Tuesday, February 17, 2015

The Payoff: Working With Trust

Last month’s blog was entitled The Cost of Working Without Trust. This month we share a story1 which stands in marked contrast. It is from Jerry Madden, a successful NASA project manager:
It’s easier to sell a project if you can show it is based on a previous successful project. People feel safer with the tried and true. When we introduced the ISEE* project, we told NASA headquarters that we would build the spacecraft exactly like the IMP-H**. The structure would be the same and we would keep the same basic electronics as far as possible. Because I believed it could be done, I issued this edict to everyone in the project and even appointed one of the best mechanical engineers to be in charge of the structure.
A short while into the project, he showed up at my office and said, “When are you going to get down off your high horse and let us design a structure for ISEE that can fly. IMP-H just will not work.” I was taken aback. This meant taking a risk rather than going down the same road of a successful project. Had he been someone else, I would have asked to have him assigned to a different project. How could I trust someone to carry out directives in a project in which I totally believed?
However, I trusted him explicitly because I had worked with him for a long time. This was an opportunity to change direction, based on solid judgment. I swallowed my pride, looked at him squarely in the face and said, “If that is the way you truly feel, now is about as good a time as any. Will it still have 16 sides and will it look the same on the outside?”
He said that it would, but it will be larger and will bear almost no resemblance on the inside. I said, “Fine. I will inform Headquarters that we will have to mod [modify] the structure and make additional changes to the internal systems.” Fortunately, the project was set up as a highly flexible organization with competent and experienced management and was made the change to the new concept with very little static. In the end, the successful ISEE spacecraft from a distance looked the same as IMP-H but internally, both in electronics and structure, there was no resemblance. You have to know when to eat your own words and enjoy the taste.
Practically the same sort of thing occurred with my counterpart in ESA who was building the ISEE-B spacecraft that was mated to the ISEE-A for launch. In the selling of the program their project manager had accepted too stringent requirements on the spacecraft partially to fit within the IMP-H. The ESA method of management was slightly different from ours so when they got to the execution phase, they brought in a new manager known for his competency and integrity, whose perspective was not jaded and who was able to see the project elements in a fresh light. He took one look at the system and like my mechanical engineer, had only one thing to say, “This is rubbish!” Here too, the future of this important project now hung on the opinion of one man.
Fortunately, my counterpart did not have to eat his own words but only those of his predecessor, who had determined the spacecraft concept design. My counterpart was straightforward and honest and recognized the value of flexibility, which helped to make the program change workable. As a true leader, he was able to affect the sharp change to the concept. Our two teams immediately formed one team to get the job done because we recognized not only the competence of our colleagues but also their integrity.
A key lesson from this story is some of the most important decisions, made by people in a rigorous and “thing-based” profession (engineering), and some of the most sophisticated technological artifacts, are often made and accepted based on two human concepts: intuition and trust. Soft is hard.
1 Source:  Madden, J. (2000). In A. Laufer & E. J. Hoffman, Project management success stories: Lessons of project leaders (pp. 104-105). New York, NY: Wiley.
*ISEE means International Sun-Earth Explorer, one of NASA’s Explorers spacecrafts.
**IMP means Interplanetary Monitoring Platform; IMP-H was one in a series of such spacecrafts.

