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Making Earned Value More Valuable
Categories:
Calculating Project Value
Categories: Calculating Project Value
| The most powerful — and most commonly misunderstood — measurement of project progress is earned value metrics, the way of measuring actual versus planned progress. "Earned value" is so attractive because the term conjures positive visions, emotions and expectations on what earned value metrics will do. But in reality, if a project manager does not measure and then present the metrics properly to project sponsors, the numbers can produce unpleasant mood swings, premature celebrations and raging arguments. I have found that project managers who successfully track project progress with earned value metric share a common practice: They allocate the same effort to the meaningful presentation of earned value and its implementation. Consider these basic tips for making earned value actually mean something: 1. Qualify activities that earn value. One of the quickest roads to failure is to include all project activities in determining earned value. This can set up the false indication of true progress by incorporating administrative tasks like the kick-off meetings, project status meetings and other activities that are not central to actual progress. To avoid misleadingly optimistic earned value, include only core items when determining earned value — for example, high- effort and -risk activities, and external dependency milestones. 2. Set standard earned value ranges. Another common trap in calculating earned value is allowing optimistic or downright untrue declarations of progress. You've all probably heard, "We are 99 percent complete, and all we have left to do is..." time and time again. To avoid this trap, set up conservative ranges of progress completion. For example, you may set a conservative percentage-complete tier of 75 percent if a deliverable is completed, and designate the remaining 25 percent to the approval process by the project sponsor. 3. Clearly communicate earned value to project sponsors. Speaking of project sponsors, one of my all-time favorite earned value moments occurred recently during the first progress status meeting. After several weeks of high expectations around earned value, the project manager stood up and said, "Our SPI is .92." Needless to say, this abbreviated report of the schedule performance index caused a long silence, puzzled looks and furrowed brows among project sponsors. Avoid such tense moments by communicating to project sponsors, in terms they understand, what earned value can and cannot do. Add relevance and context by combining earned value with other project readout content, and tailor your communications to sponsors through visualization techniques. For example, present a graph showing the schedule of planned value against the actual earned value of these deliverables for the project. Earned value can be one of the most powerful and revealing indications of true project progress — as long as it is properly determined and presented. How do you measure earned value? What are your tips in presenting earned value to project sponsors? |
Build Sponsorship, Boost the Portfolio
Categories:
Portfolio Management
Categories: Portfolio Management
| We've all been there. Portfolio managers have done their job of setting long-term objectives and a clear strategy. Projects have been selected and prioritized. And yet the organization is still having trouble gleaning real benefits — i.e., results that create business value and contribute to its strategic objectives — from projects and, subsequently, its portfolio. This disconnect is often rooted in weak sponsorship, and that's often a result of project sponsors not knowing their roles. When that happens, they aren't able to support projects in a way that aligns a portfolio to the organization's grand strategic plan. Project sponsors are instrumental in a project's selection and categorization, allocating resources, and monitoring and communicating its progress to the highest rungs of an organization. As a high-level decision-maker, an effective project sponsor gives the portfolio more agility and flexibility to adapt and absorb changes. While fostering the right kind of project sponsor won't happen overnight, it can start right away. To do so, executive-level management — many of which could be sponsors — should:
Project managers can also help sponsors support projects better by communicating in the same language. Project managers should translate technical issues (such as scope and deliverables) into tangible business results (i.e., return on investment, profit, revenue and costs) for sponsors. In this manner, sponsors and project managers together can handle the internal environment (project team and processes) and the external environment (organizational structure, strategy and market demands). Do you have strong project sponsorship in your organization? In your experience, can effective sponsorship boost the entire portfolio's performance? |
When Passion Drives the Program
Categories:
Program Management
Categories: Program Management
| Mayday is a Taiwanese rock band with a massive worldwide following. In fact, two concerts promoting their 2012 album, Noah's Ark, were held in the world's largest sports venue, Beijing's National Stadium. Those two performances alone drew 200,000 fans — an astonishing feat for any band, anywhere in the world. Believe Music manages Mayday — and staged the larger-than-life concerts in Beijing last year. For the music management company, performance — and particularly, passion for performance — is the key to industry success. In fact, the company's success comes from harnessing and managing passion for live music as a program. The focus on passion as a business driver starts at the top. CEO Yung-Chi Chen believes in the power of live music, and that success comes if you just do what you're good at, and do it properly. Artists and bands that write and perform with passion will naturally attract a dedicated audience large enough to help sustain them in a career. Believe Music's head manager, Yiu-Yang Chou, has the interesting title of "Creator of Satisfaction." This reflects the company's emphasis on live performance — as long as audiences demand performances, try to satisfy them. Mr. Chou manages over 100 concerts every year. His managerial level is that of a program manager, rather than a project manager. So when asked how he balances project constraints like scope, time and cost with quality, he says: "You can tell from the sofa bed in the meeting room that our management concepts on time and cost are very weak! But the most important requirement to work in this job [and industry] is enthusiasm. With enthusiasm, you dedicate yourself to creating something that'll make an impact. Time and money will be spent, but something great will be produced." Across the board at Believe Music, passionate employees define cost control as "surviving" and