PMP Tutorials

Business Scenario Analysis

2012-01-26T13:30:00.001-06:00

When conducting your business scenario analysis we recommend that you will go through the following steps in the order presented. Working through the flow provides an overview structure for your business scenarios and you can fill-in the blanks later! This will also help you to determine where the blanks are and the minimum effort you need to expend to successful optimise your business scenarios.

Business scenarios are used to analyse the day-to-day interactions between your company and the people with which it conducts business. Streamlining your business interactions will enable your company to maximise its profitability. The key steps in analysing business processes are:

Name What is the name of this business scenario?
Description Outline the scenario.
Observations How does this scenario actually play out in your company?
Best Practices What best practices come out of this scenario?
Opportunities What opportunities come out of this scenario?

Name

Consider the business interaction that the business scenario will represent and chose a few descriptive words that will provide a meaningful name for the business scenario. The name should be both unambiguous and descriptive so that each employee of your company will know which of your company's business interactions is being described.

Description

You should describe the business scenario in a few short paragraphs covering the following topics:

Who is the interaction between?
What is the purpose of the interaction?
How should the interaction be conducted?
How often does this type interaction occur?
What triggers this interaction?

Observations

Observations are used to analyse how your company's employees actually implement your company's business scenarios. This enables you to determine how well your company's staff adheres to your company's business scenarios.

Name What is the name of this observation?
Behaviour What was the observed behaviour?
Implied Message What was the implied message received of this behaviour?
Reaction What was the reaction to the implied message?

The future success of your company is built on the thousands of decisions being taken by your frontline staff each day. These people are creating your image and reputation with considerably greater effect than any advertising campaign. When a customer talks to an employee of your company, that person represents the ENTIRE company - everything that your company represents is embodied in that one person. Detailed analysis of customer interactions and their impressions can provide a chilling but necessary insight into your company.

The actual operation of business interactions should be observed on a regular basis (anonymously, if possible) to check whether the scenario is being followed. Staff may be following the scenario to the letter or straying from it - for good or bad. By observing the interaction anonymously the performance of staff and the scenario itself can be objectively assessed. This allows you to evaluate how well your staff are performing, so you can reward those who are doing the best job (and train those who are under-performing). Where the interaction occurs at more than one location then each site should be observed at intervals.

Business Scenarios

2012-01-26T12:30:00.002-06:00

What is a Business Scenario?

Business scenarios describe how people interact with your company in specific situations. The purpose of business scenario analysis is to both streamline and improve the effectiveness of your company's business interactions.

Why are Business Scenarios important?

They allow you to streamline and improve the quality of your business interactions.
They help you to strengthen your business relationships.
They enable you to improve your customer retention.
They increase your ability to cross and up sell your products.

What is Business Scenario Analysis?

A rapid analysis technique that:

Examines your business interactions.
Defines when, where, how and why people interact with your business.
Identifies opportunities to streamline your business interactions.
Describes examples of "best practice" for use throughout your business.

What is productivity or relentless business improvement?

2010-04-24T09:49:00.000-06:00

Most would argue that productivity or relentless business improvement is doing things faster for less cost. This is certainly a measure, and probably the most basic. Quality must also be added into this equation, as must customer service. Another measure of productivity is the rate at which an organization is responsive to market needs, service or product innovation, and its ability to change as the marketplace demands. There is much talk that an automated BPM implementation can provide an organization with this business agility.

It is imperative for an organization to identify what type of productivity is essential or critical to meeting its strategic goals. The easy answer is all of the above (time, cost, quality, customer service, market responsiveness and business agility); however, it is difficult for an organization to target all at the same time, without a structured and planned approach.

Treacy and Wiersma (1997) say that an organization must choose between three strategic options:

Customer intimacy – the best total solution for the customer
Operational excellence – the best total costs
Product leadership – the best product

They say it is impossible for an organization to be good at all three strategic options. Organizations must make a choice of one of these dimensions, otherwise they will, according to Michael Porter (1980), become ‘stuck in the middle’ and will eventually either not perform well or disappear.

It is the role of the leaders to select which strategy is the critical one for the organization, and then identify the business processes to be redesigned, or created, to achieve the desired results. There is a growing number of leaders who have identified how critical this is for the achievement of an organization’s strategies and objectives. It is also about providing BPM practitioners with a framework – and set of tools and techniques that will provide a practical guide to implementing BPM projects successfully.

Why is Product Quality Important?

2010-03-21T02:28:00.001-06:00

It doesn’t make very much sense to use superior methods to run a project if what you produce in the project is of very poor quality. Good methods do not automatically assure good products.

There are many proponents of excellence in products and services. One of my favourites is W. Edwards Deming. Here, in my own language, are his principles, with my ‘nickname’ for each following immediately in parentheses.

Create constancy of purpose towards improving products and services, allocating resources to provide for long-range needs rather than short-term profitability. (‘Mission’ principle)
Adopt the new philosophy for economic stability by refusing to allow commonly accepted levels of delays, mistakes, defective materials and defective workmanship. (‘AQL‘ principle - standing for Acceptable Quality Level).
Cease dependence on mass inspection by requiring statistical evidence of built-in quality in both manufacturing and purchasing functions. (‘QC’ principle)
Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical evidence of quality. End the practice of awarding business solely on the basis of price. (‘Supplier’ principle)
Search continually for problems in the system to constantly improve processes. (‘Continuous Improvement’ principle)
Institute modem methods of training to make better use of all employees. (‘Training’ principle)
Focus supervision on helping people do a better job. Ensure that immediate action is taken on reports of defects, maintenance requirements, poor tools, inadequate operating definitions, or other conditions detrimental to quality. (‘Supervision’ principle)
Encourage effective two-way communication and other means to drive out fear throughout the organisation and help people work more productively.
(‘Fear’ principle)
Break down barriers between departments by encouraging problem solving through teamwork, combining the efforts of people from different areas such as research, design, sales, and production. (‘Silo’ principle, as in functional ‘silos’)
Eliminate the use of numerical goals, posters, and slogans for the work force that ask for new levels of productivity without providing methods. (‘Slogan’ principle)
Use statistical methods for continuing improvement of quality and productivity, and eliminate work standards that prescribe numerical quotas. (‘Statistics’ or ‘Quota’ principle)
Remove all barriers that inhibit the worker’s right to pride of workmanship. (‘Pride’ principle)
Institute a vigorous program of education and retraining to keep up with changes in materials, methods, product design, and machinery. (‘Retraining’ principle)
Clearly define top management’s permanent commitment to quality and productivity and its obligation to implement all of these principles. (‘Leadership’ principle)

In projects, this means that a continual focus on the vision or mission of the project will prevent you from being ‘scattered’. There is no limit to how good a job you can do. The quality will improve if you trust your people to do a good job without constantly peering over the shoulders; arrange proper training; and avoid having other groups check their work. People will be proud of their work and, because fear is absent, won’t hesitate to tell you when something is going wrong.

Most notably, you as a project manager need to plan, organise and control projects, yet never need to plan, organise, and control people. The work needs to be planned, organised and controlled, but not people. They need to be led, championed, encouraged, and shown the direction.

The difference between Management and Leadership

2010-03-21T02:14:00.003-06:00

Projects need to be managed, yet people need to be led. In other words, work needs to be managed, yet people never do. In accordance with modern quality principles clearly expressed by (for example) W. Edwards Deming and the Malcolm Baldrige National Quality Award, work needs to be planned, organised, and controlled, yet people should not. Many people confuse these two issues.

Therefore, the enlightened, empowered project manager is actually a project leader. Some companies have used the term ‘Project Leadership’ for that very reason. A leader empowers others and gets consensus, delegating the work and important pieces of the project management areas as well. This improves the sense of involvement, commitment, and esprit-de-corps of team members as well.

Leaders catalyze others into action and establish a clear vision for what is desired. They take the joke ‘do what I say, not as I do’ and turn it around into ‘do what I do, not what I say’. They trust that you know how to do the work. They describe what to do, and leave the how up to you. They control the work, not the worker. This is truly a quality person.

To take the work personally, such as finding fault or laying blame, is part of a manager’s flawed attempt to control how the work is done. It depersonalizes the team member, the one doing the work. To look at work impersonally (not as my work or your work, but instead as the work) without blame, depersonalises the work and empowers the individual once again. This is the way that two friends on a team would look at the problem or issue or task, and work together to solve or resolve it-looking at the work, not the worker. Another way of putting it:

personalising the work depersonalises the worker;
depersonalising the work personalises the worker.

We want the last bullet. not the first! That is what a leader does.

In industry, the terms ‘project manager’, ‘project leader’, and ‘team leader’ all have slightly different meanings that vary from organisation to organisation. Often, ‘project leader’ emphasises the leadership aspect rather than management; it also sometimes depicts a role subordinate to the overall project manager on the same project for complex multi-tiered projects. The term ‘team leader’ often is used to refer to the leader of a sub-piece of a project. Since the leadership principles are the same, and the work description is the same, we use these terms interchangeably. This is even more appropriate given the premise that we propose project team members should try to walk in the shoes of the project manager. In a sense, the team leader is a project team member of an even bigger project and needs to walk in the shoes of the overall project manager.

The role of the Project Manager

2010-03-21T02:09:00.002-06:00

The project manager, in traditional project management tutorials, is the one who plans, organises, and controls the project. Perhaps it should be stated that the project manager plans, organises, leads and controls a project. If assigned this role, you must accomplish your goals through the efforts of others.

The ‘planning’ piece occurs initially, before the project is actually underway by the team members, and may have to be repeated during the project, especially if there are changes along the way.

The ‘organising’ piece involves allocating equipment, resources, people, money, suppliers, and anything else that is necessary to run the project, based on the plan. This frequently involves coordination with others.

The ‘control’ piece essentially means the comparison of the plan with the actual progress, and making any necessary ‘mid-course’ corrections. This is an often overlooked area of most projects. In quality terms, the planning piece is ‘prevention’ based; that is, it guides the project in the proper direction, and prevents subsequent failures if properly done. The control piece is ‘correction’ based; that is, it identifies variations of the project with the plan, and re-plans based on actual circumstances. Technically, it is true that prevention is more powerful, and better than, correction, if a choice had to be made.

Yet in the real world, it is almost necessary to be better at project controls than project planning, if you were forced to make a choice. Seldom do projects go exactly as planned. The very fact that a project includes elements that have not been done before (by definition) means that there is a certain element of unpredictability, no matter what planning is done. Many people erroneously plan projects in great detail, omitting contingencies, and then fail to control them. When they notice that the project has gone awry, they simply abandon the plan and ‘shoot from the hip’. The result is an ad-hoc approach to project management with resultant cost overruns, missed dates, and poor quality projects.

