The Money Files

This month on ProjectManagement.com we’re talking about ‘power skills’: all the things that help you lead effectively and make a difference in your work. The skills you need to advance your career and be the kind of project manager that everyone wants to work with.

I’ve done a couple of training courses in my career that changed how I approached work and gave me additional skills that I could put to good use. Early on in my career, as a graduate trainee, my cohort did a course on management approaches and I remember learning about situational leadership. That was a game changer for me.

Later on, I did an assertiveness course (another game changer) and then a day-long seminar on conflict management. To be honest, I use that one less in my day-to-day life but it was fascinating to learn about best ways to help people come to agreements.

However, I’ve read a lot more books than I have attended courses, and I have learned just as much from those as I have from being in a classroom. Today, I wanted to share a few of my favourites with you: books that will truly give you those power skills to be an excellent project manager.

Never Split the Difference by Chris Voss

This book fundamentally changed the way I saw negotiation and gave me practical tips to use in high-stakes conversation. I mean, not that I’m in high-stakes negotiations very often (read: never) but the book also gave me some tools for ‘normal’ conversations and has also been very useful at home.

If you have to negotiate with stakeholders, or even have the requirement to simply understand their perspective and what is important to them (and be honest, who doesn’t as a PM?), then this is a great read. The stories of his job as a hostage negotiator are pretty awesome too.

This one is available as an audio book if you are having difficulty carving out time to read.

Exactly What to Say by Phil M Jones

Subtitled, The Magic Words for Influence and Impact, I read this book a while ago and still flick through it now when I’m trying to craft conversations or project communications that HAVE to be just right.

It’s easy to read and full of handy tips that are simple to implement. Basically, changing a couple of words in what you say can make all the difference, so think about your communication intentionally and start to see improved results.

It’s a small format book that is nicely laid out (i.e. with some pages just taken up with a giant quote) so it won’t take you long to read and it’s tiny enough to go in your bag.

The Grit Factor by Shannon Huffman Polson

A book about courage, resilience and leadership but one of the first US female attack helicopter pilots. There are some shocking stories of misogyny in here, but also a lot of takeaways about building an intentional career, being brave enough to go for what you want and taking calculated risks to get you where you want to be.

This is an interesting and thought-provoking read, especially for women in (or wanting to be in) leadership positions.

And finally…

Getting It All Done by Harvard Business Review Press

This is a collection of essays from HBR contributors, from their Working Parents series. It’s a relatively quick read, and project managers will be familiar with some of the tools and techniques suggested as things to help us balance work and home life – for example, a family Kanban board or regular ‘stand up’ meeting around the kitchen table.

However, what I took away from it – and what makes me want to include it in a list of books about power skills – is that it’s hard to be an awesome leader and meet the requirements of your job and also be an awesome human, showing up for your family and community at the same time. And that doesn’t even include having the ability to take time out to look after your own health and mental wellbeing.

The people in the book have a support network and systems that allow them to prioritize. From shared calendars, flexible working and understanding managers, they have built flexibility and balance into their lives by being intentional. I think that’s a real power skill: knowing what is important to you and showing up for that first, and then everything else second. I mean, isn’t that part of the agile principles, prioritizing requirements? And isn’t your family a higher priority than you work?

Have you read any books that have changed your thought process on what it means to be a good project manager? I have some space on my shelves for some new reads, so let me know what I should be looking at next!

Pin for later reading

I often hear that it’s too expensive, bothersome or simply pointless to introduce project management into small companies.

Owning a small company myself, I know that is categorically not true. When you have limited time, limited resources and above all limited funding, you absolutely need to be confident that you are investing them in the right initiatives.

OK, I don’t call everything that I do in my company a ‘project’ because it’s just what I do when I turn up to work. But I do have a plan, a task list, goals and – new this year in my growing firm – a colleague who uses the same project management software as I do so that we stay on the same page.

So I was delighted to get a copy of Gren Gale’s Project Management for SME’s.

The premise of the book is good. Gren writes:

To deliver a high-quality product to time and budget requires leadership, skill and – as importantly – demands that your whole business is set up to support delivery.

