The Money Files

You hear it all the time: “We want our project managers to add value.” “How are you adding value to the organisation?” “I want to spend more time on valued-added activities.”

But what does adding value actually mean?

I’m not a great fan of buzzwords that I can’t explain and turn into practical actions, so I’ve given this topic quite a lot of thought over the years. Here are 5 things I think you can do to add value (in a meaningful way) as a project manager.

1. Team building

Projects are done by people. People make up teams. Groups of people don’t have the same impact as a well-functioning team. Therefore, spending time on team building is worthwhile and will create value for the organisation because you’ll be better at delivering whatever it is you are delivering.

Focus on creating a positive work environment. Think about what people need to get their tasks done. Look for roadblocks you can remove, processes you can streamline. Talk about the blockers and why they are a problem.

And get some fun in there too.

2. Tenacity

Being committed to the team and the job, and the project, is a sure way to add value because it increases the chance the project will actually get done. How many projects do you know of that started but didn’t have the momentum to get across the line? That’s what tenacity will help you avoid.

Assuming you are working on the right projects, the ability to follow through and get the work done is important for making sure your time pays off for the company.

3. Relationship-building

This is such a large topic, which includes resolving conflict, smoothing over awkwardness, being diplomatic while speaking truth to power, respectful challenge and knowing who to connect and when. There’s a whole bunch of soft skills (or power skills, as it is trendy to call them now) that fall into this bucket.

They are important because this is what helps you get work done even when the environment is tricky. The more you listen, the more you understand and the easier it is to get your projects done. You’ll understand more of the business context that lets you make the right decisions that – you guessed it – lead to delivering a higher-value result.

4. Control the process

Governance might not seem like a particularly value-added thing to do, but when you understand and use the processes of project management, you can structure, standardise, save time, automate, compare and improve so much more easily.

If you have a standard approach, however informal, everyone knows what to do and what to expect and that takes some of the uncertainty out of what is normally a pretty uncertain time for people – projects deliver change and that comes with an overhead of having to live with not knowing exactly what the future will look like. That can be an added source of anxiety and stress for the team and wider stakeholder community.

5. Change management

Projects start to feel out of control when change is not managed appropriately, and that’s when stakeholders start to get nervous. You can help your projects be more successful and ‘land’ better with the receiving organisation, if you manage change properly.

That goes for both the process-led effort of receiving and handling change requests as part of your project management work, and also integrating what you are delivering into the business in a way that makes it possible for the benefits to be received as soon as possible, with the least disruption. Benefits = value.

How do you interpret ‘adding value’ as a project manager? I think it could go much further than what I’ve written here. I’m sure there are many other ways of looking at our role and how we can serve our stakeholder communities in the most value-adding way. Let me know by leaving a comment below!

Benefits realisation management is one of the hardest things to do in a project setting (in my opinion) and in this video I explain why. I talk about three things that make it harder and give you a few tips on what you can do instead to help get over some of the challenges. The three things are:

• Low skill levels
• Poor integration
• Poor processes.

Watch the video below and then let me know whether you’ve seen any of these challenges in your organisation!

There is more detail in this article: 5 Barriers to Effective Benefit Realisation that draws on information from Carlos Serra’s PMI presentation on the topic.

What makes a project manager successful? It’s no secret that it’s hundreds of small decisions and behavioural traits. I’ve been thinking recently, as I’m writing a new book, about the things I believe make the biggest difference.

The infographic below isn’t based on scientific research, but on my experience working with project managers and leading teams. What do you think makes the biggest difference in whether a project manager is successful at work or not? Let me know in the comments, I’d love to hear!

What a great question: is it worth moving clients to a retainer model for project services? A got in touch to ask me, and I thought it was probably a question worth sharing with everyone here.

This is what she said:

“We're a small graphic design studio with 3 employees. My boss wants to convince some of our clients to move to a retainer model. The thing is, most of our projects are on an ad hoc basis, without much consistency from month to month. My feeling is a retainer is not ideal in such a situation, but my boss likes the appeal of it... Money in the bank every month, how wouldn't you?! So my question is: when would you recommend a retainer, and when would you advise against it?”

What is a Retainer?

A retainer is a fixed fee that the customer pays you every month to secure a certain amount of work done. The work could be anything, as long as it’s covered by the scope of your agreement.

Sometimes hours not used are carried forward (often by a limited amount e.g. use within three months or forfeit the hours). Sometimes they are written off if the client doesn’t use them (which is the arrangement I have with a supplier at the moment).

Let’s look at the pros and cons of this payment model.

Advantages of Working on a Retainer

First, the most obvious advantage: it’s money in the bank every month! Whether you do the work or not! What manager wouldn’t want that? I totally get it.

This model works well for projects where there is an element of continuity. I know project have a start, a middle and an end, but if you have projects where there are incremental improvements planned over a year or so, you can see that having the commitment to move forward works well. Think design clients, web projects, app development, that kind of thing, although I’m sure there are other industries where this would also work.

It can improve the flow of work from the client. When they know they have committed to pay a certain amount for work done each month, you might find the work planning is easier. They should be letting you know what they need you for in advance of the next month. This can improve the consistency both of the incoming work (better for you) and the communication (better for both of you).

You should get to know them better and what they want, and that might help you advise them on how to use the retained hours each month. You are also more likely to prioritise their work above incoming fixed-fee or ad hoc projects, just because you have a relationship with them that’s different. That could be a selling point for clients.

