Filling Execution Gaps: How Executives and Project Managers Turn Corporate Strategy into Successful Projects 9781501506390, 9781501515200

“I expected good, but this is great.” -Janet Pirus Phelps, Principle, Strategic CFO, Former CFO Papa Murphy's Pizza

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Table of contents :
About the Author
GAP 1: Common Understanding
Chapter 1: Understanding the Problem
GAP 2: Alignment between Corporate Goals and Projects
Chapter 2: Creating and Maintaining Corporate Alignment
GAP 3: Engaged Executive Sponsors
Chapter 3: Challenges in Executive Sponsorship
Chapter 4: A Model for Engaged Executive Sponsors
GAP 4: Adoption and Change Management
Chapter 5: Understanding Business Change Management
Chapter 6: Organization Change Management and Projects
GAP 5: Effective Governance
Chapter 7: Lean Project Governance
Chapter 8: Value Driven PMOs
GAP 6: Project Leadership
Chapter 9: Leadership’s Relationship to Projects
Chapter 10: The Project’s Leadership Structure
Chapter 11: Leadership Traits and Actions
PART 7: Pulling it all Together
Chapter 12: Filling the Six Gaps
Appendix A: Endnotes
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Filling Execution Gaps: How Executives and Project Managers Turn Corporate Strategy into Successful Projects
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Todd C. Williams Filling Execution Gaps

Todd C. Williams

Filling Execution Gaps

How Executives and Project Managers Turn Corporate Strategy into Successful Projects

Excerpts from In Search of Excellence: Lessons from Americas Best Run Companies used by permission of Tom Peters. See for further information.

ISBN 978-1-5015-1520-0 e-ISBN (PDF) 978-1-5015-0639-0 e-ISBN (EPUB) 978-1-5015-0634-5 Library of Congress Cataloging-in-Publication Data A CIP catalog record for this book has been applied for at the Library of Congress. Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at © 2017 Todd C. Williams Published by Walter de Gruyter Inc., Boston/Berlin Printing and binding: CPI books GmbH, Leck ♾ Printed on acid-free paper Printed in Germany

Advance Praise I expected good, but this is great.

Janet Pirus Phelps Principle, Strategic CFO Former CFO Papa Murphy’s Pizza Los Angeles, California

Each chapter of the book is a master-class in strategy deployment! Todd ingeniously brings together the critical elements of the strategy execution puzzle, revealing with remarkable clarity the pathway to implementation success. Claudio Miers Managing Partner, Pitcairn Partners Former VP Operational Excellence, Organizational Transformation Emerson Automation Solutions Fort Lauderdale, Florida Todd captures the reality and essence of what it takes to deliver strategy. By sharing thought provoking stories and examples, Todd provides helpful tools and approaches to navigate the difficult yet rewarding work of transforming strategy into results. A must read for anyone who works in the strategy space. April Blackmore Vice President of Operations & Supply Chain The Little Potato Company Ltd. Chicago, Illinois Filling Execution Gaps is a thoughtful review of what successful leaders do in a multifaceted, matrixed business to drive successful execution of the strategy. John E. Panichella President and CEO Solenis Wilmington, Delaware

vi  Advance Praise Todd Williams has written a book which made me think about my acceptance of current governance practices and approaches to program management in a whole new light. By applying lean concepts to achieve effective governance, Todd has changed the game. This book offers valuable thought provoking advice and I have recommended it to all our steering committee executives and PM’s. Charles (Chuck) Elson General Manager, Asset Management Solutions Bell Canada Toronto, Ontario This book is another home run for Todd Williams! I love the author’s writing style. He grasps the key concepts, then shares them in descriptive terms. The quotes at the start of each chapter are inspiring. The questions at the end of the chapters are reflective. The author’s years of experience in project management show he truly understands how things work in all sizes and types of companies . . . . This book is a must-read for executives, middle management, project managers, and project teams! Connie Plowman Former COO, Cadence Management Corp PMI Nominating Committee, Leadership Advisor, and former Region 1 Mentor Portland, Oregon Todd provides the right guidance on how to establish an effective change management organization. This is a must read before undertaking of your next organizational project, as it will help you avoid many pitfalls which drive delays or project failures. John T. Lenga, Jr. CEO, Head Business Group North America Autoneum North America, Inc. Novi, Michigan Filling Execution Gaps a great balance of methods and personal experience that delivers a practical approach to successful execution of projects. A must-read for any project executive sponsor! Tom Flookes Global Business Services Associate Partner IBM Seattle, Washington

Advance Praise  vii

We have all been there. Kicking off well deserved projects with much fanfare, only later to see them never achieving their full potential. There is a solution to this problem and Step One is to read this book! Steve Porter Vice President & CFO Columbia Cascade Company Portland, Oregon A quote from Chapter 3 in this book as a company is searching for a project manager reads. “We are looking for an anal-retentive, tenacious, asshole and we thought of you.” These traits are often overlooked in the politically correct world we live in where people are too busy looking for consensus builders who never get anything done or at least done on time. Todd Williams points out the pitfalls of far too many projects and provides insightful and practical advice for navigating around and sometimes, unfortunately, through them. Mike Scotese Affiliate CR3 Partners, LLC Chicago, Illinois Todd Williams clearly understands that project managers do more than manage projects– they must manage communications and facilitate change in the organization. He has packed a lot of observation and experience in to this book–heed his advice! Karri Eggers Vice President, Project Management Office (PMO) Dignity Health Medical Foundation Rancho Cordova, California Todd Williams’ new book, Filling Execution Gaps is a deep dive into how to build a company culture that tilts the odds as far as possible in favor of successful execution of strategy. This book is an invaluable resource for project managers and executives alike who are working to improve their effectiveness. Bram Kleppner CEO, Board Member Danforth Pewter Middlebury, Vermont

viii  Advance Praise Todd’s book does an excellent job of defining the challenge of executive sponsorship of a project who must often perform multiple leadership roles, and this requires development and training to be successful. Steve Hufford Chief Executive, Society for Information Management Enterprise Architect, Portland General Electric Portland, Oregon Suggesting the CEO as the executive sponsor for enterprise projects effecting change can be a game-changer for many organizations. This also necessitates CEOs engaged with such initiatives for the duration, which requires a mind-shift about the CEO role. Demetrios Sapounas Chief Strategy Officer Tascet Sterling, Virginia Todd Williams provides a unique window into the role that effective leadership plays with projects. His insights on the game changing impact that leadership makes in terms project execution, help differentiate Chapter 10 and Chapter 11 from other project leadership works. Jim Doyle Sr. Mgr. Talent & Organizational Development GNP Company Careers St. Cloud, Minnesota In his latest book, Todd has been able to dissect the leadership components of not only projects but all organizations with the skill of a surgeon with a scalpel. Todd has captured the nuances of leadership in projects and organizations at every level, not just the “executive” level where many seem to see it residing. Excellent insight and delivery! Dennis Bonciolini President Sherwood, Oregon

Advance Praise  ix

Todd Williams knows a lot about getting failing projects back on track, His Filling Execution Gaps provides a thorough roadmap for initiating projects well and ensuring their progress toward successful completion. The focus of the book on organizational factors makes it a good reference for leaders at all levels, particularly at the upper levels where actions and decisions have such a significant impact—for better or for worse—on project outcomes. Tom Kendrick Program Director, Project Management Curriculum UC Berkeley Extension Author of Number Project Management Books San Carlos, California If Emergence of the ‘Me’ Enterprise is a reflection of how organizations are learning to survive and thrive in this era of a clash of cultures between Baby Boomers and Millennials, then Todd Williams and Filling Execution Gaps shows how they’re doing it. If you wish to learn how leading organizations manage to find structure amidst chaos, reading this book would be a good place to start. G. Ross Kelly Consultant and Former Executive HP Co-Author: Emergence of the ‘Me’ Enterprise Gainesville, Georgia Todd’s work is an essential contribution with respect to helping executive leaders and project managers understand the magic that can occur when human capital is understood, harvested, cultivated and leveraged. Jeff Brody Chief Human Resources Officer ManTech International Corporation Herndon, Virginia Innovation cannot be an organized plan of tasks and activities, but rather a means to embrace the uncertainty of future enabling factors. We need to align our culture and organization with executive leadership and modern process. Mary Ann Coburn VP, Enterprise IT PMO of the CIO Hilton McLean, Virginia

x  Advance Praise Todd Williams has touched both macro and in detail micro level insights on execution to align corporate goals and projects and retain sustainability. Sanjay Razdan, MBA, AMP HBS, BE Electronics Board Member, CyNation Founding Partner, CapableCore London, United Kingdom

Todd gives us insight into the fundamental ingredients of what makes organizations tick. Vikas Narula Founder at Keyhubs and Neighborhood Forest, Adjunct Professor at MCTC Minneapolis, Minnesota

When I read the chapters on governance and PMOs, I realized that Todd put into words what I have experienced. Applying the concepts in this book will help form a true partnership between IT and business units and establish IT services as strategic value enablers. Chris Harris Vice President Information Technology Pacific Seafood Portland, Oregon A well-defined strategy is worthless if it cannot be executed rapidly and efficiently. In Filling Execution Gaps, Todd Williams provides the guidance leaders need to successfully execute a strategy. Ken Piddington Chief Information Officer and Executive Advisor, MRE Consulting Former Chief Information Officer and Director Operational Support, Global Partners LP Houston, Texas

To Kennedy, Alaura, and Jesse

Acknowledgments There are hundreds of people who I want to thank for making this book possible. These were the people who took surveys or participated in interviews with a guy they did not know. I could have been a spammer, salesman, or on some other more devious mission. They trusted me and I am eternally indebted. I would name them, there are more than 300, but I promised anonymity. Their stories are here, their ideas are here, they changed my outlook, confirmed my beliefs, shot a few ideas out of the water, uncovered many surprising relationships, and sent me back to the drawing board. I needed you because you were outside my “bubble.” You have a different view than the people I hang around. You all know who you are. A heartfelt thank you. There are also a number of people that are “in my bubble” that I need to mention. Again, there are too many to enumerate. There are many that I met for coffee, interacted with on social media, were in an audience, or chatted with at professional meetings, who listened, discussed, challenged, and suggested different approaches. A special shout out to those who contributed most directly: Marty Matthews, for our coffee meetings (and occasional hospital run) who has unfailing confidence, great connections, and has given support in a multitude of ways; Amy McKendry, for suffering through some of the early drafts of my works and is probably still having nightmares about my grammar (may my originals provide proofing material for your English classes for many years); Josef Pfister who regularly helps me take an inkling and turn it into a full concept; David O’Brien for our thought-provoking breakfasts; Kay Wais for her undying support and confidence; and Corina Martinez, Jean Bauman, and Dr. Victor Sohmen for their critical review of context and content in my early whitepapers and chapters. A tip of the hat needs to go to Peter Stark for pointing out how I kept saying a few things backward from what I meant and Bram Kleppner for his case study and wonderful conversations. There are thanks to all the authors, famous and not yet, for their books, whitepapers, and articles on these and related topics. You have changed the way I think and work. Of course, many thanks to Jeffrey Pepper, Chris Nelson, Mary Sudul, Angie MacAllister, Megan Lester, and Mark Watanabe who patiently explained as I tried to understand how to look at writing, books, and publishing differently. Their editing expertise was invaluable. As a team, we brought this to press. Last, and surely not least, my wife, Tammi, who has put up with hours of me hunched up over a computer and letting me tell our personal stories. And, my little gems, Kennedy, Alaura, and Jesse, who, at times, have had to compete with or share Dad’s lap with proofs or a computer.

About the Author Todd C. Williams, is an executive consultant with three decades of experience helping organizations connect strategy to successful projects. He has worked with startups and multibillion dollar companies. He is a prolific writer sharing his wisdom and experience so that others can succeed. His first book was the highly acclaimed Rescue the Problem Project: A Complete Guide to Identifying, Preventing, and Recovering from Project Failure (AMACOM, 2011) In addition, he was a contributor to Gower Handbook of People in Project Management (2013) and Toyota: A Saga of Success (2008) and a technical editor for other books on project management. You can read more of his work on his own blog ( and look for his contributions on numerous other sites including The CEO Magazine and Online magazines including Fortune/CNN Money,, CIO Update, ZDNet, Enterprising CIO, IT Business Edge, who regularly consult with him for quotes and content. He holds a PMP certification.

Foreword Kevin O’Hara Execution. Whether you are running a startup or a multibillion-dollar corporation, gaps in your company’s execution will cause you to struggle. If you continue to ignore them, you will fail. Filling Execution Gaps talks straight to this issue. Misalignment, poor middle management leadership, distracted executive sponsors, ineffective governance, insignificant adoption, and an unclear message drowns the best intentions and inventions. I have known Todd Williams and his team for six years. When I met him, I was running a $600M telecommunications company and we had lost the confidence of one of our largest customers because of poor execution and support. Todd and his team helped us realign our approach on this client deployment and then worked with my executive team to improve our focus and lay the foundation for our organization’s common understanding of its goals. I can attest he practices what he preaches. Filling Execution Gaps’ focus on the employees’ common understanding of goals is a critical message. Execution always starts with the right people; technology never replaces talent. I have seen companies stumble when they fail to gain a common understanding of their goals, and these stumbles generally manifest themselves in four key areas—alignment, accountability, leadership, and change management. Todd addresses each of these areas in a unified manner. I am very glad to see someone address alignment in three dimensions—vertical, lateral, and capability. His experience and research showing how managers talk about projects being aligned, but never understand whether individual deliverables support corporate goals or support individual desires underscores how lacking a common understanding can waste resources. This is supported by other research showing many of these same managers cannot even enumerate the corporate goals. Alignment needs to be far more detailed. Are the deliverables directly aligned to corporate goals? Are the divisions supporting each other or are they selfishly siloed looking to fulfill their own needs? Finally, and most importantly, does the company have the right talent to meet the goals? It is all about getting people informed and aligned. Without this, there is little hope in meeting the corporate objectives. I believe strongly that to be successful, each department and every employee should understand what success looks like for them on an almost daily basis, and this success should be quantified with business metrics. Once the relevant metrics are established, each department’s metrics should be rolled up to see if success in each group leads to successfully achieving the corporate goals. On many occasions, I have seen the first or second pass at this exercise leading to a plan where each group can declare victory for their contributions, but the corporate goals are not met. This can

xviii  Foreword only occur when department heads or managers don’t understand their contribution to the bigger picture. We need more accountability. Todd lands right on the biggest issue with accountability; this should be a tool for determining rewards and helping people succeed far more than as a device to assign blame. Blame destroys motivation; associating accountability with it destroys progress. This concept goes beyond executive sponsors, who need to be accountable for the project’s success, and needs to be part of the corporate culture. I stepped into a turn-around situation where a previous decision had been made to either freeze or cut salaries across the board. To soften the financial blow, the annual review process for employees got diluted. As a result, in a year where virtually every corporate objective had been missed, the overwhelming majority of employees had been rated as either being outstanding or exceeding expectations. I asked one employee how he knew if he had been successful each day and he replied, “when nobody yells at me.” In one group, the top performer was producing almost five times as much work product as the worst performer, but they were both rated the same. This lack of accountability negatively affected the top performer since he knew he was the most productive, but importantly, it also denied the lower performer the opportunity to address why his production was so low. Once the manager started to set objectives, look at how the two employees approached similar tasks, etc., we could offer greater rewards to the top performer and significantly improve the performance, and job satisfaction, of the lower performer. The strongest executive leaders will struggle if they lack the commensurate leaders in middle management and the rank and file. As reinforced throughout the book, leadership needs to be at all levels of the organization—from the customer-facing technician to the CEO. This is especially true when it comes to new technology (whether it is software or floor surfaces), front-line employees lead our customers to solutions that make them and us more successful. One of the best executives I have had the pleasure to work with rose through the ranks as a sales leader for one of the 10 largest telecom companies in the world. He made sure his organization had appropriate training in all facets of their jobs, he made sure they had the appropriate support infrastructure, he spent time in the field observing how his employees conducted themselves both internally and with customers, and he was maniacal about quantifying all aspects of his organization. People that performed well were fiercely loyal and appreciated the rewards that came with success in his organization. If there were problems with performance, he made sure that the employee that was struggling to succeed had every opportunity for coaching, training, and feedback. If individuals were ultimately unable to meet the standards that had been established, they were separated from the business. It is always easier and more economical to help current employees succeed than to simply terminate underperforming employees. But we must be cognizant that not everyone will succeed in each situation. Finally, if letting people go and affecting their livelihood ever gets easy, it’s probably time to step aside.

Foreword  xix

And if ever you get to the point where you cannot make such decisions, it’s also probably time to step aside. Leadership is also at the core of adoption. From the brief history to assigning change management’s accountability, Filling Execution Gaps defines a model unifying sponsorship, success, adoption, leadership, and projects showing how to change your organization’s approach to yield success. Every effort should be made to gain alignment and secure the buy-in of your executives. Sometimes, for historical or parochial reasons, certain leaders are reluctant or unable to accept change. In those instances, the changes need to be driven from above because, as the executive I cited above liked to tell me, “Turkeys don’t vote for Thanksgiving.” It all boils down to people. Without building corporate goals that align with your employee’s talent, your vision will not be met. I hope you enjoy Filling Execution Gaps as much as I have, Kevin O’Hara Serial Entrepreneur, Co-Founder and former President and COO Level 3 Communications Denver, CO

Anurag Harsh Reality eats strategy for lunch and strategy is nothing without the means to deploy it. Had we not built our capabilities to deploy strategy, we could never have led Ziff Davis through its transformation from a privately held publisher in 2010, to a multinational publicly traded digital media behemoth. The truth is that deployment sounds so basic that it is often taken for granted; but not as much as the intermediary steps, the road between strategy and deployment. Typically, executives come up with a set of goals, and then heave them on their teams for rollout. When the plans fail to meet expectations, the executives are shocked. It takes tenacity, strong leadership, and accountability to shape a company. Companies certainly need to foster autonomy among their people—empowered employees are more willing to try new ideas and innovate. Yet governance is necessary to keep proper focus. Employees need executives to share their vision of the future and adopt it as if it were their own. Everyone must have a common goal and be reminded of that goal. Filling Execution Gaps addresses just this deficiency of leadership. I met the author, Todd Williams, through a mutual friend, Michael Krigsman, the CEO and Host of CXOTalk. Todd sent me the manuscript of his book and after reading it, I thought to myself, “This is what we’ve been missing.” Hundreds of books talk about building strategies and even more discuss deploying projects. Very few, however, address the connective tissue between strategy and deployment. Without that linkage, outcomes are severely hindered.

xx  Foreword Indeed, the transition from strategy to deployment is the site of many organizational woes. Strategy-deployment gaps affect not only the onset of an initiative but also its life cycle, which reverberate far beyond the immediate team or department. This is why it is so important to address them. Todd is spot on with his identification and analysis of the six big gaps—achieving a common understanding, maintaining strategy-to-project alignment, leadership, change management, effective governance, and executive sponsorship. And who else is more attuned to the gaps? With decades of experience restructuring companies to run projects better, and fixing failing projects in numerous business sectors, he has a unique perspective and the generosity to share it. Supporting his experience is the thousands of hours he has spent researching his hypotheses, ensuring that his findings are not isolated to his “bubble.” In a conversation with Todd, he explained his concern about the limitations of his experience, however diverse. He decided to seek out executives who knew they had problems to solve and took the initiative to address them. He then culled their insights using a methodical information gathering process to ensure that key industries and geographies were addressed, and that his assumptions were challenged. In so doing he identified a series of gaps. But that’s not all. The big question he interrogated was: How do we fill the gaps? Todd then used his own experience, data, and outside-the-bubble perspective to provide a detailed roadmap to see and fill each gap. Herein, lies the book’s greatest value. It’s lucidity. Todd discusses gaps to establish a common ground, uses concrete examples to illustrate his points, and then presents a framework for filling those gaps. There are hundreds of takeaways from this book for executives and project managers alike. A few lessons that stood out to me were people first, engaged sponsors, sales tools, and common understanding—this last lesson being one of the most enduring themes of the book. The foundation of common understanding is a simple idea that transcends what most people refer to as communication. Communication is an action, while common understanding is an outcome. Stakeholders must have a common understanding of the organization’s goals and how they are going to be achieved. Common understanding first requires an understanding of other people’s jobs and functions, embracing the notion that everyone has a degree of ownership, a stake. Common understanding also enables accountability, an information link direly missing from many of our organizations. Todd hit various notes with me. He hit a harmony when he talked about lessons from the oft-forgotten sales department. He drew not from the vices aspects of sales, but from the virtues of large-system sales. The typifying view of systems sales being that a salesperson must understand the problem—even better than the customer— before selling a solution to the customer, so when there’s buy-in, it’s genuine and useful. And the way a salesperson upholds accountability is through guarantees. Leaders must also uphold guarantees, to their teams and their customer.

Foreword  xxi

The chapters on leadership were full of powerful insights. They were especially interesting not only because they synchronize with my own writing on the topic, but also because Todd does an excellent job of fitting leadership into the workflow. Sharing the basic premise of my book, The Empirical Leader: The Art of Leading and Being Led, he agrees that leadership is learned. From that point, he suggests specific traits and actions people can practice to improve their leadership skills. More importantly, he applies those practices to the entire delivery stack, from the CEO to the business analyst. This formulation eliminates the challenge of translating a CEO’s experience to other job functions. So, be you a project manager, architect, business analyst, or other non-executive, the way toward practicable skills is made clear and learnable. Lastly, he cements his observation in the realization that people are the beginning and the end. As a life-long technologist, I can attest that the interplay between technology and business is complex and fruitless without the right people. Although your company may want to “go digital” or implement a new technology, the goal is not technology. The goal is to increase sales, decrease expenses, or both. But before all of that planning, the vital question is: What does going digital mean to your company, its employees and its customers? The key to realizing stateof-the-art solutions is to have the right people and to target the right people. In the end, as Todd says, “Processes are necessary, but people choose to follow them (or not); people have the required skills (or not); people communicate with others (or not); and people follow direction (or not). It is all about people and whether they have the right qualifications to perform the tasks assigned.” I am honored that Todd reached out to me to write this foreword and I hope that you enjoy and glean from the book as much as I did. Anurag Harsh Founding Executive and SVP – Ziff Davis LinkedIn Top Voices: #1 in Technology Author – The Empirical Leader, Going Digital, Thinking Tech, Grow, The Professional’s Bible, Money Can’t Buy You Love Not Even a Like, and MCommerce Security New York, NY

Contents GAP  1: Common Understanding  1 Chapter 1: Understanding the Problem  3 Linear Thinking Causes the Problem  6 The Role of Vernacular  11 The Real Measure of Success: Value  12 Hubble Space Telescope Deployment Project  13 Measuring Value  14 Accountability  17 Goals, Objectives, and Priorities  18 Tension versus Gaps  20 Identifying the Major Gaps Causing Project Failure  21 Common Understanding  22 Problem Perspectives  22 Filling the Gap with Governance  27 Filling the Gap with Executive Sponsors  28 What You Should Do  29 Project and Middle Manager Takeaway  30 Executive Takeaway  31 Applying These Concepts  31 Organization Wide Questions  31 Project and Middle Manager Centric Questions  32 Executive Centric Questions  32 GAP 2: Alignment between Corporate Goals and Projects  33 Chapter 2: Creating and Maintaining Corporate Alignment  35 Alignment’s Three Dimensions  37 The Relative Occurrence of Alignment Issues  40 The Foundation for Building Alignment  42 The Relationship between Vision, People, Strategy, Process, and Technology  44 Understanding Strategy and Operational Efficiency  46 The Sequence of Strategy and People  47 The Fluidity of Strategy  48 People and Strategy  50 Process and Strategy  51 People Versus Process  52 Technology and Strategy  53

xxiv  Contents Creating a Common Understanding  57 Activity System Diagram  57 Detailed Goal Tracking  59 Strategy Maps  59 Financial Perspective  60 Customer Perspective  60 Internal Perspective  61 Learning and Growth Perspective  62 Mission Based on the Strategy Map  63 Departmental Strategy Maps  63 Initiative and Project Prioritization  64 Quantifying Goals  66 Building a Balanced Scorecard  68 Where Balanced Scorecard, and Many Other Tools, Struggle  69 Audit/Health Check  69 Risk Planning  70 Project and Middle Manager Takeaway  70 Executive Takeaway  71 Applying These Concepts  72 Organization Wide Questions  72 Project and Middle Manager Centric Questions  72 Executive Centric Questions  72 GAP 3: Engaged Executive Sponsors  75 Chapter 3: Challenges in Executive Sponsorship  77 Investigation into Executive Sponsorship  79 The Definition of Executive Sponsorship  79 Lack of Engagement  81 Organization Change Management  82 Industry Specific Issues  82 Healthcare Organizations  83 Power Differential  83 Product Companies  84 Proposed Solutions  85 Leadership  86 Accountability for Project Success  87 Communication of Priorities  87 Defining the Sponsor’s Role  89 Project and Middle Manager Takeaway  89 Executive Takeaway  90 Applying These Concepts  90

Contents  xxv

Organization Wide Questions  90 Project and Middle Manager Centric Questions  91 Executive Centric Questions  91 Chapter 4: A Model for Engaged Executive Sponsors  93 The Foundation for a New Approach  94 Core Improvements in the Sponsorship Role  95 Scope of the Sponsor’s Commitment  96 Executive Action Required  97 Solutions for Executive Sponsorship  98 The Executive Sponsor’s Accountability  98 Project Value: The True Measure of Success  98 Alignment with Corporate Goals  100 The Project’s Fiduciary  100 Proactively Monitoring Success Targets  101 Monitoring Value  102 Monitoring Alignment  103 Monitoring the Business Case  104 Responsibilities of the Executive Sponsor  104 Project Vision  104 Communication  104 Decision Maker  105 Engagement  106 Characteristics of Effective Executive Sponsors  107 Leadership  107 Belief in the Initiative’s Vision  107 The Value of Perceived Authority  108 Respect and Trust  108 Misconceptions about What Constitutes a Good Sponsor  108 Educating People on the New Sponsor Role  110 Job Description  110 Sponsor Coaching  111 Project Team Training  112 Team Requirements  112 Adoption/OCM Specialist  113 Adoption Architect  113 Evangelist or Project Champion  113 Time Commitment  113 Performance Expectations  113 Conclusion  114 Project and Middle Manager Takeaway  115 Executive Takeaway  115

xxvi  Contents Applying These Concepts  116 Organization Wide Questions  116 Project and Middle Manager Centric Questions  116 Executive Centric Questions  117 GAP 4: Adoption and Change Management  119 Chapter 5: Understanding Business Change Management  121 People Are Anchored in Their Beliefs  122 What Is Change Management: The Critical History  124 Changing Behavior in Businesses  128 John Kotter’s Change Management Approach  128 Implementation Methodologies  131 Prosci’s ADKAR 131 General Electric’s CAP  131 Change Management’s Connection Project Management  132 Project and Middle Manager Takeaway  133 Executive Takeaway  133 Applying These Concepts  134 Organization Wide Questions  134 Project and Middle Manager Centric Questions  134 Executive Centric Questions  134 Chapter 6: Organization Change Management and Projects  137 Organization Change Management  140 Why We Need Change Management  141 Survey on Change Management  142 Introducing Change Management Concepts to the Organization  145 Executive Sponsorship of the Change Initiative  145 Sense of Urgency  146 Change Management Teams  147 Change Resistance  148 Change Management Planning  149 Merging Change Management and Project Management  150 Project and Middle Manager Takeaway  155 Executive Takeaway  155 Applying These Concepts  156 Organization Wide Questions  156 Project and Middle Manager Centric Questions  156 Executive Centric Questions  156

Contents  xxvii

GAP 5: Effective Governance  157 Chapter 7: Lean Project Governance  159 The Importance of Governance  160 Why Project Governance? 164 Problems Due to Lack of Project Governance  166 Right-Sizing Project Governance  167 What Project Governance Covers  168 What to Govern  169 People Create the Need for Governance  169 Executive Sponsorship  170 Monitoring Corporate Alignment  172 Risk Governance  173 Governance over Methodology  174 Financial Governance  175 Problems Governance Tries to Solve  175 Governance Is Not a Replacement for Leadership or Engagement  179 Lean Approach  180 Value Principle Applied to Governance  182 Reducing Overhead  183 Value Stream Principle  184 Flow Principle  185 Pull Principle  186 Project Governance Examples  187 Slow Project Execution  187 Conclusion  189 Project and Middle Manager Takeaway  189 Executive Takeaway  189 Applying These Concepts  190 Organization Wide Questions  190 Project and Middle Manager Centric Questions  190 Executive Centric Questions  191 Chapter 8: Value Driven PMOs  193 Types of PMOs  194 What the Acronym “PMO” Means  194 Departmental and Enterprise PMOs  196 Lack of Meaning Contributes to the Problem  197 Problems with PMOs  198 The PMO’s Identity  198 The PMO’s Effectiveness  199 PMOs Are Perceived as Bureaucratic by Nature  200

xxviii  Contents PMOs Tend to Outlive Their Usefulness  201 PMOs That Fill Gaps  201 Alternatives to PMOs  202 The Value Aspect of Project Oversight and Management  203 Temporary Project Oversight and Management  205 Non-Governance Groups  206 Accountability of Oversight and Management Roles  208 Executive Sponsors as Oversight and Management  211 Best Practices for Addressing Problems Common to Groups of Projects  211 Project and Middle Manager Takeaway  212 Executive Takeaway  212 Applying These Concepts  213 Organization Wide Questions  213 Project and Middle Manager Centric Questions  213 Executive Centric Questions  213 GAP 6: Project Leadership  215 Chapter 9: Leadership’s Relationship to Projects  217 Leadership Basics  218 Leadership Strategies  220 The Dearth of Leadership  223 Middle Management Culture  224 Leadership is all About People  225 A Note on Technology  226 Management versus Leadership  228 Leadership Is Not About a Title  228 Factors Affecting a Project Manager’s Leadership Style  229 Project Report Structure  229 Temporariness of Project Teams  231 Project Managers Are Outside the Core Business  231 Women as Leaders  232 Project and Middle Manager Takeaway  233 Executive Takeaway  233 Applying These Concepts  233 Organization Wide Questions  233 Project and Middle Manager Centric Questions  234 Executive Centric Questions  234 Chapter 10: The Project’s Leadership Structure  235 Sources of Leadership  237 A Role’s Leadership Responsibilities  238

Contents  xxix

Executive Leadership Attributes  239 Executive Engagement  239 Projects That Change Culture  242 Executive Responsibilities That Require Leadership  242 Middle Management Leadership Attributes  244 The Lack of Leadership—Overusing Process  244 Innovation and Process  245 Process and Competency  246 PMOs as Pseudo-Leadership  247 Middle Manager Responsibilities That Require Leadership  247 Project Manager Leadership Attributes  248 The Changing Role of the Project Manager  249 Stage One: The Coordinator  250 Stage Two: The Negotiator  250 Stage Three: The Leader  250 Project Management Responsibilities That Require Leadership  251 Project Team Leadership Attributes  254 Project Team Responsibilities That Require Leadership  254 Leadership throughout the Organization  255 Everyone Agrees, People before Plan  255 Identifying the Appropriate Structure  256 Filling the Void  257 Project and Middle Manager Takeaway  258 Executive Takeaway  259 Applying These Concepts  260 Organization Wide Questions  260 Project and Middle Manager Centric Questions  260 Executive Centric Questions  260 Chapter 11: Leadership Traits and Actions  263 The Components of a Leader  265 Making Leadership a Priority  266 Leadership Traits  268 Accountable  269 Ethical  270 Inspirational  270 Decisive  271 Aware  271 Empathetic  272 Confident  272 Focused  273 Humble  273

xxx  Contents Poor Traits Challenging Leaders  273 Interviewing Suggestions  275 Actions of Successful Leaders  276 Listening  277 Establishing Ownership  285 Selling Your Vision  289 Discovering Direction through Dialog and Discussion  292 Elimination of Blame and Tolerance for Failure  295 Organization Wide Conceptual Changes  298 Redirecting the Focus Away from Process  298 Project Leadership  299 Leading without Authority  301 Project and Middle Manager Takeaway  303 Executive Takeaway  304 Applying These Concepts  304 Organization Wide Questions  304 Project and Middle Manager Centric Questions  305 Executive Centric Questions  305 PART 7: Pulling it all Together  307 Chapter 12: Filling the Six Gaps  309 Initiating a Change  310 Your Role in Initiating Change  311 A Non-Executive’s First Actions  311 A CEO’s First Actions  312 A Shared Services Group’s First Actions  312 The Strategy for Long-Term Change  313 Improving Leadership and Business Skills  314 Creating an Atmosphere for Learning  314 Organizational Assessment  315 Opposition to Filling the Six Gaps  316 Order of Filling the Six Gaps  317 Method of Execution  319 Create a Sense of Urgency  319 Making the Visual  319 Get the Right People  320 Develop a Vision  321 Deliver Short Term Wins  321 Best Practices  323 Project and Middle Manager Takeaway  324 Executive Takeaway  324

Contents  xxxi

Applying These Concepts  325 Organization Wide Questions  325 Project and Middle Manager Centric Questions  325 Executive Centric Questions  326 Appendix A: Endnotes  327 Index  337

Preface Filling Execution Gaps is focused on executing strategy—taking strategic goals and turning them into successful projects—the task of taking someone’s vision and turning it into business value. It has been five years in the making. After completing Rescue the Problem Project, which focuses on the project manager’s side of running projects successfully, and hearing the reaction of its readers, it became clear that the gaps outside the project itself were being ignored. As everyone should know, project success is based on a larger system. The people on the project are only a small microcosm of those who solidify or threaten its success. Hence, where Rescue the Problem Project speaks to the project manager on the elements of the people, process, and projects, Filling Execution Gaps takes a wider view by looking at the entire “project stack” from the executive, through middle management to the project manager, and down to the project team. It provides specific information from multiple perspectives on filing the gaps that exist in every organization’s project execution capabilities. The journey started many years ago when some specific gaps were routinely seen—notably leadership and alignment—and grew to include adoption, executive sponsorship, and ineffective governance. Finally, after grappling for years on what to call it, the concept that everyone in the organization needs to have a common understanding of the goals, objectives, value targets, and philosophy. By approaching project success as a job of filling these gaps, the foundation for proper project executions is laid. This required surveys, research, interviews, testing ideas, more research, more interviews, more testing. It became obvious that there are a multitude of good books that speak to executives or CEOs on great companies, building organizations, or change management, however, there is a void of books written for the people who do the work. It takes too much effort to read a book on being a great CEO with strong leadership presence and apply that to “my job” as a non-CEO lacking the positional authority to make action happen. Filling Execution Gaps goal is answering the questions on tailoring its application to your organization, to build a fluid communication and accountability structure that exudes success. Executives, middle managers, and project managers should all find information relevant to their jobs, and the people supporting them, achieving a complete understanding of the roles and responsibilities in the project execution stack. Readers will have the knowledge of who should know what and when they should know it. In so many words, people get the information they need to do their jobs. As opposed to Rescue the Problem Project, which experiential nature, significant research has been done to validate and expand the content of Filling Execution Gaps. This includes:

xxxiv  Preface Interviews with executives on how they tackle project troubles and where they see the biggest benefits. 2. Research with hundreds of project stakeholders on what is lacking in their projects and impeding their success. 3. Literature Research using time-tested and respected business books many of which are research works themselves (such as, Fifth Discipline, Good to Great, In Search of Excellence, and the like). 4. Experience from nearly three decades of assisting companies in resolving core project failure issues (not just fixing a single project). Filling Execution Gaps is not simply researched topics; these techniques have been used successfully in many businesses. 1.

Introduction When we try to pick out anything by itself, we find it hitched to everything else in the universe. ––John Muir Project alignment, executive sponsorship, change management, effective governance, leadership, and common understanding. These six business issues are topics of daily discussions between executives, middle management, and project managers; they are also the core of transformational leadership. Any one of these six subjects, when improperly addressed, will hex a project’s chances for success. And, they do it daily, destroying the ability of a company to turn its vision into business value. Without change management, users fail to adopt the projects’ deliverables, the project’s output has no value and the projects fail. Without maintaining alignment between corporate goals and projects, projects miss their value targets and projects fail. Without an executive sponsor, scope increases, goals drift, chaos reigns, value is lost and projects fail. Without enough governance, critical connections are not made, steps are skipped, value is overlooked and projects fail. Too much governance slows progress, companies cannot respond to business pressures, value drowns in bureaucracy and projects fail. Without a common vernacular or understanding that value is success, communication stops and projects fail. Lastly, without strong leadership defining vision and value of companies and projects, essential relationships do not form, teams do not develop, essential decisions are not made, and projects fail. This hexad (see Figure I.1), as a whole, is critical to project success and change leadership. However, organizations continually struggle at implementing each of these six components effectively. For instance, executives may start by creating a task force to work on implementing a change management process. When they find projects are still failing, they decide to focus on another gap, say governance, to try to mend the issue that way. Their energy, directed toward change management, wanes as governance is the new shiny ball and projects still fail. Maybe they see some gains from adding some rudimentary process and decide, “If some is good, more must be better!” and bureaucracy ensues. The secret is not ensuring any one of these gaps is filled; the solution to the problem must encompass all of them.

xxxvi  Introduction

Figure I.1: The Hexad Relationships

Overlooking any area creates a gap in the business. Part of every manager’s job is finding and filling these gaps. Their nightmare is missing one that causes the organization to stumble. Unfortunately, research and experience show the paranoia is justified. When companies fail to meet their goals, one or more of these gaps have inevitably been overlooked, creating unforgiving voids that suck projects, and even careers, into an abysmal black hole. The goal of Filling Execution Gaps is identifying and filling these six common gaps to enable executing projects successfully time after time. This is at the core of transformational leadership, an extremely important topic in today’s businesses. This book is organized around these six gaps. While other books look at educating executives on balanced scorecard, organization change management (OCM), sponsorship, or corporate leadership, or educating project managers on project leadership, OCM, or business alignment, Filling Execution Gaps looks at how all of these work together to create success. Although these books address each topic in a complete and narrowly focused manner, Filling Execution Gaps tackles the viewpoint that all of them need to be in place for continued success. Each of these six roadblocks to success has responsibilities that need to be assigned to people in the organization. These roles range from executives, to middle managers, from project managers, to project team members and end users. For instance, senior executives do not need to know the intricacies of change management; they need to assign someone who knows it. Senior executives, however, do have specific responsibilities (such as promoting the change or creating a change manage-

Introduction  xxxvii

ment team) and often need to be accountable for the change. On the other hand, project managers do not need to know how to build a corporate vision, but they do need to understand whether their project is in line with it and, if not, how to fix it. Without this, projects fail at alarming rates; some estimates are as high as 70% of projects fail to meet their goals. The overall process is the same in every company. Visionaries define where the company can go. Executives select the options that appear to make business sense, set goals for their development, and identify initiatives to meet those goals. Middle managers decompose those initiatives into programs and constituent projects in order to build and implement the capabilities to support achieving the corporate goals. Mechanisms need to be in place to shepherd this conversion of corporate vision to value. At a high level, there are three critical actions make this happen: 1. Translating the vision into an achievable set of goals. 2. Attaining and maintaining alignment with those goals. 3. Executing projects in an adaptive manner to deliver value to the customer. As shown in Figure I.2, different levels of the organization are accountable for completing these functions. Business is anything but static. It has to contend with changes in customers demand and an ever-changing business environment affecting its vision and goals. This requires constant reassessment and alteration of the direction and the dissemination of any changes throughout the organization. It is the interplay of these two moving targets that causes the biggest challenge in continuing to deliver value to customers. Vision and goals need to adapt to customer and business changes; plans and actionables need to follow, with projects adjusting their deliverables accordingly. This never-ending concert plays havoc in any organization that is not in lockstep. This, however, is not always a top-down or logical process. Customer changes are regularly driven from the bottom up. Project teams may be the first to see new trends with customers. Hence, the channels for moving alignment information around must be bi-directional. Organizations can maintain this alignment by focusing on a few key areas: – Adopting value as the common success criteria for initiatives and defining appropriate metrics to drive the organization. – Assigning accountability appropriately throughout the organization to ensure the proper connection between accountability and action. – Creating a culture focused on change adoption both within the organization and with customers. – Defining lean governance structures to be meet the business’ compliance and reporting requirements. – Building a culture of leadership throughout the company and the structure to support it.

xxxviii  Introduction

Figure I.2: Project Influencers

As easy as these words sounds, most organizations have not achieved this type of structure. This is due to a variety of reasons. The largest of which is the difficultly of stepping back and looking at the organization as a whole so that each part of the company can modify their actions to make it happen. Throughout the organization, factors such as time pressure and poor prioritization exacerbate this by having people work on too many tasks at time, and never being able to properly complete tasks, all resulting in confusion on task priority. This results in an environment where people know so little about another person’s job that they do not even fully comprehend each other’s language and cannot provide information in a format usable by others in the chain of delivering projects. In the research conducted for this book, it was clear that executives have to dig through reams of project details to glean whether or not there is a problem that needs their attention, they do not understand whether the risks affect the entire company, nor what actions they need to take. Project managers and middle managers are at a loss as to what executives are asking and it takes multiple attempts to get sufficient

Introduction  xxxix

direction. Some of this is due to the incongruity of career paths (rarely do project managers become CEOs, hence CEOs do not understand the project management vernacular) and the project managers often do not know how their projects fit into the corporate vision and goals (let alone how to summarize their information to an executive level). Improving communication paths to create a common understanding and thoroughly defining roles and accountability, goes a long way to solving these problems. The five items above are at the core of resolving this issue. The following chapters will define solutions to these issues and provide a framework for implementing them in any organization.

The Book’s Structure –

– – –

Although there are six gaps represented by seven sections in the book, the gaps are not distinctly separate. They are heavily intermingled and support one another. Common understanding is fed by alignment and leadership, executive sponsors need to be leaders held accountable for alignment and adoption. However, books are linear. Therefore, the gaps are discussed in what is considered the most logical fashion. There is a section for each gap and a seventh section to “pull it all together;” Figure I.3 helps illustrate this. Each gap has the same structure: The problem statement. Research results from our surveys, interviews, other researchers, and experience. Solutions to the problems.

Figure I.3: Book Structure

xl  Introduction Some gaps are covered in one chapter, others in two, and leadership in three. They, too, have structure as each closes with the following sections: – Key takeaways for executives. – Key takeaways for project and middle managers. – Applying these concepts, which are three sets of study questions directed at everyone, executives, and project and middle managers.

Cross Referencing There were a lot of tough decisions regarding the layout of this book. For instance, accountability and responsibility are huge issues in many companies. These two items touch every one of these topics. Accountability could almost be a gap on its own. But, if so, that section would then be heavily redundant with the other sections. The answer was the index. By working with a professional indexer carefully, the index could provide that other view of the book that the reader could use to find the topics needed. So, whether you are reading this cover-to-cover or looking for specific topics, I hope you will find this often-ignored appendage very helpful. Please enjoy, learn, and feel free to visit the book’s website ( for additional material, downloads, or to reach out to the author.

GAP 1: Common Understanding Vision without action is a daydream. Action without vision is a nightmare. —Japanese proverb

Chapter 1 Understanding the Problem Houston, we have a problem.

—Jim Lovell

Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies. —Groucho Marx A problem well put is half solved.

—John Dewey

A group of distracted senior executives sits around the boardroom table while fidgeting with their iPads® and cell phones as the project manager and a few of her core team members come into the room for their project’s bimonthly executive review meeting. As she looks around the room she sees the same blank faces she has seen for the past few bimonthly reviews. Some have a stake in the project while others are there because the CEO required their attendance. Her team has spent the better part of a week preparing for the presentation based on the project management office’s (PMO) required list of reports and graphs. They show hundreds of tasks being completed and a few dozen falling behind schedule. She presents tables highlighting the relentless stream of customer change orders and the growing risk register. At times, her team members speak up to highlight specific items. She adds as much excitement

DOI 10.1515/9781501506390-001

4  Chapter 1: Understanding the Problem as possible to describe how earned value is increasing; the estimate-at-completion has increased only slightly. The customer is anxious, wondering if the operations team really understands the extent of the changes. She closes her ten-minute presentation providing numerous caveats on a few predictions. Expressionless, the CFO glares, analyzing the charts, and delivers a gut punch to the project manager: “I have three questions: What is our revenue recognition to date, will we deliver the project before we have to announce the quarterly earnings, and are we maintaining our margin?”

The CEO quickly adds that she is concerned how these changes are affecting the initiative’s goals, as key functionality has been replaced and may not be transferrable to other clients. With interest rates increasing and sales in this sector weakening, she delivers the next punch: “Is the ROI still valid?”

The project manager looks back with a blank stare, her stomach feeling like a lead ball. She has no idea about the margin, nor about sales forecasts, nor when earnings forecasts are due, let alone the federal rules around revenue recognition. The project was already justified and the customer is not going to pay if the promised changes are not made. In fact, the CEO signed off on the changes two months ago, some of them against the project manager’s advice. She looks for her executive sponsor, but, as usual, he is not in the meeting. The PMO manager nods her head seeming to approve the questions while offering no assistance. Both the CFO and the CEO are annoyed that they must wait for answers and start talking about the project in third person. The CEO looks to the PMO manager and says, “These are standard questions all project managers should be able to answer. Let’s get Steve in here to straighten this out.” The PMO manager takes a few notes. The project manager and her team are dismissed. From the executive’s perspective, the wrong data were presented. There is another perspective. Nothing strikes more fear into a project manager’s heart than hearing: “I am from management. I am here to help.”

This short statement and its reaction highlight a number of issues in today’s business. The project manager’s impression of managers, leadership, and executives is that they are out of touch with the project and the customer, do not understand project management, have only their own interests in mind, and do nothing but get in the way. In actuality, the help does not get the project closer to delivery. It adds layers of governance in the form of reports and spreadsheets, extra meetings, further uncertainty, and new work. The project manager already is faced with late tasks, too few resources, and an unhappy customer; management’s “help” only adds more work.

Linear Thinking Causes the Problem  5

Examining management’s welcoming line closely, there is an implied confession. The executives are admitting they were not “here” to begin with. They were too far from the project to see the issues arise or to hear the requests for assistance from the project team. They are admitting there has been a gap between them and the project. There is a third perspective—end users. In a recent demonstration of the prototype, the end user was frustrated by the functionality. People do not want to use the product because it is too complex and slows their work. These poor folks just want a solution to a problem. Maybe it is a building expansion to increase manufacturing capabilities, but the truss supports make effective equipment layout difficult; it could be a new road to ease traffic congestion, but the access ramps are too narrow; it could be a modification to a piece of software that requires twice the amount of data; or it is a “better” procedure to buy raw material that requires three competitive bids on all purchases in an attempt to decrease material costs, but slows procurement to a crawl. End users have a need to be addressed. They expect some level of value from the solution. Unfortunately, end users are rarely experts at creating what they need; they are experts in using it. Their measure of success is value and their most common constraint is cost. In most cases these two items, value and budget, are in tension. The value they want is outside their budget. The result is ongoing compromise and change. People on all sides of a project need education and, as the end user gains knowledge, their needs change even more. In this process, they become more annoyed with the project manager’s spreadsheets as the value they desire is subjective and cannot be shown mathematically. These simple scenarios play out hundreds of times a day and are just three common examples of how we experience gaps between strategy and execution. Projects lose their alignment with corporate goals because targets change to meet the everchanging business environment, goals are not understood or disseminated to begin with, project scope changes to meet customer requests, or, more likely, some combination of these and other factors. More governance is applied to ensure gaps between goals and project deliverables do not occur again. The result is that the customer, client, or end user rejects the deliverable as unusable.1 Instead of closing gaps, these actions expand them as the new layers remove the project farther from the executives. They hobble the entire organization; slowing its ability to respond. There are no accountable executives ensuring the corporate goals are met and that the customer is happy. Governance creates irrelevant reporting requirements and no one is handling change management. People are headed for different goals and talking different languages. Leadership breaks down.

 1 In order to improve readability, two shortcuts have been used. The output of a project (the product, result, or service) is simply referred to as the project’s product or output. Similarly, the term customer, client, and end user are used somewhat interchangeably throughout the book to refer to the group of people using the project’s product. Most commonly, the term end user will be used.

6  Chapter 1: Understanding the Problem

Linear Thinking Causes the Problem The scenarios above provide three possible perspectives—the executive, the project, and the end user. They highlight the gaps in how our businesses, non-profits, and government organizations track strategy execution and project alignment. They also show how perspective hinders our understanding. Experience shows that organizations from every business domain—regardless of size, domain, or home continent; whether government or non-profit; privately or publicly owned—have these same scenarios play out with roughly the same consequences. They lose both effectiveness and efficiency. As a result, customers get frustrated and look for new suppliers. At times, these gaps—common understanding, alignment, sponsorship, adoption, effective governance, and leadership—become chasms and a crisis ensues. When the problem reaches a fever pitch, action happens. This is too little, too late, and usually produces incomplete results. The solution is too narrowly focused, due to delivery constraints, and it applies to a specific situation dealing with just that one project. People looking at symptoms on a single project or initiative miss the common threads that run through numerous projects, especially if they run across lateral business silos. Root causes are rarely addressed because we want to find the “one thing” to solve the problem. The more general solution, that would fix this and future projects, is overlooked. It takes far more work to completely investigate a systemic solution than time and budgets allow. Hence, the problems resurface in slightly different forms and rarely point to common root issues. Angry customers, more bureaucracy, finger pointing, missed goals, loss of direction, confusion, general frustration, and outright failure (see Case Study: What’s in a Name?) are common outcomes. Six gaps in today’s businesses can plague projects. These six gaps all need to be attended to. By addressing just one, little improvement is seen. These six gaps are: – Common understanding of problems and direction (Chapter ). – Alignment between corporate goals and projects (Chapter ). – Effective executive sponsorship (Chapters  and ). – Adoption and organization change management (Chapters  and ). – Right sized governance—not too heavy and not too light (Chapters  and ). – Leadership distributed throughout the project execution stack (Chapters ,  and ). The idea that multiple issues are at the source of most of our project problems (not to mention corporate ones) comes from experience. After fixing, auditing, or researching dozens of troubled projects, I have found that none had the simple solution of fixing just one problem. Trivial issues were solved long before I arrived. Real failures have three to five core issues to solve (see Case Study: Affordable Care Act Marketplace Failure—Cover Oregon). Executives always request I identify and fix “the problem” and instead I always

Linear Thinking Causes the Problem  7

find multiple problems. Until 2007, my hands were tied to fixing only “the project.” In that year, I proposed something new to a client. I would work on solving its project’s problems, if I could then address the root causes. On a gentleman’s handshake, we proceeded. Sure enough, we found three major contributors. Poor executive representation (poor leadership and sponsorship), lack of a distinct end user (lack of understanding and alignment), and no maintenance group (missing governance) were reasons for the failure. We addressed each by requiring executive sponsors on all projects, ensuring projects were aligned with clearly defined goals and end users, correcting numerous issues in the development environments (affecting all work), and creating a core team dedicated to the product we were modifying (affecting future projects on that product). The symptoms seen on the rescued project never recurred on other projects.

Case Study: What’s in a Name? As a member of the National Speakers Association (NSA), I attended the organization’s July  annual conference in San Diego. The conference leaders were hyping an exciting closing session that none of us could afford to miss. The final day came and as the , attendees strolled into the final general session we were handed luggage tags and backup batteries for our cell phones branded for a company called Platform—typical conference tchotchke. The session was highly produced with loud music, Madison Avenue video, and (of course) professional speakers touting how we all came from a wide array of industries ranging from sales to training, from music to comedy, but we all had one thing in common—we deliver our goods from a platform. From then on, the National Speakers Association would be known as Platform! The hall’s first three rows (occupied by the executive team and subcommittees who knew about the name change prior to the conference) jumped to their feet erupting into cheers and whistles. The rest of us sat, wondering how the line “I am a professional member of Platform” was going to help us be understood as professional speakers. Granted, saying we are members of the NSA caused heads to turn (most people thinking we are with the U.S. National Security Agency), but it surely is a good conversation starter. Without a doubt, the current name has many issues. However, the new name had two major problems. First, it did not mean anything to our customers and, second, the brand “Platform” was already used—by Michael Hyatt (an NSA member). Two weeks later the organization’s newly appointed president reversed the decision and we stayed with the name National Speakers Association. Hundreds of thousands of dollars were thrown away. Were there gaps in this failure? Not being invited to analyze the failure, I can only surmise. But surely the senior executives in the organization were out of touch with its membership (its customer) and did not keep the solution aligned with its customer’s needs. There appeared to be no attempt at change management, as the solution’s unveiling was designed as a surprise. Lastly, the project’s oversight appears to have followed governance rules that were focused on the executive team, not the membership (their customer), and failed to carry out a primary function of governance—due diligence. One might also assume that leadership was deficient. Understanding how the organization’s executives (all highly experienced presenters) could not have anticipated the reaction is difficult. Or did they just give the project to a branding company and not apply (or were afraid to apply) critical judgement? Regardless, alignment, leadership, change management, effective governance, and sponsorship seem to have been overlooked—gaps that cost the organization dearly.

8  Chapter 1: Understanding the Problem

Case Study: Affordable Care Act Marketplace Failure—Cover Oregon In , the Patient Protection and Affordable Care Act (commonly referred to as simply the ACA) became law in the Unites States; its goal is to provide affordable health insurance to all US citizens. It includes provisions for individual states to use the federal health insurance marketplace or to create their own health insurance exchange. The ACA required all exchanges to be functional by October , . The State of Oregon opted to create its own insurance exchange called Cover Oregon. It was envisioned to be a self-sustaining company within five years of operation. Until nearly two weeks after Cover Oregon was supposed to go live, the project leadership continued to tell people that there were few problems with the system and it would be live soon.i Over the ensuing months it became very apparent that the system would not go live and all insurance applications would need to be processed manually. Oracle, the primary contractor, sued Oregon for unpaid invoices and Oregon sued Oracle for non-delivery and racketeering. Oregon’s Governor, Kate Brown, signed Oregon Senate Bill  to abolish Cover Oregon on March , , and Oregon reverted to the federal marketplace.ii A classic colossal failure. I was contacted by a reporter to review contracts, purchase orders, statements of work, and two audits commissioned by the State of Oregon in order to help the Oregonian newspaper prepare accurate news articles.iii The following list summarizes the primary issues our assessment identified as contributing to the failure: – The State decided early in the project to not only build the health insurance exchange, but to modernize Oregon’s Department of Human Services systems at the same time. Either of these projects is a major undertaking, doing them in tandem would create even higher risk. This was witnessed by the fact that there were five scope-related documents that were overlapping but not in agreement.iv – Both audits cited accountability as an issue. One completed by First Data in February  stated, “there was no single point of authority.”v A subsequent audit conducted by Hamstreet & Associates later in  more bluntly stated, “There was little accountability among management.”vi – The primary subcontractor, Oracle, was not held accountable for their work. The State of Oregon took on all the project risk and liability by signing a time and materials statement of work where Oracle had no deliverables. Oracle’s role was clear—simply assist Oregon in building the system.vii – Governance, although complete, was ineffective. The First Data audit also pointed out that “although the project had a governance structure . . . it was not effective at the project level.”viii – Although dozens of software products were to be integrated, the State of Oregon made a financial decision not to hire a system integrator, as originally planned, and perform the task themselves. As the State had never worked as a system integrator on any projects this size, this decision incurred extremely high risk.ix – Monthly reports were issued by the quality control company, MAXIMUS, showing the project was in danger in numerous areas. The areas in serious trouble (coded red) included scope, schedule, inter-organization coordination, project management, content, and testing.x However, these reports “were generally viewed as nothing unusual for a project of its scope and with such an aggressive schedule. Overall, leadership became de-sensitized to the ongoing red status.”xi The First Data audit reported “Multiple members of the [Legislative Oversight] committee told us they were completely unaware of the MAXIMUS QA role and had not received any of the QA reports.”xii Numerous issues contributed to the catastrophic failure of Cover Oregon. Gaps in accountability, alignment to goals, governance, and leadership are clearly visible in the demise of this project. The cost to taxpayer was $ million . . . before the lawsuits.xiii

Linear Thinking Causes the Problem  9

As humans, we like to think about cause and effect in a nice linear fashion. However, there is rarely a single problem at a serious issue’s root. As in the above examples, there are multiple issues and they all need addressing or problems will persist. In fact, just addressing one will undermine attempts to fix the others. Working on just one will not result in an appreciable change in people’s beliefs and expectations and they will chide the “solution,” pointing to continued issues as evidence. Quick identification of multiple root causes is impossible; it simply takes longer. It has no bearing on a person’s intelligence or education. A great but personal illustration of this notion is when doctors stumbled on my wife’s medical diagnosis in 2005. At the age of 46, my wife, Tammi, was regularly experiencing left shoulder pain, shortness of breath, nausea, and profuse sweating. I am sure many readers know what these symptoms imply. Based on a recent CT scan, though, her doctor’s diagnosis was spinal stenosis (narrowing of the spinal column putting pressure on the spinal cord) causing a pinched nerve in her neck. I was not convinced. One cloudy Wednesday morning, these symptoms were accompanied with a loss of function of her left hand and she could not pick up her toothbrush. We went for an urgent checkup at the clinic. I was failing to convince myself that this was not a heart attack. Her doctor, still convinced the prior diagnosis was correct, ordered a sling for Tammi’s arm. While two nurses fumbled at trying to get my wife’s left arm into the sling, I had a tense, terse, and colorful conversation with her doctor culminating in my ordering her to give my wife some nitroglycerin. She relented. Tammi took the pills and the symptoms nearly vanished. Immediately an ambulance was called to transport her to the emergency room, where, about 5 hours later, she suffered a massive heart attack. As the catheterization team members attempted to stent her heart using the common femoral artery entry point (in her right thigh), they discovered the aorta was occluded below the kidneys. They completed the stenting using a more complex protocol through the radial artery in her right arm. The stenting procedure’s results were immediate and positive. The doctors declared success and saw no connection between the two blocked arteries—the coronary and aortic. Further, they had no explanation for the miraculous return of mobility to the left hand. In the subsequent three days, we returned home, the pain returned to her left arm, and its mobility slowly degraded. We returned to the hospital where the cardiologist, Dr. Lucious (all doctors’ names are fictitious), told us that the stenting procedure could not have made her arm work better. He was acting as if she were not experiencing the symptoms. I hypothesized a scenario that the blood thinners used during stenting allowed blood to move past an occlusion in her left arm and, as these thinners were slowly metabolized, her blood thickened, her arm became starved of oxygen and nutrients, and its mobility decreased. Dr. Lucious fought back with his stent logic saying there was no way there could be so many issues exhibited simultaneously. After another heated exchange, he conceded and gave orders for an internal

10  Chapter 1: Understanding the Problem medicine doctor to examine Tammi. He continued grumbling that multiple issues could not persist. “It’s just not possible.” Dr. Hines, from internal medicine, arrived about 15 minutes later. Five minutes into his exam he informed my wife that I was wrong, “Mrs. Williams, you have had a stroke.” She did not have a blood clot in her left arm. She had an embolus (blood clot) in her brain’s right hemisphere. The doctors scheduled urgent surgery and would not let her leave the hospital until the surgery could be performed. The pinched nerve that doctors were trying to fix with a sling was the wrong diagnosis. The problem was really a complex set of issues (the three major ones being peripheral, cerebral, and cardio arterial disease), which eventually took eight surgeries and significant lifestyle changes to address. Doctors were looking for the “one thing” and failed to step back and look at the patient. They treated the symptoms and not the system. Today, Dr. Lucious is Tammi’s most ardent advocate. He starts every appointment with, “Tell me what ails you?” He wants to understand all of her issues, not just the ones related to his area of expertise as her cardiologist. As a temporary endeavor with a distinct beginning and ending (a happy one, in this situation), this case meets the definition of a project that we can analyze for gaps. Most obvious, there was no executive sponsor and leadership was fragmented. The advocate for the patient (the executive sponsor) ended up being me—with no medical training. I had to lead a reluctant set of doctors, whose cumulative years of education easily dwarfed the 48 years I had been alive, to assess the problem (my wife’s condition) and build a project (set of surgeries, procedures, medicines, and lifestyle changes) that would save her life. There was no steering committee or oversight advocating a systemic approach. All the doctors had the same goal—saving Tammi’s life—but were not aligned on common understanding of how to achieve that goal. They were working in silos of expertise and that perspective biased their understanding. Five of the six major gaps in business noted above existed—lack of a common understanding, poor leadership, no executive sponsor, inappropriate governance, and a poorly aligned team. Of the six, the only one filled was change management with numerous specialists in Tammi’s room daily, coaching her and me on changing our diet, vices, and exercise. The other change—getting the physicians to change how they interacted—was absent and long in coming. Persistent problems in organizations are not the result of one root cause. These issues are usually solved quickly. Tenacious problems that impede our progress have numerous core issues that work together. Addressing one will not show drastic improvement, and we quite often move on to the next in hopes that it will be the magic cure. In the meantime, the first issue resurfaces due to lack of attention. We need to address all the root causes with equal passion. Then the problem goes away.

The Role of Vernacular  11

The Role of Vernacular The mishandling of Tammi’s nearly fatal medical episode was a result of gaps between perspectives and the common assumption that problems stem from one issue and grow linearly. The same happens in every project. There is yet another problem. Surely you notice the words I used in describing my wife’s incident; they have a medical ring to them. The story leaves out the hours I spent talking to friends in the medical field and researching topics on the web. During my wife’s 2005 incident, I learned to use contusion for a cut, nevus for a mole, lesion for any sort of wound, injury, bruise, abrasion, or, yes, contusion. Grafts are no longer related to trees, but to arteries and veins. A cabbage is not something to eat, but coronary artery bypass graft (CABG); heart attacks are MIs (myocardial infarctions); and clots are emboli. Exploiting these words in conversations with physicians changed our interactions. During one emergency room visit, as I enumerated my wife’s conditions, the attending physician who was crouched over her looked up at me and asked, “Are you a physician?” Although I had to say no, I had won his respect because we had a common language for understanding each other. Changing vocabulary will work for you, too. If you have not tried this trick, give it a test and see how your dealings with other professionals change. Use the word intervention in the public school system and your child will get extra help in math, reading, or some other subject. Use the same word with mental health professionals and you will solicit dozens of people to help someone with substance abuse or mental health issues. Use it again with your spouse and he or she will simply break up an argument between your children. Using key words in the right context visibly relaxes people, creates a call to action, and opens them up to providing more information (often using other odd words you will need to look up and learn). A similar, albeit more subtle, situation exists between executives and project managers. A few years ago, I published a white paper titled Implementing Projects Successfully. There was a lot of research behind the paper and I was excited to see its reception. I emailed it to a few dozen executives. The click-through stats (the number of times someone clicked on the link to access the white paper) were dismal. A couple of weeks later, I met with one of the executives and asked him what he thought of the paper. I knew he had not clicked on the link, so I brought along a hard copy. He could not remember getting the email, so I gave him the printed article and described what it was about. He looked me straight in the eye and said, in a nearly condescending manner, “Rename it Executing Initiatives Successfully.” I did and my executive readers jumped on the article. The initial title may appeal to project managers, but not to executives. Executives speak of initiatives, execution, goals, earnings, executive sponsors, and value, while project managers and most middle managers speak of projects, implementation, cost, project sponsors, and scope. Executives want summaries while project managers are hired for their attention to detail. They use different vernacular and, after

12  Chapter 1: Understanding the Problem just a couple of sentences, executives have project managers pigeon-holed into the “technician” column and their attention level subconsciously drops. Even this is only a symptom of a larger and more complex problem. Project managers have a very poor understanding of what an executive does for a living and few executives have ever been project managers. After all, executives most likely come up through the ranks from sales, marketing, or operations. Their business careers have focused on revenue and hitting monthly or quarterly targets. They have most likely been on the receiving end of a project, as the customer or end user, accepting or rejecting the project’s deliverable based on its value. Even though their monthly targets are based on numerous individual sales (which may resemble tasks), their eyes are always on a bigger prize, such as monthly sales goals. Projects managers, by contrast, are always monitoring scope, schedule, and budget. They rarely have a constant monthly or quarterly target to show their progress. One month they may need to build a freeway ramp and the next week install a chiller (air conditioner) on a building. In technical projects, it may be one obscure intangible component one month and the next month a different, but equally obscure and intangible, component. Anyone unfamiliar with the specific technology has little insight into whether progress has been made. Executives rightfully have trouble understanding the arcane details. Even worse, these goals have nothing to do with most executive’s penchant for generating revenue—the products of a project do that. Rarely do projects generate income; they are usually an expense. Projects simply erode net income, EBITDA (earnings before interest, taxes, depreciation, and amortization), cash flow, or some other measure that executives and their stockholders are actually concerned about. The contrast can continue when looking at risk. Executives tend to be risk averse. Risk is a way of life for project managers, who thrive on it. Project managers discuss risk in infinite detail (often with a little excitement) and at the smallest levels. This unnerves executives who track corporate risk in a much different way. Corporate risk is much broader—currency fluctuations, collective bargaining agreements, global conflicts, levies and tariffs, and the like. Executives have thirty or so risks touching the company, while project managers have hundreds affecting part of one project. A project manager’s discussion of risk seems simple, even trite. The discussion on vernacular is truly not semantics. It should be obvious at this point that some words need a common definition to facilitate any chance of groups having a common understanding of what needs to be done. At the center of gaining that understanding are the words success, accountability, and goals.

The Real Measure of Success: Value Value is the only real measure of initiative or project success. We have all seen projects that meet their scope, schedule, and budget targets, but are nonetheless under

The Real Measure of Success: Value  13

or never utilized (see the Case Studies What’s in a Name? or Affordable Care Act Marketplace Failure—Cover Oregon). Their products may be too difficult to use, do not provide enough functionality, have so many options they become confusing, have poor ergonomics, are ugly, or possess some other subjective objection. Something about them blocks their adoption. The opposite, however, is also true. Some projects can be grossly over budget, years late, and fail to provide the functionality specified and yet they are considered wildly successful. Let’s explore one of these well-documented projects—the Hubble Space Telescope’s deployment.

Hubble Space Telescope Deployment Project All projects deliver new capabilities based on a visionary’s idea. The Hubble Space Telescope is no exception. The space telescope was originally envisioned in 1923 by the German physicist Hermann Oberth; however, as his vision was well ahead of technology; a half-century had to elapse for the idea to be considered feasible. In 1977, a space telescope project was funded with $200 million, half of what was requested (Congress’ attempt at governance). Hubble’s projected launch year was 1983. The spacecraft, however, did not enter final assembly until two years after its originally scheduled launch date. Delayed by scope modifications and the Shuttle Challenger tragedy, xiv orbit finally occurred in 1990. It was heralded as a huge achievement. Everyone anxiously waited for the telescope’s stabilization and the transmission of the first highly-touted crisp images of deep space. Unfortunately, the images were anything but spectacular. The space telescope’s originally price of $400 million had ballooned to $2.5 billion. It was seven years late getting into space. Now there was a new problem. NASA discovered that quality assurance testing on the ground had failed to find a “spherical aberration” in a mal-manufactured mirror, which was now 353 miles above the earth and could not be replaced. In other words, the mirror was ground incorrectly and could not focus on distant images. As the mirror is the foundational component to any telescope (interstellar or terrestrial), a poorly manufactured mirror is the cardinal sin. NASA and their subcontractor, PerkinElmer, Inc., had missed the basics of Astronomy 101 by, according to the mirror subcontractor, NASA leadership’s pressures to shorten the production timeline. Rocket scientists, being what they are, though, developed a solution and in 1993 a second Hubble-centric shuttle mission delivered and installed a high-tech set of “contact lenses” allowing the telescope to deliver the stunning images that have become so familiar today. Images that have mesmerized people the world over. Images whose biggest tangible benefit to the laypeople whose taxes paid for them is as wallpaper and desktop backgrounds for their home and work computers.

