The Money Files

It’s January. Budgets are stretched, it’s still a long time until pay day and if you haven’t given up on your New Year’s resolutions soon, you know it won’t be long until you do. How do you motivate the project team to give their best through the long, gloomy winter days (at least in this hemisphere) when you don’t feel very cheerful yourself?

The main challenge (complaint?) I hear from project managers about motivating their team members is that they have no authority to give financial reward. Project managers are not line managers. They have no control over salary and they don’t have the ability to authorise overtime payments, let alone bonuses. And we all know that money is a motivating factor, isn’t it?

Well, actually it’s not that much of a motivating factor as you’d think. Tom Kendrick writes about the work of Frederick Herzberg in his new book Results without Authority. You may have heard of Herzberg before – he’s the one who came up with the six motivating factors: achievement, recognition, the work itself, responsibility, advancement and growth.

You may also have heard of the ‘hygiene factors’ – the things that Herzberg considers pre-requisites for happy workers. Salary falls into this bracket, along with topics like corporate policy and working conditions. “If the hygiene factors seem okay, people mostly ignore them,” writes Kendrick. “However, when workers view these aspects of their jobs as inadequate, especially when compared with other available job opportunities, they are grump and uncooperative. Sooner or later, they vote with their feet and leave.”

Hygiene factors may be largely out of your control: you can’t set company policy or spruce up the office so it’s a nicer place to work. But if those are all okay, they won’t provide a problem for your team. So forget about the hygiene factors. Think about those motivating factors instead.

Achievement, recognition, the work itself, responsibility, advancement and growth. You can provide those for your project team, can’t you?

Achievement: create an environment where people can complete tasks. Don’t set anyone up to fail. Help team members by providing what they need to get the job done.

Recognition: another easy one! Say thank you. Put a note in your diary to thank someone weekly. Tap into corporate recognition schemes or local awards. Give credit in your status reports or presentations.

The work: make sure that the team members know why they are working on that particular project. Make the work meaningful by ensuring they understand the value of what they are doing and how it contributes to the organisation’s goals.

Responsibility: delegate. And don’t delegate everything to your right-hand man (or woman). Find a way to give responsibility for tasks to everyone in the team, so everyone feels accountable for their section of the project.

Advancement: this is a bit trickier. You may not be in a position to promote someone, but you can help them gain the skills they need to advance in their career. You could also provide direct feedback to their line manager to support their promotion or advancement. If the team member is really stuck for career prospects at your company, you can help them build their CV or resume and support them in their quest for a job outside your organisation.

Growth: everyone should get something out of the project on a personal level. Is the team learning something new? Building new skills? Trying out new technology? Find ways to highlight how the project is providing them with opportunities to improve and grow in their careers.

And the best thing about all this? It’s free! You don’t have to spend any money on motivating people if you understand how motivation works and you take the time to understand what motivates your team members.

How do you motivate your team?

Today I'm interviewing Eleanor Mayrhofer, who has built a project management methodology specifically for small, indie businesses. Steal This Process (STP) is designed to save creative, independent businesses time and money by helping them do more, more effectively. The business ethic fits perfectly with this month’s Gantthead theme of doing things on a budget! Eleanor has her roots in large IT projects, and now runs her own small creative business, so she knows what works in both situations and has been able to translate the techniques used by large companies into language that makes sense to those with no project management experience.

Eleanor, how did you come up with the idea of the toolkit?

My last role at my corporate job was on the methodology team, developing how-to guides and templates for the company’s global creative practice. Many of these templates had to be used in conjunction with or integrated with templates for enterprise level technology implementation projects. By necessity some of the tools like the WBS, estimation and scope matrices were complex, but the concepts behind them were simple. I figured that a bare-bones, less-complex set of tools for people doing creative work or running very small businesses would be helpful.

You say in the toolkit that you learned a lot from working for The Man. What was the most important project management lesson The Man taught you?

Scope! Everything comes back to properly defining scope and then managing it consistently (and sometimes ruthlessly!). It seems to me whether on large scale IT projects or a small business making crochet patterns, delivery issues can almost always be traced back to problems in scope definition and management.

The design of STP is beautiful.

Thank you!

Did you enjoy putting your web and print design skills to good use on this project? Why was that important?

I did very much. It was important to create content that was in a visual language that my target audience would understand. Project management is a very analytical, left-brained and mechanistic subject, but I heartily believe that it is something that right-brained creative people can not only benefit from but can easily grasp and excel at.