Easier admin: both for you and the client. It’s one invoice, it’s a fixed fee, it can be largely automated as a recurring payment. It should be easier for you to maintain the relationship and manage the payment cycles (although for your own benefit and for “proof” you’ll still have to do timesheets). Fixed costs for the client could be a real plus point.

Disadvantages of Working on a Retainer

There are some disadvantages of course, for you and the client. First, you never know how much work the client might want you to do – if it’s a slow month you might be able to squeeze in extra ad hoc work from other people. It’s better to plan for all your hours to be used up so that you can definitely resource their work, but if they don’t send work your way you might have project staff waiting around.

Normally you’d charge your client less per hour on a retainer than you would for a project-driven rate – that’s the advantage to them of having a retainer.

The client might decide that if the work genuinely is ad hoc, that they don’t want this model and you’ll end up either going back to the way you worked before or potentially losing the client if you no longer offer that as an option.

Transparency becomes more of an issue. If the client doesn’t believe they are getting value for money they will vote with their feet and take their projects elsewhere. Think carefully about how you are going to do demonstrate what you have done and what value they have got from their investment each month.

So: When Does a Retainer Work Best?

I think the retainer model works well when the scope of the work is broad, ongoing or likely to evolve. In other words, where the requirement for a long term relationship seems apparent from the start. This might be through lots of micro projects such as graphic design projects, or through one larger piece of ongoing work.

It’s also an effective way of working where the breadth of the work required stretches over several teams or the capability of a whole agency/supplier. You aren’t costing hours per different type of specialist resource within your team, you’re quoting for work done on a flatter cost structure so it removes admin.

I have paid retainers before (and still do) but I am interested in hearing your thoughts on how this works in your business. Let us all know in the comments below, and thanks, A, for the thought provoking question!

This month it’s all about celebrating project success here on ProjectManagement.com, and with that in mind I wanted to explore some ideas around what makes a project successful.

Malcolm Gladwell has been instrumental in shaping my thinking about this, and you can read more of how I got to know of his work and his thoughts on the paradox of successful cultures in this article.

Often times, we rely on the old adage: “Fast, good, cheap: pick any two.”

The assumption here is that if you don’t pick ‘cheap’ and you have plenty of money to invest in your project, then you’ll get a successful outcome. We also hear leaders talk of being able to throw money at a problem.

Don’t get me wrong. Having money to help resolve issues and to fight off potential problems is a huge benefit. Funding does make many issues seem less troublesome. When you can call in extra resources or buy more stock without worrying about it, that’s definitely a burden removed.

The thinking of Gladwell, author of Blink and Outliers, suggests that successful cultures aren’t the ones with the most money to throw at problems. Success doesn’t come from unlimited funding.

Borrow and Follow

Successful project cultures are those that rely on the ‘borrow and follow’ approach that Gladwell laid out at the PMI Global Congress North America in Dallas where I heard him speak.

Those project management cultures don’t innovate – at least, not extensively. They look at what is working and adapt processes to their own environment. They actively pay attention to lessons learned. They work hard to build organisational knowledge and avoid the mistakes of the past – following in the footsteps of those who have done good work.

In other words, don’t reinvent the wheel if you don’t have to. Let someone else do the heavy lifting. In project management this could look like:

• Using a standard, published, recognised body of knowledge instead of trying to write your own
• Using best practice processes, instead of trying to design your own
• Having a robust and followed lessons learned process so that continuous improvement becomes part of the fabric of the way things are done (whether that’s using Agile approaches or continuous review during a sequential-style deliver)
• Using existing published career paths and competency models for your project managers instead of trying to write your own
• Using existing, recognised training and credentials for your project managers and team members instead of trying to design in-house training schemes.

There’s no requirement for ‘success’ to start with a lot of hard work in setting up systems that already exist elsewhere. While you should always be mindful of taking intellectual property and reusing it as your own (ethics is always paramount), there are plenty of materials, processes, templates and more out there that mean you can create a successful project management culture with a smaller initial outlay.

The Negative Side of Funding

The other interesting idea that has come through Gladwell’s thinking is the concept of money constraining creativity.

In other words, the more money you have, the less creative your project environment is likely to be, and that can have implications for success – both on a project level and on a portfolio or PMO level.

You’ve probably seen this yourself in your workplace. When money isn’t an issue on a project (if you’ve been lucky enough to be in that kind of environment) then you’ll know that when you hit a problem, the first thing the team thinks about is how to buy their way out of it.

When I researched my first book, Project Management in the Real World, I included a case study of a build project where the team had to work creatively together to find ways to hit the project budget. The project was a success because the effort of having to think creatively around funding brought the team together. The closer working relationships they forged when together the various suppliers worked with the project’s objectives front of mind made it a better project for everyone.

Money Doesn’t Equal Success

I don’t doubt that money makes projects more likely to hit their objectives. The experience of working on a project with adequate funding is more pleasant than having to scrabble for resources, count every penny, and challenge every receipt. But it isn’t the only thing that makes a project successful.

Think about your projects and what success looks like for you. How much of it is determined by the funding available and how much by the talent of the team, the timescales or the commitment of leadership?

What do you think about this topic? I’d love to hear your thoughts so let me know in the comments below.