotent. Previously, the PM had complete latitude with how the MR was used. Now, it’s just another way for the customer to scrutinize the PM, and potentially deny the funds (and latitude) needed for successful project completion.

Wow…the words on the screen are getting pretty blurry at this point. It’s too bad, too, ‘cuz I was just about to launch into a discussion about what I really think of…