14  Chapter 1: Understanding the Problem Although the project to deploy a functioning telescope was over, the story was not. Hubble still required periodic service missions to maintain its orbit, add new test equipment, and repair any malfunctioning modules. In 2003, however, tragedy struck again and, with the loss of the Space Shuttle Columbia, NASA’s Administrator Sean O’Keefe was forced to order that all shuttle flights have the ability to take safe harbor in the International Space Station. Hubble’s orbit, unfortunately, is not coincident with the space station’s, and O’Keefe had to make the difficult decision that another “mission with the Shuttle would be too risky.”xv The final Hubble servicing mission was canceled. The reaction was immediate and resounding. Millions of people complained, forcing the U.S. Congress and NASA to develop an alternative solution over deorbiting the telescope early. In 2009, the final servicing mission was flown on Shuttle Atlantis, with the Shuttle Endeavor in full ready to be launched if troubles on Atlantis arosexvi. Being more than six times its original cost, ten years late (doubling the timeline), and not functioning as designed should get people screaming for investigations on misuse of taxpayer money to extend a telescope’s usable life. At a minimum, there should have been an uproar about risking human life for a telescope. To the millions of laypeople in the United States (who could lobby Congress), and tens of millions around the world, the Hubble Space Telescope had greater value—value measured in pictures and discoveries fueling imagination, hopes, and dreams. For many, the only tangible connection was as computer wallpaper, but this translated to value. These pictures allowed people to dream of the final frontier, finding new worlds beyond our own, and going where no man or woman had gone before. It was this intangible, likely unpredictable, attribute of value that made this program a success. Value is not something that can be determined in a spreadsheet. Hubble’s success, and that of many other projects, has little to do with scope, schedule, or budget. Yet, time and again, projects are graded on how they are tracking on these three quantifiable elements. Meanwhile, executives and customers are preaching that projects must deliver value. This definitional disconnect around success is a major issue that organizations must resolve.

Measuring Value Daily we are barraged with commercials brainwashing us into thinking that value is synonymous with price. Big-box retailers, grocery store chains, and outlet stores want us to think that low price equates to value. However, other attributes fit into our internal calculation of value. Qualities such as durability, esthetics, social status, comfort, and size factor into the equation determining value. These characteristics deal with the item’s application. Projects must concern themselves with this larger systemic view that achieves a common understanding among stakeholders of success that reaches beyond scope, schedule, and budget to include value.

The Real Measure of Success: Value  15

Value depends on varying scope. Measuring and monitoring anticipated value takes a different type of project structure that interacts with a system larger than that of a conventional project team. As the project’s product or service is being built, project teams must have more exposure to their customers. This allows the eventual user to have continuous input to the scope and value. However, scope cannot change with every customer whim. To monitor value requires smaller, more frequent deliveries, customers who are realistic about their wants and needs, project and sales teams that avoid overcommitting, and honest brokers (from both the delivery and customer parties) finding middle ground on what functions and features yield the highest value. It requires defining the anticipated value in advance and adjusting expectations as the project proceeds. Value is subjective. The solution is getting customers, end users, citizenry, or their equivalent more involved with the project. Only they can judge value. Everyone knows of projects that seem to have little value for humankind. But value can come in unexpected forms and realized only years later. For instance, some people say that the space race and putting a man on the moon was a complete waste of money. Reflect, however, on all the products that came from that endeavor. Dozens of spinoffs were created developing new technology for the Apollo program. Companies and products that seem to have little connection to interplanetary travel were created. The result was a wide range of new products, including solar panels, pacemakers, heart monitors, cordless drills, quartz timepieces, the DustBuster®, piglet nursing machines, etc.xvii The trend continues to this day.2 Now think of the unquantifiable benefits from kids of that era who made science, technology, engineering, and math (STEM) a core part of their curriculum because they wanted to be astronauts. Juxtapose that to today’s challenge where we lure middle school students to study these topics with the carrot of lucrative careers (astronauts being far more altruistic). At times, a project’s value is not seen for years. The 1962 World’s Fair may not have been a huge money maker for a small lumber-oriented city in the backwaters of the northwest United States. More than 50 years later, however, few fail to see the Space Needle’s picture, the fair’s iconic product, as Seattle’s trademark. By economic measures, it was a huge expense for a single, high-priced restaurant and observation deck. As with other world’s fairs and Olympic grounds, the benefits are deferred and come in the form of revitalized cities with open public spaces and infrastructure providing immeasurable value. Value is delivered during the project, not just at the end. Value, though, is not just in the end product or service. It is often in how you get there. No one knew they needed Post-It® Notes (a failed super glue project) or the Internet (a military project). They were projects where someone saw a different application of a product

 2 See current tracking of spinoffs from NASA at

16  Chapter 1: Understanding the Problem to create more value. Quite often projects take a turn that creates something new and better than was originally intended. This happens on a much smaller scale in every project. Customers have a concept about a need, but may not fully comprehend the possibilities. The project starts by investigating what the customers want, and the project team leads customers to a concept that improves the end product. This switch of guiding customers to what they need versus what they want is often of more value than the end product. This requires excellent leadership skills inside the project, as the project team has no authority over the customer. Nowhere is this more evident than in software development projects. Too often, information technology (IT) departments are more enamored with technology than the business they are trying to serve. Technology gives them the ability to build just about anything. They often do just that, failing to analyze the problem and building what is asked for instead of what the customer needs. Exacerbating the heroic, and sometimes magical, view of technology is the non-IT professional’s experience with it solving many problems in quick fashion. Apps for phones, free web services, lifesaving medical devices, and cars with integrated electronics are just a few of the places where technology is integrated with our lives. We even see loads of cool tools to solve our personal and business needs in the technology sections of in-flight magazines. Often, they do solve our individual problems. However, in the complex world of business, where there are hundreds of users each with special needs, it is a different situation—a bigger system. Providing subject matter experts (SMEs) is a huge value in most projects. SMEs help educate and lead customers to a common understanding of what they need. Although SMEs are heavily used in the technology world, this concept extends to other domains. On other projects, the need may be in understanding new roofing material for a home or business or a new road’s placement to accommodate better urban planning. This is leadership at its finest: architects, designers, business analysts or the like—front-line team members—leading the customer to the right solution and adding value to the deliverables without any authority to make people change their minds—using logic, persuasion, reputation, and influence. Value—project success—comes from many areas. In fact, value could come from cancelling a project that is discovered to be too difficult before it wastes buckets of company money and people’s time. Without shifting the focus of project success to a common understanding of its value, the struggle to succeed will continue.

Accountability  17

Accountability Accountability has turned into a nasty fourteen-letter word. It has been made synonymous with punishment. To “hold someone accountable” is the same as identifying who is fired when something goes wrong. Hence, accountability is avoided at all costs—even if that choice means setting a project up for the f-word—failure. There are a few basic concepts that must be clarified about accountability: – Accountability is not just punishment and rewards. There is no place with a greater misunderstanding of accountability than public office (with reinforcement on the nightly news). Find any troubled government program and you will also find an accompanying clamor in the media from reporters, pundits, and political opponents trying to find the “guilty” party and hold them “accountable,” in other words, fire them. Punitive actions, however, do not solve the problem. To correct problems, we need: – Clearly stated achievable goals. – Criteria for altering those goals. – Standards for selecting team members. – Delineated roles and responsibilities. Firing people does not achieve this. These four actions need to replace our penchant for punishment. These are behaviors steeped in the organization’s culture. Blame and punishment need to succumb to real accountability at all levels of the company. – Accountability is decision making. Accountability is about making decisions to take a project toward delivering value. The organization’s culture creates the negative attitudes associated with the word. No one is going to call the product manager for sildenafil citrate, a little blue pill to treat angina patients, a failure for not helping its intended customers with chest pain. During clinical trials, the product manager was astute enough to comprehend the side effects’ value and redirect the drug’s focus to a very different market. With that decision, VIAGRA® was born and has made Pfizer untold millions in profits. Accountability includes making decisions that could change the entire definition of the project and the customer. – Accountability needs to be at all levels of the company. The misconception that accountability and authority go hand-in-hand is rampant. Many organizations, such as Toyota Motor Corporation, intentionally withhold authority from many of the people accountable for program and project success.3 Other companies,

 3 In The Toyota Way, 14 Management Principles from the World’s Greatest Manufacturer (McGraw-Hill Education, 2004), Jeffrey K. Liker points out that chief engineers (CEs) rarely have any authority over their product lines. They must earn the respect of people to set direction and implement changes. Experience has shown his same concept being used in other companies in the US and Europe.

18  Chapter 1: Understanding the Problem like Intel Corporation, are well known for their efforts with their suppliers to create new equipment. Teams of Intel employees combined with vendor employees work in a collaborative environment, neither having authority over the other.xviii In these settings, people gain authority by building alliances and garnering respect from others. Anyone in the organization can earn authority based on what they have mastered. Leadership without authority is the case in every project. Project managers and their team members have little to no authority over one another and over the end user. Project structures are nearly all matrixed, some include tertiary authorities like labor unions, and everyone has someone outside the project as a solid line boss. Again, there is no positional authority. Persuasion, knowledge, non-positional influence, and other leadership skills are essential to make progress on any project. The challenge with accountability is very evident in the interviews we conducted on executive sponsorship. One of the questions asked was, “Who is accountable for the project’s success?” In one of the first interviews, a respondent said it was the project manager. When asked why it was not the executive sponsor, she replied “Executives are too high up in the organization to be held accountable.” In subsequent interviews, we asked respondents how they interpreted that comment with respect to their organizations. Nearly everyone said that there was a vein of truth in that statement and, at least visibly, punishment for failure drifted “downhill,” while success was reaped at the top.

Goals, Objectives, and Priorities There are always two parties setting different goals for a project—the delivering side and the receiving side. For products and services delivered outside a company, goals are set around the customers’ adoption rates along with targets for the company’s potential profit. If both goals are met, the project is a success. However, if a product is widely adopted (the customer sees value), but does not make the delivering organization any money (no value for the company), it is a failure. For internal projects, success is gauged by the ability to move the company toward some operational or strategic goal and the solution’s adoption. Like the external project, if it is completed within scope, schedule, and budget, but its output is not adopted, this project is also a failure. Value is not a one-sided proposition; everyone in the project’s delivery must receive commensurate value from the project’s goals. Central to success is understanding each party’s goals, and, when changes are made, all sides must gain or compromise the same amount. The goals are determined at the project’s outset and adjusted as needed. Because project teams are so focused

Goals, Objectives, and Priorities  19

on the customer, they often have a better understanding of the customer’s goals than the delivering organization’s goals. Most projects have goals addressing a single overall objective that fits into one of four categories.4 The classifications are: – Strategic: Meeting some strategic goal to differentiate the organization from its competition through adding new capabilities, and so forth. – Operational: Addressing operational issues for improving capabilities and efficiencies. – Compliance: Maintaining or achieving a regulatory requirement to keep the company in a given line of business. – Maintenance: Preserving an asset’s value. Some more complex projects try to meet multiple objectives and rarely succeed because of the inherent conflicts in intrinsic priority. For instance, compliance projects are generally the most important, since failing to meet a regulation can be fatal for that line of business. Maintenance projects (which include everything from re-painting buildings, to maintenance overhauls on tools, to employee training, to upgrading software) show the biggest challenge in prioritization. Executives may say that preserving assets is critical, but when budgets get tight, these projects are usually the first to be cut. Maintenance projects, in reality, are often the lowest priority. Mixing two or more styles of project can cause significant issues if budgets get tight. Think of a project that is intended to meet a regulatory requirement, but also is supposed to modernize the infrastructure to support it. If sales drop, the maintenance aspect may need to be removed to save costs, but the two may be heavily intertwined. Possessing a corporate-wide understanding of these objectives and priorities is crucial. Unfortunately, they are often poorly understood (a gap that will be explored in Chapter 2, “Creating and Maintaining Corporate Alignment”). When people are attuned to how projects are meeting the organization’s goals and why priorities are set as they are, people can make better decisions on what work provides the highest value. One reality must never be ignored—goals change as do their respective priorities. Strategies are set as a baseline and are changed when external forces require it. Understanding this improves project performance because it improves decision-making as people have a better comprehension of the impact of their decisions. Hence, the interplay of accountability, value, goals, and project success.

 4 This is an expansion of Michael Porter’s two-category view—strategic and operational. He includes maintenance and compliance in the operational category. These are broken out here as our focus is on projects and priority and these two subcategories have significance. See Michael E. Porter, “What is Strategy?,” Harvard Business Review, 1996,

20  Chapter 1: Understanding the Problem Tools, such as balanced scorecard, can help document a common understanding and disseminate the information, but the tool alone cannot change the corporate culture. The principles of value, accountability, change management, and lean governance must be in place first. There is a significant vernacular gap in our companies. Executives use executive-speak and project managers use project-speak. This gap has to close. Executives need to be clear about their expectations for information. Project managers need to understand business better—they need to improve their business acumen.

Tension versus Gaps Tension often surfaces when creativity meets organizational constraints. This tension actually improves creativity as people develop work-arounds for the constraints. The concept was coined by Peter Senge5 to describe two or more opposing goals that make up a vision.xix For instance, creativity takes time and money. Tension is created by the conflict between creativity and these constraints forcing the organization to balance the two. Understanding where tension exists is critical in decision making. An executive’s desire may be to maintain equipment, but the cash may be needed to meet some other operational goal. This tension causes us to stop and look closely at options and make the best decision possible, maybe even creating an entirely new vision. There are hundreds of tensions in a business. Project teams often cite tension as a reason for project trouble. The issue, though, is not tension, but rather the failure of executives to see the conflict and create a channel to relieve it (such as, different goals, timelines, or the like). Gaps occur where something is absent. When someone misses the connection between two items, such as maintenance and cash, there is a gap. Many gaps are created by overlooking tensions. The tension between value and the quantitative measures of scope, schedule, and budget is a common gap. When openly addressed, however, tensions provide people with creative opportunities. Tension is good for a business, because in the act of openly addressing it, people are given creative license to develop new approaches.

 5 Peter Senge is the author of numerous books on learning organizations and systems thinking. He is the founder of Society for Organizational Learning.

Identifying the Major Gaps Causing Project Failure  21

Identifying the Major Gaps Causing Project Failure There is another way to look at the hypothetical project status meeting that opened this chapter. It could be depicted as a meeting between two disparate groups of people speaking different languages, almost as if from different countries. One side of the conference room table has a bunch of risk averse, stay-the-course, profit-driven executives, while the other side has a group of thrill-seeking, detail-obsessed, change mongers, who recklessly spend money hoping to complete this project so they can move on to the next one. Although an overly dramatic depiction, it underscores the gap in perception. Unfortunately, neither party properly manages the gap and their reactions aggravate the situation. Project managers sensing that they are not communicating add more details making matters worse. Getting frustrated responses from the executives, they feel the executives are non-supportive and do not value project management. Executives, however, only want to hear about projects in terms of what they can do to assist. They want to make the right decisions to move the project forward, but they need to get that through conclusions drawn from parsed and compiled information, not the raw data. The executive dilemma is best summed up in a quote by a CFO in a major US-based, multistate, non-profit, healthcare maintenance organization whose company was trying to execute the newly legislated Affordable Care Act. Over dinner she was truly distressed when she stated, “I hate being an executive sponsor. The [project manager] comes in and spends ten minutes spewing out a bunch of technical project details that have no bearing on how to run a business and then wants me to make a decision on what to change in the project.” She is not alone. It goes beyond communication and requires understanding. To address the lack of understanding, project managers regularly “train” their executive sponsors in the project and project management techniques. Successful project managers map out a series of short meetings or encounters that resemble mentoring or coaching sessions with the executive sponsors. Detailed responsibilities are discussed along with the problems that occur if either fails to complete their tasks on schedule. It is not much different than one might treat a subordinate team member, except you have less authority with an executive. Although this solves the problem, it places the burden on the project manager when the executive sponsor should be just as keen to create the relationship. At the same time, an equally important education is taking place. The project manager gains an understanding of the executive’s constraints and what is important to him or her. For example, in one such meeting with a CEO as an executive sponsor, I quickly learned that talking about cost reduction was of no interest. He wanted to hear about how much time would be saved. Time-to-market was his only concern. We could double the cost for even a small change in time-to-market. This forever changed my discussions with him. It gave me the freedom to request nearly any budget as long

22  Chapter 1: Understanding the Problem as I could demonstrate a quicker time-to-market. Actions like these fill the gaps between the project and the executive. They need to also be part of the executive sponsor’s playbook when assigned to any project. To fix the problem, the executive sponsor also needs to take the lead and be responsible for establishing these meetings and building these bridges of understanding.

Common Understanding The key is that all employees have a common understanding of what the organization is trying to achieve. Communication is the start, using the correct vernacular helps, but the goal must be that everyone has a common understanding. It is the recurring theme in the stories above and a thread that continues throughout this book. Governance helps establish communication standards, but can also overburden people so they lose the message’s meaning. Corporate-alignment tools help connect actions to metrics and metrics to goals, but people can get lost in the numbers and lose track of the goal’s meaning. People can use the right words, talk the language, focus on communication, and still do not gain a common understanding. It takes all the pieces working together to establish a culture where people understand goals. When people truly understand where projects are headed, or should head, companies gain new skills. They become adroit over bungling, agile over awkward, nimble over lumbering, responsive over reactive, dexterous over clumsy. Decisions can be made quickly and close to the area affected. Customers get what they need, when they need it.

Problem Perspectives At the crux of fixing the six gaps (common understanding, alignment, sponsorship, change management, effective governance, and leadership) is how we approach problems—linearly. We like to believe that Action A causes Effect B and, if the Effect B becomes a problem, that by addressing Action A we can solve Effect B. In simple cases, we can. Unfortunately, we have all experienced unintended consequences from decisions. In 2008 and 2009, Wells Fargo created very aggressive sales goals with handsome bonuses handed out when people achieved them. Employees at all levels of the company devised ways to meet those goals. Unfortunately, some schemes, known at all levels of management, fraudulently created millions of new accounts for existing customers, charging them additional fees without the customer’s approval. This culminated in the forced retirement of their CEO, John Stumpf, in 2016.xx This is a standard consequence of addressing non-linear issues linearly and neglecting a systemic approach to solving the problem. In reality, most business issues are complex and need to be addressed systemically. We need to think about problems in a global manner.

Problem Perspectives  23

Let’s look at an organization—we will call it ElectroTech—that makes innovative electronics products. It was not meeting its goals for new product development and the first reaction was to create an innovation center to generate more new and exciting products. But without looking at the entire new product development (NPD) process, it was impossible to see where the real issues lie. Adding more products to the pipeline only made matters worse. After a brief analysis, it appeared that engineering was the bottleneck. Dozens of NPD projects were stalled in engineering queues as the staff was extremely busy trying to meet everyone’s requests leaving other departments with no work. This was getting closer to the real problem—the engineers never had the opportunity to focus and complete individual tasks. They wanted to focus; other groups were always changing engineering’s priorities. They had numerous areas where unaddressed tensions were causing problems: – The innovation center, needing engineering’s help to assess the viability and sizing of new projects, was pulling engineering away from their existing new product projects. – The marketing group, pushing engineering to complete products that were in the latter stages of the NPD process to meet marketing’s Friday release schedule, was pulling engineering resources from working on products in the front-end of the NPD process. – Constantly changing product priorities created confusion on an engineer’s next assignment. – Task switching (jumping from one project to another) was derailing the engineers’ ability to concentrate on a project, resulting in errors that generated rework—a huge waste of resources. Looking at the problem systemically and identifying the root of problems allows you to build what Peter Senge calls a learning organization. By being accustomed to looking at the system view, learning organizations can more easily identify these issues and remedy them. Their continual view of the larger system enables them to learn more about how their decisions work and might affect behavior. Our overburdened lives, however, make it difficult to step back and look at the bigger picture. The same is true for transforming a corporate vision into value. People have their day-to-day view of the business, but have a difficult time seeing how all of the different internal and external operations and functions fit together to make an entire company. There are many perspectives. Three—the executive, the project manager, and the end user—are common to nearly every project. Your project may have more, but, for our discussion, these three will suffice. In any given day, executives deal with investors, financial performance, employee satisfaction, business plans, corporate risks, and guiding the organization’s products and services. Their perspective could be diagrammed a cycle of events that affect one another, as shown in Figure 1.1. Planning generates operational budgets as

24  Chapter 1: Understanding the Problem well as goals for revenue and profit. Operations generates goods and services; these are sold, revenue is received, profit is generated, and the cycle continues. There are, however, many other factors affecting this cycle that executives have little or no control over. Executives are consumed with investor demands, customers wanting new or different products, risks affecting pricing and salability, employee issues, regulations, and changes in the business environment that could affect availability of credit or appetite for a product. Projects are part of that cycle as they are the vehicle for implementing change, but executives are most concerned about their outcomes and whether they deliver value. Project management is often three to four layers removed from their purview.

Figure 1.1: Executive Perspective

One gap is in the distance between the planning and the project. Projects are so removed from the organization’s goals that project managers cannot judge what constraints and risks are critical to the company. Furthermore, this distance removes executives from seeing how well the projects are meeting the corporate goals. As pointed out earlier, even the lack of a common vernacular stands in the way, impeding a thorough understanding of both parties. Project managers have another perspective. Their world is focused on delivery (see Figure 1.2). Everything a project manager does must focus on delivering some item in the project. It may be a subcomponent, intermediate deliverable, or the entire project, but delivery is the goal. The sooner something is delivered, the earlier the customer sees a tangible product and the quicker the return on investment (ROI). Project managers’ lives become complicated when end users experience the deliverable—it may not meet their expectations. All the specifications, drawings, prototypes, mockups, models, etc.,

Problem Perspectives  25

may not have captured the essence of the actual end-product and the customer rejects the deliverable. The gap between quantitative deliverables and value is a major risk in every project. A number of factors feed this gap, but there are three major ones that deserve highlighting and two have been mentioned previously: – Project status is measured by adherence to scope, schedule, and budget, while its success is measured by end user adoption, which is just one component of value. – End users, like everyone else, rarely take a systemic view of issues, so they express their problems in terms of symptoms. They know what they want and the project must uncover what they need. Quite often they have cemented their desires by selecting a solution they think will work without doing the required analysis, causing major issues for the project team when it tries to redirect the customer to a more appropriate solution. – Lack of end-user engagement in the project can constrain identifying what provides real value.

Figure 1.2: Project Perspective

A third perspective, the end user’s (or customer’s, internal department’s, or client’s), is based on one item—a need (see Figure 1.3). Without an end user having a need, there is no basis for a project and the other perspectives are irrelevant. A business can develop a product to fill a perceived need, but if the customer does not realize the need, the project and product are failures. Because the end user could be either inside the company that is running the project (e.g., business process improvement, software deployment, or the like) or external to the organization

26  Chapter 1: Understanding the Problem (e.g., product development, construction projects, and so on), the connection between the end user and the project team can take many different forms. One factor is constant, though, the end user’s perspective is grounded on a different knowledge base than the project delivery team. End users are closer to the application of what is being built. Although this makes end users subject-matter experts on use, they often lack the breadth of experience to develop “outside the box” solutions that would improve their lives. The delivery team’s experience and their ability to guide the end user to a superior solution are invaluable.

Figure 1.3: End User Perspective

At times this gap between want and need can be quite drastic. No one knew they “needed” Facebook, Twitter, or cameras in their cell phones. Yet, once created, it took little time for them to take the world by storm. Less dramatically, sales people may know they need productivity tools, but do not know which ones will actually increase their sales. New sales processes need to be developed before they can select the appropriate tools to achieve their goals. This lack of knowledge of potential solutions is filled by the project team and is in tension with the narrowly defined scope in the Statement of Work (SOW). The gap between the SOW and the work required to generate a value-laden product can be huge. These holes are just a sample of organizational gaps that result in projects missing their success targets. Although these gaps exist in nearly every business, how they are filled is highly individualistic. Non-systemic solutions have temporary effectiveness as they are not comprehensive. The two most common ways to attempt to fill these gaps are through additional governance, executive sponsors, or both.

Filling the Gap with Governance  27

Gaps occur because we take a linear approach to our work. Our businesses are very complex systems that touch numerous other groups, people, and processes. Without taking a systemic approach to looking at our work, we will miss the gaps that exist and we will be inundated with unintended consequences.

Filling the Gap with Governance Many companies’ senior executives try to solve the lack of common understanding by attempting to normalize communication. They add processes and layers of mandatory reporting between the project manager and the executive team in hopes of achieving understanding. It seems silly when stated that way—adding layers to improve communication. When I was a child, we played a game in school where kids would sit in a circle and one person would start by whispering a message in the ear of the person next to them. This process would continue around the circle until it got back to the originators other side. At that point, the person who started would say what he or she originally said and the last person to hear the message would say what he or she heard. Messages like “I had bacon for breakfast this morning” turned into “My sister is a travel wiener.” The message got totally distorted. In business, there is one more layer of spin—political correctness. Middle managers trying to soften the message, pleasing the boss, avoiding “management coming in to help,” or avoiding hitting “hot buttons” intentionally change the message. Governance structures (often referred to as project management offices—PMOs) created to translate the executive speak into project language and vice versa run this risk and often do just the opposite of what was intended. This only exacerbates the problem as the message gets massaged and drifts further from its original intent, while leaving room for intentional alteration. The result is that project successes are exaggerated and difficulties are downplayed and executives are blindsided. Tactics like standardized reporting templates, imposed so that projects can be compared more easily by executives, also normalize the data so reports deliver the same message; the intent is to keep executives from getting alarmed or overreacting. An executive’s desire to see common parameters on all projects (estimate at completion, target due date, etc.) makes perfect sense, but, in my experience of recovering failing projects, in every case where standardized reporting was used, the status of the project was altered to look significantly better than it was in order to, as one PMO manager put it, “not create a sense of urgency.” (In that case, I submitted my uncensored report to two executives around the PMO, we addressed the problem of censoring, and I got the support I needed to fix the project—killing two birds with one stone.)

28  Chapter 1: Understanding the Problem This is nearly always the culprit when projects seemingly “go bad overnight.” The project has been on a slow retrograde, but that message is lost as critical data gets twisted in numerous translations. Frederick Brookes said it best in his now nearly famous quote from The Mythical Man-Month outlining a massive 1960s project to create a legendary operating platform that subsequently made IBM billions of dollars. “How does a project get to be a year late? . . . One day at a time.”xxi The results of this misinformation flow are surprised executives, frustrated customers, and bewildered project managers all pointing fingers trying to identify one person to blame. Governance structures have two other problems. The first is that groups cannot be held accountable; individuals are accountable. As we will discuss in Chapter 4, “A Model for Engaged Executive Sponsors,” someone who understands the project’s progress with respect to achieving value has to be accountable. As previously stated, being accountable is not a label targeting whom to blame. Accountable people are the ones responsible for ensuring decisions that move the project forward are made in a timely manner. Accountability does not equate to a sole decision maker; it carries the weight of responsibility to ensure decisions are made. The second is that governance-based solutions usually create permanent structures. This may not seem, at first glance, to be a major issue, but it is. In researching structures of exemplary companies, one of the traits that stands out is the use of the project as a totally transient tool. Staff positions are not created; organizations stay lean and responsive.6 Bureaucracies are avoided. Keeping governance structures temporary and focused on fixing the problem maintains the company’s agility. Experience bears this out with governance structures taking on lives of their own and adding significant unnecessary burden to the organization.

Filling the Gap with Executive Sponsors To combat the limitations of governance-based solutions, some organizations rely on executives sponsors to fill the gap. Although executive sponsors have some of the aspects of governance, as will be discussed in Chapter 3, “Challenges in Executive Sponsorship,” and Chapter 4, “A Model for Engaged Executive Sponsors,” they have many other responsibilities. This approach has a much higher success rate than governance, mostly due to the fact that they can be accountable. If they are also responsible for adoption, as in the case of product managers, this solution solves many common project problems.

 6 Tom Peters repeatedly references the use of small temporary teams and lean staff as keys to success. Examples may be found on pages 127-131 and 306-317 (Peters, Thomas J. and Robert H. Waterman, Jr., In Search of Excellence, Lesson’s from America’s Best-Run Companies, Harper Business Essentials, 2006).

What You Should Do  29

Executive sponsors are transient. This has two advantages. First, they can be chosen to fit the project’s needs and, when the project is completed, they return to their normal jobs. The second is that there is little chance that some bureaucratic structure will be amassed to slow the organization. This keeps a sharp, lean focus on completing the project. Implementation of effective project sponsorship, though, is not trivial. Many fail for the same reason that many solutions to problems fail—they are paid lip service from executive management. Often the sponsorship role is added to the already overfilled plate of a line-of-business executive who does not want the role, given to someone who is not a respected leader, or assigned to an executive who has little understanding of the problem being addressed. This is a byproduct of the lack of a common definition of an executive sponsor’s duties and what the role implies. A survey we conducted while developing this book showed that executives have wildly different views of the sponsors’ roles and responsibilities. Some describe a hands-off position, some include responsibility for adoption, others focus on leadership traits, others look for line-of-business responsibility, while some see sponsors as the guardian of scope. There simply is no common definition. Rarely is the role defined or a job description written. Governance should not be used to fill gaps in an organization. Its lack of accountability and tendency for creating bureaucracy can make matters worse. Using an accountable structure, like executive sponsorship, quickly addresses issues, can change culture to avoid the problem in the future, and is not permanent.

What You Should Do There is nothing unique here. Complex issues have non-trivial sources, but as humans we want to find the single point of failure causing the symptoms. After fixing, auditing, and reviewing dozens of failing projects, I can assure you that there is never just one problem responsible for the failure. There are usually ten to twenty symptoms and three to five core issues to address. Only a few are directly related to the project management methodology, while most are outside the project, existing in the underpinnings of how projects are established. These include: – Incomplete understanding. Executive-to-project-team communication is hampered by multiple behavioral and vernacular issues in the organization. – Poor alignment between the organization’s goals and project deliverables. The reality is, project scope swells for a variety of reasons, business environments fluctuate causing corporate goals to shift, and quite often both occur. Rarely do these

30  Chapter 1: Understanding the Problem

two factors change in the same direction. Complementary change occurs if people are monitoring and managing the change; otherwise, corporate goals and project deliverables fall out of alignment. Absence of accountability. As accountability has been perverted to be a mechanism for assigning blame, it has lost its connection to making decisions that get the project closer to completion. Overreliance on process and governance. Dealing with people-issues is tough. Deficiencies in technical and communication skills slow progress; however, instead of addressing these core problems with certain individuals, managers apply process that affects everyone. Process is easier to implement, non-confrontational, and less stressful than dealing with individuals. With additional process, however, the quagmires of bureaucracy grow rapidly. Conflicting perspectives on success. Project success for the end user and most executives is based on perceived value, yet the project’s progress is measured on scope, schedule, and budget. The result is that projects become invariant, value targets are missed, and there is poor adoption. Lack of leadership. Leadership is a scarce trait in most companies—in the executive ranks, with middle management, and in project teams. It is needed in the entire stack from strategy development to project execution.

Identifying how these issues manifest so they can be fixed is the challenge. The discovery process is lengthened by the gaps between the participants’ perspectives. These six items are critical gaps in business. Common understanding, alignment between goals and project deliverables, executive sponsorship, lean effective governance, adoption, and leadership are at the core of turning corporate vision into business value through successful initiative execution. Solutions to these are discussed in detail in the ensuing chapters using data gathered from experience, research, interviews, and surveys. These solutions will provide executives and project managers with what they need to know to execute strategy successfully.

Project and Middle Manager Takeaway While the executive has the challenge of creating the transparent culture, project and middle managers have the task of building their business knowledge and understanding of what is valuable. This is not solved with canned reports or presentations, but through understanding the implications of issues and how they affect the organization. Project and middle managers need to step outside the project and objectively report its status. Their goal is not to promote the project.

Applying These Concepts  31

The project manager’s deliverable is value—to the customer and the delivering organization. Project managers need to focus on the value of the deliverable and inform executives when its scope, schedule, or budgetary constraints will result in missing value targets, telling them how to address the issue. Project managers need to propose solutions to executives to solve tensions in creative ways that provide value and they must always be vigilant in looking for gaps in people’s understanding of the goals.

Executive Takeaway To understand the roadblocks that hinder turning strategic plans into successfully executed projects, the plans must be looked at from numerous perspectives. There are three perspectives common to all projects—the executive’s, the project team’s, and the end user’s. Without this systemic approach, value gets lost in gaps that develop between functions. People need to talk the same language and it is incumbent on the executives to ensure people have the business acumen and information to understand what is important and how to communicate it. They need to look for tensions in the business and exploit them to create better solutions. They need to ensure that people are accountable for their and other’s actions and, that accountability is not a synonym for blame. This creates a common understanding of the goals, direction, and expectations of the organization, giving it a nimble structure that can act quickly and effectively as business environments change.

Applying These Concepts Organization Wide Questions 1.



Identify as many projects as you can that have met their goals and those that were considered a failure as well as others that missed their goals but were consider successful. What were the defining characteristics that tipped the scale to success or failure? (Note: Searching for government projects is a good source for such data as they are usually in the public domain.) Compare the system diagrams showing perspectives of the executives, project, and end user (Figures 1.1, 1.2, and 1.3) to a current or former organization where you have worked. As these are only generic diagrams, what other actions or inputs affect these perspectives in those situations? Are there other groups (regulatory agencies, perhaps) in your organization that would need a system diagram created for them?

32  Chapter 1: Understanding the Problem 4. Consider other project governance bodies that you have experienced. What are their strong and weak points? 5. How could a project governance body or an executive sponsor help connect organization goals and projects?

Project and Middle Manager Centric Questions 1. 2.

Consider executive sponsors with whom you have worked. How did they help your projects move forward? Where could they have helped more? Have you ever been told to change a status report to downplay issues on a project? If so, what was the net effect—did it cause a problem because the executives ended up being surprised or was the advice proper as the issues got resolved in other ways? Did you design other methods to relay the information to the people who needed it?

Executive Centric Questions 1.

What information have project managers brought to you to make decisions? a. What was appropriate and inappropriate? b. Create a set of templates that a project manager might use to provide you with better data. c. Apply those to a number of projects that ran into trouble and determine if they would have helped avert the problems. d. Can you make templates generic enough for all projects? e. If not, who customizes the templates or sets the criteria? 2. Using a template from question 1, generate reports for a current project from scratch. a. How long did it take? b. Is this an effective use of a project team’s time? 3. If you have executive sponsors or project governance groups, where do they excel and where do they fall short?

GAP 2: Alignment between Corporate Goals and Projects It’s not enough to be busy, so are the ants. The question is, what are we busy about? —Henry David Thoreau

Effective Governance

Change Management

Executive Sponsorship

Goal-Project Alignment


Common Understanding

Chapter 2 Creating and Maintaining Corporate Alignment Just as your car runs more smoothly and requires less energy to go faster and farther when the wheels are in perfect alignment, you perform better when your thoughts, feelings, emotions, goals, and values are in balance. —Brian Tracy Unless commitment is made, there are only promises and hopes; but no plans. —Peter F. Drucker It does not do to leave a live dragon out of your calculations, if you live near him. —J.R.R. Tolkien, The Hobbit

Having three biological kids, numerous foster children, and three adopted children, my wife and I have seen a lot of kids’ soccer games. There are a variety of lessons to learn by watching these youngsters first play soccer and slowly mature into proficient players. The name alone is a start. For their first year or so, a more appropriate name for the game might be Swarm Ball or Look-At-The-Butterfly Ball. Family and friends all know where the ball is because there is a mass of children packed together around it. Suddenly, someone makes a lucky connection and the ball shoots down the field with no one there to receive it. The swarm moves toward the ball en masse. Meanwhile, two or three kids are diverted by a butterfly (caterpillar, dog, bird, or some other interesting item) and start running in the other direction, or maybe they are crouched down to take a closer look at this little distraction. The coach yells instructions to the players, trying to get them to focus on the game, their zones,

DOI 10.1515/9781501506390-002

36  Chapter 2: Creating and Maintaining Corporate Alignment or defense. The players interested in the game want to be part of the action, a few are distracted by the latest shiny object, and others just want the game to be over so they can go home. As the kids mature, some find another sport more interesting to them and others are sidelined so much they stop playing. The ones who excel attend to their zones, learn how to support one another, pass the ball between themselves, and build plans to work together and strategies to defeat other teams. Together these meet the objectives—achieving goals and beating the other teams. Businesses mature in the same way. Some do so at a much slower rate, and many employees never seem to play their position. The identifiable trademark here is executives swarming around a problem while trying to solve it. As a new issue arises, they all run to address it. Employees lack the understanding of what the other players are supposed to do on the field, have inexperienced teams, follow instead of lead, or, most likely, show some combination of all of these behaviors. Everyone thinks they have to do it all. Occasionally one or two people are exceptional and they charge ahead and singlehandedly complete the goal. These heroes are exalted and everyone overlooks the lack of teamwork and says “the team” made the goal; meanwhile, others are marking time or eyeing payday. Experience shows this is found not only in new companies, but also in larger organizations with poor leadership. Startups have similar issues borne out of necessity, as there are not enough people to do all the work. With good leadership, they mature, people “play their zones,” and stick to their jobs as well as support others. Employees are trained or let go based on their talents, passion, and the changing needs of the organization. The leadership, strategy, and plans adapt to changes in business and new competition. Plans and strategy are about coordinating people and change. The only way positive change occurs in any organization is through proper planning. Plans are implemented through initiatives and projects. However, research has shown that employees often do not know the company strategy, plans, or goals. A highly quoted study by the Balanced Scorecard Collaborative in the 1990s indicates that only 5% of the employees in an organization understand the company’s strategy. “If the employees who are closest to customers and who operate processes that create value are unaware of the strategy, they surely cannot help the organization implement it effectively.” i

The trend does not seem to have improved much. A 2015 report published in Harvard Business Review found that only 55% of middle managers can even name one of the top five company priorities—45% got them all wrong.ii Essentially, strategy and planning are useless if you cannot achieve a common understanding in the organization. In all the companies playing swarm ball and in a majority of other companies, executives are failing to lead. Without everyone knowing the rules, strategies, and tactics of the game, they are blind to why their teammates make a move, clueless on

Alignment’s Three Dimensions  37

how to support them, and unable to determine what play to run. This is what alignment is about. It is not just about making a goal, but understanding and supporting the rest of the company with the right talent so it can make its goals. Before anyone can work on filling any of the six gaps mentioned in Chapter 1, the organization has to have a direction that everyone understands. This starts by getting people aligned in three dimensions, understanding the basics of business planning; knowing the value of people, processes, and technology; and having the tools to execute the plan.

Alignment’s Three Dimensions We must all try to maintain our focus on the organization’s goals—goals that change during acquisitions, divestitures, business environment fluctuations, and changes in regional and national economies. As the goals change, so do plans. Keeping track of all the factors that influence goals and plans requires significant effort. Everyone in the company must know the purpose of what they are doing and how it aligns to these mutable goals so that they can ensure to address the scope correctly. Without this knowledge, a multitude of problems can arise: for instance, costs may increase and deliveries may be delayed. This core information can only be achieved through clear, concise communication. Communication needs to give to every person, from the CEO to the truck driver, janitor, programmer, and customer service representative, a common and unified understanding of the organization’s direction. At the highest level of the company, the plans may look lofty. As the plans are disseminated, they become progressively more detailed, with easy to understand succinct descriptions that help establish the basis of a common understanding throughout the company. By creating and maintaining these plans, projects stay aligned to corporate goals, provide more value, and are more adaptive to necessary changes in any business. Before you start thinking this means every company must create volumes of documentation that predict the future and control everyone’s daily lives, think again. Plans have to be nimble. Companies that make products that take years to define and build, like Boeing, General Dynamics, Caterpillar, or Ford, need relatively robust plans. Other companies that must react to monthly market changes need plans that look more like frameworks (see Case Study: Dynamic ‘Fail Fast, Fail Cheap’ Strategy). Just because you cannot plan a soccer player’s next move does not mean planning is a waste of time. Some plans are high-level, others are short-lived, and some are quite detailed. However, everyone needs to be aligned with the company’s strategy, goals, and plans. Businesses use the term alignment frequently. A quick search on produces about 800 business books on alignment. The topics include aligning exchange rates or policies, increasing organization efficiency, leadership, etc. In our

38  Chapter 2: Creating and Maintaining Corporate Alignment context, alignment refers to getting everyone to support the three dimensions of an organization’s goals (see Figure 2.1). These dimensions are: – Vertical: Vertical alignment ensures that everyone, from the CEO and directors on the board to the line workers, understands how his or her daily activities support achieving one or more corporate goals. The people in the organization should know this so well that when given a task, they can relate it to a specific goal and to whoever is supporting it. If it does not relate, an alignment-centric culture allows them to safely question or refuse the assignment. – Lateral: Lateral alignment keeps “side-by-side” departments and divisions synchronized with one another. Although the problem of various business units working as silos is greater in large companies than in small ones, departments and divisions in all sized companies must support each other’s goals as if they are their own. Too many service groups or other departments have to do work for business units to help those units meet their goals. Lateral alignment allows all divisions or departments to see each other’s goals, where support is required, and where potential overloading may occur. – Capability: Capability alignment reaches horizontally across the company. It touches each department, division, and business unit. Capability alignment makes sure the company has the right capabilities to meet the goals. Company executives often make plans and overlook assessing whether they have the right talent, tools, equipment, or other resources available at all levels of the company to achieve the goals.

Figure 2.1: The Three Dimensions of Corporate Alignment

Alignment’s Three Dimensions  39

An example will help illustrate how these can be exhibited in a project. In 2002, I was called in to a project that was in severe trouble. The company built a highly successful manufacturing execution system (MES) and decided to expand their business and start doing systems integration work. This entailed deploying their MES and integrating it with their client’s enterprise resource planning (ERP), scheduling systems, as well as interfacing the MES with the manufacturing tools. At the time, computer-integrated manufacturing systems (CIM) in the semiconductor industry were still in their infancy, and only a few of the largest foundries had successfully managed the integration. These implementations used experienced internal resources, seasoned system integrators, or both. The project was about 120 days from deployment and had been running for about three years. My audit was not promising. The customer was very upset about a number of poor decisions and late deliverables. As a result, the client added new requirements that were not aligned with the goal of total automation, and had little confidence the system would work as designed. The audit supported their views and uncovered a variety of other issues. The delivery personnel had not formed a team, there was infighting, people refused to work together, and they were lacking key experience. The deliverable showed the effects of these gaps with missing functionality. I estimated that the project would not be able to be delivered for another two years, as major components would need to be redesigned from scratch. The following were cited as core issues: – Vertical alignment issues: The original contract was signed by the Toronto-based MES manufacturer. The current contract holder had acquired the contract in a purchase of another equipment manufacturer, which had purchased the Torontobased MES company a few years earlier. The current company, however, also owned a newer generation Windows-based MES from a prior acquisition that was a direct competitor to the Toronto-based company’s product. Hence, the stated goals of the company were to promote the newer flagship Windows-based MES. With the purchase (the hardware acquisition was the primary target), they had inherited the old-technology MES. Customers still wanted to buy the older technology software for their new facilities since they could leverage the support groups in their older facilities and lower the overall support costs. The software manufacturer had overlooked reworking its strategy to include sales and support requirements of these customers. In other words, they had neglected their vertical alignment. – Lateral alignment issues: The Windows-based software team that was working on the flagship product wanted to replace the MES with their software so the project would match the company’s roadmap and reduce support issues. The cost of this was well into the millions and neither the customer nor corporate executives were willing to pay for it. In addition, the “old technology” software was deployed in a majority of the semiconductor fabrications facilities around

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the world, and the acquiring company had not developed a support plan for the existing customer base. Different departments did not understand the need for continued support of the newly acquired old technology. They were not laterally aligned. Capability alignment issues: During the two acquisitions, the Toronto-based firm’s original employees were the target of multiple layoffs and a number of people quit. Trying to keep people working in the company, prior management had deployed extra staff on the project to “hide them” from layoffs. Two key failures are evident here. First, neither acquisition placed an importance on retaining the proper skills to keep the best talent in place. Second, good people with the wrong skillset were placed on the project. This drained funds, slowed the project, and frustrated the customer. There was no capability alignment.

The root cause of the project’s current issues was that the acquiring company failed to build plans around the old products and this project was not getting the support it needed. The solution was not to change the project, but to change the corporate goals and policies. This example shows one path in which company goals can get out of alignment with actions inside the company. However, misalignment can occur based on many other triggers outside the business’ control. Reflecting back to 2008 and 2009, when the great recession occurred, thousands of companies found themselves having to drastically change their goals; those who thought it an unnecessary endeavor suffered badly and many failed.

The Relative Occurrence of Alignment Issues During our interviews and surveys, there was one type of misalignment that stood out more than others—capability alignment. Regardless of the level of the interviewee in the company’s hierarchy, the overwhelming opinion was that companies struggle because they do not have the right talent. Numerous times people said the biggest gap came in not having the capability to execute a plan. The reasons for capability gaps are plentiful, however, most are tied to the fact that people are difficult to deal with. Not because they are bad people, but because we all dread having frank conversations about performance. Research supports this, as a 2015 report showed that 78% of companies are inconsistent in dealing with, delaying action on, or tolerating poor performance.iii Experience reveals the most common line delivered when the topic of an employee’s underperformance is discussed is that he or she “is such a great person,” with no comment about whether the person can do the job. This would never be tolerated on our maturing soccer team, but is routinely allowed in our businesses.

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Over time, two conditions exacerbate this. First, low performers are retained because they are such nice people and are enthusiastic about their job, and no one wants to have the hard conversations with them about their performance. As time progresses, it becomes more difficult for someone to highlight the faults since “no one else ever commented on this,” creating a situation where it becomes more difficult to enforce a performance improvement plan. Second, business plans change. General Eisenhower once said, “Plans are useless, but planning is indispensable.” With changing plans, capability requirements also change. This fact causes grief. People need to mold to new conditions or move on. It sounds harsh. To be sure, the company has an obligation to provide mentoring and training. This is morally and ethically the correct action and is the fiscally responsible one, since the expense of hiring new personnel is significantly higher than providing a path for enthusiastic employees to meet the company’s new needs. The second most discussed issue from the interviews was lateral alignment. Working with people across business silos is tough. People are driven to focus on their own goals and have little interest in other people’s sandboxes. These results are borne out by extensive research that shows that while 84% of people say they can rely on their direct reports and superiors, only 9% can rely on interdepartmental colleagues.iv This failure lies squarely at the feet of senior management and their inability to create a culture of cooperation. Tools can help, but only if the culture is such that it promotes interdepartmental collaboration. It takes both leadership and tools, like Balanced Scorecard as will be discussed later in this chapter. The problems here range from other departments having conflicting goals to simply exercising their ability to veto an action. The most common issues arise when other departments have longer range, more esoteric goals that do not relate to shortterm profit—sustainability, compliance, diversity, environmental friendliness, and so on. These group’s goals are often at odds with short-term revenue targets and their only tool to attain their goals is through inaction, holding up the project until it conforms to their needs. This is regularly viewed as obstructionist by the profit center trying to meet its goals. In reality, however, this is another example of tension in the organization—long-term vision versus short-term targets. There is a gap if executives do not address the tension. It could be that the profit center is not addressing longand short-term goals, hence, is not fully aligned with the corporate vision or the culture fails to stress cooperation. Or it could be that the department addressing the longer ranging vision is creating unrealistic constraints to meet their goal.

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Case Study: Management by Competition Lateral alignment does not necessarily mean harmony. There are companies that intentionally create tension to find better solutions. Years ago, I worked for a startup company that was run by the former principal designer of the Cray XMP. His style, reportedly inherited from his former employer, was to create multiple teams that were challenged to solve an issue by taking two or three different approaches simultaneously. By using this method, the best solution could surface. He employed that concept in his new company. The concept did not work. Instead, it built animosity between the groups, as they had to fight for shared services (both teams were using the same infrastructure and development resources). Meetings became heated, tempers flared, and language devolved into vulgarity. The harder people fought, the more power and rewards they were given. The concept of tension can be very powerful, but it can also be very destructive if not directed properly.

Interviewees showed the least concern regarding vertical alignment. For years analysts, researchers, consultants, and executives have told employees to focus on alignment. That guidance has been heeded, but only in the simplest of ways—aligning projects, not deliverables, to the corporate goals. The problem is that passionate employees can make any pet project (or change request) outwardly align to corporate goals. At one telecom client, we successfully pared the number of strategic initiatives from 87 to 12 (still too many to maintain focus). In the following week’s executive project review, 22 of the de-prioritized projects now had “blue-fin” in their names to “show” their alignment with the highest priority project of the twelve remaining initiatives. It took a strong CEO to call the bluff and shut down the activities. At other companies, managers execute change requests to get their personal favorite scope thrown into highly prioritized projects. From our experience in fixing troubled projects, every project has 20% to 40% excess scope. This scope drains resources, increases the project’s complexity, delays delivery, and often reduces value. Changing one of the opening quotes slightly . . . just as your car runs more smoothly and requires less energy to go faster and farther when the wheels are in perfect alignment, your organization performs better when employee thoughts, feelings, emotions, goals, and values are in balance. What sounds like a daunting personal task becomes bigger when it encompasses the entire organization. Surprisingly, though, many companies achieve complete alignment. It starts with the right people followed by developing adaptive plans that people believe in.

The Foundation for Building Alignment A strategy is a model for achieving the organization’s mission and vision within the framework of its values. The effort in taking the strategy and turning it into a series of successful projects needs to ensure alignment is maintained with those four items—

The Foundation for Building Alignment  43

mission, values, vision, and strategy. Our focus will be on the steps for taking a strategy, developing an executable set of successful projects, and ensuring the corporate goals and projects stay aligned. Figure 2.2 shows the relationship between the various activities and artifacts that help build and maintain alignment.

Figure 2.2: Artifact Stack for Implementing Strategyv

Although it would be enjoyable to go through the process of building vision, mission, values, and strategy, it is the topic of thousands of books, classes, and lectures and as such is not the focus here. That said, it is important to remember that they are generated in the first few steps in the overall process. For this discussion, the assumption is that these items (vision, mission, values, and strategic plans) are complete and that the first three are static. The second assumption, which is true for nearly every organization, is that an execution structure needs to accommodate ever-changing strategic plans based on changes in the business environment and customer input. The problem with these initial three items is whether they are truly understood and followed by the organization—from the CEO and board to the individual contributor. The range

44  Chapter 2: Creating and Maintaining Corporate Alignment of that understanding cannot be stressed enough. More than one organization has gone publicly awry from an unscrupulous executive’s actions that were in direct violation of the corporate values, mission, or vision. Money, fame, or power corrupted his or her direction. This problem is larger than it appears at first glance. Far more companies have issues, albeit on a smaller scale, as middle managers and front-line employees wander off course lured by the same temptations. Vigilance in ensuring that everyone’s actions keep these three static items in the forefront is crucial. The strategic plan is the first document that translates the vision, mission, and values into rationales, initiatives, goals, interdependencies, and risks. As this is a living document with a horizon measured in single-low-digit years, it cannot be static. Business changes too fast for this plan to remain relevant for more than a year and may change after only a few months. In fact, some organizations opt for strategic frameworks that allow for significantly rapid change driven by experimentation on various approaches. Business plans and goals are in a continual state of flux (the periodicity may be months or years depending on the industry) and employees need to understand how these changes affect the three dimensions of alignment. 1. Vertical: Ever changing corporate goals and project deliverables stay aligned. 2. Lateral: Business units and divisions are aligned and helping one another achieve corporate goals. . Capability: The organization has the capability (skills, resources, and so on) to meet the goals.

The Relationship between Vision, People, Strategy, Process, and Technology Even though we are not going to talk about building corporate vision, all projects start with a vision. In Following the Equator: A Journey Around the World, Mark Twain wrote, “A person with a new idea is a crank until the idea succeeds.”vi The challenge is the “crank” getting the idea to succeed. Visionaries who can implement ideas are rare, very rare. Success requires a number of factors to come together to build a cooperative of people with a common goal and direction. They may be three people, three score, or three thousand. Regardless of the number, it requires significant effort to communicate goals and align employee effort. The larger the group is, the greater the difficulty and complexity of the endeavor—the complexity growing almost exponentially with respect to size. There are, nevertheless, a few key principles that, when followed, reduce the communication burden to a few concise documents. Every great business, product, or service starts with a vision. The route is not necessarily a straight one. Some ideas, like Post-It® Notes or VIAGRA®, may result from a

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struggling or failing attempt at some very different dream (super glue and angina medications, respectively). The vision is the spark that starts an entire process that results in new goods or services. The challenge is getting those ideas put into reality. That requires passion, persistence, patience, business acumen, and money. It is not a task for the faint of heart, and there are many swamps along the path to mire the vision and bog down the visionary. Simply put, visionaries are cheap; people come up with new ideas every day. Execution is what matters. The primary task is inspiring others. Without others believing in your dreams, you will not have customers or people to help you materialize your vision. Inspiration is not about fame or fortune. It is about something you believe in. In his book Start with Why, Simon Sinek identifies a key ingredient—the “why” of your vision. He analyzes numerous visionaries and shows that people followed them for their compelling tale of “why.” People buy a better way of life. They buy dreams. Using Mr. Sinek’s observations, people buy “why,” not “what.” He argues that Dr. Rev. Martin Luther King Jr.’s followers did not buy into his plan; they bought into his dream. In fact, Rev. King did not talk about a plan. He left the details of planning to Ralph Abernathy.vii The dream, not the plan is what inspired followers. Bill Gates wants to “remove obstacles to ensure that everyone can live and work at their greatest potential.” He did that in Microsoft, and he continues to do that in the Bill & Melinda Gates Foundation.viii Steve Jobs wanted to challenge the status quo.ix These people inspired us with why they have their vision. People who can turn vision into valuable products that others adopt must be leaders who inspire and understand a need even when that demand does not currently exist. People did not know they “needed” Facebook, Post-It® Notes, Twitter, or camera phones. It was not until some fanatic with a vision saw something different about how we worked that the new concept took life. These fanatics are champions in the greatness of their idea, not in promoting themselves. They understand that strategy and people, in combination with other components, are essential for their vision to materialize. We are seeing this in very explicit terms as more millennials enter the workplace. Experience shows that they are far more attuned to the “why” or the “purpose” of the companies that they are working for. Research by Daniel Pink (author of the book Drive: The Surprising Truth About What Motivates Us) agrees, showing that the purpose is one part of the trifecta for motivation. Defining the “why” elevates the cause. Why a project exists may be to increase social services bandwidth, sustain and preserve a universal collection of knowledge, or be a champion for the common man, while, in reality, the project implements workflow software,x scanning of manuscripts,xi or improving processes at Southwest Airlinesxii, respectively. Senior executives, if not the CEO, own a large majority of project vision. As owners, they are responsible for ensuring the project vision matches the company’s vision and values and stays on target with the strategic plan. Companies have different titles for these people, but the most common, and the one used in this book, is executive

46  Chapter 2: Creating and Maintaining Corporate Alignment sponsor. The other role often associated with the vision is the champion. In this context, the champion is the person who developed the vision. This can be anyone in the organization. The relationship between these two is important. Experience shows that for a project to be successful, the executive sponsor has to adopt the vision of his or her own volition. The champion may have developed the vision and may guide its implementation, but the person spearheading the effort needs to be a leader with significant influential authority. More will be said about this in Chapters 3, “Challenges in Executive Sponsorship,” and 4, “A Model for Engaged Executive Sponsors.” Understanding Strategy and Operational Efficiency Nearly every advancement today is delivered via a project. People can make proclamations of direction, have exciting ideas for new products, or even create a new detailed workflow. However, to make these a reality that everyone in the company supports, there are one or more projects initiated to do so. Consequently, project portfolios include a conglomeration of strategic, operational, compliance, and maintenance efforts. Strategy is sexy. Many people want it on their resumes as they feel it associates them with the “big thinker” aura that surrounds the term, but strategic projects are not necessarily the most important. Great strategy with excessive operational costs will certainly fail; while a company with poor strategy, coupled with operational efficiency, will probably only have its growth hobbled by limited vision. Why is this so, and what is strategy? In the mid-1990s, Michael Porter published the most accepted definition in a white paper called What is Strategy?, one of the most referenced white papers on the subject. He says: “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”xiii

He effectively argues that operational effectiveness is not strategy because it does not make an organization unique. Companies cannot survive without continually improving operational effectiveness, but this is not a path that will make them different from competitors. Using Porter’s definition, an organization’s strategy has to clearly state what the company is doing to distinguish itself from the competition and has little mention of efficiency, regulatory, or maintenance activities. Strategies define movement— growth, expansion, re-alignment, retraction. Operational items focus on improvements and are usually addressed in tactical plans. As the business world changes rapidly, strategies must have three key attributes—they are measurable, malleable, and understood by all. 1. Measurable. As the old adage goes, what is measured gets done. Failing to create a set of measurable goals and holding people accountable for achieving those goals will most likely result in failure. This is the management part of a plan and is why organizations have leaders and managers. Leaders set the goals and show

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people the way to the vision, while managers assure compliance and adherence to achieving the goals. All are necessary functions toward achieving a strategy. 2. Malleable. Contrary to popular belief, strategy is not immutable. Strategy has to be malleable. Stubbornly sticking to a plan that fails to provide value (to the company and the customer) is foolhardy. Had Pfizer continued to press sildenafil citrate to be an angina relief medicine in 1991, it may have never produced today’s blockbuster VIAGRA®. In 2008, when the great recession hit, many, if not most, companies had to change strategies. Many of those who could not, or would not, disappeared. A written strategy is still required. If not, it wanders at a whim and alignment is lost. People have no reference to guide them and, even though written plans can be misinterpreted, unwritten plans lack a common baseline. 3. Understandable. As silly as it sounds, any strategy will fail if people do not understand it. Too often, a shroud of secrecy surrounds a strategy, it is vague, or it does not make sense to people. There is a problem when the people who must implement a plan do not see how their work relates it. In only the rarest of cases (for example, military secrecy) may this be appropriate. To be effective, strategies must be written, disseminated, and discussed. Experience shows unclear strategies are all too often the norm; documentation is often overlooked. The most common reasons for not documenting range from written strategies being too restrictive and not allowing change, to written strategies being too easy for competitors to pirate. The fact is, written strategies are neither of these. Strategies can be flexible to current situations whether they are written or not. However, when unwritten, the goals can morph to meet anyone’s needs, the modification history is lost, and there is no basis for common understanding. This cripples communication as people lose track of refinements to the strategy and the reasons for any change. The result removes people’s ability to work autonomously on a plan. Hundreds of new ideas are created every day. Visions are cheap, ideas are abundant, and strategies are many. Delivering to the plan, knowing what has to change, and when it must change, are the rare ingredients that turn visions and strategies into reality. The key is getting the right people to work on creating this reality. If a competitor gets better people than you do, your competitor’s plan will outperform yours. The Sequence of Strategy and People How do you create a strategy? People like Walt Disney used his brother, Roy, to figure out how to pull the business together,xiv Dr. Martin Luther King, Jr. used Rev. Ralph Abernathy to transform his dream to a plan,xv and Wells Fargo CEO Dick Cooley surrounded himself with what Warren Buffett referred to as “the best team.”xvi The real quandary is which comes first, people or strategy? Being in the businessworld for three decades, I cannot count the number of times I have been handed a

48  Chapter 2: Creating and Maintaining Corporate Alignment strategic goal, a mass of people, and told to go forth and create. All too often the team supplied is suboptimal. Somehow there are disconnects between why the project is being done, what is being built, and the skill of the team to do it. Executives support an idea and often assign a set of employees to proceed forward on a given path—only, to their frustration, to end in failure. Failure starts with the wrong ingredients. To implement any vision, you need the same single primary ingredient—the right people. Although other components like strategy, process, technology, and that pesky little item called money are required. Without the know-how, the vision will remain an ethereal concept and never see the light of day. Visionaries do not have to know the strategy to build their vision; they need to know the people who know how to build strategy. Visionaries do not have to know investors; they need to know the people who know investors. Visionaries do not even need to know how to build their “product”; they need to know the people who know how to build the product. In Good to Great, Jim Collins’ research supports this premise. The first step in building a strategy is getting the right people. In other words, if you have a company that designs and builds automobiles or focuses on online retailing, it will be difficult to create a strategy for a company to build space vehicles. Spaceships are different. They require people who understand rocket motors rather than V6 engines, thrust over horsepower, escape velocities instead of zero-to-60 acceleration, cosmic radiation as opposed to comic book distribution, Einsteinian rather than Newtonian physics, launch sites versus websites, and so on. The needed talent is simply missing. As Jim Collins points out, ignoring this fact has hurt many companies trying to do much more modest diversifications.xvii To be sure, Collins reviewed numerous good-to-great companies and their comparable competitors. He cites differences in how CEOs approach building their teams. Wells Fargo’s Dick Cooley surrounding himself with the “best team,” while Bank of America took the approach of “weak general, strong lieutenants”—was cited as the chief reason Wells Fargo saw 3.7 times the value growth than rival Bank of America, between 1983 and 1998.xviii The same type of result occurred in Walgreens’ performance at more than seven times the market growth of comparable companies under Cork Walgreen and his successors. Cork Walgreen fostered a “genius for picking people,” while companies like Eckerd’s, that relied too heavily on the genius of their forefathers, struggled after their founder’s departure.xix People must come first. When we are handed a strategy and told to deploy, we must stop and ask our leaders for the right people. The Fluidity of Strategy Plans have always had difficulty surviving reality, so companies have developed formal and informal processes to get around this issue. Their ability to change course— “pivot” in current vernacular—on a small or grand scale is critical to their survival.

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Over the decades, researchers have documented numerous cases of skunkworks,1 covert operations, sequestering of money, and the like, at the lower levels of organizations; running these secret projects to test concepts that have no funding or recognition of senior management. Successful companies seem to acknowledge and quietly condone such activity, as executives are well aware of the benefits. Companies need tools and methods to capture opportunities as they arise. In organizations that rigidly adhere to plans, their planning cycles run too slowly to catch market swings. In addition, when people are used to having direction from above, they tune out opportunities when they see them. This inability to respond appropriately is highlighted in current research as one of the major flaws in strategy execution. When surveyed, more than 50% of companies reacted too slowly or overreacted to opportunities or threats. xx Case Study: Dynamic ‘Fail Fast, Fail Cheap’ Strategy The story of Danforth Pewter is one of discovery. Danforth products date back to . The industrial revolution’s advent of inexpensive ceramic and glass, however, displaced pewter as the standard kitchenware. Danforth took a brief -year respite. In , the family revitalized the brand and opened Danforth Pewter in Middlebury, Vermont. As you might imagine, the demand for handcrafted pewter merchandise is significantly less than that of iPhones, Harry Potter books, or Rubik’s Cubes and is limited to a relatively static group of collectors. All pewter companies vie for this demographic’s business. Those familiar with the product would not be surprised to know it sells well in colonial and tourist areas like the northeast United States or Colonial Williamsburg, Virginia. Danforth Pewter, like many businesses reliant on discretionary spending, was hit hard in ’s great recession. Senior executives methodically reassessed their options for increasing sales. They built a strategic plan that had a number of initiatives to complete for the year. One was to take advantage of decreased sales in the industry and purchase distressed pewter manufacturers. As a result, Danforth acquired a small pewter company with a storefront in Colonial Williamsburg. Having a store outside of Vermont was new and rife with risk. The purchase was ultimately successful, but many of the original products in the store were rebranded and the store was changed to carry only Danforth products. There were many upsides to the acquisition as a number of ideas for highly profitable lines were created. One lesson from the acquisition was that the risk in such a major strategic move was dangerous, and the company looked for better ways to build its strategy. Handmade pewter products, unlike other mass-produced goods like ice cream (which current CEO Bram Kleppner uses as a comparison), have a low-cost entry point. New products can be developed relatively quickly without high tooling costs. Products that do not meet sales expectations can be discontinued after a year or two without a great loss. Testing a wide range of new products and doubling down on the ones that work is a perfect strategy.

 1 The term skunkworks was originally coined by Lockheed Martin in the 1940s and is used widely today to describe a group within a company that has a high degree of autonomy and can bypass most of the organization’s bureaucracy.

50  Chapter 2: Creating and Maintaining Corporate Alignment Bram refers to this as their “fail fast, fail cheap” strategy and it is thoroughly ingrained in the company’s culture. In , an opportunity presented itself that would help expand this model to other parts of Danforth. As the Christmas season approached, the company found that a mall where it normally had a seasonal inline store had no vacancy. Instead, the company opted to build and use a kiosk. To its surprise, sales increased %. The kiosk concept might give Danforth a new tool to test seasonal expansion. The following season, Danforth expanded the concept and put a kiosk in a New Hampshire mall. The concept failed miserably. Rather than being looked at as a failure, though, it was deemed a successful negative test. The costs of a new inline store in an unreceptive location were avoided. Had the kiosk worked, the company had many options. It could have lengthened the kiosk’s duration in the mall by opening it for Labor Day (the first Monday in September) as opposed to the first of November. Alternatively, it could have opened a seasonal inline store. However, the inexpensive kiosk test showed otherwise. “Fail fast, fail cheap,” which many readers may recognize as the mantra of most iterative project methodologies, could be applied in other parts of Danforth’s business. Seeing the promise of leveraging famous figurine brands like Winnie the Pooh, it tried other licenses, including Dr. Seuss, Beatrix Potter, and some of its own creations, each having various levels of success. In another example, catalog marketing had always been directed to customers. The company ran tests with rented lists that showed the idea’s limits. This was more than prudently stepping into a new method of work. It is Danforth’s culture and part of its strategy. It does not make detailed strategic plans; it creates a strategic framework to guide its activities. As you can imagine, the impact on execution is huge. Compared with many models, Danforth’s strategic direction might seem to be a rapidly moving target. However, the process executes several initiatives each year, but they are field-tested and generate significantly better results. When a project starts—opening a storefront, deploying a kiosk, or reaching out to a new demographic—the number of unknowns is drastically reduced based on inexpensive trials. In addition, employees feel ownership in the company’s future and are proud of its progress. The concept of failure is redefined and almost gone. Blame is not part of the culture. Failures only happen when the fail fast concept is circumvented. Starting a poor-performing new product or having a new kiosk miss its revenue targets is part of success. The results are impressive. For a static market that is not growing, Danforth has increased revenue % over the past six years. Better than that, it has taken a business with almost no profit to one making a tidy income of % of sales.xxi

People and Strategy Above, I chose the spaceship analogy to draw fire. Some of you are already thinking, “Wait, that is exactly what Elon Musk and Jeff Bezos are doing.” However, Tesla is not building spaceships and I just checked, and I cannot buy a rocket (or even a ticket to ride on one, yet). These amazing entrepreneurs have built completely different organizations to design, build, and launch their space vehicles. As of this writing, it looks like they are succeeding better than many expected. Both searched for the right people before they built a strategy. This is true at the highest level of the company—the right people need to be in place first. Most of us, though, are not in the C-Suite, and strategy, goals, and people

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are handed to us, many times without our input. Trying to get our often-ragtag teams to coalesce and build the desired result is not trivial, especially when we are one project in the middle of a larger program. Executives are not going to stop to hear us whine about our team. This stems from the fact that people planning stops just before the executives think about the project they are about to create. They seem to think that people who know accounting controls can be assigned to design flight controls and those designing universal joints will build gimbals. The talents are different. The project manager’s job is to get included in the planning process and proposing a methodology that looks at the company at a deeper level. The company needs to consider the talent at the execution layer—the people who will build the product. We need to change the process and focus on the getting or growing the right people to implement the strategy at the project level. This should be done as an ongoing process as the company grows, but it often falters when people at the execution layer do not keep up with changing times. People with legacy skills (antiquated programming skills, taking shorthand, handwritten ledgers, and the like) stay attached to their comfortable jobs and become outdated. It is not that longevity and commitment are the foe of corporate growth, rather the organization’s commitment to learning new skills. For companies to meet the ever-changing business environment, they must keep their talent pool current. As defined by Peter Senge in The Fifth Discipline, organizations committed to helping employees lead the most enriching lives they can see that longevity and learning go hand in hand. Employee development as an enduring operation is how leaders like Kazuo Inamori, founder of Kyocera Corporation, and Bill O’Brien, former president of Hanover Insurance Group, see progressive organizations. They look to managers moving away from command-and-control to empowering people. In actuality, the stagnation of employees is a function of a company culture that fails to see value in growing its employees.xxii People are critical. We need to follow the directions given by Jim Collins, Peter Senge, Daniel Pink, and others who focus on doing right by people, giving them the knowledge and autonomy to do the jobs that need to be done. Process and Strategy We are enamored with process. It helps us in so many ways. Without question, process is essential, but not the cure to all of our business problems. It drives nearly every aspect of our lives. We all have our habits, whether they get us ready for work, control how we drive to work, get us through the day, or ready our kids for bed. These routines are really just undocumented processes that make our lives easier. The reason is that letting process run our less cognitively challenging tasks gives us more brainpower time to focus our cognitive tasks (or in the case of our morning practices, delaying our need to think at all). In every case, we do them so that we have less chance of forgetting something.