While I cannot advocate lack of planning, a person who plans but does not control is in worse shape than a person who controls without planning. In the latter case, at least the project is continuously re-oriented to the real-world facts and events of the day. Obviously, both planning and control are necessary. It is hard to overemphasise the importance of adequate project controls because this is an extremely common failing in projects.

Think of it this way: it is important to be able to predict, or forecast, the weather (planning). We might not want to go for a day trip with the family if rain is forecast, although we would if it were sunny. However, if the weather forecast was fair, and we were at a ball game, we would probably cancel it if a heavy downpour ensued (control). It would not matter what was forecast: it is the reality that would affect our behaviour. In fact, the good project manager ‘prepares for rain’ even if the forecast is clear. In essence, the actual weather (rain or shine) is 100% accurate in the moment, while the forecast may be inaccurate. For a project, the reality that a certain task did not complete in time is a 100% certainty in the present, while the prediction that it would or would not complete in time is not 100%.

The issue at hand is usually the ego of the project manager, wishing through ‘habituation’ or ‘cognitive dissidence’ that the prediction would come true, even in the face of conflicting real outcomes. We are so blinded by past experience (habituation) or invested in our plan with ‘tunnel vision’(cognitive dissidence) that we think controlling our projects is an admission of failure. It is not-it is an admission of wisdom!

This, then, is planning, organising, and controlling-the P-O-C of projects. This is the 5% of project knowledge and experience. Part of the remaining 95% is:

leading and motivating others; and
doing actions through the work of others (delegating).

So, project management is planning, organising, leading, and controlling, all while properly motivating and delegating. These two new areas are the ‘forgotten children’ of many project managers. It is very odd that most treatments on project management describe the start-up (planning, organising) and corrections after completion of tasks (controlling), but not what happens during the execution of the project (running the project, or leading). How well this is done can make or break projects. And to try to do everything yourself can be most disappointing indeed.

Try to imagine a family in which a parent plans a vacation, organises all the details, and is there to control the finances after completion, and is not present during the vacation and does not actually go! This is absurd, yet is attempted with many projects in the office. Also, try to imagine the man who managed the fibre optic cable project mentioned above. How well would this have worked had he tried to do the entire job himself?

Many technicians in specialty fields are rewarded by their managers with project management positions. They are taught the P-0-C of project management, and then ‘thrown to the wolves’ to fend for themselves in such a position. Of course, they don’t know how to do that. The natural result is this: they reward themselves by choosing all the great tasks for themselves. This gives them a feeling of accomplishment. Since it is easier to tell when you are done with a technical task then when you are done with a management initiative, there seems to be more ‘completion’.

The fallacy with this thought is two-fold. First, a detailed task might be taking time away from your project management responsibilities. Second, by taking the interesting tasks for yourself, you are ‘robbing’ others of the exciting work, decreasing their motivation, and possibly sending the signal that they are not trusted.

It is true that there are many kinds of projects: large ones for which the project management position is full-time, where a number of people are doing the detailed tasks, and smaller projects for which you are the only team member-both project manager and team member, ‘doer’ of all tasks. Even more, you might be managing several projects, either doing management tasks alone or managing/doing coupled with other projects and non-project activity.

One cannot cast a rule for delegation in stone. It is sometimes necessary for you, the project manager, to do certain tasks for which you are the only one having the expertise (especially in smaller projects where it is simply a necessity to do the detailed work too). The test is this (and this is the secret question you need to answer for yourself honestly, perhaps privately):

Have I done all the planning, organising, leading/running, and controlling that really needs to be done, or am I skipping this work to do the task?
Am I selecting the task only because I enjoy it, for my own ego, or to get a sense of completion? Or am I doing it because it is indeed an appropriate way to use my time?

Project Cascading and Size

2010-03-21T02:00:00.003-06:00

Many times, the output of one project (the product) is the input to another (part of the other’s process). For example:

the research and development activity results in an idea, and this is one project;
the idea is then used to build a prototype of a new customer product. This activity is a project also;
the prototype is used to design the operations for the method of mass production on the manufacturing shop floor. The setup of the assembly line, for the first time, and the ‘working out of any bugs’ in the manufacturing operation, is also a project;
the continued mass production of the customer product is not considered to be a project; and
any subsequent quality assessment or focus group activity to validate that the product meets the needs of the market and customers is a project.

If projects are all different, how can it be possible to have any kind of a method to make their construction more efficient, effective, and of higher quality?

Because although what ‘goes through’ a project activity is different, the techniques, activities and problems associated with vastly different projects can be very much the same. In the same way that a software development project can be governed by a phased methodology that remains the same, so too can projects be governed.

This ‘same kind of things’ approach applies not only to the technical aspects of project management, but also to the human side: staying ‘sane’, managing stress levels, managing your time, leading your people, and being a quality participant in the process as a team member.

Projects can be ‘phased’; that is, broken down to a series of sequential steps. They can also have concurrent sub-elements or modules. These pieces can be very small projects in themselves. For example, many job-shop operations, such as software projects, require sequential developmental phases (requirements, design, construction, testing, and implementation). Also, many complex projects need to be broken down into smaller pieces just to make them manageable. The planning of an extensive family vacation might have concurrent pieces done by different family members: selecting the vacation spot, meeting the needs of all family members, planning travel arrangements, booking reservations, completing office work and cross training others for your absence, allocating savings to finance the trip and expenses during the trip, and so forth.

On the other hand, projects can be very large. For example, I met the person responsible for laying all of the fibre optic cable in the ground, in the whole world, for a long distance communications company. This person had hundreds of project managers working for him. In a sense, his ‘project’ was to coordinate the projects managed by his team members.

Products and Processes

2010-03-21T01:57:00.002-06:00

As we can see from the comparisons, any time you construct a new type of ‘product’ you are running a project. For the purpose of understanding this, we need to define what is meant by ‘product’.

A product is the output of a process. It is not necessarily physical, or even tangible. If a process is an activity, or work, or an action, then a product is the result of such an action. As such, a product can, of course, be a physical thing that is constructed (a home, a piece of software, a machine tool). Because it is the output of a process, a product can also be a customer service action, a meeting, or even a thought-anything that is the result of an activity.

What defines a project is not the product. It is, instead, the fact that the product is unique and non-repetitive.

What is a Project?

2010-03-21T01:55:00.003-06:00

A project is an organised effort to a specific, typically one-time, goal. We will be looking at projects not only in business but also personally, including home life, raising a family-even self-improvement.

It is important to understand what a project is and what it is not.

There are many things that go on in a company, or even in a household, that one does not consider to be projects, for example:

ongoing operational work, or day-today repetitive actions. The structure of the work is known, typically via a series of procedures. While the content may differ, the actions to carry out the content are the same, such as running routine errands, making a meal, or seeking family entertainment;
customer service actions, once designed, are not projects so long as the work is routine; and
manufacturing assembly line operations on the shop floor, where the work does not change, even though different cars, machines, or parts are produced.

A project, by contrast, has a specific beginning and an end. In many important ways, no two projects are the same:

a project has a specific goal. Once the goal is achieved, the project is over;
a project is finite-it has a specific time period and an end point;
a project is usually fairly complex and has many details;
projects are generally one homogeneous unit. Even though large projects often have many phases, components, or sub-components (sub-projects), they
form one unit overall; and
in contrast to repetitive, day-to-day ongoing operations, projects tend to be one of a kind and non-repetitive.

Illustrations of projects include:

software development activities. While there may be a uniform development methodology, the work might not be repetitive or operational. This is because the nature of the product being developed is different each time. However, the mass reproduction of user manuals or packaging of products such as diskettes
or compact disks are not considered to be projects;
the development of a new or unique machine tool in a job shop operation. Each machine tool is different, and when it is done, it is done;
the development of a painting by an artist. The development and painting is a project; the mass production of multiple lithographs of the painting is not;
the design of procedures used in day-to-day customer service operations by bank tellers, help desk attendants or operators, but not the day-today operations themselves. While the tasks in the procedure are repetitive, the initial design of the methods is not;
a research and development activity, even if it leads to an idea rather than a finished product. The nature of the research is different each time, and it results in a specific outcome;
planning a family vacation to a new or unusual destination-it is neither routine nor repetitive;
gaining and using a new skill, or completing on-the-job training;
undertaking new personal growth and introspection with a specific improvement goal in mind; and
undertaking a major home improvement activity.

A final example: a custom home builder undertakes a project each time they build a new home. Although they may have constructed many homes, each home and each set of circumstances is different.

Life Cycle of an Issue

2010-03-09T13:00:00.001-06:00

Symptoms. You first typically become aware of an issue because of uneasiness, a surprise, or some event. You cannot define the problem, but you know it is there from the symptoms.
Issue discovery. After some time and thought, you discover what you think is the issue. Now you want to get your hands on it.
Issue investigation and tracking. Here you look into different facets of the issue and determine what possible actions and decisions are possible. Since there are multiple issues, you have to do tracking as well.
Issue analysis. With the information in hand, you can now proceed to more in-depth analysis of the issue.
Decisions and actions. A decision and actions will often be required to deal with the issue.
Re-emergence of the issue. You thought the issue was solved and that it went away. Think again. The world is political. It can come back — like Freddy in the Halloween movies.

How IT and the Business have changed

2010-03-09T12:57:00.001-06:00

Consider the world of business several decades ago. Processes were centered in individual departments. The departments owned their own processes and work. IT was reactive to user requests. IT was like a fire department — responding to successive emergency calls and requests. Life was fairly straightforward.

Things have changed. Processes now cross departments and divisions. There are more interfaces among processes. The boundaries between processes are fuzzier. IT has responded with integrated systems such as ERP systems. Another example is that of WalMart and the rollout of RFID (radio frequency identification) to replace bar coding. Effective RFID implementation requires warehousing, distribution, and the supply chain to be integrated. IT has moved into a coordinating role in implementation. In this new environment, IT responded to management. But what happened to the business departments? In many cases they remained the same. The work changed, but the business organization did not. A single business department does not own a process that crosses three other departments. Who owns the new processes? All of the employees and management. Who increasingly coordinates improvements to the processes? IT.

Why IT efforts fail

2010-03-09T12:51:00.000-06:00

IT efforts fail often for the following reasons.

