Project Managementfor Organizational

Excellence Manu K. Vora, Ph.D., MBA, ASQ CQE & ASQ Fellow

ASQ Past Vice President Chairman and President, Business Excellence, Inc.Tel: 630-548-5531, E-mail: manuvora@b-einc.com

Presentation at ASQ Section 1213, Glenwood, IL 10/16/2012

Outline Define Project, Project Goals, and Project Management Project Management Journey (The WOW Project):

Find & Create, Selling, Execute, Hand Off Project Management Journey:

Create a Project Charter (Define & Organize) Develop the Project Plan (Planning) Work as a Team (Planning and Execution) Do the Project (Execution) Close Out the Project (Close Out)

Best Practices: Project Risk Management Project Budget Project Communication

Best Practice Articles (HBR, MIT SMR, etc.) Managing a Complex Project – 2010 Chilean Mining Accident

Q & A

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Project A project is a temporary, organized effort that creates a

unique product, service, or plan. Characteristics:

Single definable purpose (performance, cost, & schedule requirements)

Unique (one-time activity) Temporary activity (limited time frame) Cut across organizational lines (multiple professions/

organizations) Unfamiliarity – uncertainty and risks Something at stake when doing a project Process of working to achieve a goal – distinct phases of

project life cycle

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Project Goals: Performance, Cost, and Schedule

Software Project Failure Statistics(The Standish CHAOS Report , UK – 1990, 2000, and 2009

Seer Galorath, June 7, 2008

Year 1994 2000 2009

Succeeded 16% 28% 32%

Failed 31% 23% 24%

Challenged 53% 49% 44%

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Cost of Software Project Failure(Worldwide cost of IT Failures: $6.2 Trillion, M. Krigsman, 12-22-2009)

Region GDP (US Billions) Annual Cost of IT Failure (US Billions)

World 69,800.00 6,180.48

USA 13,840.00 1,225.47

New Zealand 44.00 3.90

UK 2,260.00 200.11

Texas 1,250.00 110.68

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Project Management Project Management Definition: The role of the Project Management is to integrate

resources and tasks to achieve organizational goals Advantages of Project Management:

Avoids excessive work loads for few individuals Avoids cost overruns Builds the right skills or expertise for the project Avoids strained relationships among team members Prevents scope creep Avoids duplication of work Better use of limited resources Better visibility to manage deadlines

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Project Management Evolution of Project Management:

World War I (1914) – US Army developed Gantt Chart, a production scheduling and monitoring tool

World War II (1944) – Process flow diagram 1957 – Critical Path Method (CPM)

– DuPont Corporation 1958 – Program Evaluation and Review Technique (PERT)

– US Navy 1967 – Graphical Evaluation and Review Technique (GERT)

– computer simulation 1960s – Cost Schedule Control Systems (CSCS) –

US Federal Government (Defense & NASA) 1970s – Earned Value Management for planning & tracking (EVM)

US DoD

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Find &Create

Selling

Execute

HandingOff

The WOW Project(Tom Peters, Fast Company.com, December 19, 2007)

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The WOW Project Finding & Creating your WOW Project:

Does it matter? (personal passion) See projects as a first-rate opportunity to add value Everything is a golden learning opportunity Use superfast approximations to refine your WOW project

(3M – Make a little, try a little, sell a little)

Selling your WOW Project: Be smart, sell it hard from beginning to end Develop a 2 minutes elevator spiel Community organizing (Generate grass-roots support ) Build supporting community of endorsers

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The WOW Project Executing your WOW Project:

Execute in a series of rapid prototypes (fail often to succeed sooner)

Think, act, live, sleep, eat, and breath your time line Keep it fun Don’t talk it to death Don’t stop selling Don’t lose the emotion

Handing Off your WOW Project: Turnover to someone else to run on a day-to-day basis Celebrate your accomplishments Size up new opportunity Self evaluate (worked, didn’t work, lessons learned, etc.) Open first chapter of your next project

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WBS

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Gantt Chart

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Project Management Best Practices

Project Risk Management Project Budget Project Communication

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Risk Management Risks are an inherent part of project management

Risks relate to occurrence of events that have undesirable consequences such as: Delays Increased costs Inability to meet technical specifications

Good risk management involves: Identifying as many risks as possible Analyzing and assessing those risks Working to minimize the probability of their occurrence Establishing contingency plans and budgets for dealing with

any that do occur

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Enterprise-wide

Portfolio/Program

Project

Process

Risk Management Levels

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RiskIdentification

RiskAssessment

ResponsePlanning

StrategySelection

Enterprise Risk Management

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External

Internal

Process

Technology

Levels of Risk Taxonomy

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StrategicRisk

OrganizationalRisk

ComplianceRisk

OperationalRisk

Risk Management

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Risk-Level Matrix:• For each risk, the Consequences, Likelihood of

