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Viewing Posts by Richard Maltzman
Risk = Threat + Opportunity
Categories:
China
Categories: China
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One of the toughest things to convey to those who study the PMBOK® Guide is the focus that PMI has on risk – a bifurcated focus that says “risk is not just a bad thing… it’s good and bad… we call the good risk opportunity and the bad risk threat”. Well, those aren’t the exact words, but it’s the thinking behind this idea of a split-personality of risk. Since this blog is focused on the “planet”, we decided to tackle the issue of regulations in China with respect to pollution, and how this may affect decisions made at the portfolio level of your organization. We start with an astounding fact, courtesy of a very recent story in China Daily. In brief, it says, “Chronic air pollution and unclear regulations are the major obstacles for most of the United States-based companies operating in China, a survey said on Wednesday. Of the 477 companies that participated in the annual business climate survey conducted by the American Chamber of Commerce in China, 53 percent said that they experienced difficulties in hiring senior executives to work in China because of the country's chronic air pollution. This is the first time that air pollution has been cited as a reason by most of the companies that have participated in the survey's 17-year history.” And of course, it’s not just an inability to hire senior executives that is of concern to China. Disturbingly, air quality in the country’s cities is so bad, that a very active twitter feed, @BeijingAir, tracks air quality in China’s capital city on a daily basis. A similar Twitter feed does the same for Shanghai - @CGShanghaiair (example below):
China is doing something about this. In this story from Reuters, we see that in 2014: “(China passed) amendments to an environmental protection law imposing tougher penalties on polluters in the most sweeping revisions to the law in 25 years amid mounting public anger over pollution. The much-anticipated amendments follow a two-year debate among scholars, the government and state-owned enterprises over changes to the environmental protection law. The amendments enshrine environmental protection as the overriding priority of the government, but fall short of calls by non-governmental organisations to allow all such groups to file lawsuits against polluters. The amendments were passed by the Standing Committee of the National People's Congress, China's largely rubberstamp parliament, and take effect on Jan. 1, 2015. They include provisions to help the government impose rules on powerful industrial interests. In contrast, the environmental legal code in the past was focused on growth, said legal experts." From BusinessInsider, we find: “The much-anticipated amendments signal the close of a two-year debate among scholars, the government and state-owned enterprises over changes to the environmental protection law, and come in response to public anger over widespread pollution that has choked the country.” And the law has teeth, as indicated from this article from The Japan Times: "A Chinese court has fined six domestic companies a record $26 million for discharging tens of thousands of tons of waste chemicals into rivers, state media said. The firms in Taizhou, in the eastern province of Jiangsu, were sued by a local environment protection organization and were found to have dumped 25,000 tons of waste hydrochloric acid into two rivers, the official Xinhua News Agency reported. A court in the city ordered the companies to pay 160 million yuan ($26 million) in fines earlier this year, the highest ever penalty in Chinese environmental public interest litigation. A higher court upheld the punishment Tuesday, Xinhua said. In August, 14 people involved in the case were sentenced by another court to prison terms of two to five years for causing environmental pollution, it added." So we had a threat (devastating pollution effects) a risk response (the new regulations)… where is the opportunity? Well, here, opportunity is in the form of helping with the risk response (amongst other things). For example, in this article from Reuters, note how some enterprises have adjusted their project and program portfolios: "Firms from Bill Gates-backed start-up EcoMotors Inc to Faurecia SA, a parts supplier controlled by French giant Peugeot SA, are jostling to help automakers meet new diesel emission rules taking effect in January, despite concerns the standards may not be strictly enforced. "Generally speaking, we will benefit from higher emission standards in China as they will further spur our business growth," said Liu Xiaoxing, China vice president of Cummins Inc, a U.S. diesel engine maker that partners with Faurecia and counts China as its biggest and fastest-growing market. Mathias Miedreich, Asia president of Faurecia's emission control technologies unit FECT, whose clients include makers of both diesel and gasoline-propelled vehicles, said annual sales stood to grow 40 percent faster than the broader auto industry's growth rate over the remainder of the decade. The company forecasts FECT's China revenue will double to 2 billion euros ($2.72 billion) by 2020. FECT recently invested several million euros in a plant in Beijing to expand capacity for NS4-compliant exhaust systems. "China represents the highest growth market ... We believe our products will give us significant advantage," Miedreich said. Other players are also boosting investment. EcoMotors struck a deal in March with a unit of state-owned China FAW Group Corp [SASACJ.UL], one of China's biggest producers of commercial vehicles, to jointly build a $200 million engine plant in China. EcoMotors President Amit Soman said many Chinese automakers were looking to skip straight to the latest technology in fuel efficiency rather than "just do small changes in conventional engines". German automotive supplier Eberspaecher Group is also getting in on the act, setting up a joint venture in December with Shaanxi Automobile Group Co Ltd to make exhaust systems for the China market." This article from Thomas talks further about the opportunities: "This commitment by the government to exert some air pollution control measures has created an opportunity for U.S. companies in the industry to gain a slice of the Chinese pollution-control market. And that's just what some U.S.-based manufacturers are doing, though there are obstacles. One U.S. company that has established a beach-head in China is Fuel Tech, a giant in air pollution control systems. Fuel Tech entered the Chinese market a little more than a decade ago and opened its first full office in Beijing in 2007, said company CEO and Chairman Doug Bailey. The Beijing Fuel Tech branch has 35 employees and subcontracts all the equipment the U.S.-based headquarters of Fuel Tech would sell. The company's employees are predominantly engineering-based. "We're fully staffed by local Chinese citizens, and I think that does help us with local businesses looking for services like we offer," Bailey said." And it’s not just the news media that has sensed this threat-opportunity pairing. The well-respected Conference Board will host a webinar on this topic on April 27th Check out a teaser video here in which you can see the very mixture of threat and opportunity which we cover in our post. And here's a link to the upcoming event - should you want to ... er... take advantage of the opportunity...