Issues are detected too late. Management and staff may not be aware of issues or be looking at the glass as “half full.” Here is a lesson learned. Always look at the work as “half empty” — you will achieve more success.
Issues are not managed well. Typically, issues are managed in an unsystematic, ad hoc manner. Moreover, different managers and leaders may deal with the same issues in different ways. Inconsistency leads to more problems.
Issues are not tracked using the same measurements of both IT in general and IT project management in particular. This leads to more surprises.
Experience in resolving issues, doing work, and completing work is not used to improve the management of issues in the future.
People tend to make the same mistakes again and again with the same issues. This makes measurement, management, and estimation difficult at best and impossible at worse.

There are also problems with the traditional system life cycle. Here are some of them.

When gathering requirements, it is assumed that users are supportive of the effort and change. This is often not the case. You need to get users to see the need for change.
Traditionally, you seek to involve a few senior users (called here king and queen bees). These people are often the ones who are most resistant to change.
After the requirements are gathered, users are asked to sign off and approve them. These approvals, as users have learned, are not legally enforceable. We have seen many cases in which users later state that they did not understand or that things have changed. Only with involvement can come commitment to the requirements.
Users are left alone, sometimes for months. They have seen no results.
The requirements gathering could have generated new ideas, resulting in change of scope.
There is often a disconnect between the training and the implementation of the new system and the current business process. How to get from A to B is not made clear.

Many of the problems stem from a lack of understanding of users and business departments. Let’s examine the world from the user point of view. Users each day show up for work and try to get through it. Regardless of IT and projects, the user supervisors still want the employees to get their work done. There is not much incentive to do well in the project or to change.

Then there are the senior users who have been in their departments for years. We will call these individuals queen and king bees. They seldom take vacations and have vast knowledge of exceptions. As such, they have tremendous informal power. In some departments the supervisors and managers rely heavily on them to informally manage the work. They are seen by management as a great source of strength. Too bad this is flawed. The king and queen bees often act as barriers to change. In a number of ERP (enterprise resource planning) implementations they supply the business rules to the consultants and IT. If they put in all of the exceptions, the new system may work fine. However, it works just like the old process. What does this add up to? No benefits. However, the king and queen bees as well as the consultants win. Why? King and queen bees get all of their exceptions; consultants get more money, more billable hours.

What is an exception? An exception is a transaction that requires special handling or rules. An exception tends to be a rare event. An example in a standard bank branch is a very large deposit of money or foreign exchange in a strange currency. King and queen bees are often needed to handle this work. Exceptions make king and queen bees important. The more exceptions there are, the more power the king and queen bees have. However, the more exceptions that exist, the less productive and efficient is the department.

To IT, the visible process is seen through the systems provided and supported by IT. However, there is frequently more to the picture than meets the eye. Everyone develops his own shortcuts, tips, and tricks to get things done. It is the same with business departments. When an IT system does not meet their needs, they have to invent solutions. These spreadsheets, databases, or manual systems will be called shadow systems. Shadow systems are very important to many users, who may have a substantial investment in them. Shadow systems can also be created to handle new work on an ad hoc basis.

Your body, car, clothes, and apartment or house deteriorate over time. It is the same with business processes. When a new employee is hired, that person is often put into the work and not properly trained in the work. Deterioration sets in. Efficiency drops. Moreover, the new employee can easily fall under the (evil?) influence of the king and queen bees. King and queen bees may create new exceptions to deal with situations. When there are changes in the work, it may be easier to generate a new or modified shadow system than to call on IT and go through another life cycle.

Now you can connect the dots in the foregoing to get an overall picture.

If the shadow systems are not included in requirements, the users may have to carry them over and even make changes to them to adapt to the new process. What incentive do the users have to do this on their own? Not much.
If the king and queen bees are able to implement all of the exceptions, then there will be less or no benefit from the new system and process.

Does this sound too cynical? Perhaps, but all too often these things occur. Of course, there are times when the users want change, when the king and queen bees are willing to give exceptions, and when the shadow systems can all be incorporated into the new system. Experience, however, reveals these to be rare events.

Macon, Inc.

2010-02-14T13:59:00.000-06:00

Macon was a fifty-year-old company in the business of developing test equipment for the tire industry. The company had a history of segregated departments with very focused functional line managers. The company had two major technical departments: mechanical engineering and electrical engineering. Both departments reported to a vice president for engineering, whose background was always mechanical engineering. For this reason, the company focused all projects from a mechanical engineering perspective. The significance of the test equipment's electrical control system was often minimized when, in reality, the electrical control systems were what made Macon's equipment outperform that of the competition.

Because of the strong autonomy of the departments, internal competition existed. Line managers were frequently competing with one another rather than focusing on the best interest of Macon. Each would hope the other would be the cause for project delays instead of working together to avoid project delays altogether. Once dates slipped, fingers were pointed and the problem would worsen over time.

One of Macon's customers had a service department that always blamed engineering for all of their problems. If the machine was not assembled correctly, it was engineering's fault for not documenting it clearly enough. If a component failed, it was engineering's fault for not designing it correctly. No matter what problem occurred in the field, customer service would always put the blame on engineering.

As might be expected, engineering would blame most problems on production claiming that production did not assemble the equipment correctly and did not maintain the proper level of quality. Engineering would design a product and then throw it over the fence to production without ever going down to the manufacturing floor to help with its assembly. Errors or suggestions reported from production to engineering were being ignored. Engineers often perceived the assemblers as incapable of improving the design.

Production ultimately assembled the product and shipped it out to the customer. Often times during assembly the production people would change the design as they saw fit without involving engineering. This would cause severe problems with documentation. Customer service would later inform engineering that the documentation was incorrect, once again causing conflict among all departments.

The president of Macon was a strong believer in project management. Unfortunately, his preaching fell upon deaf ears. The culture was just too strong. Projects were failing miserably. Some failures were attributed to the lack of sponsorship or commitment from line managers. One project failed as the result of a project leader who failed to control scope. Each day the project would fall further behind because work was being added with very little regard for the project's completion date. Project estimates were based upon a "gut feel" rather than upon sound quantitative data.

The delay in shipping dates was creating more and more frustration for the customers. The customers began assigning their own project managers as "watchdogs" to look out for their companies' best interests. The primary function of these "watchdog" project managers was to ensure that the equipment purchased would be delivered on time and complete. This involvement by the customers was becoming more prominent than ever before. The president decided that action was needed to achieve some degree of excellence in project management. The question was what action to take, and when.

QUESTIONS
1. Where will the greatest resistance for excellence in project management come from?
2. What plan should be developed for achieving excellence in project management?
3. How long will it take to achieve some degree of excellence?
4. Explain the potential risks to Macon if the customer's experience with project management increases while Macon's knowledge remains stagnant.

Hyten Corporation

2010-02-14T13:55:00.001-06:00

On June 5, 1998, a meeting was held at Hyten Corporation, between Bill Knapp, director of sales, and John Rich, director of engineering. The purpose of the meeting was to discuss the development of a new product for a special customer application. The requirements included a very difficult, tight-time schedule. The key to the success of the project would depend on timely completion of individual tasks by various departments.

Bill Knapp: "The Business Development Department was established to provide coordination between departments, but they have not really helped. They just stick their nose in when things are going good and mess everything up. They have been out to see several customers, giving them information and delivery dates that we can't possibly meet."

John Rich: "I have several engineers who have MBA degrees and are pushing hard for better positions within engineering or management. They keep talking that formal project management is what we should have at Hyten. The informal approach we use just doesn't work all the time. But I'm not sure that just any type of project management will work in our division."

Knapp: "Well, I wonder who Business Development will tap to coordinate this project? It would be better to get the manager from inside the organization instead of hiring someone from outside."

COMPANY BACKGROUND
Hyten Company was founded in 1982 as a manufacturer of automotive components. During the Gulf War, the company began manufacturing electronic components for the military. After the war, Hyten continued to prosper.

Hyten became one of the major component suppliers for the Space Program, but did not allow itself to become specialized. When the Space Program declined, Hyten developed other product lines, including energy management, building products, and machine tools, to complement their automotive components and
electronics fields.

Hyten has been a leader in the development of new products and processes. Annual sales are in excess of $600 million. The Automotive Components Division is one of Hyten's rapidly expanding business areas.

THE AUTOMOTIVE COMPONENTS DIVISION
The management of both the Automotive Components Division and the Corporation itself is young and involved. Hyten has enjoyed a period of continuous growth over the past fifteen years as a result of careful planning and having the right people in the right positions at the right time. Thls is emphasized by the fact that within five years of joining Hyten, every major manager and division head has been promoted to more responsibility within the corporation. The management staff of the Automotive Components Division has an average age of forty and no one is over fifty. Most of the middle managers have MBA degrees and a few have Ph.D.s.

Currently, the Automotive Components Division has three manufacturing plants at various locations throughout the country. Central offices and most of the non-production functions are located at the main plant. There has been some effort by past presidents to give each separate plant some minimal level of purchasing, quality, manufacturing engineering and personnel functions.

INFORMAL PROJECT MANAGEMENT AT HYTEN CORPORATION
The Automotive Components Division of Hyten Corporation has an informal system of project management. It revolves around each department handling their own functional area of a given product development or project. Projects have been frequent enough that a sequence of operations has been developed to take a new product from concept to market. Each department knows its responsibilities and what it must contribute to a project.

A manager within the Business Development Department assumes informal project coordination responsibility and calls periodic meetings of the department heads involved. These meetings keep everyone advised of work status, changes to the project, and any problem areas. Budgeting of the project is based on the cost analysis developed after the initial design, while funding is allocated to each functional department based on the degree of its involvement. Funding for the initial design phase is controlled through business development. The customer has very little control over the funding, manpower, or work to be done. The customer, however, dictates when the new product design must be available for integration into the vehicle design, and when the product must be available in production quantities.

THE BUSINESS DEVELOPMENT DEPARTMENT
The Business Development Department, separate from Marketing and Sales, functions as a steering group for deciding which new products or customer requests are to be pursued and which are to be dropped. Factors which they consider in making these decisions are: (1) the company's long- and short-term business plans, (2) current sales forecasts, (3) economic and industry indicators, (4) profit potential, (5) internal capabilities (both volume and technology), and (6) what the customer is willing to pay versus estimated cost.

The duties of Business Development also include the coordination of a project or new product from initial design through market availability. In this capacity, they have no formal authority over either functional managers or functional employees. They act strictly on an informal basis to keep the project moving, give status reports, and report on potential problems. They are also responsible for the selection of the plant that will be used to manufacture the product.