Occurrence, and Levels are estimated. • Consequences (I-1, M-2, Mo-3, Ma-4, C-5):

Insignificant; Minor; Moderate; Major; Catastrophic• Likelihood of Occurrence (A-5, L-4, P-3, U-2, R-1):

Almost certain; Likely; Possible; Unlikely; Rare• Levels (E-4, H-3, M-2, L-1):

E – Extreme Risk – Immediate action; senior management involved H – High Risk – Management responsibility should be specified M – Moderate Risk – Manage by specific monitoring or responses L – Low Risk – Manage by routine process

• Risk Identification Number (RIN) = C x LO x L

Risk Management Tools

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A budget is the translation of plans into measurable expenditures and anticipated returns over a certain period of time.

Budget is the financial blueprint or action plan for the project.

A good budget-and adherence to it-gives people the resources they need to complete their project tasks.

What is it going to take-in terms of resources-to successfully complete this project?

To determine the project’s costs, break it down into the key cost categories you anticipate.

Developing the Budget

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Personnel – full-time and temporary workers (largest part of the cost).

Travel – from location-to-location for project work. Budget for meals and lodging.

Training – Will training be required? If yes – travel needed? Outside trainer add fees and expenses.

Supplies – Any unusual equipment, etc. – must anticipate. Space – People may be relocated to rented space,

estimate room and money. Research and Professional Service – Buy studies or hire

market research firm? Need a consultant or legal advice? The budget must reflect these costs.

Developing the Budget –Categories that Generate Costs

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Budget Control Budget control is an important aspect of

project managementCosts can exceed budget

Overly optimistic time estimates Unforeseen events

Unless corrective action is taken, serious cost overruns can occur

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(K$) 1 2 3 4 TotalAllocation

Work Planned

25 25 25 25 100

Actual Costs 22 20 25 25 92

Earned Value(Value of completed work)

20 20 20 20 80

Primary Measures of Earned Value Management – US DoD

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Sender ReceiverMessage

Acknowledgment

Two-Way Communication

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Purpose

Message

Media

Effectiveness

Communication

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Feedback

Relevant

Timely

Useful

Communication - Effectiveness

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The Project Life Cycle

Is This Your Project Pipeline?

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The Aggregate Project PlanSteven C. Wheelright & Kim B. Clark – HBR March-April, 1992, September 2003

Incremental

Foundation

New generation

Basic research

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Chilean Mining Accident An accident happened in the afternoon of Thursday,

August 5, 2010 at the troubled 121-year-old San Jose copper-gold mine.

Chile’s minister of mining, Laurence Golborne received a short but chilling text message at 11 pm on Aug. 5, 2010 which read “Mine cave-in Copiapo; 33 victims.”

69 days later (October 13, 2010), standing by the mine, Golborne – along with an estimated 1 billion television viewers – watched as the cave-in victims emerged unscathed.

The search and rescue operations carried out in Chile offer great lessons in change management, crisis leadership, project management, and people management.

Source: “How to Lead during a Crisis: Lessons from the Rescue of the Chilean Miners”, Useem et.al., MIT SMR, Fall 2011.

Chile’s Mining Accident Time Line of Events 5 August 2010 – Rock-fall at the San José mine in the Atacama Desert in northern Chile

leaves 33 gold and copper miners trapped 2,300 feet below ground. 7 August 2010 – Second collapse hampers rescue efforts and blocks access to lower

parts of the mine. Rescuers begin drilling boreholes to send down listening devices. 22 August 2010 – 17 days after the first collapse, a note is found attached to one of the

drill bits, saying: "33 of us have found a shelter and we are fine". The miners were in a shelter having lunch when the first collapse occurred, and had survived on rations. Food, medical supplies, clothes and bedding began to be sent down the borehole.

27 August 2010 – The miners send first video greetings to the surface. 30 August 2010 – First attempt to drill a hole to rescue the men, Plan A, begins. 5 September 2010 – Plan B drilling begins. 18 September 2010 – Miners celebrate Chilean Bicentennial holiday underground. 19 September 2010 – Plan C drilling begins. 24 September 2010 – Miners had now been trapped underground for 50 days, longer

than anyone else in history. 9 October 2010 – Plan B drill breaks through to the miners' workshop. 11 October 2010 – "Fénix 2" rescue capsule is tested to ensure that it can pass up and

down the newly completed shaft. 12 October 2010 – Rescue begins at 23:20. 13 October 2010 – At 21:56, the last of the 33 miners is brought to the surface.