Blogger's note: This is one of many new posts that will feature the Program and Portfolio level - and sometimes the Enterprise level - of the intersection of sustainability, and long-term thinking - with projects. If you have ideas about this, suggestions of topics, issues that concern you, let us know. We want to make this as meaningful to you as possible. Thanks!
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Oh look, a BIRD!
| …but not just any bird. A puffin. What’s a puffin, you ask? You can see them in action in this video from explore.org (and it’s from this video we got our blog post's accomanying image).
We’d like to share the story of Project Puffin, which was featured this Sunday in The Boston Globe Magazine, and is an example of a Green By Definition1 project, and one which also demonstrates that projects can have a long - in this case - nearly unlimited - life span, if necessary. In fact, when we contacted the project team, they indicated that although it’s a project by name, they’ve had the realization that ongoing care is a part of the deal, so it really doesn’t have an end date. I suppose that we in the project management world would call it a projeration- a combination of a project and an operation. The story of Project Puffin – or at least its inception, as well as the introduction to the bird itself, is captured by the first part of the story, written by Stephen Kress, project director. "The Atlantic puffin’s black-and-white plumage, which mimics a friar’s robes, prompted 18th-century zoologists to name it Fratercula arctica, “little brother of the north.” Thanks to its brilliant, clownish red-orange-and-yellow bill, the puffin was once known as the sea parrot. Many today consider the puffin to be the most endearing bird of the North Atlantic. Although never listed as endangered, Atlantic puffins were plundered in Maine and Canada in the 19th century for food and feathers. The National Audubon Society and I started Project Puffin in 1973 with the knowledge that no seabird has ever been restored to an island where humans had wiped it out." The project charter was clear: restore this seabird to an island where it had been eliminated by humans. Fast forward to today: "On a shoestring budget and against daunting odds, Project Puffin offers proof that individuals can make a difference and that enterprising conservation programs at local levels can have larger benefits to species conservation. Today, more than a thousand puffin pairs are nesting on several Maine islands, and this development has led to a flourishing industry called puffin watching. It is ironic that at the same islands where shooters once used 8-foot-long punt guns to blast seabirds 50 at a time, now the sight of even a single puffin is greeted by cries of delight from boats carrying a hundred or more bird-watchers." We’ve been coaching project managers to think through the end of their projects to triple-bottom-line benefits. Here’s a project that actually yielded a successful ecological benefit as an outcome, but also provides a social and economic ongoing benefit as well. The story, however, doesn’t end there…at least not with certainty. Rising temperatures may undo some of the good work of this project. To quote the article again: “THE SUMMER OF 2012 saw the warmest waters ever recorded in the Gulf of Maine and has changed my thinking that all’s well along the Maine coast. Although puffins seem to have dodged climate effects until recently, other species have suggested that change has been underway for at least the past decade. At least 14 fish stocks have shifted northward in New England, and some of these have also moved into deeper water where they are out of reach of puffins.” Indeed, the overall trend is not good for the puffin population. But as Kress says, “nature is complex, and the lessons are in the details”. The 2013-2014 winter cold showed how even small changes in temperatures can affect conditions in either direction for the puffin, and in this case, in a positive way. “Following the cold winter of 2013-2014, the average Gulf of Maine surface temperature dropped by almost 2 degrees Fahrenheit from the previous year, bringing it into the high end of the “normal” range. This water temperature combined with the flow from rivers filled with freshwater from heavy, abundant winter snow to create a more typical spring plankton bloom, resulting in ample herring and white hake for puffin chicks throughout the nesting season.” From our perspective it’s another example how climate change is not the same as weather, and not even a few years’ data can be taken as evidence; one must look at the science, the long-term trends, to understand what is happening holistically and for the longer term. It goes back to our blog post title, which is supposed to mimic a short-term project thinker with a limited attention span, expemplified by them getting distracted easily... “oh look, a bird”. As project managers we can’t – and shouldn’t - be focused only on what is happening right in front of us, right now. We need to be aware of trends, and we most certainly need to think of our project’s product in the steady state. Project Puffin teaches us that within that long-term thinking lies opportunity – witness the puffin tours (see here and here) that are generating income (economic bottom line) as well as a plain old day of family fun and education (social bottom line) for tourists and residents! And of course, this is in concert with the ecological bottom line of further understanding the environment and supporting the diversity of species. For Project Puffin, although that one cold year provided some relief and a boost in capability for their puffins, the project itself is still (and indefinitely) underway – and the focus is still on assuring the survival of these birds on these home islands for the population. Should you want to assist the project, you can find out how to donate here.