The functions of Business Development were formerly handled as a joint staff function where all the directors would periodically meet to formulate short-range plans and solve problems associated with new products. The department was formally organized three years ago by the then-38-year-old president as a recognition of the need for project management within the Automotive Components Division.

Manpower for the Business Development Department was taken from both outside the company and from within the division. This was done to honor the Corporation's commitment to hire people from the outside only after it was determined that there were no qualified people internally (an area that for years has been a sore spot to the younger managers and engineers).

When the Business Development Department was organized, its level of authority and responsibility was limited. However, the Department's authority and responsibility have subsequently expanded, though at a slow rate. This was done so as not to alienate the functional managers who were concerned that project management would undermine their "empire."

INTRODUCTION OF FORMAL PROJECT MANAGEMENT AT HYTEN CORPORATION
On July 10, 1998, Wilbur Donley was hired into the Business Development Department to direct new product development efforts. Prior to joining Hyten, he worked as project manager with a company that supplied aircraft hardware to the government. He had worked both as an assistant project manager and as a project manager for five years prior to joining Hyten.

Shortly after his arrival, he convinced upper management to examine the idea of expanding the Business Development group and giving them responsibility for formal project management. An outside consulting firm was hired to give an in-depth seminar on project management to all management and supervisor employees
in the Division.

Prior to the seminar, Donley talked to Frank Harrel, manager of quality and reliability, and George Hub, manager of manufacturing engineering, about their problems and what they thought of project management. Frank Harrel is thirty-seven years old, has an MBA degree, and has been with Hyten for five years. He was hired as an industrial engineer and three years ago was promoted to manager of quality and reliability. George Hub is forty-five years old and has been with Hyten for twelve years as manager of manufacturing engineering.

Wilbur Donley: "Well, Frank, what do you see as potential problems to the timely completion of projects within the Automotive Components Division?"

Frank Harrel: "The usual material movement problems we always have. We monitor all incoming materials in samples and production quantities, as well as in-process checking of production and finished goods on a sampling basis. We then move to 100 percent inspection if any discrepancies are found. Marketing and Manufacturing people don't realize how much time is required to inspect for either internal or customer deviations. Our current manpower requires that schedules be juggled to accommodate 100 percent inspection levels on 'hot items.' We seem to be getting more and more items at the last minute that must be done on
overtime."

Donley: "What are you suggesting? A coordination of effort with marketing, purchasing, production scheduling, and the manufacturing function to allow your department to perform their routine work and still be able to accommodate a limited amount of high-level work on 'hot' jobs?'

Harrel: "Precisely, but we have no formal contact with these people. More open lines of communication would be of benefit to everyone."

Donley: "We are going to introduce a more formal type of project management than has been used in the past so that all departments who are involved will actively participate in the planning cycle of the project. That way they will remain aware of how they affect the function of other departments and prevent overlapping of work. We should be able to stay on schedule and get better cooperation."

Harrel: "Good, I'll be looking forward to the departure from the usual method of handling a new project. Hopefully, it will work much better and result in fewer problems."

Donley: "How do you feel, George, about improving the coordination of work among various departments through a formal project manager?"

George Hub: "Frankly, if it improves communication between departments, I'm all in favor of the change. Under our present system, I am asked to make estimates of cost and lead times to implement a new product. When the project begins, the Product Design group starts making changes that require new cost figures and lead times. These changes result in cost overruns and in not meeting schedule dates. Typically, these changes continue right up to the production start date. Manufacturing appears to be the bad guy for not meeting the scheduled start date. We need someone to coordinate the work of various departments to prevent this continuous redoing of various jobs. We will at least have a chance at meeting the schedule, reducing cost, and improving the attitude of my people."

PERSONNEL DEPARTMENT'S VIEW OF PROJECT MANAGEMENT
After the seminar on project management, a discussion was held between Sue Lyons, director of personnel, and Jason Finney, assistant director of personnel. The discussion was about changing the organization structure from informal project management to formal project management.

Sue Lyons: "Changing over would not be an easy road. There are several matters to be taken under consideration."

Jason Finney: "I think we should stop going to outside sources for competent people to manage new projects that are established within Business Development. There are several competent people at Hyten who have MBA's in Systems/Project Management. With that background and their familiarity with company operations, it would be to the company's advantage if we selected personnel from within our organization."

Lyons: "Problems will develop whether we choose someone form inside the company or from an outside source."

Finney: "However, if the company continues to hire outsiders into Business Development to head new projects, competent people at Hyten are going to start filtering to places of new employment."

Lyons: "You are right about the filtration. Whoever is chosen to be a project manager must have qualifications that will get the job done. He or she should not only know the technical aspect behind the project, but should also be able to work with people and understand their needs. Project managers have to show concern for team members and provide them with work challenge. Project managers must work in a dynamic environment. This often requires the implementation of change. Project managers must be able to live with change and provide necessary leadership to implement the change. It is the project manager's responsibility to develop an atmosphere to allow people to adapt to the changing work environment."

"In our department alone, the changes to be made will be very crucial to the happiness of the employees and the success of projects. They must feel they are being given a square deal, especially in the evaluation procedure. Who will do the evaluation? Will the functional manager be solely responsible for the evaluation when, in fact, he or she might never see the functional employee for the duration of a project? A functional manager cannot possibly keep tabs on all the functional employees who are working on different projects."

Finney: "Then the functional manager will have to ask the project managers for evaluation information."

Lyons: "I can see how that could result in many unwanted situations. To begin with, say the project manager and the functional manager don't see eye to eye on things. Granted, both should be at the same grade level and neither one has authority over the other, but let's say there is a situation where the two of them disagree as to either direction or quality of work. That puts the functional employee in an awkward position. Any employee will have the tendency of bending toward the individual who signs his or her promotion and evaluation form. This can influence the project manager into recommending an evaluation below par regardless of how the functional employee performs. There is also the situation where the employee is on the project for only a couple of weeks, and spends most of his or her time working alone, never getting a chance to know the project manager."
"The project manager will probably give the functional employee an average rating, even though the employee has done an excellent job. This results from very little contact. Then what do you do when the project manager allows personal feelings to influence his or her evaluation of a functional employee? A project manager who knows the functional employee personally might be tempted to give a strong or weak recommendation, regardless of performance."

Finney: "You seem to be aware of many difficulties that project management might bring."

Lyons: "Not really, but I've been doing a lot of homework since I attended that seminar on project management. It was a good seminar, and since there is not much written on the topic, I've been making a few phone calls to other colleagues for their opinions on project management."

Finney: "What have you learned from these phone calls?"

Lyons: "That there are more personnel problems involved. What do you do in this situation? The project manager makes an excellent recommendation to the functional manager. The functional employee is aware of the appraisal and feels he or she should be given an above average pay increase to match the excellent job appraisal, but the functional manager fails to do so. One personnel manager from another company incorporating project management ran into problems when the project manager gave an employee of one grade level responsibilities of a higher grade level. The employee did an outstanding job taking on the responsibilities of a higher grade level and expected a large salary increase or a promotion."

Finney: "Well, that's fair, isn't it?"

Lyons: "Yes, it seems fair enough, but that's not what happened. The functional manager gave an average evaluation and argued that the project manager had no business giving the functional employee added responsibility without first checking with him. So, then what you have is a disgruntled employee ready to seek employment elsewhere. Also, there are some functional managers who will only give above-average pay increases to those employees who stay in the functional department and make that manager look good."

Lyons: "Right now I can see several changes that would need to take place. The first major change would have to be attitudes toward formal project management and hiring procedures. We do have project management here at Hyten but on an informal basis. If we could administer it formally, I feel we could do the company a great service. If we seek project managers from within, we could save on time and money. I could devote more time and effort on wage and salary grades and job descriptions. We would need to revise our evaluation forms-presently they are not adequate. Maybe we should develop more than one evaluation form: one for the project manager to fill out and give to the functional manager, and a second form to be completed by the functional manager for submission to Personnel."

Finney: "That might cause new problems. Should the project manager fill out his or her evaluation during or after project completion?'

Lyons: "It would have go be after project completion. That way an employee who felt unfairly evaluated would not feel tempted to screw up the project. If an employee felt the work wasn't justly evaluated, that employee might decide not to show up for a few days-these few days of absence could be most crucial for
timely project completion."

Finney: "How will you handle evaluation of employees who work on several projects at the same time? This could be a problem if employees are really enthusiastic about one project over another. They could do a terrific job on the project they are interested in and slack off on other projects. You could also have functional people working on departmental jobs but charging their time to the project overhead. Don't we have exempt and nonexempt people charging to projects?'

Lyons: "See what I mean? We can't just jump into project management and expect a bed of roses. There will have to be changes. We can't put the cart before the horse."

Finney: "I realize that, Sue, but we do have several MBA people working here at Hyten who have been exposed to project management. I think that if we start putting our heads together and take a systematic approach to this matter, we will be able to pull this project together nicely."

Lyons: "Well, Jason, I'm glad to see that you are for formal project management. We will have to approach top management on the topic. I would like you to help coordinate an equitable way of evaluating our people and to help develop the appropriate evaluation forms."

PROJECT MANAGEMENT AS SEEN BY THE VARIOUS DEPARTMENTS
The general manager arranged through the personnel department to interview various managers on a confidential basis. The purpose of the interview was to evaluate the overall acceptance of the concept of formal project management. The answers to the question, "How will project management affect your department?" were as follows:

Frank Harrel, quality and reliability manager
Project management is the actual coordination of the resources of functional departments to achieve the time, cost, and performance goals of the project. As a consequence, personnel interfacing is an important component toward the success of the project. In terms of quality control, it means less of the attitude of the structured workplace where quality is viewed as having the function of finding defects and, as a result, is looked upon as a hindrance to production. It means that the attitude toward quality control will change to one of interacting with other departments to minimize manufacturing problems.
Project management reduces suboptimization among functional areas and induces cooperation. Both company and department goals can be achieved. It puts an end to the "can't see the forest for the trees" syndrome.

Harold Grimes, plant manager
I think that formal project management will give us more work than long term benefits. History indicates that we hire more outside people for new positions than we promote from within. Who will be hired into these new project management jobs? We are experiencing a lot of backlash from people who are required to teach new people the ropes. In my opinion, we should assign inside MBA graduates with project management training to head up projects and not hire an outsider as a formal project manager. Our present system would work fine if inside people were made the new managers in the Business Development Department.

Herman Hall, director of MIS
I have no objections to the implementation of formal project management in our company. I do not believe, however, that it will be possible to provide the reports needed by this management structure for several years. This is due to the fact that most of my staff are deeply involved in current projects. We are currently working on the installation of minicomputers and on-line terminals throughout the plant. These projects have been delayed by the late arrival of new equipment, employee sabotage, and various start-up problems.