Source: 2010 Copiapo Mining Accident, Wikipedia http://en.wikipedia.org/wiki/2010_Copiap%C3%B3_mining_accident

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President Piñera holds the message sent by the miners along side Mining Minister Golborne (red jacket, blue shirt)

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On Aug. 22 (day 17) received a note(“We are well in the shelter, the 33”)

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2010 Copiapó Mining Rescue Drilling Plans

1. Plan A (Aug. 30), Strata 950 (85%) Reached 598 out of 702 meters (South African company)

2. Plan B, (Sep. 5) Schramm T130 (100%) Reached 624 meters on Oct. 9, 2010 (Day 65)

to reach the trapped miners (Chilean-American company)

3. Plan C, (Sep. 19) RIG-421(62%) Reached 372 of 597 meters (Canadian company)

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Diagram of the rescue capsule "Fenix" class and the miner equipment used in the Copiapó accident of 2010 rescue.

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Luis Urzúa, the leader of the trapped miners and the last of the 33 to be lifted to freedom, celebrates with President Piñera at the San Jose Mine,during "Operación San Lorenzo”

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The iconic image of the six rescuers displaying the famous "Mision Cumplida CHILE" (Mission Complete Chile) sign in San Jose Mine near Copiapo, Chile

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Change Management – Chile’s Mine Collapse

Project ManagementManage Technical

Aspects

Leadership Set Direction

PeopleImplement

Change

Lessons in Leadership Three Leaders emerged during the crisis:

Laurence Golborne - Chile’s Minister of Mining Key leader to direct the search and rescue mission Took overall responsibility for resolution of the crisis Created and led a team to solve specific issues in the crisis Chose among the options for ending the crisis

Sebastian Piñera– Chile’s President Insisted on searching the miners at all cost Provided consistent support to Golborne Closely supervised the rescue efforts

Luis Urzúa (54 year old) – Mine’s Shift Foreman• Just after the incident, he led 3 men to scout the tunnel. After assessing

the situation, he made detailed maps of the area to aid the rescue effort.• He gathered the men in a secure "refuge“, then organized them and their

meager resources to cope with a long-term survival situation (first 17 days).• Helped form a microsociety to ration food, preserve morale and

prepare for rescue.• He directed the underground aspects of the rescue operation.

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Lessons in Talent Management Rapidly Building a Top Team of Inner Circle:

Mining expert Andre Sougarret took charge of technical issues Safety Director Rene Aguilar worked with miners’ relatives and

managed many subcontractors Cabinet Chief for the Ministry of Interior Christian Barra managed

the rescue team’s relations with the national government.

A Common Mission – To Rescue the Men! Open Collaboration improved decision making process

Manage team’s decision process but not outcome

Identified critical stakeholders – miners, drillers, relatives, subcontractors, and government

Policy of full disclosures – share drillings’ successes and failures – complete transparency (There were too many people, we could not hide anything)

Create alternative paths to resolving the crisis (3 strategies to extract the trapped miners)

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How Project Leaders Can Overcome Crisis of Silence(Grenny et.al., MIT Sloan MR, Summer 2007)

Are we planning around facts?

Is the Project Sponsor

providing support?

Are we faithful to the process?

Are we honestly

assessing progress & risks ?

Are team members pulling their weight ?

Lessons in Change Management(John Kotter’s 8 Stages of CM)

There was a sense of urgency to find and rescue miners Leadership at all levels (trapped miners):

Luis Urzúa (54) - overall leader; Florencio Avalos (31) - second in command; Yonni Barrios (50) - Medic (Dr. House); Mario Gomez (63) - religious leader; Jose Henriquez (54) - preacher & pastor; Mario Sepulveda (40) – video journals; Ariel Ticona (29) - communications specialist

For trapped miners, the Common Vision was Survival. Streamlined communications – miners to rescue team,

rescue team to media, media to the world Self empowerment by miners – ran a microsociety Short-term wins – 17 days later initial contact More wins – 3 drilling plans strategy for miners’ rescue Anchor new approaches – miners kept their morale high,

rescuers persisted in their efforts until “the 33” were rescued 44

Mission Accomplished After stepping free from the rescuers and greeting

his son, Luis Urzúa embraced President Piñera saying, "I've delivered to you this shift of workers, as we agreed I would".

The president replied, "I gladly receive your shift, because you completed your duty, leaving last like a good captain."

President Piñera went on to say "You are not the same after this, and Chile won't be the same either.

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Planning

Promotion

PersonalTouch

Persistence

Summary - Productivity Model (4Ps)

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Project Management You Tubes

http://www.youtube.com/watch?v=m2Vbc7ASr80 (1.16 min.)

http://www.youtube.com/watch?v=N2qm3ZMEn_s&feature=related ( 4.11 min.)

