The Money Files

“Influencing stakeholders is something we do from birth,” said Guy Giffin, speaking at the latest APM Women in Project Management conference. “As soon as you are dealing with more than a couple of stakeholders, you’re dealing with a number of conflicting views and interests.”

Giffin explained that “the same old things” keep turning up on the list of challenges for projects and that they nearly all have some link back to the humans involved in running the project. “It’s hard to give you a recipe for success,” he said. “Some analysis is scientific but building relationships is more art. Charm certainly comes into it.”

Giffin shared his 4 step process for managing stakeholders with the audience. “Some people get hung up about ‘engaging’ instead of ‘managing’,” he said. Whatever you call it, you need to go further than just plotting names on a chart and analysing impact and influence. Here are his 4 steps to better stakeholder management.

1. Identify

“Some appropriate questions asked in the right way can get you some good information,” Giffin said. The pool of stakeholders is probably wider than you first thought, so asking individuals for their view on who should be involved is a good way to identify your full stakeholder group.

2. Profile

The more you know about them, the easier it is to manage them. Giffin recommended finding out all you can about the stakeholders you have identified. Do this via their LinkedIn profiles, the company annual report (for the C-suite executives), a Google search or just by asking around.

3. Define

This step is about defining their role in the project. They may be the budget holder, or a representative of a group that needs to be kept informed. Determine what their role is and then you can judge the best compromises to use.

4. Sell

Giffin recommends using “all your weapons” to sell the project to the stakeholders. He talked about using allies on the project – those key stakeholders who strongly support the project’s aims. Get them involved in the sales activity on the project and encourage them to spread the word about the initiative and the changes that are coming. Use public relations activity – get your PR team involved and do as much communication as possible. Use internal newsletters, a wiki or an intranet site for this.

Project managers need to become experts in managing relationships. We need to understand EQ – the emotional equivalent of IQ. We need to be skilled in political science to be able to navigate through the boundaries of organisational politics. We need to understand social psychology. Good stakeholder managers are experts in communication and listening. They are great at consulting and they show deep empathy with the people they are working with, and working for. “It’s a bit of science, a bit of art, and a bit of luck,” Giffin said.

How to sell when you have no money

One of the questions from the audience was about how you can win over stakeholders when you have no budget for entertaining or ‘schmoozing’. “Asking good questions is a good start,” Giffin replied. There is a lot of mileage to be had in making sure that you have a proper, full understanding of the challenges facing stakeholders and the concerns they have about the project. Spend time with them understanding their world, and asking intelligent questions.

Once you have done that (and this is the bit that Giffin didn’t really cover) you need to follow up on your discussion sessions. It’s no good asking questions if you cannot resolve any issues that are raised. Even if there is nothing you can do, go back to the stakeholder in question, thank them for their input and explain why you cannot make the change they requested. This is an easy, free way to build a good relationship with stakeholders when your project budget does not stretch to corporate hospitality.

Just a note on hospitality: if you do decide to go down this route and host events for stakeholders or similar, be careful not to fall foul of the law in this area. In the UK, the Bribery Act sets out what you can and cannot do in a workplace setting, and I’m sure other countries have similar regulations.

This month, the discussion topic here at Gantthead is stakeholders. Project stakeholders need documents – but how do you know how much documentation is enough? Unfortunately, the answer is always, “It depends.”

The amount of documentation stakeholders need to feel comfortable depends on:

• The project scope
• The project size
• The project’s requirements and how complex they are
• Any legal requirements
• Any financial requirements
• Your company’s documentation standards (although you could flout these if you have good reason)

According to Tom Kendrick in his book, 101 Project Management Problems and How to Solve Them, there are three types of project management document:

Definition documents: these define the project so include things like the project charter, requirements catalogues and organisation charts. Stakeholder management/engagement grids and analyses also fit in here. Definition documents might sound static, but they actually need updating regularly as things will always change.

Planning documents: these help the project team plan the work. They include the plan (of course), risk register, the project schedule, and any other project-specific sub-plans like a communications plan.

Status documents: these are the documents that stakeholders are generally most interested in. While they should be interested in the requirements and the risk log, you’ll find that the majority of stakeholders only really want to know how things are going and what they have to do next. Status documents include the things you would expect like regular reports, the issues log and follow up actions, the change log and other regular, non-standard documents that discuss status like meeting minutes.

Where does your project budget fit in all of this? Well, it’s partly a definition document: as part of the project initiation activity you would have defined the budget in the project business case or initiation document. But it’s also a status document: the real-time changes in the budget and tracking how much you are spending is very much related to project status.

You may find that it is easier to have two versions of the project budget: one definitive, signed off, formal version of the budget that never changes and acts as a reference point (your project budget baseline) and another as a living document that you update for quarterly forecasts and use to record actual spend. Personally I spend much more time on my living document than I do going back to the original, but I know that at the end of the project I will be expected to justify any changes to budget in the post-implementation review, so it’s important to still have those figures unchanged, with details about the project assumptions that helped shape them as no doubt by the end of the project I will have forgotten why the budget was set up that way.

Those two documents are ‘enough’ for my project budget. I can pull extracts or summary figures for my status reports, and that satisfies my stakeholders. How do you manage your project documentation, and do you find yourself doing just enough, or producing documents that no one ever looks at again?

In my last video, I talked about the cost of change. Today, I’m going to talk about the cost of metrics. That said, how much did it actually cost you to gather information about your project?