As a result of these problems, one group admits to being six months behind schedule and the other group, although on schedule, is 18 months from their scheduled completion date. The rest of the staff currently assigned to maintenance projects consists of two systems analysts who are nearing retirement and two relatively inexperienced programmers. So, as you can readily see, unless we break up the current project teams and let those projects fall further behind schedule, it will be difficult at this time to put together another project team.
The second problem is that even if I could put together a staff for the project, it might take up to two years to complete an adequate information system. Problems arise from the fact that it will take time to design a system that will draw data from all the functional areas. This design work will have to be done before the actual programming and testing could be accomplished. Finally, there would be a debugging period when we receive feedback from the user on any flaws in the system or enhancements that might be needed. We could not provide computer support to an "overnight" change to project management.

Bob Gustwell, scheduling manager
I am happy with the idea of formal project management, but I do see some problems implementing it. Some people around here like the way we do things now. It is a natural reaction for employees to fight against any changes in management style. But don't worry about the scheduling department. My people will like the change to formal project management. I see this form of management as a way to minimize, of not eliminate, schedule changes. Better planning on the part of both department and project managers will be required, and the priorities will be set at corporate level. You can count on our support because I'm tired of being caught between production and sales.

John Rich, director of engineering
It seems to me that project management will only mess things up. We now have a good flowing chain of command in our organization. This new matrix will only create problems. The engineering department, being very technical, just can't take direction from anyone outside the department. The project office will start to skimp on specifications just to save time and dollars. Our products are too technical to allow schedules and project costs to affect engineering results.
Bringing in someone from the outside to be the project manager will make things worse. I feel that formal project management should not be implemented at Hyten. Engineering has always directed the projects, and we should keep it that way. We shouldn't change a winning combination.

Fred Kuncl, plant engineering
I've thought about the trade-offs involved in implementing formal project management at Hyten and feel that plant engineering cannot live with them. Our departmental activities are centered around highly unpredictable circumstances, which sometimes involve rapidly changing priorities related to the production function. We in plant engineering must be able to respond quickly and appropriately to maintenance activities directly related to manufacturing activities. Plant engineering is also responsible for carrying out critical preventive maintenance and plant construction projects.
Project management would hinder our activities because project management responsibilities would burden our manpower with additional tasks. I am against project management because I feel that it is not in the best interest of Hyten. Project management would weaken our department's functional specialization because it would require cross-utilization of resources, manpower, and negotiation for the services critical to plant engineering.

Bill Knapp, director of marketing
I feel that the seminar on formal project management was a good one. Formal project management could benefit Hyten. Our organization needs to focus in more than one direction at all times. In order to be successful in today's market, we must concentrate on giving all our products sharp focus. Formal project management could be a good way of placing individual emphasis on each of the products of our company. Project management would be especially advantageous to us because of our highly diversified product lines. The organization needs to efficiently allocate resources to projects, products, and markets. We cannot afford to have expensive resources sitting idle. Cross-utilization and the consequent need for negotiation ensures that resources are used efficiently and in the organization's best overall interest.
We can't afford to continue to carry on informal project management in our business. We are so diversified that all of our products can't be treated alike. Each product has different needs. Besides, the nature of a team effort would strengthen our organization.

Stanley Grant, comptroller
In my opinion, formal project management can be profitably applied in our organization. Management should not, however, expect that project management would gain instant acceptance by the functional managers and functional employees, including the finance department personnel. The implementation of formal project management in our organization would have an impact on our cost control system and internal control system, as well.
In the area of cost control, project cost control techniques have to be formalized and installed. This would require the accounting staff to: (1) break comprehensive cost summaries into work packages, (2) prepare cornmitment reports for "technical decision makers," (3) approximate report data and (4) concentrate talent on major problems and opportunities. In project management, cost commitments on a project are made when various functional departments, such as engineering, manufacturing and marketing, make technical decisions to take some kind of action. Conventional accounting reports do not show the cost effects of these technical decisions until it is too late to reconsider. We would need to provide the project manager with cost commitment reports at each decision state to enable him or her to judge when costs are getting out of control. Only by receiving such timely cost commitment reports, could the project manager take needed corrective actions and be able to approximate the cost effect of each technical decision. Providing all these reports, however, would require additional personnel and expertise in our department.

In addition, I feel that the implementation of formal project management would increase our responsibilities in finance department. We would need to conduct project audits, prepare periodic comparisons of actual versus projected costs and actual versus programmed manpower allocation, update projection reports and funding schedules, and sponsor cost improvement programs.
In the area of internal control, we will need to review and modify our existing internal control system to effectively meet our organization's goals related to project management. A careful and proper study and evaluation of existing internal control procedures should be conducted to determine the extent of the tests to which our internal auditing procedures are to be restricted. A thorough understanding of each project we undertake must be required at all times. I'm all in favor of formal project management, provided management would allocate more resources to our department so we could maintain the personnel necessary to perform the added duties, responsibilities, and expertise required.

After the interviews, Sue Lyons talked to Wilbur Donley about the possibility of adopting formal project management. As she put it, You realize that regardless of how much support there is for formal project management, the general manager will probably not allow us to implement it for fear it will affect the performance of the Automotive Components Division.

QUESTIONS
1. What are some of the major problems facing the management of Hyten in accepting formalized project management? (Include attitude problems/personality problems.)
2. Do any of the managers appear to have valid arguments for their beliefs as to why formal project management should not be considered?
3. Are there any good reasons why Hyten should go to formal project management?
4. Has Hyten taken a reasonable approach toward implementing formal project management?
5. Has Hyten done anything wrong?
6. Should formal project management give employees more room for personal growth?
7. Will formalized project management make it appear as though business development has taken power away from other groups?
8. Were the MBAs exposed to project management?
9. Were the organizational personnel focusing more on the problems (disadvantages) or advantages of project management?
10. What basic fears do employees have in considering organizational change to formal project management?
11. Must management be sold on project management prior to implementation?
12. Is it possible that some of the support groups cannot give immediate attention to such an organizational change?
13. Do functional managers risk a loss of employee loyalty with the new change?
14. What recommendations would you make to Hyten Corporation?
15. Is it easier or more difficult to implement a singular methodology for project management after the company has adopted formal project management rather than informal project management?
16. Is strategic planning for project management easier or more difficult to perform with formal project management in place?

The Reluctant Workers

2010-02-14T13:21:00.003-06:00

Tim Aston had changed employers three months ago. His new position was project manager. At first he had stars in his eyes about becoming the best project manager that his company had ever seen. Now, he wasn't sure if project management was worth the effort. He made an appointment to see Phil Davies, director of

project management.

Tim Aston: "Phil, I'm a little unhappy about the way things are going. I just can't seem to motivate my people. Every day, at 4:30 P.M., all of my people clean off their desks and go home. I've had people walk out of late afternoon team meetings because they were afraid that they'd miss their car pool. I have to schedule morning

team meetings."

Phil Davies: "Look, Tim. You're going to have to realize that in a project environment, people think that they come first and that the project is second. This is a way of life in our organizational form."

Tim Aston: "I've continually asked my people to come to me if they have problems. I find that the people do not think that they need help and, therefore, do not want it. I just can't get my people to communicate more."

Phil Davies: "The average age of our employees is about forty-six. Most of our people have been here for twenty years. They're set in their ways. You're the first person that we've hired in the past three years. Some of our people may just resent seeing a thirty-year-old project manager."

Tim Aston: "I found one guy in the accounting department who has an excellent head on his shoulders. He's very interested in project management. I asked his boss if he'd release him for a position in project management, and his boss just laughed at me, saying something to the effect that as long as that guy is doing a

good job for him, he'll never be released for an assignment elsewhere in the company. His boss seems more worried about his personal empire than he does in what's best for the company."

"We had a test scheduled for last week. The customer's top management was planning on flying in for firsthand observations. Two of my people said that they had programmed vacation days coming, and that they would not change, under any conditions. One guy was going fishing and the other guy was planning to spend a few days working with fatherless children in our community. Surely, these guys could change their plans for the test."

Phil Davies: "Many of our people have social responsibilities and outside interests. We encourage social responsibilities and only hope that the outside interests do not interfere with their jobs."

"There's one thing you should understand about our people. With an average age of forty-six, many of our people are at the top of their pay grades and have no place to go. They must look elsewhere for interests. These are the people you have to work with and motivate. Perhaps you should do some reading on human behavior."

Wynn Computer Equipment (WCE)

2010-02-14T13:17:00.001-06:00

In 1965, Joseph Wynn began building computer equipment in a small garage behind his house. By 1982, WCE was a $1 billion a year manufacturing organization employing 900 people. The major success found by WCE has been attributed to the non-degreed workers who have stayed with WCE over the past fifteen years. The non-degreed personnel account for 80 percent of the organization. Both the salary structure and fringe benefit packages are well above the industry average.

CEO PRESENTATION
In February 1982, the new vice president and general manager made a presentation to his executive staff outlining the strategies he wished to see implemented to improve productivity:

Our objective for the next twelve months is to initiate a planning system with the focus on strategic, developmental, and operational plans that will assure continued success of WCE and support for our broad objectives. Our strategy is a four-step process:

1. To better clarify expectations and responsibility
2. To establish cross-functional goals and objectives
3. To provide feedback and performance results to all employees in each level of management
4. To develop participation through teamwork

The senior staff will merely act as a catalyst in developing long- and short-term objectives. Furthermore, the senior staff will participate and provide direction and leadership in formulating an integrated manufacturing strategy that is both technology- and human-resources-driven. The final result should be an integrated project plan that will:

Push decision making down
Trust the decision of peers and people in each organization
Eliminate committee decisions

Emphasis should be on communications that will build and convey ownership in the organization and a we approach to surfacing issues and solving problems.

In April 1982, a team of consultants interviewed a cross section of Wynn personnel to determine the "pulse" of the organization. The following information was provided:

"We have a terrible problem in telling our personnel (both project and functional) exactly what is expected on the project. It is embarrassing to say that we are a computer manufacturer and we do not have any computerized planning and control tools."

"Our functional groups are very poor planners. We, in the project office, must do the planning for them. They appear to have more confidence in and pay more attention to our project office schedules than to their own."

"We have recently purchased a $65,000 computerized package for planning and controlling. It is going to take us quite a while to educate our people. In order to interface with the computer package, we must use a work breakdown structure. This is an entirely new concept for our people."