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Key ResourcesAbudi, Gina and Tsoukalas, Christa (2009). “20 Things Every Project Manager Should Know … and Do!”, Boston

University Corporate Education Center, http://www.ginaabudi.com/articles/20-things-that-every-project-manager-should-know-and-do/

Dahle, Cheryl (1999). “How to WOW”, Fast Company.com, http://www.fastcompany.com/magazine/24/howwow.htmlGrenny, J., Maxfield D. & Shimberg, A. (2007). “How Project Leaders can Overcome the Crisis of Silence”, MIT Sloan

Management Review, Vol. 48, # 4, Summer.Kotter, John (1996). Leading Change, Harvard Business School Press, Boston, MA.Liebesman, Sandford (2008). “Risk Management: A Tool for Improving Quality Management”, The Quality Management

Forum, ASQ, Spring.Managing Projects Large and Small: The Fundamental Skills for Delivering on Budget and on Time, Harvard Business

Essentials, Harvard Business School Press, Boston, MA (2004).Martin Paula and Tage, Karen G. (1997). Project Management Memory Jogger, GOAL/QPC, Salem, NH.Meier, Ron, Williams, Michael, and Singley, Rodger (2008). “Merging the Bodies of Knowledge in Quality, Project, and

Risk Management”. The Quality Management Forum, ASQ, Spring.Peters, Tom (1999). “The WOW Project”, Fast Company.com, http://www.fastcompany.com/magazine/24/wowproj.htmlSchrage, Michael (1999), “The Proto Project”, Fast Company.com,

http://www.fastcompany.com/magazine/24/schrage.html.Useem, Michael, Jordan, Rodrigo, & Koljatic, Matko (2011). “How to Lead during a Crisis: Lessons from the Rescue of the

Chilean Miners”, MIT SMR, Vol. 53, No. 1, Fall 2011.Williams, Michael, Singley (Rodger), Meier, Ron (2009-8). “Using Affinity Analysis to Develop a Technology-Based Risk

Taxonomy”, The Quality Management Forum, ASQ, Spring.Wikipedia – 2010 Copiapó mining accident,http://en.wikipedia.org/wiki/2010_Copiap%C3%B3_mining_accident

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Select Project Management ArticlesHarvard Business Review (HBR):

“Tipping Point Leadership,” by W. Chan Kim and Renee Mauborgne, HBR, April 1, 2003.Project Management: The View from 30,000 Feet (HBR Collection, September 1, 2003): “Creating Project Plans to Focus Product

Development”, by Steven C. Wheelwright and Kim B. Clark.Project Management: The View from 30,000 Feet (HBR Collection, September 1, 2003): “Getting the Most Out of Product

Development”, by Paul S. Adler, Avi Mandelbaum, Viên Nguyen, and Elizabeth Schwerer.Project Management: The View from 30,000 Feet (HBR Collection, September 1, 2003): “Why Good Projects Fail Anyway”, by Nadim

F. Matta and Ronald N. Ashkenas.”Why Bad Projects are Hard to Kill”, by Isabelle Royer, HBR, February 1, 2003.“Can Absence Make a Team Grow Stronger?”, by Ann Majchrzak, Arvind Malhotra, Jeffrey Stamps, and Jessica Lipnack, HBR, May 1,

2004.“Management Lessons from Mars”, by Alan MacCormack, HBR, May 1, 2004.

MIT Sloan Management Review (SMR):

“The New Practice of Global Product Development”, by Steven D. Eppinger and Anil R. Chitkara, MIT Sloan Management Review, Summer 2006 (Reprint 47408).

“How to Manage Virtual Teams”, by Frank Siebdrat, Martin Hoegl and Holger Ernst, MIT Sloan Management Review, July 2009 (Reprint SMR322).

“How Project Leaders Can Overcome the Crisis of Silence”, by Joseph Grenny, David Maxfield and Andrew Shimberg, MIT Sloan Management Review, Summer 2007, Vol. 48, No. 4 (Reprint SMR253).

“Implementing a Learning Plan to Counter Project Uncertainty”, by Mark P. Rice, Gina Colarelli O’Conner and Ronald Pierantozzi, MIT Sloan Management Review, Winter 2008, Vol. 49, No. 2 (Reprint SMR272).

”Cutting Your Losses: Extricating Your Organization When a Big Project Goes Awry”, MIT Sloan Management Review, Spring 2000 (Reprint SMR045).

”How to Fail in Project Management (Without Really Trying)”, by Jeffrey K. Pinto and Om P. Kharbanda, Kelley School of Business, Business Horizons, July-August 1996 (Reprint BH010).

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Thanks

Questions?

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