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Grey hair, traffic lights and trust. How they all combine to create profit.

My hair is a little greyer than I would like, but on the upside nowadays people seem to offer me seats on crowded trains! My grey hairs didn’t just appear one day, I have earned them the hard way, through the delivery of hundreds of projects during my career. Most of the projects worked out well, and one or two not so well. But just like with my grey hair, there is always an upside. Over those years and through those failures, I have learnt how to manage a project to keep it on the rails.

In my previous role I ran a team of over 60 people who could be delivering around 20 projects at any one time. These projects ranged in size and complexity however there were a number of elements that stayed consistent across them all. In every successful project there was a strong partnership between the two key leaders on the delivery team, these were the Technical Consultant (TC) and the Project Manager (PM). Between these two people they are able to be completely responsible for the schedule, the budget and most importantly the quality of the project. If either of these people are weak then the project is most likely to be weak in one of these areas.

It took me around three years of tinkering and working with some excellent people to finally get to a point were we felt we had nailed this vital project leadership role. We had a range of issues that had to be resolved to get us to that point. When I first started in that business the projects were lead by the PM only. We had a lot of quality issues and even mentioning the word budget in proximity of a project was a bit of a joke. On the upside we did seem to be able to deliver on-time to our clients. While there were many issues to rectify, the first priority was to improve the quality of our projects. The intention behind tackling this element first was to give us pride in our work, as well as also improving our client satisfaction and reducing our post-project support costs. The approach was to empower the TC’s, making them a joint leader along with the PM on a project. It took about 12 months of pushing our TC’s pretty hard to start to see real improvements in deliverables, increased employee satisfaction and less post-deployment support issues.

Once we had our quality under control we set our focus on budget management. To be completely honest, this one took a lot longer than I ever expected to turn around. The initially was to set the budget as the sole responsibility of the PM. When a new Production Manager (a senior PM who managed the PM team and sat on our executive team) joined the team and brought new ideas and approaches to the problem, we started to see some real improvement in budget management. He introduced more governance and structure that provided the support, mentoring and most importantly built trust between the PM’s and management. Using this approach the Production Manager was able to have the PM’s actively manage their projects and to identify risks and issues early making it easier to keep the budget and schedule on track or to at least minimise any overruns.

The other key change in improving budget management was the development of the partnership between the TC and the PM. The PM is heavily reliant on the TC to ensure the selected technical approach is going to be able to be delivered within the budget. Developing this partnership built trust between the pair and allowed an easier and more frequent flow of communication throughout the project. Over time TC’s began to inform the PM earlier when problems arose. This enabled the PM to communicate effectively with the client and if required additional budget could be agreed upfront. The team worked hard over a long period to develop these partnerships and they continue to reap the rewards for this investment across the quality, budget and schedule of all projects they deliver.

With so many projects on the go at any one point, it's impossible for a senior manager to be involved in the day-to-day detail of all of them. The key is to maintain a high level of governance across all projects through a weekly project health report. As part of my standard weekly health report layout, I like to see a summary of the budget and the estimated budget to completion, key issues and any payment milestones completed in the last week for each project. It’s nice and simple and looks something like this one:

Each project is given a traffic light rating of red (over budget or schedule), amber (at risk), or green (on track). My approach to managing a portfolio of projects is fairly standard across the industry. I have been involved in these weekly traffic light meetings across many companies and in many different roles. The shocking truth about the majority of these meetings is that they are a complete waste of time. From my experience, the typical approach is to have a report submitted by the PM before the meeting, the executive team take a cursory glance during the meeting, potentially ask one or two questions, shrug their shoulders and move onto the next agenda item. I am horrified to admit that I have been a part of many useless meetings like that, but I refuse to let this happen any more.

In my previous role, when we first introduced the weekly health report, we found that the projects would be on track right up until the final week or two of the project when the health report would dramatically change, showing a massive budget blow out. This is a common problem I have seen across many projects both as a vendor and as a client. From what I have observed, it most likely means one or more of these things are happening:

  • The TC and the PM are not accurately recording/tracking the status of tasks in progress.

  • The TC is not communicating with the PM when assumptions are violated about the approach or issues are encountered.

  • The project was estimated inaccurately and this was not re-baselined at the start of the project by the TC and PM.

  • The PM has not been tracking the budget on a week-to-week basis.

  • Your team are too scared to tell you the truth.

The most effective weekly review involve the Production Manager, Development Manager and the Senior Manager/Executive reviewing each project summary. Most of the time should be spent focusing on the amber projects, as these are the ones that you can have the largest impact to get the project back on track or to minimise the damage. Talk through what is going wrong and what the senior team can do to mitigate these issues and risks in detail. The goal is to bring the amber projects back to green or at least prevent them from going into the red. You should also review the project payment milestones weekly as it helps keep your eye on the cash flow in the business at the same time. Think of the weekly review as 52 opportunities a year to get a project back on track and maximise your profitability.

Project governance isn’t the sexiest part of any job, but it certainly is the biggest single factor that affects the profitability of your operation. It takes time to get the right system in place and even longer to convince a large team of why it is important . In my experience people want to do the right thing, it's about providing a framework where the team can succeed.

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