"We have a lack of team spirit in the organization. I'm not sure if it is simply the result of poor communications. I think it goes further than that. Our priorities get shifted on a weekly basis, and this produces a demoralizing effect. As a result, we cannot get our people to live up to either their old or new commitments."

"We have a very strong mix of degreed and nondegreed personnel. All new, degreed personnel must 'prove' themselves before being officially accepted by the nondegreed personnel. We seem to be splitting the organization down the middle. Technology has become more important than loyalty and tradition and, as a result, the nondegreed personnel, who believe themselves to be the backbone of the organization, now feel cheated. What is a proper balance between experience and new blood?"

"The emphasis on education shifts with each new executive. Our non-degreed personnel obviously are paying the price. I wish I knew what direction the storm is coming from."

"My department does not have a database to use for estimating. Therefore, we have to rely heavily on the project offlce for good estimating. Anyway, the project office never gives us sufficient time for good estimating
so we have to ask other groups to do our scheduling for us."

"As line manager, I am caught between the rock and the hard spot. Quite often, I have to act as the project manager and line manager at the same time. When I act as the project manager I have trouble spending enough time with my people. In addition, my duties also include supervising outside vendors at the same time."

"My departmental personnel have a continuous time management problem because they are never full-time on any one project, and all of our projects never have 100 percent of the resources they need. How can our people ever claim ownership?"

"We have trouble in conducting up-front feasibility studies to see if we have a viable product. Our manufacturing personnel have poor interfacing with advanced design."

"If we accept full project management, I'm not sure where the project managers should report. Should we have one group of project managers for new processes/products and a second group for continuous (or old) processes/products? Can both groups report to the same person?"

Williams Machine Tool Company

2010-02-14T13:11:00.001-06:00

For seventy-five years, the Williams Machine Tool Company had provided quality products to its clients, becoming the third largest U.S.-based machine tool company by 1980. The company was highly profitable and had an extremely low employee turnover rate. Pay and benefits were excellent. Between 1970 and 1980, the company's profits soared to record levels. The company's success was due to one product line of standard manufacturing machine tools.

Williams spent most of its time and effort looking for ways to improve its bread-and-butter product line rather than to develop new products. The product line was so successful that companies were willing to modify their production lines around these machine tools rather than asking Williams for major modifications to the machine tools.

By 1980, Williams Company was extremely complacent, expecting this phenomenal success with one product line to continue for twenty to twenty-five more years. The recession of 1979-1983 forced management to realign their thinking. Cutbacks in production had decreased the demand for the standard machine tools. More and more customers were asking for either major modifications to the standard machine tools or a completely new product design. The marketplace was changing and senior management recognized that a new strategic focus was necessary. However, lower-level management and the work force, especially engineering, were strongly resisting a change. The employees, many of them with over twenty years of employment at Williams Company, refused to recognize the need for this change in the belief that the glory days of yore would return at the end of the recession.

By 1985, the recession had been over for at least two years, yet Williams Company had no new product lines. Revenue was down, sales for the standard product (with and without modifications) were decreasing, and the employees were still resisting change. Layoffs were imminent.

In 1986, the company was sold to Crock Engineering. Crock had an experienced machine tool division of its own and understood the machine tool business. Williams Company was allowed to operate as a separate entity from 1985 to 1986. By 1986, red ink had appeared on the Williams Company balance sheet. Crock replaced all of the Williams senior managers with its own personnel. Crock then announced to all employees that Williams would become a specialty machine tool manufacturer and that the "good old days" would never return.

Customer demand for specialty products had increased threefold in just the last twelve months alone. Crock made it clear that employees who would not support this new direction would be replaced. The new senior management at Williams Company recognized that eighty five years of traditional management had come to an end for a company now committed to specialty products. The company culture was about to change, spearheaded by project management, concurrent engineering, and total quality management.

Senior management's commitment to product management was apparent by the time and money spent in educating the employees. Unfortunately, the seasoned twenty-year-plus veterans still would not support the new culture. Recognizing the problems, management provided continuous and visible support for project management, in addition to hiring a project management consultant to work with the people. The consultant worked with Williams from 1986 to 1991.

From 1986 to 199 1, the Williams Division of Crock Engineering experienced losses in twenty-four consecutive quarters. The quarter ending March 31, 1992, was the first profitable quarter in over six years. Much of the credit was given to the performance and maturity of the project management system. In May 1992, the Williams Division was sold. More than 80 percent of the employees lost their jobs when the company was relocated over 1,500 miles away.

Kombs Engineering

2010-02-14T13:03:00.002-06:00

In June 1993, Kombs Engineering had grown to a company with $25 million in sales. The business base consisted of two contracts with the U.S. Department of Energy (DOE), one for $15 million and one for $8 million. The remaining $2 million consisted of a variety of smaller jobs for $15,000 to $50,000 each. The larger contract with DOE was a five-year contract for $15 million per year. The contract was awarded in 1988 and was up for renewal in 1993. DOE had made it clear that, although they were very pleased with the technical performance of Kombs, the follow-on contract must go through competitive bidding by law. Marketing intelligence indicated that DOE intended to spend $10 million per year for five years on the follow-on contract with a tentative award date of October 1993.

On June 21, 1993, the solicitation for proposal was received at Kombs. The technical requirements of the proposal request were not considered to be a problem for Kombs. There was no question in anyone's mind that on technical merit alone, Kombs would win the contract. The more serious problem was that DOE required a separate section in the proposal on how Kombs would manage the $10 million-l-year project as well as a complete description of how the project management system at Kombs functioned.

When Kombs won the original bid in 1988, there was no project management requirement. All projects at Kombs were accomplished through the traditional organizational structure. Line managers acted as project leaders.

In July 1993, Kombs hired a consultant to train the entire organization in project management. The consultant also worked closely with the proposal team in responding to the DOE project management requirements. The proposal was submitted to DOE during the second week of August. In September 1993, DOE provided Kombs with a list of questions concerning its proposal. More than 95 percent of the questions involved project management. Kombs responded to all questions.

In October 1993, Kombs received notification that it would not be granted the contract. During a post-award conference, DOE stated that they had no "faith in the Kombs project management system. Kombs Engineering is no longer in business."

QUESTIONS
1. What was the reason for the loss of the contract?
2. Could it have been averted?
3. Does it seem realistic that proposal evaluation committees could consider project management expertise to be as important as technical ability?

Clark Faucet Company

2010-02-14T13:01:00.002-06:00

BACKGROUND
By 1999, Clark Faucet Company had grown into the third largest supplier of faucets for both commercial and home use. Competition was fierce. Consumers would evaluate faucets on artistic design and quality. Each faucet had to be available in at least twenty-five different colors. Commercial buyers seemed more interested in the cost than the average consumer, who viewed the faucet as an object of art, irrespective of price.

Clark Faucet Company did not spend a great deal of money advertising on the radio or on television. Some money was allocated for ads in professional journals. Most of Clark's advertising and marketing funds were allocated to the two semi-annual home and garden trade shows and the annual builders trade show. One large builder could purchase more than 5,000 components for the furnishing of one newly constructed hotel or one apartment complex. Missing an opportunity to display the new products at these trade shows could easily result in a six-to-twelve-month window of lost revenue.

CULTURE
Clark Faucet had a non-cooperative culture. Marketing and engineering would never talk to one another. Engineering wanted the freedom to design new products, whereas marketing wanted final approval to make sure that what was designed could be sold.

The conflict between marketing and engineering became so fierce that early attempts to implement project management failed. Nobody wanted to be the project manager. Functional team members refused to attend team meetings and spent most of their time working on their own "pet" projects rather than the required work. Their line managers also showed little interest in supporting project management.

Project management became so disliked that the procurement manager refused to assign any of his employees to project teams. Instead, he mandated that all project work come through him. He eventually built up a large brick wall around his employees. He claimed that this would protect them from the continuous conflicts between engineering and marketing.

THE EXECUTIVE DECISION
The executive council mandated that another attempt to implement good project management practices must occur quickly. Project management would be needed not only for new product development but also for specialty products and enhancements. The vice presidents for marketing and engineering reluctantly agreed to try and patch up their differences, but did not appear confident that any changes would take place.

Strange as it may seem, nobody could identify the initial cause of the conflicts or how the trouble actually began. Senior management hired an external consultant to identify the problems, provide recommendations and alternatives, and act as a mediator. The consultant's process would have to begin with interviews.

ENGINEERING INTERVIEWS
The following comments were made during engineering interviews:

"We are loaded down with work. If marketing would stay out of engineering, we could get our job done."

"Marketing doesn't understand that there's more work for us to do other than just new product development."

"Marketing personnel should spend their time at the country club and in bar rooms. This will allow us in engineering to finish our work uninterrupted!"

"Marketing expects everyone in engineering to stop what they are doing in order to put out marketing fires. I believe that most of the time the problem is that marketing doesn't know what they want up front. This leads to change after change. Why can't we get a good definition at the beginning of each project?"

MARKETING INTERVIEWS
"Our livelihood rests on income generated from trade shows. Since new product development is four to six months in duration, we have to beat up on engineering to make sure that our marketing schedules are met. Why can't engineering understand the importance of these trade shows?"

"Because of the time required to develop new products [4-6 months], we sometimes have to rush into projects without having a good definition of what is required. When a customer at a trade show gives us an idea for a new product, we rush to get the project underway for introduction at the next trade show. We then go back to the customer and ask for more clarification and/or specifications. Sometimes we must work with the customer for months to get the information we need. I know that this is a problem for engineering, but it cannot be helped."

The consultant wrestled with the comments but was still somewhat perplexed. "Why doesn't engineering understand marketing's problems?'pondered the consultant. In a follow-up interview with an engineering manager, the following comment was made:

"We are currently working on 375 different projects in engineering, and that includes those which marketing requested. Why can't marketing understand our problems?"

QUESTIONS
1. What is the critical issue?
2. What can be done about it?
3. Can excellence in project management still be achieved and, if so, how? What steps would you recommend?
4. Given the current noncooperative culture, how long will it take to achieve a good cooperative project management culture, and even excellence?
5. What obstacles exist in getting marketing and engineering to agree to a singular methodology for project management?
6. What might happen if benchmarking studies indicate that either marketing or engineering are at fault?
7. Should a singular methodology for project management have a process for the prioritization of projects or should some committee external to the methodology accomplish this?

Ferris HealthCare Inc.