52  Chapter 2: Creating and Maintaining Corporate Alignment Every job needs process. Some extremely important tasks in our lives need it more than others. Aircraft maintenance, surgery, and drug testing are but a few places where the value of process is saving lives. There are times, however, when process is over applied. We have all called the customer-service person who is working through a script and has little knowledge of what he or she is supporting—“Is it plugged in?” “Is it turned on?” People working at these jobs are not listening to the customer and understanding the customer’s knowledge of the product. In these cases, knowledgeable people with soft skills are better than a good process. Customers not only get upset with overtly process-oriented service departments; their lack of personalized service reflects on the company. People Versus Process There are three primary challenges with process—human nature, conflict avoidance, and bureaucracy. 1. Human Nature. The challenge with process is that it stifles creativity. In many cases that is good. None of us want the aircraft mechanic to be “creative” when he or she is verifying whether our plane is ready for flight. The well-documented creative accounting practices of Enron, WorldCom, Tyco, and others are a longlasting reminder that affected a huge number of businesses and families around the world.xxiii Creativity has its place. Creativity not only gives us new products and services, it adds joy to our jobs. Most of us love the innovative portions of work. In the training I have conducted, when asked what gets people excited about going to work, their answer is not about a paycheck, but about solving problems, making new things, removing roadblocks, and the like—all dealing with the cognitive aspects of a job and all involving creativity. Even those who say they like working with people admit they enjoy the creative challenge of getting everyone to work together the most. In other words, solving the problems between people brings meaning. I have yet to hear someone say he or she likes going to work “because it is mindless work, that I can do in a rote manner.” Research by people like Daniel Pink underscores this. In his book Drive: The Surprising Truth About What Motivates Us, Pink concludes that jobs that have a cognitive component need three core elements to motivate people—autonomy, mastery, and purpose.xxiv All three are critical elements that allow people to be creative. All three require a corporate philosophy of leadership over management. Management is about compliance, much like a process. Providing the why (or purpose), decentralizing decision making (autonomy), and sticking to your knitting (mastery) will invigorate employees and accelerate an organization. 2. Conflict Avoidance. Process provides a tool to avoid conflict. When people are given a choice of coaching someone who made a mistake or developing a process

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to prevent recurrence of a problem, they nearly always choose to develop the process. As mentioned earlier (and will be revisited in other chapters), working with people is tough. If we can implement a process that keeps us from having a critical conversation with someone, we will implement a process—even if that means dozens of people who do not have that performance issue need to follow it. The result is that we dumb down our workforce by trying to make jobs foolproof. One process adds to another and, before long, we end up with bureaucracy. 3. Bureaucracy. Bureaucracy paralyzes progress, destroys value, increases expense, and infuriates customers. It can actually do the opposite of process’ intent and reduce overall value. Take, for instance, the current debate on drug testing in the United States. Everyone realizes that if we eliminated the US Food and Drug Administration’s (FDA) drug-testing processes, people would die from taking drugs with adverse side effects. There are dozens, maybe hundreds, of drugs, though, that are tied up in the FDA’s decades-long qualification process. They could save lives but cannot be used as a last resort option for terminally ill patients. Patients argue they are going to die anyway and, if the drug could help them, they would be better off. The process states, though, that a drug cannot be used on anyone until all of its trials are complete. Process creates repeatability, transferability, and consistency. It is a means to an end, not the end in itself. The goal is saving lives, not the process. However, people do die when the overburdening processes are not followed, and opponents are concerned that drug manufacturers will put financial gain over efficacy. When that happens, people die and lawsuits ensue. We need not look far for proof. The case of Vioxx, a nonsteroidal anti-inflammatory drug (NSAID) pain reliever, like ibuprofen or aspirin, is a prime example. It was removed from the market after a review of data showed that Merck short-circuited the FDA processes and withheld testing data showing a link to more than 27,000 heart attacks or sudden cardiac deaths.xxv After litigation, Merck reserved $4.85 billion for legal claims of between 88,000 and 140,000 cases of serious heart disease and for withholding information about risks for more than five years from doctors and patients.xxvi We moan when there is bureaucracy, but we scream when someone else does not follow it. We have a love-hate relationship with process. It surely is required, but we over apply and misapply it. It builds up over time, impeding innovation and slowing our ability to respond rapidly. Technology and Strategy Technology is essential in nearly everything we do. Like process, it is with us from our waking hour, through the day, and often aids us in our sleep. Wi-Fi technology connects our coffee pot to our alarm clock, providing piping hot brew with its jolt

54  Chapter 2: Creating and Maintaining Corporate Alignment of caffeine when we first stumble out of bed. Our cell phones’ GPS alerts us of troubles and advises alternate routes for our upcoming commute long before we leave the house. Our tablets and watches connect to the Internet everywhere we go; we can chat with and track our kids when they come home from school. Our CPAP devices help us with our sleep apnea so we can wake rested and start the process all over again. We are mesmerized by the wonders of technology, but, as consumers we sometimes fail to see the infrastructure that is required to enable that technology. Business processes and secondary technology needs to be in place for our phone to get the data about traffic to re-route our commute, maps need to be kept current to show construction and new roads, large-scale applications need to be in place to do the myriad calculations to determine thousands of traveler’s potential routes. What appears to be a simple application to an end user has hundreds or thousands of scenarios to be understood and tested prior to the application being released for general use. Bringing these technologies into business is usually far worse. Think back on when smart phones were first released. Many businesses did not consider the implications. Suddenly phones were given access to networks, camera phones were taking picture of documents with sensitive data, personal email accounts were being used instead of business accounts to send confidential material (material that may have included health or personally identifiable information on you). Implementing technology without first understanding its implications can be a disaster. As a technologist who has recovered dozens of troubled projects, there is one thing in common in all of them. Implementing technology in order to solve a problem without first thoroughly understanding the business environment it is being placed in, without exception, has led to failure. The first step is to understand the business. For instance, taking pictures of automobile damage for an insurance claim can greatly improve the claim process. But, to be effective for the company, there must be a plan for rolling it out to all insurance agents. This means agents must have the means to take a picture and associate it to the claim. This may seem like a small problem today, but when it was first deployed it was a major issue. The second task is assessing people’s ability to use the technology—even today people have trouble understanding how their cellphone cameras work. In our example, whether people are poorly trained or technology-challenged, deploying a new insurance claim process based on using cellphone cameras is going to meet with marginal success if people cannot take the picture and attach it to the claim (electronically or printed). Next is process. Without defining a process to use the technology, people will develop different ways of using it that may compromise the quality of the technology’s output. Again, in our example, do the agents get company phones so that pictures with sensitive data are not stored on a personal device? If they use their personal devices, what if they lose them or the phone is stolen? Should all the agents’ phones be password protected? Should the car’s license plate be removed from any pictures?

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Should the driver’s license be photographed instead of photocopied? The information gathered can identify people’s personal information and compromise a customer’s personal security—maybe yours. These types of questions and concerns can be raised for nearly any technology deployment in any company. I have seen the simplest of accounting systems, for small companies that are trying to eliminate their old manual invoicing processes, be unable to buy raw material, invoice a customer, or run payroll because they did not start with the business needs, then people, then process, and finally implement the technology. Process and technology, though, are well made for one another. Once you have a process understood, you can add technology to make it less monotonous, more efficient, less error prone, and more repeatable. Like process, technology is a means to an end, not the end in itself. Selecting and implementing technology has to follow understanding the business issue, having the right people, and defining and implementing new processes to garner gains that businesses need. Technology affects the processes by allowing new methods to be used, but it does not define the process. This does not mean that we need to reinvent every wheel. Some processes are so well-known (sales, accounting, driving to work, manufacturing, and so on) and we can adopt some best practices through technology. Technology’s biggest asset is adding efficiency. It does not create the right process. It can just as easily make bad processes, get us in trouble faster and, of course, quite efficiently. Technology also helps attract the right people. For people to have the time to be creative and enjoy their jobs, technology is required to relieve them of many mundane aspects of their jobs. Imagine having to handwrite memos as opposed to using a word processor, calling each person to find out when he or she can attend a meeting instead of letting the corporate calendar find free time, or commuting to every meeting instead of using video software to bring people together virtually. Technology improves productivity and it makes our jobs more enjoyable. However, word processors are of little use if I do not write memos, calendar software does not help line workers who never attend meetings, and video conferencing tools are useless if the conference room does not have a video camera.

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Case Study: Technology Addresses Efficiency A few years ago, an executive working for a company that builds process control and data systems software for the pulp and paper industry called because he was having trouble coordinating projects and requested help deploying Microsoft Office Project Server®. The company had numerous software development, systems deployment, and custom software development projects running simultaneously. Custom software modules were normally destined to be included in future revisions of the core manufacturing execution system (MES), which also had a list of new non-custom features in the queue. This required the close coordination of numerous departments to ensure that sales, software development, professional services, marketing, and customers were synchronized with the software roadmap. Lately, the project load had been excessive and the head of the software development group was finding it difficult to get answers from people or to get them to empathize with the coordination effort. His request sounded reasonable. We met in his office for  minutes. I asked a couple of questions to understand his business and then asked, “What problems are you trying to resolve?” He spent the next  minutes highlighting failures of each department’s lack of interest in recognizing there were multiple projects competing for resources, poor attendance at meetings, slow responses (if any) to emails, incomplete software specifications, and other coordination activities that were struggling. He showed me Excel® spreadsheets listing the projects’ resources and MS Project® Gantt charts enumerating conflicting deadlines and overdue deliverables. He finally paused and I was able to ask two questions. First I asked, “Have you met one-on-one with these people and explained the issue?” “I don’t have time,” he replied. “Well, if they don’t understand the problem, won’t read your emails, ignore your Excel spreadsheets and Gantt charts, refuse to come to meetings, and you don’t have time to meet with them one-on-one, how is deploying a new piece of software going to solve that problem?” He sat for a moment with a pensive look on his face. In a quiet, almost defeated voice he replied, “It won’t.” After a pause, he continued, “What should I do?” I recommended that he hire an intern studying project management from the local university to maintain his spreadsheets and Gantt charts. This would create free time for weekly visits with the CEO and each department head to get them to understand the problem. Once he had done that, he could get everyone to agree to a manual process for keeping people apprised of the inflight projects and the potential conflicts. If, after doing that for a few weeks, a majority of the people thought the new processes were helpful and added value, then he could look for a technology solution to improve the efficiency. He was calling HR to get an intern as I excused myself from his office.

Before technology can be addressed, business goals, competent people, and new processes need to be validated; otherwise, the odds of failure skyrocket. First address the people issues, next develop a process to standardize expectations, and finally look for a tool to help make it more efficient. In the above case study, a simple Kanban Board with Post-It® Notes might have solved his problem. Technology makes operations more efficient. Using it to solve a problem is often a mistake. It only gets you in trouble faster, albeit more efficiently.

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No doubt about it, technology is the last part of implementing a business strategy. Although some technologies have become very flexible and easy to adjust, it is significantly easier to adjust a manual or paper process than it is to change the technology that codifies it. When solving any problem, the order to addressing issues is: 1. People: Get the right people doing the right things. 2. Process: Add process to handle mundane or complex issues; do not use it to solve people problems. 3. Technology: Use technology to make processes more efficient. Never try to solve a problem by starting with technology; first understand the business, then the implications on the people, and then what processes will surround it.

Creating a Common Understanding Having a picture of how vision, people, strategy, process, and technology fit together, we can progress to getting the people in the organization to understand how they work together to achieve their goals. The connection between planning and execution is communication—vigilant and never ending. By properly communicating the plan, everyone knows what he or she needs to do, whether hiring the right people, building a new widget, creating a new process, developing some piece of software, or defining a new training course. When done properly, everyone also knows the minimal scope required to achieve the goal. This is critical, experience shows, as most projects have between 20% and 40% superfluous scope not contributing to corporate goals. This robs critical resources (both time and money) from the organization and limits its ability to make all of its goals.

Activity System Diagram In order to see quickly what an organization does, we need a picture. One tool to do this is an activity system diagram. Activity systems help keep people focused on what they should be doing and the interrelatedness of functions in the organization. Preferably, the diagrams are generated before the strategic plan, but can be developed from the strategic plan as a double check of its completeness. An example is shown in Figure 2.3, Activity System for Southwest Airlines, which was initially presented in Michael Porter’s white paper What Is Strategy?xxvii Southwest is the pioneer in low-cost air travel and the reason most of us can afford to fly for pleasure. For veteran fliers, it is a great example of the transition from

58  Chapter 2: Creating and Maintaining Corporate Alignment full-service airlines to “air travel for the commoner,” be it good or bad. In fact, many people have experienced where other airlines have tried to copy Southwest’s activities, with varying degrees of success.

Figure 2.3: Activity System for Southwest Airlines

Activity systems are developed by listing the central three to six activities that define the business (shaded) and the key supporting activities. “Lean, Highly Productive Ground Crews,” neither new nor unique to Southwest, is an operational effort that most companies strive to achieve (refer to the definition of strategy, above). Other items, however, like “Specialized Fleet of 737 Aircraft,” are strategic items that reduce ticket prices (through easier maintenance and interchangeability of aircraft), decreased gate turnaround times (through commonality of equipment), and work well in short-haul flights. Other airlines, flying from the US to Europe or Asia, cannot reap the same benefits, as they need aircraft with a multitude of different ranges. Activity systems encompass the vision and mission. In doing so, they ensure the employees have the complete picture of what the company is doing from both an operational and strategic standpoint. They are foundational in developing a common understanding. Activity systems diagrams do one more thing. Nothing in business is linear, no matter how much we want it to be. Most planning methods and analysis tools (not to mention how we think) are linear. Trying to build a complete system diagram for a

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business is extremely difficult and may be impossible. Taking a systems approach, though, is a requirement for understanding how plans will work and where risk can surface. Activity systems help people understand how activities interrelate and direct people to where lateral alignment can be an issue. These diagrams should not be drawn and shelved; they should be referred to throughout the planning process to minimize overlooking connections.

Detailed Goal Tracking Tools that focus people on the details require planning tools that provide more granularity. Balanced Scorecard, developed by Robert Kaplan and David Norton in the 1990s, is such a tool. They wrote numerous books and articles that describe its implementation.2 The purpose is to develop goals and metrics to focus people on the right work. Having people in the organization (from executives to individual contributors) know their goals and how those goals relate to the corporate goals reduces work on extraneous items, minimizes management of subordinates’ time, and saves money. To understand the high-level aspects of Balanced Scorecard, we will look at two tools in the toolbox—strategy maps and scorecards. (It is worth noting that the term ‘balanced scorecard’ refers to both the entire process and a physical deliverable from the process—a scorecard for each person to track their progress.)

Strategy Maps Strategy maps are great tools for visualizing the efforts a company must do to achieve strategic and operational goals (see Figure 2.4).3 The concept, developed by Norton and Kaplan after they developed Balanced Scorecard, represents the high-level work required to achieve corporate goals using one infographic that is easily understood by everyone in the organization. In general, strategy maps consist of four sections

 2 This chapter is not intended to be a rewrite of Norton and Kaplan’s work. For exhaustive information on Balanced Scorecard, refer to the three books from Norton and Kaplan (The Strategy Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Alignment: Using the Balanced Scorecard to Create Corporate Synergies, and Strategy Maps: Converting Intangible Assets into Tangible Outcomes (all Harvard Business Review Press)). Other references in the bibliography refer to specific cases that may apply to your organization. 3 Michael Porter defined competitive strategy, not internal business strategy. Strategy Maps as Norton and Kaplan define them are for internal strategy—the strategy to get everything done. Although you could make a strategy map that showed only competitive strategy, it would not include the operational work needed to meet financial goals. For more information on strategy maps refer to Strategy Maps: Converting Intangible Assets into Tangible Outcomes by Robert Kaplan and David Norton.

60  Chapter 2: Creating and Maintaining Corporate Alignment that define goals and initiatives from four different perspectives (financial, customer, internal, and learn/grow). Although the format can be customized to meet your organization’s needs, the top two layers identify the goals of the company in financial and customer terms and the bottom two define what the company must do to meet those goals. Not all strategy maps have the four sections in the order discussed here and some may show some perspectives broken down further. The most common alterations are: – Government and nonprofit organizations often place the customer perspective at the top, as the customer need is the end result and financing is only a means to get there. – Departmental maps for service groups often split a perspective in two. For instance, an information technology (IT) map may split the customer perspective to show IT’s customers (a business unit) and the business unit’s customer’s needs. Disseminating information throughout the organization can be troublesome as people try to understand how their work relates to the larger organization’s goals. The strategy map helps them by providing a visual to do just that, keeping them in line at all times. Life, however, is not that orderly and changes present themselves daily. The culture of a company using Balanced Scorecard (or any methodology) has to be that people can question a new assignment’s alignment to goals. If they do not align, the people have a reason to decline the assignment. This distribution of authority is a direct benefit of the transparency of Balanced Scorecard because people can maintain focus. By examining each perspective, it will be clear what the map provides. Financial Perspective In most cases, the financial goals are at the top of the strategy map. Nearly every organization, be it government, nonprofit, for-profit, or a division or department inside one of these, is constrained by money. If the organization does not make money, it will cease to exist. Four to five financial goals are identified and entered in this section. These goals may be to improve the investor’s return, increase sales in a given division, boost donations, create a new tax levy, improve audit procedures, find more working capital, or the like. Customer Perspective Customers are patients looking for a cure, parents wanting less crowded classrooms, drivers looking for a nice car, people looking for an easier way to purchase, or public radio listeners hoping for better programming. Customers support revenue. Customer needs are placed in this layer of the diagram and must support the financial goals above them. If the customer’s desires do not support the financial goals, the goal has no reason being there. Your organization also has to have the

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capability to achieve the goals (either now or noted in the learning/growth perspective). These capabilities may need to be built or, in the case of people and equipment, purchased, trained, or hired. From a strategic standpoint, these need to differentiate you from your customers’ other choices—your competition. The descriptions entered into this layer often represent requests from customers for products, services, functions, or features that you will provide. They should be written in customer terms—even using quotes. This stresses the customer focus. They could be “Decrease my child’s class size,” “Repave the roads,” “Reduce my hospitalization recovery time,” or the like. As stated before, it is critical that the customer requests meet the financial goals. The strategy map does not quantify the financial goals. That is done in the strategic plan or a separate business case. It simply shows the customers’ needs in relation to the financial targets. If customers will not pay enough money to meet the goals, after operating and strategic initiative costs are deducted, there is no basis for that goal being part of the overall business objectives. Assuming your organization is already in existence, the operating costs and current revenue are known. The increase in the financial goals must support the cost of implementing the new strategies. This is a very simple business principle, but is often overlooked. If the strategy map is for a service group, this layer is often represented as two layers split horizontally—the lower one for the service group’s customer (another business unit) and an upper one for the organization’s customer (an external customer). This gives people in the service unit a view of what they are doing for their customer and how it relates to the goals of the entire organization. Internal Perspective The bulk of the work is laid out in the internal and the learning and growth perspectives. The internal perspective layer identifies the initiatives needed to meet the customer perspective. Implementing new processes and systems or developing new products and services are examples of what can populate this section. This is a picture of where the company is headed over the next few years. Hence, there are dozens of initiatives in this section—too many to address at one time. Therefore, the time component in this layer is more prominent than in the other layers. As shown in Figure 2.4, items are usually sorted into multiple categories, in this case: basic (value dominance), intermediate (sustaining revenue), and advanced initiatives (national prominence). The left most column contains items that might build infrastructure, establish processes to accurately process orders, or ensure all transactions or forms can be processed. These are items that would be considered basic functionality in the organization. The second column contains items that advance the organization. This could be the capability to run projects, improve revenue, or add new features that enhance customer or employee processes. The third column contains the most advanced items and might be initiatives that distinguish the company from

62  Chapter 2: Creating and Maintaining Corporate Alignment its competitors. These are quite often strategic items. Each column requires that the maturity of the prior columns is established.

Figure 2.4: Strategy Map

In mature organizations, the columns could represent various departments or divisions. This helps achieve lateral alignment. This has the advantage of showing how the different business units interact, but can become too cluttered and high-level. It is often better to use separate strategy maps for each line of business. Learning and Growth Perspective The last section, acting as the foundation for the plan, addresses capability alignment—the acquisition and growth of skills and other resources in the organization to achieve the plan. Here investment in training, hiring, acquisitions, and capital expansion are identified. Being at the bottom of the diagram underscores its foundational aspects of the plan. This directly addresses the challenges mentioned in our interviews regarding the neglect of assessing capability in planning.

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Mission Based on the Strategy Map When the strategy map is complete, it should be easy to determine the organization’s mission. Reading up the left-hand column of Figure 2.4 is a short description of the strategy map’s content. For this example, it says, “Build a world class team to create products and services for doctors to create revenue.” Granted this statement could be used for just about any business by replacing “doctors” with another customer name, but the point is to be able to derive the mission from the initiatives. If your mission is “To be America’s most loved pharmacy-led health, well-being and beauty retailer,” as is Walgreens’,xxviii then initiatives to build stores in Asia, embedding coffee shops in stores, and selling tobacco products would create a statement in the left-hand column that would be quite incongruous with the mission. Departmental Strategy Maps Strategy maps that address groups smaller than the entire company are quite useful and can help by illustrating lateral alignment, aggregating shared services efforts or helping a group (like a shared services group) organize its message in a company that does not use Balanced Scorecard. Organizing the message. Shared services organizations have work that is often quite removed from their departments with specific goals—they primarily support other groups in achieving those group’s goals. Hence, they often need tools to help them communicate their objectives to a somewhat disparate group of customers. Information technology, human resources, finance groups, and the like are such groups that have goals to predominantly help other groups reach their corporate goals. Human resources (HR) groups have goals that include items like compliance, retention, and training, while information technology (IT) groups have ongoing tasks like infrastructure (routers, switches, servers, phones, and so on), software upgrades, and maintenance. At times, it is quite difficult for employees to understand their relationship to the greater organization. For this reason, it is helpful for these groups to develop their own strategy map to show how they support their customers. This information can also be used to work with business units to justify different funding models and move away from capped models that hinder the ability of a services group to meet every business unit’s demands. It supports funding by initiative, percentage of revenue, or other methods. In companies that do not have a thorough planning process, strategy maps help shared services groups show their backlog across business units. These groups can develop a map where the customer layer represents each business unit’s requests. Then they can fill out the internal section on how they would support requests and identify the gaps in capability that they needed to address. By quantifying the work (see the Quantifying Goals section below), they can have a logical discussion on funding, growth, and timelines. This consolidation helps business units understand a shared service’s capacity.

64  Chapter 2: Creating and Maintaining Corporate Alignment Lateral alignment. In organizations that have multiple business units with strategy maps, the internal perspective of the map should change to show how other units provide supportive roles. This can be done in a variety of ways. It could be that the layer gets split horizontally with delivering and receiving business units at the bottom and top, respectively. The interdependency could come through adding external initiatives that note work by other departments. Regardless, the two maps need to show the complementary work.

Initiative and Project Prioritization The work outlined in the learning and growth and the internal sections is too much to do at one time. The type of projects, their priorities, and their dependency upon one another influence the layout of the strategy map. Most companies can handle only three to five initiatives at a time (not 20 to 30 initiatives in a typical strategy map). In addition, there are often strong dependencies between items and across business units (lateral alignment). Most obvious, if the learning and growth (capability alignment) items are not completed, then the internal items they support will suffer. The emphasis is that the foundational elements (people, training, facilities, and so on) in the learning and growth perspective must be implemented first. As we will revisit many times, remember people first. As with all the layers, items are not placed in a random order. Items to the left are expected to be completed earlier than items to their right; items at the top are supported by the items beneath them. In other words, items in the lower left are done first and the work continues until all the times are done culminated in completing the items in the upper right. There is, however, another inherent priority for the initiatives and projects in the map. Let’s return to Porter’s definition of strategy versus operational effectiveness. From that definition four types of projects are derived—strategic, operational efficiency, compliance, and maintenance.4 Strategic Projects: These projects focus on increasing the number of customers or revenue in areas that have the best long-term advantage over competitors. Examples are projects that implement new capabilities that competitors do not have, such as new innovative products or creating direct purchasing options when all your competitors use distributors.

 4 Porter’s white paper has only two classifications of projects—strategic and operational effectiveness. Based on experience, I have divided operational effectiveness into three groups—operational, compliance, and maintenance.

Creating a Common Understanding  65

Operational Projects: These projects enable organizations to increase efficiencies and save either time or money in operations or new product creation. Examples include lean initiatives, manufacturing or purchasing process improvements, and the like. Compliance Projects: Without successfully completing compliance projects, the organization will have to abandon some aspect of its business. Not meeting new regulations, whether governmental, standards groups, or those from partner companies, will completely isolate the organization from specific customer sectors, if not risk running afoul of the legal system. Examples of compliance projects are Sarbanes-Oxley (SOX) compliance (legal), electronic data interchange (EDI) required from clients or suppliers (standards), or software licensing audits (legal). Maintenance Projects: These include projects for restriping parking lots, upgrading to the latest version of operating systems, training employees, and replacing roofs, they rarely contribute much if any to the bottom line and function to preserve assets— whether those are making people happy to prolonging the useful life of a building. The distinction is not academic. These classifications drive the priority and the level of dedication and attention projects will get from executives (see Figure 2.5). When companies are flush with money or have few crises, project priorities are set rather idealistically. When revenue slumps or there is an urgent and unexpected issue that requires executive attention, priorities change. The problem is that the reprioritization usually comes with little notice and no fanfare. Suddenly, executive sponsors do not attend meetings or return emails or phone calls. Teams, and even middle managers, are left bewildered at the sudden silence. The executive sponsors seemingly disengage from projects as they are refocused on a new objective. Taking a quick review of the inherent priorities might lead to the answer. It could be that the strategic or maintenance project is no longer as important as others. Project Type


Inherent Priority


Create a competitive advantage


Reduce cost


Regulatory adherence


Preserve assets

Operational Effectiveness:

Figure 2.5: Types of Projects

66  Chapter 2: Creating and Maintaining Corporate Alignment Herein lies the problem. Nearly all the projects in the learn/grow layer of the map are either strategic or maintenance. Hence, if issues arise requiring cutting projects, the ones essential in supporting the initiatives higher on the map are cut. This tension, when recognized and properly handled, is valuable as the critical dialog and discussion of these issues hones the company’s direction (the distinction between dialog and discussion is covered in Chapter 11, “Leadership Traits and Actions”). Unfortunately, the response to trouble is often reactive, and executives make broad reaching statements such as canceling all training and discretionary spending. These often pull the supporting actions for other initiatives. The effect is crippling other projects and limiting their chances for success. A proper approach is addressing overall initiatives, trimming scope, or canceling projects and their supporting initiatives. Including the type of project on the strategy map is valuable in creating a common understanding of the effect of the change. As a side note, when teaching classes on alignment, I routinely ask those in the class whether they prefer working on compliance or strategic projects. Normally just one or two attendees acknowledge their love for compliance projects. After understanding that compliance projects are the closest thing to recession-proof work, many others see the logic and longevity in working on these commonly undesirable projects. The strategy map is a tool to create a concise visual to help maintain alignment (vertically, laterally, and capability) to allow everyone in the organization to see how their work relates to the corporate goals.

Quantifying Goals The strategy map and activity system act as guides to show the relationships and priorities of the organization. Concrete, measurable goals need to be defined for every item and each person working on them. Implementing a procurement system in an initiative requires milestones and measurements to ensure the target is definite, and predictive milestones must be defined to ensure the target will be met. Figure 2.6, Sample Metrics, provides examples of what might be reasonable measures of success in implementing a new procurement system. Numerous books and white papers speak to creating and achieving goals. Current philosophies center on a handful of common approaches. First and foremost is that the goals must be developed and set by the person working toward the goal.xxix With that, the goals should: 1. Focus on what is important. Creating goals that are “too in the weeds” makes it difficult for people to see the correlation to the corporate goal. These goals might

Quantifying Goals  67

be referred to as big hairy audacious goals (BHAGs) or wildly important goals (WIGs)5 based on the preferred philosophy. 2. Report and act on leading indicators. Indicators of progress have to be predictive of the needed end results. Looking at increased sales is not very good, since it is a trailing indicator. Looking at the number of hits to the website might be the indicator to watch for future sales. 3. Monitor through a scorecard. Scorecards (sometimes called scoreboards) need to be publicly displayed and use simple and compelling graphics that show progress on the leading indicators. 4. Foster self-accountability. Much like scrum meetings in an agile setting, everyone should be attuned to the most recent progress, where help is needed (between team members), and the next period’s goals. This format enables ownership and commitment. The public nature of this style also helps establish an atmosphere of cooperation. Item


Due date Goal

Predictive Metric

Define new process Procurement flows. Implement new flows using manual processes.

June 

Reduce procure- Number of vendors ment turnaround on plan %

Remove redundant or nonvalue processes.


June 

Decrease PO Cost %

Number of steps removed from process

Deploy new software.

Information technology

June 

System usable by all procurement and engineering personnel

Modules tested in each environment (development, unit, integration, systems, or pre-release)

Implement reorder methodology with software implementation; reduce out-of-stock issues.


July 

Maximum % of orders

Number of stock-outs in manual processes

Figure 2.6: Sample Metrics

 5 In Built to Last, Jim Collins coins the term BHAGs (big hairy audacious goals), and in The 4 Disciplines of Execution, Achieving Your Wildly Important Goals, McChesney, et al. call them WIGs (wildly important goals).

68  Chapter 2: Creating and Maintaining Corporate Alignment These goals should have a common format for employees to follow as in one of the more commonly accepted paradigms. One such tool is George Doran’s SMARTxxx mnemonic—meaning goals are Specific, Measurable, Achievable, Realistic, and Timebound. Achievable and realistic are the two most difficult factors to define. People are continually optimistic. The group should review these goals to ensure that people are getting the support they need and those struggling or overcommitted have a safe environment in which to ask for help. Working in a tightly controlled system such as this requires above-average personnel since it relies heavily on accountability. Processes should never be used to hold people accountable. The right people should be self-accountable and the process helps them focus on the right elements to monitor.

Building a Balanced Scorecard The order in which these topics are presented above is recommended for developing them. They are not developed in a vacuum and should be heavily socialized in the process. For instance, more than one company has found that the list of core activities from the executive perspective differ from those of the front-line troops. When building the strategy map, the same is true. Of course, trying to identify the required initiatives and projects without consulting the people who will do the work rarely meets with good results. Failing to engage representatives throughout the organization limits buy-in and ownership. A scorecard has four components—objectives, measures, targets, and initiatives. 1. Objectives are major items to be achieved—increasing revenue, decreasing the work to be redone, shortening turnaround time, or decreasing employee turnover. These are a subset of the examples shown in Figure 2.6. 2. Measures are how progress is tracked. As much as possible, these should be forward-looking predictive measures. For instance, to improve revenue, the measure could be increasing website traffic. For decreasing employee turnover, it might be employee engagement in all-hands meetings, increased participation in employee benefits, or improved on-time attendance. These are highly subjective to the situation, but analysis shows they have a high probability of positively affecting the end goal. They need to be evaluated continually for applicability, as what is measured drives behavior and people’s actions can bias these numbers and not achieve the desired results. 3. Targets are the quantitative value to measure. They include values and units. They often include timeframes if they are predictive. 4. Initiatives delineate which initiatives in the company affect the objective and measures. They are critical in providing lateral alignment, as the initiatives may be in different business units.

Quantifying Goals  69

Where Balanced Scorecard, and Many Other Tools, Struggle Balanced Scorecard is just a tool. It can help change the culture of the organization. As will be discussed in the chapters on adoption (Chapters 5 & 6), change requires people to adjust their beliefs and expectations and that will support a change in their behavior. If people expect that Balanced Scorecard is a passing fad, no initiative for any tool that changes how they work will succeed. The fact that Balanced Scorecard (and other topics like PMO, TQM, six sigma) has a name, throws it into the category of executive flavor-of-the-day, and employees expect that they can wait out the change and maintain status quo. Although this is true of nearly every process, the effort required by executives and managers to implement and maintain Balanced Scorecard is high enough that apathy can take over. This is exacerbated by the fact that predictive measures are hard to develop and can take several iterations to get right. In one of the examples above, a suggested predictive measure was website hits leading to more sales. Someone can achieve that goal by placing pay-per-click ads that lure the wrong demographic. In this situation, not only is the measure non-predictive, but the low-quality traffic comes at a cost. What is measured gets done, but not necessarily done right. It takes a continued crucial look at how the “dials get turned” and the effect measured. As mentioned in the Chapter 1, business is not linear and most tools (including Balanced Scorecard) are linear—all using if-then logic. Looking at your organization from a systems standpoint (hence, the importance of the activity system) allows you to find metrics that are predictive, but as the business environment changes, so do the metrics. This is not only a problem with Balanced Scorecard, but with all tools. The effort to deploy Balanced Scorecard often outlives the executive implementing it. New executives like to find activities that do not relate directly to revenue and kill them. They can kill a Balanced Scorecard initiative and show short-term gains from cost reductions, but misalignment will slowly return. The connection between the action of removing the tool and seeing the effect are too far apart.

Audit/Health Check Lastly, entropy reigns. Although these two words hold as the second law of thermodynamics, they are the first law of people. Keeping groups of people aligned and moving toward common goals is difficult. No tool or communication in the world will stop people from wandering off course. This drift is rarely done with malice or even intent. In most cases, people are trying to improve a deliverable based on their perspective. Unfortunately, these individual changes can add up over time to significant scope creep, added costs, and, usually, misalignment. Creating a process to allow cost-effective process audits and health checks is critical in averting this drift.

70  Chapter 2: Creating and Maintaining Corporate Alignment There is another value to audits—sanity checks. I do not know if a story relayed to me years ago as an example is real or simply a good story. My friend told me that every year when cooking the Christmas ham his wife would cut off an inch or two of the shank. After a couple of years, he asked her why she did that. She told him that this is what her mother did and since her ham always turned out so good she did it, too. After a long discussion on how this could possibly change the taste of the ham, it was determined that her mother had a smaller roasting pan and the ham had to be trimmed to fit. We have hundreds of processes that have no bearing on success. The best people to see these are the people from the outside. Collecting unused weekly reports, gathering data never used, saving papers for no reason, and the like are rampant. Health checks and audits, therefore, are usually done by independent parties to review the status of a single or set of initiatives and processes. They can coach teams and leaders on how to maintain focus on specific company goals.

Risk Planning Proper planning identifies risk and one of the best methods to reduce risk is simply identifying it. Even knowing that risks might exist in an area, but not being able to identify what they are (known unknowns), is still extremely valuable. Once a risk is identified, people subconsciously look for ways to avoid it. The planning processes above do not focus on identifying risk but will drive out significant risk elements. As this process is followed, risks and risk areas should be captured. The key to a scorecard is that the metrics are: – Predictive and forward looking. – Specific, measurable, achievable, realistic, and time-related (SMART). – Applied to everyone in the organization.

Project and Middle Manager Takeaway The final deliverable of project managers is value. They are ultimately accountable for their team’s ability to run projects that make the customer happy. To do that, they need to map each project deliverable to the goals of the customer or end user and then deliver the organization’s goals. Although alignment is ideally driven from the top, project and organization leaders inside a company can create their own alignment tools to ensure they are adequately reaching their goals. Regardless, alignment is an ongoing dilemma. To help:

Executive Takeaway  71

– – –

If a strategy map does not exist for your department or company, create one. Vet it with managers and ask them if it is correct. If not, ask them what needs to be fixed. Do the same for an activity system. Work with your customer or end user to understand how the project deliverables map to their goals. If there is a conflict between the two organizations’ goals, identify them and put them in the risk or issue register. Map your projects’ deliverables to goals. Confirm the mapping with the steering committee members or executive sponsor. For any that are not directly supportive of the goals, evaluate removing them from the project. If it looks viable to remove them, attach a cost savings and identify who needs to approve it. Evaluate whether the skillset on the project is correct. If not, determine a mitigation plan and enter it into the risk or issue register.

These are not easy tasks to carry out. If the culture is not very open, there will be significant pushback and you will need to have executive support.

Executive Takeaway A large majority of the work in achieving alignment is driven by corporate executives. It must encompass vertical (from project deliverable to goal), lateral (interdepartmental), and capability (horizontal) alignment. Executives are responsible for building strategy and goals based on data showing the strategy’s viability. They and their teams break down these plans and goals into initiatives and projects. To do this effectively, there are a variety of responsibilities: – Building an achievable set of goals and strategies. – Clearly communicating the organization’s focus through tools like activity systems and Balanced Scorecard. – Building core capabilities to meet the goals. – Establishing strong inter-business-unit cooperation. In other words, build a culture to support lateral alignment. – Building a culture that is accountable. – Addressing problems’ root causes. – Communicating, vetting, and validating the strategic plan. – Having employees identify (do not assign) measurable and meaningful predictive metrics (leading indicators) for achieving the corporate goals, creating accountability. – Removing blame from the culture. Allowing mistakes when others are trying new ideas to improve the organization. – Communicating changes in strategy that are needed when business, customer, and other external factors alter the strategy.

72  Chapter 2: Creating and Maintaining Corporate Alignment – – –

Focusing the entire organization on people, strategy (competitive and internal), process, and technology, in that order. Creating concise infographics, like strategy maps and activity systems, to communicate the corporate priorities and strategy to all the employees. Building the ability to distribute decision making closer to the problems, reducing bureaucracy, and creating faster turnaround and higher value.

Applying These Concepts Organization Wide Questions 1. 2.

Create an activity system for your company. If you are in a shared services group, how might you approach implementing Balanced Scorecard when the rest of the organization does not use it? 3. If you are in a shared services group, how could you use a strategy map as a foundation to move your funding from a fixed amount to initiative based? 4. Many shared services groups have core functions they provide (information technology has phones, email, networks, and so on; human resources has legal compliance, onboarding, training and the like), but they also have discretionary spending. How might a strategy map help justify and monitor discretionary funding?

Project and Middle Manager Centric Questions 1.

Think of projects you have done recently and map their deliverables to corporate goals. Do they all map? 2. How might a strategy map help your project overcome risks and issues? 3. How does your organization prioritize projects? How could this change to be more effective? 4. In your company, what is the relative priority of strategic, operational efficiency, compliance, and maintenance projects? 5. If you were to prioritize the projects in your group based on whether they are strategic, operational efficiency, compliance, or maintenance, do they match the priority they actually get?

Executive Centric Questions 1.

List ways that you could ensure the goals of your company have been communicated in a manner in which there is a common understanding in the organization. How might that change to become better?

Applying These Concepts  73

2. List the projects in your organization. Classify them as strategic, operational efficiency, compliance, and maintenance projects. Now assume your revenue drops 50%. a. Which projects are you going to cut? b. Are any of those projects supportive of other projects? c. If they are, how would you change your selection of projects to stop? 3. Individually ask your direct reports to write down the top five goals in the company. Tell them not to mention this to anyone else. a. How many of the company’s top goals can they actually identify? b. If not satisfactory, how can you improve this? 4. Select a representative slice of your organization—from executives to individual contributors. Ask them to rank the organization on a scale of 0 to 10 on these two items (anonymously, but identifying level only). What does this tell you about your organization?6 Are the differences related to comprehension from the top of the organization to the bottom? a. How well does your strategy support fulfilling the company’s purpose? (Zero: I do not know the strategy or purpose; 10: perfectly supported.) b. How well does the organization support achieving its strategy? (Zero: I do not know the strategy; 10: perfectly supported.)

 6 After getting the answers back, read the article by Jonathan Trevor and Barry Varcoe, “A Simple Way to Test Your Company’s Alignment,” Harvard Business Review (May 16, 2016),, and compare your score with their matrix.

GAP 3: Engaged Executive Sponsors The best executive is the one who has sense enough to pick good people to do what he wants done, and self-restraint enough to keep from meddling with them while they do it. —Theodore Roosevelt

Chapter 3 Challenges in Executive Sponsorship The biggest problem with executive sponsors is that they are never engaged. —An overwhelming number of surveys Executives are too high up in the organization to be held accountable. —Anonymous senior director in the insurance industry I hate being an executive sponsor. The [project manager] comes in and spends ten minutes spewing out a bunch of technical project details that have no bearing on how to run a business and then wants me to make a decision on what to change in the project. —Anonymous healthcare CFO Nearly two decades ago, I was sitting in my office on a pleasant Thursday morning, when my phone rang. It was a good friend of mine who, after a couple of sentences of niceties, got straight to the point. “We are looking for an anal-retentive, tenacious asshole and we thought of you.” I was taken aback by what I would eventually understand to be a compliment. Within a few hours, though, we had signed a memorandum of understanding. In two days, I was in meetings at his company’s local office with a few members of their team, and in eight days I was at 38,000 feet on a 36-hour

DOI 10.1515/9781501506390-003

78  Chapter 3: Challenges in Executive Sponsorship journey to their client’s site in the Middle East. This was the start of a two-year challenge to redefine, lead, and successfully deliver a project that was in far more trouble than the company realized. The client needed to automate their manufacturing system to stay competitive and was using a North American software vendor as the system integrator. The team delivering the project consisted of technicians from seven countries on four continents. People were dispersed across a dozen time zones, but, with the Middle East team’s workweek of Sunday through Thursday, it felt as though my home base was thirty-three time zones away (when the Middle East is wrapping up its week’s first workday, North Americans are just waking up to a cup of coffee and readying for church or Sunday brunch). The project consisted of delivering a fully integrated software solution and numerous pieces of material-handling hardware for the client’s new manufacturing facility. There were three project managers (one from the customer and one each for the vendor’s hardware and software delivery). The vendor also had a program manager to keep the hardware and software teams aligned. The vendor’s executive sponsor was the vice president of sales and services. He was an extremely nice guy and his unfailingly positive attitude exuded confidence. Everybody on both teams spoke highly of him. Every two months he would fly in to the client site for steering committee meetings and was easily reachable by email and phone. As a sponsor, though, he struggled. His company had inherited the project through a couple of acquisitions and he was hastily assigned the sponsorship role. As time progressed, I noticed that escalated issues did not seem to get closed. He would tell me they were resolved but I would get a different response from the client. As it turned out, the sponsor was missing two traits that are required in any sponsor—he could not make “tough decisions” (in other words, he could not say “no”), and the sponsorship role was added to his regular job of sales (he simply did not have the time required by the project). It is not that anyone was out to blame him for the project’s woes; there were plenty of issues on the project. Good sales people, by nature, have a difficult time denying anything. It is part of how they keep the sale alive. If they cannot deliver a feature, function, or service now, they prefer to address that in the future and close this part of the deal now. After a few months on the project, I understood why my friend used a terse description for a new project manager. “Anal-retentive”—the project needed someone to keep track of the sponsor’s tasks, which had been neglected. “Tenacious”—it needed someone onsite with the customer at all times pushing to resolve issues. “Asshole”—it needed someone to be realistic with the customer and deliver the hard news.

Investigation into Executive Sponsorship  79

Investigation into Executive Sponsorship Nearly fifteen years later, in 2014, a large Midwest healthcare provider and research hospital requested that we develop a training program for executive sponsors. We decided our first step was to survey as many healthcare organizations as possible to assess what types of problems existed in the industry to ensure our proposal would hit the mark. These candid and confidential conversations were conducted with projectrelated personnel including executives, sponsors, managers, and project managers. Everyone described problems, but their responses were a surprise and the survey was expanded to non-healthcare organizations. In the end, there were more than 150 interviews with finance, information technology, military, government, manufacturing, service industry, and human resources professionals. All of this chapter’s opening quotes came from those interviews. The survey data were then used as part of the information to develop this chapter. Multiple problems were uncovered. In summary, they included: – Executive sponsorship is an issue in all business domains. – Good sponsorship is an essential component in running projects successfully. – Many issues are pervasive across all industries. – Sponsor selection criteria are poorly defined. – Executive sponsors need to work with project managers to design a successful project outcome. – There are inadequate training tools for sponsors and project managers on the topic of sponsorship. – Sponsor roles are neither properly defined nor supported. Conversations touched on all the other gaps—leadership, change management, alignment, common understanding, and governance. Although the intent of the survey was to find situations unique to healthcare, it highlighted other industry-specific peculiarities (namely manufacturing and healthcare). This chapter and the next combine the results of the survey, experience from clients, and research from others on the most effective sponsorship, the traits of good sponsors, and their roles and responsibilities.

The Definition of Executive Sponsorship The first discrepancy noted in the interviews was the lack of a common definition of the role. When asking the survey question, “What is the role of an executive sponsor?”, it became evident that the role simply was not defined. A large majority of executives agreed that executive sponsorship (the role assigned to a project that provides clout) is critical to project success; however, few saw issues with their executive

80  Chapter 3: Challenges in Executive Sponsorship sponsorship role. They felt the role is well-defined and served the purpose intended. This very well could be based on the fact that few of the executives have a common definition of the sponsor’s role. It appears the definition of a sponsor is tailored to the organization’s situation. It is also possible that executives, who soon might need to step into the sponsorship role, like the fluidity of the definition. It is easier to succeed when the responsibilities are dynamic. This was justified by saying that every project is different and has different needs. The few dissenters who felt the role needed to improve said they felt that some executive sponsors are routinely very poor, their interactions with project managers far too brief, and they have trouble understanding project details. This results in decision-making by both sponsors and steering committee members being too hasty and based on incomplete data. Evident in our survey, but easily confirmed in any meeting with project managers today, this is in sharp contrast with the project managers’ view, which was highly critical of the level of support they received and the effectiveness of sponsors. When asked what could be changed within the sponsor role, project managers had lists of items, while few executives had more than one or two items. Table 3.1 illustrates the differences between executives and project managers. Table 3.1: Hierarchical Trends in Sponsor Role Perception Executives

Project Managers

Sponsorship Role – Well understood – Rarely a problem

– Highly dependent on the individual – Poorly defined – An ongoing issue to manage

Responsibilities of a Sponsor

– Largely the same from individual to individual (see Chapter , “A Model for Engaged Executive Sponsors”)

– Wide range of definitions from one executive to the next

Although project managers and most project management office (PMO) managers hold a similar definition of an executive sponsor, the survey results indicated that the role rarely has a written job description, and it was uncommon to have consensus of the role at all levels of the company. For instance, even though executives and managers felt engagement is crucial, they disagreed on whether their sponsors are engaged. Executives felt their sponsors are very engaged; project managers see executive sponsors, on the whole, as disengaged. Key is the lack of a common definition of a project sponsor’s role and the need for constant sponsor engagement with the project. In a large majority of cases, project managers and PMO managers saw executive sponsors as being the face of the project. They work with end users or customers, extol the project’s virtues, are critical in adoption, and are the final point of escalation. It is

Investigation into Executive Sponsorship  81

a role that requires active engagement. For executives, engagement means showing up for meetings and, when scheduling conflicts arise, sending a delegate.

Lack of Engagement Talk to any project manager about sponsorship and the most discussed issue by far is the lack of sponsor engagement: Project managers often feel “unsupported” and that their projects are “set adrift” without leadership when sponsors seemingly disappear. Repeatedly, non-executives indicate that sponsors do not attend meetings nor give thorough (or any) response to requests for assistance. Project managers feel strongly that they are often left to fend for themselves. Escalation is considered futile as no one knows why the sponsor is unresponsive and everyone in the escalation path appears ineffective at redirecting sponsors as they have little or no influence over sponsors’ tasks. The survey showed that this often resulted from the sponsor’s level in the organization. Project sponsors “multiple levels above the project manager’s pay grade” exacerbated engagement issues. This “distance” made it difficult to find a common language or convenient time to meet. Many conversations happened before or after normal work hours. However, this highlevel position was deemed critical to have the clout to affect change. When asking executives about this problem, the only answer was that sponsors are responsible for many other tasks besides projects and that project managers must understand that. They felt the sponsor’s priorities are well understood. Executive sponsors need continual involvement in projects by attending meetings, inspiring the project team, promoting the project’s goals to the end users, verifying that value targets are being met, and ensuring that the project is aligned with corporate goals. If the priorities of the project dwindle to a point that the sponsor cannot do these tasks, a new sponsor should be assigned or the project put on hold or cancelled. Executive sponsors are critical in setting expectations and beliefs of the project team and the customer. Without changing those, behavioral changes will be short-lived and adoption will wane. Despite the opinion of many executives, executive sponsorship is poorly understood and ill-defined. However, everyone agrees executive sponsors are needed to provide direction and executive clout to the project.

82  Chapter 3: Challenges in Executive Sponsorship Organization Change Management Organization change management, the discipline of helping companies’ and organizations’ end users make the transformation to a new system, is a relatively new field (see Chapter 5, “Understanding Business Change Management,” and Chapter 6, “Organization Change Management and Projects”). For this reason, many companies do not have a good understanding of responsibilities and who is accountable for the work. Everyone in the survey, regardless of industry, cited inadequate adoption as a major issue in the perceived value of the project. There was no agreement on who should be accountable for it. Inherent in this issue is that success is not achieved with delivering the defined scope on time and within budget. As discussed in Chapter 1, “Understanding the Problem,” success is delivering a product that is adopted and which improves end users’ capabilities in doing their jobs, as well as achieving some goal for the delivering organization. In other words, the project needs to deliver value for both parties (adoption being a major indicator of value). If it does not, the project is unsuccessful. Because the executive sponsor is the person supporting the existence of the project, that is where the accountability for the adoption of the project’s output has to lie. The executive sponsor is instrumental in establishing value. As will be discussed later, change management is defined and executed poorly. There are a multitude of methods for its implementation, all carrying varying degrees of success. Our survey shows, however, that in healthcare and new product development organizations accountability for adoption is assigned to the executive sponsor/product manager. In other domains, accountability was often not defined. To be sure, sponsors are not expected to be change management experts (any more than they are expected to be project management experts); however, they must understand the need and account for the resources to make it happen. Often these will need to be resources added to the project from its inception. The sponsor must: – Understand the jobs of the end users affected by the change. – Rally everyone around the change. – Advocate for resources and changes when end user value is not being met.

Industry Specific Issues The study uncovered peculiarities in two general business domains—healthcare and product manufacturing.

Industry Specific Issues  83

Healthcare Organizations Well over half of the healthcare interviews cited clinicians as poor sponsors. Those that did not mention this were asked if they felt this is an issue; a little less than half agreed. The complaints about clinicians were all based on their style of work. The broad classification is that clinicians are focused on patient care. They are trained in addressing short, often urgent, interactions that could have life-threatening outcomes. To be specific: – Clinician sponsors want projects to relate to improving their patients’ quality of care. Business projects that deal with revenue, profit, efficiency, process, reporting and the like, are more often neglected. – Clinicians are trained to work on risk factors and issues, not to be involved with anything that is running well (for example, your doctor does not call you when you are well). Lacking a proactive principle in their practice results in not knowing when to question a project manager when he or she is not reporting on risks and issues. Once in trouble, though, clinicians jump into the project and micromanage it with relatively poor results. – Many clinicians’ professions are based on very short and episodic interactions (for example, ER/ED, surgeons, specialists, and the like). They are not used to dealing in long-term “projects.” Clinicians that deal in long-term care (for example, oncology, chronic disease, and so forth) are more effective sponsors. – Clinicians often have schedules booked months in advance with time reserved for emergency appointments and are not available for meetings on short notice. (This is a variant on the priority issues note above.) Power Differential As noted earlier, there is a benefit to executive sponsors who are highly respected. But this causes problems if they are unapproachable. This is worse in healthcare than in most other domains. Nearly any patient who has been hospitalized knows there is a long-standing power struggle between doctors and nurses. Although many organizations are trying to break this disparity down, it still exists. Part of this results from the nature of the job and part of it is cultural. Many doctors are revered. Our culture puts them on a pedestal based on the doctors’ years of education and ability to make life-or-death decisions. In the hospital environment, doctors do their rounds and make decisions that technicians and nurses then carry out. These are referred to as “doctor’s orders.” Even the terminology embodies the hierarchy. However, nurses are less subject to this episodic interaction with patients. They spend a significant amount of face-to-face time with patients and learn more about their conditions and their subtleties. The result is nurses often have more information about potential indicators and diagnoses than the physician.

84  Chapter 3: Challenges in Executive Sponsorship This creates a situation where physicians, merely by the type of job they do, often fail to take the time or have the people skills required of an effective project sponsor. As said in our survey, “barking orders,” treating people-issues crassly, and feeling “all knowledgeable,” creates strife and animosity. This behavior carries over into their jobs as sponsors. They lack basic leadership skills. When we see these traits in doctors, we refer to them as lacking bedside manner. Healthcare is an example of a business domain where conflicts exist in the executive sponsor’s values. This may exist in other domains where teams of people have nonbusiness goals.

Product Companies Based on the findings from the sponsorship survey, a separate survey was run to understand project adoption and organization change management. The topic of executive sponsorship resurfaced. The reason was that new product development organizations described a specific type of executive sponsor that was essential to any new product’s success—the product manager. It might help to understand this process. Developing a new product is very similar to that of deploying a new internal process—or at least it should be. New products are conceived in about the same way as new business processes or other projects—through customer input, someone’s bright idea, looking at competitors, or external requirements. Someone champions the idea and creates a business case. If it is approved, a project is spawned to create the new idea and eventually it is deployed. In a product’s case, the person who shepherds this process is the product manager. In the non-product case, it is the executive sponsor. The difference is that most product companies use product sponsors from conception to deployment and often the sponsors, in the end, see its retirement. Product managers are staff positions with job descriptions. They are convinced that the product is viable at its inception and, in that sense, volunteer to take it on. As a result, product managers “believe” in the products they manage. Executive sponsors, on the other hand, are never staff positions (at least in the surveyed companies). Non-product projects use executive sponsors sporadically and they often are only part of the “build” phase of the project. They are part of only a small portion of the project’s lifecycle being assigned after the business case is presented and relieved of their duties before it is completely deployed. They never see its decommissioning. (In the case of processes, there are process owners who are responsible for this; however, processes rarely get removed.) These are major differences. Product managers (executive sponsors of products) volunteer for their projects; they are with the project for its entire lifecycle, and it is

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their job. Too often executive sponsors are assigned by their boss to a project, interact with it for a very small part of its lifecycle, and it is a temporary assignment added to their normal work load. Looking at successful projects, regardless of size, their executive sponsors volunteer for the project. This is in lieu of their regular duties, and they have a clear charter for their duties. In general, they also are connected to the project earlier and stay through its deployment. Many of these companies would lament about adoption of their internal projects and laud their success with products. When asked if they use the same processes for internal and external projects, most executives had trouble seeing the connection between the two roles. Asked why product companies do not use the same sponsorship concept for internal projects, most executives were baffled. A few thought it was a “silly idea,” or worse. Products need a product manager because the company has to make sure the product is addressing customers’ needs and is profitable. Only after pressing further with a comparison to a product and the notion that internal adoption has the same correlation to revenue or cost reduction, did executives start to see the connection. Not surprisingly, these are the same findings of other researchers. The best executive sponsors (sometimes called ‘executive champions’) volunteer for the assignment and remove other duties from their plate so that they can devote the needed time. They surround themselves with project champions who are subject-matter experts and understand the need and value. They focus on adoption and how end users will pick up the new processes. Our survey exposed lessons to learn from product managers when assessing the executive sponsorship role. As opposed to executive sponsors, they: – Have job descriptions. – Volunteer for their projects. – Are judged by their project’s performance. – Manage the project and product for its entire lifecycle.

Proposed Solutions A few interviewees had experience with successful executive sponsors. There were common threads in what contributed to their success. The four major items were leadership, accountability for project success, relentless communication, and a clear definition of the role. However, there was a component that was outside the skills of the executive sponsor—the company’s culture had to value these traits over positional leadership.

86  Chapter 3: Challenges in Executive Sponsorship Positional leadership is the errant concept that a person’s title makes them a leader and that edicts create behavioral change. Although this flawed thinking is refuted in article after article, lecture after lecture, book after book, many companies still have the concept that the CEO is a leader by title. This is usually bred by CEOs as they create organizations that focus on themselves and fail to surround themselves with independent thinkers or build succession plans. These executives are often hailed as great leaders; they are praised for their efforts. Their inadequacies are not obvious until their departure when the company stumbles and falls from grace. The poster children are executives like Lee Iacocca and Jack Eckerd. Iacocca brought Chrysler back from near demise and then made his name a household word often synonymous with leadership. His leadership, however, was single-handed and did not survive the test of time as Chrysler fell into disrepair once he left.i Lesser known are geniuses like Jack Eckerd, the namesake of the corner drugstore chain, whose company has struggled after it lost him as the CEO. His archrival, Cork Walgreen, on the other hand, demonstrated his leadership by hiring the right people.ii The success of that leader is seen every few miles in nearly every US city. Without a doubt, people like Iacocca and Eckerd are amazing executives who hit the height of success, but they have one thing in common: They were not great leaders focused on their people. As they left their CEO positions, their companies faltered.

Leadership The common feeling among the survey’s respondents was that the dearth of leadership in today’s organizations is appalling. Nowhere is this more evident than in how projects are run. From disseminating the vision of the company to inspiring the troops, leaders are responsible for making the gains toward achieving the corporate vision. Both project sponsors and project managers need to lead their teams. However, more important is that each must also understand how to lead without authority—“leading up” and leading non-subordinate stakeholders. Strong leaders must have the ability to lead their bosses. This requires concise project updates that clearly identify project risks and issues to ensure that executives carry through on the actions required to successfully address those risks and issues.1 In the other direction, these leaders, especially the executive sponsor, must rally the end user to be excited about adopting the change. This takes a soft approach that focuses on both individual and organizational change.

 1 Anyone responsible for project success may want to read Tom Kendrick’s book Results Without Authority: Controlling a Project When the Team Doesn’t Report to You (Amacom, 2012). He does a great job of pointing out tools to help project and PMO managers.

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Selecting sponsors for their domain knowledge, or even their enthusiasm for the project, is insufficient. Executive sponsors need to have leadership skills first and foremost. They need to empower their team, generate excitement in the vision, communicate the need for the change, enable the end user to take ownership of the change, and help build the infrastructure to support it. This is the most critical contribution any sponsor can provide to realize the project’s successful completion and adoption.

Accountability for Project Success Of all the leadership characteristics, accountability is essential. As stated in earlier chapters, too much of our culture is focused on blame, which is only a thinly veiled attempt to mask the desire to sidestep one’s own accountability. Holding ourselves and others accountable to fulfill these roles and responsibilities and deliver on commitments is the cornerstone of running projects efficiently. Accountability for project success cannot lie at the feet of the project manager alone. The project manager is delivering only within a set of artificial bounds on the project, which all too often are conflicting. This is most evident when end users or sponsors increase scope and fail to provide commensurate increases in resources or time. To thwart this, executive sponsors must be held accountable for the project’s level of success. The area where this is most applicable is in the project’s value—its adoption by end users and its ability to provide the capabilities needed. In most cases, this requires delicately balancing usability, functionality, time to market, and cost. Too much scope increases the cost; at some point the added expense decreases the effectiveness of the solution. Achieving the right balance must be part of the sponsor’s goals and objectives and woven into a financial rewards system.

Communication of Priorities Respondents cited that the single most common cause for an executive sponsor’s inability to engage in a project is conflicting priorities. The root cause of this could be in any number of areas. Table 3.2 shows some reasons and appropriate actions to resolve them. Tools can help with the communication and focus of the company. These include: – Balanced scorecard templates and strategy maps that are available throughout the organization and which reflect the current business environment are essential to keeping any organization aligned and focused on the essential components of the strategy (see Chapter 2, “Creating and Maintaining Corporate Alignment).

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Implementation goals and guidelines to demystify compliance projects’ regulation requirements and how they relate to other projects and the organization’s risk tolerance. Production metrics to understand the impact of projects focused on operational efficiencies. Executive sponsors: – Do not need to be in the line of business for the project. Leadership is a more important trait. – Are accountable for the project’s success, even if that means canceling it. – Are responsible for communicating priorities.

Table 3.2: Common Priority Disconnects Reason


The project is not part of the sponsor’s performance goals.

Determine why the project is missing from the goals: – If the project is still part of the corporate objectives, add the success of the project to the sponsor’s goals. – If the project is not part of the corporate objectives or has lost its business case, cancel the project. – If the sponsor has too much work or is not interested in the project, look for a new executive sponsor.

Sponsor is not responsible for the area the project is focused on.

– In general, executive sponsors do not need line-ofbusiness responsibility. If this is being used as a reason, validate that it is a requirement. If it is not a requirement, determine the real issues (for example, do the sponsors have competing goals, or were they assigned to a project they are uninterested in?).

The sponsor’s goals have changed due to a business change.

– Cancel the project if it is no longer on the corporate roadmap. – Reprioritize the project and communicate its new priority to everyone. – Look for a potential sponsor who has these goals, is interested in seeing the project to its completion, and will make it a priority.

The sponsor is not supportive of the project.

– Sponsors should volunteer for the role. Assigned sponsors will most likely be suboptimal and another potential sponsor that is excited about the project would be a better fit.

Project and Middle Manager Takeaway  89

Defining the Sponsor’s Role The executive sponsor must be seen as a partner with the project manager in delivering a value-laden project addressing one or more corporate goals. The sponsor’s role should include the responsibility for: – Maintaining scope effectively to meet corporate objectives. – Ensuring capabilities are in place to achieve the project goals (maintain capability alignment). – Assisting in securing adequate financial resources for the required scope. – Engaging end users early and regularly to address organization change management and adoption of the project’s deliverables. – Enforcing or negotiating assistance from cross-functional departments to complete the project (maintain lateral alignment). – Adjusting and communicating project priority within the organization. As mentioned in the opening of this chapter, the genesis of this work was to identify training techniques for executive sponsors. The ensuing survey found that few of the organizations have any form of sponsor training. Mostly, training consists of project managers working with their sponsors to come to an agreement on responsibilities. This helps to a degree, but perpetuates the issues of poor definition, bifurcation in expectations between project teams and executives, and is often thwarted by the implied superiority of some sponsors. As executives step up to be sponsors, they should be provided with formal job descriptions, a description of how project deliverables support corporate goals, and mentoring from other successful sponsors, project managers, outside mentors, or some combination of these resources. Training for sponsors cannot be conducted in isolation; all sponsors should be given the same level of mentorship, coaching, and tools. Indoctrination in the company’s style of project delivery should be part of the mentoring as the sponsor cannot be assumed to have project experience (especially that which is currently used in the company). It must stress their ownership of the objectives and their relationship to the team, the end users, and other stakeholders. This is not a single workshop or even a curriculum of courses; it is a culture in the organization to connect the executive sponsor with the project. If the project success rates are going to improve, sponsorship models must change.

Project and Middle Manager Takeaway In general, project managers have a difficult time addressing the issues around ineffective project sponsors. There are ways to influence the selection and even effect changing the sponsor; however, the most effective tool is setting expectations with sponsors. These include:

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Set up regular communication meetings. Make this flexible as everyone has dynamic lives. Establish a communication protocol that addresses times when an urgent issue arises on the project. When sponsors disappear or become nonresponsive, assume positive intent and that they have other priorities. Establish that your project still has the same priority with your sponsor or other executives. Try to transfer noncritical issues away from overloaded sponsors. If an urgent issue arises and the sponsor does not respond, escalate the issue to address the lack of response. If the problem continues, effect a process to change the project’s sponsor. If the project does not have an executive sponsor, create a sponsors’ job description, list of expectations, and a list of what he or she should expect from a project manager. Present this to project leadership and determine who is filling each role. Work through this documentation in one of your first meetings. If the executive sponsor does not have an executive sponsor’s job description, present a template and come to a mutual agreement on his or her role.

Executive Takeaway The results of our survey showed many areas of sponsorship that need addressing. In all business domains, senior executives should: – Define the roles and responsibilities of executive sponsors just as with any other position. – Choose executive sponsors based on their leadership skills, not domain experience. – Hold sponsors accountable for the project’s adoption and its value. – Ensure sponsors do not have goals or styles that would conflict with their level of engagement in a project (such as clinicians).

Applying These Concepts Organization Wide Questions 1.

Create a generic job description for an executive sponsor for your current company. Think of other jobs you have had and make changes to accommodate specifics to that position. a. What areas do you see changing the most in the job description?

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2. Thinking about sponsors who you considered wonderful, what traits did they have that made them that way? To the contrary, what negative traits frustrated you and your team? 3. What techniques did successful sponsors use to engage and involve end users or customers?

Project and Middle Manager Centric Questions 1. How might you replace a sponsor who is not supportive of your project? 2. What techniques have you used to successfully re-engage a sponsor in your project?

Executive Centric Questions 1.

When you were a sponsor of a widely successful project, what did you provide that attributed to its success? 2. What criteria does your organization use to select sponsors? How could those change to improve sponsor selection?

Chapter 4 A Model for Engaged Executive Sponsors One factor that marked every failure—“We hadn’t had a volunteer champion on the project.” —Anonymous executive at Texas Instrumentsi Accountability breeds response-ability.

—Stephen Covey

Make yourself accountable and your employees will hold themselves to a high standard. —David J. Greer Over the past thirty years, the most common complaint I have heard from project managers is, “My sponsor is not engaged.” In the early years of being a project manager, I had the same experience and assumed that this was the industry norm. By the early 2000s, I started looking at sponsors skeptically as an unnecessary evil of a project manager’s life. Then I managed a project where a mild-mannered, polite vice president was the executive sponsor. He was not very aggressive and worked in another line of business. Almost every day as we would pass each other in the hall he would look me in the eye and kindly asked how I was doing and how he could help.

DOI 10.1515/9781501506390-004

94  Chapter 4: A Model for Engaged Executive Sponsors One day, still early in the project, my frustration piqued due to one organization always interfering in finalizing the project’s scope. The sponsor came by and asked his normal question. I took him up on his offer. I logically laid out the problem and showed him documents to verify that the offending group was not part of determining project scope. He gave me his typical mild response saying he would look into it and we parted. I was certain nothing would happen. The next morning, he asked me to come to his office. We were usually the first ones in the building so I was quite surprised to find a dark-haired lady already sitting in his office. Judging by the looks of the whiteboard, she had been there a while and he had comprehended my monologue from the day before. We sat down and he thanked her for coming in so early to hear about the project. Without any other conversation, he introduced her to me, “This is your new scope czar. Nothing will be in scope unless she says it is.” In the following three days, the scope was cut about 30%. From that day forward I had no more issues with scope or the offending group. I had just seen the power of an effective executive sponsor. This changed how I addressed projects forever and, instead of just complaining about ineffective sponsors, I started documenting a list of attributes that comprise a great sponsor. Now, when evaluating the viability of a project, my first questions determine how the organization views the sponsorship role, who the executive sponsor is, and whether he or she will support the project in politically tense situations.