1This is a reference from our book, Green Project Management, in which we cover several types of projects along a 'spectrum of green'. You'll just have to get the book to find out more... |
Falling down to light things up
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A brief post today - one regarding an example of a "Green By Definition" project like we wrote about in our first book, Green Project Management. We discovered this one on a resource we suggest you bookmark: http://edie.net - an outstanding and oft-updated listing of what's new in the area of triple bottom line projects - mainly renewable energy.
Have a look at this video:
GravityLight: lighting for the developing countries from Therefore on Vimeo. It's about providing people light - needed to live, learn, and work in the developing world. Right now, these people resort to Kerosene lamps which are dangerous, cost up to 25% of household income to operate, and emit fumes which equate to smoking a couple of cigarettes per day for these families. The inventors and promoters of Gravity Light have a development which provides this light for free on on ongoing basis, using only the action of a slowly-falling weight to drive the unit's LED light. The prinicpals have also done a good job of communicating with their stakeholders, witness this Milestone Chart and accompanying project journal.
As we said: just a brief example of how project management - and projects - can weigh in on social and ecological problems and how it's not always ONLY about the economic bottom line. There will be more of this focus in our new book, Driving Project, Program, and Portfolio Success: The Sustainability Wheel. |
Data -> Information -> Reports
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The average length of a song played on today’s radio stations is 3 minutes. It’s raining in Maracaibo, Venezuela, right now. You’re hungry. Tom McMillen was the all-time tallest Congressman in the US. Oh, look! Karen got engaged! The state insect of Massachusetts is the ladybug. Rubbing alcohol is usually isopropyl. There are 13 players on a rugby team. You’re thirsty. These are bits of data. Every day, you process (or at least - you are bombarded with) thousands or even tens of thousands of these tidbits – especially nowadays, with the amount of email and other electronic media bombardment that we all get. One of the key jobs of a project manager is advancing these bits of sometimes totally random data into information which is more useable by your team members. This information, in turn can be advanced and packaged further into reports. Reports – according to the PMBOK® Guide, are the highest form of conveyance. Actually, there’s quite a bit of study around this, and it’s beyond the scope of this blog post. However we would steer you to the Wikipedia entry on the DIKW (Data, Information, Knowledge, Wisdom) pyramid. The Project Management Institute, however, uses Data -> Information -> Reports. And that brings us to weather reports, which puts us back at our familiar intersection between project management and the triple bottom line – this time focusing in particular on climate and climate change. An article in today’s Boston Globe talks about Judah Cohen and his propensity for accurate weather forecasts. In fact, he was able (back in November) predict the snowy winter that was a record breaker (in fact it is snowing as this is being written – Boston is now over 110 inches!) better than the NOAA or any other forecasting entity. He does this using the PMBOK® Guide. Well, not exactly. But he does use the principle of advancing data to information to reports. From the article: Each October, Cohen looks at the amount and the rate of snowfall in Siberia that month to determine how snowy the eastern United States and Europe will be come winter. “The snow cover is the most efficient reflector of sunlight out into space, so more snow cover creates dense air masses that stay close to the ground,” he says. That cold, dense air spreads over the North Pole into North America and westward into Europe. Cohen proceeds to go into more detail than the average human can stand, or understand, with terms like “The Aleutian Low” and “The Siberian High”. But for him and us, the bottom line is that this past October was Siberia’s second most extensive snowfall on record, and Cohen knew the implications for Boston and other East Coast cities. In a nutshell, that’s the way Cohen works. His analysis embraces multitudes of facts and figures, but his forecasts describe big-picture trends. Like the Farmers’ Almanac, you may ask. Not exactly, he laughs. “The Farmers’ Almanac is not scientifically credible and should only be viewed for entertainment value.” This connects with climate change in the following way: ask anyone from the northeast US what they thought of February. They’ll tell you it was cold. (If they're from Boston they may add a few choice words as well. I'm guessing they'll use $&#*@ and #@**&, at least. They’ll tell you they were bombarded by snow. They may even tell you that they are beginning to doubt “global warming” theories because it was so terribly cold for so long in February. But here we go back to Judah Cohen. Again, from the article: Despite his stellar track record, Cohen knows that long-term climate predictions are tough calls. “I do climate,” he explains. “Weather is what you get. Climate is what you expect.” His is a difficult field with a “very low bar for success,” he says. Take a look at the map below, provided by NASA. It shows, in shades of orange, temperatures which have been warmer than normal in February 2015. In blue – especially dark blue – you see areas where temperatures were colder.