2010-02-14T12:56:00.002-06:00

In July of 1999, senior management at Fems recognized that its future growth could very well be determined by how quickly and how well it implemented project management. For the past several years, line managers had been functioning as project managers while still managing their line groups. The projects came out with the short end of the stick, most often late and over budget, because managers focused on line activities rather than project work. Everyone recognized that project management needed to be an established career path position and that some structured process had to be implemented for project management.

A consultant was brought into Ferris to provide initial project management training for 50 out of the 300 employees targeted for eventual project management training. Several of the employees thus trained were then placed on a committee with senior management to design a project management stage-gate model for Fems.

After two months of meetings, the committee identified the need for three different stage-gate models: one for information systems, one for new products1 services provided, and one for bringing on board new corporate clients. There were several similarities among the three models. However, personal interests dictated the need for three methodologies, all based upon rigid policies and procedures.

After a year of using three models, the company recognized it had a problem deciding how to assign the right project manager to the right project. Project managers had to be familiar with all three methodologies. The alternative, considered impractical, was to assign only those project managers familiar with that specific methodology.

After six months of meetings, the company consolidated the three methodologies into a single methodology, focusing more upon guidelines than on policies and procedures. The entire organization appeared to support the new singular methodology. A consultant was brought in to conduct the first three days of a four-day training program for employees not yet trained in project management.

The fourth day was taught by internal personnel with a focus on how to use the new methodology. The success to failure ratio on projects increased dramatically.

QUESTIONS
1. Why was it so difficult to develop a singular methodology from the start?
2. Why were all three initial methodologies based on policies and procedures?
3. Why do you believe the organization later was willing to accept a singular methodology?
4. Why was the singular methodology based on guidelines rather than policies and procedures?
5. Did it make sense to have the fourth day of the training program devoted to the methodology and immediately attached to the end of the three-day program?
6. Why was the consultant not allowed to teach the methodology?

Lakes Automotive

2010-02-14T12:50:00.001-06:00

Lakes Automotive is a Detroit-based tier-one supplier to the auto industry. Between 1995 and 1999, Lakes Automotive installed a project management methodology based on nine life-cycle phases. All 60,000 employees worldwide accepted the methodology and used it. Management was pleased with the results. Also, Lakes Automotive's customer base was pleased with the methodology and provided Lakes Automotive with quality award recognition that everyone believed was attributed to how well the project management methodology was executed.

In February 2000, Lakes Automotive decided to offer additional products to its customers. Lakes Automotive bought out another tier-one supplier, Pelex Automotive Products (PAP). PAP also had a good project management reputation and also provided quality products. Many of its products were similar to those provided by Lakes Automotive.

Because the employees from both companies would be working together closely, a singular project management methodology would be required that would be acceptable to both companies. PAP had a good methodology based on five life-cycle phases. Both methodologies had advantages and disadvantages, and both were well liked by their customers.

QUESTIONS
1. How do companies combine methodologies?
2. How do you get employees to change work habits that have proven to be successful?
3. What influence should a customer have in redesigning a methodology that has proven to be successful?
4. What if the customers want the existing methodologies left intact?
5. What if the customers are unhappy with the new combined methodology?

Step 7: Evaluate the Effectiveness of Gap-Closing Strategies and Revise Strategies as Needed

2010-01-14T08:21:00.001-06:00

The final step in the Seven-Step Workforce Planning Model involves evaluation and revision. Monitoring implementation and evaluating results provide the early warning system that organizations need to ensure that their workforce planning assumptions are valid, their strategies are being implemented as planned, and, most importantly, the strategies are having the desired impact. Monitoring occurs at two levels. First, agencies must monitor plan implementation. In other words, “Are the strategies being implemented as intended?” Second, agencies must monitor impact by asking, “What results, intended or unintended, have been achieved as a result of the strategies?”

Assessing the degree of strategy implementation often requires the use of performance data. For example, if an agency is in a tight labor market for scientists and has identified delayed approval to hire as a recruitment barrier, it may implement strategies to reduce the approval time or to provisionally hire people who are likely to pass the screening. Tracking the use of provisional hiring is one way to assess the degree to which the strategy is being implemented.

If strategy implementation is on track, the agency can move to evaluate the impact that the strategies are having on reducing workforce gaps. If strategy implementation is off track, agency leaders need to assess the reasons why. Some of the possible reasons why strategies are not being implemented include employee resistance, lack of awareness of the strategy, lack of knowledge about how to implement the strategy, insufficient resources, or intervening external events. Once the reasons are identified, top leadership support and attention may be needed to remove the barriers to implementation.

Assessing impact requires performance data that many public organizations lack. While the federal government, through OPM, has an excellent system for collecting and reporting workforce data, the same cannot be said for most state and local governments. Research conducted by the Government Performance Project identifies the lack of timely and accurate workforce data as a barrier to workforce planning efforts in states across the country. States such as Georgia and Michigan that have excelled in workforce planning owe their success in part to excellent integrated HR IT systems.

Evaluation of workforce planning looks to assess whether or not the strategies implemented have made a difference in closing the gap or addressing the workforce problem identified in the environmental scan, to consider whether there have been unintended consequences of the strategies, and to identify changes in the internal and external environment that mitigate the need to implement specific strategies. Common evaluation indicators include workforce demographics, demographics in mission critical occupations or positions, measures of workforce gaps, retention rates, and employee climate assessments.

Good workforce planning is about process as well as outcome. From the process perspective, the agency must evaluate if it has good systems in place to identify emerging trends in workforce supply or demand. Does the agency have a process in place for scanning the internal and external environments to identify technology shifts or best practices that can help the agency staff most effectively? Are procedures in place to regularly review work processes to identify methods for reducing costs and/or improving efficiency?

Because the external and internal environments are constantly changing, workforce plans must remain dynamic as well. It is important to engage in a regular process of assessing the environment, reviewing the workforce implications of changes in strategic direction, identifying future workforce needs, identifying gaps, and re-evaluating the utility of workforce strategies.

Step 6: Implement Gap-Closing Strategies

2010-01-14T08:16:00.000-06:00

With critical thought and reasonable data, workforce planning teams are able to develop sound strategies to address the most significant workforce challenges. However, implementing gap-closing strategies requires much more time, attention, and resources. Assuming an agency has developed sound strategies, leadership, communication, and supporting resources are critical to successful implementation.

As with any change initiative, agency leadership support is critical to implement the more novel initiatives to address workforce supply gaps. Leaders are in a unique position to challenge their employees to test the bounds of the flexibilities allowed under the current personnel system, identify creative solutions to workforce challenges, and provide resources necessary to support implementation.

Communication is another critical component of change initiatives. Leaders and workforce planning team members must communicate with managers and employees about the goals, scope, and timeframe of the workforce planning effort. Once strategies are ready for implementation, they must be communicated broadly as well. Managers and supervisors need to understand their roles and responsibilities in workforce planning, and employees need to understand their rights.

Key stakeholders should be consulted during the design and implementation of workforce planning strategies. For example, union and employee representatives can provide insight into the views of employees or potential employees that can be invaluable during the strategy development and implementation steps.

Strong IT systems and appropriate levels of staff and financial resources facilitate successful implementation of gap-closing strategies. States that are the most successful at workforce planning have sound, integrated IT systems for human resources with workforce data readily available for managers and supervisors who are involved in day-to-day workforce planning. Centralized support and guidance were also provided in these states. This is also true in the federal government, which through OPM has invested significant resources in developing, implementing, and supporting workforce planning across all agencies.

A lack of sufficient resources—both human and financial—has been a barrier to successful and timely implementation of gap-closing strategies. This barrier seems most significant in agencies where workforce planning is not mandated or centrally supported. However, it has also been a problem in federal agencies where staff, funding, and IT resources have been appropriated. The implication for HR managers is that they will need to be judicious when selecting which strategies to implement and then provide resources to support implementation.

Step 5: Identify Gaps and Develop Gap-Closing Strategies

2010-01-14T08:13:00.001-06:00

At its most fundamental level, gap analysis identifies the deficit or surplus between the projected workforce supply and the projected workforce demand. How an organization will reduce the surplus and overcome deficiencies provides the substance of the strategic workforce plan.

Gap Identification
From the comparison of workforce supply and demand, organizations will be able to identify gaps—those particular areas where they will need more employees, need different skill sets, or need to redesign positions and work processes. Gap analysis can be as simple as assessing the number of key leadership and technical positions that will need to be filled in the next five years. More commonly, gap analysis focuses on identifying critical professions where the organization expects to have a shortfall and new skills that will be needed that are not easily available in the organization or in the local labor market. Most of the emphasis in gap analysis is on identifying and correcting expected deficits. Much less attention is paid to identifying employee surpluses.

As organizations take advantage of improvements in technology, outsource support functions, and change the way they do business, there will be people whose skills are no longer needed.

Development of Gap-Closing Strategies
How the gap between supply and demand will be closed is at the heart of workforce planning strategy development. State, federal, and local government agencies employ a variety of techniques to close the gap. Gap-closing strategies fall into five groups:

Retaining good employees with needed skills
Recruiting good employees with needed skills
Developing employees
Retaining organizational knowledge and building employee skills
Reducing overstaffing

Some of the more common gap-closing strategies used by federal and local agencies are summarized below.

Strategies for Retaining Good Employees with Needed Skills
Public sector agencies are often challenged to keep highly skilled and productive employees. The two primary avenues by which organizations lose employees are retirement and voluntary separation, which usually means the employee found a better job.

Public sector organizations may be unwittingly hastening the retirement of their employees by offering them benefit-rich retirement packages at relatively young ages that enable them to collect their pensions and receive healthcare benefits while they are simultaneously working for another employer. It is not unheard of for employees in the federal sector to retire on Friday and return as a contract employee to a similar job in the same organization the following Monday. Some government organizations limit this practice by having policies that prevent employees from returning as contract workers.

Another tool for blunting the potential impact of mass retirements is phased retirement. Some employees would prefer to work part-time and/or cut back their level of responsibility instead of retiring completely. This option is often precluded because agencies do not consider it a viable employment option and sometimes the rules that determine employees’ retirement benefits penalize employees for working on a part-time basis. Allowing valuable employees a more gradual entry into retirement has the potential to be a win-win strategy.

Retaining quality non-retirement-age employees is frequently a particular challenge for government agencies, which often pay less than their private sector counterparts and in some instances pay less than other government entities in the same region.

Addressing the work/life balance seems to be a key factor in employee retention. Some of the more successful strategies employed by federal agencies include alternate work schedules, employee assistance programs, child care centers and assistance, subsidized transportation, telecommuting, and retention bonuses. Other strategies include job enrichment, job sharing, tuition remission, differential pay for advanced education or certification, and regular competitive salary reviews.