A large part of the battle is just presenting it right. I still vividly remember how intimated I was by Excel, Gantt charts and the like when I only did graphic design. One look at this type of documentation sends all kind of symbolic messages to the creative brain such as: Math! Rigidity! Rules! Mechanism! Constraints! All of this creates an immediate instinctive aversion to the content.

However if you can present the same content in a compelling visual way, defences go down and the concepts can be absorbed. Witness the popularity that beautifully designed informational graphics are getting. When analytical information is beautifully presented it can be quite sexy.

How do you feel good project management helps small businesses be more effective?

Small business owners tend to wear multiple hats and have to carry out more than one role. This can cause a lot of overwhelm which good project management can alleviate. In my own business working with defining scope and converting it into tracks (marketing, continuous improvement, product development, operations, etc.) really has helped me get realistic about what I can accomplish as well as get focused on certain projects. In some ways it’s not so much about finishing on time and on budget, since you are your own client, but rather structuring all of the work, projects and activities that are part of running a small business.

Reusable templates can help with structuring the work, and you provide these in the toolkit. They must save companies a lot of time, and, if you are working for yourself, time is money. You’d be surprised at how many non-indie businesses don’t have a suite of templates. How much time do you think they saved you when you were setting up your print and design company em.papers?

It’s hard to know because by the time I had started e.m.papers planning was second nature and I just re-purposed templates that I had from my old days on the job. It was only after talking to crafters and folks with creative businesses that I realized that defining scope, estimating work and doing high, mid and low level planning wasn’t ‘normal’for most indie businesses. I think it’s fair to say, though, that being able to grab some templates and just run with them probably saved me at least 6 months of churn.

Wow, that's a lot of time! You no doubt learned a lot along the way so what is your top tip for people implementing project management and time management practices in their companies?

To do less better. Everyone –including myself –is usually too ambitious about what can realistically be accomplished. Overly aggressive scope and planning will only lead to discouragement. It’s all about setting achievable goals and projects, then executing well against them.

Thanks, Eleanor!

You can download the Steal This Process project and time management kit from Eleanor's website, here.

Imposter Syndrome is not a medical condition. It is a convenient term for the feeling you have when you believe that you do not really know what you are doing. You attend a meeting where the discussion goes over your head and you suddenly feel like an idiot. You believe that you are in completely the wrong job and the wrong company and you are in no way worthy of holding your current position. Surely it is only a matter of time before someone notices that you are not up to the job and fires you?

In reality, lots of people feel that they don't measure up. I’ve spoken to men and women who have said they occasionally (or regularly) feel like a fraud at work. At one conference I spoke at earlier this year, when I asked if anyone had ever felt like they didn’t really know what they were doing in their job, nearly every hand in the room went up. Lots of people feel like this, but we don’t talk about it much. Why is that?

When you take on something new – a new project, a new responsibility – you might be surrounded with people who are subject matter experts or who have been in a similar role as yours for years. It feels as if they know everything, and you don't know anything at all. Who wants to confess that they don’t feel they fit in when everyone around you looks like they have always belonged here?

That's how Imposter Syndrome manifests itself: it undermines your self-confidence. It can hit anyone, at any time. And the truth is that nearly everyone feels like this at some point – some people are just better at hiding it than others!

Ring any bells? If it does, my new ebook could help. Overcoming Imposter Syndrome: Ten Strategies to Stop Feeling Like a Fraud at Workdiscusses how you can feel more confident at work. It explains what Imposter Syndrome is, why we feel like we aren’t measuring up, and shares practical strategies that have been proven to work addressing the feelings of Imposter Syndrome.

You can get your copy at www.OvercomingImposterSyndrome.com or on Amazon Kindle. May 2012 be the year that you feel better about your abilities at work!

Value Management: Translating Aspirations into Performance is a new book by Roger H. Davies and Adam J. Davies (Gower, 2011). It’s heavy going, but if you are into getting the best value out of the change programmes you are delivering, then it makes useful reading.

There is a fair amount of theory, but there are techniques in here that you can apply to your programmes straight away. I’d say that it is aimed at people in a pure programme management, portfolio office or senior executive role, as there is not much here that project managers will be able to put into practice without senior support.

Defining value

The authors define value as:

Or, to describe it less financially:

I would argue that value means different things to different people, but I understand that you need a common ground on which to base the rest of the book.

