People, Planet, Profits & Projects

An outstanding article in a recent issue of CIO magazine article, by Moira Alexander, has significant value of its own, and I suggest you follow the link earlier in this very sentence.  The article also includes a couple of key quotes that triggered this blog post.

The theme (and the play-on-words title) of the post is… Value.  Value that YOU bring as a project manager, that you bring to your project team, and value that you and your project brings to the business.  It’s a very positive, intertwined, broadly-based web that I am suggesting you weave.

Here’s the first quote.  It comes from Gerald Leonard, PMP, author of the book “Culture Is the Bass”.

• “Customer value creation is key; all projects are initiated to create value. If a project is delivered on time and on budget but does not create value for the organization, does it really matter that it was delivered? Projects have to have a positive impact on an organization to create value.”

That’s absolutely striking when you think about it, almost on a philosophical level.  The age-old question, “If a tree falls in the forest, does it make a sound?” comes to mind. 

We often get caught up in the art and science of PM and forget that the project is meant to bring value to the organization, the users, the community, the planet.  When we do this, we think in shorter terms than we should, we don’t include all the proper stakeholders, and we may be doing something that matters for only our own purposes, for a very short time, or both.

That’s not why you took on the role of PM, is it?  Remember, one of the key differentiators of project work from operations is the fact that projects are unique and are meant to change something.

That change had better be a positive change, and, as Leonard says, that change should be to create value for the organization.  And, following that logic just a little further, most organizations have, at their mission and vision level, statements about corporate social responsibility, “good corporate citizenship”, or something of that nature, as core values. 

Is your project connected to those values?  Is your project creating value for the organization?

Does your project, in a word, matter? 

To paraphrase The Who, it better, it better, you bet.

This may be important not only for this connection in and of itself, it could easily be a motivator for team members, especially those who are more aware of the ‘big picture’ or those who are more focused (as younger employees, ‘millennials’, GenX/GenY folks tend to be) on the organizations’ purpose.

The other quote from Ms. Alexander’s article is this one:

• "A project manager and PMO’s value can only be recognizable if stakeholders and executives can distinguish a direct line back to strategic goals If a project manager can effectively communicate how the efforts of the team are geared toward successfully meeting (the organization’s) goals, it helps to pave the way when issues arise, and teams get sidetracked."

Again – that theme of value is coming through loud and clear.  We need to ‘hitch’ our projects’ ‘wagons’ to the power, the drive, the overall value of the organization. 

You better.  You better.  You bet.

I enjoy blogging about the intersection of project management and sustainability, and sometimes people think this is ‘only’ about project management applied to ‘green’ projects, like building a wind farm or saving a species.  To illustrate this, when we published our Cleland Award-winning book, Green Project Management back in 2010, the book covers submitted to us all had themes of daisies, windmills, and solar panels, as if to say, the intersection of PM and sustainability is about doing projects which save energy or whales.  While many (perhaps most) of my posts are more about taking a long-term view as a project manager, and integrating sustainable thinking into project decisions, this particular one happens to be one of those posts that is indeed about that ‘pure’ intersection – so feel free to imagine daisies, windmills, solar panels, and (in this case) voltage optimization.

What is voltage optimization?  It’s a sort of re-volting (if you will) the power supply to a facility – especially one that uses a lot of electrical power.

One vendor that makes products that do this is Powerstar, and it’s from their web page that I adapt this explanation of how voltage optimization works:

Power from the energy supplier is supplied at a higher voltage than necessary due to old electrical distribution networks in place which were designed to operate at higher voltage levels, as well as electricity suppliers being required to ensure all buildings are supplied voltage within set parameters.

If a building is being supplied at a higher voltage than necessary it will likely result in a mass of wasted energy, excessive levels of carbon emissions, and higher than necessary electricity bills in addition to power quality issues, including increased wear and reduced lifespan of electrical equipment.  We’re talking about motors and fans and any other electrical equipment lasting longer – a reduction in waste in and of itself.

In addition to reducing energy consumption, cutting carbon emissions and providing savings on electricity bills, voltage optimization can also improve power quality by balancing phase voltages and filtering harmonics and transients from the network operators supply.

Voltage optimization technologies are typically installed in series between the distribution transformer and the main low voltage distribution board, allowing all of the consumer’s electrical equipment to benefit from an optimized power supply.

And here is a more detailed description, for those of you who are just a little more science-minded:

http://www.explainthatstuff.com/voltage-optimisation.html

Does this voltage optimization technique work?  Well, a recent story from excellent sustainability resource edie.net gives an example of a Spanish cheese company that saved 98,000kWh annually after installing such a system.

But this cheesy example is by no means an exception.  In just a few moments of research I found examples of such levels of savings in government buildings, trailer parks, burger restaurants, Air Force bases – all sorts of enterprises.