The Foundation for a New Approach Lack of executive project sponsorship continues to be an issue for many projects. Corporate leaders routinely falter with the definition, responsibilities, and characteristics of executive sponsors. Chapter 3, “Challenges in Executive Sponsorship,” covered our survey of numerous organizations across a variety of business domains that determined how executive sponsorship is viewed, the challenges faced, and how organizations address escalated issues. These problems included inconsistencies in the definition of the role, poor sponsor selection criteria, inadequate training tools, and obstacles in prioritizing a sponsor’s duties. While compiling the survey data, it was impossible to ignore the parallels with findings presented in many revered business books. For instance, in Tom Peter’s seminal work, In Search of Excellence, he discusses the need for product and executive champions.ii The characteristics of the executive champion are the same as those required for a successful executive sponsor. In Jeffrey Liker’s The Toyota Way, he points out that for chief engineers (essentially an executive sponsor with technical expertise) to be successful they need to master responsibility without authority.iii This is a key characteristic of effective executive sponsors. Of course, John Kotter’s The Heart of

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Change, shows how champions and executive champions (that is, executive sponsors) work in concert to establish the urgency, team, and vision—the first three steps of his change process.iv The list could continue, but the point is made. This research pointed to three foundational changes in the organization with respect to the role—addressing the role’s definition, the position’s scope, and who needs to drive these changes.

Core Improvements in the Sponsorship Role The survey on sponsorship clearly showed three broad areas where the role needed to change: 1. Role definition. The executives interviewed had a wide range of definitions of a sponsor’s roles and responsibilities, including varying levels of accountability. Very few executives had the same definition. On the other hand, project team members had a relatively consistent understanding of the sponsor’s duties, but often included tasks that were clearly too detail oriented and “in the weeds” of running the project. 2. Sponsor education. Rarely, if ever, were there training, mentoring, or coaching programs for executive sponsors. Although many organizations talked about it (the reason for the study arose from a training request), most saw the logistics and format of executive training as problematic. Poor role definition made it nearly impossible to create standardized training transferrable across companies. 3. Selection criteria. In talking to project team members, it was obvious that it is common for executive sponsors to be more of a problem than a benefit. Extremely common complaints include, “Sponsors are just another resource the project manager has to manage,” “Sponsors are not engaged and a burden, simply asking for reports and pointing to obvious issues; solutions are rare,” and “The biggest problem I have is that sponsors are never around and never help.” It should be obvious that these issues are fully intertwined, with the role’s definition being at the root of the problem. With a good definition of the role, one has a better chance of selecting the most appropriate person and designing the best education. The primary hurdle to clear is the definition. The definition must be universal—meaning that it is transferable within and between the companies. However, unlike the sweet, short definition of a project (a temporary endeavor to create a unique product, result, or service), doing so for executive sponsorship is more involved. Three areas must be defined—the role’s accountability, responsibilities, and characteristics.

96  Chapter 4: A Model for Engaged Executive Sponsors Scope of the Sponsor’s Commitment Looking at the grander project lifecycle (from inception to adoption), the project (what a project manager usually manages) is only a small portion of the lifecycle (see Figure 4.1). To ensure the project delivers value, though, the executive sponsor must be engaged at the earliest stages when the concept is only a flicker in one’s eye. This early stage is where most entrepreneurial endeavors make their first misstep—thinking there is a market for their concept and not properly testing its acceptance. Without properly understanding the desires of the target user, adoption will never occur and the entire business fails. The same is true for projects.

Figure 4.1: Initiative Lifecycle

The executive sponsorship, as defined below, implies a level of commitment rarely associated with sponsors. This is because most sponsors today retain their original duties when assigned the sponsorship role. Annual performance reviews seldom include sponsorship duties outside the job description’s catchall line, “Other duties as assigned.” If they do the job right, the sponsors’ investment in both time and effort can be significant. The tasks associated with these responsibilities can be very timeconsuming. Attempts by sponsors to delegate these duties to the project manager prove less than fruitful due to the project manager’s own workload and lack of authority (both influential and hierarchical). To realize the commitment, it is important

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to understand the initiatives and be accountable throughout their lifecycle. Hence, the “project” cannot be the bounds for executive sponsors engagement, because the items they are accountable and responsible for have a lifetime that is greater than the project. This also changes how many organizations look at projects. It broadens the focus, but allows for filling two gaps—ineffective executive sponsorship and incomplete change management.

Executive Action Required Finally, before discussing what a sponsor is, it must be clear who is responsible for solving issues with the sponsorship role. Currently, most people interviewed and many of the relevant books, articles, and discussion groups are aimed at the project manager solving problems with difficult sponsors. This view is supported by the split in recognition of the problem; executives see sponsorship as a small problem. Most literature targets the project management audience since it is the base that will most actively listen. Publishers are keen to ensure that this large audience, driven by its need for continuing education credits, is supplied with an abundance of information and tend to overlook targeting the less lucrative middle management and executive crowd. This exacerbates addressing symptoms by excluding executives, who can fix the problem, from the conversation. Executives are not interested in reading this material since it does not address actions they must take. However, as borne out simply by the number of executives willing to partake in our survey, there is concern at the executive level. Project managers clearly see the issues and, by nature of their jobs, try to take on the responsibility of fixing them by enlightening the executive sponsor. Eventually, however, the sponsor’s priorities change and he or she disappears from the project. This is a problem that must be squarely addressed at the highest levels of the organization— often the CEO. Without the clear assignment of accountability, the sponsor has no choice but to desert the project for other areas of responsibility. CEOs, general managers, division presidents, and the like must be accountable for assigning diligent sponsors and ensuring they are fully engaged in the projects they sponsor. To fill gaps in the executive sponsorship role, companies need to change three major aspects with respect to executive sponsorship: . The role needs a definition, access to mentoring and coaching, and new selection criteria. . The scope of the role must cover the entire initiative lifecycle from its first inception to its final adoption. . To implement these changes requires executive action.

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Solutions for Executive Sponsorship As with all complex problems, there is never one issue to address. As discussed in earlier chapters, there are many. In formalizing the sponsorship role, all aspects from accountability to the composition of the sponsor’s team and performance criteria need to be defined. The following eight sections—executive sponsor’s accountability, proactive success monitoring, executive sponsor’s responsibility, sponsor’s characteristics, education the organization on the sponsor’s role, sponsorship team requirements, time commitments, and performance expectations—will cover these items.

The Executive Sponsor’s Accountability To understand any role in an organization, the accountability of that role must be defined. Understanding this sets the stage for defining responsibilities and training. In the end, the sponsor must be held accountable for: – The project’s value and its ultimate adoption. – Maintaining alignment of the project with the business’ objectives (strategic and otherwise). – Fiduciary fitness of the project, ensuring that the cost and value meet the business’ needs. Project Value: The True Measure of Success There are two major definitions for project success that are used on any given project. As discussed in Chapter 1, “Understanding the Problem,” a large part of tracking success is to deliver within the scope, schedule, and budget targets. Most, if not all, of the executives interviewed, however, said projects must deliver value to the customer. If a project fails to deliver value, all executives agreed it is a failure. The two definitions are used based on who is in the conversation. With project managers, success is tracked using scope, schedule, and budget. However, when customers enter the conversation, value is often added as part of this measure. Customers are more concerned with this less quantifiable factor of success. It is not until the project gets to deployment (after the project manager’s tenure is often over) that the measure switches to meeting business cases and end-user adoption, a key component of value. Projects need to be tracked on how they are meeting their business case and whether they are on track for adoption.

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The Project’s Business Case Business cases are built on a series of assumptions. Some are known and documented prior to the project, while many are buried deep in the organization’s culture. These assumptions are continually tested and explored during the project. This job is often left to the project manager, but the end user is the only one who can affirm that the goals are met. Projects running iterative methodologies (like agile), surface and test these assumptions routinely, since, by the nature of the methodology, the end users are closer to the project team. Projects that have to follow a more linear approach need different tools to validate the assumptions sooner. At a minimum, end users must be far more engaged with projects in their earliest stages and throughout the initiative lifecycle. In addition, arcane project management and technical terms used by project teams need to be replaced with business language that allows end users and executives to understand the project’s status and the deliverable in its conceptual state. This is a critical function of sponsors. They are the bridge that brings the user’s voice into the project. They are in the position to see when the customer is not engaged and why this condition occurs. Sponsors can work with the project manager and the customer to ensure that issues are understood and a common language is being used to describe functionality and status. To help, it is convenient for the sponsor to have hands-on experience as an end user; however, it is not a requirement. Rather, sponsors need to know the correct people to draw into the project to give this advice and, most importantly, have the respect and persuasive talents to get them to participate, even though these subject matter experts have other pressing tasks in their day. Selection of the sponsor is critical and can predispose the fate of the project. At times, the sponsor needs to be the CEO. The opening story in Chapter 6, “Organization Change Management and Projects,” describes an example of how a CEO may need to lead enterprise deployments that affect culture. Value and End-User Adoption Roads must be driven, buildings must be occupied, products must be bought, and software must be used if they are going to provide value. Even when all the business cases are achieved, people are people and they simply may not adopt the change. For product companies, this means lower than projected sales and, for internal projects, where organizational change is the goal, the change’s benefits are not fully realized. Without adoption, the project is a failure—regardless of its performance measured by scope, schedule, and budget or the validity of its business case. Project managers have to build the product or service to specification and are often too far removed from the end users to manage the business case, adoption, or the more intricate issues of organization change management (OCM). Additionally, their

100  Chapter 4: A Model for Engaged Executive Sponsors skills are often far too analytical and linear to champion this cause. The core project team does not have the time or means to champion the change. End users have their “day jobs,” which rarely include project support. As an extreme example, consumers of a new cellphone product could never be held accountable for its adoption. More arguably, a billing department manager should not be accountable for new system adoption when he or she must continue to ensure that accounts receivable are being properly processed. Only if this person has the characteristics of a sponsor would he or she be able to take on this task. Executive sponsors, on the other hand, have the breadth of responsibility, visibility, and knowledge that allow them to have accountability over this broad range of adoption scenarios. The operative word in this is the adjective “executive.” The characteristics of the sponsor will be discussed below in more detail, but suffice it to say at this point, the preferred sponsor candidates need to be trusted leaders who have general knowledge of the business as opposed to line-of-business ownership of the area affected. If they have the ownership, great, but this should not be the primary selection criterion. The art of persuasion, quality of respect, and ability to make decisions are far more important than domain knowledge. Tom Peters, in In Search of Excellence, refers to this role as the executive champion—someone who knows the politics and procedures and can shield the project from the organization’s bureaucracy.v Alignment with Corporate Goals Projects change for three major reasons: 1) the business environment changes, 2) the initial concept behind the project changes (for example, assumptions prove invalid), or 3) the customer wants a different deliverable (usually for one of the first two reasons). Unchecked, these three sources of change can create shifts in goals that oppose one another, causing the project to lose its perceived value. The only people who have the view to see this are, again, executives. Project managers can see the project drift, and they rely on change order processes to ensure that changes are communicated. But it is far more difficult for them to see business environment changes. In the same light, the business environment may change and the impact on the project may not be immediately apparent. One central entity must be accountable for the alignment of those changes, ensuring the appropriate subject matter experts are fully aware of the impact and who can distill the information to executives so they can make the decision on a new direction. The only role with the visibility and oversight to see and address this shift is the executive sponsor. The Project’s Fiduciary By any definition, executive sponsors are the guardians of their projects. They have fiduciary responsibility to ensure that the stakeholders (business executives, customers, and end users) have realistic expectations that are met in a financially responsible manner.

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The key is that the expectations are reasonable—meeting the needs and the common constraints of scope, schedule, and budget—and efforts are focused on achieving these expectations. As expectations change, the sponsor must be the person tying the capabilities to the current conditions. This is beyond the simple financial commitments, as meeting scope to provide value on a given schedule may significantly increase costs when difficulties arise. It is incumbent, therefore, on the executive sponsor to maintain the balance of value and the triple constraints. The sponsor needs to highlight and mitigate unreasonable limitations. Sponsors, though, are not necessarily accountable for funding their projects. They are the trustees—the fiduciaries—ensuring proper use of the funds. End users, customers, marketing groups, or other business units may have the ultimate responsibility for acquiring the funds, and if those funds are insufficient to meet the meet their needs, sponsors must be held accountable for adjusting expectations and scope to reconcile the funding and delivery. This guardianship does not mean that the executive sponsors support projects by all means. Instead they support them to all ends. This may mean that executive sponsors make the most critical calls on projects and may even push for their cancellation. This happens when a project cannot meet value expectations within reasonable funding targets. Although this should be rare, value must be evaluated at each major change and periodically, especially after numerous change requests.

Proactively Monitoring Success Targets Saying someone is accountable for an item implies that there is some method to track that he or she is on target for meeting project goals. In other words, if an executive sponsor is accountable for adoption, predictive performance indicators need to be identified to ensure that the adoption target is going to be met. As with any critical task, milestones ensure that people are on track to meet expectations. Each industry sector has a variety of waypoints to monitor whether projects are on track to meet their expectations. Classic waterfall projects often use gating processes for control and to illustrate of conceptual value, while iterative methodologies use frequent interim deliverables to show value in a more tangible manner. These same periodic checks need to be in place for the sponsor’s goals in achieving the value, business case, and maintaining alignment. Tracking alignment to goals and business cases is relatively easy and achievable through standard project reporting methods. The vagueness and lack of quantifiability of value makes it a much harder task.

102  Chapter 4: A Model for Engaged Executive Sponsors Monitoring Value As mentioned at the outset, value is the real measure of success for a project. Value is ultimately measured by customer satisfaction in using a final product, but progress toward that is very difficult to measure and is highly subjective. This may require adding advisory groups and periodic meetings throughout the product development cycle. This increases cost (which will be offset by reduced rework) and needs to be championed by the sponsor. Other forms of value require different methods for tracking and, again, the sponsor must shepherd that effort. Adoption and its sub-discipline, organization change management, are the most common value elements, often contributing most of the project’s value. Unfortunately, the processes to ensure proper adoption are less mature than those for project management and are poorly understood. In fact, as we will see in Chapter 6, “Organization Change Management and Projects,” the theories that form the basis for change management are only a few decades old and still changing rather rapidly. However, it is clear that most project methodologies provide only a portion of the processes that must shepherd the adoption of the project’s product or service. Executive sponsors must work with the project managers to ensure that project managers have the right resources and tools to meet the adoption goals. Although there are many potential reporting structures for change management responsibilities, after analyzing the successes of multiple organizations it appears that having the functions fully integrated into the project achieves the best result. To do this, project managers must use an adoption lead (much as if they may use an architect or quality lead) to insert checkpoints to gauge end-user involvement and acceptance. The executive sponsor must ensure that the project manager has this or an equivalent resource. These people need to assure and report how the project is meeting adoption expectations. If those expectations are not being met, the project team must implement changes to alter the scope to achieve better acceptance. For this, the rigor of the project methodology’s change control process is essential. Too many organizations wait until a project nears delivery to work on adoption or organization change management. This is far too late. Just as marketing groups test acceptance of a new product with end users long before the product development starts, the same function must be done on other projects requiring behavioral changes. In the inception stage of these projects, long before the project is funded, a project manager assigned, or even the scope defined, change management must start (see Figure 4.1). Without executive sponsors engaging end users at this early point in understanding the direction, most projects will need to be reset to guide them toward an acceptable solution later in the project at a much higher cost.

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Monitoring Alignment Less difficult, because of its tangibility, is ensuring the project’s alignment with corporate goals. Everyone is familiar with how a customer’s desire to get more functionality causes scope creep. Although it seems reasonable to give customers everything they ask for, changes slow the project and many of the features do not add value. Every change must be assessed closely and critically. In many cases, projects drift away from the goals based on people internal to the project adding or modifying small parts to the project’s scope. The challenge is that these changes may appear covert in nature, while the people making the changes are doing so with the best intentions. These numerous small additions happen in a nearly imperceptible manner but continue to add up to major alterations over time. These are very hard for project managers to detect and even more so for executive sponsors. The key is a culture of alignment established through actions like those established in Chapter 2 “Creating and Maintaining Corporate Alignment.” So, too, the business environment changes in unremarkable ways. At times, such as in 2008 and 2009, however, they are nauseatingly massive and rapid. There are only two practiced methods for ensuring alignment: 1. Engaging in continuous effective executive engagement and communication, and 2. Conducting project audits. The preferred method is the former; the more complete is the latter. Transparency and solid communication always offer the best approach for effective executive engagement. At the speed of today’s business, however, communications can fall apart quickly. Executive sponsors need tools to see project progress. Audits and health checks are tools that confirm projects are on track to meet the goals of the business and anticipated value. Both look at all aspects of the project to make sure that items like stakeholder communication, scope control, scheduled management, testing, release management, alignment to corporate goals, and so on, are being properly addressed (both in planning and execution). They are quite thorough and can analyze hundreds of aspects of a project and in that respect, resemble financial audits. Conducted by either internal or external resources, they can validate that projects are on track to deliver value in each area examined and, if not, provide suggestions on corrective action. Audits are independent checks of a project to determine its state. Health checks are the same as audits, but are periodic with the person doing the health check spending more time with the project team offering suggestions and discussing corrective actions. Their need and frequency are dependent on the project’s size with respect to the maturity of a company’s processes, but are often conducted every one to three months. In addition, audits and health checks help support the fiduciary responsibility of the executive sponsor.

104  Chapter 4: A Model for Engaged Executive Sponsors Monitoring the Business Case Business cases are monitored by periodic reviews to ensure they are still valid. Like value, they are heavily influenced by changes in the business environment, but are more subtly affected by other actions in operations. Changes in operations from another project’s improvements, changing duties, corporate reorganizations, and the like, can nullify a business case and devastate the payoff for a project. Appropriate times to review the business case are during the monthly review of the risk register and project assumptions (after all, the business case is an assumption and, hence, a risk). Executive sponsors must be at a level of the company where they can be held accountable for: – Tracking the project to the business case. If it appears the business case cannot be met, they must take corrective action. – Achieving the intended value and adoption targets. – Maintaining alignment with corporate goals. – Proactively monitoring success targets.

Responsibilities of the Executive Sponsor At a minimum, the executive sponsor role has four basic responsibilities—setting project vision, communication, decision making, and engagement in the project. These, of course, require a variety of tasks that the executive sponsor may do themselves or delegate. Ultimately, they are responsible for the tasks to be completed. Project Vision The project’s vision, like any vision, is a picture of the idealized future state that the project will bring to the organization. Sponsors are responsible for maintaining this vision. Others may create the vision, but sponsors approve it and are its guardian. They need to affirm that over the project lifecycle the vision aligns with the goals of the organization as both the project and business goals change in reaction to events external to the project. Communication There is a saying in the project management world, “The three most important aspects of running a project are communication, communication, and communication.” Everyone, at all levels, is responsible for communication within the project and outside the project to stakeholders and end users. Communication is truly never-ending. Executive sponsors and project managers share this task. In general, project managers handle communication around ongoing project status (within and outside

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the project) while executive sponsors handle broader communications that go beyond status. While most project managers communicate objective and quantitative information talking about progress, budgets, costs, tasks completed, features delivered, and the like, sponsors often communicate more subjective information—benefits, value to the company, or sacrifices in one group for improvements in another. In addition, sponsors need to create excitement around the initiative and enlist support. This requires widespread respect, trust, and vision. In our survey, effective sponsors felt they over communicated. This is a perspective issue. Many sponsors felt that they talked to hundreds of people throughout the company; however, from the standpoint of hundreds of employees, the sponsor talked to them only once. To have effective communication, stakeholders need to feel they have had numerous communications with the sponsors, the more personal the better. It takes a considerable amount of the sponsor’s time to provide meaningful connections with the project team and stakeholders. The communication needs to span the entirety of the lifecycle shown in Figure 4.1. Often words like cheerleader, champion, and evangelist are used for an effective sponsor’s involvement in a project. Chapter 6, “Organization Change Management and Projects,” will cover this part of communication more thoroughly, including how it changes throughout the project’s lifecycle. The need for intense communication is not lost in Tom Peters’ research, either. When talking about champions he identifies five attributes about communication: 1) it needs an informal component, 2) it must be intense, 3) it must be physical (using whiteboards, infographics, and so on) to aid dialog and discussion, 4) there must be a vehicle or device to nurture it, and 5) it needs to act as a control system. By nature, these attributes are all interdependent, sparking cooperation and Decision Maker Project decisions are made daily. They are made at all levels of the company, while the project manager dispatches and delegates many of the project decisions. Scope, resource allocation, direction, thoroughness, time allocation, methodology, and so forth, all change. In an efficient project environment, these decisions are delegated to project managers, leads, and individual contributors, getting the decisions as close to the problems as possible. This strategy minimizes the time needed to resolve issues and expedites the project. This can be done, however, only if a sponsor makes a clear statement on vision and direction. To be sure, sponsors make a variety of project decisions. These are decisions that have global impact on the project. They affect the alignment to business strategies, goals, or objectives and may have impact far beyond the project itself. Some of these decisions come from within the project (for example, the team escalating issues) while others come from outside the project (for example, changes in business direction requiring changes in the project). This requires influence throughout the organization—a much larger scope of influence than a project manager can affect.

106  Chapter 4: A Model for Engaged Executive Sponsors These “global decisions” are difficult and likely unpopular with parts (or even a majority) of the project constituency (if they were popular they would be easy to make). Sponsors must make these decisions, get the team to accept them, and move forward. These decisions often include eliminating parts of the project’s scope, outsourcing, removing team members, or other actions that will be generally disagreeable to project team members or stakeholders. Regardless, decisions must be made, the justification explained in an honest fashion, and the project shepherded through the change process. This will likely require both “sell” and “tell” talents of the sponsor. Engagement Overwhelmingly our surveys said that the biggest issue with executive sponsors was their level of engagement. Nearly every project manager cites this as the biggest issue with sponsors. This, in large part, results from the lack of a good definition of sponsorship. If sponsors have one understanding of their responsibilities and the project managers and their teams have another, there is little hope the sponsor will meet the project teams’ expectations. There is, however, more to engagement than a mechanical checklist of responsibilities. Engagement means executive sponsors are available and seen by the team; that they attend a majority of the meetings they are invited to, rarely sending delegates. They routinely ask questions about status and direction, show up for celebrations, have a sense of the challenges on the project, and proactively provide advice to address issues and avoid risks. Referring back to the opening story, the executive sponsor was visible daily. Project managers and their teams do not feel the sponsor is engaged if they lack a “one-ness” and a relationship with the sponsor to make the routine decisions that are part of any project. Executive sponsors must be more engaged at the start of the project in building a relationship with the project manager, imbuing in them the framework for decision processes and building observable mutual trust. Sponsors that are leaders generally do this. Without the accountability for the project’s success, though, sponsors are easily pulled away to other responsibilities for which they are accountable, and often have large bonuses tied to their completion. Without the role having accountability, sponsors seemingly disappear from the initiatives or projects. Executive are responsible for: – The projects vision, even though the project team may develop it. – Communication with stakeholders and the project team to ensure a common understanding of the goals and value. – Making or clearly delegating decisions in a timely manner. – Being properly engaged in the project and accessible to the project team.

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Characteristics of Effective Executive Sponsors Using the guidelines above for defining the sponsorship role can shape the job description. Roles and responsibilities alone, however, do not identify the appropriate sponsor. Ideal sponsors have impeccable business knowledge and numerous softskills (such as leadership, dealing with ambiguity, and influence). There are some very specific characteristics that must be present to make a sponsor effective. As might be expected, our study showed these were all soft skills most associated with being a leader. They center on influence that will make people support the project, supply needed resources, and move the project to successful completion. Leadership First and foremost, sponsors need to be authentic leaders. Thousands of books have been written on what makes a leader, and Chapters 9 through 11 discuss leadership in a project context. The next few sections merely emphasize a few leadership characteristics that are most critical for sponsors being “champions” for their projects, deferring to later chapters for a complete discussion. To be sure, leadership is not a position or title in the company. It is the quality in an individual that guides people to implement a vision—in this case the project’s vision. The person must be trusted, seen as objective and fair, and remain engaged in the project. One aspect is being what Jim Collins defines in Good to Great as a Level 5 leader. Projects are full of tensions and conflicts. Hence, handling ambiguity and paradox, along with will and humility, are key sponsor attributes. When looking at the responsibilities of executive sponsor for both promoting and being critical of the project, accepting accountability of its challenges yet letting the project team revel in its success are absolute musts.vii This is a result of accountability and humility. This, of course, is not lost in Tom Peters’ research, either, as he devotes nearly 30 pages in his book, In Search of Excellence to how great leaders address ambiguity and paradox.viii Belief in the Initiative’s Vision Sponsors must have a relentless and untiring belief that the vision of the initiative is good for the organization and end users. Their support must be objective in order to maintain a critical view of the project. This is a delicate balance of duties—on one hand being a cheerleader and on the other ready to kill the project if the value diminishes. This is also the primary quality that allows the sponsor to be a good fiduciary. It provides the organization with the direction the project requires to meet its needs; it thwarts superfluous or people’s personal favorite changes to the project, and, if it becomes apparent that value from the project cannot be achieved, it guides what features or functions to remove.

108  Chapter 4: A Model for Engaged Executive Sponsors The Value of Perceived Authority Contrary to lore, sponsors do not need hierarchical authority. Hierarchical authority, also call direct, positional, or organizational authority, exists when someone has authority granted due to some understood reason. For instance, the CEO has authority to direct most people in the company due to his or her position. At times, direct authority hampers success. Two aspects of hierarchical authority can impede the project. First, direct authority can short-circuit getting data from the project team. Teams over-rely on authoritative sponsors to make decisions. This slows the project. It can also limit data, especially negative data, from reaching the sponsor. Many people have the perception that authoritative, central decision makers are also punitive. This misconception makes people hesitant to provide all of the information. It often filters out much of the bad news. Second, sponsors with hierarchical authority tend to make decisions without getting buy-in from others. To the contrary, when sponsors do not have direct authority, their decisions are based on a common accord and agreement versus edict. Their lack of direct authority requires them to get the assent of others to reduce resistance to the decision. This results in less strife and pushback. People accept decisions because they had a larger part in making them. Effective non-authoritative leadership comes from a combination of blessings from the executive ranks, oversight of and leading the program, a proven track record, and the link between the product and customer satisfaction.ix Respect and Trust You cannot be a leader or a sponsor without people’s trust. End users, executives, project team members, and stakeholders must have trust in the sponsor. Trust is most often gained (or lost) by a person’s actions. Making decisions, being accountable, and following through on commitments are three common examples of how people gain other’s trust and respect. Trust does not mean that everyone agrees with the sponsor, nor is it saying that initiatives are run by consensus. The sponsor must be the type of leader who knows when the project needs a stated direction and when the extra time is essential to attain broad agreement. Without respect and trust, decisions are continually questioned, their direction is skeptically followed, and issues are continually reopened. This defeats the morale of the team and leads to cost overruns and delays. Misconceptions about What Constitutes a Good Sponsor At the risk of restating certain points, there are a number of misconceptions that need to be dismantled about what characterizes a good sponsor. These are seen commonly in organizations and were affirmed in our survey. – Project Champion. Executive sponsors, often called executive champions, can also be project champions, with a caveat. Project champions are primarily zealots for the completion of the project. Project champions, as Tom Peters refers to

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them, may be a little “mad.”x They do not need a complete grasp of the business case for the project. They are supportive of the project despite any obstacles. Executive sponsors, though, need to be objective, able to take a critical stance on the project. This obviously challenges the fiduciary role of the sponsor and creates the tension that vitally requires a leader. The project champion’s role is biased toward the project while the fiduciary role is far more objective. For larger projects having enough budget, the project and executive champions should be separate people. The project champion is someone in the project hierarchy under the sponsor. In smaller projects, this is a rare luxury; the executive sponsor quite often needs to be the project’s zealot. Authority. To reiterate the point above, hierarchical authority is not required and is often a determent to success. Experience and research substantiate that responsibility without authority achieves better results. As pointed out in the references to the works of Liker, Peters, and Cialdini,1 the power of trust, persuasion, and influence are the optimal tools for inspiring people to support the cause. Human Resources. Although sponsors may have suggestions for appropriate subject matter experts (SMEs), they are not responsible for acquiring resources for the project. This is squarely in the project manager’s scope of work. Too many project managers (in our survey and in experience) feel the sponsor needs to supply the people. Executive sponsors are not responsible for finding resources, but they are responsible for capability alignment. They assist the project manager in working with stakeholders and use their influence to identify the correct quantity and quality resources. There is a fine line that must be respected. Executive sponsors have fiduciary responsibility for the project; if the project is challenged by a lack of needed skills, then they need to reassess the project’s priority and value. Conflicting projects competing for resources must be prioritized by working with other sponsors and organization executives. Financial Resources. Although executive sponsors have a fiduciary role, they are not necessarily the source of finances. Their role includes working with other executives to secure the budget and assist in finding additional funding as changes occur. This does not mean that they never provide money. If they have the unallocated funds (remembering that the first priorities are that they are leaders, they have time to be accountable for the delivery, and can conduct the tasks associated with a sponsor), they can fund some aspect of the project. However, to say they are responsible for securing all the funds is incorrect. Other stakeholders, from the project manager to the end users, have a part in finding money to complete the project. If funds cannot be found it is up to the executive sponsor to

 1 Robert B. Cialdini’s book Influence: The Psychology of Persuasion (Harper Business, 2006) is an excellent resource.

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determine if the anticipated value exists for the project. After all, if the value is there, funds usually follow. Domain Knowledge. Leadership qualities and business acumen are far more important than specific domain knowledge. Being a leader with an understanding of the supply chain or accounting is more valuable than having experience with some specific software package. Being a leader and understanding the telephony business is more important than experience in running a cell phone product release cycle. The more specific experience can be found in subject matter experts assigned to the project. Likewise, although the best sponsors are often found in the end user group or their representatives, sometimes that person is not available or lacks the required leadership traits (see Chapter 9, “Leadership’s Relationship to Projects”). Executive sponsors must understand the end users’ plight, not how to do their day to day tasks. They need to inspire adoption of new systems, not how to execute the new workflow.

The value of a sponsor to the end-user community is threefold—leadership, empathy, and credibility. This buys a lot of clout with the end users. The proper sponsor genuinely knows and feels their pain, understands the issues, and understands how the new solution will address the issues. With a respected representative, the end users will buy in more quickly. With a leader’s vision, teams become inspired. As stated above, domain experience is something that is only “nice to have.”

Educating People on the New Sponsor Role As mentioned in Chapter 3, “Challenges in Executive Sponsorship,” the genesis of this work was a request from a healthcare organization for executive sponsorship training. The result was an understanding that training was a secondary issue and that “education” on the definition of executive sponsorship needed to be the first step. Without this definition, developing an educational program was a waste of time. It also expanded the task as it was not only the sponsor who needed training, but rather the entire organization. This starts with something as simple as the job description. Job Description Although a specific job description will differ from industry to industry and potentially project to project (based on project size and complexity among other things), the core accountabilities, responsibilities, and characteristics will remain the same.

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Accountability. Here are ways executive sponsors will be accountable for the project: – Success based on value. Project managers are held accountable for the scope, schedule, and budget, and the executive sponsor needs to assure that these parameters create value for key stakeholders. – Alignment to corporate goals in order to fulfill the business strategy. – Achieving the business case and ensuring that the project is modified as necessary to meet corporate needs. Responsibility/tasks. Executive sponsors are responsible for: – Developing and maintaining the project’s vision. – Communications with stakeholders and team about overall project vision, direction, risk, and challenges. – Engaging with the project, at a minimum, on a weekly basis. Attending meetings, communicating with stakeholders, and inspiring the project team. – Making critical decisions on the project that affect its value and alignment to corporate goals. Other decisions should be delegated to the team. Characteristics. Executive sponsors must have the traits of a leader, belief in the project’s vision, perceived or influential authority, respect, and trust. It is unreasonable to require that sponsors have performed the job in the past. Although many executives have, this fact can be a hindrance as they will bring with them old concepts or habits. Their experiences from the past may make it more difficult to step into the new definition. Sponsor Coaching Sponsors are busy people and do not have the time or inclination for training classes. Ideal situations will require short bursts of time (30 minutes) to apprise them of how they should function as a sponsor, reminding them of their different responsibilities or when they should step in to resolve stakeholder issues (for example, excessive change requests, inter-stakeholder conflict, conflicting values targets, and the like). The best structure for this is a retained or internal service that can mentor or coach executive sponsors on the role and on-demand coaching for experienced sponsors. These services should commence with the project and the coach or mentor should create an engagement plan based on the project’s needs. The initial meetings should be with both the executive sponsor and project manager. From that meeting, the coach or mentor can determine the level of engagement with either party. The coach or mentor should be consistent throughout the project as he or she needs to understand the project’s goals and be in contact with the team to see issues.

112  Chapter 4: A Model for Engaged Executive Sponsors In some cases, the initial training (regarding the new role’s definition, basic project management concepts, and the like) could be done in two or three short (10- to 15-minute) videos and some documentation. It is recommended that the sponsor and project manager review these together to create a solid baseline of expectations for how the two roles will interact. Project Team Training As alluded to in the prior section, the project manager (and hence the team) must also be indoctrinated into the executive sponsor’s role. As our survey pointed out, project managers had a more consistent view of the executive sponsor’s role, but often gave tasks to the sponsor that in reality were a project manager’s tasks (most notably responsibility for funding, human resources, and developing the project charter). To address this, project team members need to understand what is expected of the sponsor and the sponsor needs to appreciate any unique characteristics of the project. This requires constant communication between project members and often the project manager has to take the initiative to set expectations with the executive sponsor. There are two major areas where the project team needs to change how it deals with the executive sponsor—decision making and communication. The challenge with both is working with the sponsor to draw a clean line between when the project team or the sponsor should do these tasks. The project team should be as autonomous as possible, but it needs to know when it is politically more prudent for the sponsor to decide or communicate an issue. This requires a good working relationship between the sponsor and project manager. Coaches, mentors, internal company guidelines, or both can help develop the relationship.

Team Requirements Every project, regardless of size, needs an executive sponsor. Texas Instruments ran a survey of approximately fifty product development projects that showed, without exception, one factor that marked every failure—“We hadn’t had a volunteer [executive] champion on the project. There was someone we had cajoled into taking on the task.” Projects should not be started without a sponsor who truly wants to champion the project.xi In fact, one must ask why the project exists if a sponsor cannot be readily found. But sponsors are not all that is required; at times, both projects and sponsors need other support in completing the job. Depending on the size of the project, other roles may be required. Three are highlighted below and all support the executive sponsor.

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Adoption/OCM Specialist Although executive sponsors are accountable for the adoption (as it is such a large part of value), they are not expected to be organization change management (OCM) specialists. The team may need help creating a culture of adoption. The structure of this is discussed above and in Chapter 6, “Organization Change Management and Projects.” Adoption Architect Sizable projects focused on long-term goals may have arcane and esoteric requirements that subject matter experts need to address. This often requires that sponsors have adoption architects who understand the ramifications of decisions that will affect the project in the long term. This is obvious in many technical projects, but also can be critical in nontechnical projects that have specialized business, regulatory, or compliance challenges. Evangelist or Project Champion Projects that are large, have a long duration, or have a significant end-user base may need help with communication. For these types of projects, the role of an evangelist, or project champion, helps fill the need. This role exists solely to promote the project’s output of a service, result, or product (hence, its popularity in the new product development businesses). The executive sponsor retains the objective view of the project, while the project champion solely promotes the project, at times addressing issues uncovered to the project manager or executive sponsor.

Time Commitment It is obvious that the role of executive sponsor is not a minor commitment. It cannot be added to a potential sponsor’s “day job” and be completed. Estimates are that the executive will need an average of 5 to 15 hours per week, peaking at 40 and rarely dipping below 3. In the story that opened this chapter, the executive sponsor was nearly full-time for the program. The project I was running was about 20% of his responsibility.

Performance Expectations Because of the time entailed, performance expectations for sponsors need to be modified to offload some level of work that would allow them time to complete the sponsor’s job. In addition, performance criteria have to be added to account for the project and the possible outcomes. Care should be taken that these criteria account for both

114  Chapter 4: A Model for Engaged Executive Sponsors success and aborted execution of an unfeasible project. Although project failure should not be considered a positive outcome, aborted projects are potentially positive. “Impossible” projects that are canceled before burning thousands or millions of dollars, demoralizing teams, and wasting resources are often successful outcomes. This is quite often the case in projects using agile methodology. The fail-fast-failcheap approach is challenging for some executives. A client once came to me with an issue after converting its Information Technology (IT) development to agile. It had been successful delivering projects running agile for a year and was going through an annual review with the corporate executives. Its scoreboard indicated the “wasted dollars” (money spent on failed projects and rework) on its $38 million portfolio budget was less than $30,000 (0.8%), and it had a $4 million reserve from two projects that had been canceled when their concepts were determined to be invalid. Out of 18 projects started for the year, 16 finished successfully. This compared with the prior year with a $45 million budget where it started 22 projects and completed only 14, with a wasted-dollars rate of 34%. The IT group was excited, but the executives kept asking about the other two projects and why they had not been completed. IT realized that it had failed in educating the leaders that success included finding out projects were impractical after spending only a few thousand dollars instead of a few million—even if you did not deliver the project. Executive sponsors need two tools to help them out: . A job description to set expectations to stakeholders. . A support team, such as a change management team, to help track the projects through its lifecycle.

Conclusion In the end, executive sponsorship is a serious role and when done improperly can be very costly. Our surveys show that currently little accountability is associated with the role, which must change. The role cannot be assigned as an after-thought to uncommitted executives. Potential sponsors need to understand that the role is central to project success and needs a significant time commitment. Job descriptions, incentives, and a common set of expectations need to be built for the role. As with many projects, sponsors fail before they first meet the project team. This happens as the executives who assign them to the project do not understand the importance of a sponsor, nor do they set expectations for the role. The executives are simply checking off the box that says, “Assign Sponsor.” Sponsors need to work on projects of their own volition, that they are enthusiastic about, have a passion to see succeed, and who have the time to attend to the projects’ needs. Proper sponsorship

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will move the needle on project success rates as it affords the project the clout and vision to deliver value.

Project and Middle Manager Takeaway Without a doubt, project managers can run projects without an executive sponsor. It will be harder, the project has a much higher chance of failure, and customer satisfaction will most likely be diminished. However, even when an executive sponsor is assigned there can be dubious benefit. In either case, it is incumbent on project managers to address the situation. They can work with their sponsor or other executives to highlight where they need support. In the case of a sponsor not providing the correct support, the project manager should call a series of meetings with the sponsor to set guidelines and get the sponsor to understand the expectations of the role. Create a sponsor’s job description, keep it in your folder, and when starting a new project use it as a baseline to determine the sponsor’s role. In project management terms, it should be part of the project’s communication plan. Ask about adoption (see the next two chapters) and determine what the sponsor feels his or her role is in adoption and make plans to fill in any gaps. Create a plan to educate sponsors on project management methodology. Do not assume they have ever been sponsors. Even if they were, it could have been for a project significantly different from the current project. After all, projects are unique by definition, and so are sponsors. Other projects could have had assorted styles or methodologies. It is best to respectfully take the sponsor through all the expectations. Making assumptions about a sponsor’s knowledge is very dangerous. Lastly, if your sponsor is not supporting you, escalate it to determine the reason. If his or her priorities have changed, make sure the project is still a priority. If they have, ask for a new sponsor who can support the project. This is the time when knowing how to lead your leaders is very beneficial (more on this when we discuss Gap 6: “Project Leadership” in Chapters 9 through 11).

Executive Takeaway To meet corporate goals, projects must succeed. Without exception, corporate leaders know that executive sponsors, often called executive champions, are critical to success. Our survey and additional research have shown numerous issues as root causes that must be addressed to create an effective sponsorship role. These include: – Defining sponsor roles and responsibilities. There is no common definition of the executive sponsor role; it varies within companies and from company to company, yielding inconsistent expectations.

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– – –

Fostering application of accountability throughout the project hierarchy. Accountability for various deliverables throughout the project hierarchy must be as close to issues as possible. Thorough engagement with the project. Executive sponsors must have the belief in the project to take on the assignment voluntarily and have sufficient time to devote to the project. Developing criteria for selecting sponsors. Leadership over domain experience or direct-line responsibility is the most important trait. Establishing mentoring and educational programs. Few organizations have any form of training, mentoring, or coaching programs for their sponsors. Needing CEOs to be the drivers of a top-down approach in addressing sponsorship issues. Solving issues with executive sponsors, their roles, accountability, and availability must be addressed by executives.

Implementation of solutions to these issues rests at the executive level of the organization. When addressed properly, the benefits are many, including drastically improving project success rates and achieving corporate goals in a timely and cost-effective manner.

Applying These Concepts Organization Wide Questions 1.

What are the specific nuances in your business or type of projects that affect the sponsor role? 2. Take a project from the past and identify its tangible and nontangible value. How could the sponsor and the project manager have handled the customer differently knowing these values?

Project and Middle Manager Centric Questions 1.

Develop a communication plan that is sponsor specific. a. How does it address an unresponsive sponsor or urgent communication? b. What are the limits and how should the sponsor be notified? 2. Develop a list of expectations that you have of your sponsor. How would this change from project to project?

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Executive Centric Questions 1.

What criteria does your organization use to select sponsors? a. How would those change to improve sponsor selection? b. With the information from this chapter included, compare your answer with the same question in Chapter 3, “Challenges in Executive Sponsorship.” 2. Are there other project-related items that executive sponsors should be responsible for in your organization? 3. Do all your direct reports have the qualities to be executive sponsors? What tasks would you remove from each if they had to sponsor a large project that took 50% or more of their time?

GAP 4: Adoption and Change Management We cannot change anything until we accept it.

—Carl Jung

Chapter 5 Understanding Business Change Management People don’t resist change. They resist being changed!

—Peter Senge

All changes, even the most longed for, have their melancholy; for what we leave behind us is a part of ourselves; we must die to one life before we can enter another. —Anatole France Your success in life isn’t based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business. —Mark Sanborn

It would seem that if a company changed its enterprise resource planning (ERP) system, the core system that drives the company’s production, procurement, financials, and human resources tracking, there would be little leeway on its adoption. People would have to use it to perform their jobs. In fact, there would be little to gain in avoiding adoption. Nevertheless, companies recognize the need to spend significant amounts of time, money, and effort to make sure that the transition is smooth. It is for a good reason.

DOI 10.1515/9781501506390-005

122  Chapter 5: Understanding Business Change Management One such deployment involved a semiconductor tool manufacturer that had multiple facilities in the United States, Asia, and Germany. The goal was to have a unified worldwide system to reduce redundant efforts and have better visibility into the company’s performance. The project, management, and executive teams did everything right. They assembled groups of subject matter experts to explain the reason for the switch over, did extensive communication, and had a team that went to each facility to work with the management, office staff, and production workers. The project went well. There were many glitches along the way, a couple of minor slips in the schedule, but most people were cautiously optimistic. When it was complete, the cost of communication and coordination was more expensive than planned, but the switch to the new system went very smoothly. They waited a month to complete the month-end processes before declaring victory. Again, everything went smoother than expected. People rejoiced at having one of the few smooth ERP deployments. After the system had been live for about two months, a manufacturing facility in a former East German location started running out of raw material, and production on some orders was being delayed. Information technology analysts dove into transaction logs, system code, and databases to find the site-specific bug. They found nothing. All the systems seemed to be running normally. The only issue was a very low number of purchase requisitions from that site. One of the transition team members flew to the facility to investigate the situation. In talking to the production material planners, she was shown how spreadsheets were used to enter requisitions. Aghast, she asked why the planners were using the spreadsheets from the old process instead or the new system. The reason was that the plant’s general manager had not instructed them to use the new system. The culture still had the respect for the authoritarian model from decades before Germany’s reunification. The western-centric transition team had trained and communicated with the workers and management, but had violated the hierarchical structure by not properly including the general manager and leaving him out of some of the detailed meetings. Offended, he had not given approval to use the purchase requisition functions. People do not adopt new processes, products, or concepts easily. There could be any number of reasons they remain stuck in their old ways. In the story above, it was a cultural issue.

People Are Anchored in Their Beliefs When trying to understand difficulties with how people change, think of a boat at anchor. Winds, tides, and currents push the boat this way and that, but the boat stays close to its anchor point. One of these elements may move the boat to a new position and as long as that external force continues, the boat will stay in its new position. If,

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say, the wind stops, the boat will return to the same general location above the anchor. Extremely strong forces might move the boat permanently by dragging the anchor, but the easiest way for the boat to move outside its anchor chain’s limit is when someone has the motivation to pull the anchor up out of the mud and deliberately move it to a new location. This is much like a person facing change. Our behaviors drift back and forth around our basic expectations and beliefs, our anchors. People can sway us in some direction, and we will stay there until they stop applying their influence and we will drift back to our anchor point. Not until we get the inspiration to alter those convictions and move our anchor are we going to change. With that, our behavior follows. This is the primary reason that change does not stick. Our beliefs and expectations remain the same, and we always come back to our anchor.1 People’s beliefs and expectations mold their behavior. Whether it is addictive behavior, driving a car, negotiating with vendors, networking at evening events, or a propensity to assign blame, our behavior will not change until we move the anchor of our beliefs and expectations.i Many of us can relate to how this occurs when we think about going to a social event and need to network. There are a few people in the world who enjoy meeting complete strangers and talking up a storm. My wife is one; I am not. The feeling that I will have nothing to talk about, will stumble over my words, or say something wrong has one effect—I get nervous and do just what I feared I would do. It is a self-fulfilling prophecy. Until I change my expectations and beliefs about networking, my behavior will be the same. The proof is evident when I am in crowds where I know, say, 20% or more of the attendees. In those cases, I relax, feel comfortable, and talk to anyone—even people I could not speak with at a prior week’s event. Different expectations and beliefs drive different results. Therefore, when taking on a task where we are asking people to change, we need to first think about their beliefs and expectations and address how to change those. In general, we cannot make someone change, but we can frame the change in a manner that will allow them to be influenced and alter their feelings. If we want people to be part of an initiative to improve company innovation, but they expect to be blamed when something goes wrong, they will not take the risks inherent in innovation. They will not highlight how much time they waste waiting for their slow computers if they believe the reply will be there is no money to replace them. If we want to stop waste but people feel management ignores them, they will not identify issues. However, show them action contrary to their beliefs and expectations and change can occur. We can show them that when something goes wrong, people do not get blamed; when slow workstations impede their work, they will get new ones; when they express an

 1 The boat analogy came from an interview with Peter Stark in March of 2017. He is a cross-cultural organizational effectiveness and leadership development consultant and executive coach at Chaos Navigation, Inc.

124  Chapter 5: Understanding Business Change Management issue, management steps in to address the problem. These actions sway beliefs and expectations; actions speak louder than words. When core beliefs and expectations change, people change. For people to change their behavior, their beliefs and expectations must change. For you to affect people’s beliefs and expectations, you need to first understand why those beliefs and expectations exist and focus on changing those sources. Understanding this is essential because projects have only one purpose—change. Whether the project is for a new highway or purchasing process, it involves implementing a change. For the project to be successful the output of that project—the project’s product—has to be adopted. People must drive on new roads or use new processes; otherwise, the project is a failure. Hence, running a project without considering how to get people to use its output is foolish. Change management, a relatively new discipline that specializes in this, is not nearly as well understood as project management (the discipline that needs to implement it). In fact, the field of change management has surfaced only in the past few decades. To correct this, business leaders need to learn how to integrate change management processes into project methodologies. This chapter and the next show how companies perceive change management and the current research in developing methodologies that can be implemented in today’s businesses. Since the concept may be new, a little history is important to understand its current state.

What Is Change Management: The Critical History Throughout history, projects delivered primarily physical goods. They could be pyramids, canals, machinery, buildings of all shapes and sizes, ships, planes, and space capsules. A huge array of items were created that people used because they wanted to. They were places to worship, to keep them drier or warmer, get them someplace faster, cheaper, or with more excitement, or to give them status. It was easier to change people’s thoughts or their patterns in life. To be sure, there were projects to get people to buy items like hybrid corn (a classic case study),2 but there was still a highly tangible personal outcome such as increased corn production and greater profits. The tangibility of the item makes it easier to understand. But there has always been an adoption cycle. There are the first people to use new inventions, like toilets and touchtone phones. Those same inventions have their laggards, who drag their  2 The 1943 studies of Bryce Ryan and Neal C. Goss on adoption of hybrid corn seed in the 1920s and 1930s are recounted in many writings on adoption. It is one of the cornerstone examples used by Everett M. Rogers in Diffusion of Innovations.

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feet and move to the new “systems” only when the old ones are simply no longer available. It took business a while to understand this need to modify how it looks at projects. But the problem has always existed. At first, it was a matter of need or desire and was solved by marketing. Take, for instance, the advent of rolled glass. Glass, like project management, is older than the pyramids and was an item of luxury until the mid to late 1800s. At that time, the America of unbridled hopes and dreams was in its heyday of invention. People like Michael Owens (partial namesake of today’s Owens Corning) developed inexpensive ways to roll continuous sheets of evenly thick plate glass that could be used for clear windows.ii The change management process was simple— show that the common man could afford glass windows. The expectation was that glass was too expensive. The desire to show the luxury of clear windows and the status that came with them took over. Awareness was the issue. Campaigns were developed to show the reborn product at its newly affordable price. The same relationship existed for automobiles, an issue addressed by Ford’s Model T. Southwest Airlines did the same with air travel. Michael Owens, Ford Motor Company, and Southwest Airlines leveraged pent-up desire. The new concept had to break just one barrier—the belief that these items were only for the wealthy. The study of adopting new products started in the late 1800s when larger numbers of people started earning disposable income. Ever since people had money available to spend beyond what was needed for subsistence, marketers have been designing ways to help people part with it. As a result, this honed the product development cycle to where it is today. Innovators quickly learned that they could have a great idea, but if it was even a little off from what people liked, their product would struggle for acceptance. Marketers had to understand more about what made people want to buy something that would change the way they lived. The break came in the 1960s with two people studying two very different topics—Everett M. Rogers, a sociology professor focusing on communications, and Elisabeth KüblerRoss, a clinical psychiatrist and instructor studying the behavior of terminally ill patients and the people around them. Their work eventually morphed into the discipline of change management by defining two key behavioral patterns—individual and group—that, when juxtaposed, could be used to understand how to effect a change. In 1962, Rogers published the book Diffusion of Innovations. Now in its fifth edition (published 40 years after its original edition), it was quickly accepted as a critical book in understanding how new ideas permeate society. He described populations in the terms of innovators, early adopters, early majority, late majority, and laggards. Each group has a given tolerance for accepting new ideas. His studies determined the percentage of the populations in each group. He learned that if you could get innovators (2.5% of our population) and early adopters (13.5%) to adopt a change, the next two populations would follow (early and late majority, each at 34% of the population). He also concluded that the laggards (the remaining 16%) will change only by force, when the old method no longer exists, there is no infrastructure to support it,

126  Chapter 5: Understanding Business Change Management or it is cost prohibitive (see Figure 5.1).iii Statisticians will recognize this as a normal distribution, with limits drawn at the first three standard deviation boundaries. After all, we are working with populations of people, so why would it be any other form of acceptance. He then used hundreds of studies of how groups of people adopted new ideas. These innovations ranged from the advent of hybrid corn, to the introduction of contraception into societies that had social taboos against it, to boiling water to kill bacteria in third world counties where people did not understand what they could not see (microbes). The research continually produced the same results. If you can get the innovators and early adopters (16% of a population) to accept the innovation, the early majority would soon accept the idea with the late majority begrudgingly following. The concept that it takes between 15% and 20% of the population to give change the momentum to take hold has become the crux of many familiar works. It was further popularized in Geoffrey A. Moore’s Crossing the Chasm, in which he places the chasm at the 16% mark,iv in Malcolm Gladwell’s The Tipping Point,v and used by other authors on adoption, persuasion, and influence. They all claim that when you pass the 15% to 20% threshold, your product will become a sensation.

Figure 5.1: Adoption Curve

When working with groups of people, you need to persuade about % of that population to use a product. From there a critical mass is reached, a tipping point, where a large majority of the population will also change.

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In the late 1960s, in a completely different corner of society, Elisabeth Kübler-Ross was studying one of the biggest changes that everyone experiences—death. She wrote the other great work that eventually served as the basis for the current theories on change management theory—On Death and Dying: What the Dying Have to Teach Doctors, Nurses, Clergy and Their Own Families. Although now dated in its view of the medical profession, the case studies and conclusions provided a foundation for the discipline of personal change management. The book documents numerous interviews with terminally ill patients and their families. In it she defines the five stages of grief—denial, anger, bargaining, depression, and acceptance— through which each patient and family member progresses. These are not lost on today’s change processes, as many individuals undergoing organizational change experience these same stages. Equally amazing, however, is Chapter 11, “Reactions to the Seminar on Death and Dying,” as she captures this same denial-to-acceptance process in the doctors whose terminally ill patients she is studying. In the first ten chapters, her findings were that physicians denied patients (and often their families) the information to proceed through the grieving process, let alone to make their informed decisions. She claimed that the doctor’s handling of information regarding treatment and prognosis for terminally ill patients was wrong and needed to change. She found: “The hospital staff reacted with great resistance, at times overt hostility, to our [interviewing their patients] . . . It appeared that the more training a physician had, the less he was ready to become involved [in understanding terminally ill patients’ attitudes toward death].”vi

Arguably, it is difficult to tell if her findings in Chapter 11 or in the rest of the book have more impact in today’s world. The first ten chapters have changed how anyone associated with terminally ill patients deals with the situation, while Chapter 11 addresses how we work with individuals struggling with any change. Her five-stage process can be seen in many of our businesses today. Whether you must change to a new purchasing system or are using this material to persuade people how to change the way they run projects, you will struggle with these five stages. Paraphrasing Kübler-Ross’ observation, the longer they have been doing something a particular way, the more reluctant people will be to change. Over the subsequent decades, psychologists and sociologists have added to and refined these theories and observations. These studies have included the research on cognitive behavior and the theory has been applied to a multitude of discretionary changes, from business environment, to personal situations, various types of addictions, and more (death being recognized as nondiscretionary). This returns us to the opening discussion about expectation, belief, and behavior. All these play a part in how we change, how we can propose change, and how we can work with people who resist it.

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There are three precursors that have developed current change management thought: – Cognitive behavior studies that show we need to change expectations and beliefs before changing behavior. – Grief process, which says all people go through the stages of denial, anger, bargaining, depression, and acceptance when they incur a change. – Social change theory, which says that we need to achieve % adoption before a change will take hold in a society.

Changing Behavior in Businesses As much as we want to deal with individuals, it is difficult in a business. There are too many people. As impersonal as it sounds, if you have a department of 1,000 (or even 50) people and you want them to change, it will take a lifetime to work with each person individually to effect it. You have to work at a macro societal level and address departments, divisions, and corporate cultures. This is the reason Everett Rogers’ work is so important. It gets us to look at groups as a whole. Instead of swaying fifty people, you need to focus on the right eight to 10 people; instead of influencing a thousand, you have 10 direct reports sway 16 or 20 each. This is far more manageable. People still need to go through the business equivalent of the grief process, but the leverage of what is known as social proof helps them.vii

John Kotter’s Change Management Approach One organizational approach was developed by John Kotter, who has an impeccable reputation in the world of organization change management and business. His numerous white papers and books on change have brought him worldwide recognition. He looks at a top-down approach to change. His book The Heart of Change has one simple thesis, “People change what they do less because they are given analysis that shifts their thinking than because they are shown a truth that influences their feelings.”viii

This statement is firmly embedded in cognitive behavior theory. Affect their feelings (expectations and beliefs) and you will affect behavior.

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His eight steps to affect change clearly encompass the theories above: 1. Increase urgency: Some people refer to this as creating a burning platform. In an organization, change comes from anywhere and you need to get the innovators to see the need. That first few percentage of people, like everyone else, need to have their feelings (expectations and beliefs) challenged. Urgency is the key to moving them emotionally. 2. Build the guiding team: As mentioned in prior chapters, people first. You need to have the right team to move the tens, hundreds, or thousands or people in the organization. They need to be close enough to the individuals to understand the expectations and beliefs that properly address their concerns and move them emotionally. 3. Get the vision right: The urgency only highlights the problem. It does not create the solution. In one of Kotter’s famous examples, he talks of a manager who gathered all the different types of gloves used in the various divisions to show executives that there was significant waste in some mundane areas. He covered a boardroom table with more than 400 samples from throughout the company. This merely highlighted the problem. The solution needed the right people to help design the vision and proper planning for addressing resistance. 4. Communicate for buy-in: Once agreement on direction is reached, the rest of the organization needs to be brought on board. Communication, through actions and words, needs to be logical and must speak to people’s feelings. 5. Empower action: We do not change people; people change themselves. This is a key fact of life that many people seem to ignore. We cannot influence others; people accept our argument and allow themselves to be influenced. Empowering people to take action creates a culture where you acknowledge that people are in control of their feelings. 6. Create short-term wins: Action is the strongest form of persuasion. As people change their beliefs, they continually question the new direction (Kübler-Ross’ five steps). Showing repetitive successes along a plan’s path to reach a vision provides the inspiration to continue. 7. Don’t let up: As in the anchored boat analogy, people quickly move back to their moorings when the forces of change wane. Change is rapid and constant in today’s business. It is also exhausting. Wins provide energy; constant pressure creates continuous change. 8. Make change stick: Positive reinforcement is the easiest way to keep people from returning to their old ways. Actions as simple as a compliment or as tangible as an unexpected reward help to make changes stick. A word of warning, though, people in cognitive roles are not always inspired by rewards. They can actually create disincentives for people. As will be mentioned in the upcoming chapters on leadership, providing autonomy, mastery, and purpose can be a much stronger motivator.

130  Chapter 5: Understanding Business Change Management These steps create the top-down approach to lasting and constant change. This is not to say that all change needs to come from the top. On the contrary, the need for change can have its genesis anywhere in the company, but there must to be a sense of urgency at the appropriate level of the company to accept and support it. The core of a single change is in the first six steps above, while the last two sustain a change culture in the organization. Case study: Short Term Wins The concept of short-term wins is powerful for changing people’s expectations. Many people feel they must wait for weeks or months to see output from anything. When they see results quickly, they make a strong positive statement. An insurance company had a project that was supposed to be delivering new tools for their customers to maintain employee insurance coverage. There had been numerous delays and the marketing group (the project’s owner) was very disgruntled with the information technology (IT) project team. Its members had lost confidence not only in the project team, but also in IT’s ability to fix the project. They felt IT was proposing another failed solution; their involvement in the project was waning, and they were considering outsourcing the development. My first goal was to bolster confidence that the changes we were implementing in the project were going to make a difference. After completing the assessment, issuing the report of problems, and identifying how to address them, I set out to change marketing’s attitude toward the project. I had a meeting with team members to find some feature that we could quickly demonstrate to the stakeholders. They settled on displaying a roster—a list of all a customer’s employees with coverage details that could be exported to a spreadsheet. The roster became everyone’s highest priority. It took about four weeks for the team to complete the work. We gathered the marketing group and end-user representatives in a conference room and demonstrated the feature. The audience was shocked. Their expectations were that it would take months to develop this feature. Seeing the new functionality changed not only their view of the project, but also of IT’s recovery effort. They became reengaged and the conversations about outsourcing stopped.

Where Kübler-Ross’ work comes into play is when working with individuals critical to the change. In organizational change, a single person does matter when he or she is a person of significance. If such people are well respected and trusted, they can make a significant impact. This is not necessarily the boss (see the opening story in Chapter 10, “The Project’s Leadership Structure”). We all have met the couple of line workers who can torpedo any change initiative. Understanding how they react to an idea can direct our behavior to better address expectations and move those few people to acceptance more quickly, hence, moving the people who respect them.

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John Kotter’s change process is directed at executives. It has eight steps: . Increase urgency: Address people’s beliefs and expectations . Build the guiding team . Get the vision right . Communicate for buy-in . Empower action . Create short-term wins . Don’t let up . Make change stick

Implementation Methodologies Without a doubt, John Kotter’s process is an executive approach for building the culture. Without attaining the level of executive buy-in that he prescribes, any change management initiative is destined to flail and fail. However, he is missing the detailed processes and procedures that implementers, middle managers, and project managers need to ensure their project’s changes are adopted. For that you need a corporate-wide methodology. Two stand out—Prosci’s ADKAR and GE’s CAP. Prosci’s ADKAR ADKAR is an implementer’s tool. Surely some people at Prosci will disagree, but ADKAR (an acronym for their process steps of Awareness, Desire, Knowledge, Ability, and Reinforcement) is for implementers. Prosci has worked hard to up-level ADKAR to a complete package, but it still does not walk and talk at the executive level. Jeffrey M. Hiatt, author of the Prosci-published book ADKAR: A Model for Change in Business, Government and Our Community, even acknowledges, “By its nature, ADKAR is an individual change management model.”ix ADKAR, though, is the de facto change management process used by thousands of businesses worldwide, albeit with varying degrees of success. The primary reason for these failures, per our survey, is that executives are not driving change initiatives. They inappropriately delegate the initiative, send people to training, and do not address the company culture or create a plan to move people’s feelings. This lack of executive commitment is the nemesis of leadership. It is commonly referred to as lip service or management’s process du jour. As a result, companies never realize the benefits of a good change management process— reduced project failure. General Electric’s CAP GE’s Change Acceleration Process (CAP) is a complete solution. Training starts at the executive level and flows down. It is born out of Jack Welch’s drive to make the GE

132  Chapter 5: Understanding Business Change Management team adaptable and responsive to customer needs and business environment changes. Wrapped in the cloak of a process, it is a blend of dogma, philosophy, and religion that everyone in the organization lives, eats, drinks, and sleeps. It is the meld of a Kotter-like philosophy with an ADKAR-like process integrated to create a complete culture. This is the ultimate goal of any organization wanting to embrace a change philosophy.

Change Management’s Connection Project Management The word project comes from the Latin word projectum “a plan, draft, scheme, something thrown forth.” That is what we try to do every day in business—move forward to a new level. In today’s business, thousands of situations require rapid change. Projects are change. Businesses start projects to develop tools, processes, and forms. More likely than not, software is developed to codify these processes, and the new software-process solution gets plopped in front of the workers, cohorts, and customers only to find that the processes are too limiting, the forms fail to capture all the data, and the tools are too confusing. People may try the new processes for a few days (if you are lucky) and then they are back to their old familiar ways. Nothing moves forward—the project fails. Over the past decade, change management has entered the business vocabulary as a solution to this issue. It is no longer just a conversation in the halls of marketing and product development departments. It is a topic of discussion in the boardroom, albeit with some level of confusion and frustration. It is a corporate-wide initiative with the front-line soldiers in project teams. Project management and change management need to be integrated. To that end, and the topic of the next chapter, we need to understand how this integrates into project-delivery models. Unfortunately, too many weathered executives, managers, and project managers roll their eyes at the mention of change management, as they have change control processes fully implemented in their projects. This is an observation from experience reinforced by the confusion in interviewee’s replies in our interviews and surveys. However, this is not the change we are talking about. Project change processes are well understood, as are their effect on project scope; they do little to address an individual’s behavior. Adoption and organizational change management directly address the willingness or ability of someone to change expectations, beliefs, and behavior. It is less about adherence to a specification and more about how someone feels.

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Project and Middle Manager Takeaway Project management is more highly structured than change management. Change management requires significant soft skills. Leadership skills are critical when understanding how to correctly implement a change management methodology. Projects closer to the end user will find that change management theory is more important to guide the project’s adoption processes. Hiring a change management consultant with knowledge and experience in the area the project affects is an effective use of funds. Education on specific change management processes is most valuable when the entire company is adopting a change management philosophy.

Executive Takeaway Because the study of change management is new to project management, understanding the theory is critical to making it successful. Two major aspects must be considered: – Individual change has two key elements: – Cognitive behavior theory says people are anchored by their expectations and beliefs. They will not change until their expectations and beliefs change. In many cases, a company’s culture has a large impact on these two attributes. It is up to the executive team to create the correct culture to foster those changes. – The process of individual change consists of the five stages of denial, anger, bargaining, depression, and acceptance. In an organization, it is difficult, if not impossible, to attend to everyone’s grief process for every change; however, some aspects can be addressed globally. – In organizational change, there is a normal distribution of people’s desire to accept a change. Paying attention to this distribution allows the organization to focus on a small portion of the organization to effect a change. This 15% to 20% of the organization can influence the rest of the organization to change. There will always be a percentage of the organization unwilling to change. Trying to get them to accept the change will drain the organization’s energy. This set of people must be handled differently by removing their old methods or moving them to new jobs. Implementing a commercial change management methodology without first addressing the company’s culture has little chance of success. This is a process an executive must drive.

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Applying These Concepts Organization Wide Questions 1.

Reflect on your behavior or people you know well and show how their expectations and beliefs have controlled their behavior (such as the networking example). How might they change a belief or expectation to change their outcomes? 2. The grief-process theory encounters significant pushback as people deny that they actually go through five stages of denial, anger, bargaining, depression, and acceptance. Can you identify how these stages may be identified in people when replacing systems? 3. Can you identify any major changes that were successful where there was no sense of urgency? Describe how a sense of urgency might have changed the outcome and made them more successful. 4. Have you ever been part of a celebration for the decommissioning of an old system? a. If so, how does this help people move forward with a change? b. How does it differ from a funeral?

Project and Middle Manager Centric Questions 1.

“Sense of urgency” is a term used a lot in projects to say that the people do not seem engaged and are trying to solve a problem quickly. Think of a project where there was a perceived or real lack of urgency. a. Can you relate that statement to how the project was initiated? b. Could a change in how you started the project made a difference in the project’s “sense of urgency”? 2. Describe how the agile methodology improves adoption in terms of John Kotter’s eight steps and changing people’s expectations and beliefs.

Executive Centric Questions 1.

If your company is a product company, do you use the same change management process for both product and internal projects? a. If not, why not? b. If so, what problems have you had to accommodate?

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2. Executives often say that their project teams do not show a “sense of urgency.” Reflecting on one of those projects, enumerate the project’s issues. a. How could the executive team have created a different atmosphere to change that attitude? b. Would changes be done in the manner the project was established, in the style of the executive sponsor, or somewhere else? c. How many of these risks were not identified prior to the project starting? Would a sense of urgency have helped identify those risks earlier and prevented them from becoming issues?

Chapter 6 Organization Change Management and Projects The world hates change, yet it is the only thing that has brought progress. —Charles Kettering People don’t like change; yet they knowingly and intentionally have kids . . . and look forward to it with great anticipation and excitement. —Todd C. Williams The rate of change is not going to slow down anytime soon. If anything, competition in most industries will probably speed up even more in the next few decades. —John P. Kotter Enterprise-software deployments seem to always struggle. Hence, it is no surprise that customer relationship management (CRM) implementations fail at an alarming rate. For the past fourteen years, numerous independent parties have come up with the same dismal statistics. In fact, most deployments continue to miss their implementation goals. Between 2001 and 2014, CRM implementation failure rates were reported by various sources to range between 18% and 70% with an average of 47% failing to meet their goals.i,ii To be sure, configuring software is significantly more difficult than it appears at first glance. As much as one wants to blame Salesforce, Microsoft, or some other software vendor, the trouble lies much closer to home.