Strategies for Recruiting Employees with Needed Skills
Recruitment poses particular challenges for government, especially when the agency needs to attract specialized or technical skills, or when the supply of needed skills is limited in the hiring area. Some of the more effective recruitment strategies include special hiring bonuses, accelerated or special hiring authority, relocation bonuses, and outstanding scholar programs allowing high-quality students to be hired quickly. Employee referral bonuses and differential pay scales have also been used effectively.

For some agencies, the recruitment problem begins with the pipeline of employees. In some cases, there are not enough qualified applicants in their hiring market. In these instances, government agencies have been known to team up with local high schools or colleges to develop training or degree-granting programs. Some agencies recruit students while they are still in school and pay for them to attend college based on their promise to stay with the agency for a fixed period of time after graduation.

Another issue with worker availability occurs when agencies have the talent they need, but that talent is assigned elsewhere in the organization. Relocation authority is important, especially for assignments that are less than desirable. Management needs the authority to shift managers and employees around as needed to best assist the organization in the achievement of its mission. However, reassignment authority should be used judiciously since its abuse may increase the voluntary turnover rate in the organization.

With lean staffing patterns in many agencies, significant spikes in workload can be a major drain on the workforce. Some of the strategies for dealing with workload peaks include hiring supplemental staff via private companies or hiring retirees as temporary staff. Chronic staffing shortages need to be addressed in a more permanent manner. When hiring additional agency staff is not viable, agencies can look at outsourcing their non-mission-critical functions and positions to free up positions to hire people in mission-critical areas. Another common solution is to hire supplemental staff through a third party. This is often a good solution for functions like IT, where the skill sets are constantly changing and the agency has difficulty retaining employees with the right skills.

Strategies for Developing Employees
Employee development is a continuous process, and strategies relating to employee development should be in sync with the organization’s strategic priorities. A basic employee development strategy is the continual reassessment of the training curriculum to ensure it supports the organization’s needs. Cross training has been a popular strategy as a tool for ensuring adequate coverage of a particular function. However, strategies such as job rotation, temporary assignments, and shadowing have the added potential to increase the employees’ skills and understanding of the organization while facilitating improved communication across the organization and boosting the organization’s creativity in problem solving.

Strategies for Retaining Organizational Knowledge and Building Employee Skills
Transferring accumulated knowledge and wisdom from senior employees to their replacements is a significant challenge. Phased retirement is one strategy for knowledge transfer. Another option is the use of personal services contracts or temporary employment contracts to hire retirees back on a limited basis to work on special projects or participate in knowledge documentation projects. Parallel appointments are another good tool for knowledge management and knowledge transfer. This is especially true for highly complex or specialized jobs.

Succession planning programs are useful for building organizational knowledge while ensuring that a strong pool of potential successors will be available to replace retirees. Common activities included in succession planning programs are job shadowing, job rotations, mentoring, and formal professional development.

While it may seem obvious, documenting processes, procedures, and best practices is a good basic knowledge management strategy. The use of communities of practice is a less well-known strategy. In communities of practice, people meet regularly with members of their professional peer group to discuss best practices, share information, and serve as resource people for other members of the community. Communities of practice can be helpful in building and maintaining a base of topic- or function-specific knowledge within an organization.

Skill development is an important component of workforce planning. Since the skills needed in the workforce are always changing, employee development will always be an important component of strategic human capital management. Employee development strategies can include training programs, tuition reimbursement, job rotation, and mentorships. These activities serve to professionalize the organization, improve work quality and consistency, and prepare people to advance in the organization.

Strategies to Reduce Overstaffing
In every workforce planning effort, there will come a time when it is clear that some employees have skills that do not match the agency’s needs. In the private sector, these employees would typically be laid off or fired. In the public sector, this strategy is often not viable. Fortunately, there are a number of viable strategies for dealing with skill mismatches including retraining or reassignment. In situations where a function is outsourced, the outsourcing contract can require the vendor to interview those agency personnel who perform the function in-house. Other options include offering voluntary separation incentives, also known as buyouts and voluntary early retirements.

Finally, when layoffs are unavoidable, offering retraining and/or outplacement services may be a viable option to help the employees while maintaining morale in the organization.

Step 4: Assess Future Workforce Needs and Project Future Workforce Supply

2010-01-12T21:40:00.001-06:00

From the environmental scan, the workforce planning team will have a good idea of the core functions in which the organization must excel to achieve its mission. The next step in the process is to project the future workforce needs. Workforce need is often referred to as workforce demand. A parallel step is to project the composition and characteristics of the workforce the organization will have in the future if trends remain unchanged. This projection is often referred to as workforce supply. Workforce supply and demand models can be computed with a general assessment of trends or with more sophisticated mathematical models. Organizations without access to workforce databases should not skip this step. Instead, they should work with the information that is available and develop a long-term plan to collect and analyze workforce data on a regular basis.

Assessment of Future Workforce Needs
In the public sector, projecting future workforce needs is a relatively new phenomenon. The assessment requires leaders to think critically about how the organization will do business in the future. Assessments can be complex, data-driven models for organizations with sound workforce data or more qualitative estimates developed by the organization’s leadership team for organizations that lack strong workforce data. Regardless of the technique used, one maxim applies: Bad assumptions create bad models. Therefore, it is important to vet the model’s assumptions thoroughly.

The workforce demand forecast is an estimate of the number and mix of employees that an organization will need in the future. Particular attention should be paid to identifying and projecting mission-critical occupations. The forecast has two components: first, the estimated workload and related staffing requirements; and, second, the likely competencies and skill sets needed. Guidance for both is provided by the strategic plan.

Estimating workload is the heart of demand forecasts. Like the workforce supply projections, workload projections can be based on qualitative models, quantitative models, or a mix of the two. The key outputs of workload projection are the estimate of the type and volume of tasks to be performed and how many people will be needed to perform the tasks. The projection of the type of work and, to some extent, the volume of work is grounded in the direction provided by the strategic plan. The environmental scan provides input into the workload analysis as well. For example, projected increases or decreases in the population served will have a corresponding impact on the volume of work. Advances in technology may alter how tasks will be performed, with a corresponding impact on the number of employees needed and the skills needed.

Staffing requirements can be estimated through quantitative and qualitative techniques as well. High-volume tasks that are mostly standardized are well suited to more quantitative analysis. Specialized, unique, or low-frequency tasks are more suited to qualitative techniques such as expert panel reviews or Delphi analyses.

The Delphi technique is a tool originally developed by the Rand Corporation to gather the collective wisdom of a group of experts in situations where conventional data analysis techniques were too costly or where analysts needed to employ so many assumptions to make the techniques work that the validity of the final model is suspect. Under the Delphi technique, a panel of experts is convened and sent a survey to complete on the topic at hand. The results are tabulated and shared with the individuals. The experts are then asked to complete a new survey on the same topic that has been modified to include the results of the first survey. There are usually several rounds of surveys. While participants get to respond to the collective findings in the follow-up surveys, they do not engage in direct discussion and they are often not known to one another.

Estimating the skills and competencies that will be needed in the future is somewhat more challenging than estimating the future volume of work. How key competencies required to complete core functions are defined impacts the number of employees and has a significant impact on staffing projections. Employees with higher-level skills are able to work more efficiently than those with lesser skills. Workforce planning provides the opportunity for the organization to assess the competencies required to make each position function optimally. The focus should be on the ideal competencies that will be needed in the future and not just the skills and competencies of the incumbent in a given position. By thinking strategically about the skills that will be needed in the future, organizations can make the most of each position instead of designing positions and workflow to suit the skills and background of the incumbent.Industry trends identified in the environmental scan can provide useful insight when developing the competency requirements.

In summary, workload analyses tell managers how much work will need to be done, staffing analyses project how many people will be needed, and competency assessments tell managers what types of skills the workforce will need to develop to be successful.

Projection of Workforce Supply (Number of Employees by Skill Group)
Workforce supply is, at its most basic level, the current workforce plus new hires less projected separations at some specific date in the future. For some organizations, projected workforce supply will be the result of a sophisticated mathematical model. For others, it will be an educated guess based upon data collected in the environmental scan. For most, it will be somewhere in between.

No matter the level of sophistication, all models need to consider the same elements when projecting the future workforce composition: the inventory of the current workforce; the rate at which employees in specific occupations and at various leadership levels will leave the organization; what types of skills and abilities the organization will be able to attract; how the permanent workforce can be supplemented; and how the skill set of those who remain will or can change.

When computing how many people to add to the current workforce inventory, workforce planners must forecast who they will be able to recruit and what skills they will bring, how many supplemental direct-hire employees will be available to the organization and what skills they bring, and what skills they will be able to acquire though the use of contract employees.

The forecast of new hires (the recruitment forecast) is arguably the most difficult component of the supply forecast. Whereas current and historical data provide a foundation for the current workforce inventory and the separation forecast, the recruitment forecast is influenced by many variables outside the control of the organization. From the environmental scan, the workforce planning team should be able get a good idea of the general availability of the skill sets that will be needed. The most challenging part of the forecast is projecting the organization’s ability to be a successful recruiter of the talent it needs. Recruitment success depends upon economic conditions, the local market for specific skills, and the competition for labor. While it may be hard to forecast precisely whom the organization will be able to hire, it should be relatively easy to identify positions that will be harder-thanaverage to fill. Another difficult component of the recruitment forecast is the unknown needed skill sets. No matter how well the organization plans, there is always a possibility that people will be needed to fill jobs that currently do not exist. The key in recruitment forecasting is to remember that it is a forecast—an imperfect projection of the future supply.

Projecting the availability of contract employees is another important component of the supply forecast. Because the companies for whom these employees work usually compete in the same labor market as the public sector organization, they can be subject to the same labor shortages and skill deficits as the public organization.

Once the current workforce inventory and recruitment forecast are complete, the next step is to forecast how many people will stay with the organization and why. Attrition stems from both voluntary separation (retirement, transfer, or resignation) and involuntary separation (termination for cause, layoff, long-term medical leave, death, or medical retirement).

Once again, for strategy development purposes, it is important to assess attrition at the micro and macro levels. In the case of voluntary separation, it is essential to collect information on why employees are leaving, where they are going, and what types of jobs they are taking. High turnover in a specific department or job classification may be a signal that salaries in the classification are too low, workload is too high relative to the salary, or working conditions are sub par. Micro-level knowledge is useful for developing targeted workforce planning strategies. The current workforce inventory must be compared to the assessment of the future workforce needs to identify the human capital gaps that must be filled to achieve organizational success.