Here’s a video that shows how Paragon Foods, for example, achieved savings and reductions of its carbon footprint.

Powerstar is not the only player in this business.  Here’s a site that shows some of the other top players.

And yes, I did mention an Air Force base, it happens to be a Royal Air Force (RAF) base, and here is an example of a PowerPerfector® deployment.

Case Study from PowerPerfector – RAF

Does this really work? It sounds a bit too good to be true, but it does work.  See this study, written up by the Environmental Defense Fund’s blog:

A study by Commonwealth Edison Company (ComEd) looking at this technology’s potential within Chicago and northern Illinois found it could reduce the need for almost 2,000 gigawatt-hours of electricity (enough to power 180,000 homes) each year at an amazingly low cost of less than two cents per kilowatt-hour – more than is achieved now from the utility’s other efficiency programs. This translates to $240 million per year in savings for ComEd’s customers, of which 90 percent could potentially benefit. The study also suggested full deployment of voltage optimization would only take about five years.

And the connection to project management?  Well that should be obvious.  Each of these deployments of a voltage optimization system is – you guessed it – a project.

Here's a visual to accentuate this point:

Here is (from Powerstar) their project management process:

Now, I would argue that the project management element of this chart should be at the hub, overseeing the whole process, but that is a blog post for another day…

This post is about transparency. It’s based on an article in a special edition of Scientific American.  For full disclosure, we should notice that this special edition is produced by Scientific American Custom Media, produced for SC Johnson, the article’s subject.  By telling you this, I want to be transparent about the transparency about which I’m writing.

Here are some of the highlights from an article called “The Deepest Family Trust”:

I’ll key in on a few points which will be of interest to project managers.

The Greenlist™process (and program)

Going back to 2001, SC Johnson developed and instituted Greenlist, which evaluates ingredients on environmental and human impact.  The four steps are shown below.

The Greenlist process may look familiar to those of us in product development – a sort of gate process for release of hardware or software products, in which the criteria are not feature and functionality focused but rather ‘impact’ focused.

The Greenlist program has yielded results.  See the chart below for an illustration.

It’s a risk assessment on an ingredient level, which results in elimination if an ingredient doesn’t meet standards on effects on human health and environment.  SC Johnson intends to publish the scientific criteria behind the Greenlist program.  The process looks to be a good benchmark for others to follow, however, in the name of transparency, here is an alternate view.

Regardless of your view, it is clear (excuse the pun) that SC Johnson has put significant effort and has the “right” idea.  From the section of the article which contained an interview with CEO Fisk Johnson, he says:

“It was not a small task.  There were tens of thousands of raw materials and components, and countless ways to classify and rate them, so we had to figure out how to simplify and systemize the approach.  The biggest challenge by far was one of internal resistance. People were concerned it would increase costs or reduce efficacy of our products and put us at a competitive disadvantage.  That certainly ended up being the case in certain instances, like when we eliminated some of the insecticides in our bug killers.  But, because it was so important to make those changes, we accepted those costs or changes efficacy.

What’s Inside

SCJohnson is indeed focused on ingredients. In addition to the Greenlist program which helps determine what goes in to the products, you as a consumer can find out what’s in the products – and what each ingredient does.

Visit http://www.whatsinsidescjohnson.com/us/en to look up a product for detailed ingredient information.  Since Windex® is a product used to clean glass and make it more transparent, we chose it as an example to illustrate the website for you, and focus on one ingredient - Lauryl dimethyl amine oxide.

Lauryl dimethyl amine oxide is a cleaning agent, or "surfactant," that can also be found in a variety of products including shampoos and dishwashing detergents. We use it in our products to remove dirt and deposits by surrounding dirt particles to loosen them from the surface they're attached to, so they can be rinsed away.

Are your projects transparent?  More importantly, are the products of your projects focused on ‘trustworthiness’?  And, probably most importantly, is your organization’s culture such that it promotes this form of transparency in its portfolio of projects?  Do you have parity with this level of clarity? The SC Johnson story can be a trigger or inspiration.

I like to say that the ‘animator’ of projects is risk.  Without risk, projects would just be ‘deliverable factories’.  Where’s the fun in that?  Also – as project managers, we earn our pay by dealing with uncertainty that comes naturally with projects, due to their cute uniqueness.

I know... sometimes risk is not cute.  In fact, it can be deadly.  Imagine a category 5 hurricane.  Deadly.

Remember, though, that risk – by definition – can be threat OR opportunity.

“An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.”

In this post we’re going to talk about something that sits at the intersection of risk management and sustainability – and a way that a company has turned a threat into an opportunity – an opportunity that could provide both economic and ecological benefit.

I think that means it’s worth reading on, right?  Yes.

The article, from Bloomberg News, is called Coral Reef Gets An Insurance Policy Of Its Own.