DOI 10.1515/9781501506390-006

138  Chapter 6: Organization Change Management and Projects Astute onlookers can easily anticipate when the implementation will go awry. It is the argument over who is going to drive a CRM project—IT or sales and marketing. Unfortunately, these are the wrong people to have in the discussion. Sales and marketing teams make a great case; after all, in classic business structures they “own” the customer and are the ones that drive the customer communications. They know the minute something goes wrong because the account manager’s phone is the one that rings—whether the issue is with an invoice or an installation. The sales and marketing team is the center of the customer’s world and needs to sponsor and drive the CRM implementation. Or so they say. Information technology (IT) makes an equally strong case by pointing out that for the CRM to be effective it needs to integrate with every system, from customer support to sales, invoicing, shipping and receiving, engineering, scheduling, and so forth. With this level of integration and technological hurdles that must be cleared, IT clearly needs to drive the implementation or the resulting deployment will be a hodgepodge of interfaces where only some of the data required to deal with the customer are available across the organization. The logic behind both arguments is sound; however, both are flawed. With all their passion, they have taken an unfortunately myopic gaze at the problem and missed the bigger picture. The goal of most successful CRM implementation is creating uniformity in dealing with customers regardless of who in the company is addressing them. It should improve the customer interface by allowing the customer to talk to anyone and get the correct answer (from the company’s standpoint). For instance, if a customer is on credit hold, it wastes company resources to prioritize: – Answering engineering questions. – Responding to their requests for proposals. – Looking up replacement parts. – Shipping them more product. Other customers current on their bill should be handled first. To enforce this, everyone in the company needs to see the same data and have the same process to follow— in our example, politely telling the customer to talk to accounts receivable. Imagine a high-volume customer current on its bill getting treatment that’s second-class to a delinquent customer. Although all of us want to treat customers with respect, we also need to reward our best customers. The problem with sales and marketing’s argument is that the customer should not need to go through them to solve an issue. Every group should have the same data. Everyone in the company should treat customers the same way. This is where IT is both right and wrong. A complete CRM implementation touches nearly every system in the company. It is a huge integration effort and IT will spend a significant amount of time and money making these interfaces work. However, technology is only a tool—it does not solve the problem. Technology gives sales

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people a place to maintain their contacts and see new relationships, but some sales people are loath to divulge their contacts, let alone inform the entire company. For a successful implementation, the attitudes and actions of people need to change. IT is not up to that kind of leadership and putting it into this role will lead to trouble. According to the dictionary, culture is the totality of socially transmitted behavior patterns, “arts, beliefs, customs, institutions, and other products of human work and thought.”iii That is what a thorough CRM implementation project is really trying to accomplish—everything a customer or potential customer sees in the company. A CRM implementation changes the company’s culture in dealing with its customers. There is generally only one person who drives the culture of the company—the CEO. Hence, the CEO is the sole person that can drive a CRM project. He or she must set the tone for how to treat customers in every condition and ensure that the entire company lives that culture. Software is not a requisite to making this change. It requires leadership. Without painting the vision and leading people to that better place, the CRM implementation is a failure before it starts. The software only enables the culture. It allows you to share a complete and common picture of the customer from one end of the company to the other efficiently and accurately. It is only a tool and will just as easily automate the wrong culture as it will the desired one. CEOs need to take CRM implementation failures by the horns. Forget what the CRM vendor is telling you about how to implement the tool. The vendor is only selling software to make their monthly quotas. CEOs are selling a new culture to make their companies successful. It might be better to call this project what it really is—“The New Customer Culture Project.” Since they define the culture, CEOs need to be the executive sponsors. They need to head the organization change management project, and with their change management team (see below) create a sense of urgency, get the right people, build the vision and follow the rest of Kotter’s eight steps to change. Each and every department in the company must be responsible for educating its people, identifying the core expectations and beliefs that need to change, and implementing the new culture and processes to support it. Only then can an organization look at how a software package is going to support that culture. The project is all about a new culture and the CEO is the only one who can be accountable for its adoption. The negative side of this rather long story has unfortunately played out many times. It appears it will be replayed again as businesses have a difficult time sharing and learning from their horror stories. The cultural aspects are overlooked. The concept that people will resist the new system will be downplayed. The CEO will be consumed with investor demands, customers wanting new or different products, risks affecting pricing and salability, employee issues, regulations, and changes in the business environment that could affect availability of credit or appetite for a product. So, the executive accountability will be delegated and change management will not be addressed properly.

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Organization Change Management “Just tell them they have to use the new process. Project management is as old as the pyramids and now you tell me that we need some newfangled buzzword—organization change management—to get people to do what we tell them? Who do they think is boss here anyway?” We all know where this project is headed. The person delivering this line, though, was correct. Egyptian construction projects spanned a few decades, using tens of thousands of workers, hundreds of tasks, and countless risks throughout their design and construction. The introduction of management techniques helped build these dynasties. Convincing slaves of a new method of moving blocks was simple—do it as you were told or risk being killed. Luckily, most of our work environments have improved since then and we have a little more say in adopting new processes. Change management is anything but a cliché; the number of people who think it is, however, is a sign of how poorly it is understood. To make matters worse, many people do not realize it is poorly understood. In our surveys and interviews, a large number of respondents confused project change management (managing changes to a project’s definition) with organization change management (managing how people in the organization will adopt the changes the project’s product will produce). When asked for examples, they would tell stories of change review boards, scope control, phasing, and other items relating to project change management. For others, the approach is just as above, projects have been run since long before pharaohs developed those early management principles—closer to the time when Neanderthals organized their first group-kill of a saber-toothed tiger or woolly mammoth. Arguably, getting people to adopt new processes reach back to that same timeframe, but as a discipline change management did not get the same boost as project management did in the dynastic period. Studies in adoption do not appear in earnest until the late nineteenth century, with the field of change management being only few decades old. So why all the fuss? Why the seemingly sudden upsurge in the interest in change management? Simply put, project management has not changed, but the types of projects have changed. Projects are for more than killing tonight’s dinner, building elaborate tombs, or paving roads. They are now a huge percentage of a company’s operating budget, creating tangible and intangible items that require people to change their behavior and follow new business processes. Fortunately, there are laws prohibiting threatening people within an inch of their lives if they choose not do what we ask (even though we may want to at times). Organization change management, commonly referred to as just OCM, addresses transitioning people to new business processes. It is a subfield of adoption and deals with how groups of people inside companies adopt new processes and tools. In project management circles the term is relatively new. Given that the OCM discipline is

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only a couple decades old while project management has existed for millennia, project management’s exposure to it is minuscule. Adoption and OCM are borne out of the necessity to deal with every human’s natural tendency to shun change and yield to inertia. If we neglect how the organization will accept the output of a new corporate initiative, however, all the declared success in the world will fall prey to organization apathy. The challenge is in applying the theories and observations from Chapter 5. After witnessing the aftermath of a few failed attempts, I can strongly recommend avoiding the use of the Kübler-Ross’ grief process to describe to line workers how they will react to reducing their selection of gloves or a salesperson who will lose their spreadsheets or other system to a new companywide CRM. Telling people they are grieving or in the denial or depression phase over the loss of their desk phone as the organization switches to cell phones, is not going to win friends and influence people. Directly applying these theories and implying that people are following this pattern has proved time and again to be counterproductive to getting their cooperation, if not eliciting outright hostility. They do not want to deal with work-related text messages and having their phone with them at all times, because they believe they have to leave their cell phones turned on when not at work and expect text messaging will cause a flood of interruptions. But underneath they will be longing for the “good ol’ days” when they could walk away from their desk and be unreachable.

Why We Need Change Management From a business standpoint, it is easy to understand why adoption of new systems and products is needed. Without it, projects fail and businesses do not progress. Adoption and change management are part of every project. At times, this is difficult to grasp. If one reflects back to the Hubble Space Telescope project from Chapter 1, it may seem that there was no adoption or change management. Build telescope, launch rocket, fix telescope, happy scientists. From an adoption point of view, nothing could be simpler. But there was adoption, a lot of it. Millions of people complained about its potential premature deorbiting, each individual apparently feeling ownership of some part of the mission and expecting more from the Hubble. The real key is whether people feel they get value from the project’s product. Throw around facts and figures and you will not win over users; appeal to their feelings and you will succeed. As value is anything but quantitative, our world of spreadsheets, instant gratification, and return on investment (ROI) have a difficult time of understanding how to build and measure project progress when trying to achieve such indefinable goals. After all, the Hubble’s images simply fueled imaginations. The problem is that project managers are trained to manage “the big three” (scope, schedule, and budget) and are likely more than arm’s length from the people

142  Chapter 6: Organization Change Management and Projects who will be the eventual consumers of the project’s output. Even worse, many projects are conducted remotely from customers (whether the customer is inside or outside the company), and the project is considered complete when its product is delivered. It is commonplace to start disbanding project teams and redeploying individuals on other projects well before the customer has the first glance at the product. True success can be determined only later as end users have a chance to adopt the product. At this point, they can use it or ignore it into oblivion, when the thousands or millions of dollars invested in the project are lost forever. The goal of change management is to avoid failures stemming from missing the value target. Unfortunately, since this is a new aspect in managing projects, little has been done to integrate the two disciplines.

Survey on Change Management In 2015, we undertook a survey to understand how companies address organization change management. We interviewed about 125 C-Level and V-Level executives to understand their approach to OCM. By far, the most successful organizations took a holistic view of OCM. They had subject matter experts who participated in the earliest phases of a project’s lifecycle. Many were product-development organizations and were using their product-development lifecycles throughout the company. A high-level depiction of the product-development flow was shown in Chapter 4. It is reproduced here in Figure 6.1 for easier reference. Most product lifecycles start with inception of the product—the point at which it is simply an idea. This may be in an internal engineering or product design group. Or it could be a marketing group responding to customer input or coming up with a completely new product. Regardless, some form of field or customer testing takes place to judge the acceptance of the new idea. Only when an idea looks viable will it be proposed for funding. There may be many iterations of the concept, as input from the end users may change the concept to make it more acceptable. Once demand is confirmed, the concept is funded and a sanctioned product test is run to determine its wider acceptance. Upon passing the gate showing it will have a solid return on investment the actual product development cycle starts. This is the stage that we often think of as “the project,” where a project manager and development team are assigned to create the product and modify manufacturing lines and processes for its production. The final stage is acceptance and adoption of the product or service. This is where most people think about marketing creating awareness and working with users to improve and refine the idea. It includes ongoing marketing and education to get the masses to accept and use the product. Companies are in search of the magical 16% of market share leading to mass acceptance.

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Obviously, adoption is integral to this entire release process and running well into the future. The concept of the end user’s attitude and anticipated acceptance of the new product is a gating factor for the project—if at any time it looks like its adoption target will not be met, the project needs to stop and the stakeholders need to reassess their options. These go/no-go gates are built into most project methodologies. In waterfall projects, they are usually called stage or phase gates and there are typically four to six of them in the project’s lifecycle. In iterative methodologies, these assessments should happen at the end of each iteration.

Figure 6.1: Initiative Lifecycle

The decision on whether to continue with a project is based on a variety of parameters. If adoption is not one of those parameters, it should be added. Obviously, there are many products that are flops and there are many projects that never get adopted, hence executives do not always get their teams to heed or ask for the end users’ opinions to determine potential adoption. Our interviews with people at companies who used the lifecycle depicted in Figure 6.1 indicated they had excellent adoption with both internal projects and external products. Internal projects had “marketing” managers assigned who “championed” the change internally from its inception and who refined and honed the idea long

144  Chapter 6: Organization Change Management and Projects before it was funded. The champions involved the end users, thereby creating a better concept and establishing a feeling of end-user ownership. These internal “marketing champions” were most often the executive sponsors. Surprisingly, even though product development companies had more thorough adoption processes, less than half actually used those same principles in internal projects. Not so surprisingly, they claimed poorer adoption of their internal projects. At times interviewees saw the disconnect and would point it out, while other times they did not and often had trouble understanding the value when presented with the suggestion to use their normal product development cycle on internal projects. The reasons for refusing to use the process ranged from: “internal projects are not delivering products to the business end users,” to the business “moving too fast to be weighed down with that bureaucracy.” For non-product companies, nearly two-thirds had difficulty understanding the meaning of organization change management and, as mentioned above, often confused it with scope control processes in the project methodology. Routinely, interviewees would give examples of project change management—a request to change the operating constraints governing a project. The examples they would use would either not affect the end user or the end user was not considered a stakeholder in managing the change. Bottom line, more work needs to be done in organizations to reduce the confusion between organization change management with project change management. When asked who should be accountable for adoption, only two areas had consistent responses. In product companies, the product manager was accountable for product adoption (almost unanimous). In healthcare, it was the executive sponsor; however, there was a caveat. As for being executive sponsors—clinicians were rarely good at promoting adoption of non-clinical innovations. As mentioned earlier, clinicians’ training and priorities are for episodic interactions focused on improving patient care. If a project involved implementing a new drug-dispensing system to reduce errors, clinicians were great at achieving adoption. If it was to reduce cost, they were far less effective. They were routinely poor at the other responsibilities of an executive sponsor, too. Many healthcare organizations had a secondary role, a champion, who was accountable for the adoption and, given the right kind of project that addressed patient needs, that person could be a clinician. The executive sponsor was accountable for the project’s other success factors. For the rest of the companies interviewed (and the internal projects inside many product companies) accountability for adoption was randomly assigned or not present. Although not part of the survey, but seen in companies and validated through research, is that the first part of the initiative, the lifecycle process in Figure 6.1 can be done covertly. Engineers and marketing groups can do significant development of ideas hidden from the view of corporate processes. Other researchers documented behavior where many products in excellent companies are developed surreptitiously. They are not funded or sanctioned, but started with money “robbed” or sequestered

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from other budgets. These actions augment the first two steps in the lifecycle. Champions drive the concept as an idea the community wants. This champion is the person with the vision and who ensures the concept stays true to the customer.iv

Introducing Change Management Concepts to the Organization With the poor understanding of organization change management, where should a company start? The process appears to be a chicken-and-egg dilemma. It seems difficult to alter the corporate culture around change without first implementing a change management methodology. After all, this is a major change. You need a culture attuned to change to make the change! The answer is to focus on these three main steps: 1. Creating a sense of urgency. 2. Selecting the right team. 3. Developing the vision.

Executive Sponsorship of the Change Initiative How people react to change is influenced directly by the company’s culture. There is only one person who can be the executive sponsor of any project directly affecting the culture—the CEO. This person must hire and train the right set of people to develop and execute the plan. They, in turn, need to get between 15% and 20% of the population to adopt the change philosophy to give it the momentum to take hold. This garners the power of Everett Rogers’ innovators and early adopters getting the acceptance numbers across Geoffrey Moore’s chasm. The CEO, though, must be the visible sponsor who continually pushes people to adopt change as part of the culture. The CEO defines the culture and provides the money. Just like the opening stories in this and the prior chapter, projects that change the culture can have only one sponsor—the CEO. Adoption requires changing the emotional drive and beliefs of people away from what they see as familiar, toward something new and frightening. To make matters worse, in today’s business world, change is omnipresent. Whole teams of people are experiencing change fatigue. CEOs are the only people in the position to foster a culture that values constant change through motivation and rewards. They need to be the people building a culture that embraces change and, as the second step says, the CEO needs a team to help build the vision. Unfortunately, most companies ignore this fact, jump to a methodology, and issue an edict for people to follow. The connection to the culture and the executive team is lost. The problem is the overwhelming desire to dive into the implementation. Most

146  Chapter 6: Organization Change Management and Projects executives skip Kotter’s first two steps of building urgency and getting the team with the right skills. They start by sending project teams to change management training long before anyone truly understands the need or develops a plan. It seems so simple to implement a process and be done with it. However, just as you would not build a new house without hiring an architect to do the load calculations, double-check codes, and draw up the plans, why would you dive into implementation without a plan to get where you are going? As was said in Chapter 5, people’s beliefs and expectations must change first, and you need a plan to do this. Issuing an edict fails because of complacency—people will take the classes, wait for the winds of change to subside, and return to the prior moorings. Their beliefs and expectations unchanged, there is no sense of urgency. The answer is in Kotter’s first two steps—creating a sense of urgency and getting the right people.

Sense of Urgency To avoid complacency, follow the three steps above. A sense of urgency must exist and the right people need to get behind the change initiative. This is the hardest step and will be unique for each organization. Presenting spreadsheets of numbers showing adoption will not create the required emotional drive. It needs to be more visceral. Instead of listing the surgical processes that failed to be adopted, for example, show pictures of the lesions, abscesses, draining infections, and even corpses that resulted from physicians not adopting a proposed process, such as surgical checklists, that they thought to be unnecessary. Physicians are more attuned to patient care than costs; showing suffering speaks more clearly to them. If you are going to show costs, lawsuit settlements will be far less effective than increases in malpractice premiums or time doctors have to spend in court or defending their reputation. Choose attributes that relate to the people who need to change. For a product development company, like Sony, the best way to instill urgency might be a table full of poorly adopted products, including Betamax video, Minidisc players, Mylo, Rolly music player, AIBO Dog, PlayStation Portable (PSP), UMD media disc, the eVilla, and others.v (Do not be surprised if you are unfamiliar most of these products . . . that is the point.) It would be useless to use such a display to move engineers to change their behavior—they see all these as great engineering feats. This display might be more appropriate for marketing people to drive changes in their market research to judge acceptance outside their home country. Adding labels to each item listing total product development costs, lost commissions, reasons for lack of adoption, or similar might help create the emotional impact. The preceding examples illustrate that you may need more than one visual. People in different parts of the organization have varying opinions of what is important. Whoever needs to support the change needs to have a sense of urgency, a visual that they will understand and remember.

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Change Management Teams One of the most important steps, regardless of the type of change, is the creation of a change management team. This temporary, non-bureaucratic, voluntary team is different for every project and reports to the executive sponsor. The team consists of visionaries, influencers, the project or program manager, adoption architects, change management leads, subject matter experts, end users, and even dissenters. This team is comprised of a core membership with different levels of involvement and functions over time and people acting in supporting roles as advisors. They build the change management plan. This team guides the project to meet the optimal target. As with the project, the key to success is the strength of the executive sponsor as a leader. Figure 6.2 is a representation of this structure. At the highest level are the three states of any change—current, transition, and future states. These phases are overlaid with the general development stages of inception, conceptual design, build, delivery, and sustain. These five stages drive changes, the degree of individual involvement, and activities of the team. For instance, the project team, which builds the project’s output, is involved for about one-third of this cycle, having only partial involvement in conceptual design and delivery. The central roles are those of the executive sponsor and the adoption architect (see below). Aside from the functions already defined for the executive sponsor, he or she pushes and is accountable for adoption. Although not a change management specialist, the sponsor has a major role in working with and listening to the team and end users. The sponsor’s primary tasks with respect to the change management team are leadership and communications. Communications priorities change over the lifecycle, covering each of the following areas: – Vision during inception. – Direction in conceptual design. – Focus during development. – Empowerment and resolutions in delivery. – Praise and reinforcement throughout sustaining. Adoption architects are people steeped in the discipline of change management and have a thorough understanding of how end users will use the project’s product with respect to their job or situation. If the program or project is large enough, there may also be adoption leads who report to project managers and help the project team with the details of the project’s adoption. These are people-persons. They understand motivation, change management, and other cognitive models. Like executive sponsors, adoption architects need to be committed to the project at its earliest stages and remain well into sustaining. They are the people who validate the usefulness of the change for the end user. In product development projects, this usually falls under the product manager. If anyone other than the sponsor is held accountable for adoption, it is the adoption architect.

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Figure 6.2: Organization Change Structure  2017 eCameron, Inc. All rights reserved.

Two key artifacts are developed by the change management team—the key performance indicators (KPIs) and resistance mitigation plan (discussed in the next section). Ultimately adoption success is measured at the end of the project. In most cases, these KPIs will be quantitative numbers, such as transaction counts, cost reduction, sales numbers, service calls, help desk tickets, etc., that can be used to gauge success. However, any accountable function must have measurements to determine that the goals are on target to be met. These are predictive, or leading, measures, many of which could be subjective (surveys, excitement level, and so on). These metrics can be difficult to quantify and the best approach is end-user involvement.

Change Resistance In any project that requires people to change, one reality exists: there will be resisters. With the intangibility of implementing many changes and the comfort of status quo, resistors can easily thwart many change initiatives. Although push-back can come for anywhere, nowhere is the resistance to change greater than in middle management (as illustrated in the opening story of Chapter 10, “The Project’s Leadership Structure”). Middle managers have the most to lose. Weak

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leadership skills, micromanagement, hunger for power, information hoarding, and insecurity all drive middle managers who have built empires and see change as a major threat to their positions. As most changes require people to learn new skills, this (generally older) crowd is slower and more hesitant to pick up new tools for doing their jobs. Executive management and the CEO must focus on this problem to ensure middle managers buy in and do not sabotage the project. If any of your initiatives are going to succeed, this most likely means employees will need training in leadership and change. Without this, any change management process will stall as it languishes without the proper leadership support. Just like the advice from Jim Collins, Tom Peters, and Peter Senge, the vision comes after the right people are in place. This highlights the value and sensitivity of a resistance mitigation plan (see sample in Figure 6.3). Resistance mitigation plans, assembled by the OCM team, identify where resistance to the change will most likely reside and how to mitigate it. They have the same layout data as a risk register, but consist only of risks related to change resistance. These risks are not kept in the risk register as they identify issues with people and groups. Making these data public, as is a risk register, would surely damage relationships and increase resistance. The tasks outlined in this plan will most likely have a greater effect on the executive sponsor as many of the mitigations and contingencies will be assigned to them. A lot of these actions are addressed through proper communication. However, the plan will have tasks for people on the OCM team and the project itself. It must be highly confidential as it needs to be explicit and candid about these risks while using group and individual’s names.

Change Management Planning Change management planning depends solely on your company’s culture. There may be aspects of the culture that must be addressed that are seemingly unrelated to change management, but are critical to its success. For instance, the oddity of business staff versus clinicians in healthcare (discovered in our surveys) demand an extremely different structure than in non-healthcare organizations. Our interviews included an apparel company adamant that executive sponsors be accountable for processes (including their end-of-life), just as their product sponsors were for their products. There was an electronics manufacturer insistent that new product adoption accountability land with the engineers because they should be building “sexy products.”

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Figure 6.3: Sample Risk Mitigation Plan

Merging Change Management and Project Management From a project standpoint, the challenge with most change management processes is how to integrate them into the existing project management methodology. To a degree, the project management processes need to change to accommodate change management—for two reasons. First, as shown in Figure 6.1, adoption needs to start long before the project exists. The second is that adoption, as part of value, is a project deliverable and needs to be treated like all other deliverables. Iterative methodologies accommodate the tracking of value better than most other methodologies. As with all methodologies, there are numerous flavors, but most center on a few basic premises. The core practice for successful change management is tight integration of end users with the project team to accommodate adjusting requirements and approving direction on an ongoing basis. Iterative processes automatically provide the essential reporting showing progress toward adoption, creating

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end-user ownership, hyping the new system, and setting and maintaining end-user expectations. Similar practices must be developed and implemented in other project management methodologies. The agile methodology (a popular iterative style) embeds large portions of adoption philosophy into the methodology. Over the past couple of decades, the agile project management methodology has been developed to help new product and software development projects deliver value more quickly to the end users. It works well for projects where the requirements are poorly understood or cannot be defined without experimentation. Although there are claims that it can scale to run large projects, success is rare. One of the many virtues of agile is its requirements for the team’s structure. It demands that the development/engineering team be co-located with the end-user team. In addition, it is based on the concept of frequent releases of final product to the end-user community. This creates an automatic acceptance and adoption process for the change. The end users are so involved with the development of the product that the introduction and adoption cycle is almost nonexistent. Although agile does not render itself nicely to a wide range of projects, this closeness with the end user needs to be incorporated into all projects. The conundrum is determining the relationship between the project and adoption endeavors. As discussed in Chapter 3, “Challenges in Executive Sponsorship,” and earlier in this chapter, the executive sponsor is ultimately accountable for the project’s value and, hence, its adoption. Under the executive sponsor, though, there are many structures for integrating change management and the project. Plus, as we have seen in healthcare, there may be industry-specific models. To have that discussion, we need a better understanding of the type of people who work in each of these disciplines. For the past several decades, companies and organizations have invested significant time and effort in project management. The value of project management was seen in the construction realm, and those disciplines were imported into the scientific/military, engineering/information technology, and product development world. This created the need for standards and organizations like the Project Management Institute (PMI) which created the PMBOK® Guide and the UK’s Office of Government Commerce developing PRINCE2®.1 Right or wrong, this boiled down project management to a process-driven discipline. Change management, as noted previously, is a relatively new discipline. Because of its focus on human nature, practitioners tend to be from the soft sciences and are less focused on (or even abhor) process. Hence, with project management’s increased focus on process, this has created a world where project managers focus too much on  1 For more information on PMI and the PMBOK® Guide visit for PRINCE2® visit

152  Chapter 6: Organization Change Management and Projects process, missing essential soft skills, and change managers relying too heavily on soft skills, having little desire to use a defined methodology. The correct solution is in the middle. However, the world of change management is still maturing and with it the theories that processes are built on. It surely requires more skill and experience. The question becomes who should be leading the combined change and project management initiative. The options are simple (illustrated in Figures 6.4 and Figure 6.5): 1. Adoption tasks are asynchronous with the project and run in the end-user group. 2. Run two parallel projects—one for building the solution, run by a project manager, and the other running synchronously with the core project in the end-user group, run by an adoption manager; the project manager and adoption manager being peers. 3. Adoption manager reports to the project manager as part of one project. 4. Project manager reports to the adoption manager as part of one project. The first two options are “loosely coupled” consisting of two separate projects that may or may not be well coordinated (see Figure 6.4), while the latter two are tightly coupled. They will be discussed in that order.

Figure 6.4: Loosely Coupled Management Options

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Adoption being the responsibility of the end-user group: This option is the least optimal of choices. The primary reason is that it cannot be used universally. Simply put, in new product development projects there are no end users to run this effort— they are customers outside the company. In these cases, adoption management needs to be a marketing or similar group’s responsibility with a product manager held accountable for adoption (as discussed in the chapters on sponsorship). Unfortunately, this is how many non-product development projects are run—throw the project’s output over the wall to business units and let end users handle adoption. This has proved to produce failures time and again. 2. Adoption running in parallel with the project with responsibility in a separate group: This option is viable; however, it has challenges in many projects. Obviously, in the stages before and after the project there must be a change-management function that lives without the project. During project execution, however, as the product is starting to take shape, numerous tasks must take place to ensure that the project is on track to deliver the expected/anticipated value. Starting as early as the charter, through design, prototyping, testing, and implementation, end users must be involved and take ownership of the end product. Without this, the adoption-acceptance process at the end of the project will become far too difficult. This need for tight integration with the project means the functions must also be tightly integrated. This option requires too much management overhead as the respective managers try to keep the two projects in sync. Proponents of this option cite large initiatives that have multiple projects feeding into one larger deployment. They contend that the single accountable group for adoption is the only way to have clean delineation of responsibilities. However, these projects also exhibit much higher rates of rework from the constituent projects than for projects that are tightly integrated as below. The tightly coupled options (see Figure 6.5) have a single project entity. Each has its own advantages. 3. Project management reporting in to the adoption manager (the adoption manager holding the responsibility): This option creates change management accountability for the executive sponsor, but also moves the project (where sponsor attention is critical) one layer away from the sponsor. As building and implementing the product are the primary focus of this phase, the distance from the sponsor to the project should be minimal. In addition, the field of change management is still in its infancy and its processes are less mature. This may have the effect of jeopardizing the project’s overall success.

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Figure 6.5: Tightly Coupled Management Options

4. Adoption manager reporting to the project manager (the project manager holding the responsibility): Having the project manager leading the effort of both project and adoption has the advantage of adding the same highly structured approach from the project to adoption. A project management’s rigor is often missing in the change management world (with the notable exception of new product development). In this model, adoption tasks become tightly integrated with the project as change management becomes part of the project manager’s responsibility (as opposed to being delegated to another party). The challenge remains that adoption spans a longer time frame than the project. Hence, if the project manager is not assigned to the project at its inception, he or she needs to step in mid-process and will most likely depart before full implementation. No option is perfect. However, the model described in Figure 6.2 shows the range of involvement of the different roles. The functions described are still needed and can be applied in all of these options. This figure implies that the adoption architect be in the driver’s seat for its duration. However, the bulk of the work in this lifecycle is in the project. Few will say that process has deterred project success. The only arguments are from people who advocate one methodology over another (for example, agile versus waterfall). It is easy to extol the virtues of waterfall over iterative project styles and vice versa. However, they are not condemning process, but what processes support success. As mentioned earlier, agile processes keep the customer aware of the project’s final output. That is great if you are running a project that can use agile (or other iterative method). However, you cannot build a commercial jet or replace a multinational corporation’s ERP system using agile—these projects need predictive outcomes. The missing element from most change management initiatives is the rigor facilitated by process— tasks, dependencies, metrics, schedules, KPIs, risk/mitigation registers, RACI charts,

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SWOT matrices, and the rest. This thoroughness is needed if project success rates are going to consistently improve. Thus, it is essential to have a project manager working with the adoption architect ensuring these actions are completed. This requires a project manager being assigned long before the actual project starts. Through interviews we have conducted, this is the view of a majority of organizations. At the earliest point in the initiative lifecycle, executive sponsors need to form organization change management teams that include: – Advisory groups representing all stakeholders. – An adoption architect, who is responsible for driving adoption. – A project manager to manage the process.

Project and Middle Manager Takeaway The project manager’s job is to integrate change management tasks in the project to enhance adoption. In general, they are not responsible for designing those tasks—a core team member does, preferably an adoption architect. Accountability for adoption should be with executive sponsors. They have the clout and oversight to influence end users on adoption. Working with executive sponsors early in the project is critical to get their help in addressing end-user acceptance. In organizations that do not have a formal change management process, the project manager needs to implement processes early in the project, as it must be assumed that the steps that should have been taken in the inception phases were overlooked.

Executive Takeaway Organization change management (OCM) is a new discipline relative to project management, yet it is critical to any project’s success. Its importance has increased since the types of projects that businesses run do more than build products, buildings, or roads. They change the way people do their jobs. The combination of these three points about OCM—new to business, coupled with projects, and affecting people— requires leaders and project managers to perfect OCM-related soft skills. These areas need consideration: – The executive team must build an OCM culture that implements the process to accommodate change. – Executive sponsors must be accountable for the product’s adoption. – Executive sponsors and project managers must ensure OCM components are added to every project at the product’s inception (long before the project’s start).

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Executive sponsors need to assemble change management teams for each project that will define the tasks required for the product’s adoption, creating resistance mitigation plans and establish predictive KPIs for adoption.

Accountability for adopting a project’s product, the real measure of success, must be held by an executive, preferably the executive sponsor or someone higher in the organization.

Applying These Concepts Organization Wide Questions 1.

What model for integrating change management into your project methodologies makes sense for your company? Would there be multiple forms? If so, explain why. 2. Has your company tried to implement a change management philosophy? a. How successful was it? b. What could have made it more successful?

Project and Middle Manager Centric Questions 1.

Have you been through change management training? If so, how has it changed your project management process? 2. How could you use the individual change models (Kübler-Ross and cognitive behavior) in addressing specific issues you had with project adoption or a change in a project to effect a better outcome? 3. Explain how you have integrated change management into a project. a. What issues did you encounter? b. If you have tried and failed to do so, what problems did you encounter and what would you do differently? 4. Have you run a project that had poor adoption? What would you change in the project to alter the outcome?

Executive Centric Questions 1.

Have you implemented a change management process? a. If so, what worked and what did not? b. What would you do differently next time? 2. What changes would you make in your company’s culture to change its adoption rate?

GAP 5: Effective Governance The human race divides politically into those who want people to be controlled and those who have no such desire. —Robert A. Heinlein

Chapter 7 Lean Project Governance Like all fads, corporate governance has its zealots. —Conrad Black Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society. —Sir Adrian Cadbury In the interviews for this book there were a number of amazing stories of defeat and even greater ones of triumph. One of my favorite success stories comes from a company that refused to be quoted. The company has nearly 10,000 employees spread around the globe working in more than a dozen divisions in the fast-paced, everchanging world of media. It has hundreds of projects in flight. Governance could be a nightmare. On the contrary, over the ten or so years of this governance group’s existence its secret is hiring the best of the best. These are not control freaks or micromanagers with a police mentality that could shut down another group. The group

DOI 10.1515/9781501506390-007

160  Chapter 7: Lean Project Governance consists of people who have worked in leadership positions of multiple divisions; they have “been there, done that.” Three simple rules make them successful at ensuring the six gaps discussed in this book never occur: 1. Apply governance that is the right fit for each situation by utilizing people familiar with the specific operation. 2. Leverage established relationships that are built over time. Realize it takes time to create trust. 3. Maintain the ability to pivot quickly to meet the needs of an ever-changing business environment. These rules give them a flexibility to evolve at the speed of the rest of the company. The group’s leader refers to them as an internal consulting team that ensures lateral alignment, and they are so well respected that the business units come to them for assistance; they have no need to look for work. You might think that for any group to sustain such a superlative reputation over the reach of the company this size it would need dozens of people. But no, the group consists of only 13 people. Governance fills or protects against voids in a system. Whether there is a potential, perceived, or genuine lack of ethics, appropriate behavior, fiscal responsibility, accountability, quality, or norms. Governance fills the absence. The need could originate internally (established within a company to address an issue or concern) or be mandated by an outside organization (federal regulations, organizational standards, or customer requirements). Achieving the correct level of governance is crucial—too little will damage customer, employee, investor, or public relations while too much will increase cost and bureaucracy. These structures are often permanent and burdensome. However, with the proper culture, lean governance structures can be created that are lightweight and even temporary. Although reducing cost is an obvious outcome of leanness, customers feel an increase in attentiveness.

The Importance of Governance The need to govern has been around for ages. The level of governance, often synonymized with oversight, is inversely proportional to the level of responsibility and accountability of the people being governed. The more responsible or accountable people are, the less governance needed. Unfortunately, other factors, having little to do with the individual, contribute to the level of oversight applied. Dictators implement a massive amount of governance regardless of the people’s level of responsibility; they look for power and control. Likewise, in business, micromanagers have little care for the thoroughness or responsibility of the people they hover over and meddle with. To understand what level is needed, let’s relate this to our personal lives. Think of a small group of people—a family. Families start as just two people. Governance is light. Most couples have rules regarding monogamy, housework (laundry, cooking,

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cleaning, and the like), and managing money. Depending on the couple, these may be written; others consider that an affront to trust. Some rules are cultural and we never think about them. They rely on the larger body of society to prescribe them. These norms may have gender typecasts setting acceptable behavior and action. The accumulation of practices creates a framework for governance for this microcosm. Add offspring and the couple’s roles change. Not just because children are too young to take care of themselves and need oversight, but because the workload of preparing meals, nurturing and loving, changing diapers (surely not governance) adds a huge number of demands. With growing families, a governing body is necessary—parents. Sometimes it is just one person, as in a single-parent situation or when one parent is authoritarian. The relationship could become very egalitarian, with each person’s role looking identical. Or there could be a very distinct set of duties for each person. As children enter adolescence, the governance will most likely change again as the children strive for independence. If the same level of governance is applied to teens as to toddlers, revolt is sure to ensue. Now bring families together to make a village or town. Groups of people have formal bodies that set rules for protection and punishment, care of indigents, help for people under duress, and more. Some societies may even issue edicts on how many children families should have or who will live in which area of town. Often a family may have a counseling clergy or elder as a guiding entity. Personal beliefs start to clash at this point, creating divisions. Factions are formed based on political, religious, social, and cultural lines as people with like beliefs band together. For the group to be functional, though, it must agree on some set of rules that guide how to define and judge appropriate and inappropriate behavior and what services should be provided to the community. Societies worldwide (even in the most egalitarian or democratic countries) impose strict controls without thinking of them as governing rules. For instance, there is hardly a city in the United States that is not segregated based on ethnicity, race, and economic class even though there are rightfully laws against specifically declaring that type of prejudice. Yet, as you drive through any city you find various ethnic sections, wealthy and poor parts of town, and the like. We become blind to those actions and need others to point them out. When people move out of their socially acceptable neighborhoods or challenge other norms they meet resistance, often from the same people that declare themselves non-prejudiced. For instance, a few years ago, some low-income housing was going to be built in my neighborhood and a band of residents started a petition to tell city hall to deny the permit solely on its “low income” status. Our city’s permitting department allowed the buildings to be built and we are a better neighborhood for the diversity. Governance bodies are set up to stymie prejudice and segregation, while others try to ensure industry and housing are separate and home size and value are consistent across a

162  Chapter 7: Lean Project Governance neighborhood to preserve home values (an attempt in many areas to reduce intermingling based on family income). Businesses function similarly. Corporate governance is instituted to adhere to external or internal business safeguards to maintain order, focus people on good practices, change bad practices, meet quality standards, and reduce prejudicial actions. Governance structures guide people in maintaining methods that establish a common set of expectations. Some forms are voluntarily adopted while others are required by law when an organization wants to do business in a certain area. The four general business domains that governance covers are: 1. Alignment between groups. 2. Setting performance goals (operational, product, financial, and so on) and reporting criteria to meet these internal and external goals and requirements. 3. Managing risk. 4. Improving communications. Part of the reason for performance goals and reporting standards is external governance. The objective is protecting people inside or outside the company, whether they are consumers, employees, investors, or the public. Our world is replete with external regulations. Regulatory commissions attempt to protect people from companies building unsafe cars or planes, releasing dangerous medications or toys, contaminating our food and water, discriminating during hiring and firing, or maintaining unsafe industrial conditions that might harm residents and workers. Sometimes the governance is too light, and companies can unscrupulously and adversely affect millions of people. We have seen this in institutions establishing “creative” accounting methods, forming monopolies, suppressing data on product safety (see the Vioxx example in Chapter 2), or hiding environmental contamination. Each discovery of ill deeds adds another layer of external governance to protect the public. The result can be a morass of regulations. Even with the intent to help, they can become mind-numbingly complex. Everyone has met with bureaucracy in a business. Few can honestly say they have not experienced it in their work life. Maybe it is the famed TPS report satirized in Office Space1 or through a purchase requisition, travel authorization, expense report, or other arcane business process whose noble intent is to reduce waste, fraud, and abuse. A businesses’ metamorphosis in getting to this overburdened condition follows the same evolutionary path as the social example above. Small companies, having

 1 Office Space is a 1999 movie satirizing everyday work life in the typical American company. The TPS report was a new policy for a report that people had to submit. Its purpose was never fully explained in the movie, highlighting instead that many of the arcane actions required in the business world are done without a real knowledge of why or whether there is value in doing them.

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little interaction with outsiders, may need only a few rules. Executives in smaller companies can more easily see and control what is happening and do not need much structure. Some executives prefer tight control and being involved with every activity that happens. Others are hands off—providing a significant amount of autonomy. As companies grow, though, they need process and structure. The challenge is how much. Successes, however, contain a common thread. Pick up nearly any business book that has researched how extremely effective companies surge to success and you will read about the balance between freedom and control. All are based on hiring the right people—knowledgeable, ethical, and responsible—where leaders can distribute authority and create pockets of extreme autonomy (even anarchy).i They minimize control and maximize performance to achieve success. Three examples come to mind—two must remain unnamed and the last is well documented in industry literature. The first, a small company ($20 million to $50 million in annual revenue) in a nonregulated industry, has made its name developing new innovative products at a rate of at least one a week—a truly phenomenal feat. With growth, however, sustaining this development rate and maintaining the existing product line (revisions, integrations, and so forth) are becoming difficult. Engineers cannot properly focus on their work while coordinating with other departments to make sure all steps are executed properly to maintain quality. The workload increases dramatically with growth. The company lacks two items: 1) a “throttle” to start only what it can build, and 2) prioritization (a holdover from the past, when everything could be high priority). It needs structure and process to help the engineers, and others, focus on the value stream. The concerns come from the top. This company has a wide range of options. The CEO feels he cannot see the entire problem, but knows he needs to do something. Engineering wants to add either new tracking software or a new product development group. To address these concerns, the engineering manager hires a consultant who steers the company away from those options and to a manual tracking system similar to a Kanban2 board. This tool highlights the issues and changes how all of departments do their work, allowing each to see how their work relates to other groups. The cost is minimal and accountability focuses on the individual contributor. There is little governance added because each person is accountable for confirming the priority of their work.

 2 Kanban is a tool developed by Taiichi Ohno at Toyota Motor Corporation to improve manufacturing efficiency. It entails creating input, work, and output queues with limits on how many items can be in each queue. When applied system-wide, it prevents excessive backlogs and helps control flow through a production line. In this example, it was controlling the flow of the NPD process.

164  Chapter 7: Lean Project Governance The second case involves a medium-sized company ($100 million to $500 million in annual revenue) in a highly regulated industry where every employee spends three to four hours every Friday writing a status report detailing his or her week’s activity. These reports often contain trivial items such as number of brochures mailed, phone calls made, or hours doing design but miss more important items like the status or goals of sales campaigns to pick up new customers, issue resolution, or progress on new client acquisition. The individual reports are compiled by group managers, whose reports are further compiled by division managers. In turn, the vice presidents roll all those into a report presented to the company’s president, who reads the entire 170- to 220-page report over the weekend and provides comment—especially on any reports that are missing. The cost of this micromanagement exceeds $3.5 million annually—nearly 15% of the company’s EBITDA. This company is struggling to bring any new products to market under the weight of a micromanagement culture. Management will not let the employees be accountable. As the micromanagement culture starts at the top, there is little hope for change. Neither company can make it past the growth ceiling they have hit without a change. Failing to morph to the proper level of process and structure is stalling their growth. The third example is not just one company but a set of companies found in the book In Search of Excellence, by Tom Peters. He points out one of the key concepts in excellent companies is their ability to create small groups of people unbound by the organization’s classic processes. Peters profiles numerous multibillion-dollar companies from nearly every business domain (IBM, 3M, Procter & Gamble, Frito-Lay, HP, Raychem, Schlumberger, Digital Equipment, and the like). He finds that the most successful employ “limited autonomy” or skunkworks-type tactics in developing new products. These small, sometimes short-lived task groups develop innovative products and services outside the bureaucratic structure necessary for the rest of their business. They all know bureaucracy stifles their agility. Examples include a $5 billion company creating a fully developed product in 28 days, netting the company $300 million per year (in 1983 dollars). Another is a company where a single skunkworks team member solved a machine-cooling issue with an $8.95 household cooling fan as opposed to the engineering team’s proposed one-ton air-conditioner.ii Process and structure are required for us to function as a society or a business. But, just because some process works, more process is not better. As companies grow, processes need to evolve to meet their needs. Some processes need to go away completely and new, lean ones put in place.

Why Project Governance? This corporate governance primer is necessary before diving into a discussion of project governance. Tying corporate direction to projects requires some form of governance. Whether a formal group or person provides the governance or it is embedded in

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the tasks associated with corporate governance depends on a number of conditions. The responsibilities, though, are the same. Figure 7.1 shows the relationship between corporate governance and projects. It covers three areas—corporate governance, which we have already discussed; project management, with its various stakeholders, end users, steering committees, and project managers; and project governance, to fill any gap in responsibilities between the two.

Figure 7.1: Project Governance’s Role

Ascending the corporate ladder, away from the project and its management, governance functions become more oversight in nature, with implementation details being left mainly to people close to the project team. At the project level, action centers on implementation, but that does not mean there is no governance. Oversight as simple as the project methodology is governance. Projects lacking a project manager or scrum master flounder and founder. It is probably worth digressing for a moment to make this point clear, because there is confusion on the difference between management and governance. Governance is the action of establishing processes and standards to create a framework for how work is completed, its level of quality level, or both. Management applies the framework and organizes the work to be done. Management directs people on how to do tasks and governance provides boundaries on how to undertake those actions. The existence of a gap between the organization’s governance and project execution often leads to the creation of a formal project governance group. In many organizations, the gap does not exist or can be closed by other means. If governance needs to be applied, lean governance is the best option.3 Lean concepts keep the company focused on the customer, reducing costs, and improving people’s attitudes about their work. For this reason, applying governance (or filling any

 3 Lean will be discussed in the section Lean Approach, later in this chapter. For now, think about lean as a concept that filters out all processes that do not add value. To select the value-added processes, think of how customers might look at functions your company performs. If they would pay for it, it is

166  Chapter 7: Lean Project Governance gap, for that matter) should be carefully thought through from a systems thinking standpoint. History provides scores of examples of poorly governed projects and their ugly demise. However, it is also replete with heavily governed projects that have also failed (see Case Study: Affordable Care Act Marketplace Failure—Cover Oregon in Chapter 1). Without a doubt, though, some form of governance is needed or projects will run into trouble.

Problems Due to Lack of Project Governance Insufficient project governance often goes unnoticed until a problem occurs, usually in the form of a major failure. Common problems include: – Maintaining proper project/strategy alignment. – Lack of executive ownership. – Poor stakeholder engagement. – Managing third-party relationships (especially at an executive level). – Identifying and allocating proper resources.iii When one of more of these problems occurs, executives often overreact or find solutions that apply to projects individually, not taking the time to address root causes. The challenge in a lean structure is to develop a project culture where the project manager identifies these problems early and requests the appropriate assistance from executives to mitigate risks at their root. Without this, governance bodies grow and apply onerous rules and procedures to all projects and create checklists that lack context, again not addressing root causes. Lean governance requires two key ingredients—knowledgeable and experienced project managers and open communications channels with leaders. The tougher of these two is developing open communication. However, it also reaps the most benefits. Executives are busy and have difficulty setting time aside to work with project managers and their teams. At times, the issue is finding the right executive to address a problem. This underscores the extreme value of one of the leaner forms of governance, that is, establishing an executive sponsor. Sponsorship is a critical factor in project success. It alone can address each of the remaining five gaps very effectively without overdue burden. A complete discussion of sponsorship can be found in Chapters 3, “Challenges in Executive Sponsorship,” and 4, “A Model for Engaged Executive Sponsors.”

 probably value-added. Customers will not pay for rework and repair of faulty product, preferring the product, service, or result gets produced properly the first time. Given a choice, they will not choose to pay for inspection for the same reason. They feel it should be done right the first time.

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Right-Sizing Project Governance As with the fairy tale Goldilocks and the Three Bears, some forms of governance are too light and others are too overbearing. The real goal is finding governance that is just right. As our businesses are in a constant state of change—growing, contracting, or changing to meet new demands—this requires constant critical review. It is logical that larger organizations require more governance, but governance is not solely proportional to the organization’s size or the project’s complexity. The opening story to this chapter is a prime example of lean governance in a large company. Although size is a factor, another ever-changing characteristic of the organization comes into play— maturity. If a company is new to project management or a specific type of project, “simple” projects may need significant governance, regardless of the company’s size. For example, a large company may have never attempted rapid new product development (NPD) and needs significant oversight on the first few projects. Once the organization gains experience, the need for oversight diminishes greatly. A small company, experienced with NPD, may need very little project oversight until another dynamic affects how it works; for instance, if it starts working in a highly regulated industry, needs to design more complex products, or grows beyond their processes capacity, then governance may need to increase, at least temporarily. The level of governance is based on three factors: 1. External governance requirements. 2. Maturity of the organization doing a certain type of project. 3. The complexity of the projects being attempted (also based on the company’s experience). Companies have the least amount of flexibility with external governance requirements. These may be levied by a government (avionics, healthcare, pharmaceuticals, military, and the like), regulatory bodies (investment, financial, standards, and so on), or by clients or vendors (electronic data interchange, quality, and others). To supply products or services in one of these areas, the external regulations cannot be ignored; they are simply a cost of doing business. However, when meeting these standards, the level of compliance needs to match the company’s goals. If customers regard the governance as valuable, then exceeding expectations may be critical; otherwise, meeting the baseline may be enough. Lean methodology focuses on delivering customer value. However, identifying the customer on some regulations may be difficult. For instance, United States’ Sarbanes-Oxley rules4 do not add value to a shovel purchased at the local garden store,

 4 Sarbanes-Oxley rules were put in place in the United States in 2002 to thwart many high-profile corporate scandals. Its focus is corporate governance and the processes are quite onerous. It has ramifications throughout the corporate structure, including project accounting. Hence, connecting a

168  Chapter 7: Lean Project Governance but for an investor buying stock in the shovel-manufacturing company, the rules are critical. The shovel purchaser may not care about the OSHA and EPA regulations5 regarding the handle’s varnish, however the employees care about exposure to harmful chemicals, environmentalists are concerned about volatile carbon emissions, and neighbors of the plant are worried about its disposal. Project complexity and organization maturity can be addressed. As companies step into the realm of more complex projects and business situations, oversight is the single most important factor to improve the chances for success. However, once the organization gains experience with a new type of work, the oversight can usually decrease. The variable is the organization’s ability to acquire and retain the knowledge. This can be done by experiential learning, formal training and development, hiring expertise, or some combination of all three. The key is investing in the organization’s people. Responsible people are a recurring theme in lean. What Project Governance Covers The Project Management Institute (PMI), one of the major worldwide project management standards organizations, defines four general project governance domains— alignment, performance, risk management, and communications.iv These are a subset of the corporate governance domains, have more granularity than their corporate counterparts, and often focus on inter-project relationships. Project governance bodies can focus on one or more of these domains. The first step in establishing lean project governance is in understanding the minimum level of governance needed. As mentioned, the “Project Management” box in Figure 7.1 includes various stakeholders, end users, steering committees, and project managers constituting a level of project governance. This may be all the oversight required. In fact, it could be too much. But just saying this is not very descript, as the number of project methodologies and rigor with which those processes are applied are about as numerous as the number of currently running projects. The argument for strict standardization is weak (as standardization almost always defines needless process) and may be tied to insufficient capabilities, even incompetence.v High-performance, lean teams require less standardization, less process. They defy bureaucracy. At its simplest implementation, project governance is constrained to a given project or program. At this level, inter-project alignment and coordination, comparing

 project’s financials to the corporate financials is critical. For companies not publicly traded, Sarbanes-Oxley rules are irrelevant. A corporate decision to be publicly traded adds a required level of corporate and project governance. A good overview of the Sarbanes-Oxley Act can be found at 5 OSHA (Occupational Safety and Health Administration) and the EPA (Environmental Protection Agency) are two United States Government agencies that provide regulation with respect to worker safety and the environmental protection, respectively.

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and reusing risk mitigations, and sharing lessons learned are usually a lower priority than trying to get the project completed. The next level up, general project governance, the oval area in Figure 7.1, refers to a corporate-, division-, department-wide assessment and tracking of all the projects in that group. The decision-making functions in this model focus on project progress, identifying where resources may need reallocation, prioritization, handling escalation, controlling projects to ensure they meet standards, and integration between projects (including future plans). The determining factor is the gap between the projects and the corporate governance structure. If this gap is small, there is little or no need for separate project governance. If the gap is large, then it must be covered by changing the project or corporate responsibilities or adding a layer of project governance.

What to Govern The question, then, is: what type of oversight adds value to projects? There are six general areas where governance commonly applies—people, sponsorship, alignment, methodology, risk, and financial. A project governance structure can specialize in one of these areas or may cover multiple areas. Each is explored in the following sections. People Create the Need for Governance Most governance is a result of us—people. We are all different, a quirky bunch. Even though that makes us fun to be around, it makes us hell to work with. Processes are necessary, but people choose to follow them (or not); people have the required skills (or not); people communicate with others (or not); and people follow direction (or not). It is all about people and whether they have the right qualifications to perform the tasks assigned. Worse than that, trying to address these faults is neither easy nor fun. It is hard and causes division, derision, and disgust. If someone does something wrong, the first reaction is to put a process in place to keep the error from recurring and avoid having a face-to-face discussion on corrective action. Adding process to avoid fixing root problems builds bureaucracies. Governance is not the action of applying layer upon layer of laws. It should create an atmosphere where responsible people are doing the right work based on knowledge and ethics. Businesses, as opposed to the analogy of a free and open society above, have the luxury of moving people into positions where they fit best according to their skills and capabilities. In not taking these actions, but in applying process after process to make sure there are no mistakes, businesses become less responsive, perpetuate mediocrity, impede the ability to innovate, and frustrate good employees.

170  Chapter 7: Lean Project Governance Progressive leaders want just enough mistakes and failures to stretch the company’s capabilities, not cost them a customer. Pushing the envelope is how companies discover new products and services. Without that, competitors steal customers. The philosophy must be that people can make mistakes, but they (and others) need to learn from those mistakes and not repeat them. Governance structures regularly run afoul of this by trying to create error-free environments. Governance too often equates to control. As we discussed earlier, we are motivated by autonomy and selfdirection, not governance. Few of us like to be governed, or, as we say in the business world, managed. We desire leadership. We want to know the vision, direction, and mission, and from there use our own creativity to design the solution. We want to have teams that believe in the goals and can help achieve them. As supported by research and put so nicely into three words, what motivates us is autonomy, mastery, and,vii Although each researcher uses different words, Tom Peters, Jim Collins, and Daniel Pink all describe this concept for inspiring people. The secret to success is hiring the right people who believe in the company, continually training them in new skills, and giving them the autonomy to do their job right. Applying a philosophy that tells them what to do when, is neither inspiring nor satisfying. It quite literally disconnects people’s cognitive functions. That is the point behind process—making something invariant, repeatable, and transferrable. We need process and structure, but they need to be in the right place. As mentioned earlier, creative accounting did not move us forward. The genesis of the Sarbanes-Oxley Act was to prevent recurrence of that form of corporate malfeasance. Process and structure have given us air travel that is safer than nearly any other form of transportation (except possibly walking). I, for one, do not support removing all the processes pilots, mechanics, and manufacturers must follow. I will pay the extra to know the airline industry continues to have an exceptional safety record. At times, though, those rules need to be reevaluated. In 1982, with the introduction of the Boeing 767 (the first twin engine wide-body commercial jet), the rule that all transoceanic aircraft had to have three or more engines needed to be challenged.viii At the same time, the three-person flight crew was modified.ix Inherently, both of the original rules lead to safer air travel as redundancy leads to fewer opportunities for failure; they also increase operational cost. However, improvements in reliability, automation, and maintenance procedures set the stage for this change, which reduced the cost of air travel with no noticeable change to passenger safety. A balance is made between safety and cost. Executive Sponsorship The single most important action any organization can take to close the gap between corporate governance and its projects is implementing effective executive sponsorship. This role is the heart of lean governance. It uses the existing structure and does

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not require establishing a new group. The right executive sponsor provides leadership and direction in lockstep with the corporate direction, as well as ensuring the project delivers value. When looking at the functions of executive sponsors in Chapter 3, “Challenges in Executive Sponsorship,” and Chapter 4, “A Model for Engaged Executive Sponsors,” it is easy to see how they can fulfill the alignment, risk, and financial functions, thus creating a lean and temporary governance structure. When executive sponsors do not do this job, someone needs to backfill or even act as an intermediary between the project team and the sponsor. Instead of addressing the sponsorship issue, many companies create oversight groups to perform the tasks. This creates a significant amount of overhead that is often ineffective (and surely not following lean principles). Some companies use steering committees to fill the sponsorship role. Unfortunately, they have a few inherent limitations. The biggest is accountability. Unless the structure is to have a single sponsor using a steering committee as an advisory group, they tend to be useless. Case Study: Driving the Steering Committee A project to maintain and improve the primary sales tool of a large international vehicle manufacturer used a steering committee for governance. It met every other week and consisted of five representatives from the business unit and six individuals from the information technology (IT) group. Only three managers from the business unit attended, representing only three of the four user groups; four from IT attended. Absent were both the business’ general manager and CIO. The general manager was the project sponsor. As the project manager, I tried to meet privately with the general manager. He refused, saying the meeting was “a total waste of time” and he had other more important goals to make. For the next meeting, I called the chairperson and proposed an agenda three days before the meeting. A couple of adjustments were made. This pattern followed for the rest of the project. At the second meeting, the IT director, who occasionally attended, complained that the meeting agenda should be prepared by the chairperson, but it was obvious that I was preparing and running the meeting. After the meeting, I talked to the steering committee chair and asked him to write a note to the sponsor telling him how effective the meetings had become. It had no effect. The steering committee was completely ineffective. The collective success of the project was not part of their goals—each having only a portion of the project as their responsibility. The three business unit managers were always at odds with each other as each was myopically focused on the parts of the projects that related to their bonus only and the IT executives were simply trying to meet scope, schedule, and budget. With the executive sponsor’s lack of engagement, there was no guidance. As the project manager, I had to take the steering committee’s lead role. The steering committee became a tool for me to drive the project’s executives.

There is something else, however, about steering committees that tend to cause problems. They are engaged with a project only periodically. They meet monthly or quarterly, which is too infrequent to handle issues as they arise. I work primarily with troubled projects so my project sampling is biased; however, I have never seen an

172  Chapter 7: Lean Project Governance effective steering committee. All of the steering committees addressed problems after they occurred; none could address risks and assist in mitigating them. More than half of the steering committees had been established or evolved into the only forum where the project manager could access specific executives who could solve problems. Attempts to talk to steering committee members outside the meeting were met with resistance, the members deferring all questions to the meeting. Hence, issues languished until it was time for a subsequent steering committee meeting. In addition, the project manager was never a peer in the committee, even though it was clear that the project manager was the source of nearly all the project solutions. The steering committees did the opposite of empowering project managers and teams. They would give direction and hold the project manager accountable. I am sure there are steering committees that have a positive influence on projects, but I have yet to experience or hear of one. Monitoring Corporate Alignment Keeping projects focused on corporate or customer goals is essential. The case is, though, that many companies do not have clear, written corporate goals. Without these documents, projects flounder. Creating a governance structure to fill the gap is one option, but that focuses on a symptom rather than a cure. The company should focus on building and communicating a concise set of corporate goals. This should be part of the executive team’s responsibility. In one interview, I explored this point in a large electronics manufacturing company that had numerous divisions running projects in a relatively autonomous fashion. The interviewee ran the corporate Project Management Office (PMO). He and his team reviewed every project from each division for adherence to budget and alignment to goals. They confirmed alignment with corporate goals and ensured that new product development was not leading the divisions down the wrong path. I asked him why he did this if corporate had properly worked with each division to lay out the year’s objectives. I could not understand why the executives in each division were not simply held accountable for their agreed upon goals and budgets. Why did his group have to review the projects for alignment? He had to take pause at that question and could not answer it. After trying to justify the process, he finally relented. He was not sure if the division presidents were too busy to do the work or whether corporate executives did not trust their numbers. These types of issues can be avoided by using an executive sponsor to maintain alignment. With goals in place, one of the executive sponsor’s responsibilities is ensuring that the projects stay aligned with the goals and provide value. There is no requirement for a governance body. By the sponsor having this responsibility, two aspects of lean are maintained.

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First, the overhead of a formal governance organization is reduced because the executive sponsor is a temporary position. This lessens the burden of maintaining a permanent governance structure and focuses accountability onto a single executive. The second area is that an engaged sponsor can ensure that the project’s scope is the minimum required to meet the organization’s needs. Pet project scope, scope expansion, and ambiguous scope are removed while a laser focus is maintained on the corporate goals and no further. Risk Governance Every business manages risk. This is most prevalent when a company works in areas where it has little experience. Projects implementing new products or services are the epicenter of risk. The first line of defense in risk management is the project team. However, many project teams lack experience developing effective mitigation strategies. When risks are large enough to have a significant impact on the company, a group of specialists should be assembled to monitor and control the exposure. This group functions similarly to the role of an actuary in an insurance company—developing strategies around exposure, probabilities, and mitigations to minimize a company’s exposure. Key indicators for a separate governing body over risk include: – Heavily interwoven dependencies between multiple projects. – Major complexity in projects. – A large percentage of the organization’s assets at risk in a small number of projects (that is, nuclear reactor construction, pharmaceutical and commercial aircraft development, and so on). – Numerous high-risk projects. Care must be taken to ensure the charter of this group does not exceed its usefulness. Companies often execute many high-risk projects as part of an initiative to accomplish a large business objective. This type of initiative may take multiple years to execute. When the initiative has achieved its goals, the risk group has most likely outlived its usefulness. In that case, it should be disbanded. The conditions for this should be stated in its charter. For example, consider the decade-long effort to build power transmission lines. In the United States, every state, county, city, tribal, and individual property owner establishes regulations to follow, rights to respect, and issues to settle before the first shovel of dirt can be moved or tree cut. Risks are extraordinary. An external group that can service multiple projects in addressing the risks makes economic sense. These types of governance groups—with attorneys who know the laws and regulations, people who have established relationships, libraries of forms, and templates to

174  Chapter 7: Lean Project Governance document agreements and discussions—can be quite efficient compared with building this structure for each project. Governance over Methodology Some project governance structures include oversight, standardization, training, and resourcing of the project methodology. There are numerous project management methodologies. They include waterfall, agile, critical chain, design-build, design-bidbuild, construction manager at risk (CMAR), and the like. All have their optimal area of application and large projects may use multiple styles based on the component being built. An organization needs to take care when it tries to standardize its methodology. Projects managers need the freedom to use the most appropriate tools for what they are trying to achieve. Standardizing on just one methodology often leads to issues as most organizations have multiple styles of project. The challenge becomes a technical issue. If projects address well known project types (maybe it is a construction company building homes), then one methodology may be all they need. Take a hypothetical construction company that has been building homes for years. Using a methodology in which its architects design a house and contracts with a builder for fixed-price construction would be quite reasonable (the design-bid-build model). The risks are well known and can be easily monitored. But then if the company ventures, say, into building strip-malls or custom industrial buildings. That methodology may no longer be optimal as the company is not familiar with all the design risks, codes, and the like. It could rely on another source for design knowledge and offload the design risk to that company. In that case, a methodology that removes its design function would be needed (design-build or CMAR). This style of project takes very different skills. The same goes for technology and new product development. Large or well understood projects can use waterfall, while projects with high levels of unknowns may need an iterative approach, like agile. Because this is a technical choice in addressing risk, the project team needs significant leeway in selecting the appropriate tool. It is a mistake to put the decision in the hands of a governance group. Key to this is understanding that project management is a form of governance itself. It is the oversight of the people doing the work of building and implementing a solution. Maintaining and educating the project teams is extremely important to ensure project success. Just as you would not tell a plumber what wrench to use, you should not tell your project team what tool to use. The goal of this type of governance is making sure project teams have the right tools for the job, not telling them the tools to use. Ensuring the organization has the right training, education, knowledge of best practices, and hires knowledgeable people is more important than having a group to standardize the methodology.

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Financial Governance The seemingly never-ending battle in any company is controlling costs. Generally, projects have little or no return on investment until the product is delivered. An expenditure profile is developed at the project’s inception and is changed through a change order process. For organizations or companies running projects for external clients (for example, information technology departments, system integrators, construction contractors, or the like), one central finance group is an appropriate solution. Such an application can be commonly found in Information Technology Financial Management (ITFM) groups. They are valuable when IT groups receive a yearly budget that must handle all project requests for multiple disparate departments (a very poor practice). The ITFM group acts as a shared accounting service for the projects. Years ago, when I worked with Digital Equipment Corporation, we were required to use their corporate Project Management Office (PMO) to review all project bids before submitting them to a client. Many of us considered it a bureaucratic waste, but the meeting took less than an hour. Even though its function was to approve budget, its members were senior project and program managers with extensive experience and they routinely pointed out risks and issues from past projects to help our bid. It would have been much better had the resources in that group been more engaged in the bid process in its earlier stages. To use terms that we will discuss later, they provided value. Clients respected the company’s vast experience running projects in numerous business sectors, but the PMO disrupted the value stream and flow. Being earlier in the process of building a bid would have reduced rework and made our bids timelier. Oddly enough, many extremely successful companies have relief valves around this budget bureaucracy. They need innovation to create leaner processes, neater products, and sexier services. Innovation takes money, however, and not all of them can wait for the annual budget cycle. These organizations overtly or, as in the skunkworks example, covertly sequester funds from other budgets and projects to create clandestine innovative items. General Electric calls this bootlegging; 3M refers to it as scrounging.x The lesson is that if governance is too tight, progress will slow. Governance has its place, but not to the point of stagnating the organization.

Problems Governance Tries to Solve To establish the value of a specific governance structure, you first need to understand what it is solving. Using information from our 2015 survey on governance, consulting experience, and the information gathered by the Project Management Institutexi, there are eleven major symptoms that PMOs are trying to tackle. These are:

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Problems Addressed

Aligning Corporate Goals and Projects

Keep projects focused on the correct tasks and deliverables to achieve the organization’s corporate goals.

– Rapidly shifting business environments. – Project scope creep.

Stakeholder Communication

Communicate with a wide variety of stakeholders on project progress.

– Lack of information getting to stakeholders.

Benefits Realization

Report to the stakeholders on project benefits.

– Lack of understanding of the project’s value. – Poor project performance. – Lack of understanding of project management’s value in the organization. – Vocalize project risk to solicit mitigation and contingency needs.

Project Sizing and Costing

Ensure projects (internally and externally) are correctly sized and costed.

– Variability in projects meeting their cost and schedule targets.

Risk Management

Continually assess project risk with respect to business opportunities and threats to reevaluate corporate exposure.

– Create a risk management culture in projects. – Common high-risk areas in multiple projects.

Develop Talent

Create and maintain a pool of re– Lack of project management sources with business and domain knowledge in the organization. acumen, strong leadership skills, and – Lack of business domain knowledge in project team. an array of project management skills in multiple methodologies.

Process Definition and Define the processes that projects – Lack of project management disTraining must follow to create uniformity becipline in the organization. tween all projects to be used for gating, comparative, and training purposes. Organization Change Management

Work with end users and customers to adopt the project’s output.

Executive Liaison:

Work as a conduit with executives to – Project teams’ lack of undercorrelate business and project standing of the business direction. needs. – Poor project performance. – Lack of uniformity of project reporting. – Lack of business domain knowledge in project team. – Lack of common vernacular.

– Lack of adoption of projects’ product or service.

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Problems Addressed

Project Manager Support

Help individual projects solve problems unique to that project or all projects.

– Political or intracompany issues.

Compliance with Standards

Monitor and report on compliance with a project management framework.

– Customers (i.e., government) requiring a project management document framework.

Any given governance structure may provide one or more of these functions as each addresses different issues inside the organization. Adding management to solve problems is not necessarily the best tactic. A lean approach corrects the underlying issue by focusing on identifying and correcting the root cause. To that end, it is important to list the problems being addressed, their associated root causes, and the appropriate solution. The options for solving the problems above can be the following: Solution to Root Issue


Problems Addressed

Assign accountability to executive sponsor.

Develop (temporary – Rapidly shifting business environments. task) and imple– Lack of information getting to stakeholders. ment a sponsor-vetting process – Lack of understanding of project value. – Vocalize project risk to solicit mitigation and contingency needs. – Project teams’ lack of understanding of business direction.

Create a task force to work with Temporary risk task – Create a risk management culture in proexecutives to formulate a risk force and training jects. management strategy for the company. Create a group of SMEs to adLong term dress common high-risk issues in all projects.

– Common high-risk areas in multiple projects.

Assign accountability for adop- Develop sponsortion to the sponsor. vetting process

– Lack of adoption of projects’ product or service.

Develop strong steering committees.

– Political or intracompany issues.


Create a task force to develop Temporary hiring or hire project management tal- task force ent in the organization.

– Lack of project management knowledge in the organization. – Lack of project management discipline in organization. – Poor project performance. – Project managers’ lack of business acumen.

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Solution to Root Issue


Problems Addressed

Establish a strong project change control culture.


– Project scope creep.

Increase project management discipline.


– Poor project performance.

Increase PM’s leadership skills. Training

– Poor project performance.

Create project management awareness inside the organization.


– Lack of understanding of project management value in the organization. – Lack of common vernacular.

Increase the project team leaders’ involvement in the business.

Long-term or reorganization

– Project managers’ lack of business domain knowledge.

Send project teams to business domain training.


– Lack of business domain knowledge in project team.

Integrate OCM in the project methodology.


– Lack of adoption of projects’ product or service.

Create a group of experienced project managers and solution designers to bid jobs.


– Variability in projects meeting their cost and schedule targets. – Over-reliance on existing vendors or overloaded internal resources.

Create a task force to define a Temporary task limited number of reporting for- force mats (less than five) by type of project.

– Lack of uniformity of project reporting.

Question the need for compliance.


– Customers (i.e., government) requiring a project management document framework.

Merge the compliance function into another compliance group for the products needing it.