The northeast US is in deep, dark blue. Which means, if the people there were taking in data about what was locally around them, and not gaining information – or reports – about what was happening more globally in the month, you cannot really fault them for making that conclusion, given what was all around them (lots, and lots of snow, and very cold temperatures – all bleeping month!). So here is our other lesson from Data-Information-Reports: for data to become information, it has to be centered not only on YOU or your organization but must have a broader perspective. Look at your “stakeholders” on this map from almost anywhere else on the planet, and they’re in the orange, not the blue. To them, February DOES seem warmer than usual. So, to review... You are faced with streams of data of all sorts and in all formats, all day long. You need to be capable of parsing that into information and reports for many types of stakeholders, some near you (and here I mean not only geographically but perhaps functionally) and some far away from you. Take a lesson from Judah Cohen. · Consider if what you are looking at is ‘weather’ or ‘climate (PMI might call this "trend analysis") · Look globally (again, not literally planet wide, although that may apply – we mean globally in terms of multiple viewpoints) · Spend a little extra time with your data – put extra effort into organizing it...advancing it o Ask: how can I add ‘meaningfulness’ to this data to help convey an important project message? That’s it from us today, here in the land of deep, dark blue. |
Canoyster
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Our admittedly strange title this week comes from the smooshing together of two other words: Canary Oyster Why those two animals? We stumbled on an interesting article from the Boston Globe about the increasing acid levels in the ocean and their effects on the oyster population in Maine. The piece that got our attention was this one: “Hatcheries are the canary in the coal mine for the shellfish industry,” said Bill Mook, oyster hatchery owner. “Because of our level of control, we can see problems that others might not — and we were seeing really big problems.” Let's make a project management connection here right away, because this story is generally about science and ocean acidity but we want our PM audience to see that there are indeed several important 'learning threads' here. The immediate connection is that of risk triggers. As a PM we need to know when a threat to project objectives is happening or is about to happen. Ideally, we prevent the threat from even being triggered - but the next best thing is to catch it as it is about to happen or as it has happened and before the major impact has taken place. Example: we think there may be a threat of a labor action which wold affect construction of our bridge. Instead of waiting for the union to strike, we watch the negotiations to see how they are going - we keep tuned to the news - so we know in advance if we need to apply a mitigation, transfer, or other risk treatment. In this case, the issue is some pretty astounding numbers, and evidence, which should serve as a major trigger for mitigation of what appears to be a looming disaster for the oyster (and generally shellfish and other fishing) industry. Listen to some of these facts from the article:
Those are some pretty big 'canaries'. What threat do they embody? What impact on the "portfolio" of ocean life and the fishing industry do they represent? Check this out:
How about risk response? It may have to come in the form of further research and legislation. For example in Massachusetts:
But risk and threat is not the whole story here, and not the only 'thread' binding this example of the 'Planet' part of our blog's title, People, Planet, Proftits & Projects. The other (related) part is the long-term view. As PMs we know about units and how to get order-of-magnitude estimates, right? Read this paragraph and note the relative timeframes being mentioned (it also shows up earlier in the post): "The oceans are becoming acidic at a rate 100 times faster than at any time in the past 55 million years, he said. Changes that previously took more than 10,000 years, he said, are now occurring over a period of several decades." The relative times here are 10,000 years and several decades. "Several decades" is a timeframe beyond most of our projects, so our eyes may glaze over when we hear such long, drawn-out periods. But compare and contrast several decades (let's say 50 years for sake of argument) with 10,000 years. That relative relationship is one half of one percent. So even though it seems like a long time for us PMs, it's a blip on a bump on a mountain range of time. Our point? If you'll allow us a shellfish metaphor, we need to come out of our shells a bit, and extend our thinking - in time, in focus, in impact assessment, in risk assessment - in a whole sea of aspects that we might not have had to do before. We have to think through to the impact of the operation of our project's product in its steady state. These are the sorts of impacts that have led (for example) to ocean acidification. I know - I know... we have enough constraints already. But unless you want your project to be one that contributes to the problems you see being triggered above, problems that come back and actuall affect your own industry monetarily as well as ecologically, it makes sense and is a professional responsibility to do so. If not for yourself, do it for the canoysters! |