There is a lot of good common sense advice: the kind that isn’t common everywhere such as why you should let your team set estimates (because if you don’t, they’ll end up not believing the schedule).

The book is organised to take you through the project life cycle. Each phase is a chapter starting with inputs, actions and outputs. Once you’ve got through the life cycle, Gren covers governance and soft skills.

At the end of the book are helpful document layouts and links to free online versions, which makes it easy to put any of this advice into practice and get started quickly – important factors for small businesses making the decision to move to a formal project management approach.

There are recommendations for software that work well for small firms, which might end up dating the book in the future. Overall, it’s angled towards service and client organisations: the kind of small businesses that run as consultancies or agencies and important points related to what it is like to work in those businesses are called out when it’s relevant.

There are some interesting stories shared that really point to the fact that the author knows his stuff. He’s definitely been there and done that and knows what works in real life.

Having said that, the book isn’t without problems. PMP, for example, is not a methodology but it’s referenced as one quite early on. I know that many PMI members and others would probably just use ‘PMP’ as shorthand for ‘the way PMI recommends projects are run using the PMBOK® Guide as a reference’ but it might confuse someone else who is newer to this whole project management thing.

Equally, I missed the references. The CHAOS report is cited but there is no reference to which year. The original report is now extremely old and not something that is worth citing any longer (in my opinion) as a reference to how things are today. But there have been other CHAOS studies. It’s not clear which one Gren is referring to, which is a shame.

It’s a slim book, easy to read, and convincingly makes the case for why project management should be adopted by small and medium-sized businesses. There’s a clear return on investment, and this book will help you make the case to your colleagues.

A Russian spy, Ivan Petroff, infiltrated the white House disguised as a rat exterminator and stole a top-secret document. Three people witnessed Ivan Petroff inside the White House. Whose description of the spy is most probable?

a) White House bartended Mick Mousy described the exterminator as a big guy in a black suite.

b) White House taxi driver Mohamed Toscanini described the exterminator as a big guy in a black suit and sunglasses.

c) White House secret service agent Bert Bigneck described the exterminator as a big guy in a black suit and sunglasses, who spoke with a Russian accent.

This is how Project Think: Why Good Managers Make Poor Project Choices begins. A series of questions designed to test your decision making and uncover biases. I’ll tell you what the right answer is at the end.

Project Think, by Lev Virine and Michael Trumper, is a thought-provoking book. They include lots of examples of failed projects and poor judgement on projects and unpick why that might have happened. They talk about three types of mental error that lead to mistakes on projects:

• Overconfidence
• Confirmation bias
• Optimism bias.

All of these result in a lack of analysis of the facts – basically jumping to conclusions and failure to see the real situation on a project.

Sometimes, the authors say, intuition is enough. But often, you need to take that out of the equation and go with analysis.

It’s a well-researched book that I found fascinating, but it’s a shame that there a number of typographical errors in it: a missing full stop here, a misspelling of an author’s name there. The editor could have done a better job at making sure those little points were sorted out, although I’m going through the same stages for my new book at the moment and I know that it’s not easy.

The book aims to take a different view of project risk by talking about the risks that we, as project managers, sponsors and team members, introduce into a project through poor judgment and lack of analysis. Are those on your risk register? Thought not.

The Alternatives

So what do they recommend instead? The authors talk about a number of ways that you can try to reduce your personal biases and make better decisions. While ultimately their aim is to make you more aware that those biases are there, so you can more critically analyse your own thought processes when it comes to making decisions, they also offer a number of suggestions.

They talk about ‘choice engineering’ which means not mandating one process for everything. For example, on a small project you might choose to follow a particular path or use a particular template. By allowing people to apply their judgement (or use a set of criteria to identify the suitability of their project) you can help them use the right tools for the job.

They also talk about ‘adaptive management’. This is basically using iterative processes and continuous process improvement combined with a number of other ways of working such  as:

• Multi-model analysis: not using the same tools all the time to run your analysis when you might get a different result or a different understanding if you used another model.
• Hypothesis testing: trying out a hypothesis and testing it before committing to a course of action.
• Performance measurement: this gives you data to use for decision making and assuming you do it well should give an accurate picture of the truth today.
• Making reversible decisions: I’m not personally sure how practical this is, but I can see it working in some situations where you have the flexibility to move to a different course of action if required.