Temporary task force

– Customers (i.e., government) requiring a project management document framework.

Although organizations have seen benefits from governance structures serving a long-term function, temporary alternatives often can address the same issues. This does not mean that governance disappears; however, alternatives can focus on other issues, such as limiting the size of efforts, requiring continual reevaluation of purpose, and implementing accountability. The temporary nature is not, however, in sync with how most employees think. People like the stability of a permanent charter for their job. Building an organization with a temporary charter is unnerving. People want the permanency of knowing their position will endure and they will strive to create this permanency.

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Say an organization is having problems keeping projects aligned with corporate strategies. This could be for multiple compounded reasons. The business environment could be rapidly changing (as with most high-tech and start-up companies), project scope could be changing (due to challenging technology issues or poor project change management), executives may not be communicating the company goals completely, or some combination of these items. Whatever the cause, a governance body could be created that only addresses the problem, say, of translating the corporate goals to project deliverables and mapping all project deliverables to those goals. This is a perfectly acceptable solution for some companies, but is a lot of overhead to cover up a managerial gap. Another solution is for the governance body to establish a set of communication tools that are the part of everyone’s job. It could: – Work with the executive team to establish balanced scorecards that highlight deliverables and timelines for each goal. – Modify the job description of the executive sponsor, giving him or her accountability for maintaining alignment. – Coach the project managers on reviewing the scope of all work to ensure they only deliver items directly related to the goals. After these three tasks are completed, documentation published, and new employee training established, the problem is solved. The function does not need to continue. There is a temptation to institute an audit function to validate that the scope stays constrained, but, in this example, the executive sponsor provides that function. It may take multiple years to solve the problem, but once complete, the governance structure (more like a task force) can be dissolved. By implementing actions to address the gaps, we have removed the need for additional governance. The action of implementing Balanced Scorecard also addresses the operational side of the company. Here our focus is projects, but operations benefits significantly from the direction of Balanced Scorecard. Governance Is Not a Replacement for Leadership or Engagement Executives should never use governance structures to abdicate responsibility or accountability. As simple as that sounds, this is often the hidden agenda—create a group to govern some aspect of the company’s projects and hold that group accountable for any failures. This is a huge mistake, which, experience shows, is all too common. After a more than cursory look at the solutions above, it is obvious that many of the problems’ root causes lie in the executive and executive sponsor’s role definition. Too many times people report that governance bodies (or PMOs as seen in the next chapter) are tools for delegating executive responsibility or accountability. In their white paper, Top 10 PMO Worst Practices: Pitfalls to Avoid, the Change Management

180  Chapter 7: Lean Project Governance Group lists lack of executive support as the eighth worst practice—executives stepping aside from hands-on involvement and delegating to people who do not have the explicit or persuasive authority.xii In our survey, one reason that shared services groups see governance structures as valuable is communication. The outward communication that governance achieves provides alignment of projects to corporate goals, but also creates awareness and alignment between projects and other divisions (lateral alignment). There is little doubt that this is a valuable function. However, the implication is that the information is not being delivered through executive channels. That is a bigger problem and is more important to solve as it affects other functions in the organization than just the projects it is running. Without this communication, shared services groups are relegated to being “order takers,” taking on assignments without having the visibility of how they fit in the corporate strategy. They lose sight of the company’s “big picture” and have little context to their tasks or ability to forecast loading. The corollary is also true—business units cannot see the load on the services organization. A shared services group can support dozens business units, each of those business units submitting multiple requests. From the business unit perspective, it is asking for some small list of items, say five, but from the shared services group perspective, the dozen business units could have, in the example, 60 or more open requests. The business units get frustrated by the shared services group providing poor support, while the shared services group is feeling inundated. Reflecting back, one goal of Balanced Scorecard in service groups is the common—balanced—understanding of the work required by all groups. Executives need to be engaged with projects beyond the summary provided by a third-party governance layer. Alignment with corporate goals, adoption of the end product, advocacy for end-user changes, and executive team communication are all part of an executive sponsor’s responsibility and accountability structure.

Lean Approach Many lean principles come from manufacturing. The Toyota Production System (TPS) is a major source of lean principles and is considered the ideal lean culture. Although there are many processes in TPS (even the name denotes a system), it actually is based on a culture that permeates everything Toyota does. Volumes have been written from Taiichi Ohno’s (the TPS chief architect) own workxiii to scholarly analysis of the system and how it works.6

 6 One of the most comprehensive books addressing every aspect of TPS is The Toyota Way: 14 Management Principles from The World’s Greatest Manufacturer, by Jeffrey Liker (McGraw-Hill Education, 2004).

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Lean has five basic principles—value, value stream, flow, pull, and perfection.xiv Value to the customer has been discussed. Value stream is the set of steps that add value to a product, service, or result the project is creating. Project governance needs to be addressed from both aspects. It must provide value and each step it prescribes must add value to the project’s product. Flow denotes the even progression, without bottlenecks or gaps, of value-added work to the project’s product. Pull is the concept of work being pulled through the system by the subsequent steps, starting with the customer. These four principles are customer-centric concepts that define how something is built and delivered. The primary question to ask when determining value is whether the customer would pay for the action. If not, it should be reduced or removed. The last principle is perfection. In the words of Womack and Jones: “As organizations begin to accurately specify value, identify the entire value stream, make the value creating steps for specific products flow continuously, and let customers pull value from the enterprise, something very odd begins to happen. . .. [T]he four principles interact with each other in a virtuous circle.”xv

The result is that perfection comes into the realm of possibility. With lean advocates, at times, sounding fanatical, people often reject the initial claims made about its value. The common erroneous objections to lean’s principles are: – These apply to manufacturing and operations, but project management is unique. – Our projects are too big and we need more oversight and governance than afforded by lean. – Lean is just a fad and will go away. – Lean is just an excuse not to do necessary documentation and testing. Categorically, these are just excuses (see Table 7.1) to ignore the reality that our business systems have become overburdened empires that vest power in a few people who do not want to cede it.

182  Chapter 7: Lean Project Governance Table 7.1: Excuses for Avoiding Lean Objection


Lean principles apply to manu- Avoiding unnecessary work, performing only tasks that add value facturing and operations, but to the product or service, and focusing effort on the highest priorproject management is unique. ity work are applicable throughout the organization. Our projects are too big for lean principles. We need more oversight and governance than lean affords.

Lean does not remove necessary oversight, but it does look to solve the problem that oversight addresses by root cause analysis and correction. This will reduce oversight through eliminating the need for it.

Lean is just a fad and will go away.

Lean has been in use for more than five decades. It has been a focus in some cultures for three or four decades. It is not a fad.

Lean is just an excuse not to do The critical aspect of lean is to do the documentation needed, not necessary documentation and the documentation that has been done in the past. testing.

Lean systems expect everyone to be responsible and accountable. This is a result of lean’s principle of hiring the right people. Lean methodologies assume that the people doing a job can do it as well or better than anyone else. When applied to governance, lean focuses primarily on: – Increasing value to the customer. – Improving the value stream through actions such as reducing overhead. – Removing bottlenecks and gaps to improve work flow. – Improving people’s ability to focus on work. – Reducing errors that cause delays and require inspection steps. These are discussed below in the context of increasing value, focusing on a value stream, improving flow, and following the pull principle.

Value Principle Applied to Governance A tenet of lean is that companies should undertake only activities that add clearly defined value to the project’s product. When creating governance structures to address problems, their value must be clearly understood. Every aspect should be validated as bringing value to the product in a way the customer would pay for. Some governance structures struggle to define their roles within organizations and their value.xvi Hence, when creating a new governance function, it is critical to define value and the length of time it will provide that value. The fact is, well-known business books by highly respected authors like Peter Senge, Jim Collins, Tom Peters, Peter Drucker, Patrick Lencioni, Jeffrey Liker, John Kotter, David Norton, Robert Kaplan, and others never refer to permanent governance

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structures, project governance, PMOs, or anything like them, as the key to a company’s success. Project governance is never on the list of attributes having a positive impact on making a company “great.” In fact, these knowledge leaders identify developing accountable leadership that experiments with new ideas, throwing them out if they do not add (or stop adding) value. It is in this flexibility and temporary nature that bureaucracies fail to entrench themselves and value reigns king. Tom Peters supports this concept in In Search of Excellence. He notes that adhocracy, the ability to create ad hoc project teams to address issues, is a key element of an excellent company’s success. This structure allows the companies to “chunk up” work and create definitive objectives. These groups are formed by pulling people from multiple organizations, using them for anywhere from a couple days to a few years, and then disbanding them to their home organizations.xvii The companies that fail to reach excellence work differently: “Most organizations, when confronted with an overwhelming strategic problem, either give it to planning staffs or tack it onto the objectives of numerous otherwise busy line managers. If staff is supposed to solve the problem, commitment never develops. If the usual line organization is supposed to solve it, momentum never develops.”xviii

To understand what level of governance your organization needs and its degree of permanency you need to first define the problem it is trying to solve. This, of course, is very individual to the situation. If the problem is a lack of project management principles, there is one task to focus on; if it is aligning project work to corporate goals, there is another. Hence, having a “management office” is probably an ill-conceived notion. As-needed governance is a better approach.

Reducing Overhead The quickest way to ensure that governance does not create long-term bureaucracy (creating wasteful overhead) is to make it temporary. Permanence is the antithesis of lean. The solutions to root causes that often predicate governance, as noted above, show many areas where governance activity should be temporary. The preferred solution is setting up a structure, establishing a training program, enhancing the culture, or the like, and disbanding the group. This is far from some new radical idea; however, it is not in many organizations’ culture and does not feel comfortable to many employees wanting a sense of permanency in their job (usually rooted in a company’s culture is the notion that temporary assignments are synonymous with insecurity). As mentioned earlier, one example of value-focused governance is establishing an organizational culture of projectxix or change management. By its nature, this should be a finite task. The governance body (or task force) works within the organization to create the foundational elements, education, processes, and so forth and

184  Chapter 7: Lean Project Governance trains the executive team to carry the culture forward. After all, if the executive team does not support the new project or change management culture, the governance body will be unable to sustain the drive. As mentioned before, executives—often the CEO—are responsible for any cultural component. The accountability for maintaining a culture cannot be delegated. Without an approach of creating a transient body to fix core issues, governance runs a very high risk of being a bureaucratic weight slowing the organization’s progress. Tom Peters commends a number of large organizations on just this fact. Referred to as project centers, he cites General Motors, Canon, Toyota, IBM, Bechtel, and Boeing as: “excellent companies [that] use this mundane tool quite differently from the rest [of the companies studied] . . . [it is] an exciting, fluid, and ad hoc device.”xx

He does not advocate any level of permanency in the structure. In fact, he specifically comments on the lack of any staff. There is no residual overhead when the mission is accomplished. The body’s temporary nature is essential. Creating staff positions with changing assignments as opposed to reconstituting a task force runs two risks. The first is absolving people outside the group of being accountable for developing lean processes. Other employees consider the governance body accountable. Lean is a not a set of processes to follow; it is a philosophy and model of work where everyone accepts responsibility for finding wasteful processes and improving them. The second risk is assuming the staff has the expertise to address every issue. Although a team of “lean experts” can be assembled to coach others on being lean savvy, establishing staff positions can result in a culture where the staff acts in place of subject matter experts. Lean always trusts the person closest to the work to identify waste. Value Stream Principle A lean governance structure looks to remove unneeded steps. This sounds simple; however, when told that a quality assurance step should be removed, people flinch. Table 7.2 shows an actual 15-step project flow. In reality, the only steps that add value to produce the product are: 1. Writing the specification. 2. Detailed design. 3. Production run. 4. Complete user documentation and website material.

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Table 7.2: Sample New Product Development Flow Step

Responsible Group

Ideation: Identify the new product

Product Management

Write a specification


Product Approval

Executive team

Detailed product design


Review design and manufacturing rules

Quality Assurance

Purchase material for prototype


Build the prototype


Test the prototype


Procure first-run production material


Build first article


Test first article


Approve first article

Quality Assurance

Build initial production run


Complete user documentation and website material


Release for sales

Product Engineering

About half of the steps (seven) validate that prior steps are done properly—not adding value. Quality is at the core of lean. As a process gets leaner, more time is available to ensure quality work is completed. This has the benefit of reducing cycle times and increasing customer satisfaction. Transforming this process from the 15 to four steps requires significant work and investment in training and tools. If the governance structure can achieve this reduction, it has surely added value.

Flow Principle Governance often has the largest effect on flow—unfortunately, rarely in a positive manner. Most governance actions insert approval processes, managerial reviews, inspection steps, and the like (see prior value stream example). These actions do not add value to a project’s product. All are double-checking work done by others. Steps that require review are especially problematic as they insert long wait times for groups of people to do the task and add the cost of highly paid overseers. Where governance can help is to watch the flow of projects to ensure no given area is being overloaded. For instance, Figure 7.2 shows the number of projects at each step (work in progress or WIP) of an 18-step project flow. It is obvious that steps

186  Chapter 7: Lean Project Governance 1, 2, and 7 are backlogged. A good governance process will address or prevent this issue. It could be implementing a better flow principle, limiting the number of new project starts, improving the ability of people to focus on their work, adding resources, or any number of other solutions.

Figure 7.2: Project WIP Example

One major contributor to shoddy flow is poor focus. Many of today’s businesses have become hyper-reactive to a point where employees cannot focus on their work. Multitasking is the norm. Employees jumping from one task to the next, before the first is completed, destroys flow and introduces considerable waste. Once a task is started, it should be finished before switching to a new task.

Pull Principle Another way to address the project WIP shown in Figure 7.2 is through the use of pull. Governance structures can help organizations see and address these bottlenecks by identifying the areas where work should be prioritized. The pull principle says people should not work on items where subsequent steps are at maximum capacity. Analyzing the figure, there is a huge spike of projects in step 7. No work should be done on any projects that reach step 6 until the number of projects at step 7 decreases. The same is true for starting new projects, as step 1 is backlogged. Lastly, no work should be done on projects in step 1 when step 2 is also overloaded. With steps 8, 9, and 10 empty, focus should be placed on step 7. Nearly the same focus should be placed on step 2. However, working on too many projects in step 2 could result in adding more work at step 7; hence, work at step 2 should be minimal until the backlog at step 7 is reduced.

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Governance might help by identifying bottlenecks or when people are not following lean principles. However, this removes accountability from the people actually doing the work, which violates the rules of lean. Workers should be looking at the loading themselves, know the rules, and select the next item to process. Governance would actually defeat empowering the people doing the work. This is true in general for governance; it does not help pull.

Project Governance Examples These concepts are best understood through examples. The following example will help explain the application of lean governance. It is from a specific company we referred to in Chapter 1 as ElectroTech. Reflecting on the example of a governance body at the opening of this chapter, you can see all the traits of lean governance bodies. It provides value by having subject matter experts (SMEs) that are not redundant in each division, reducing overhead. The SMEs are in the value stream as each division pulls them into their flow only when they are needed. The groups do not push themselves on other divisions— they wait for requests for assistance.

Slow Project Execution Projects, by definition, develop a unique product, result, or service, but the project’s flow is not necessarily unique. There is an operational aspect where various resources (people, roles, tools, equipment, and so on) are constrained, causing bottlenecks that slow project execution. For instance, let’s look at ElectroTech, it does new product development with a goal of between 50 and 80 new products in the pipeline at any given time. Each new product developed is unique (by definition), but the company can use a common project framework to handle the process. The steps are generally outlined in Table 7.2. The company was unable to meet its product development goals and felt the issue was in the procurement steps. Procurement could take anywhere from four to twelve weeks from purchase requisition to receipt of raw material. However, Table 7.2 shows that projects are very reliant on engineering. This creates bottleneck potentials at each engineering step as shown in Figure 7.2. Analysis determined that the difficulty the company was having with its huge backlog of products came not in procurement, but rather in the first three engineering steps (writing the specification, developing the detailed design, and testing the prototype). Because these steps were holding up the release of new products, as soon as a project got through the prototype test step, it was prioritized above every other project. This created a drain of products in the latter stages of the flow. To try to compensate

188  Chapter 7: Lean Project Governance for this slow generation of new products, the company had decided it should create an ideation team that would meet twice weekly to identify new products to design or carry, adding more to the initial queue and making matters worse. Seven actions were taken to correct the situation: 1. Create a manually updated WIP board on an office wall that had project tickets to show where each NPD (new product development) project was in the process (flow principle). 2. Stop the ideation process until the initial queue was reduced to acceptable numbers (pull principle). 3. Prioritize specific products to focus on reducing the backlogs (flow principle). 4. Allow multiple engineers to work on one product when normally one engineer would take a product through the entire process (flow principle).7 5. Assign product managers by product class to champion products by market (pull principle). 6. Implement Kanban in the entire facility (flow principle, specifically enabling people to focus). 7. Change redundant quality assurance steps to spot-inspections to push accountability to engineering (value stream principle). The project governance issues were solved by two temporary actions (the WIP board and stopping ideation), two methodology changes (Kanban and engineering allocation), and two permanent actions, both based on a new role of the product manager (prioritization and product champions), thus reducing effort at two quality assurance steps. There was no project governance structure remaining after the work-in-progress was leveled. Future leveling was handled by each department using Kanban boards. These changes took about two months to implement. However, the payoffs were much bigger—reduced cycle time, increased throughput, decreased rework and labor costs, and, best of all, shorter time to market with 1.5 new products per week.

 7 Removing the one-to-one relationship between projects and engineers had a number of side effects: increasing quality since there were multiple engineering talents on a product, cross training of engineers, and reducing manufacturing difficulties as design for manufacturing issues were addressed earlier.

Executive Takeaway  189

Conclusion Lean project governance must focus on adding value for the customer. This is at odds with many of the concepts about governance that have an emphasis on monitoring and control. Project governance fills any gap that might exist between organizational governance and project execution. The preferred methods of closing that gap are through education, training, and hiring the right people. This implies that most of the gaps can be filled by temporary task forces that assemble solutions for the executives and the project teams. This transient mentality is a key factor in reducing bureaucracy and focusing the organization on reducing waste by concentrating on the five principles of lean— value, value steams, flow, pull, and perfection. Long-term governance structures should be established only when all other avenues for solving problems fail. The level of project governance required is always in flux and must be continually adjusted as the company grows and matures and the projects it executes become more complex.

Project and Middle Manager Takeaway For the most part, project managers need to follow governance rules; however, that does not mean they should not question their validity. Governance that is onerous and excessive slows projects. If the case can be made that the project will be completed faster or less expensively by removing unnecessary governance, not only will your project benefit, but so will others. Project managers can look for better ways to run their projects to address gaps that governance is trying to fill. This reduces the additional work that might be required. The best actions a project manager can take are: – Educate your team and yourself on the project’s business domain. – Understand what executives and stakeholders need to do their jobs and help you do yours. – Educate executives and stakeholders on project methodology techniques that could improve project performance. – Take the initiative to solve problems in a manner that will help other projects. – Ensure the people assigned to your project are of the highest caliber.

Executive Takeaway Project governance is necessary when gaps exist between corporate governance and project execution.

190  Chapter 7: Lean Project Governance – –

– –

Most governance is needed due to lack of accountability and responsibility. The easiest option, albeit the antithesis of lean and that has been documented as providing inconsistent results, is establishing a permanent project governance group (that is, a PMO). Temporary project governance structures, with specialized expertise, are excellent at identifying and establishing point-fixes at a root cause. Lean governance must focus on value to the customer and removing waste from processes; often governance achieves the opposite.

Executives should avoid the tendency to create permanent project governance structures as these structures rarely solve root problems. Instead, assemble temporary task forces to solve the root issues.

Applying These Concepts Organization Wide Questions 1.

What governance do you have over your current projects? Classify them into the following groups: people, sponsorship, alignment, methodology, risk, or financial. Do they show gaps in accountability? 2. Describe changes so that governance groups, defined above, that will make them leaner. 3. Which governance bodies identified above could be removed if some other form of accountability or responsibility was assigned? 4. Take the list of problems that governance addresses above and indicate other problems they address.

Project and Middle Manager Centric Questions 1.

Take your company’s standard project process or a project you are working on and identify the steps that add value to its product. Indicate where accountability needs to reside for the steps that are not value added and can be removed. 2. How do your current project methodologies hold people accountable? Where can they improve? 3. Assess your current project structure and how people are assigned to do work. Will a Kanban style system work for your organization? How would this look across various departments that need to do the work?

Applying These Concepts  191

Executive Centric Questions 1.

Look at your current project governance processes (this could be a project release or gating process) and identify what you would have to change to remove it. What root causes may they be covering? 2. How many of the eleven symptoms does your company have? a. What root causes are they addressing? b. How many might go away by solving root causes?

Chapter 8 Value Driven PMOs The truth of the matter is that no two [PMOs] are alike. —Project Management Institutei Traditional PMOs have become paper tigers, ineffective at managing programs to achieve results. —Deloitteii

Over the years, I have dealt with a lot of companies and listened to their woes and tales. One has its devout consortium of employees wanting a Project Management Office (PMO). They have had numerous consultants run workshops, develop plans, and create frameworks, but the executive team never funded the headcount. The CEO, who owned significant stock, refused to let go of the funds to make it happen. He was the focus of the angst of the bevy people in the information technology group wanting the PMO. They would lament, “He tells us nothing and we can never justify what we need. We are flying blind and need a PMO.” Finally, about three years ago a new executive heard their cries and lobbied on their behalf for a PMO. A close friend was ecstatic. It took a few months and he was assigned as the PMO’s manager. A couple years into running the group, I talked to him about that role. He told me he had no

DOI 10.1515/9781501506390-008

194  Chapter 8: Value Driven PMOs staff and was responsible for reporting on project status to the executives. Projects were running quite well and he was planning to grow the position to include standardization of methodologies and resource allocation. I asked what the PMO was doing to get better information from the executives. He admitted that this was still problem, but a new CIO was helping fill that void. Last, I asked, “If your projects are running well, why are you standardizing methodologies?” He replied, “Because, that’s what PMOs do.” I said nothing else. This seems to be a common case with PMOs. They are created because someone thinks it is a good idea but there are little objective data supporting their need. As in the opening quote for this chapter (which came from the Project Management Institute’s own Pulse Report) says, “. . . the truth of the matter is that no two are alike.”iii

Types of PMOs PMOs (most commonly referring to a project management office) have been a common form of project so-called governance for decades, even though many simply provide adjunct management. Their value, however, is debated and most are short-lived due to lack of effectiveness—with longevities on the order of three to five years. Often, their creation and destruction are not with achieving goals, their demise corresponds with management or major business transitions, as PMOs struggle to demonstrate their value. Three factors appear to be driving their episodic nature—the perceived value of project offices, an executive’s prior experience with project offices, and the degree to which the company has external project compliance requirements. In fact, many PMOs spend a significant amount of time justifying their benefits to the organization.1 If the benefit of a running PMO is not obvious, it probably is not there.

What the Acronym “PMO” Means The acronym itself is part of the problem. Although the term PMO is bandied about in project management circles with confidence, there does not seem to be a common understanding of what PMO categorically means, let alone what the group is supposed to do. Therefore, every discussion on PMOs must start with the question, “What does the acronym stand for?” Experience shows that two letters are regularly in ques-

 1 The Project Management Institute publishes a series of thorough leadership articles on Benefits Realization Management (BRM) and has created a Benefits Realization Management framework that is available to members on their site.

Types of PMOs  195

tion—the P and the O—the only standardization appears to be the M’s meaning management (although some companies leave out the M and refer to just project or program offices). The P is the most highly variable letter. It most commonly means project or program with a vocal crowd insisting on portfolio, product, or process. Variability is much less with the letter O, which a large majority (greater than 90%) of the time means office, but can also translate to organization or operations. There is a rise in the use of the word officer, which completely alters the meaning to refer to a person’s role. The Project Management Institute (PMI), one of the major worldwide project management organizations, published a study of PMOs in 2013, finding this same confusion.iv To help rectify this, I am offering seven definitions for two of the letters in the acronym PMO. They are commonly combined to make ten different types of PMOs. Let’s look at the P first: Portfolio: Overseeing groups of disparate programs or projects for a company, organization, or division. Program: Overseeing a single program2 that is comprised of multiple related projects for a company, organization, or division. These are temporary organizations with lives no longer than the projects they manage. As soon as the constituent projects are complete, the PMO is dissolved. Project: Overseeing a group of related or unrelated projects for a company, organization, or division. Process: Overseeing a set of processes that are used in a company, organization, or division. This could be for running projects or doing other activities that need well documented process. Product: Overseeing the design, development, and strategy for products in a company. Usually this governs the product development process from conception to retirement. Each new product development event is often a project, while the other functions are operational. This makes a product management office look similar to a project management office as it manages a number of disparate projects. The O has the effect of defining the scope of the acronym in the dimension of how it relates to the company: Organization or Office: This is by and large the most common usage and implies a group that oversees some aspect of projects that an organization executes.

 2 A program is an aggregate of interrelated projects that are associated with a single initiative for a company. Some companies have a Program Management Office that oversees multiple programs. That is reasonable as the “Project Management Office” oversees multiple projects. However, in an attempt to more clearly present the topic, an organization with purview over multiple-programs would be a “Portfolio Management Office.”

196  Chapter 8: Value Driven PMOs Operations: This is a newer addition to the alphabet soup and adds an interesting twist. To say that there is an operational aspect (ongoing) to projects (by definition unique and temporary) implies repeated projects that produce a common product. This speaks to the reality that some companies run projects to drive income. These are companies similar to home construction, building house after house in a nearly identical fashion; the publication industry, producing books and the like following the same process; or the system integration industry, integrating common hardware or software products repeatedly. In the previous chapter, ElectroTech was a company that ran projects in an operational manner to develop new products. Even the bounds established by these possible definitions, however, are insufficient. Many companies make outright distinctions in the breadth of their PMOs—departmental or enterprise. Although these distinctions seem to better describe the terms, they can cause further confusion as some groups intentionally misuse the qualifiers to exaggerate the breadth of the group, as will be discussed below.

Departmental and Enterprise PMOs Some organizations use departmental PMOs—commonly a portfolio- or project-focused group addressing the needs of a single department (sales, manufacturing, information technology, and so forth). These are common in shared services organizations that need to serve many business units. These groups often do a wide range of activities including, but surely not limited to, sizing of projects, defining methodology, providing something similar to account management functions to the business unit, and project prioritization. There are companies that have taken the departmental PMO to an extreme, though, and each department within the corporation has a PMO, making a patchwork of five to ten PMOs throughout the company (many with the same definitional challenge, creating multiple PMO definitions within the same company). Enterprise PMOs (EPMOs) are normally project governance groups that oversee projects in multiple departments or divisions. EPMOs can provide any of the functions outlined in the previous chapter. They often report in to the CEO or a direct report. Because of this implied positional authority and their business-wide responsibility, enterprise PMOs are more likely to deliver value.v Their breadth of reach across the enterprise can bring a common understanding of how groups can better interact. This usually has a positive impact on the customer. The enterprise designation, however, is commonly misused adding more confusion to the overall definition of a PMO. This is done in an attempt to bring more credibility to a departmental PMO. To capitalize on the presumed additional authority of an EPMO, some departmental PMOs call themselves enterprise PMOs. They justify this because they handle projects for multiple divisions, even though there are other

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projects in the enterprise that they do not affect. This is common for information technology groups (although other shared services groups use the term). This is a true misnomer as the projects they have oversight over are only for the department and not the enterprise. It is an attempt at trying to elevate their stature in the organization. Adding the “E” is only appropriate if the group affects all projects in the enterprise. Case Study: The IT PMO One of the more common departmental PMOs is the information technology PMO (IT PMO). As most IT departments service multiple business units, these groups function very similarly to account managers (each business unit representing an account). Shared services groups like this have a couple of common challenges that they address: .

Allocating resources (human, hardware, software, and other physical items) and talent across business units’ projects.


Managing budgets for disparate projects from the organization’s various business units.


Maintaining a close connection with the business unit needs.


Sizing and costing estimates for business units.

These functions rightfully tend to take on a permanent character, but they are managerial in nature (not governance). A common charter for such groups is to establish a pool of business-domain experts to address one or more of these four points for each business unit. This allows people to concentrate and specialize on each business unit’s needs. Groups chartered with managing budgets need to track and periodically review (that is, annually or quarterly) finances from each business unit earmarked for specific work. Non-unique services (for example, IT infrastructure) are divvied-up to support the projects that all the business units are using.

Lack of Meaning Contributes to the Problem Many companies do not even use the PMO title. Some do this to avoid the confusion inherent in the PMO acronym while others are trying to avoid its bad reputation, biases from past experiences, or general misconceptions of its responsibilities. Regardless of how they decode the PMO acronym, organizations all have this same issue— defining the PMO’s function. Unfortunately, the term is widely used, often as a project governance function—even though, as introduced above, many PMOs have nothing to do with governance. It may sound academic to point out these differences; it is not. Common understanding is a gap we have already discussed and unclear vernacular is a major contributor to that gap. Getting an organization to a common understanding starts with the words we use. Since the first chapter it has been repeatedly highlighted that people need a common language to communicate. The term “PMO” is the prime example of that failure. Executives and project managers talk about creating and disbanding

198  Chapter 8: Value Driven PMOs PMOs and are rarely even talking about the same type of organization. They are simply repeating business terms hoping this silver bullet will solve their woes. When in fact, they may not even understand the problem they are trying to solve. I recently had a conversation with a senior vice president of a company that was invoicing about $2 billion a year. The company was creating a new position titled Vice President of PMO (which I found out stood for Project Management Operations). I asked her what problem she was trying to solve with the new position. Her reply made me pause, “We don’t really have to be solving a problem.” I relayed that conversation to another executive in the company who strongly disagreed. “Yes, we do! We are growing and starting to run many more projects for our clients. We need a PMO.” I still did not have an answer to my question of what problem the company was trying to address. It wanted a PMO since it sounded like a good idea. This is the wrong reason to create a PMO, regardless of what the acronym stands for. Unless otherwise stated, when I use the acronym it indicates an enterprise level group with responsibility for disparate programs and processes (the portfolio definition) and I will define its responsibilities directly related to the business problems it is addressing. Also, I will only use the acronym in this discussion when talking about its historical usage; otherwise, I will use project oversight and management to talk about the functions in a general manner.

Problems with PMOs With the amount of time PMOs have existed, their problems are well known; but the solutions are a little more elusive. This was the genesis of our third survey on project governance and PMOs. Although prior to the survey it was known that there was confusion on the definition of PMO, the gravity of it was not fully understood. The numerous definitions for the PMO acronym above came from that survey.

The PMO’s Identity A leading question in the survey was asking for a one-word description of the organization’s PMO. The responses showed the following patterns: – People whose jobs were associated with operations overwhelmingly used words like bureaucracy and process. They felt that PMOs have a strong focus on establishing process and at times so much process that they became an impediment to running projects. – When interviewing people in shared services groups (departments focused on supporting groups delivering the company’s product), answers reflected a higher value proposition—alignment, communication, and resources. These employees saw PMOs as helping keep alignment between departments or with corporate

Problems with PMOs  199

goals (lateral and vertical alignment, respectively), corporate-wide communications, and resource sourcing and allocation (capability alignment). It is worth noting that alignment and communications are closely related, as maintaining alignment is a form of communication. Executives (regardless of their line of work) used positive terms like alignment, guidance, and metrics. Alignment functions kept projects focused on corporate goals. Guidance was used in the same general context, by acting as a channel for providing bi-directional information on where projects and goals were headed. Metrics provided common measures of project progress.

Further, the survey showed that executives were looking for a silver bullet to address problems in how projects were running. They may have had a PMO at a prior company that appeared to address issues and so they tried to establish that same structure at a different company. The challenge is that simply referring to a successful PMO at Company A and saying it will have applicability at Company B is highly unlikely, even in the most general of aspects. A PMO that has implemented a project management philosophy at Company A will probably only work well at Company B if the latter has a need for the same project management philosophy and is in the same business domain. Although it seems like a logical choice to copy successful PMOs, rarely do companies have the same issues. Simply looking at the eleven different areas that oversight and management can cover (see Chapter 7, “Lean Project Governance”), it is hard to believe a PMO would be transferable. Or, as PMI says, no two are alike. More qualifiers need to be added to describe the actual function. PMI’s report, Pulse of the Profession In-Depth Report: The Impact of PMOs on Strategy Implementation, underscores these issues by saying PMOs have an “identity crisis,” with room for improvement, and are “still maturing.” It concludes that the PMO is poorly The issue seems to be that the term PMO is trying to cover too much and should, as mentioned above, be dropped altogether.

The PMO’s Effectiveness As mentioned above, there are two general types of PMOs—departmental and enterprise. Experience shows that most long-term departmental PMOs are ineffective. They are generally a layer of management that fills a leadership void. They are effective as temporary groups, however, when chartered to solve a specific deficiency in their department—for example, lack of project management experience. Hence, in the case of a human resources department having the need to run their own projects yet not having the project management technical skills, a governance group chartered with establishing project guidelines is ideal. It can build the project management framework and acquire and train for the skills needed until the organization becomes proficient in project management. Even in these cases, the longevity of a departmental PMO

200  Chapter 8: Value Driven PMOs should be short (at most a year or two), deferring to an existing organizational entity to maintain the project management philosophy the PMO created. One form of a departmental project management group that is usually quite effective is one that does project sizing and costing. These types of PMOs, usually part of a shared services organization, develop and have team members who are accountable for estimating the size, cost, duration, risks, and other constraints for projects that are run for other business units. These are usually staffed with senior project managers, business analysts, and former business leaders. Enterprise PMOs, being closer to executives, are more likely to be a vehicle that can help instantiate a change in company culture. This may help a CEO establish a common project philosophy or compliance effort. An example might be a company doing government or military projects that must show a specific rigor, process, or reporting format. A single enterprise solution is likely to be more efficient than multiple decentralized department- or project-based solutions. However, CEOs cannot delegate establishing a culture to an EPMO, this responsibility belongs solely to the CEO. In large organizations, keeping track of the impact of changes to business goals that are supported by multiple projects across disparate departments, can be daunting. Assuming that a simpler project structure or Balanced Scorecard is not the correct solution, having an enterprise PMO is one method for addressing this problem, albeit a better name may be Enterprise Project Alignment Organization. Although enterprise project governance is more capable of delivering value, care must be taken that it is not simply handling tasks delegated from executives. This obfuscates accountability and could make an enterprise governance group a scapegoat. In the project alignment example above, the better solution might be using Balanced Scorecard and make executives and managers accountable for the alignment. This leaves accountability directly in the business chain of command.

PMOs Are Perceived as Bureaucratic by Nature From experience with dozens of companies, though, many PMOs exhibit a level of red tape that would make any government agency proud. They often use process as a tool to try to create mistake-proof environments. Each time a problem occurs on a project, the PMO adds a process to keep it from happening again. At first, this might sound like a noble endeavor; however, all projects (which are unique by definition) are then required to follow these processes even if a similar error cannot occur on another project. These process-heavy structures have a net effect of lengthening project execution time and hobbling innovation. This is especially true in groups that rely on using inexperienced (hence, inexpensive) contract project managers as a cost reduction tool. Process is seen as the only way to minimize on-boarding time (reduced training) and controlling projects. This blind application of process slows projects and reduces value.

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PMOs Tend to Outlive Their Usefulness Challenges for PMOs occur even when they seem to meet their objectives: What happens with the group when its objectives are met? Once a PMO has, say, established a project management culture in the company, the executive team is responsible for maintaining the culture. By rights this PMO should be disbanded. It should come as no surprise that the people running the PMO want it to remain. This may not be the best choice. Does it stay in place to do the maintenance (that is, indoctrinating new people into a philosophy)? There is no single answer, however, lean logic says it should be dissolved and maintenance functions embedded elsewhere in the organization on an as-needed basis. Without this reset, PMOs become empires of rigid process-driven bureaucracy. Our survey showed that most PMOs stayed in effect long after they had achieved their goals and thus became roadblocks to progress. PMI’s 2013 report concluded that there are three key characteristics of high-performance PMOs—building a project management culture, continually evaluating PMO performance, and evolving and improving through knowledge and change management.vii Two observations can be made about this triad. First, the latter two attributes are introspective and fail to provide any value to the customer (hence, not lean). The PMO is focused on the continuation of the institution rather than providing value. Second, PMOs involve the continuous re-evaluation of their performance through input from executives or other stakeholders. This further underscores the need of the PMO to morph to maintain its value. The PMO would be far more effective if it was chartered to solve one project related problem and then move on to the next problem. If providence was on its side and it solved all the problems (highly unlikely), then it should be totally dissolved. This concept of a project improvement office throws into question whether the PMO should be permanent in the first place.

PMOs That Fill Gaps PMOs that are chartered to ensure alignment to goals, facilitate communications, act as a liaison, and some other functions mentioned in Chapter 7, “Lean Project Governance,” are often just compensating for issues that executives are not addressing at their root cause. Instead of creating a PMO, address these gaps by acknowledging the root cause. For instance, if the missing component is alignment of goals to projects, implement Balanced Scorecard. If executives are not engaged, properly define the role of the executive sponsor and make them accountable for the project’s success. If the issue is that the project’s output is not adopted, build a culture of change management. These alternative solutions to a PMO provide permanent solutions as opposed to permanent band-aids.

202  Chapter 8: Value Driven PMOs The most egregious incarnations of PMOs are those designed to fill incompetency gaps. Organizations establish this form of PMO to compensate for inadequate corporate oversight, improper hiring practices, and insufficient leadership education. The result is removing accountability, responsibility, or both from leadership and creating a scapegoat culture. Other problems beyond reputation, definition, and vague objectives beleaguer PMOs, including being a buzz-word to solve poorly understood issues, static structures that do not morph as issues are resolved, and empires that layer on process and rarely remove or change old ones. To the gentleman above who said, “We are growing and starting to run many more projects for our clients. We need a PMO.” My reply would be, “It sounds like the person running your system integration group is having trouble delivering value in his or her projects. Why create a new organization to backfill for that deficiency? Why not train or replace that person?”

Alternatives to PMOs There are legitimate occasions when companies need to have a group overseeing some aspect of projects for an entire company or some part of it, albeit possibly temporary. In those cases, using the term PMO to generically refer to such a group overseeing or assisting projects is tempting, but “PMO” itself is misleading. A more descriptive title would be better. Project Resource Office better describes a PMO that has a stable of project managers that work on projects, a Methodology Standardization Office works on methodologies, and a Project Risk Office works on risk. Using more descriptive terms helps reduce the confusion of the group’s responsibilities. The problem with PMOs is more than the name, it is the scope, function, tenure, and the reason they were established. The problem is not a task of fixing the PMO; it is a task of replacing the concept with something different. Everyone knows that business has changed over the last couple decades and, as pointed out in Chapter 6, “Organization Change Management and Projects”, when talking about organization change management, projects have changed as well. This must change how our executives and organizations approach project oversight and management. Before creating a PMO, look to an alternative that fixes the root cause of the problem, for instance placing management responsibility back onto managers (Balanced Scorecard), executive responsibility back on executives (executive sponsorship), and so on, by looking at the functions in the last chapter and determining ways to correct the problems at their root cause. To do this, start by focusing on value—the key to success.

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The Value Aspect of Project Oversight and Management As with any function in a company, the target value of oversight and management of projects must be identified. Most people will agree that if a customer is unwilling to pay for any activity we do in our business it has little or no value. As mentioned in the prior chapter, this is a precept of lean. By using this principle, the qualitative and quantitative aspects of whatever you are analyzing becomes measurable based on your customer’s perception of value. Referring back to Chapter 7’s opening story about the 13-member PMO in a 10,000employee company shows that it provides value by offering support in achieving lateral alignment through subject matter experts that have executive experience. Its customers, business units, gladly request and pay for its services. In contrast, one client’s PMO had a cache of experienced technical project managers that were well versed in multiple project methodologies. Unfortunately, the focus of this PMO was enforcing the use of a single methodology, waterfall, against the recommendations of its project managers. Its managers did not see the significance of the brain trust they had hired and opted to impose governance in the form of rigid standards. They had numerous project issues as many projects had poorly defined requirements and needed an iterative methodology to tease the requirements out of the business users. They completely missed the value proposition for the company. As a result, the business units they served continually complained about their level of service. With this in hand, when replacing a PMO with either oversight or management, the first step is ensuring the new structure provides value. Our research supports this view—PMOs struggle with identifying their value and role within organizations.viii More work needs to be done to clearly specify their goals and value in their charter. To be sure, according to PMI, the PMO’s value is in solving organization-, division-, and department-wide problems with how they run projects. The solution has to be permanent, but the PMO does not. In fact, according to Peters, et al., a temporary task force should have the responsibility for defining the project management culture. To avoid falling into the trap of no value, when setting up project oversight or management functions, the value, in customer terms, needs to be defined as part of the group’s charter. The information provided in Chapter 7, on the eleven types of oversight and in Table 8.1, below, is intended to help provide parameters to make this task easier.

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Case Study: Circumventing the PMO’s Methodology Some PMOs define a methodology framework that all projects must use which restrict project managers to one or two styles. One information technology group in a vehicle manufacturing company performed all work—both project and maintenance—using a waterfall methodology, even though maintenance was ongoing and, by definition, not a project. It would bundle maintenance, bug fixes, and enhancements into one set of requirements and deliver all in a project. Since the projects had nine to twelve-month delivery cycles, the customer had an inordinately long wait for bug fixes. This also made the product very difficult to maintain and the bugs complicated the development process. At the same time, this practice frustrated the business-unit users having to endure the bugs. As the project manager, I determined that trying to do all the work required for the project release was too difficult, but I had to work within the constraints of the PMO. The project would have been late due to the amount of work; therefore, I decided to run the bug fixes as a subproject. Working together on a plan with the development and quality assurance teams, we selected two dedicated resources from each group who would fix bugs and test functionality while the core project was still gathering and documenting requirements for the project’s major enhancements. I compiled all the known bugs into a spreadsheet with formulas to accumulate the estimated time for building and validating the bug fixes. In two meetings with the customer representatives, we were able to get the bugs prioritized for the first bug-fix release due in five weeks. I promised the them there would be another iteration in four weeks to determine the second release’s scope. They were skeptical. The architect developed single-page specifications to define the bug fixes and the test procedures. End users would work with the developers to ensure the fix was correctly implemented. The bugs were fixed, tested, and deployed according to schedule. Second, third, and fourth scheduling meetings were held, fixes deployed and the scope of the project’s final delivery was greatly reduced. The word agile was never used to describe the process; the executive management would have never allowed an agile process. Business unit users saw so much value that they funded establishing a maintenance team to focus on small enhancements and fixing bugs. They were happy because issues were fixed promptly and major projects ran more quickly. The project team was also happy for not having to wade through code that was a tangled mess.

Let’s return to the example above of a project oversight group chartered with aligning corporate goals and project deliverables (the first of the eleven types in Table 8.1). The value target might be that all projects meet corporate goals without delivering excess functionality. This reduces the cost of products and their time to market—making both customers and stockholders happy. If the group’s goal is to develop talent, on the other hand, then the measure might be the number of open requisitions for people or that project managers report that projects are properly staffed. Again, this reduces project cost and delivery time. Some of the metrics may be quantitative and others qualitative. Finding a solution may require monitoring two or three attributes. It depends heavily on the situation and company.

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Negative aspects must also be monitored. As with any system, unintended consequences can always arise. For instance, meeting goals at other’s detriment is not good. One group could meet their goals quite nicely at the expense of not supporting another group meeting theirs.

Temporary Project Oversight and Management The concept of temporary functions for project oversight and management is nothing new. For instance, the PMI report, mentioned earlier, says that temporary PMOs that serve just one project or program (a collection of projects that have some form of commonality) “claim the highest level of business value realization among all PMO types.”ix A transient concept gives oversight and management a distinct beginning and end, delivering a product that needs ongoing operational maintenance. This sounds just like the definition of a project or task force. Table 8.1 gives many examples of oversight and managerial functions that PMOs are designed to cover and what could be done to make some of them temporary groups. For instance, if there was a need for better alignment, a task force could be assembled to implement Balanced Scorecard. After the implementation, managers and executives throughout the company would have the responsibility for using that tool and maintaining alignment. Executives are accountable for ensuring goals and projects stay aligned. There is no need for a group to manage or oversee the operation. As a second example, a group could be assembled to show how properly run projects do a better job at meeting goals by developing examples that create a sense of urgency around using project management methodology in other areas of the company. This would show benefits realization for the entire company. After that has been done, there is little need for the group to exist. As with the concept of lean governance, many project issues are better addressed with a task force that can identify and correct root-cause issues. Table 8.1 lists each style of governance structure listed in Chapter 7, and whether these groups could become temporary. These are the same findings of other researchers—temporary non-staff positions are more effective. Obviously, if the function is ensuring that proper training, use of current best practices, and pools of talent are available, or external compliance requirements are met, the need will be long term. However, executives should be focused on establishing task forces to find and correct root causes first as opposed to creating staff positions. Every time a new function or group is proposed, it should be determined if the best solution is to fix some root cause issue that is creating the need or if the function must be solved by adding a new permanent group. This is just good business sense. Although it is always better to fix the root cause, there are times when that cannot happen. Maybe that is because the root cause is in another group or company that

206  Chapter 8: Value Driven PMOs you have no authority (influential or direct) to effect the change. In those cases, the only option maybe to create a permanent group. During the research for this book, I was talking with a vice president of IT. He relayed a story from a prior job with a multinational logistics company where the IT group was in total disarray. Their projects were regularly late and missed their goals. The problem was that IT managers did not understand the corporate priorities and goals. One option was to create an IT PMO to work with corporate to understand the goals and then continually adjust project direction and priority. However, they looked closer at the issue and determined that the cause was actually unclear direction from the corporate executives. The CIO worked with executives to establish a task force to look at the problem. The task force developed some new standards and procedures that corporate executives and IT managers had to follow. It was a rough few months getting a common understanding and proper documentation. When understanding was reached, their problems around project prioritization and goals virtually disappeared. The steering committee was disbanded. A few months later some IT managers saw a problem again. They found out that they had ventured into some new conditions that had not been covered in their original work. They reconvened the task force members and came up with a solution in a few days. In the end, there was no addition to staff. Managers and executives just did their jobs better. The group’s charter should always reflect the condition that made the function a permanent or temporary endeavor. This should be reviewed regularly to determine if the conditions causing the need have changed.

Non-Governance Groups Referring back to the last chapter, you may have noticed that some of the items that were listed as governance functions are really managerial.3 Table 8.1 summarizes the governance styles mentioned and whether they are governance or managerial and their level of permanence.

 3 Management and governance are often confused. Governance is the action of establishing processes and standards to create a framework for how work is to be done, its level of quality, or both. Management applies the framework and organizes the work to be done.

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Table 8.1: Examples of Making Eleven Oversight Types Temporary Function


Aligning Corporate Goals Managerial, but often sold to executives as govand Projects ernance. A group doing these functions should be replaced with tools the entire organization uses (like Balanced Scorecard) and executive sponsors should be accountable.

Temporary/ Permanent Temporary

Stakeholder Communication

Managerial. Develop the correct communication Temporary tools and train project managers and executive sponsors on using them.

Benefits Realization

Managerial. Establish the value of project management in the company and disband.

Project Sizing and Costing

Managerial. This will probably be an ongoing Permanent operation. In some companies, this could be made temporary and project teams could be assembled for each potential project. Many companies that do system integration work and the like assemble bid teams for each new project.

Risk Management

Managerial for companies with repeatable high Permanent risk projects (nuclear, aerospace, and others). Governance in companies with numerous disparate high-risk projects that need oversight so that risk is appropriately addressed.

Develop Talent

Managerial. Should be part of the training and development group.


Process Definition and Training

Managerial. Should be part of the training and development group.


Organization Change Management

Managerial. Integrate change management into the project lifecycle and place change management resources in same group as develop talent (above).

Integrating into the project lifecycle: Temporary. Training: Permanent

Executive Liaison

Managerial. The training and development group should help establish good communication skills.


Project Manager Support

Managerial. Establish a set of tools and coaching programs for sponsors and transfers this task to them. Bolster the training and development groups to be a resource center for project management improvement.

Identify the tools for training and development and executive sponsors: Temporary. Training and development support functions: Permanent.


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Temporary/ Permanent

Compliance with Standards

External Compliance: Governance. Internal compliance: Managerial, although whether internal compliance is needed should be questioned.


Reviewing Table 8.1, you will see a number of references to moving functions into a training and development (T&D) group. During our interviews, many respondents resisted the idea of taking training and tools out of their PMO and placing them in a central T&D group. This is a prime example of compensating for another group’s deficiency. However, by involving people who are adept at education and providing them the budget and tools to build and maintain training on communication, project management, and organizational change management can be a major strategic tool for the entire company (not just the groups running the projects). Improving these three areas for project teams and stakeholders can significantly change the outcome of a project. Giving executive sponsors and project managers a tool to get on-demand training for new team members or their business unit counterparts would be invaluable.

Accountability of Oversight and Management Roles Any time a new role is established in an organization, what that role is responsible for achieving and who is accountable should be defined. This lays the groundwork for ensuring the role is successful by defining who the decision makers are and highlights why the function is required. If the role compensates for a gap in another area of the company, it becomes apparent that decision making authority is overlapping and probably in conflict. Let’s look at the oversight and management roles from Chapter 7, and determine who should be held accountable. Aligning Corporate Goals and Projects: As mentioned in Chapter 2, “Creating and Maintaining Corporate Alignment,” alignment has three dimensions—vertical, lateral, and capability. Vertical alignment: – Meeting corporate goals is tied to an executive role (that is, executive sponsor) and an executive should be accountable. That person has a right to limit the scope of the goal to make it achievable. If goals change, the executive must communicate that information to the affected project teams.

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Project managers are accountable for a project’s scope. Projects should have the minimal scope defined to meet the executive’s goals and no more. Scope creep is the project manager’s to manage and, if needed, escalate. If the executive signs off on the scope increase, the executive becomes accountable to support the increase in scope and its adoption.

Lateral alignment: Ensuring lateral alignment across business units is the project manager’s responsibility; however, the executive sponsor has to be held accountable for lateral alignment as a project manager rarely has the influential authority to sway other business units. Capability alignment: Ensuring there are the right capabilities to meet the goals starts when the original goals are defined. At that point, planning teams should be building capabilities (refer to the learn and growth perspectives of strategy maps). Hence, the executive sponsor is accountable. As the details of projects get defined, more arcane needs are identified. The project team is responsible for identifying these needs while executives are accountable for getting the resources (financial, and so on). Stakeholder Communication: The project manager is ultimately accountable for accurate communication with stakeholders. Project managers can escalate issues as they occur and use executive sponsors as a mechanism for delivering the message. Benefits Realization: Ensuring an organization sees benefits from project management, in general, or specific projects being run are a matter of company culture and alignment with corporate goals. If the company’s culture does not grasp the value of a project or project management, the person chartered with creating the culture (that is, the CEO or President) needs to be accountable for this action. Project Sizing and Costing: Project sizing and costing is best done by a core team of experienced project managers, requirements analysts, and designers. The accountability for this function needs to be on the person in charge of the estimations for a given project. However, this does not remove project managers’ accountability for running a project in a fiscally responsible manner. Risk Management: There are three common aspects to risk on projects: – Identifying and managing risks within a project. Project managers are normally responsible for managing risk. If risks are not mitigated or contingencies inappropriate, they are accountable. – Risks relating to market conditions, adoption, and usability of the project’s product. These types of risk are often part of the business, outside most projects’

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scope, and belong to the person or group that developed the business case. This may be a marketing manager or an executive sponsor. Recurring major or complex risk situations in projects (nuclear power, aircraft development, and so on). These risks may span several projects and a separate permanent group would be a good solution—with one person in that group being accountable.

Develop Talent: In functional roles, talent development is left to the manager. However, many project management roles are not reporting to functional managers. This is an ideal role for a permanent project-oriented resource management group—acquisition and training of project management talent. This might also include organization change management staff with the required domain expertise for the organization. Process Definition and Training: As with talent development, process definition and training is difficult to handle in a person’s functional role, as the focus of the functional unit is not necessarily project management. Moving these functions into a training and development role is the most effective, having someone in that group being held accountable. Organization Change Management: Much like project management, organization change management is a broad discipline needing much attention. – In this light, a change management resource group could be responsible for talent acquisition, and process definition and training (as above). – Adoption, however, is specific to each project. Like risk management, a marketing manager, product manager, or an executive sponsor should be accountable for end-user adoption. Executive Liaison: Communication accountability has to be held by the executive team. Although everyone has to be able to communicate, the executive team leads the vision, direction, and hiring/firing of employees. Failure to communicate is its issue to address. Project Manager Support: A project support group would be a great organization to be responsible for supporting project managers in a general sense (training, mentoring, and so forth) and with a person in that group accountable. As noted in Table 8.1, many functions could be done in a generic sense for the company through a training and development group. However, projects still need support from the executive sponsor, who should be accountable for project specific issues. Compliance with Standards: Assuming that there is a true requirement from a customer to adhere to project standards (which is rare), a project compliance group

Best Practices for Addressing Problems Common to Groups of Projects  211

would be the correct group to be responsible for this function. Someone in that group should be accountable. As mentioned, out of the reasons that PMOs have been established, sizing and costing, develop talent, process definition and training, project manager support, specialized risk, and compliance with standards are the functions that could justify staff positions. The challenge is ensuring that this style of oversight and governance does not become an “establishment” and is continually questioning its value to the organization.

Executive Sponsors as Oversight and Management It is hard to miss that the term sponsor is used heavily in the prior section, in Table 8.1, and in Chapter 7. This is because executive sponsors are often the actual solution to the problem. Put another way, gaps in executive sponsorship are being solved by establishing entire groups to do the oversight and management. Properly addressing the executive sponsorship role is the first step in creating effective governance. Successful executive sponsors can identify where other gaps exist in alignment, leadership, and change management and avoid setting up staff structures to address these issues.

Best Practices for Addressing Problems Common to Groups of Projects PMOs are poorly understood and so their value is often thrown into question. As many companies have found them beneficial, however, time should be devoted to understanding their applicability in specific situations. Below are some guidelines to follow: – Do not use the term PMO. Create a name that describes the function being performed. – Do not create a generic group that handles disparate functions. This confuses its function and tends to hide the value it provides. – When your organization needs to manage or govern groups of projects, start by using small temporary teams to deliver specific solutions to definitive issues and disbanding them upon completion of that task. Make sure the charter clearly states that the group is temporary and define its success criteria. Establish a longterm structure only when all other avenues in solving a problem are impractical or fail. – One temporary structure that is very effective in many situations is the executive sponsor role. Deficiencies in this role can cause many of the gaps that oversight and management groups have been created to address.

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Before making a group permanent, ensure that it is not filling a void somewhere else in the organization. Spend time analyzing and fixing that issue directly. Most PMOs are permanently staffed groups having characteristics to promote and perpetuate their own existence. Temporary task forces, taking the place of PMOs, have proven more effective in addressing and solving many issues, while not flirting with the creation of new bureaucratic structures. Do not create a group in order to delegate accountability. PMOs fail when they diffuse accountability or focus on administrative excellence over providing value by solving issues. By the nature of their access to executives, enterprise project bodies can be more beneficial than departmental management offices. However, they too can fall prey to becoming overburdened with process. Create a charter for the any oversight group stating its: – Goals. – Value targets and timeframe to achieve them. – Expected lifetime. – Function as management or governance. – Responsibility. – Accountability. – Triggers to indicate when it has achieved its goals. – Actions to take if it has not achieved its value targets in the expected timeframe.

Project and Middle Manager Takeaway Project managers should work to clarify the needs of oversight and management functions inside the organization. This includes suggesting more descriptive names for the groups or its subcomponents and suggesting alternate solutions that are temporary or part of existing groups (as in training and development). Shy away from suggesting governance structures that are permanent.

Executive Takeaway PMOs have met with inconsistent results. This is an outcome of being poorly understood and the problems they are trying to address being different depending on each individual company’s needs. Part of this is that the PMO is too generic a term to have a proper discussion on how it should perform. Companies should use terms that are more descriptive of the oversight or management being performed. Key factors to keep in mind are: – When setting up a project oversight of management group refer back to the best practices.

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– – – – –

Staff organizations often lack effectiveness resulting in self-perpetuating bureaucracies. Lean philosophies are often more effective. Focus on customer value, and associated metrics. Oversight is not a replacement of executive engagement or leadership. Temporary entities using subject matter experts for addressing specific problems in an expeditious approach should be explored prior to creating staff positions.

Long-term oversight is beneficial if it is addressing external compliance, risk, or other areas where the company has little influence on an enterprise level.

Applying These Concepts Organization Wide Questions 1.

List the PMOs that you have worked with: a. What does the acronym stand for? b. Identify the problems they are trying to address. c. Describe whether they are actually governance or managerial in nature. d. Determine how you could make them temporary. 2. Why is a PMO that is focused on maintaining alignment damaging to other parts of the company beyond its projects? 3. For each PMO in your company, develop a charter for it as outlined in best practices. Do they meet the list of best practices?

Project and Middle Manager Centric Questions 1.

How could you do your work differently to reduce your reliance on your organization’s PMO? 2. List the functions of your company’s PMO that are bureaucratic or overburdening? How could you change them to be less so?

Executive Centric Questions 1.

Describe the effectiveness of your PMO(s). a. Do they have written charters? b. What are they accountable for? c. If there are multiple, how do they interrelate? Is this truly efficient?

214  Chapter 8: Value Driven PMOs 2. Describe how you could take your PMO and move its functions to other roles in the organization that would leverage their strengths (project manager training to training and development).

GAP 6: Project Leadership Leadership is not about men in suits. It is a way of life for those who know who they are and are willing to be their best to create the life they want to live. —Kathleen Schafer

Chapter 9 Leadership’s Relationship to Projects Leadership should be more participative than directive, more enabling than performing. —Mary D. Poole A leader takes people where they want to go. A great leader takes people where they don’t necessarily want to go, but ought to be. —Rosalynn Carter True leaders understand that leadership is not about them but about those they serve. It is not about exalting themselves but about lifting others up. —Sheri L. Dew

Each troubled project comes with its own variety of challenges. But one is common to all—leadership. I have yet to be called in to recover a project that was surrounded with great leadership. There may be one or two leaders, but they are too few in number or in the wrong role to have a positive affect on the project. To get to a solution, you need to understand the second aspect common to all failing projects—the frantic condition of the organization in combination with the executives’ state of “immediacy.” Executives need answers on which direction to go and they want them now. Do they stop the project? Does the project’s scope or personnel

DOI 10.1515/9781501506390-009

218  Chapter 9: Leadership’s Relationship to Projects need to change? Is it a problem with a technology or the organization’s capability? When can the project be completed? What is this going to cost? Leaders are required to recover failing projects. They must gain trust rapidly, address issue objectively, and be capable of making or recommending decisions quickly. If the organization’s executives decide not to cancel the project, the recovery manager is the most likely person to be running it. He or she will need to make many more decisions. But there are still many hurdles as the state of confusion and frantic environment is going to take time to abate. Bosses will want the burn rate cut, teams to focus, and get the project completed as quickly as possible. However, they are probably divided on how to achieve success, an executive sponsor may be missing or disengaged, and steering committees may be non-functional. Customers have likely lost trust and are close to losing hope. The team members know the issues, but are surely demoralized, have not been empowered to correct them, and are probably blamed for the failure. In some cases, nepotism and favoritism limit options and furthers the helplessness of the team. In this disarray, consternation is the rule of the day, because anyone making a decision inherits the blame. Some decisions are easy. For instance, stop overtime. Why pay extra when there is no clear direction? Other decisions are harder. Corrective actions are going to include cutting scope, taking a hard stand with the customer, and maybe removing or replacing some team members. The changes directly affecting the team need to happen swiftly—dragging out team and scope reductions can devastate morale. Rarely will a decision be popular. Even cutting overtime will frustrate people accustomed to the additional money in their paycheck. The project is in crisis mode and a directive or expert leadership strategy is the only option until there is more knowledge of the team’s capabilities and the problems. As time progresses, some team members surface as better leaders and decision making can be distributed. The recovery manager is engaged in some decisions, coaching on others, and empowering some people to make others. Eventually, he or she turns into an on-call, coaching resource. Flexibility in leadership style helps morale and builds trust within the team and with executives. Respecting team members, making informed decisions, and being accountable are the underpinnings of rebuilding a team that can drive a project to a successful completion. These are some of the core attributes of a leader. In this case, a situational leadership style utilizing multiple leadership strategies works best.

Leadership Basics Tomes have been written on leadership. It is an art and, although it can be learned, no class or book will give you what you need to be a good leader. Some people have the genetics, intuition, or childhood experiences to make them naturally good leaders. The rest of us need lots of introspection, advice, success, and practice. Not all

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leaders are good in every situation. Some of us can lead companies, others can lead projects, some can lead volunteers, and other people seem to have the ability to lead anyone. Some people do not want to lead and others cannot. There are a few who try and fail and a few that do not realize they have failed at leading. There is no set formula. The opening story describes a special situation that requires a mix of leadership strategies that change over time. Many “leaders” get that label from their position in the hierarchy of the organization. It may be that they are elected to be on a leadership council of a professional organization or they are promoted due to superlative professional or technical performance. These are leaders who are placed into a role and often have no training on what it really takes to be a leader. We have all suffered under some of those reigns. Leadership, however, is not exclusive to the people at the top of an organization. In fact, many top executives are dismal leaders. Leaders are needed throughout the organization. We need leaders for divisions, departments, initiatives, projects, customers, clients, and individual contributors. Since we have trouble getting good leaders to run our governments and companies, we have even more difficulty finding people with leadership skills to work at all levels within our organizations. If the goal is to complete projects successfully that deliver value to the customer, then leaders are required throughout the hierarchy—from the executive to the individual contributor. Too often the leadership characteristics of the people working on the project are overlooked. Individual contributors—analysts, architects, builders, designers, developers, trainers, and testers—collectively meet with the customer more than most other people associated with the project. In the course of doing their jobs, these individuals lead the customer toward a solution that the customer needs versus wants and have the technical expertise to translate those wants, needs, and desires into a set of deliverables that a project team can create. This process is often referred to as “leading the customer through the process of discovery” (a technique to be discussed in Chapter 11, “Leadership Traits and Actions”). The operative word is lead. If the project team tries to tell customers what they need and not let customers discover that for themselves, customers are less likely to buy in to the idea. Executives, relationship managers, and even project managers are too far from the end user and detailed knowledge of the solution to intimately influence their decisions. The team’s members, who talk on nearly a daily basis with the end user about their problems and potential solutions are close enough to influence the troops. To understand how to correct the dearth of leadership in projects, we need to understand three areas: 1. How different leadership styles relate to projects. As already mentioned, there is more written about leadership than there is time to read. We need to get grounded on what traits and actions are most relevant to creating successful projects. 2. How to recognize leadership deficiencies in our organizations so that we can apply the appropriate corrective action. 3. What techniques to use to start changing the leadership deficit in each situation.

220  Chapter 9: Leadership’s Relationship to Projects Some of these items apply to any job. For instance, motivation techniques are the same at all levels of the project management stack. Others are more tightly associated with a specific role. Executives may need to use leadership strategies on their board that have little use on a project, while project managers use “leading up” strategies to manage their stakeholders and customers.

Leadership Strategies A leadership style is actually a composite of various leadership strategies. The reason is that various situations require different strategies. One strategy is insufficient. Your style is a product of how you use and deploy these strategies. We each have a basic personality that directs many of our actions, but when trying to lead people if we do not consciously adapt to specific situations, we probably will not get the best results. Unlike business strategy, which takes thought, there are a number of great leaders that never think about a leadership strategy. Others, like me, need to be very conscious of it. Let us first look at the most common strategies. Bill George does a wonderful job of defining these strategies in his book True North, Discover Your Authentic Leadership, but does not emphasize the need to use multiple. He defines six different styles of leadership—directive, expert, engaged, coaching, consensus, and affiliative.i Directive Leaders: This form of leadership is compliance and obedience based. There are specific areas where it is used effectively (for example, some military situations, emergency response, and the like), but is best used in short spurts in a time of crisis. Quite often the strategy is used by someone who is a subject matter expert needing to solve a problem. This style is best used in attaining short-term goals. Expert Leaders: Expert leaders often have a strong component of direction in their style until they build a team of highly competent self-directed experts. They rely on their own and other’s expertise and knowledge to create and achieve goals and visions. Consensus Leaders: Consensus leadership focuses on building agreement through participation and agreement of everyone. This style of leadership is slow at making decisions, but often can be effective at building allegiance to the decision. This is a common form of leadership in volunteer and non-profit organizations. Engaging Leaders: The engaged strategy is visible and upfront. These leaders are driving the creation of a shared purpose and vision. They rally and mobilize troops around that purpose and vision, by questioning, listening, motivating, and encouraging people.

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Coaching Leaders: A coaching strategy in leadership has the goal of developing others for leadership roles. It, like engaging and affiliative, is a long-term strategy focusing on building leadership as a core strength in the organization. This leadership strategy is very tolerant of mistakes and sees them as building blocks for strong leaders and solid character. It encourages the process of discovery for arriving at a solution. Affiliative Leaders: The affiliative strategy works to create emotional bonds and harmony. It requires excellent soft skills for pulling people together by building bonds between them. Its focus is long-term and relies heavily on delegating to groups for making decisions. In general, people have a core style made up of these strategies that fits with their personality. Few people can genuinely master and move fluidly between all of these strategies. However, all of us should learn to use multiple strategies to employ in given situations. Figure 9.1 shows the six strategies and how they relate to one another with respect to type of control, focus, and centralization. Directive is the most centralized and most authoritarian and has applications when immediacy is of prime concern. The affiliative strategy provides the most autonomy and decentralization and is often seen in organizations that are looking for long-term sustainable results. Popular thinking, as well as experience, says that the further up and to the right you advance your strategies, the more innovative and productive your teams will be. Directive styles are too restrictive, but decentralized leadership cultures require time to develop and mature.

Figure 9.1: Leadership Strategies

222  Chapter 9: Leadership’s Relationship to Projects Using multiple leadership strategies is not only useful when working in stressful situations, but also across cultures. Its obvious use is when you enter a culture that is different than the culture you are in. If you are from a directive culture and start working in another culture that is egalitarian, the directive strategy simply will not work. The people will revolt. Likewise, if you move the other direction, from egalitarian to a hierarchical culture, you need to start by taking a more directive approach or people will not know what to do. They feel lost and will quietly wait for you to tell them what to do, while you are waiting for them to move forward. Eventually, equilibrium will be reached usually with a culture between the two original cultures. These cultural shifts are not just between countries, but between companies and their divisions. Case Study: Project Manager to Business Leader I know an accomplished project manager who commands great respect as a leader running extremely difficult projects. There were dozens of testimonials identifying how he had led teams through muck and mire to success. He decided to grow his single-shingle consulting business and hire employees. As he was continuously hailed as a great leader that could adapt his style to nearly any situation, he was confident that he could make his business a going concern. The business flourished . . . at first. After a couple of years, though, his employees started to get annoyed with him and grumbled about his lack of leadership skills. He worked to address this and got in worse shape because he lost self-confidence and faltered at acquiring new business. Later, when he sat back, depressed about his failing business he saw that his leadership strategies worked wonderfully in projects, he had mastered all six strategies, but failed miserably in building long-term commitment from employees. He did not articulate his vision and mission. His employees were working for paychecks. He went back to being a sole proprietor and stuck with what he was good at—situational leadership.