Now, project managers like metrics and I do because they are very useful for monitoring your project, controlling your project and diagnosing potential problems. So metrics can give you early warning of trends that show that there is a problem on the project that needs to be corrected. Those, they give you the control that you need because they can set boundaries around tolerance levels and they allow you to monitor progress effectively.

So metrics are good but you have to make sure that the amount of time you are spending on gathering that data actually is worth it for the value that you’re getting from those numbers.

Now in this book “Results without Authority,” Tom Kendrick writes “All diagnostic metrics even those you intend to collect only infrequently have an ongoing cost.” He says, “Select your metrics carefully choosing ones that provide useful data that you can use to guide and control your project without inappropriate cost or high potential for needlessly annoying your team.” And that’s something else to consider - not just the cost of actually the time and effort that it takes to gather that piece of project data that the amount of good will that you are eroding by continually badgering your team for information about progress, numbers, data on a regular basis especially if they cannot see that they are going anywhere. And that really is the hidden cost of gathering metrics.

Metrics do have a very valuable place in the world of projects but you do need to weigh that against the two different aspects of costs. Financially, how much is it costing you to gather them and on a good will basis, how much is it costing you in relying on the team to continually gather information?

The 2012 Arras People Project Management Benchmark Report is out - the 7th annual study of the project management industry that the company has produced. The company surveyed over 2000 project professionals, mostly UK based. This year, there were some interesting results reported around budgets and salaries.

What's your budget?

Nearly a third of project managers are responsible for budgets between £1m and £5m, which is the category that had the highest response rate. Programme managers manage the larger budgets, with 37% managing between £1m and £5m and 29% having a budget of over £5m.

Contractors have responsibility for larger budgets than employed project managers, which surprised me. They also typically have more staff working for them - again, I found this surprising. It shows that contractors aren't just brought in to fill recruitment gaps but to take the lead on significant change initiatives with significant spans of control.

How much do you earn?

The survey looked at salary movements. 83% of respondents reported that their salary increased by less than inflation in 2011 - a virtual pay cut. Unsurprisingly, the public sector was the worst hit, since the pay freeze was announced. Over 60% of public sector workers reported that their salary hadn't changed, compared to under a third of private sector project workers. The average salaries were:

•   Project manager: £43,762

•   Programme Office and Portfolio managers: £57,560

•   Programme manager: £58,788

•   PPM Consultant: £67,237 (and 46% of them feel worse off than they did last year)

For mid-range salaried jobs, the public sector is the place to be. Many more employees earn in the £35k to £50k range than in the private sector. If you want to earn more than about £55k, move to the private sector - that's where the higher paid jobs are.

If you get a bonus at all, it's likely to be up to 8% of salary according to the survey. Only 2% of people receive over 25% of salary as a bonus, so if you fall into that category, consider yourself lucky.

Contractor day rates also took a dive, especially at the lower end of the pay scale. Where day rates were already low, it looks like hiring managers have squeezed them even further.

What's next for salaries in 2012?

The experts at Arras are expecting it to be another tough year for the public sector. 95% of public sector survey respondents are predicting no change or less than inflationary change in the coming 12 months.

Private sector workers are expected to fare better. Nearly two thirds of project professionals are expecting to get a rise this year. Arras is predicting that there won't be huge increases (for huge read over 5%) but that salaries will increase this year.

21% of contractors are predicting that their rates will decrease over the next year - not good for those already suffering the effects of rate declines in 2011.

So in summary, 2011 was tough and 2012 is likely to be a little bit better, but not much. However, project and programme work still remains well-paid and sought after, so it is still a good employment sector to be in.

How do you think salaries and bonuses will evolve in your country over the next year?

Last time I wrote about the 7 C’s of social media. There is one more C. It’s not strictly a social media guiding principle, but it’s aligned. Have you worked it out from the picture? It’s Cloud.

Cloud computing is the delivery of infrastructure, an operating platform and software delivered over the internet as a service.  You can buy storage space, platforms to build your own applications or access to software applications.  The latter is often called Software as a Service (SaaS). 

Lots of vendors are using this model to deliver software, and you can read some reviews of project management software on my blog, A Girl’s Guide to Project Management. The more upscale the tool – software designed to be used by professional, trained project managers – the more likely it is to have an on-site hosted option. Many of these products also have cloud versions for use by smaller companies or those who don’t want to invest.

Clouds with benefits

That’s the good thing about cloud computing: it means that companies don’t have to invest in data centres or massive server rooms, and they can avoid the cost of having to buy, host and maintain software themselves. If your organisation gets busier, you pay your cloud computing supplier a bit more money and they scale up the solution for you to cope with the demand. If you have fewer projects to run, you can scale it down. It’s very flexible, and system upgrades tend to be implemented immediately. It also has a low capital outlay, which can be a huge selling point if you are trying to convince your management team to invest in a social media tool for your project. You won’t be left tied in to ongoing contracts or with expensive servers sitting idle.

The downside of clouds

However, you don’t own perpetual rights to the software. If your internet link goes down or the vendor is doing routine maintenance, you can’t access your project files. And if you decide to move to another tool later it can be awkward to migrate all your data.

There is also the security question: where is your data actually being stored and who can get at it? If you work on projects in the government or healthcare arena you may be prevented from moving project files to the cloud.

Cloud computing solutions have also been criticised for not being ‘green’, meaning that they are energy hungry server farms with a high carbon footprint.  If this is a concern for you and your organisation, research the hosting company fully before committing to doing business with them.

Do you use the cloud for your project management software? I’d be interested to learn more about your experiences, so let me know in the comments.