Thursday, January 15, 2015

The Cost of Working Without Trust

photo in public domain

This month’s story, the first of a two-part series about working with and without trust, is about a manufacturing plant in a well-known consumer goods corporation.
     Three years ago we began a “grass-roots” plan to expand production capacity for a successful product. The project started in a wheat field and was to end two years later with a multi-million dollar plant. Unfortunately, the eventual plant cost became a troublesome issue in an otherwise successful project.
Management blind to the facts  
     To begin with, upper management believed the project should cost $40 million, a figure based solely on their own experience and not on the facts. Management declared the conceptual study’s estimate of $55 million to be unacceptable because it had already agreed to staff and develop a conceptual study based on their $40 million figure. They questioned the cost engineer's credibility, even though he was quite experienced and used proven methods to develop the estimate. There were even discussions that the scope and estimate were “gold-plated” and that we really wouldn’t build the plant like that. After reducing the project scope to appease management (reduced building size, eliminated some non-process scope, etc.), a compromise estimate of $50 million was accepted for the project's appropriation.
     Immediately after appropriation, the eliminated scope was returned to the project because the scope reduction decisions had been based on cost criteria alone, with no consideration for the actual needs of the project. For example, reducing the building size meant a key piece of production machinery would no longer fit, so the building had to be returned to its original dimensions. Despite valid scope additions such as this, management refused to approve changes. They said, “You already have $10 million more than you need. We're not going to give you any more fat!”
Given management’s attitude, the project team maintained very little cost consciousness. Since management was ignoring valid cost estimating and trending data, the team didn't bother with cost control and the cost situation soon became disruptive. The project team knew they were exceeding the appropriated amount, but since management refused to listen to the team's concerns, cost control became a big joke.
     So the scope grew while the cost predictions remained the same. When the project team completed definition and design, a second estimate was published at $58 million.  When construction took over, the estimated cost of the plant increased to $64 million (the amount the contractors originally estimated for the project). Even the most dedicated effort of a competent project team cannot deliver a successful project without the trust and support of upper management. Trust is a two-way street:  the trust of senior managers in the project team facilitates the trust of the team in the senior leadership.
     At project close, the project team had done an excellent job of building a $64-million plant. The start-up was on time and one of the best in the company. The only criterion the project failed to meet was cost, due to management's stubborn arrogance and unbending devotion to its own target cost. Unreasonable pressure from management to pursue unrealistic objectives does not ensure the achievement of those objectives.
     When it comes to organizational performance it is a balancing act to challenge people to achieve high performance. Set the bar too low and it only calls for minimal effort to reach. However, if the bar is set too high, with unrealistic objectives, failure is the assured outcome. And what was upper management’s response to the outcome in this story? The contractors were hung.
Part 2 of this two-part series will be published next month, with a story about working with trust.

Wednesday, December 17, 2014

Pragmatism Does Not Mean Being Unprincipled

In the last blog we stressed the importance of judgment for successful project management. Robert Goehle, from the US Department of Energy (DOE), had to resort to judgment when attempting to adhere to one of the key principles of project management: Strive to meet the customer’s needs!1
Good project managers understand that it is important to involve the customer in the project deeply. Involvement can mean many things, but generally requires the project manager to listen to and be responsive to the customer’s needs.
Listening and responsiveness do not mean always accepting the customer’s point of view. Following are two examples in which customers were deeply involved in the projects, but the extent to which their initial demands were met differed considerably.
A Research Facility with Only One Line In
One project entailed the design and building of a facility for ecological research and was operated by a local university (the customer) at a site operated by the DOE. The facility would house a veterinary-type clinic for observation, surgery and autopsy of small animals. As most of the researchers using the facility would have offices elsewhere, the customer required only a single telephone line for the entire facility.
The DOE site manager decided that the facility must comply with DOE standards, and this included multiple phone lines, fiber optics, computer capability, and a fire notification system. These applied to all new facilities constructed no matter what their functions.
The customer was furious when informed of this because these requirements were going to add substantial cost to the project, and the customer had a limited budget. At that point the customer proposed doing away with all the communication lines to the facility, settling for a cellular phone. The DOE site manager still found this idea unacceptable; all facilities located on site must be on the site system.
It was a delicate situation for the DOE project manager, whose job was to provide oversight of the project and serve as the go-between for the customer and the DOE site manager. Despite the site manager’s requirements, the project manager was convinced that the customer was right. Under these unique circumstances, the Project Manager believed the DOE standard was inappropriate. The site manager, however, was adamant about his requirements. Thus, the Project Manager decided to take the case to DOE headquarters and argue on behalf of the customer.
In this case, a waiver was granted. The facility was constructed with a single phone line, and the project was completed within budget.
A Testing Facility for Multiple Customers
In the second project, led by the same Project Manager, the mission was to design and build a facility to test products for five different customers. The new facility was to provide environmental test chambers that could quickly raise and lower temperatures. Each customer had completely different temperature requirements for the products to be tested. This meant that the facility had to provide multiple ovens or additional environmental chambers to satisfy all the different requirements. The result was that the total estimated cost of the facility was much higher than the approved budget.
The Project Manager approached the customers separately and tried to get them to relax their requirements so that the project would be able to meet its budget. The customers listened to him, but were clear that they could not compromise on their requirements. While the Project Manager wanted to satisfy his customers, he realized that unless he found a way to get them to relax their requirements they would all wind up with nothing. Therefore, he decided to approach them one more time to ask them to relax their requirements, but this time he approached them as a group.
Each customer was provided with the temperature ranges required by the other four. They all were requested to adjust their requirements to the next closest set of requirements. At first, there was resistance to changing anything. Each customer felt that the requirements could not be changed. But once they realized that unless they collaborated, none of them would get anything, they worked together to streamline their requirements so the project could succeed. By combining requirements, they reduced by half the number of ovens and environmental test chambers. In the case of special needs, small units would be purchased at a greatly reduced cost. Since fewer units were needed, the size of the facility was likewise reduced.
In both examples the project manager fully engaged and worked with the customers and met budget constraints. However, in the first case he was willing to confront authorities to meet the customer’s requirements, while in the second case he confronted the customers and convinced them to modify their requirements.
These two examples demonstrate that when it comes to meeting customer needs, context and customer engagement are key. John Russell, former vice president of Harley-Davidson Europe, put it this way: “The more you engage with customers the clearer things become and the easier it is to determine what you should be doing.”
In his book Six Action Shoes, Edward de Bono relates pragmatism to context-sensitivity. “Some people condemn pragmatism because they believe that pragmatism seems to be a way of acting without principles. Pragmatism does not mean being unprincipled: it means the pragmatic use of principles. Pragmatism is when you do what can be done to achieve an objective and put as much emphasis on practicality as on principles… Pragmatism means being sensitive to the situation...”2
1 Laufer, A. & Hoffman, E. J. (2000). Project management success stories: Lessons of project leaders. New York, NY: Wiley, 149-151
2 de Bono, E. (1991). Six action shoes. New York, NY: Harper Business, 67-8.