Researchers like Peter Senge and Jim Collins do not use such labels or equate them to aspirational levels. They look at how leaders use them as tools. Collins defines an evolutionary scale that culminates in the Level 5 leader. At the lowest level of his scale is the capable individual, who graduates to a contributing team member. This is the formative level where interpersonal skills first come into play. Once these leaders get to the point of being able to organize people to achieve a common goal, they reach Level 3 as a competent manager. Their entry into the leadership world is when they act as a catalyst bringing vision and people together. Collins postulates that Level 5 leaders focus their ambition primarily on the organization rather than themselves. Although they have strong egos, they channel their egos into creating a great company.ii Creating a shared purpose, passion,iii and vision while tackling mental models that stand in the way of achieving those goals are how effective leaders become excellent leaders.iv Without exception, books from the most highly respected authors— Jim Collins, Dan Pink, Peter Senge, Tom Peters, Bill George, and the like—see that great leaders motivate their teams by allowing them to master the skills that they can

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apply to a shared vision and purpose, and giving them autonomy within a framework to combine those two attributes to achieve excellence. Utmost humility and strong professional will are the main ingredients to inspire people. v The six leadership strategies—directive, expert, consensus, engaging, coaching, and affiliative—are not exclusive. They are used in tandem to address situations differently.

The Dearth of Leadership Unfortunately, one of the major issues in today’s business is the dearth of It is at the heart of every project failure, but it is pervasive throughout organizations. Nowhere is it more apparent than in middle management. The scenario plays out hundreds of times every day around the world: An executive calls an urgent steering committee meeting as she has just heard that one of the projects in her portfolio, a seemingly simple project doing a routine upgrade, is projecting a 20 percent cost overrun and will be three months late. How can a project go that far off track since the executive team meeting? Managers scramble to get their stories straight, determine who to blame, form opinions and alibis, and pummel the project manager for failing to manage the project correctly. The project manager has produced numerous monthly status reports warning of forthcoming issues. The reports, though, were manipulated to amplify the gains and downplay the issues; the executives were sheltered from the news to avoid overreaction. The goal of middle management seems to be to report only good news and now its focus is finding a scapegoat. For this scenario to happen, something has broken down in middle management. How can middle managers fail to see the impending doom? This layer is supposed to monitor projects, consolidate information—both good and bad—and provide guidance to project managers and executives. When the trouble is finally exposed, these managers are now in a position of reacting as opposed to directing. They try to push the problem down and eventually come in to “help” the project. Hearing “I am from management, I am here to help,” as mentioned in the opening chapters, is a project manager’s worst nightmare. This form of help most often consists of more reports, indiscriminately chopped scope (with no regard to value), and imposed time constraints rather than determining the root cause of the delay, identifying value-added components, and focusing on interim deliverables. The organization moves from strategy to short-term tactics—it needs something quick. The result is a poorly developed product that is still over budget, requires excessive time and money to maintain, that the customer dislikes and may never fully adopt. The project’s poor performance shames the delivery organization, diminishing nearly any chance of repeat business. In the end, middle management gets credit for the rescue, the project team receives

224  Chapter 9: Leadership’s Relationship to Projects the blame, the customer is displeased, the business loses a repeat customer and a referral, and the core problems are not addressed. Although a hypothetical story, I have seen this play out dozens of times. Middle managers in multiple situations have told me “No, you cannot say that. It will make the project look bad.” It is so pervasive I have even seen it printed in current project management training guides that management wants to hear the “good news of how well the project is moving” with no instruction on presenting bad news.vii Middle Management Culture The problem stems from middle management’s culture. Middle managers fail to report or act on actual status, which eliminates the opportunity for small mid-course corrections. Their hope that the project will correct itself works just often enough, by the heroic efforts of project teams, that projects occasionally hit their target. For them, ignorance is much easier than resetting expectations and gaining alignment. The case study in Chapter 1, Affordable Care Act Marketplace Failure—Cover Oregon, is a prime example. To exacerbate this problem, current business culture rewards the firefighter and penalizes the pragmatist. The white knight running to the rescue leaves us in awe. He or she is exalted as triumph is forthcoming. The urgent rescue produces immediate gratification at the cost of a robust solution and yields only short-term benefits rather than properly addressing the problem using logical analysis and resolving the root causes of the problem. Meanwhile, the cautious pragmatist is decried as being a pessimist or, after the project gets in trouble, creating a self-fulfilling prophecy. Too often the leadership style of middle management is directive or expert in nature. This stems from the fact that middle managers are promoted on technical talent and rarely have access to leadership training. They are simply trying to get their job done. Leadership is often far from their minds and they simply want people to follow direction. This form of leadership is really management—asking for compliance. It is also the simplest form of directive leadership. However, it is very ineffective at motivating cognitive oriented people. As discussed above, their drive comes from the freedom to be self-directed and focus on creative solutions. The Arbinger Institute calls this directive form of leadership self-deceiving—trying to act like a leader, focusing on “what” needs to be done, and in the process turning people into objects. In its business novel Leadership and Self-Deception, the writers review a series of scenarios to demonstrate how we tend to treat people in demeaning fashions and perpetuate negative reactions in others, all resulting in poor morale and diminished performance.viii They give numerous examples of how our culture promotes negative features, in people and other things, rather than to develop a positive approach. Without saying it directly, they outline the directive form of leadership as a right-and-wrong style of management, promoting defensiveness in a cognitive based team. As the stress in a setting gets worse, people retreat into a role where

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they become less willing to work in a team, focus on a series of objectives for themselves, and fail to help others make their goals. Arbinger refers to this as being “in the box.” As the attitude perpetuates, people start blaming others who they could have helped to avert the problem. We need to step outside “our box” and care for others as people, not objects, and we will get more done. Arbinger illustrates this process in a very simple personal example that is worth repeating as nearly every parent has felt this way once in their child’s early life. The writers ask you to imagine being a first time parent and you have to be at work in the morning. Your baby starts to cry and you know you should get up to check. However, you have this urge to lie there and wait for your spouse to acknowledge that he or she hears it, so you can go back to sleep. However, your significant other does not move. You start thinking about all the reasons your spouse should get up to care for your child and how selfish your partner is for not doing it. You start to villainize your spouse and put yourself on a pedestal. Of course, too much of this behavior and your spouse will do the same thing. You are literally creating stress and strife in your own head. We do the same at work when we focus on our own goals. Others become objects who have less and less chance of doing something right. We actually need them to fail to justify us objectifying them. Our attitude gets so bad that we can actually get mad when others do something correct as it shows that we were wrong about them and this thwarts us from having someone else to blame. The cycle gets out of control. Unfortunately, that is where many of our middle management roles have devolved to as our blame-driven culture exacerbates the problem. Leadership is all About People In all of this, the people assigned to solve the problem—middle management—are the problem. For whatever reason—the Peter Principle, ignorance, inattention, or the desire to be a hero—middle managers by and large are not monitoring projects or correcting problems as they appear. Ignorance is no excuse. Attempting to blame incomplete project reports is only denying the manager’s fiduciary responsibility to validate the project’s progress. No matter how one looks at it, middle managers are not doing their jobs. Experience provides four reasons that this happens: 1. The Peter Principle (promoting someone to their level of incompetence) has taken on a new dimension. With businesses’ rapid worldwide expansion in the first part of this century, finding qualified resources is difficult. Too many people are promoted to fill positions without thoroughly vetting their leadership and management qualifications. 2. Companies over-emphasize short-term gains. The drive is for quarterly earnings, month-end numbers, maintaining triple constraints (scope, schedule, and budget), and ignoring the project’s value. Companies focus excessively on “the

226  Chapter 9: Leadership’s Relationship to Projects now” versus a long-term view of the product’s value. The “now” mentality creates an atmosphere where if it is not a problem now, it is not worth looking at. The focus is on today’s news, not tomorrow’s. We want sensations. 3. Focus on wins. We do not value pragmatism or the concept that not every project is going to be a stellar success. If issues arise showing a weakness in an initiative, the reaction is to keep it quiet. Admitting that there may be problems we cannot handle shows weakness—and weaknesses are bad. The result is suppressing the bad news and amplifying the good. 4. Everyone admires the hero who comes in to fix the problem. Repeatedly, praise goes to the stereotypical white-hatted cowboys riding in on a gallant steeds to solve all the problems in one swift, albeit shortsighted, swoop. Heroic actions continue to capture our imagination and wonderment. We, as a society, envy their abilities. In business, they are revered and promoted. Executives keep tabs on their whereabouts and pull them in when middle management fails. Middle management is tantalized by technology, possessed by process, and removed from their resources. This prioritization must change. We need to hire people that have experience, not certifications; people with interpersonal communications skills, not skills at reading status reports; and people who talk to team members, ask the right questions, make the right connections, and question direction. Checklists, status reports, and weekly team meetings are no replacement for daily interaction with our teams—hands-on and in their face. We spend too much time trying to impress the boss instead of spending time with our team members ensuring they are doing the right work. People-to-people interactions make businesses run. A Note on Technology As mentioned above, managers are smitten by technology. Solutions, however, follow a tried and true path—strategy, people, process, and only then technology. As often as technology is in the headlines and the occasional time that technology seems to lead the solution, it is not the answer. Based on his analysis of thousands of companies, Jim Collins’ final thesis is that technology does not create momentum, technology accelerates it.ix A good leader is not lured by technology and realizes it is only a tool to improve efficiency, reduce errors, and create reproducible results. Implementing technology to solve a perceived problem without first ensuring the right people and processes are in place almost always meets with doom. Experience in rescuing dozens of technology projects yields one fact: Defining and implementing a successful technology strategy is equal parts people and process, 15% technology, and 5% luck. The common theme of the reviews on my first book, Rescue the Problem Project, is that it pays “excellent attention to how people, at all levels of management, impact the success or failure of a project.”x

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A couple of years ago, I had a conversation with a prospective client’s CFO. He was having a discussion of the characteristics of the new CIO his company wanted to hire. This company had grown drastically in the past 48 months through private equity acquisition of about a half-dozen businesses to create a distribution network that covered the United States. Its challenge was that they had not integrated these businesses into a single ERP system. At the time of our conversation, it had made two failed attempts to merge two of the acquisitions. It had failed horribly—to the point where customers were finding new distributors. The CEO wanted a CIO who was an expert in technology. The CFO wanted a CIO who was strong in technology, but understood how to reestablish the employees’ trust in senior management and could navigate the politics involved in getting the dozen formerly independent entities, with a total of 26 or more distribution centers, to agree on one set of processes and sell that methodology to their teams. The CFO knew that the damage of the prior failures would completely undermine a technology-centric solution. He saw the role of the CIO as not selling the latest technology buzzwords, but addressing damage to the company’s brand and image, he or she would have to travel extensively to regional offices regaining trust in “corporate.” The divisions were going to have to buy into the plan and own it. The new CIO needed to have extensive delivery experience with a solid business plan, not just a technology sales pitch. The technology enamored CEO, was not interested in the CIO traveling the country garnering buy-in. He wanted a solution that he would direct people to use. Both he and the private investor did not have the stomach to pay for multiple trips to regional offices—that could all be done remotely—using technology. They wanted a quick inexpensive deployment of an ERP solution. For this project to have the highest chance for success, the CIO would need to be responsible and accountable for the solution and delivery. Accountability, though, is not just someone to blame. Accountability, as we have discussed, means being able to make decisions based on the input and agreement of the operations and distribution centers—a collaborative decision process. Not everyone would get what they wanted, but the core functions would be met for the greater good. Without this, the CIO would not gain the credibility. Without credibility, there would be no trust. The CFO’s approach would not be fast, but it would most likely succeed. As of this writing, two years later, the company continues to struggle, the investors are still frustrated, and it is no closer to an integrated solution. The CEO is still frustrated. First people, then process, and finally technology, it is not a cliché, it is a timetested requirement.

228  Chapter 9: Leadership’s Relationship to Projects Management versus Leadership Management is about control; leadership is about self-direction. Both have components of sell and tell. But managers tend to tell, where leaders tend to sell. Excellent leaders get people to sell themselves. This is never more apparent than in behaviors when something goes wrong. Management is concerned with blame and punishment while leaders, to use the words of Nelson Mandela, focus on truth and reconciliation. The significance in these conceptual differences is huge. Too many of our corporate cultures have devolved into control, blame, and punishment. In fact, our culture seems to be too focused on those three attributes. The minute anything goes wrong, managers are looking for the person at fault—someone they can remove, demote, or fire. That action addresses a symptom and shows action, but it does nothing to solve the problem. Blame and punishment demotivates teams, discourages innovation, and destroys morale. Leaders who focus on truth, resolution, getting the right answer, and doing the right work build trust and create inspired and motivated teams. Leaders paint a shared vision and passion, encourage self-direction, urge experimentation, tolerate failure, and celebrate success. Management is easy, but does not foster sustainable results. It is what most of us learn from the day we are born, condemning mistakes and striving for compliance. Our parents and our teachers control what we do. We get carrots in the form of puppies, treats, and special treatment for good behavior and sticks in the form of time out, removing privileges, and detention. Our schools keep the kids at their desks where they cannot help others. Only in private settings where student-teacher ratios drop do you see leadership principles applied in education. Progressive schools, like Montessori, incorporate leadership into classes where children reinforce what they have learned by teaching others, they learn at their own pace, children are encouraged to experiment and learn from their mistakes.xi They move around the room, their goal is to get a task done over the day, not during lesson time, they work with others, and gain experience. The solution is training, coaching, and mentoring.

Leadership Is Not About a Title As alluded to above, leadership traits are currently not used as the first requirement of promotion into a “leadership” position—mastery at a technical skill is. However, as people are moved up the ladder, their need for technical mastery diminishes. In fact, maintaining that skill is often a detriment. Leadership is about setting vision and enabling others to do the detailed technical work. Unfortunately, position has a large impact on whether people are deemed leaders. Stated best by Peter Senge:

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“The very word “leader” has come to refer largely to positional authority, a synonym for top management. . . . Why not just say “our senior management” or “our executive managers”? . . . But we encode a broader message when we refer to such people as the leaders. That message is that the only people with power to bring about change are those at the top of the hierarchy, not those further down.”xii

This may seem like a semantic argument; however, these subtle messages shape the culture in our organizations and can have a major stifling effect. Position does not make you a leader. We can find leaders in children, janitors, prisoners, and project managers. Real leaders step aside letting others develop the vision, passion, and mastery. They give people the autonomy to do the right work. Continual evolution through education is the key. Learning and practicing leadership’s soft skills become critical. Technical skills are important for directing tasks within your team, not for being a leader. Managerial and technical skills are important for directing tasks; aligning employees, customers, and timelines; and assessing risk. Businesses need leaders throughout their hierarchy. There is a void of leadership in middle management. The dearth of leadership must be addressed through training and promotions based on leadership qualities.

Factors Affecting a Project Manager’s Leadership Style What about project managers? Where are they in the leadership food chain? Three major factors differentiate the project management role from other roles—reporting structure, cost structure, and the temporary nature of projects. Project Report Structure Unlike functional managers, most project managers are considered individual contributors. In today’s matrixed reporting structures, project managers rarely have anyone reporting directly to them. Functional Managers (Figure 9.2) have primarily solid line reporting, which provides them the luxury of having authority. Project managers, on the other hand (Figure 9.3), rarely have any solid-line responsibility. Their project team members report to other managers—functional managers. In addition, project managers have the task of leading the myriad of stakeholders that the project affects. As shown in Figure 9.3, that can be a significantly larger group than the project team. Leadership skills are imperative. Comparing these two figures it is easy to see the project manager’s additional leadership responsibilities.

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Figure 9.2: Leadership Scope of Functional Managers

When project managers are assigned to a project they may have anywhere from one to 500 or more people placed on their team, are introduced to a few dozen (or maybe a few thousand) stakeholders, informed of their goals (often in nebulous, lofty terms), and told to deliver results. They are not in a business’ “management” or “leadership” structure, but they may have hundreds of people they need to guide with budgets potentially counted in millions of dollars—all of this while lacking any solid-line authority over a single person whom they can direct.

Figure 9.3: Leadership Scope of Project Managers

Leadership, however, is rarely included in the position’s required skills.

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Temporariness of Project Teams The second major difference is the temporary nature of projects. This means that the project managers are continually building new teams, working to gain trust with new people assigned to the project (often who they never interview), and may be running multiple projects in tandem. As most projects’ lifecycles are measured in months, project managers are never able to develop a permanent core team, like functional managers or executives. This is a consequence of one of the attributes most project managers enjoy about their job—they rarely get burned out on one type of work, within a short time they move to a new project. This ability to quickly build tightly bound teams is a virtue, but often short-term tactics are used to get the project done. Rarely is there the luxury to use slower leadership strategies that build long-term results. Project Managers Are Outside the Core Business The third oddity with project managers is that many are often not part of the core business operations. Without a doubt, construction managers, system integrators, installers, and the like deliver the company’s products and make a profit. But a growing number of project managers are delivering projects internal to the company that do not contribute directly to the company’s bottom line. They are cost centers. Worse than that, they often get in the way of the operations units by asking for people’s time to help design, test, and deploy the new system. Case Study: No Project Support Time Early in my career, a friend took out a sheet of paper and said, “Pretend this is how much time I have in a week to work my normal job.” He then painstakingly folded over about two millimeters on the short end of the paper. He held it up and said, “. . . and this is how much spare time I have to help you and this project. I know you are doing it for me, but I have no time.” This taught me the value of getting assistance for every functional manager or team member that had to support a project.

Leaders tear down walls. Project managers have to understand other people’s walls and help tear them down. Project leadership needs stronger leadership qualities than a project manager’s functional peers, because project managers have to lead numerous stakeholders over which they hold no authority.

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Women as Leaders Sheryl Sandberg and others have made it politically acceptable to talk about the gender differences in leadership and this chapter would not be complete without a personal anecdote on the topic. In the late 1990s and early 2000s I traveled all over the world working on projects. I learned about culture the hard way and made my fair share of mistakes. The team on the road was almost always male and we spent long hours on airplanes and in airports, cooped up in conference rooms, going out to dinner, and working late into the night on deliverables. We carried our American bravado on our sleeves. Some people admired the life, but it was draining. Shortly after the turn of the century, I was working for a dot-com that had its first large delivery in Taiwan. The team was the usual male composite, but through the turmoil of a forming company, people fighting for titles, others wrestling to show up the next guy, and the stress of long stints aboard, the team suddenly changed and I found myself working and traveling with a core team of three women and myself. One was my boss. I had worked for numerous women in the past, but none had ever been on the road. The difference became apparent immediately when we all met in the business class lounge waiting for our flight to Seattle out of Taipei. The four of us sat around a table sipping on our beverage of choice trying not to think about the dozen-hour flight that was ahead. One of my team members mentioned a situation with her spouse before we had left and the other two ladies each asked questions exploring more about her situation. I had the presence of mind to sit and listen, although I was eager to throw in a comment about an incident that happened to me that was almost the same, but twice as embarrassing. I instead asked how she got out of the situation. After fifteen minutes or so, everyone had listened and asked questions. Nobody had offered better stories or solutions to our team member’s conundrum. She then asked if anyone had any advice. One or two items were rendered and she thanked us. This was the format of the entire trip and the dozen or so to follow during the project. Sitting on the plane, I juxtaposed this with what I was used to: Male A saying something happened over the weekend, Male B having something twice as bad as that, Male C having a story even worse, as they took turns playing one-upmanship. Never would we ask how they got out of the situation or how they felt. We would however give the “best advice” ever. The project teams showed the same differences. The female led teams were far more cooperative and empathetic, there were less arguments, and happier people (including the customer). Fast forward the clock a decade and I found my company had grown to a nice size of about 14 people—an even mix of employees and contractors. We were working primarily on technology projects in electronics, healthcare, telecom, semiconductor, and the like. Then one day it was pointed out to me that only two of the people in the company were male. I had never thought about the mix even though it was completely the opposite of the companies we serviced. I reflected on our hiring process

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and what I valued when hiring new people. I read a number of books on gender issues in businesses. I wanted to understand the difference. The traits of, empathy, humility, accountability, and awareness the actions of listening, non-aggressiveness, and elimination of blame are part of how our culture raises girls. Studies have shown that women accept their failures while not taking credit for their successes—a common action that is used to describe good leaders.xiii These were heavily weighted traits in how I rated candidates. It is quite the opposite of how we see boys. To be sure, there are women who do not fit this stereotype (no one would ever call Sheryl Sandberg non-aggressive) and there are men who can be empathetic. However, I feel that women (in Western society) have been raised with the traits that we look for in good leaders as positive virtues.

Project and Middle Manager Takeaway Project managers usually start their careers as being directive leaders. Over time they refine their skills and run projects that are less centralized and authoritarian. However, organizations expect project managers to manage tasks and be more directive. Your strategies are restricted to the situation around your project, the type of project you are delivering, and the type of stakeholders.

Executive Takeaway There are six key leadership strategies—directive, expert, consensus, engaging, coaching, and affiliative. As an executive, you should be able navigate quickly between these without much thought. In addition, it is incumbent upon the executive team to grow leaders, not through promotion and title, but by making training, mentoring, and coaching available to them, before they are in a leadership role.

Applying These Concepts Organization Wide Questions 1.

For each leadership strategy, identify a situation from your past where you used it. What could you have done better by using a different strategy or blended strategies? 2. What strategies can you put together to deal with ineffective leaders in your organization?

234  Chapter 9: Leadership’s Relationship to Projects Project and Middle Manager Centric Questions 1.

Take a current or recent project and identify various stakeholders and which leadership strategy would work best for them and which would be worst. Explain why. 2. How could you coach executives or executive sponsors on improving their leadership style? It might be helpful to use a specific project where that was required.

Executive Centric Questions 1.

How do you address leadership training in your organization? How can you improve it? 2. What changes can you make to get more effective leaders in middle management? 3. What safeguards do you have in place to identify ineffective leadership?

Chapter 10 The Project’s Leadership Structure It’s not what you know, it’s who you know.

Invisible threads are the strongest ties.

—circa 1914, Unknown

—Friedrich Nietzsche

Do not wait for leaders; do it alone, person to person. Be faithful in small things because it is in them that your strength lies. —Mother Teresa

We all know (or think we know) whom to turn to to get something done in an organization. We know who might support one idea over the next, the resisters, the people who get things done, and those who whine. We foster and grow the advantageous connections and create mitigations around the detractors. These relationships and knowledge are valuable since connections to the right people give us significantly better chances at getting ideas sanctified, funded, and prioritized with a top-notch team to bring them to fruition. What if, however, we were wrong and there were better influencers or we missed a stealth naysayer that could torpedo our idea? The supporters, naysayers, stress inducers, success makers, and the like are the de facto leaders who actually make our companies run—or inhibit their growth. They

DOI 10.1515/9781501506390-010

236  Chapter 10: The Project’s Leadership Structure are not necessarily in the C-, P-, or V-Suite; they could be mid-level managers or line workers. Think how differently the company could run if everyone could see who these people were—especially senior executives? In our research, it was obvious that these people existed in every company’s networks and were crucial to a project’s success. The issue was that someone who was successful in one situation, due to the right connections, was less so in another because their connections did not have the same influence in the second scenario. This leads to an introduction to Vikas Narula, the founder of a small start-up in Minneapolis called Keyhubs®. We spent time talking with him and reviewing some of his data showing who was influential inside companies. He was a wealth of knowledge on how people’s connections can affect companies. One study he did was intriguing as it shows how blind we can be about who actually leads our companies and how that can influence their success. His client was a new executive that wanted to take a languishing organization and make it more innovative and customer focused. To that end, they surveyed all of their employees. Two of the questions were: – Who do you perceive as customer-service role models? – Who in the organization actively blocks the forward momentum of new initiatives?

Figure 10.1: Customer-service role model

The replies were plotted on a chart showing the person’s place in the organizational hierarchy (CEO being tier 1 at the top), lines showing connections between people, and each employee’s bubble size representing the number of other employees answering that that person had the attributes indicated in the question. As shown in Figure 10.1, the leader of customer service was four layers down in the organization and notably not connected to or known in the executive tier. To find the naysayers, though, the CEO had to look no further than his staff-meeting table

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(see Figure 10.2). Three of the four barriers were his direct reports with the fourth reporting to the biggest obstructionist to innovation. As noted in Chapter 6, “Organization Change Management and Projects,” the people who provide the greatest resistance are not the people on the front lines. They are the people who, because of the change, could lose the most power or be held accountable.

Figure 10.2: Employees who actively block new initiatives

Sources of Leadership The preceding story illustrates of how leadership commonly manifests itself in an organization that has neglected to make a conscious effort to cultivate it. To address this, we need to step back and look at the macro-structure of transforming corporate goals into projects. To run projects successfully and repeatedly, leadership has to be distributed over the four tiers of the organization—executive, middle management, project manager, and project team. Distributing leadership properly over this “stack,” accelerates decision-making and issue resolution by getting leadership as close to the area of execution as possible. Decentralizing leadership creates a leaner organization by eliminating much of the managerial hierarchy. Every project’s leadership stack is basically the same: – Senior executives set goals. – Middle managers deconstruct goals into projects. – Project managers orchestrate a team to build the deliverables. – The project team creates and delivers the components that constitute the goal. In small organizations, both middle and project managers may be absent from this stack, but their functions remain intact and are dispersed between the executives and project teams. As organizations grow, they generally add project managers first, because customers see the value in a single point of contact dedicated to the project. Customers quite often ask for it. Eventually, as growth continues, the fourth tier—

238  Chapter 10: The Project’s Leadership Structure middle management—is added, but customers usually see little direct benefit from it. Not that middle management is unnecessary; its addition distributes the workload and improves internal processes. Care must be taken to ensure the right people are placed in these positions—people who are leaders (or capable of becoming one) and understand the need for customer value. With the exception of projects delivering output directly to a consumer channel (such as spec-houses, new product development, and the like), most projects consist of two mirrored project teams—one in the delivery organization and one in the receiving organization. If the project is internal, the senior executives (such as, the CEO or other C- and V-level executives) are the same for these two projects. Usually the delivering organization has the larger project team, but the receiving group (who could be the end user or project customer) often has a similar structure including the same four tiers described earlier in this section. Here we will use the delivery side’s perspective, unless otherwise noted, but the leadership responsibilities are the same.

A Role’s Leadership Responsibilities To understand how leadership has to be distributed throughout the project stack, let’s look at the four generic roles—executives, middle managers, project managers, and project teams. Some leadership responsibilities cross all levels. Viability of the project is an example. Projects can become inviable for three reasons: Business environment changes, the customer’s desire or needs change, or the project proves too challenging. Business environment changes could be so severe that an executive may determine that the project has to be canceled due to rechanneling funds to higher priority projects. It is not that any given project lost value, but others gained more. Similarly, the project team could make the recommendation for cancellation. For instance, a project’s architect could determine that current technology or materials are insufficient to meet the specifications. He or she needs to work with the project manager to build the case for recommending cancellation of all or part of the project. These are fiduciary responsibilities that relate to the overall project and everyone has a hand in ensuring they are addressed. Responsibilities differ based on what situation leadership plays at any given position. As implied by its name, situational leadership is narrowly focused on a given condition and what action to take depends on the situation. The intent is to prime the pump and help you understand how leadership impacts the daily lives of every role on the project. Situational leadership is much more prevalent in project management than in other areas of most companies. This is due to the nature of projects; that is, creating unique products and services. Their scope is narrow and often quite specialized, they

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are always dealing with change, and the teams are usually different from project to project.

Executive Leadership Attributes Most people think about executives when the topic of business leadership arises. Good leadership in the executive ranks is crucial for any company or organization, but leadership is not exclusive to them. Peter Senge’s quote in the previous chapter says it well. Companies that have a culture that refers to senior executives as “leadership” without regard for whether they can lead, is damaging in that it biases the people with respect to who is allowed to lead and what leadership looks like. Many aspects of executive leadership are important to projects. First and foremost, senior executives define the culture of the company and that directly affects every project. The effect may be positive or negative. Small companies can start with a highly directive leadership style, where the CEO/founder is intimately engaged in every project. Many companies start that way and grow as the founder brings on capable people to run the projects. Founders who fail at doing this limit the growth of the company. They need to change their leadership styles by moving away from the directive style (see Figure 9.1). Executive leadership styles tend to permeate the company. A company with executives accomplished at delegation, often do a better job at delegating at all positions of the company. A style promoting micromanagement also proliferates throughout the organization. Executives who coach people promote a coaching strategy through all of their subordinates. Unfortunately, poor leadership styles propagate through the organization as fast, if not faster, than good ones and it takes strong middle management to create a positive subculture. Some projects alter the culture. In these cases, executives (often the CEO) are critical drivers in the adoption of the project (as mentioned in the opening stories in both Chapter 5, “Understanding Business Change Management,” and Chapter 6, “Organization Change Management and Projects”). Their role may be the executive sponsor, champion, and end user. If the project is to set up the framework for a new culture (changing the culture does not meet the definition of a project, as it never ends), executives at the highest level need to change with everyone else and they must champion the change during the project and sustain it afterward.

Executive Engagement Without a doubt, the most common complaint on projects is lack of executive engagement. This was confirmed in our 2014 survey on executive sponsorship with 100% of the project managers surveyed indicating engagement was in the top two issues with

240  Chapter 10: The Project’s Leadership Structure executive sponsors (95% had it as the biggest issue). As nebulous as it is, there are many distinct actions that constitute engagement; there are as many negative actions. Proper executive engagement will prevent 50–60% of project failures simply due to the project team’s increased exposure to the bigger picture. Executive suggestions come more fluidly and help guide project teams in directions they may never have considered. Executives should: – Work with project managers to develop a workable communication plan. – Make themselves available to the project team. – Attend key meetings on a regular basis. If unable to make a meeting, send notice, but do not make missing meetings a regular occurrence. – Be aware of the project’s status. – Critically read and question status reports. – Establish guidelines with project managers on alerting, not alarming, them when extra attention is required. Although scheduled meetings are the most efficient for executives, risks and issues on the project pay no mind to that schedule. Executives should not: – Delegate their tasks, responsibilities, or accountability. – Send delegates to meetings, except on very rare occasions. – Say they will attend a meeting and not show up. Executives have a reputation of being involved in the project twice—once at its kickoff and again at its closing celebration (assuming the project was a success). They need to show up more—a lot more. Otherwise, the project team assumes they are not interested. It is worth repeating that I have heard executives claim that they have had dozens of meetings with a project team, but when queried a little further they made a single pitch to each department about the importance of the project. Each team member saw them once; the executives feel they have met team members hundreds of times, when in fact they met with hundreds of stakeholders once. Most projects have monthly meetings with executives. Executives must show up. They may not learn anything about the project, but they show concern and the importance of the project. Executives should take a few minutes in each meeting to mentor project managers on the value of the project to the end user, the organization, the executive, and the project team. This unstructured conversation underscores that goals and desires, but often restates something that can be obvious to the executive, but less so to the project team. These conversations help shape what data are important and how to summarize it in a useful manner. Mentoring, though, is a two-way street. Astute executives will learn something more about the project and the people. Executives need to be open to listening for

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direction from the project manager (as the project manager should be telling executives what they should be doing to help). If the executive sponsor has to focus on other higher priority issues or projects, complete the reprioritization by stating how it affects the projects in flight. In many cases, this means taking two simple actions: 1) explain the ramifications to the project manager, and 2) find another executive who wants to sponsor the project and has the appropriate time. In some cases, it may be necessary to cancel the project or put it on hold. Many people overlook the option of stopping the project because it sounds rather drastic. However, people forget to step back and reflect on the premise of the first sentence—focus on other higher priority issues or projects. Since other work has been reprioritized, that reprioritization needs to be applied to all projects and some projects need to be de-prioritized. It may not be that any given project is less important, but other projects have increased in importance and are a better use of company resources. As basic as these actions sound, changing priorities is the leading cause for executives being accused of non-engagement. The second largest issue is indecisiveness. Executives have an obligation to be decisive when issues are escalated. If they cannot make a decision, they need to ask the project manager for what additional data are required to make the decision. If executives take the responsibility for making the decision after gathering their own data, they need to inform the project manager when to expect a decision and, out of courtesy, what those data are. Lastly, the executive can push the issue back to the project team. That can expand a project manager’s envelope of authority. Without clear direction on the fate of the decision, confusion ensues and both money and time are wasted. A good example is in one enterprise resource planning (ERP) implementation at a manufacturing company that we were asked to straighten out; the goal was to standardize billing across all countries and consolidate it in the United States. One country office, Japan, refused to use a US billing address. This office’s executives felt that it would offend their Japanese customers and hurt business. The project manager escalated the issue as this was a core requirement of the project. The executives never made a public decision to let the office depart from the requirement. They were concerned that forcing the office in Japan to conform would alienate employees and customers, but allowing the departure from the new process would open the doors for other countries to do the same. The result was confusion and an open issue that the project manager had to keep addressing. Eventually, the project was closed and the office in Japan used a different address and forwarded billing correspondence to the US office. There are many different ways this could have been handled, but making a decision and policy would have saved time and money.

242  Chapter 10: The Project’s Leadership Structure Projects That Change Culture Some projects need more executive involvement because they change the organization’s culture. This seems like an obvious statement, but what gets lost is that through a cultural lens, almost all projects affect culture. Real or perceived, executive noncommitment is why so many organizational change projects have lackluster results or simply fail to stick. The best example of how executive engagement can help or hurt a project is when looking at a project that affects the company at its foundation—one that changes the culture across much or all of the organization. The opening stories of Chapters 5 and 6 are prime examples. In this and other chapters, there are examples of dissenters and resistors challenging project direction and adoption. The responsibility for building a strategy to resolve these lies with executives. The source of the resistance could be rooted in past experience and whether the executives are lenient, overbearing, inward facing, outward facing, hands-off, or engaged. Regardless, executives must walk the talk and hold themselves and others accountable for using and adopting the new solutions.

Executive Responsibilities That Require Leadership Executives include both senior executives (CEOs, CFOs, and so on) and the executive sponsor. We have covered the executive sponsor as a standalone entity in prior chapters, but need to address them again in the context of the other roles in the executive suite. In fact, anyone in the executive suite could be a sponsor. In small companies or projects that affect the organization’s culture, the CEO could be the executive sponsor so using the term executive refers to both roles. Responsibilities that require leadership are: – Leadership Style for the Organization. Setting the tone for the leadership style is the most critical leadership activity in the company. It truly drives the culture and other leadership activities. It proves to be the most challenging issue in many companies. Executive leadership styles that consist of engaging, coaching, and affiliative strategies are best (see Chapter 9, “Leadership’s Relationship to Projects”), but that includes the assumption that significant attention was paid to getting the right people in the organization. Traversing the organization from the senior executives to the project team, though, styles can differ. One level can use a directive strategy, while another can be more autonomous. Too directive a style at the top, though, does not allow the lower levels in the organization to lead. In these cases, decisions and leadership come from the top. To get the autonomy that some projects need, a subculture

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must form around an experienced middle manager with strong leadership skills. This can be extremely cumbersome and slows project progress drastically. For large organizations, the executive structure could have multiple styles. The CEO could be affiliative and the executive sponsors engaged or coaching. The leadership style of executive sponsor depends on the seniority of the project manager—the more experienced, the more autonomous the style can be. Vision and Defining Goals and Value for the Organization. Depending on the type of project being run, vision, goals, and values can take many forms. Regardless, at the inception of the project, the executive team creates the vision and goals to ensure the value and goals align. If the business environment or project scope changes, executives have the final say on the project’s direction (or existence). Goal-Project Alignment. The decisions surrounding maintaining alignment of the project with organizational goals falls to the executive sponsor. This helps preserve the value to the organization. To maintain alignment, executive sponsors will be leading not only the project, but the senior executives and customers. They could be negotiating, persuading, and directing each of these groups at the same time. Although the project manager needs to assist by supplying accurate and timely data and coaching the project team, the executive sponsor is accountable. Executive-Level Customer Relationship. Whether this is an internal or external project, executives function as high-level relationship managers. They insure that the commercial agreements are sound and mutually acceptable. They are the highest level of escalation when resolving issues. Most of the leadership at this level should be persuasive in manner, but occasionally they may need to rely on negotiation skills. Goal-Project Advocacy. Some goals and projects have explicit champions who act as cheerleaders for the cause. In some cases, especially those noted in In Search of Excellence,i champions are non-executives, however, backed by an executive sponsor (sometimes called an executive champion) to execute the leadership actions. These executive leaders foster champions by educating, inspiring, and enabling champions to perfect and carry their vision to fruition. These cheerleading actions can be with just the project team, or expanded out to the entire company, the end users, or a new customer base. Engagement and Esprit de Corps. The executive sponsor’s engagement in the project is in essence to assure the team spirit and their fervor to ensure the project meets its goals. This is leadership beyond advocacy as it is focused on inspiration and empowerment in the project team and possibly the end user. Adoption. The ultimate responsibility for adoption of the project’s output rests on the executive sponsor. This is because adoption is tied to the overall value, which the executive sponsor is also responsible for. For internal adoption, not all changes are positive for all people. Trying to effect change by edict will have poor

244  Chapter 10: The Project’s Leadership Structure results. Working on changing people’s beliefs and expectations is essential to changing their behavior. For instance, if a project implements a time tracking system, few people are going to see the benefit, even though it may be required for billing. Full adoption is not an option, as customer invoices are affected. Less authoritative executive leadership styles can increase adoption and severely reduce headaches.

Middle Management Leadership Attributes Although leadership is critical at the top, its absence in middle management is just as destructive as when it is missing in the executive ranks. To paraphrase the old adage, this is the place where it is critical to ensure people are doing the right things and not simply doing things right. This entails levels of both innovation and control. Classically, management is about control. Middle management needs to ensure certain types of work get completed reproducibly and predictably. At the same time, though, there needs to be room for developing new methods that improve operations. These two needs, like many in business, are in tension—too much innovation and control suffers, too little innovation, the organization loses competitiveness and people get frustrated. Middle managers have to strike an appropriate balance based on the company’s risk profile. This is a major part of their job that requires leadership. Middle manager’s involvement in projects is often quite different than executives’. They are closer to the project and can get more involved with the details. Common roles include: – Acting as a surrogate for an executive. – Recipient of the project’s deliverable. – Responsibility for some aspect of all projects in organizations, such as process or resource allocation.

The Lack of Leadership—Overusing Process The four attributes anarchy, process, leadership, and management have a similar relationship—process is to anarchy as management is to leadership. Process and management are very close cousins. Both relate to giving direction. Managing people and projects is the act of imposing process to gain control and predictability. Process gives us the tool to influence an action’s outcome. Without it, planning would fail. Process also helps remove human factors so we are not reliant on the skills of a particular person—whether he or she is local or a few thousand miles away. It even crosses language and cultural barriers. Unfortunately, it removes accountability. Telling people

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to follow a process reduces our concerns. If something goes wrong, by either someone not following process or a faulty process, the manager has less culpability. The other factor that rewards the overuse of process is that most employees are rewarded for conformity rather than creativity. This is true even in organizations that tout an innovative culture. Process tells people what to do—the actions, the order, and the expected results. Deviating from those processes are offenses. If a process’ results are not as anticipated, it is analyzed and altered to bring its results back to acceptable values. This new process is followed until the next unexpected output brings it to our attention and then we layer on more process. Processes are trusted; people are suspect. People are not rewarded for being creative with an established process; in fact, the reaction is quite the opposite. On the other hand, leadership has less of an emphasis on process. At times, companies that have decentralized leadership may seem chaotic to people who have spent a lot of time in top-down managerial environments. There is a hint of anarchy or, in Tom Peters’ words, adhocracy.ii It forms a set of fabric walls that channel people in a direction to achieve a vision. An example was the Danforth Pewter Dynamic ‘Fail Fast, Fail Cheap’ Strategy case study in Chapter 2. Leaders are accountable and take responsibility for reaching a goal; team members are accountable for their actions contributing to that effort. In an atmosphere of leadership, there are fewer rules. People are responsible and trusted. In these environments, process controls mundane activities and creativity enables people to attain their vision. With leadership, people are rewarded for creativity, achieving goals, and adhering to values. Values and goals tell people where to go, their bounds, and provide a framework. If something goes wrong, they hold themselves accountable. No one is blamed. The challenge is that we are enamored of process. Managers want to create a process every time a mistake is made. This is a great idea when it comes to air travel, hospitals, and the manufacture and testing of pharmaceuticals, it has its place in adhering to laws and regulations, but it has its limits when dealing with status reports, project methodology, and travel requisitions. To my knowledge no one has died directly from the latter three being shortcut or even completely omitted. Too much process inhibits innovation and is a sign that the wrong people are in place.

Innovation and Process A few years ago, I was in a meeting and reiterated a phrase I have made numerous times, “Process stifles creativity.” A friend, two seats down from me, nearly jumped out of her chair. “I need to correct you,” she barked, “Only poorly implemented process stifles creativity.” The suddenness and passion in her response caused the gentleman sitting between us to slide his chair back quickly in order to avoid being tangled in any physical altercation. The room was full of jocular jeers for us to settle the

246  Chapter 10: The Project’s Leadership Structure dispute in the parking lot. Realizing I had just stepped in a hornet’s nest, I made a joke of it; however, process has its place—making something repeatable, predictable, and transferrable. Process is great in some applications; no one wants to revisit the world of creative accounting, fly on a plane that has not been through its hundreds of safety checks, or take some medication that short cut its clinical trials. Process can help channel the efforts of innovation or even allow it to surface in the organization, but it does not promote it. Ironically, this was a facilitated meeting and I had broken the rules by not raising my hand and waiting my turn to inject my quip. Had I followed that process, the line would have lost its punch and the ensuing conversation would have never taken place. Twenty people would not have had a brainstorming session on how process should be used and whether we were using process right to begin with. That subtly underscored the point. If you want open conversation, innovative thinking, and wild ideas, then remove process. Create a few ground rules and allow people to wander. People try new approaches, think outside the norm, and premier products and exemplary (not bigger) processes come into being.iii Yes, processes. Once we have a better way to do something we want to capture and implement that so others can use it.

Process and Competency We love process for its ability to control and also its ability to remove us from real hard work. As said a little earlier, any time someone does something wrong it is too easy to slap a process in place. It is much harder to solve the problem, especially if it entails dealing with a person who has made a mistake. In workshops and presentations, I perform a routine skit. After doing it hundreds of times the results have never varied. I ask how many in the group like working with people; nearly all attendees raise their hands. Then, I ask how many people like process; fewer, but a large majority raise their hands. Next, I ask how many people like fixing processes that are broken; still fewer but about half of the people raise their hands. For the final condition, I invite two people to stand and join me. I randomly select one to be a middle manager and the other to be an individual contributor. I, as the executive, tell the middle manager that he or she needs to have a discussion with the individual contributor about his or her poor performance, which, if not corrected, could get them fired, and I walk away. As soon as the middle manager starts to talk, I interrupt and ask who in the group likes doing this assignment. Occasionally, one or two people raise their hands. Later, I ask how many people would have minded talking to the individual contributor about designing a process to avoid the mistakes he or she was making. Again, well over half of the audience thinks this a great solution. The results are 100% consistent: depersonalize the interaction by adding process and

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a large majority of people will take corrective action. If a person is the target of the corrective action, the desire to do the work drops to less than 2%. Layering process upon process, however, creates unresponsive, bureaucratic organizations. Research study after research study finds this application of process is onerous to the organization. George Rathmann, cofounder of Amgen, clearly states the absence of discipline and simple incompetence creates bureaucracy. Getting the right people who are disciplined to begin with will largely eliminate the overhead iv Quite often, solving this starts with getting the right middle managers in place, which is an executive’s responsibility. Middle managers, though, need to forego adding more process and do the hard work of getting the right people in place. Middle management in great companies shepherd improvement, foster competency, and encourage innovation. Too much process lessens the need for leadership, removes culpability, and is the reason so many projects fail. Following a process, be it right or wrong, is easy and there is no one to blame but the process. Middle management does not need to monitor and mentor. Although process is needed in some situations, generally using less process and more capable people is the correct choice.

PMOs as Pseudo-Leadership One middle management structure pervasive in organizations are project management offices (PMOs). As mentioned in Chapter 8, “Value Driven PMOs,” they are often used to control one or more aspects of projects. Care should be taken to ensure that the overhead is adding value to projects and not an overburdening bureaucracy. There are three areas where PMOs make sense: – Educating and mentoring project managers on project management methodologies that pertain to the type of projects the organization executes. – Providing a pool of project managers to draw from that have a wide range of skills that are needed in the organization. – Helping organizations meet compliance standards.

Middle Manager Responsibilities That Require Leadership The middle management roles include functional managers that are delivering or receiving a solution, PMO managers, program or portfolio managers, finance and accounting support, functional and human resources managers, or the like. If the company is small and there is no middle management role, these responsibilities are divvied up among the project manager and executive sponsors. Their four leadership responsibilities with respect to projects are: – Implement a Leadership Style Acceptable for the Project. Modeling the correct leadership style is critical for the project success. This is most often an issue when the

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executive leadership style is either too removed or too directive, if the project manager’s leadership experience is weak, or if the team is inexperienced. This “buffer or bolster” function runs between the executive and the project to allow the project to succeed. This is far from the optimal condition; however, it is a reality in most organizations. When helping project managers improve their leadership capabilities, both mentoring and coaching are required. Occasionally the middle manager needs to step in to do damage control. If the issue is that the project needs a less directive style, middle management may be acting as a shield with senior management. This latter situation is difficult and requires an experienced middle-management leader well versed in politics. Resolving Escalated Project Issues. Acting as a secondary decision support channel is a critical responsibility when executive sponsorship is nonexistent, weak, or not engaged. It is often used in an attempt to engage or supplement the executive sponsor when he or she is not making decisions. The challenge is that middle management usually does not have much more authority than the project manager. Middle managers are coaching the project manager on skills for reaching decisions without escalation. This includes helping the project manager with persuasion and negotiation skills. The middle manager must also work with other executives in an effort to get them to make decisions—also known as leading up. This can be daunting as escalated issues are often politically charged and executives do not want to make decisions, as decisions make you accountable. Human Resources Coordinator. Conflicts between projects and their priorities and project managers who are non-cooperative, commonly cause resource constraints. In general, these conflicts identify leadership issues at the executive level around alignment and priorities (see Chapter 2, “Creating and Maintaining Corporate Alignment”). The tactical aspects of the capability alignment rest heavily on middle management’s shoulders. Leadership is required when marshalling constrained resources or in highly political situations. Persuasion capabilities are paramount. Inter-Project Issue Resolution. In addition to human resources constraints, other limitations may exist between projects around equipment, workspaces, and even access to the end user. Many project managers live by the rule that possession is nine-tenths of the law. Middle managers often need to break these behavioral patterns (at times with escalation), which point to issues with corporate culture (an executive leadership issue). Non-authoritative influence is the most powerful tool.

Project Manager Leadership Attributes Projects and project managers have been around for millennia. Not until around the end of the twentieth century, however, did the role of project manager become a concrete position in a company. Prior to this, project management was a senior position

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that required in-depth expertise in a specific domain, business acumen, persuasive negotiation skills, and attention to detail. People did not strive to be a project manager; they suddenly found themselves managing a project. Many considered it a true art form. Over the last fifty years, numerous professional organizations started offering certifications, colleges offered degrees in project management, and a plethora of books were published on various methodologies. Now, people argue for the best methodologies as if they were religions. Others espouse the need for various skills like negotiation, persuasion, and leadership, saying the pendulum has swung too far and we have lost the art that makes projects successful. For the most part, people no longer become accidental project managers; they have studied for the role. Today, most new project managers come to the profession via a degree and not from working within a project team. New project managers tend to know the theory but have little experience in any line of business. As a result, many junior project managers have a weak understanding of executive roles, fledgling business acumen, and few leadership skills.

The Changing Role of the Project Manager These changes in project management have been a boon for most businesses. There are formally documented and implemented processes and procedures and standard bodies. These processes have made it difficult to overlook certain aspects of projects that could set them up for failure. Because of this, project management has shifted toward being a commodity. Various organizations push their certificates as the end-all of employment requirements and companies have created checklists to qualify “good project managers,” just as one might look at the functions required from a personal accounting program. The concept of certification implies that people can handle the various situations straight out of college with a few hours of extra study. Employment firms, relying on highvolume placements, capitalize on this attitude, realizing the cost effectiveness of certification-based screening processes. Meanwhile, thousands of people continue clamoring for their certification so they can jump into the resource pool. It takes more than a certification to make a good project manager. Attaining expertise requires the ability to work with others and coordinate people to achieve a common goal. Other skills like persuasion, negotiation, tenacity, leadership, strategic planning, and business and operations planning are required skills. Traits of being ethical, meticulous, and tenacious are invaluable. These skills and traits are difficult, if not impossible, to acquire in a class, let alone grade on a test. Knowing process is a vital component; however, the list of necessary soft skills is long and much harder for most people to develop. Project managers must step beyond utilizing process and aspire to be leaders. Project managers have three evolutionary stages—coordinator, negotiator, and leader.

250  Chapter 10: The Project’s Leadership Structure Some project managers start at the higher levels, while others need to progress through the stages. Stage One: The Coordinator Today’s certifications equip project managers to be coordinators. This is a comfortable non-confrontational role occupied by a majority of project managers. Most companies require this ability; many feel this is all that is needed. The coordinator implements processes and procedures, monitors timelines, reacts to problems, and escalates outof-control issues. This is the “commodity project manager” who can manage a project as long as it stays inside the bounds of process. To use a common project analogy, project managers at this level “herd cats.” They work reactively at the rear and the flanks keeping the cats all going the same general direction. Stage Two: The Negotiator The next level up, the negotiator, has a larger set of skills. These project managers have matured to the level of understanding the stakeholder’s needs and values and regularly negotiate a compromise. As a company grows and the project portfolio develops past the point of repeatable projects, there is no longer a single possible goal for a project. Project managers have to coax people to compromise and develop a mutual endpoint that provides value to all stakeholders. This is the first level of leadership and often a project manager’s first experience with it. Luckily, negotiation has a large component of process—planning the approach, exploring options, proposing and bartering a solution, and then executing the plan. However, few question that a majority of negotiation is an art. Developing options, supporting a viewpoint, handling one’s demeanor, showing empathy, using subject matter experts, exhibiting confidence in a set of beliefs, and dealing with rebuttals can make or break a successful negotiation. These are key aspects in being a leader. By managing in this manner, the team becomes self-correcting adjusting its course, realizing its collective power and the ineffectiveness of running off on tangents. Back to the analogy, negotiators run with the cats and apply reason and emotion in getting them to head in the correct direction. Stage Three: The Leader Leaders understand their mission, mold and maintain a vision aligned with the strategic goals of the organization, communicate the direction to the team, and inspire people to achieve that vision. The team moves from self-correcting to self-directing. The good news is that experience shows “great” project managers bubble to the top based on their leadership capabilities. There is little room for gaming the system,

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as it is their success at completing projects and making a majority of both sides happy about the delivery that makes them stand out. Rarely can people quantify why they are good, they just seem to be able to reach compromise and deliver. These are the project managers that have learned what is essential to successful delivery—not tasks, not timelines, not budget—value and leadership. Project leaders walk in front of the herd, with the cats following. They have reached the pinnacle of the profession.

Project Management Responsibilities That Require Leadership It should not be a surprise; project managers have more responsibilities that require project leadership skills than other people in the project stack; they are the central point in leading the project. Some items, however, might seem surprising. In fact, some project managers are not even aware that they should be doing all of these nine actions: – Vision for the Project. Projects have goals and visions. Champions see not only a cure for a disease, reduction in traffic congestion, beautiful parks, phone apps to connect domestic violence victims to help, or kid-safe social media platforms. They also see exciting visions for expense report systems, roofing composites, and weed killers. The project team, though, is comprised of people who know how to achieve that goal; they are not necessarily impassioned with the vision. As with companies, project visions are not stated by project managers, but created by the core team. To maximize the strength of the team members, they need to be motivated around a common vision. Project managers must do that. The first step is for them to work with the project’s core team to develop a vision. If project managers cannot lead the team to form a vision, they need to step aside. Great project managers will. It is common for project managers to step aside as they cannot formulate a vision or one they can support. The biggest reason is lack of alignment of the goals and the project manager’s values. A close friend of mine refused to manage a project that tightened the confidentiality of patient records for children 13- to 18-years-old because she thought it was stepping on the ability for parents to raise their children. Whether her beliefs are in line with yours or not, her ethics were where they needed to be and she recused herself. Project managers quite often use success as the theme for their vision. The appeal of working on a high-performance, successful team is a strong lure. However, others are able to leverage some aspect of the deliverable or the tools to develop the end product as the primary motivator—a new technology, the first, the biggest, the smallest, the fastest, or just the sheer challenge. – Methodology. If companies want to succeed running a portfolio of projects, they need a portfolio of processes. The project manager may need to sway the team or convince executives that an unfamiliar methodology is the correct direction. If

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the project manager sees that the requirements are in high flux or are poorly defined, he or she may push for prototypes, mockups, or an iterative development process. A common example is introduction of new technology. Maybe a proof of concept is required before the project commences, or there are a series of releases or demonstrations of increasing complexity to show critical aspects of a new solution that runs in parallel with the core project. These are decisions the project manager can propose and champion based on the overall constraints of the project. He or she may need to convince skeptical executives, customers, end users, and team members. Team Composition. All too often project managers are handed a team to achieve a goal. They are not part of hiring process—building the job description, the interview process, or the onboarding. They have their hands tied and need to make the best of the team they are given. They must also know how to address people that simply are not a fit with the team or are abrasive to the end user. Project managers may need to lobby for their replacement, buffer their exposure to others, coach them on their social skills, or get the budget for training or mentoring. This will rely heavily on persuasive skills. It is critical to get the team to form. Without a solid core team, the rest of the team may not be able to coalesce enough to build a project vision. Communication Hub. As mentioned in the opening chapter, common understanding is the foundational gap that dooms most of our projects. Specifications, drawings, and other documentation may not be enough to sufficiently communicate the goals. Working with project team members for a new approach to relay ideas is essential. Oratory, written, body language skills, along with knowing your audience, are crucial in leading your team and your leaders. Reconcile Project Delivery Team/End User Leadership Style. After nearly thirty years of running projects, I have yet to find a project where the leadership styles of senior executives and end users matched the leadership style required to complete the project successfully. The project manager has to work between these three entities, continually using different leadership strategies to achieve the best results for the project. Messages may need to be reformatted and meetings restructured, depending on the leadership style of the various parties to the project. Nowhere is that more evident than in multi-cultural or multi-national projects. Different cultures have different core expectations of acceptable leadership in the project and project managers must learn to work in each of those cultures. Project Strategy. General Eisenhower said it best, “Plans are worthless, but planning is everything.”v The ability to complete thorough planning and give a full set of options is the basis for changing direction in an instant. It is one of a leader’s most valuable assets. Whether it is reordering tasks, inserting new ones, stepping over some tasks that have been proven redundant, or focusing the team

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on achieving the minimum viable product, all require the project manager to lead the project stakeholders to an acceptable solution. Promote Self-Organization and Team Unity. Many of the actions that require leadership help create self-organizing teams. For instance, simply getting the right people on the team and working with them to create a mutual vision is a majority of the task. There are other leadership traits, though, that are also required such as giving team members autonomy and creating mutual trust. Aligning Stakeholders and Leading Up. Knowing how to lead the project’s leaders and stakeholders is an essential skill in any project manager. The opening line of Wayne Hale’s article Leading Your Leaders says it all: “First of all, remember that your leaders are not very smart.”vi It is not a derogatory remark about leaders, it is due to the fact that they are no longer in a technical role and have not kept up with the latest developments. The same is probably true for the end user or customer of your project. The team knows more and has to educate the stakeholders in what the project’s needs are. This takes humility, patience, and persuasion. Alignment with corporate goals. As mentioned previously, numerous people have responsibility for alignment. The executive sponsor is accountable, but the project manager has the responsibility to ensure the team implements the solution to meet the corporate goals and be technically appropriate. This may not be the best or latest technology or the most elegant solution, but the solution meets the goals inside the organization’s constraints.

Case Study: The Team with the Wrong Vision A few years ago, I inherited a project that was chartered to fix some major issues with a software tool used by a company’s customers. It had numerous bugs and functionality issues. The business unit funding the project did not know whether it was going to continue to use the platform and was considering buying a commercially available replacement. For this reason, it wanted the most inexpensive quick solution possible. Its leaders knew they would throw away the solution in the next two years, regardless of their make-buy decision. They wanted the solution to “stop the bleeding” and no more. They used a project team that had improved other parts of the system in the past, as they were most familiar with the system’s architecture. The problem was that the project team leads did not want to modify the old Visual Basic  program and they wanted to replace it a Java-based solution. This meant completely re-writing the system. They never divulged their intentions. It was only when I looked at detailed plans that I notice references to Java tools and re-writes. I asked the architect for clarification and he refused to use the old architecture because, in his opinion, it was not the best solution for the customer. Within a week, the issue was escalated and the development team was replaced with a team in another city. My leadership had failed at creating a team with a common goal, but it did achieve alignment with corporate goals.

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Project Team Leadership Attributes Frontline troops, whose primary responsibility is to build the product, take the brunt of everything that is wrong in the project. The project team is the entity that gets the brunt of the accelerations, the right-angle turns, the stops, the starts, and, all too often, the blame for the project’s woes. These are the people, though, who are closest to the customers or end user. They provide the data for decisions and, in turn, evaluate how other decisions will affect the outcomes. They are accidental leaders who design the implementation and pull the customer from what they want to what they need. These project team members are rarely thought of as leaders, but are the ones that lead customer and end user troops to victory. In most projects, the key roles needing leadership skills are the architects, designers, and business analysts. They need superlative negotiation and persuasive skills and to be humble experts educating the people who will be responsible for using and accepting the project’s end product. The people in these roles see and experience the problems along with the end user, they hear the complaints and the desires, and they propose and sell solutions.

Project Team Responsibilities That Require Leadership Project teams need leadership skills in three areas: – Leading to “Needs over Wants.” Customer and end user facing team members (that is, business analysts, architects, and the like) need to lead customers and end users from what they want to what they need. This may be one of the most critical leadership positions in the company, as it is the primary function for controlling scope. These people have little authority, but must ensure the deliverables provide value to the end user. This requires that they listen to the customer, lead them to the correct solution, which is often quite different from what was initially envisioned or requested. – Leads Build the Team. Projects are normally comprised of a number of smaller teams with one person acting as a lead. Just as the project manager fosters selfdirection in the team, so do the team’s leads. – Technology Direction within Constraints. In many cases, the project team makes technology decisions to achieve the project’s goals. These must be practical with respect to the budgets and risk tolerance of the delivering and receiving organization. Significant negotiation and persuasion skills are required to guide the project team to the correct solution.

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Leadership throughout the Organization As should be obvious, success is about having the right people. Organizations cannot afford to make excuses for people who are missing required leadership skills. They need to develop their soft skills if they are going to move our companies forward. This is reiterated in every study on successful business structures. Be it Bill George, John Kotter, Jim Collins, Tom Peters, Peter Senge, or others the message is the same. We need leadership at the lowest ranks.

Everyone Agrees, People before Plan Kotter’s eight steps for change management (see Chapter 5, “Understanding Business Change Management”) commence with create urgency, build the team, and create the vision. The right people come before the vision. Per John Kotter, “By the ‘right people,’ we mean individuals with the appropriate skills, the leadership capacity, the organizational credibility, and the connections to handle a specific type of organizational change. We do not mean ‘good individuals’ in a generic sense.” vii

This is rarely the order that projects are put together. A champion sells the vision and existing teams and people are used based on their availability. Jim Collins came to the same conclusion when talking about wildly successful companies. People first, then vision. Underscoring the concept with three truths: 1. To adapt to an ever-changing business environment start with defining who will be involved, not what they will be doing. 2. Motivation issues disappear when you have the right people. 3. Having the wrong people, but the right direction, will still not create a great company.viii You need people fully capable of leading their team, their leaders, and their stakeholders. People throughout the organization who can lead real companies, according to Tom Peters, “… there is one area in which the excellent companies have been truly blessed with unusual leadership. […] It is patient, usually boring coalition building. It is the purposeful seeding of cabals that one hopes will result in the appropriate ferment in the bowels of the organization.”ix

This intentional action to create a culture of leadership is critical. In Chapter 9, “Leadership’s Relationship to Projects,” we already cited the frustration of Peter Senge with his observations that “leadership” often connotes a trait that follows power,

256  Chapter 10: The Project’s Leadership Structure “The very word “leader” has come to refer largely to positional authority, a synonym for top management.”x

Without recognized leaders throughout the organization, projects and their associated changes will fail. It is just that simple. Bill George, former CEO of Medtronic, uncovered the same data. He cites report after report from CEOs like Howard Schultz (Starbucks), Anne Mulcahy (Xerox), Jack Welch (General Electric), Roy Vagelos (Merck), Marilyn Carlson Nelson (Carlson Companies), that leadership is of vital importance throughout the company.xi The agreement is overwhelming, if leadership is not recognized and fostered throughout, the organization will suffer. Leadership at the top is important, but rigid top-down leadership does not work. In our interviews, closed-door executive planning teams making opaque plans and barking decisions on direction are still rampant. They create plans and tell people to execute without the information to understand the “why” for the direction. The execution teams are blind to their real direction. These companies require all decisions to come from the top. It slows their reaction time, frustrates potential leaders, and loses market share. People overlook critical risks, communicate the wrong data, miss the warning signs of trouble, and fail to shepherd clients to what is needed—clients are pulled to what the executives want to sell them, instead. The result is unhappy customers.

Identifying the Appropriate Structure To “lean out” this leadership structure and make it more responsive, we need to look for the groups that do not add value and replace them with value-added functions or eliminate them. Without a doubt, projects create value. We cannot eliminate executives, as they are the company, so we need to look at how to streamline either project management or middle management. If value is the answer to success, then our project teams need to be of the highest caliber. Agile zealots will say that they can remove the project manager; however, they are simply replacing that role with a different role called scrum master.1 Although the functions of project manager and scrum master are drastically different with the scrum master being mostly hands off and the project manager being more task tracking, trying to remove roles that lead project teams has proven very problematic and usually results in failure. The advantage of the agile discipline is that it pushes leadership into the project’s team, so the scrum master has responsibilities “higher” in

 1 There are many excellent books on agile and the role of a scrum master. My favorite over many years is Agile Project Management by Jim Highsmith (Addison-Wesley Professional, 2009). It covers both new product development and IT projects.

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the leadership chain. This reduces the reliance on middle management, thus removing part of or an entire layer of management. There is no reason that the same cannot be true for conventional projects. It requires taking a few pages of tools from other methodologies. We need to: – Be more selective about the project managers and core project team members that lead the customer or end user to the final solution. They need to be leaders as well as subject matter experts. – Move away from accepted stereotypes that great architects and technical experts are artists and should be forgiven for an inability to interact, persuade, negotiate, compromise, and lead. They need to learn these skills. – Embed customers in project teams to direct and focus effort to value-added solutions. We all know the great team members who can do this, but we try to accommodate the eccentric experts all to the loss of our projects and cost to our businesses.

Filling the Void When good leadership is in place, an amazing transformation occurs in the organization and projects. Complacency, status quo, and stagnation are replaced with advocacy, innovation, and growth. Suddenly revenue grows. Advocacy over Complacency: Advocacy destroys complacency. Employees who blindly accept and comply with a manager’s direction reduce the power of the team. Complacency saps the energy from a team’s most innovative resources. Promoting advocacy made Nelson Mandela, Mahatma Gandhi, and Dr. Rev. Martin Luther King, Jr. great leaders, separating them from everyone else. Leaders that promote advocacy inspire people to drive positive change and embrace its uncertainty. Advocacy builds passion, creates excitement and ownership, and encourages people to stand up for their beliefs and visions. Leaders design ways for both companies and their employees to benefit from those visions. Innovation over Status Quo: Employees accepting status quo and avoiding anything new, kill innovation. Stasis is easy; you do not need a degree in physics to know it takes energy to move. Innovation requires creativity, confidence, risk taking, and the acceptance of occasional failure. Inspiring innovation and investing in your teams’ ideas helps projects achieve value. Leaders leveraging their team’s innovation reach their goals quicker and create a trusting culture. Growth over Stagnation: Stagnation—the unwillingness of your team to acknowledge the need for change. Growth and change takes energy, effort, and intention. Lessons

258  Chapter 10: The Project’s Leadership Structure from learning, gratification of growth, and achieving advancement produce long lasting rewards for you and your team—both professionally and personally. Team members who thrive are the basis for your project to flourish. Increasing Profits over Stalled Revenue: Empowered team members grow, innovate, and advocate for what is right. The effect goes beyond a project. They will do far more than raise revenue—they will bolster the bottom line. Stagnation, status quo, and complacency may still increase receipts, but this tactic will not improve the organization’s performance or provide an upturn in profit. Teams that embrace change are willing to take chances, continue to learn and grow, and will propel a company forward. It cannot be said often enough, neither leadership nor accountability require authority. They require mutual respect more than anything else. In fact, many management philosophies feel that the best leadership comes with no authority, whether it is Intel, Toyota, or any of the companies mentioned above. The ones that see leadership as a distributed function thrive on respect and trust.

Project and Middle Manager Takeaway Project and middle managers must strive to increase their leadership skills to match or exceed their technical skills. It is not enough to manage people—they need to be led. Project managers have an especially difficult task in leading dozens, hundreds, or even thousands of people over which they have no authority. They need to understand that leadership, like projects, is all about change and getting people to step up and do the right thing. Middle managers must lead by: – Implementing a leadership style that is acceptable and accommodating to the project. Every project is different (by definition); hence, variations to a core style are necessary. – Escalating issues and attaining resolutions for the project. This is an active leadership task that requires leading your leaders. – Coordinating human resources so that the right people, with the correct skills are on the project at the right time. – Resolving inter-project issues that exist beyond human resources issues. Project managers must lead by: – Working with the team to create a project vision. Just like corporations have visions, so do projects. The project manager must work with the core team to create an effective vision.

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– – – – –

Selecting the correct methodology or methodologies to achieve the highest value. Rarely does one strict methodology solve an organization’s needs. The team and customer’s maturity demand alterations. Creating a team with the appropriate skills. Continually assess your project team’s capabilities. Mentor, coach, and replace to achieve the right leadership and technical mix. Acting as the communication hub for the project to ensure that there is a common understanding of direction on the team and with the customer that matches the goals. Reconciling the leadership styles to meet the needs of the customer and project team. Defining the project’s strategy by planning for successes and failures, set expectations, and remove blame. Promoting self-organizing teams to adapt to the changing environments and lead the customer to the most valuable solution. Aligning stakeholders to the goals by leading up. Assuring alignment between corporate goals and the team’s direction. Ensuring that everyone can tell whether a feature or function is providing value and is aligned with goals.

Executive Takeaway The inescapable fact is that leadership is needed throughout the project management stack. Executives, middle management, project managers, and core project team candidates need to be selected based on leadership skills equally with their technical skills. It is incumbent on the organization’s executives to create this culture. This action alone is not enough to increase project success rates. Executives also need to be more involved in projects; the gap in leadership and sponsorship is solely for corporate executives to solve. Project managers and middle managers cannot solve it on their own. Executives lead by: – Setting the style of leadership for the organization that accommodates the need for distributed leadership throughout the company, not just for projects. – Creating a vision and defining goals and value for the organization and how they relate to projects. Without this, project managers and sponsors cannot assure alignment. – Communicating business changes that effect project alignment and setting new direction and priorities to keep people working toward the proper goals. – Working at a high-level with the project’s end users to ensure that their value needs are being met. If there is misalignment, the executives must help propose corrective actions that still meet corporate goals.

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Advocating for the project’s adoption. Executives are the primary cheerleaders that promote the project’s adoption. Creating an esprit de corps and inspiring project teams and customers. Shepherding adoption through the actions above, communicating, and working to shift people’s beliefs and expectations.

Applying These Concepts Organization Wide Questions 1.

Assumptions were made about the leadership responsibilities at each tier in the project leadership structure in the first section of this chapter. These assumptions may not work well in your organization. What changes or additional assumptions would you need to make for your organization?

Project and Middle Manager Centric Questions 1.