Back To The Spy…

As for the Russian spy, the most probably description is (a). The authors point out that the more general the description, the more likely it is to be accurate. They also explain that the representativeness heuristic can lead to a number of mistakes in decision making, not least because it clouds your judgement. What this means is that people “make judgements about probabilities and risks based on the category that this object, person, or process represents.” In other words, you are programmed to believe the secret service agent, despite the fact that the chances of the suit, sunglasses and accent coming together at the same time is less probable than the other two descriptions.

The book is a challenge for open-mindedness and well worth a read. It will make you question how you come to conclusions on your project and the biases inherent in your decision making. While alone that won’t promise you better project results, it should go some way to making sure that your projects have a better chance of success because you are taking away the risk of poorly-formed decisions.

This is an extract from the draft of the second edition of Social Media for Project Managers by Elizabeth Harrin and published by PMI. Consider it a sneak preview for when the book comes out!

The normal approach is to define your strategy, research what you need to do in order to achieve that (both in terms of cultural and non-technical changes and software/infrastructure investment) and then prepare a business case to secure the investment. When the business case has been approved you then go into more detail and fully scope the projects or programs required to deliver on that investment.

However, a full financial business case doesn’t always stack up for collaboration tools for many reasons including:

• The difficulties of measuring intangible results like ‘better collaboration’
• The time it takes to baseline today’s results to compare future performance
• It’s hard to define exactly what return on investment would look like
• The lack of detailed time recording to see whether improvements have been made in productivity and speed of access to experts.

In short, the intangibility and unpredictability of knowledge work makes it hard to quantify anything reliably. Project work by its nature is non-repetitive, and if you have deployed your collaboration tool at the beginning of a project you may not have sufficient experience with that team and on that project to estimate, for example, the length of time tasks are taking with any degree of accuracy. Without that baseline you cannot definitely say that your software has improved the delivery time for tasks. For that reason, many organisations choose not to measure efficiency in a quantitative manner. Instead, companies often rely on employee surveys that in turn rely on subjective responses around whether a tool has made it easier to work together. Make an educated guess based on anecdotal evidence and feedback from the project team.

To give another example, it is difficult to quantitatively measure the positive impact on enabling online communications. How much more useful are project workspaces than a phone call? Bloggers in the public online space often use the amount of comments and social shares received on a blog post as a measure of popularity, interest, engagement with their readers and so on. This is not a reliable measure in a workplace setting: a discussion post may have a couple of comments before you step in and facilitate a face-to-face meeting on the topic, or the commentators pick up the phone to each other to get to the bottom of the finer points. The amount of conversation going on is not necessarily a reflection on the quality of those conversations, so again this is a difficult thing to measure.

The inability to clearly define and measure what you want to achieve will make many project managers uncomfortable (and may force them to choose irrelevant or subjective measures for success). After all, the project charter should include enough detail about scope and acceptance criteria to ensure that the relevant people can sign off the project’s products as complete and fit for purpose. You wouldn’t embark on a project without knowing what ‘finished’ looks like, and knowing who would agree that the work has been completed to the required quality.

However, do you measure how well you wrote the Project Charter or how effective your quality reviews were? Probably not, outside a general feeling that it was a good, comprehensive document or that the meeting participants got what they needed from the review. Collaboration tools are a project support system much like email or conference calls – and would you measure the success of those on a monthly basis? Success criteria are useful, but they do not have to be statistically measurable. Consider the implementation of digital team tools as another option for your project management toolkit. You can measure it with the same judgment calls that you do for the other processes in your methodology.

Don’t struggle with a full financial business case unless you really need one to get your investment approved.