Asking the right questions

The book starts with a really nice feature that I’ve never seen before: executive questions. Here’s an example:

Q: How does Value Management address the challenge of delivering greater value from change programmes?

A: Value Management provides the means to deliver more benefit for less cost and risk. Value Management targets, times and aligns initiatives to maximise overall value. This is achieved by linking programmes explicitly to attributable benefits. This requires precise quantification of cause and effect relationships between programme deliverables, the drivers of business performance and consequential stakeholder benefits.

Reference: See Chapter 7 (Programming Value) and Chapter 8 (Aligning Value)

This is a neat way of explaining to people picking up the book the kind of questions that will be answered by reading it, and forms a kind of annotated table of contents so you can flick to the section that most interests you first.

Is it a good read?

Value Management is not an easy read, but perhaps I’m just not in a role where I can act effectively on the information in here. There is also a good glossary and lots and lots of graphs, figures and tables, so the authors make it as easy as possible to understand the concepts discussed. They also draw on real life examples and their own anecdotes, including examples from the movies, so they have tried to make the theory as accessible as possible.

One of the authors was obviously very taken with neuro-linguistic programming (NLP) and there are a number of references to how powerful this can be. The authors write: “The ability most relelvant to Value Management is to produce radical shifts in performance by re-programming limiting perceptions and ... enable clients to release latent potential through change.” They call this a value breakthrough, but this was one of the weaker points of the book for me. I’m sure you could achieve similar results with cultural change without having to ‘NLP’ your entire organisation.

If you are looking to drive savings and ensure that your change programmes and portfolio of projects delivers the best possible value for your company – and you work in an organisation with a high level of maturity when it comes to PMO practices and project thinking – then you could get a lot from this book. If your company doesn’t have a mature approach to programme management, you could struggle to get any of this implemented, but at least understanding the concepts will help you assess which are likely to be the best programmes for your business, and how to get the last drop of value out of them.

Over the past months we have looked at payback period, internal rate of return, benefit cost ration and net present value. Today I want to introduce two other financial metrics.

Discounted Cash Flow

As with a lot of these metrics, different companies have different ways of calculating them. Discounted cash flow is all about the time value of money. You use it to work out how much stuff in the future will cost you at today’s prices.

You can use it to value a project in terms that the project board – or whoever is assessing the business case – will understand. If we do this project, the value is £x, and that project has a value of £y.

In other words, you work out how much cash your new fancy project will generate for the company, knock a bit off of because prices go up in the future, and that tells you the value of the income today.

OK, that is a terribly simplistic view of discounted cash flow. The good thing is that you probably won’t ever have to work it out yourself. Your Finance team or your project office accountant will be able to plug the right figures into the equation, use the standard discount rate for your type of project and you just add the numbers to the business case.

The only other useful thing to know is that discount rates are normally linked to the cost of the capital. So, if it costs you 5% a year to borrow money to invest in your new engineering product or to hire the land that the new shop is going on, then that will factor into the discount rate calculation. In other words, it’s not just about inflation.

Activity-Based Cost Management

Don’t you just love all this terminology? I think it’s important for project managers to understand these terms because even if we never have to work them out for ourselves you don’t want to be bamboozled by your colleagues in Finance, or even business people who are used to dealing with profit and loss accounts and business cases.

Activity-based cost management, or ABC/M, just means working out how much each activity costs. It’s a bit more scientific than just assigning day rates to different types of resources as it also looks at processes. The idea is to calculate how much different routes through the processes cost, using different types of resources including customers.

That gives you the activity-based part. You can then do the management part, which is analysing the results and working out if there are smarter ways to do things. If you know the elements that add the most cost to the process, you can work out how to influence these and deliver more stuff for less money.

Personally, I can see the value in doing this in manufacturing and engineering environments, but up until recently I couldn’t see the value in doing it in other sectors. After all, so much is non-standard, as we try to give personal service to everyone. But actually there are a lot of things that can be standardised, and even standard costs give you an indication of the success (or value) of the process.  Projects drop out of this data.

For example, turnaround times in airports. If you knew which type of planes, terminals, crews and passenger combinations took the most time to get the flight in the air, you could launch a project to assess the process and speed it up. Or you could look at locations and crews that had great turnaround times and replicate the success where you could. The same goes for the cost of surgery in hospitals, supply chains, and customer service teams handling different types of customer problems.

While ABC/M takes a lot of effort and number crunching, it’s a useful tool. Does your Project Management Office do anything like this? Let us know in the comments.