risk management as "we've still got next time." And although that approach might seem like unsound business sense, the company's faith in passion for performance counts on a major stakeholder — the audience. Believe Music considers audiences not just passive viewers, but also as appreciative co-producers of the live event. Their enjoyment is a key measurement of the performance's success. It is what Believe Music, and their artists, define as a successful result with each concert (i.e., project). Such word-of-mouth and long-term audience growth cannot be bought overnight, and that is why passion — and satisfaction — is so important in Believe Music's business. Believe Music team members attribute enthusiasm over any business model for their success. When their specialized experience and passion is combined with a mature concert management system, the power of live performance becomes a money-making enterprise. How do you apply non-traditional business drivers — such as passion — in your programs and industry? Share your experiences below, and Voices on Project Management will publish the best response as a blog post. Learn more about the art of project management in the entertainment sector in "Let Us Entertain You," the cover story of the May 2013 issue of PM Network®. |
Leadership: The Mission Is Vision
Categories:
Leadership
Categories: Leadership
| As a project manager, you're a leader by default. And as a leader, your job is to inspire your team to achieve a shared vision. That means you create an "inspiring vision" of the future and then build the expectation that the vision is achievable. An "inspiring vision" is not simply finishing your project, either. A great example of this was one put forth by London's Olympic Delivery Authority (ODA) responsible for building the facilities for the Olympic and Paralympic Games. The ODA set a much-publicized "zero harm" goal. The London Olympics construction program completed the work on budget, ahead of schedule, to a high standard — and with no fatalities. Not only that, but the overall accident frequency came in at 58 percent below the UK construction industry average. This is a remarkable achievement, given that a total of 40,000 people worked on the projects. After creating the inspiring vision, make sure your team can commit to and communicate it effectively. To do so, each member must:
Framing your vision in the right context is a big part of communicating it effectively to your team and to all that touch the project. The London Olympics construction program knew that "on time and on budget" was not an exciting rallying cry to many people. (Project managers notwithstanding.) So it framed the project around the idea of looking after workmates, which was an easier concept for securing widespread buy-in. Looking after co-workers meant achieving a safer worksite. And for that, construction had to be well-planned, well-managed, clean and tidy — coincidentally, all the same facets for achieving a high-quality, on-time, on-budget outcome. After framing your vision, preferably working with team members so they own it, the hard work starts. The vision needs to be communicated and reinforced at all times. No compromises. As soon as you stop living the vision, it will fade. In London, for instance, safety was always the first agenda item at meetings. It was continuously policed, communicated and enforced. But more importantly, safety success was celebrated. Major milestones — such as 1,000,000 hours worked with no accidents — were big occasions. There were also smaller, more personal celebrations of people contributing to the vision. Enforcing and celebrating the vision created a culture focused on safety and achieving the vision of an accident-free project daily. What is the inspiring vision you can create for your team to help achieve your project objectives? How will you communicate and maintain that vision? |
Conquering the Us Versus Them Mentality
Categories:
PMI Global Congress 2013 - EMEA
Categories: PMI Global Congress 2013 - EMEA
| "Culture eats process for lunch," keynote speaker Avinash Chandarana of MCI Group told attendees at PMI® Global Congress 2013 -- EMEA in Istanbul, Turkey. And as organizations continue to expand into emerging markets, the pressure is on project professionals to build a keen understanding of how different cultures operate. For starters, they must get past the "us versus them mentality," said Mr. Chandarana. "We consider our culture to be normal and others to be abnormal." Instead, project professionals should acknowledge the values and even the stereotypes of other cultures, which he broke into three categories:
This is powerful knowledge as linear-active U.S. and European organizations launch more projects in emerging markets, which tend to fall into the multi-active and reactive categories. Only those countries and companies that bridge cultures and geographies will succeed, Mr. Chandarana said. "What measure are you going to take to go beyond just having surface-level knowledge of other cultures?" he said. "This is the question you must ask to hone relationships in a multicultural environment." The three panelists on the "Project Management in Emerging Economies" panel tackled a different kind of cultural challenge. "In the Middle East, there is a lack of awareness of the value of project management," said panelist Imran Malik of du Telecom in Dubai. "Practitioners need to educate decision-makers by translating the tangible benefits of using best practices in the context of business." Organizations view project management as a "magic pill" and temporary fix, added panelist Puian Masudifar of VIRA Co. in Iran. "They don't look at the long term." Still, the project management cultural revolution can start with baby steps. "Bring upper management and executives to the kitchen and teach them what projects are," said panelist Adnan Metin of Turkish Airlines in Turkey. As a growing regional power, Turkey needs project managers, particularly in the defense sector, said Murad Bayar, Turkey's Undersecretary for Defence Industry. In his long tenure in the sector, Mr. Bayar says he's rarely seen a project completed that met the original plan, mostly due to the long timelines. "A combat aircraft takes 15 to 20 years to complete," Mr. Bayar said. "By the time the project is finished, the requirements have changed. We have to be better at managing projects." To that end, the department encourages its project professionals to go through training, including earning the Project Management Professional (PMP)® credential. But Mr. Bayar also acknowledged his country could use a little help. "We need people with a deep understanding of strategic organizational, commercial, industrial and political environments. Is there someone in the room that I can hire today?" What advice would you give on bridging cultural differences? If you attended PMI® Global Congress 2013 -- EMEA, what were your top takeaways of doing business in emerging markets? |