The alternative to a financial business case

If a full financial business case won’t stack up, or your leadership doesn’t require one, then prepare a short options appraisal instead. Review the solutions available to you, using any identified in your strategy document and any others that have come about as part of your general research into delivering the strategy. An options appraisal includes:

• Pros and cons for each option
• Financial investment for each option
• Timescales for implementing each option
• Resource implications for each option
• A recommendation, stating which option you want to go for.

Present this to your decision makers and start the discussion to secure the investment in your collaboration tool.

Alternatively, consider asking for approval at this point only for the analysis phase or a small pilot. This would give you a mandate to go ahead and research the market and how the tools might benefit your teams, while not asking for a financial commitment at this point.

The second edition of Social Media for Project Managers by Elizabeth Harrin will be out next year.

I’m not the world’s greatest when it comes to numbers so when I started getting more involved with project financials I decided it would be a good idea to read up on the subject. I bought Project Management Accounting a few years ago now and it has become my go to book for understanding project budgets. It’s by Kevin R. Callahan, Gary S. Stetz and Lynne M. Brooks. My copy actually still looks pretty new, as I don’t get it out to read very often – it’s the kind of book that is useful at certain points in a project and then goes back on the shelf.

Here are my takeaways from it.

Financial understanding brings seniority and gravity

“Senior project managers have their roots in many different areas of expertise, but the great majority do not come of out finance or accounting,” write the authors. That’s true, and it means that for many of us there is a huge hole in our knowledge of how the mechanics work around paying for projects and accounting for the returns.

The authors think that once you’ve gained experience and proficiency in project management skills, you’ll benefit from learning more about the numbers. They write:

“After years of managing larger and more complex projects, senior project managers often aspire to making greater contributions to their organisations. One way to do this is by gaining expertise in fiancé and accounting, thereby enabling them to view the organisation from a different perspective and to make a greater contribution to it.”

I agree: I think it’s hard to really make a strategic difference, even on smaller projects, unless you understand the fundamentals of how cash moves around the business and how your company makes money. It’s one of the reasons that I’ve tailored this blog to be mainly about the financial topics relating to project management. If we want to – as an industry, as a profession – move the perception of project management to the next level then we have to be taken seriously and be seen to operate a senior levels. Seniority in many companies often goes hand in hand with the ability to handle budgets.

Get involved in the financial decisions

I particularly like the fact that it advocates for project managers to get involved in financial decisions. The authors write:

“[Early during the project’s conception], often project managers are not part of the decision-making process. In many cases, it is because the project manager is not believed to have the business experience necessary to make such decisions. However, using the project management and business tools [discussed in the book] a project manager can guide the decision process to avoid making costly mistakes. It will not always be easy for project managers to have input into important financial decisions, but without some knowledge of how finance and strategy work, they will have no input at all.”

I think this is a really important point, because the shift in project management is towards project managers taking on a greater responsibility for leadership in the early stages. It’s no longer just a delivery job (thankfully) and includes elements of business change and strategy. So you need to have the vocabulary and skills to take part in discussions at that level.

Boost your network

One of the things discussed in Chapter 6 is the role of the financial manager. Do you know who the financial manager is for your project? It’s not an accountant. The authors point out that the role of finance is to “develop benchmarks as a guide to managers”.

A financial manager is someone who can create a good balance sheet, the optimal one for the company at this point in time. That can involve advising on which projects to take on, which to stop and providing input into business cases. They also work on financial documentation such as budgets, and income and balance sheet statements.

Your project, especially if it is sizeable, will need someone in this financial management role as well as potentially another person to handle the invoices and make payments from the bank. Those latter functions are normally handled by the Accounts Payable team and you’ll have standard corporate processes for doing those. Advising you on your project takes a trusted financial ‘adviser’ in an internal role, so build your network and consult the company org charts so you know who to turn to.

In summary

I’ve only pulled out a few key points from this book and added my thoughts but I hope you can see that it’s a useful shelf reference for project managers looking to move into more senior positions or those generally wanting to understand more about how money moves around in the company. I’d recommend it.

Book referred to in this article: Project Management Accounting, Kevin R. Callahan,  Gary S. Stetz and Lynne M. Brooks. Wiley, 2007. The image is of the 2nd edition. I am quoting from my copy, which is the first edition.