Tuesday, November 11, 2014

Avoid the most expensive words in business when it comes to project management

“That’s the way we’ve always done it” may well be the most expensive words in business. While it’s important to build on past success, every organization must remain open to new ideas and accepting of change in today’s rapidly evolving environment.
image by Gwydion M. Williams
free use via CreativeCommons
There is no doubt that current practices affect all other practices. And they should. However, successful project managers deviate from the common “one best way” approach and adjust their actions to the context of the project. Avoiding the “one best way” approach does not imply that there are no “wrong ways,” that “anything goes,” or that you must always “start from scratch.” The best approach is to strike a balance that relies on accumulated organizational knowledge while fostering flexibility and creativity among all those involved.
Most successful project managers understand that context is king, and thus, they spend much time adjusting their practices to the context of the project. At the same time, however, in projects sharing common characteristics and challenges, project managers used many practices in a like manner.
Compare, for example, the use of procedures in a product development project with their use in a repeated tasks project.
New product development: The Joint Air-to-Surface Standoff Missile (JASSM) program was established to replace the cancelled Tri-Service Standoff Attack Missile program, which had exceeded its budget estimates by record levels. The US Air Force told the contractor, Lockheed Martin: “We don’t have the time, we don’t have the funds, and we don’t have the answers. We want a missile in half the time for half the price.” Thus, it became clear quickly that the only way to produce an affordable missile was to stop doing ‘business as usual’.
Repeated and risky tasks: The Environmental Research Aircraft and Sensor Technology program, established by NASA, was charged with converting Unmanned Aerial Vehicles (UAVs) into research platforms. The know-how required to overcome and manage risk put most companies off. AeroVironment, one company that was brave enough to embark on the adventure with NASA, found that it faced a daunting technological challenge: to operate an aircraft that was light enough to fly and large enough to be powered by the sun and carry meaningful payloads.1 
In the JASSM project, Larry Lawson, the project manager for Lockheed Martin, was instructed to throw out all the military standards and was given the freedom to devise his own approach as long as it met the project’s three key performance parameters. In sharp contrast, the team at the Pathfinder project was expected to strictly adhere to the extremely detailed flight procedures. Moreover, there was even an extremely rigorous process for preparing and refining these flight procedures.
The call for judgment
The classical model of project management, in which standards are developed for virtually all situations, expects the project manager to serve primarily as a controller: to ensure that team members adhere to the established standard. This role entails only a minimal requirement for judgment and no requirement for adaptation. In reality, the project manager must constantly engage in making sense of the ambiguous and changing situation, as well as adjusting common practices to the situation.
This process requires a great deal of interpretation and judgment based on rich experience.
Quinn, Mintzberg, and James concluded that judgment is the most indispensable attribute of managers: “It is simply our conclusion that among all other attributes of managers, the most indispensable is judgment because it is the integrator which guides and controls all the others… most judgment calls are not simple selections between black and white, but are between subtle shades of gray… Don’t expect everything to work out well the first time…Don’t be afraid to make mistakes as long as you learn from them.”2
The judgment needed in specific context situations cannot depend on the use of general rules and therefore cannot be developed solely on the basis of reading books or participating in training seminars. Rather, it requires extensive experience. Stories, like those presented here, which present a variety of contexts and solutions, are an excellent source for enriching your experience base.
1. Laufer, A. (2012). Mastering the Leadership Role in Project Management: Practices that Deliver Remarkable Results. Upper Saddle River, NJ:  FT Press.

2. Quinn, J., Mintzberg H., and James, R. (1988).  The Strategy Process: Concepts, Contexts, and Cases.  Englewood Cliffs, NJ: Prentice Hall, xi, 956-60.