It discusses an insurance company, Swiss Re AG, which is currently writing a policy for a stretch of the Mesoamerican Reef in Mexico (see red areas in map below). Here you have an insurer covering a natural structure. The actual policyholders will be the beachfront hotels protected by that reef.

If you recall from the PMBOK® Guide, risk transfer is one of the seven ways we can respond to risk – and one of the four ways we can respond to threat.  In this case we are talking about the threat of natural disaster (i.e. tropical storms and hurricanes).  What shape does risk transfer usually take?  Insurance.

Who normally covers (provides insurance for) damage from natural disasters?  The government. The numbers are huge. The U.S. government spent at least $278 billion on disaster assistance between 2005 and 2014.  The U.S. GAO (Government Accountability Office) says that climate change as one of the most significant financial risks to the federal government.  This is one of the reasons that I think government can make a great rationale for investing in reducing climate change – a preventive approach.  But I digress.

From the article:

Insurance groups have long urged governments to address climate change—the companies are, after all, at risk for big disaster payouts. But the Mexican example shows that risks can also be a business opportunity.

The Nature Conservancy has proposed a different approach: The extra money paid by the hotel owners to the government could be converted into premium payments to Swiss Re to cover the reef. The policy would be what’s called parametric insurance, in which a large hurricane would trigger near-immediate payouts. By having the money arrive quickly, reef repairs could begin sooner.

More about Parametric Insurance here.

Is this a Mexican thing?  Is it limited to one country or region? Again, from the article:

The approach planned in Mexico can be expanded to other countries, says Kathy Baughman McLeod, the Nature Conservancy’s managing director for coastal risk and investment. She says at least 26 countries around the world are both protected by and economically dependent on coral reefs. The model could also be used for other publicly owned features that shield coastlines from storms, such as mangrove forests and coastal wetlands. The Nature Conservancy was one of the sponsors of a July conference of the International Insurance Society in London, which focused on the potential for insurers to augment governments in protecting against extreme weather.

What do you think?  Is this a good example of People, Planet, Projects, and Profits?  We think so.  Launching this new type of insurance is a project, as would be any physical projects to protect the reef.  It all comes together.

Being right is important. Getting to facts is important.  This has been a theme of People, Planet, Profits and Projects – avoiding bias, seeking to remove emotion from issues such as climate change and sustainability thinking, and in particular the effects of such on projects and project managers.  And even if those aren't of immediate concern to you, wouldn't it be better to have better, more accurate estimates for your project?

To that end, we draw your attention to a recent episode of an excellent podcast called Hidden Brain.  The episode is called: I’m Right, You’re Wrong. 

There’s a very interesting part to the podcast that has to do with something called the Surprisingly Popular answer.  It explains how you can mine data from a crowd with 20% (or greater) improvements over a simple democratic vote.  It relies on the distributed expertise in the crowd who may ‘know better’, and requires the addition of a subtly different additional question when asking a group to make a determination about a factual answer, or even to zero in on a good estimate of a sales price for a piece of artwork.

The podcast explains this very well, but if you aren’t in the mood to listen to it now, we go to Princeton University’s website for an excellent summary:

The researchers tested their algorithm through multiple surveys conducted on various populations. In one test, they asked people a yes-or-no question, Is Philadelphia the capital of Pennsylvania? Respondents also were asked to predict the prevalence of “yes” votes. Because Philadelphia is a “large, historically significant city,” most people in the group thought that, yes, it is the capital of Pennsylvania — Harrisburg is in fact the state’s capital. In addition, the people who mistakenly thought Philadelphia is the state capital also predicted that a very high percentage of people would answer “yes.”

Meanwhile, a certain number of respondents knew that the correct answer is “no.” But these people also anticipated that many other people would incorrectly think the capital is Philadelphia, so they also expected a very high percentage of “yes” answers. Thus, almost everyone expected other people to answer “yes,” but the actual percentage of people who did was significantly lower. “No” was the surprisingly popular answer because it exceeded expectations of what the answer would be.

Across all topics, the researchers found that the “surprisingly popular” algorithm reduced errors by 21.3 percent compared to simple majority votes, and by 24.2 percent compared to basic confidence-weighted votes (where people express how confident they are in their answers). It also reduced errors by 22.2 percent compared to answers with the highest average confidence levels. On the 50 test questions related to state capitals — such as the Harrisburg-Philadelphia question — the SP method reduced incorrect decisions by 48 percent compared to the majority vote.

Perhaps this could be adapted to getting more accurate project time and cost estimates?

Here's a figure from the Nature article.

Additional links on the Surprisingly Popular methodology:

http://news.mit.edu/2017/algorithm-better-wisdom-crowds-0125

http://lesswrong.com/lw/okv/why_is_the_surprisingly_popular_answer_correct/

http://www.nature.com/nature/journal/v541/n7638/full/nature21054.html?foxtrotcallback=true