Assume you are on a project where there is too much process and the bureaucracy is slowing your progress. What can you do? 2. Assume you are on a project with deliverables that are not aligned with corporate goals. What can you do? 3. You do not see your project generating value for the company, but your management thinks it is doing well. What do you do? 4. Which level of project management are you at (coordinator, negotiator, or leader)? What is your improvement plan? 5. List the projects in your organization. What levels of project management do they need (coordinator, negotiator, or leader)?

Executive Centric Questions 1.


For your organization, outline what leadership duties you can delegate and which need to stay with you. a. If you had different managers, how would this change? b. What leadership skills do you need to bolster in your organization? It is clear that the company needs to change direction (books to non-print, typewriters to computers, film to digital, or the like). How can you start that change in our project structure?

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Review your middle management structure. Identify where there is strong leadership and where it is missing. What is the effect on your current projects? 4. Assess each project manager in your organization by level (coordinator, negotiator, or leader). a. Is this the mix your company needs? b. What plans do you have to improve them?

Chapter 11 Leadership Traits and Actions A ‘no’ uttered from deepest conviction is better and greater than a ‘yes’ merely uttered to please, or what is worse, to avoid trouble. —Mahatma Gandhi

My best successes came on the heels of failures. —Barbara Corcoran

You manage things; you lead people. —Rear Admiral Grace Murray Hopper

I have yet to meet anyone who says that leadership is easy. People say it is gratifying, rewarding, challenging, fun, or difficult, but never easy. As a leader, you need to make decisions that not only affect the goals of the company, but also the project, project team members, stakeholders, and the families associated with the project team and stakeholders. There are times when you will face ethical issues that might seem very easy to solve in the confines of your own family, but when recast in the context of business pose a dilemma. While reading this chapter, keep the following three stories in mind, evaluating them on the basis of their ethics and what you might have done differently. These three cases are all real situations: The layoff: You are assigned to a project that is severely over budget and late. After assessing the project, you determine that there are simply too many people working

DOI 10.1515/9781501506390-011

264  Chapter 11: Leadership Traits and Actions on the project and most are lacking the skills needed. Times are tough for the company that is running the project and you know that if you remove or replace people on the project there is a very high likelihood that they will lose their jobs. You work through the list of people and decide that you are going to cut the team size from 65 people to 28. You are going to do this by removing 41 people from the project and bring in four extremely competent contractors. Obviously, the cost savings will be huge. However, you forecast a far less intuitive benefit. Because the net skills of the team will increase and the complexity of dealing with so many people will decrease, the project will get done in about two-thirds the time. You make the move; all of your predictions are right—costs come down, in the end the project is delivered much faster, and 15 of the people you removed from the project are laid off. The former project manager, who still works for the company, sees you a few months after the project and congratulates you on being a heartless jerk. Changing the executive sponsor: You are placed on a new project when the current project manager quits and moves to a different company. You find out that the executive sponsor is not engaged or supportive in any way. Escalated issues are never addressed, he never shows up to meetings, and rarely responds to email. You find that another executive in the company is very interested in your project and helps you on occasion, but is hesitant because she does not want to step on the toes of the executive sponsor. Your attempts to escalate the issues with the sponsor’s inattentiveness go unheeded. You come up with a plan to persuade a change of sponsors. The projections show that the project is in serious trouble. If everything goes right, you will be slightly over budget, but if issues being faced are not solved, the project will be about 50% over budget and five months late. Critical to making the lower budget is sponsor engagement. You present this forecast at the monthly project review. The senior leadership team is furious, but will do nothing about the sponsor. You talk with your current sponsor and stress that if the negative predictions come to fruition, he is going to look horrible and that you really need him to engage to help. You go to your adopted mentor, tell her the same information, and say that if she were sponsor the two of you as a team could pull this project out and she would look like a hero. You ask her to talk to the CEO about volunteering for the sponsorship. You have kept the data the same, but have biased your presentation of the data to achieve your means. The plan works and you get your new sponsor, the project beats your best-case scenario, and you and your new executive sponsor get credit for a great job. Was biasing the presentation to achieve your means ethical? Cultural challenge: I often relay a story from my past that challenged my ethical core. Well over a decade later, I am still unclear if I made the correct decision. The setting was in a Pacific Rim country when working on a multimillion-dollar semiconductor fab automation project bid for a large US-based system integrator. While debating the tactics for securing the contract, the country’s account manager suggested

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funding a prostitute for the potential customer’s senior procurement manager. Shocked, nearly speechless, by this unquestionably unethical proposal, I realized the ensuing conversation by the local management was as matter-of-fact as my suggestion to take the same individual to lunch (incidentally, equivalent costs). Knowing I could not condone his idea, I had to determine quickly whether to protest or shut up. To recuse myself was too subtle, putting up an argument on the ethics seemed too intrusive into this country’s culture. In a lighthearted manner, I recalled company policy and that if he wanted to continue with idea that the two other US employees and I would have to leave. He politely stopped the conversation and we moved on to the next subject. I honestly do not know what he did. As said earlier, accountability and ethics are closely tied. To this day, nearly 20 years later, I question whether I took a strong enough stance.

The Components of a Leader Mutual respect, accountability, ethics, decisiveness, humility, listening, asking the right questions, treating people like people, and personal trust are just some of the traits and actions needed to be a leader. However, once you have gained mutual respect and trust in technical capabilities, you miraculously become a leader—whether you wanted to or not. Between just those two qualities, people will make the decision on whether to follow you. They are bound by the situation. You may trust a neurosurgeon to dig around inside your brain to prevent a stroke or repair the damage from one, but you will not consider that person a leader until your trust goes beyond his or her technical competence. In fact, given a non-emergent situation, you may even find a surgeon with slightly lower technical skills to manage and conduct your surgery because you have more respect in him or her. It might be impossible for you to trust a surgeon to lead your procedure if you do not feel there is mutual respect. The same is true in business. I know many great CEOs that I would never ask to lead a project and even more fantastic project managers that would be lousy at leading a company. Not because of their technical skills, but about the manner in which they lead. In general, a project’s shorter lifetime causes project managers to react faster to issues than is appropriate for many business decisions. In the same vein, CEOs have a longer reaction time. They need more time as the impacts of their decisions are usually more expansive. Their system is larger and the impacts greater. Project managers tend to need a more directive leadership strategy; CEOs need to be more affiliative. Architects need to be more collaborative, using persuasion to lead clients, customers, and end users forward. Hence, when talking about leadership traits and their application, frame it based on the type of job being performed. What has been outlined in the previous two chapters is a general discussion of leadership and the need for leadership throughout the “project stack.” Now we need

266  Chapter 11: Leadership Traits and Actions to understand how to accomplish this, the essential traits necessary for someone in a new role, how to identify candidates, and how to foster leadership skills. We also have to eliminate the numerous misconceptions on what defines a good leader.

Making Leadership a Priority As simple as it sounds, if you want to have better leadership in your organization, make it a priority. Establish training, mentoring, and coaching programs for people. Leadership training needs to be at least as important as technical training. Many people can pick up manuals and learn scores of technical skills on their own. Yet when the task comes to bolstering leadership skills, it takes training, mentoring, and handson trial and error. This needs prioritization by our educational systems, employers, and employees. After making leadership a priority, the second step is thinking about what leadership traits are needed in the context of an assignment and making it as least as important as other technical skills. As said earlier, people are nearly always placed in a job based on their technical skills for which we have had plenty of training. Unfortunately, our leadership skills are built almost solely through on-the-job training and the “school of hard knocks.” When people stumble as leaders, they get blamed when it really should be the person who gave them the assignment. The third step is targeting people with technical proficiency, assessing their leadership skills based on their level in the organization, bolstering those skills as needed, and then putting them in a new role. Following these three steps reduces frustration and improves performance not just for those people targeted, but throughout the organization. Initial steps for changing the culture to focus on leadership: – Make leadership a priority for every role. – Define the traits for each role. – Target candidates that show aptitude and interest for training and coaching. The challenge is that even though people can take leadership training, experience using the techniques in the real world is needed to understand how to apply them in various situations. Leadership skills are unlike technical skills where competency can be trained and tested. Additionally, people need to have an aptitude for leadership, some seem to naturally know the tricks in leading, others need some help learning them, and some will never be good leaders. Without exception, though, everyone needs practice. Experience is best gained in a safe environment through a series of trials. For instance, junior project managers can try leading non-complex projects or be a deputy project manager for a larger project. Inexperienced executive sponsors

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need mentors or coaches and maybe even project management training. Throwing people into difficult leadership roles might teach them a lot, but will most likely do significant damage, some of which could be irreparable. When evaluating people as leaders or potential leaders, we should be looking for certain specific traits based on the roles the person will fill. Unfortunately, we often hear about actions and confuse them with traits. For instance, standard interview questions include asking people to recount a time when they handled a specific situation. Nearly anyone can cite actions with great outcomes. Understanding what central traits that person has to create those outcomes is the real challenge. Our interview questions need to: – Center on what traits define the interviewee. – Juxtapose business situations to those traits to understand and evaluate the prospect’s learning curve for improving or acquiring new traits. The number of applicable traits people need is based on the job they will perform. Of the leadership traits discussed below, senior executives should possess all of them and never have to really think about which trait to apply in a situation. Executives need to exhibit strong leadership qualities prior to taking the position. A business analyst on a simple project, however, needs to be conscious of these traits and when to use them—at a minimum, planning approaches of how to use them with certain individuals. If the project is complex, the business analyst may need to be significantly more experienced with these traits to lead obstinate end users to a solution that would provide more value. Project managers need the ability and experience in leading more diverse groups. Traits like humility become more important. As we go up the project leadership chain of command, more and more traits should be ingrained in our personality. The world is not perfect, though, and we will not always have the perfect person. Knowing people’s leadership strengths is critical. It could be that a middle manager is missing some trait. In that case, two actions need to take place. First, the person should focus on bolstering those skills, and, second, the people around that manager need to be able to compensate for the deficiency. The danger in this is that it provides an excuse to hire less than qualified individuals. There needs to be a plan and the resources to bring this person up to operating speed. This is not an excuse for mediocrity. We need the best people working on our teams. We may need to hire or grow them. This is the core to ensuring capability alignment. Both take time and we need to adjust our plans accordingly. Never hire a person when you have doubts over their abilities to do the job. This is derived from what is often referred to as Packard’s Law,1

 1 Packard’s law was made famous by Jim Collins in Good to Great. It says, “No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company.”

268  Chapter 11: Leadership Traits and Actions named after David Packard co-founder of Hewlett Packard.i If a person is unable to aspire to the leadership level required, place him or her in a skill-matched role—either inside or outside the team.

Leadership Traits Effective leaders have the respect and trust of the people they lead. These two qualities are essential. How that trust and respect is used falls back to the traits of the person. Leaders are role models. They respect others’ opinions. Instead of berating, they carefully listen and excel as coaches and advisors. Using these skills, they develop the ability to get others to think in new ways, identifying and questioning unsupported opinions allowing them to grow based on evidence and reasoning. The result is a fresh approach to problem solving in the organization. Trust, however, cannot be blind. For any number of reasons—over optimism, coercion, inexperience, dishonesty, and the like—we need to double check direction and ensure trouble is not pending. Hence, every trusting manager has to verify intentions quietly and discreetly. This is not a sign of mistrust; it is a prudent measure to ensure the organization as a whole is functioning properly. Unfortunately, some leaders can garner the respect and trust of enough people to wreak havoc in their betrayal, always at the cost of ethics. These are particularly troublesome leaders. The names in this category are many throughout history in politics and business. We see them all too often in the news. Executives like Bernard Ebbers (WorldCom), Kenneth Lay (Enron), John Stumpf (Wells Fargo), Sanjay Kumar (Computer Associates), Bernie Madoff (Bernard L. Madoff Investment Securities), Charles Keating (Lincoln Savings and Loan), Joseph “Sepp” Blatter (President FIFA), Mark Swartz (Tyco), and Richard Scrushy(HealthSouth) were seen by many as great leaders until their motives were uncovered. It is sad that the list of unscrupulous leaders, whose names are now synonymous with deceit, could continue for pages. These leaders were missing one or more key traits. Surely, they were all inspirational at some point in their careers. At least they were to the people that mattered and could help pull off their deeds. They had the skill of persuasion as they seemed to get hundreds of people to buy into and execute their schemes. I am sure you can list other leaders, political leaders, perhaps, where there is an open debate on their leadership qualities—George W. Bush, Winston Churchill, Bill Clinton, Mikhail Gorbachev, Nelson Mandela, Barack Obama, Vladimir Putin, Franklin Roosevelt, or Donald Trump. There are others, once supported by millions, who have only a small minority of supporters today—Adolph Hitler, Saddam Hussein, or Benito Mussolini. All of them wielded great power, all persuaded many millions to follow and revere them, many still have followers today—even if history has told us that they had little or no ethics, empathy, or humility. Once in power, some had to resort to bloody brutality to maintain their power, but they all, alive or dead, have a vocal set of followers. As well,

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they have their detractors. One has to ask, why they could all be called leaders by so many people. There are hundreds of opinions on the core traits of a leader. Over the years the following list has been compiled and refined by looking at people who excelled at their job. It was honed with input from notable researchers and authors. The result is a list of nine traits that great leaders have. These are: accountable, ethical, inspirational, decisive, aware empathetic, confident, focused, and humble.ii It is important to remember that some use their leadership prowess to rise to positions of power and authority and may have had questionable traits at the start; others surely have struggled with the common assertion that power corrupts. The true test of anyone’s traits comes when they gain that power. The ability to step outside a situation and objectively assess your or others’ motives is critical. Hence, it is valuable while reading about these traits to keep a few points in mind: 1. Each has a negative aspect. When you see them in someone, you need to discern whether they are being used inappropriately. 2. Consider them as a whole. To be a good leader you must have all these traits. Missing just one creates a major flaw. 3. They are loaded with ambiguity. None of the traits are quantifiable. There is no correct answer to a test or interview question that will divulge whether someone has these traits. For instance, there is a fine line between confident and arrogant. 4. Some appear to be in conflict. Leaders are humble, but they need a touch of audacity or hubris to achieve wild goals; they need to be empathic, but not to the point of trying to please everyone and becoming indecisive, and they must be focused while not being so directive to squash their team’s motivation.

Accountable A lot has already been said about accountability. It need not be belabored here. However, a leader is responsible for his or her decisions and for those of people around them. Leaders share the celebration of successful decisions; they take the responsibility for less successful ones. This, paired with others traits, is the core of our childhood heroes—they all see unjust situations and take it upon themselves to correct them. Accountability and ethics are the two traits that seem to have been the downfall of most of the fallen business leaders cited above. As stated by Chris McChesney, a pervasiveness of accountability in the organization “is where execution really happens.” He developed a trusted execution strategy based on four disciplines that help people stay focused on wildly important goals (WIGs). Accountability is the essence of his fourth discipline. “ . . . unless we consistently hold each other accountable, the goal naturally disintegrates in the whirlwind [of distractions we deal with on a daily basis].”iii

270  Chapter 11: Leadership Traits and Actions Ethical Ethics is at the core of a healthy organization’s culture. Without ethics, all is lost. It must permeate the company from the board of directors to the individual contributor. Project teams in vibrant, honest organizations, report status accurately. Unpleasant news brings offers of assistance as opposed to criticism. The problem with ethics is that it is different in every culture. Hence, leaders need to adjust their ethics to other cultures. There is no absolute right answer. Honesty is required for ethics. Although it may seem that omissions of fact may at times be good (for instance, leaving out details that might seem overly harsh or critical), if uncovered it can leave one’s ethics in question. It is much better to deliver the truth tactfully than to leave the point unmentioned. Ethics also include the far more subtle aspect of directness. People need to know your meaning and often, in an attempt to be polite or not to offend, our conversations become overly nuanced and lose their meaning. Leaders address issues unabashed, head on, with honesty,iv and with a bias for action.v Holding any type of second agenda is simply too subversive.

Inspirational Inspiration comes from a vision—grandiose or small. Leaders set high standards and achieve goals. They do this not only for themselves, but they also use it as a tool to coax others to maximize results. Without identifying a goal, the team is directionless. Failure to develop and communicate a corporate vision is a primary responsibility of the senior management team. In the same light, project managers must work with their core team to paint a vision for achieving the project’s goals. Regardless of their level in the organization, leaders must maintain a clear vision and clarify any adjustments to meet changes in the business climate. Leaders also define the standards for work. Their attention to detail, relationship with clients, and thoroughness of work send a message and set the standard for the rest of the organization. Most executives in companies with an inadequate or poorly communicated vision are in denial that the condition kills inspiration. Their organizations are often riddled with mistrust and dishonesty. It starts at the top, when management denies there is an unclear direction, it manifests as an apathetic team unwilling to take the political risk of highlighting management’s error.

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Decisive Projects languish in indecision. Decisions give employees direction and bounds. People in authority make broad decisions and people closer to the execution make decisions focused on their area of expertise. Without successive layers in the organization knowing the objective direction, critical decisions often are not made, and projects stall. Leaders make decisions. They do not yield to popular views or demands and have the courage to look at solutions that are outside the mainstream—regardless of the personal cost. They are adaptive and effective in rapidly changing environments, with an ability to discern issues, simultaneously handling a variety of problems, and making course corrections as required. As stated before, creating value is not about giving customers what they want—it is about giving them what they need. This requires making tough decisions, producing minimally viable products, testing the premise the product was based on, and learning how to limit scope. Leaders are masters at saying no. Maybe a story will help. A number of years ago I was driving the agenda of a meeting in a posh Montreal hotel conference room, two customers on one side of the table, and the client and me on the other. Taped to the back of my laptop lid was a conference-center supplied piece of paper with a hastily scrawled note on it. The entire message consisted of only two letters followed an exclamation mark. The letters were “N” and “O.” The note sent a succinct message that was hard to ignore as the customer incessantly strove to get a little more functionality brought into the failing project’s scope. For every request, I would drop my chin slightly, look over my glasses, tap my right index finger on the top of my laptop drawing attention to my sign, and they would relent. Instead of being a pessimistic curmudgeon, I was bringing realism about the budget and timeline and doing what leaders do—making hard decisions.

Aware Leaders are naturally curious about their surroundings; they keep abreast of what is happening, but not in a meddlesome manner. This awareness allows them to provide advice that has a natural “system” bias to it. They see things in a broader scope than others do. This gives them the ability to understand people and situations better. A common tool used by leaders is management by walking around (MBWA). Best known for its use by the founders of Hewlett Packard, it is also documented as being core to the success of United Airlines, 3M, Corning, and many other This tool not only makes leaders aware, but the employees feel closer to the executives and can mention risks long before becoming issues.

272  Chapter 11: Leadership Traits and Actions Empathetic Empathy is a cornerstone of the action of listening. Leaders’ ability to listen empathically builds their understanding of employees’ and clients’ situations allowing them to find constructive solutions to problems. It gives them a oneness that knowledge about a person or group alone cannot provide. Knowledge is simply facts and figures. Empathy gives a leader the ability to take raw data, apply the context created by the circumstances around the situation and develop a more accurate understanding of the problems that need to be addressed. Empathy is also the basis of trust. We rarely trust someone that is not empathetic to our needs.

Confident The ability to be confident in one’s self and supporting staff is central to gaining trust. This allows the leader to help others build confidence. Confidence removes accusatory actions from leaders. It supports other traits such as decision making, accountability, and focus. This level of confidence, at times, even borders on hubris. The “hubris factor” is what allows companies to create and meet big hairy audacious goals (BHAGs). BHAGs are easy to find looking around the business landscape. For instance, the 1952 commitment to build a 100-passenger commercial jet aircraft (the 707).vii Or a decade-anda-half later taking the lessons-learned from designing a large military cargo plane and applying them to a commercial aircraft of twice the 707’s capacity—the 747—when the company did not even have a building big enough to build the plane.viii Another well know example is the audacity of the executives of a small company building commercial scales, tabulators, and meat slicers in 1924 to name their company International Business Machines Corporation.ix Or more than a half of a century later under different executive leadership to invest $5 billion (in 1964)x in designing and building the System 360 computer architecture (the operating system alone was estimated to take 5000 man-years to buildxi). For both Boeing and IBM these were major leadership commitments defining the companies’ greatness.xii Optimism, presented with a realistic tone, is the basis for extravagant goals that are not impossible to reach. The path to reaching these goals has a sensible set of steps with intermediate goals when supported by the right people (the reoccurring theme of people first). Attaining wildly important goals (WIGs), discussed in Chapter 2, “Creating and Maintaining Corporate Alignment,” is only a slightly different philosophy. These wild dreams create exciting new products, services, and companies. The WIG is the basis of McChesney’s first of four disciplines of execution (followed by acting on leading measures, maintaining a scoreboard, and accountability).xiii

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This trait creates positive energy, by and large, gaining consensus and balanced with decisiveness.

Focused Jim Collins uses the term hedgehog concept,xiv Tom Peters uses “stick to your knitting,”xv McChesney uses scorecards,xvi and other authors use different terms and tools, to denote the focus that is a core tenet to great leadership. Do what you do best and do it to the best of your ability. Leaders do not look for the next fad, react to the latest whim, or, as it is often referred to in the ranks, “chase shiny balls” (or soccer balls, reflecting back on our parenting analogy at the start of Chapter 2). They know that constantly changing the company’s direction destroys a common understanding of what the company is doing and is not the path to success. Leaders focus. They have their eyes on the prize.

Humble There are dualities in good leaders. The relationship between humility and confidence is one. From a company aspect, great leaders have confidence and hubris as mentioned earlier, however, they are generally humble people. They avoid talking of themselves, and instead, defer to the company and others’ contributions.xvii And, as mentioned in the last section of Chapter 9, “Women as Leaders,” they accept their failures while not taking credit for their successes (a combination of humility and accountability).xviii This gives leaders the ability to honestly share business successes with others and build an allegiance. Based on a strong sense of mission, leaders are dependable, honing their commitments and taking responsibility for their actions and mistakes (accountability). A foundation of internal integrity guides them through what is morally and ethically correct. Leaders understand and care for the people they lead. They are confident and show superior judgment allowing them to evaluate multiple action plans objectively using logic, analysis, and comparison. They are pragmatic decision makers who can move people toward a goal.

Poor Traits Challenging Leaders Larger-than-life leaders that draw everyone’s attention are generally not topshelf leaders. They are often too focused in their own self-interest. As opposed to many other analysts, Jim Collins cites some of the commercially successful leaders,

274  Chapter 11: Leadership Traits and Actions for instance Lee Iacocca, as lacking true great status as their companies did not continue to thrive upon their departure. Yes, some of these leaders did amazing work, but become too I-centric and fail create successful succession plans that call for hiring staff to continue their success.xix Although charisma is often listed as a critical trait, there are data proving otherwise. People who are abrasive, are rarely good leaders as they lack empathy and awareness. They do not, however, need charisma. Charisma often comes with a flair of selfishnessxx and deception. It is regularly seen as a component of unethical behavior. There are many famous people who had amazing charisma—Bernie Madoff, Adolf Hitler, Charles Manson, and Ted Bundy to name a few—who used their engaging charisma to the severe detriment of others. Charisma too often focuses on the self, not the company, pulling people to the person not the vision. Great leaders do not stand in front and upstage employees. They prefer staying out of the spotlight and instead work internally building leadership traits in the organization. We can all think of executives who attempted to pass themselves off as leaders that narcissistically paraded around touting their virtues, but failed to run their companies in a sustainable manner. They can build better buildings, are the best at negotiations, have great plans, and wonderful visions, but, they are so enamored of themselves that they forget to build the teams around them; their organizations either fell apart under their rule, they were fired, or their companies crumbled after their departure. Carley Fiorina at HP, Lee Iacocca at Chrysler, Stanley Gault at Rubbermaid, and Al Dunlap at Scott Paper are often used as prime corporate examples.xxi They are in politics, too. All we need to do is to open a newspaper any day of the week to see examples. Being a leader is a great aspiration, but requires more effort than that required to attain a simple certification or degree. It requires endless work, tireless introspection, and continual adjustments to improve your abilities. Leaders have nine core traits. Accountable Aware Confident

Decisive Empathetic Ethical

Focused Inspirational Humble

Depending on where you are in the organization, they have varying degrees of importance. Everyone needs to be accountable and ethical. Humility and empathy, though, are traits that people in the lower levels of the project stack may be able to develop over time.

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Interviewing Suggestions Two challenges exist in interviewing for leadership—determining the minimally required traits for the position and uncovering whether these traits exist in candidates for a position. The information provided in the previous chapter will help identify the traits needed for the position; however, the real list is based on the job and the company culture. The first tenet is to cultivate versus acquire candidates. By doing so, you build a company culture that values leadership skills and makes them a priority. Employees see the focus on leadership and growing employees, which improves morale. Spend a couple of hours each month looking at key positions, determining the leadership fit of the people in those positions, and how those people could be improved. Look at current talent inside the organization and who may be able to step into various roles. Hold informal meetings featuring a notable leader (inside or outside the company). Include leadership goals in prospective leaders’ objectives. Help employees or their bosses create a development plan. Do the same for you. Bottom line, retention is always less expensive and more predicable than replacement. Education and training will reduce the chances of people leaving. Obviously, companies have to hire to fuel growth and combat attrition. When hiring new talent, make sure to take your time to get the right person. Remember Packard’s law from above—never hire a person when you have doubts. Everyone puts their best foot forward during an interview and if you question their fit, it will most likely be worse than you thought. One problem is how to do interviews. We do not spend enough time structuring the interview to get the answers needed. Usually we ask questions to address their technical abilities, but rarely do we dig into their core values and leadership strengths. Hiring teams should review the types of questions to ask. Never send an interviewer to talk with a candidate without first discussing the long-term and shortterm goals of the hire. Ask open-ended questions based on hypothetical situations or past experiences. Try to create a conversation that increases the complexity of the situation. This is usually not too difficult as every position has situations that challenge one or more of the traits above. Evaluate how well interviewees listen, whether they ask questions to get more information, state any assumptions that they make, and whether they stop to think about the situation. These all point to positive traits. On the other hand, if they are quick to respond, make assumptions without stating them, or relay a situation or event as solution, be concerned about their ability to listen, be aware, or be empathetic. For instance, purchasing has to deal with vendors trying to sway them. Architects have issues trying to get customers to go with the “right” solution, which may not be the direction they are thinking about or that is compatible with the solutions the architect can supply. Executives can probe how candidates would handle situations where duality or tension have conflicting goals. Questions should try to keep them

276  Chapter 11: Leadership Traits and Actions from talking about how interviewees handled a past experience and keep them focused on the hypothetical. A line of questioning for sales people might be, when taking prospects to lunch: – What determines the restaurants you take them to? – If it is a dinner, do you take their spouse or significant other? – What do you do if they bring someone other than their spouse or significant other? – What do you do if they have too much to drink? These questions get closer to their real core. There are no right answers, but you can usually assess someone’s ability to use traits that are needed for the job at hand.

Actions of Successful Leaders Traits are the foundation that supports all of our actions—not just for leaders. Reactive tendencies—how we act in given conditions—are a reflection of our traits. These action patterns are difficult, but not impossible, to change. We are judged by these actions. However, as we mold ourselves into better, more effective, leaders, our actions will most likely have to change. A person’s actions expose their leadership traits and actions cannot lie. Actions, of course, are endless in number so trying to hone in on “actions to identify leaders” would take volumes. Some leaders are out in front of people, often making bold proclamations; others prefer to be further in the background. From experience though, there are five actions that standout over the rest— listening, establishing ownership, fostering dialog and discussion, cultivating a nofault environment, and selling people on ideas. Listening. By far, the most pronounced action a leader can take is to listen. The combination of listening and leading requires asking the right questions. There are numerous books about listening and active listening for leaders, but the best come from the world of professional sales. People selling high-profile, complex items must have a complete understanding of their customers’ needs and the only way they can do that is by asking the right questions to get people to expose their actual issues. Establishing Ownership. Creating ownership of an idea requires skill and strong persuasive talents. The inputs are to convey why something is being done that allows people to justify changing their beliefs and expectations. The outputs are a sense of urgency, passion, motivation, modified behavior, and finally ownership. Selling, not Telling. People rarely change by demand. Edict breeds resentment and people revert to their old ways quickly. Therefore, the ability to get people to do something because they truly want to, persuasion, is what enables leadership throughout the organization.

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Fostering Dialog and Discussion. The foundational gap that this book identifies is a lack of common understanding. Once a common understanding exists, the organization gets buy-in and alignment and change management becomes easier. The critical action here is dialog and discussion; two very different types of discourse which must be understood by everyone. Cultivating a No-Fault Environment. Open communication will never happen in an accusatory finger-pointing environment where scapegoats and blame surface when difficulties arise. When people think they or a co-worker will be blamed, discourse stops. This experience is supported by authors such as Jim Collins, Peter Senge, John Kotter, and Patrick Leoncini. Collins identifies four principles for leaders getting the information they require (lead with questions, engage in dialog and debate, conduct blameless autopsies, build “red flag” mechanisms).xxii Senge spends nearing a chapter clarifying the use of dialog versus discussion,xxiii Leoncini devotes a book to asking the “dumb” questions to lead customers to the right solution.xxiv Let’s explore these five points in more detail.

Listening A speaker at a recent conference asked the well-dressed audience, “When is the best time to listen?” As with most presenters’ questions, there was a host of blank stares, a few people rustled in their seats, and the remainder diverted their eyes to their laps as if a sudden important message had appeared on their tablet or phone. After a pregnant pause the answer came, “When someone is talking.” A relieved, yet embarrassed, chuckle floated among the suit-clad attendees. The advice is a good start; however, listening entails significantly more effort. The most important action of any leader is listening. Listening is the cornerstone of every decision. Referring back to the opening story in Chapter 2, “Creating and Maintaining Corporate Alignment,” the action that impressed me the most was that the executive sponsor listened, retained, and could relay my story from the previous day. He listened. The traits that make listening effective are being aware, empathetic, and decisive. Listening allows you to understand the people and situations at the core of making good decisions and setting priorities properly. Listening Is Learning. Fundamental to listening is the concept of learning. If you are not trying to learn something from people speaking, you are not listening. By doing this, you are treating people as if they are an object.xxv Use the same traits when listening as you do when you are learning something. You may repeat what you hear, ask for clarification, or take notes. Taking notes may seem like overkill for many conversations and is inappropriate when people are revealing deeply personal issues; however, writing down what someone says is complimentary to the speaker. Few things make people feel better than having their thoughts being important enough to archive.

278  Chapter 11: Leadership Traits and Actions At the end of Chapter 9, “Leadership’s Relationship to Projects,” there was a story about traveling with female teammates. The core of their communication was different because they asked empathetic questions. Learning Is a Humble Act. Listening with the goal of learning is inherently humble. It says, “You know something I don’t and I want to learn it.” This is why the leadership trait of being humble is so important. Good leaders are humble. This is part of what makes a leader great. The willingness to listen and learn acknowledges that we do not know everything. Think of people who were great leaders and how they made you feel valued. In a word, they were humble. You can see how the traits enumerated above are all important as a foundation for being a leader. Questions Are Critical. By understanding how to ask questions, leaders can get others to buy into concepts without issuing edicts. Questions, though, do more than supply a leader with data to make decisions. They also help the people affected by those decisions understand the basis and buy into the direction. This process of “leading people down the process of discovery” helps develop a common understanding and a sense of ownership and passion around the topic. People feel they are part of a decision. Action Is Not Necessarily Required. Listening requires participation, not always action. You need to pay attention to when to take action. At times, for instance when new to a group or when there has been a major setback, you need to wait to see what action to take with respect to what people are saying. When people raise issues, you need to demonstrate that you heard them through actions not words. The answer may be days or weeks later. At times, it is not prudent to make wholesale changes, but rather to win the hearts and minds of individuals. Making small changes of a personal nature—getting team members more powerful computers, helping them connect with someone they have had trouble meeting with, or buying them a cinnamon roll for putting in a little extra effort— can demonstrate a new style of leadership and change beliefs and expectations. There are, however, times when people just want someone to listen. Unfortunately, many of us came up through the ranks of the problem solver, which has conditioned us otherwise. Our lives consist of a continuous stream of puzzles to solve— subordinates presenting problems, children needing help with homework, and myriad of gadgets that need some special knowledge to make them do what we want or what they are supposed to do. We listen, dissect the problem, and take or suggest corrective action. After more than 30 years of marriage, I still struggle with this. More than once my wife has recounted an exasperating situation with one of our children, friends, or work. After dutifully listening to her monologue, I supply a suggestion or solution and it does nothing but increase her frustration. “Would you please stop trying to solve the problem and just listen?” she demands as she retreats to another part of the house. The same thing happens at work. Employees simply stop talking, insincerely acknowledge that they will try your advice, and put more distance between you

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and them. Our advice may be perfectly valid, but before people will act on it, they have to feel we are listening. It is hard for many of us to listen in a manner that prompts people to talk about issues that matter to them. Lesson from the Parenting World The problem with questions is that they can sound like interrogation. Remember back to your childhood, coming home from school, and possibly one of your parents asking you a litany of questions about your day, your lunch, what was fun, what your teacher did, and so forth. It felt like you had just walked into a district attorney’s office. Worse than that, most of your feelings were denied. We have all heard some form of this. In fact, you may have used some of these same lines on your children: My teacher hates me . . . No, he doesn’t; I am sure you are fine. I had a horrible day . . . It could not have been that bad. Everyone thinks I am stupid . . . No they don’t; those people are just jealous of your talent.

We do the same thing at work. Not too long ago, I picked up a book by Adele Faber and Elaine Mazlish titled How to Talk So Kids Will Listen & Listen So Kids Will Talk. My intent was not for my professional growth. I wanted to read it because I was feeling a wall go up between my six-year-old adopted daughter, who had just started attending public school, and myself. As I read the book, I started seeing things that happened at work all the time that were shutting down communication. One of their first claims is that we deny people their feelings. For instance, your daughter comes home from school and says her best friend does not like her anymore and you quickly retort trying to soothe her by saying that it is not true and she is making something out of nothing. This shuts down communication. Instead we should respond with an empathetic statement, like “That must make you feel horrible.” This gives her an opportunity to open up.xxvi I was at a client site and one of my peers said, “That stakeholder does not like me. I can never get him to come to a meeting.” I almost said, “Oh, that’s silly. I am sure he is just busy.” I chose a different approach and said, “That must be frustrating.” The next twenty minutes was a dump of what this stakeholder had done wrong. Had I dismissed the frustration, I would have never heard the reason behind the comment. We talked further and together came up with an action plan to address the stakeholder. A few weeks later all was solved. It took the act of empathetic listening to get the problem exposed. Hearing “frustration” and not a “silly complaint” made it so that we could come up with an action plan. That twenty minutes of being a mentor, probably saved the project a dozen or more hours of frustration. I have used other techniques from their book as well. After the equivalent line to “You sound frustrated” to acknowledge their feelings, I have said nothing but “hmmmm . . .” And let the room fill with silence. Before too long the person says,

280  Chapter 11: Leadership Traits and Actions “Maybe I could try . . .” and they start solving their own problem without me doing anything other than uttering a monosyllabic grunt. Paying attention to the person and being totally silent is a powerful statement of trust. It is a different version of a skill my dad, a former Boeing executive, would use. He was a smoker back in the day when conference rooms were the leading cause of cancer. Someone would ask him a question and he would do nothing but pull a tobacco pouch out of his breast pocket and roll a cigarette. A process that took 60 to 90 seconds left the conference room dead quiet while he went through the process of unrolling the pouch, getting a rolling paper, carefully distributing the tobacco, licking the seal, returning everything to his pocket, and lighting his cigarette. After a long drag, he would look around the table and ask, “Good question, what do you folks think?” The group, having had time to digest the question, had tons of suggestions. Dad would just facilitate the discussion by asking questions. In the end, he got an answer that everyone bought into. The other useful trick Faber and Mazlish point out is brevity. When you ask someone a string of long questions you do two things—you frustrate them and you limit the answer. Questions like, “Do you have a Gantt chart?” “Have you talked to all the stakeholders?” or “Did the CEO approve the project?” are closed-ended and solicit just one response—yes or no—and the conversation is done. Open-ended questions are better, “How does the Gantt chart look?” “Which stakeholders have you talked to?” or “What did the CEO have to say?” The problem is that many questions are actually statements that tell someone what you would do. “Did you talk with the CEO?” Really means “I would talk with the CEO.” One-word questions such as “CEO?” leave the question open. That question could be asking if someone knows what the CEO wants or thinks, whether the CEO is supportive or even aware. The question, points to a person but does not prejudice the response. Similarly, “Gantt chart?” or “Stakeholders?” will get a wide array of answers. You may find that blocks of tasks are undefined and people have only made guesses at durations, one stakeholder is not engaging or no one knows who the real stakeholders are. The answers are freeform. The one word question also avoids the feeling of being grilled. It leaves the person answering feeling that he or she has liberty in forming the question. The answers are of higher quality and the person answering feels better. The mindset when leaders listen is based on the following precepts: – Listening is learning. Do not deny emotions. Let people talk. – Learning is humbling. It tells people you are talking with that they can teach you something. – Questions are critical. Often, the shorter the better. – Action is not necessarily required. Sometimes you just have to listen. – Acknowledge the challenge. Acknowledge people’s emotions and let them figure out the solution.

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Leading People down the Path of Discovery For more complex situations a different tactic is needed, employing the art of persuasion and sales. Both are central to leadership. Someone once said that leadership is the act of getting people to do something because they want to. The line sounds nice, but does little to explain how to persuade someone to follow a direction. An example will help. A few years ago, I was talking with a client who had a very successful data analysis company. The problem the company was having was with a custom piece of proprietary hardware it had designed and built to collect the data. The business development manager, who loved hardware design, was managing the product development and was relaying the current situation to me. I asked for the history on how the company got to its current disheveled state. He sighed and told me his tale of woe. The first release was a success, but after a short time a key supplier of one of the core components, a small company, went out of business. This made him look for a new supplier. Adding to the frustration was that all the other suppliers were significantly more expensive. We talked about the functionality and a few other particulars on that version. He continued, about a year later he created a new revision and changed the component’s functionality to use firmware, so reprogramming would be easier. He contracted with an individual to design the part, who was desperate for work. He got a great price. Unfortunately, the protocol used was nonstandard and no other suppliers supported it. When the contractor found full-time employment, the company was again without support and found a standard product to replace the component. Version 3, the version in current use, had another part of the tool losing support and he needed to find a new vendor. This problem was with a contract with a young company, started by a recent college graduate, to supply a subset of components. My client was running into multiple problems, various vendors were arguing that the component’s interfaces were designed incorrectly, while the owner had taken another job out of state vowing to maintain support through a set of off-shore workers. The business development manager was left with money invested in an unusable product and no confidence in his supplier. He insisted the problems were unavoidable and the company’s strategy was prudent and fiscally conservative. Looking at the hard expenses, he was correct. His continued involvement, though, was pulling his time from business development. We set up a follow-on meeting to review some possible options. I returned to my office to determine how to approach telling him that the company needed him to focus on gathering and analyzing data, not building hardware, and the business development manager’s pet project should be given to a company that specializes in developing custom hardware. If I simply told him this, however, I would most likely fail on two counts—he would not change his ways, and I would lose a client. I requested more data on each business unit’s growth plans and clarified a few other points from our conversation. My agenda for the follow-on meeting was:

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Recap the previous meeting. Summarize the information that I had gotten, ask how the company was going to achieve its aggressive growth goals, and what role the business development manager would have in that. 2. Review the growth plans. Understand how the executive team was addressing operational issues common to any growing company—cash flow, security, crosstraining, hiring new staff, turnover, and so on. 3. Review the company’s client expansion plans. Have the executive team enumerate how they were going to grow their revenue with existing clients and new client acquisition plans. Ask who would manage the custom product development. 4. List the problems with the previous versions. Highlighting the areas that were a result of not having an established hardware company to manage and build the custom equipment. As we worked through the agenda with the company’s executives, they started filling in the answers, arriving at the conclusion that they would need to hire an additional person to either manage business development or manage the hardware build. They quickly came to the additional conclusion to focus on their core business of collecting and analyzing data, rather than building hardware. The hardware project needed to be outsourced. I never had to mention bullet 4, they came to that conclusion on their own. Investing time in building a trusting relationship with a reputable product development group, whose responsibilities would include architectural design, building, and supplier management, would free up the time of the business development manager to focus on his job. It would surely require a capital investment, but with the business development manager focusing on growing the client pipeline, the increased revenue should support it. This plan would also insulate the company from problems in the hardware supply chain. I could have told them in the first meeting that product development was not their forte, and that the business development manager’s personally favorite project of managing all the vendors was costing them dearly. Had they taken this direction without going through the discovery process, they would not have owned the decision. As obvious as some answers seem, when problems evolve over time, the people in the middle are unable to see some of the most obvious answers. Replaying their words in a different context and asking a series of questions is the key to shedding light on what direction is needed. The conclusion, though, is their own. Leaders simply facilitate the process. The Answer Is Questions There is a lot to learn from the world of professional sales. As a leader, you have two options in getting people to go a certain direction. You can either tell people the direction, or you can sell them on the idea (often referred to as sell-or-tell). Persuading people to take a new direction is always better and, as in the prior example, they come

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to the conclusion themselves. The simple solution is to ask them what is important. For these questions to be successful, however, they need to be structured to guide people past symptoms and toward what is of value. A number of years ago, I was introduced to a book by Neil Rackham titled SPIN Selling. My first reaction was revolt. The last thing I do is to put a “spin” on anything. However, the person recommending it was right about everything else he told me, so I forced myself to read it. Since then, I have recommended it to hundreds of people. SPIN is an acronym that describes the types of questions to ask to get down to the real problem. These structured questions are classified as situation, problem, implication, and need-payoff questions; hence, the acronym. It describes a process that drills down past symptoms and reveals core issues. The goal is to lead a person down the path of discovery to allow them to convince themselves of a solution.xxvii Situation Questions: The first level of questioning is situational. These questions determine the authority of the person to make the decision, who is involved with the decision, and so forth. These are the most basic of questions. Often these questions can be answered with a little research and do not need to be asked. In fact, asking some of these questions (Are you the decision maker? Do you have budget? and the like) can be rather annoying. So you want to minimize them. These questions seldom dive into the problems and may seem irrelevant if asked out of context. Problem Questions: When most people state a problem, they have rarely thought it through completely. More often than not, they are actually stating symptoms. Refer back to the example above of the data company that was trying to manage custom hardware development. The problem as it was first addressed was a series of “bad luck” choices around vendor selection. You need to resist the desire to try to solve that problem. The solution is most likely short-term and does not address the root causes. In fact, making a suggestion for a solution at this point will defeat the goal of giving the person you are working with the opportunity to provide the data for him or her to solve the problem. To get to the real problem, you need to probe further. Problem questions explore how the problem manifests itself in the organization. The standard question at this point is, “Why?” You need to avoid, however, sounding like a 3-year-old going through the annoying why-stage. “Do you have the criteria for the vendors you reviewed?” or “What were the primary selection criteria?” are questions that give you critical information, but refresh the situation in the mind of the people you are talking with. In the prior example, the answer was often cost. However, when they mentioned cost it was obvious that they were starting to factor in additional costs like those of missing a lead as the development manager was focused on hardware and vendor issues. The key is that you do not tell them that, they come to that understanding. Do not make assumptions or use prior knowledge to answer these questions. There is something very important in having people answer these questions. The answers have to be theirs. This creates ownership (see the next section).

284  Chapter 11: Leadership Traits and Actions Implication Questions: Once you have answers to what the bigger problems are, you can start asking implication questions. These should be asked in the positive. In the example, my first question was, “With the special hardware working the way you want, how much business will you get?” followed by “How much less work will your analysts need to do?” and finally “How much time will that free you to do business development?” These are the implications of a change in operations and obviously lead directly to the actual costs of the old method. These questions give people time to internalize the problem’s scope. They help the interviewee comprehend the problem’s total impact. For instance, if you are trying to resolve a problem with untimely production throughput reports, then implication questions could center on whether on time reports will reduce: – Starting jobs with the wrong material. – Scheduling inappropriate overtime. – Slowing production throughput. – Missing customer deliveries. – Failing to identify quality issues in time to minimize rework. – Shipping defective product. These questions help the listener understand the breadth of the problem and set up the final set of questions—the needs-payoff questions. Need-payoff Questions: The structure of need-payoff questions allows interviewees to justify the solution in their own words. These questions all need to be asked in a positive manner. Instead of saying that an implied problem is costing a certain amount, the questions take on a positive form focusing on how much would be saved or gained if an explicit problem were resolved. For instance, “Eliminating the accidental scheduling of overtime would save you how much money?” or “How much would you save in rework costs if you could catch issues a few hours earlier?” These questions provide the final pieces of data to have people convince themselves of the direction to take. If they conclude in their own words that the cost savings or value warrant the work, there is little argument left. When people state that solving some problem saves them $100,000 dollars a year, they cannot argue with you about the number being wrong. Through your questions, you have led them down the path to the answer. Note that not all payoff questions need to be quantified. This is where a lot of people will make intangible value statements. These answers play directly to emotions and are very powerful in setting up change. Statements like, “Then Fred will no longer bug me about the quality issues” may be more important than the cost savings from higher quality output or improved product reliability. Obliterating Objections The sequence of these questions has two significant benefits. First, the value/cost benefits come from the people needing the solution; it will be difficult for them to

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object to the reasoning. Second, the conversation ends on a positive assessment of potential solutions that directly addresses the people’s explicit problems. Will some still object? Of course. In fact, some will realize that you are trying to get them to commit to a number and will stop answering questions. They may feel you are trying to trick them into a quick, ill-thought-out answer, trying to offload accountability to them, or some other diabolical deed. If you are a leader, this better not be your goal. You goal is getting to the right answer. You will need to gain these people’s trust and may need to resort to asking the questions over the course of weeks in casual conversation while keeping meticulous notes. Is there still further analysis to do? Yes, and further dialog can now continue as you have helped them change their beliefs and expectations and now behavior can change (refer back to Chapter 5, “Understanding Business Change Management”). In the end, you will have an extremely convincing case for supporting a fact-based decision. Asking the right questions leads people down the path of discovery. These questions get people past their fixation on symptoms, drives them to root causes, and the actual benefit from solving the issue. The steps are asking questions that determine: . The situational aspects (for example, who can affect a change). . How the problem manifests itself. . The root causes that create the problem. . The financial and value aspects from solving the problem.

Establishing Ownership Part of our research was doing interviews on what project managers and executives saw as major execution issues. The second most common response was what we classified as ownership. This included a number of responses that seemed to relate, such as passion, sense of urgency (often referred to as creating a burning platform), employees engaging in the “why” behind the organization, and motivation. There were many terms used in these interviews that seemed to revolve around a central theme. Here, I have called it ownership. An argument can be made that each term should be addressed on its own, but in our discussions with people, the lines were significantly blurred between all of these terms. They were not distinctly different, however, they all related to inspiring people to buy-in to a concept or project. “Ownership” seemed to be the most acceptable term to the people we talked to and would not be confused with other terms in the book. When people felt ownership, either through urgency or passion, they had a natural motivation to help the project complete successfully. As mentioned above, some listening techniques actually build other people’s ownership. Following a process of taking someone down the path of discovery, you

286  Chapter 11: Leadership Traits and Actions have them justify the reason for the goal, initiative, or project and they lay the foundation of ownership. Later in this chapter, we will see how leaders use dialog and discussion to promote ownership further. Listening, ownership, and dialog are all tied together. First, we need to understand some of the poison in today’s business culture—the dehumanizing of people. People versus Human Resources Business tends to dehumanize people. Everything from the term Human Resources, our allocation schemes, and matrixed organizations tend to treat people like objects. We create tasks and assign resources—conference rooms, inventory, money, projectors, trucks, shelving, and, lest we forget, people. We send out emails to book conference rooms, reserve trucks, and so on, and others telling functional managers we need their “resources” assigned to our project. Not quite the personal touch. In our haste to solve problems, we worship the flamboyant white knight who comes in to save the day and ignore those that get it right the first time. As people are rewarded for being the hero, people work harder at being recognized for being right, and slip into the pattern of making others look wrong. This destroys teams and slows progress. As we get under the pressure of continually shorter deadlines, we become increasingly rude to our coworkers, subordinates, and even our customers. This sounds crass and demeaning. As mentioned in Chapter 9, “Leadership’s Relationship to Projects,” this objectification is explored extensively in the book Leadership and Self-Deception, which shows how our drive to succeed poisons motivation in others. It does an excellent job of illustrating (for instance, through the example of an infant’s middle of the night crying) how we deceive ourselves into thinking that we are keeping the goals of the organization in mind, while inadvertently sacrificing others. It shows how our overloaded work lives, coupled with an individualistic approach and success-driven behavior, creates animosity and non-cooperation. Under the pressure of trying to achieve too many things, we start looking at ourselves as over important and others as less so and slowly turn our co-workers into objects. We routinely follow a pattern of elevating ourselves more as hardworking, fair, sensitive, good managers, and dedicated workers. This alters our view of co-workers as lazy, inconsiderate, fake, and unappreciative.xxviii Although unintentional, all of us exhibit this behavior to some degree. The culture set by the organization’s senior executives drives this. Due to our own deadlines at work, we are reluctant to help co-workers who need assistance. Inherently, we know this is wrong, but we start the process of self-justification just as in the example of the crying infant example. When others fail, even though we might have been able to prevent it, we claim that it is their lack of work ethic or knowledge that caused the problem. We know quite well that, had we offered

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a few minutes of advice, the trouble could have been averted. As a result, we can notably come to the rescue, too late, and promote our own skills. This builds further animosity in the group and people shun our advice seeing it as criticism. The Arbinger Institute encourages consciously obstructing the I-centric, hero-focused culture. The authors’ solution focuses on identifying the issues in you that breed this behavior and giving you the tools to change. As easy as it is to see faults in others and want them to change, they prescribe that we need to address traits in ourselves. Each person needs to ask what he or she can do to help others. As the author’s say, “focus on what you can do right to help.” xxix This is founded in the traits of ethics (honest conversation), humility, and empathy, and creates a selfless culture. Following this style is hard for some people. I have tried it in both my professional and personal lives. It lessens my stress, I see more good in people, and I achieve more. It breeds a cooperative environment. The nice part about it, is that you do not have to be an executive or CEO to change the culture. It is all in you. It is also contagious and others pick up the style. Jim Collins found the same to be true. By focusing on the right people, utilizing what he calls the hedgehog effect (focusing on what you do best), and discipline, this culture is achieved automatically. By getting the right people who are focused innately on your company’s goals, self-motivated, and committed to the vision, problems The continuing theme—it is all about people. Motivating People If people are not motivated to do something, they will never take ownership. I am sure hundreds of books have been written on the topic of motivation. The world of sales is infatuated with the topic—you buy, if you are motivated. The topics range from philosophical to practical to pragmatic. The easiest way to have a motivated team is to hire people that are passionate about your vision. Whether you are following the people-then-vision (you are an executive or are starting a new endeavor) or the vision-then-people paradigm (you are a mid-level manager or project manager being assigned a task), people are at the core. Developing a direction based on your organization’s capabilities is the most pragmatic approach. If you have a team of people excited about quilting, it will be easier to motivate them to do a new line of cloth-based products than it will to motivate them to design and build maple furniture. Get the right people before developing a vision. Unfortunately, in the real world, we are often handed teams that need a little more help at being inspired. The first step is helping them see the purpose for why the change is needed. Once a cause resonates with people, they are far more likely to champion the initiative and rally others. Referring back to the discussion on change management, getting core supporters creates the initial excitement and starts recruiting the early majority. Great

288  Chapter 11: Leadership Traits and Actions leaders such as Abraham Lincoln, Dr. Rev. Martin Luther King, Jr., and Mahatma Gandhi all had a dream. Politicians know the power of “why.” “It’s the Economy Stupid” (Bill Clinton), “Make America Great Again” (Donald Trump), “Yes We Can” (Barack Obama), or “Heim ins Reich” (Adolph Hitler), and “Make Love, Not War” (the antiVietnam war movement) whether you like the message or not, all swayed and inspired large masses of people—some set the foundation for some horrific acts. Throughout human existence, the one word that surfaces from childhood to death is “why.” Any parent knows this is the most commonly used word of any three- or four-year-old. Philosophers and laypeople have asked why we exist for centuries, and nearly all discoveries are based on someone’s query into why. People are driven by “why” something is being done. The slogans in the previous paragraph say nothing about how or what will be done to achieve results. Maybe that is why some of the slogans generated catastrophic results. Understanding “why” is core to human nature. No one describes this concept better than Simon Sinek is his book (and related videos) Start with Why. Using his visualization of the “Golden Circle”—three concentric circles with “Why” in the center, “How” in the next ring, and “What” in the outer ring—he describes how leaders inspire people to take action.xxxi He illustrates numerous companies and movements whose successes are focused on why, and others whose failure were focused on what. “Why” is the basis for motivation and motivated people get more work done. Experience shows that when people understand the purpose, are trusted, and given autonomy they excel. Daniel Pink has done significant research in motivation. Pink’s work is sensible, concise, and clear. In his book Drive: The Surprising Truth About What Motivates Us and related video (with over 15 million views as of this writing)xxxii he makes the argument that too many organizations still try to motivate people solely using carrots and sticks. This style may have worked in the past for blue collar jobs, but for the increasingly cognitively-driven workforce, this does not work. Today’s workforce is not solely driven by money. Successful leaders motivate the new workforce by focusing on three actions—autonomy, mastery, and purpose (purpose equating to “why,” supporting Sinek’s view.) Based on observations at Atlassian, 3M, Google, Herman Miller, Zappos, JetBlue, and others he defines Motivation 3.0 (Motivation 1.0 being caveman’s “eat or be eaten” and Motivation 2.0 being carrots and sticks). “Motivation 3.0 begins with a different assumption. It presumes people want to be accountable— and that making sure they have control over their task, their time, their technique, and their team is the most effective way to that destination.” xxxiii

This is nothing new, however. Decades prior to Pink’s work, Peter Senge, Tom Peters, and others discovered the same concept embedded in many companies they researched. Senge writes,

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“When personal mastery becomes a discipline . . . [it is] . . . continually clarifying what is important to us. [. . .] People with a high level of personal mastery share several basic characteristics [. . .] for such a person, a vision is a calling rather than simply a good idea.”xxxiv

When people are placed in an environment where they can learn, develop, and grow, the rewards to the organization are huge. Tom Peters comes to the same conclusion with his research on 3M, Lockheed, HP, Walt Disney, and dozens of other companies who used skunkworks, champions, bootlegging, and the like to provide a vehicle to promote innovation. He enumerates six human traits that drive us—we like praise; we are deductive as much, if not more, than rational; we react based on the data we can comprehend; we are self-motivated; we innately understand action over words; and we need meaning and independence.xxxv Capitalizing on these traits allows companies to move toward excellence. The challenge of motivating people, however, is not exclusively an executive issue. Just as our corporate leaders need to motivate around a vision, functional managers need to empower and motivate their employees, project managers need to do the same for their teams, and architects need to excite a customer about a better solution. One of the common complaints in struggling projects is low motivation and a lack of sense of urgency to elicit action (what many refer to as the “burning platform”). Little will be achieved without an atmosphere of motivation. If excitement cannot be achieved about doing a project, we must ask if the project is worth doing.

Selling Your Vision The tools of a sophisticated salesperson are in every leader’s toolkit. Think of the number of times you have heard a CEO define a new direction that you think is crazy. But as he or she continues the campaign to sell the idea, you start to see how the idea will make a positive difference, eventually you buy into the concept, and you are an ardent supporter. Now think of all the failed initiatives and how you or others never really bought into the concept. Now look at these last two sentences and realize that the verbs and nouns used to talk about the subject are marketing and sales words— sold, sell, buy, and campaign. Even the concept of ownership implies someone bought something. To be an effective leader, you need to understand how to persuade others for the simple reason that, regardless of your level of authority, you cannot make people change or support a vision unless they believe in the concept. There are many tactics to increase the chances of persuading someone to buy in to your idea. The field has been studied extensively to help advertisers increase sales. One of the most articulate researchers on the topic is Dr. Robert Cialdini. He has authored and co-authored numerous of books on the topic. Two of them, Influence: The Psychology of Persuasion and Yes! 50 Scientifically Proven Ways to Be Persuasive, are

290  Chapter 11: Leadership Traits and Actions excellent sources for honing this skill. I have developed many of these skills over time and many were added (or understood) after reading some of Cialdini’s material.2 Not all the persuasive actions happen when you are in the act of asking for agreement with your idea. A few actions should be done prior to asking. Experience shows that these are the most crucial: Ask for advice. Not involving people early in your idea is certain to increase the challenge of getting ownership. Surprises are great for birthdays, but disastrous when it involves how people do their work. You can start getting ownership with good dialog and gleaning advice on how to achieve a concept. Otherwise, people do not feel involved in the solutions or idea and they are far less likely to opt for it. Ask and utilize for some small item first. Much like asking for advice, ask for some small buy-in from the people you are trying to get engaged. The commitment may seem trivial; in fact, that seems to help. If the people you are asking see it as little or no effort, then they are more likely to do it. What has worked is asking an executive to use their influence to secure a long-term booking of a conference room for the project war room, requesting a key manager to lobby a peer to fund a proposal or inviting a key stakeholder to participate in a prototype review. If people have some small investment in the idea they mentally take some ownership. Establish common ground. This is an age-old tool and most of us do this as part of small-talk, but it is anything but small. This could be as simple as having the shared experience of having kids, but is much more powerful if the common ground is a shared pain that your solution is solving. Jill Konrath, in her book Selling to Big Companies, stresses this as the opening line or two in any communication. Make sure you express a common knowledge of the person’s situation and how your proposal will affect them.xxxvi Fear with an action plan. Fear can be a motivator, but only if there is a proposed action plan to avoid it. It should only be used when it is real and imminent. For instance, fear for further terrorist attacks was justifiable and real for many years after the September 11, 2001, attacks in the United States and gained nearly unanimous support for many actions (some later questioned for their legality). Using it again in early 2017, however, when terror attacks inside the US by foreigners and immigrants seems much less imminent, far fewer people supported and many protested new restrictions to immigration that were based on terrorism fear. One attack would change that behavior.

 2 Many, if not all of these techniques, are referenced in Cialdini’s works. They are presented in his format in the joint work by Noah J. Goldstein, Robert B. Cialdini, Ph.D., and Steve J. Martin, Yes! 50 Scientifically Proven Ways to Be Persuasive, Free Press, 2008.

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Create a culturally aware message. You must be culturally sensitive. Early in my career I spent time in Asia. It was painfully obvious that I was a stereotypical American and I had to change many aspects of how I worked to complete my assignment successfully. In the United States, United Kingdom, and Europe people are very self-focused. When asking for acceptance, using personal pronouns like “you” are appealing as these cultures value individuals over the group. When outside these cultures you need to be aware of group-focused cultures. If you are working in Asia (or with a person steeped in that culture) their focus is more on the group. In these cases, it behooves you to refer to the benefits to the organization and avoid extolling any personal gain. The culture shift is not just as simple as geographic; corporate cultures can have the same biases. These subtleties should be identified as early as possible as it effects all communications. The bulk of the persuasion, though, is centered on the proposal itself. The following are some tried and true techniques: Provide three options. Always provide a good, better, and best option for your proposal. The middle option should be your preferred plan of action. Although using this technique for years, I did not understand the psychology until Cialdini pointed out the reason. We are loath to choose the cheapest option, yet we do not want to want the most expensive. We gravitate toward the middle. This also shows people that you are accommodating and, by giving them choice, the feeling that they had a hand in shaping the solution—creating ownership. State the positive aspect. It is a well-publicized statistic that about 60% or 70% of projects fail. If you use that statistic to promote changing your company’s project approach (say to the one described in this book) you will have a more difficult time selling your concept. The reason is that people see themselves in the majority. They have social proof (see below) that their project success rates are the norm. Instead, reword the statement: Rewording



You can be part of the % or % of projects that succeed.

Relays the message that he or she can be part of an elite crowd


You are part of the % of executives that want a better way to run projects

Shows that he or she should be on board with their peers.

Social proof

These rewordings stress the positive, appealing to people’s desire to make things better. Social Proof. Few persuasive techniques are stronger than social proof. People are heavily influenced by what others do. If it seems like everyone at work is using some item (a tablet, Salesforce, Patient Fusion, smartphone, Fitbit, and more), then pressure mounts to use the same item. It is vested in the adolescent phrase, “All the cool

292  Chapter 11: Leadership Traits and Actions kids are doing it.” Be careful as the proof can be used against you. As mentioned in the prior technique, some social proof can point in the opposite direction—“Nobody runs projects well, why do you think you have the golden solution?” Stress how your solution moves the organization forward. In most cases, organizations want to advance. They are tired of status quo and want to move forward. By framing your request in terms of how people or the organization can advance, more people will be supportive and take ownership. Ask them how they will be supportive. By asking people how they will be supportive for an idea, they take the first step in committing to take action to help. Telling them how they should support the concept does not make the idea theirs and will not have an impact. By them saying how they will support the idea, they are more likely to keep their commitment. (Notice this is a major tool when working with executive sponsors when trying to increase their engagement.) Use the word ‘because.’ Xerox conducted research showing the word because has near magical powers when it comes to gaining agreement. Even if it states the obvious—“May I use the copy machine before you, because I have to make some copies.” Why else would you want to use the copy machine? But it met with a 93% acceptance rate.xxxvii We need to do ABC, because we want to solve this problem, be the best, reduce errors, improve project success rates, or whatever you are trying to achieve. As silly as it sounds it works . . . try it on your kids. Motivating people to the point of taking ownership needs a few basic components: – Treat people like people, not resources. – Establish a vision that speaks to the why of what you are trying to achieve and lead people to that vision. – Use positive conversation as it helps people understand and support the vision. – Promote autonomy, mastery, and purpose as they are critical motivators for cognitively driven people. Discovering Direction through Dialog and Discussion Leadership fails without honest input from others. Earlier in this chapter, when talking about decisions, I relayed a story of a meeting in Montreal where I taped a sign on the back of my laptop that said “NO!” There are certainly more polite ways to deny requests; however, that project would be millions of dollars over budget. We had to make tough decisions or fail—in the form of project cancellation and likely litigation. The seemingly perfunctory statement, though, points to another issue that is rampant in society, and therefore infests our businesses and projects. We have created a culture that is rife with the positive. We say “yes,” but do not mean it. In a pinch, we say “maybe.” As Jack Johnson’s song Flake goes,

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“It seems to me that maybe, it pretty much always means, no . . . Cause no one, no not, no one likes to be let down.”xxxviii

Saying no is exhausting because we have to follow it with justifications, reasons, and explanations. People continually question your decision. They sulk off and make us feel bad. You are branded a naysayer, pessimist, or curmudgeon. Most of us want to please others so we say yes or maybe and deliver little or nothing. Our beliefs and expectations are that if we say no, it will reflect negatively upon us. Hence, we pad estimates to give us more time to accede to an executive’s miscellaneous work request that we know will divert us from our assigned tasks. Agreeing to the request creates more work that requires time we should have given to our families. It subverts required dialog and short circuits discussion; the result is that we do sub-caliber work. The worst part is most must-be-done-right-now requests are poorly thought out, are less than “earth shattering,” and lower priority than the currently assigned work. The result is that we fail at making people happy (defeating our goal in saying yes) and neglect the core work that needs to be achieved. In the end, there are few winners and everything moves slower. Our societal culture that requires us to say “yes” infests our organizations and personal lives. The yes-phenomenon frustrates leaders as they cannot get the critical information they need to make decisions. They need real data and for people to state and defend their positions. Good listening traits are essential to ferreting out the yes-folks and promoting good dialog and discussion. People though, need to understand what type of input you are looking for. At times, leaders want to hear everything, including the wild and crazy ideas; other times we want to focus on a very specific topic. Sometimes we want to simply talk about ideas without coming to any conclusion, while at other times we want a decision. Leaders foster and use both forms of communication to enable and empower their teams. Both of these forms of discourse are integral with how effective leaders act, to the point that their teams do not realize how these tools are being used. Many researchers have found these to be foundational in creating great organizations. Jim Collins includes them in one of the four practices in creating a “climate of truth,”xxxix Peter Senge devotes a section to the concepts of dialog and discussion,xl and others underscore how they use these tools to get to the correct answer quickly and allow organizations to accelerate. Most of us have experience with dialog. Unfortunately, it is often restricted to our personal lives. It happens over coffee, beer, wine, or some other beverage and usually with friends as we are talking about potential new jobs, places to live, maybe a new car, possibly some philosophical topic that we are grappling with, or some other future activity. We talk pros and cons, we make jokes, and we imagine the unimaginable. Our goal is not to come to a conclusion or make a decision. We are simply talking and exploring options and ideas.

294  Chapter 11: Leadership Traits and Actions Sometimes, dialog happens at work. It needs to happen more. We need to stop saying yes and ask more questions. If the right people are not involved, though, dialog can be counterproductive. We have all been in a brainstorming session where at the end we know our ideas are going nowhere. We know the culture will not “hear” our input or the communication channels are simply not in place to assimilate it. By the end of the meeting, the general feeling is “that was great, but a waste of time.” If lucky, someone volunteers to find a sponsor. Some conduit has to be in place for these ideas to be brought back to people who can facilitate a discussion and make decisions. Unlike dialog, a discussion’s goal is to make a decision. Discussion has the same etymological roots as percussion and concussion. Discussion creates an atmosphere of percussive statements of direction and creating solid arguments in order to come to a final answer or conclusion. The result of a discussion is an answer. Dialog is nothing without discussion. There are organizations that have great ideas and no decisions to implement them. Innovative concepts founder and good people get frustrated and leave. These companies are recognized by their lack of action and neglected teams. Again, though, the two are a pair. In companies with discussion and no dialog, decisions are based on incomplete data and limited insight. Companies whose executive management makes decisions that troops have to implement are usually cast as arrogant and are stepping over their most valuable resource—their employees. Decisions are made by people who lack current experience or firsthand knowledge to make a well-founded decision. Faulty discussions are conducted in executive suites or with a closed circle of managers resulting in decisions being made with little reallife input. The solution is for leaders to be closer to their teams, remove blame, and create opportunities for spontaneous interactions. Every interaction must have clear objectives, people need to know whether decisions will be made or not (is this conversation dialog or discussion?), everyone has to have an opportunity to be heard, and numerous forums for communication must be in place to handle different work schedules and remote teams. This can be done in a variety of ways. The best is that someone influential who was in the brainstorming session engages a champion who can facilitate further dialog and eventual discussion. It could be that the champion ends up in these meetings. It could be through the practice of MBWA. MBWA is the acronym for management by walking or wandering around. The term is most often credited to the founders of Hewlett-Packard, but personal experience says that it came from a genre of management leaders at about the same time in the 1960s and 1970s. My first exposure was at John Fluke Manufacturing where John Fluke, Sr. (who happened to go to school with both Bill Hewlett and Dave Packard) was routinely seen walking around the buildings learning from his employees. A mountain of a man with a booming voice, he was known by all and routinely asked any employee for his or

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her opinions and ideas or would invite them to coffee (which was always free) to talk about what they were doing. He fostered an open dialog that put new ideas and innovation first. In today’s environment with virtual teams, home offices, and offshoring, MBWA needs a little assistance. Technology helps us keep people close together. It is up to the leader to determine the right tools and foster their use. There must be an opportunity for informal and formal meetings to promote dialog or have the group discussion—in person or virtually. Dialog and discussion create the transparency that any organization needs to promote honesty and integrity. Transparency is part of any honest organization. An honest organization has nothing to hide. However, honesty does not guarantee transparency. In trusting and honest organizations, it is often difficult to find these enclaves of opacity. People who are not inclined to be honest produce just enough data to maintain a façade of openness. Even in non-covert situations, transparency takes confidence and constant communication. The best of intentions to complete a set of difficult tasks can create an environment where groups, focused on their goals, forget to ask for help. It creeps over them slowly like an evening fog, enveloping the workday, eliminating the ability to stand back and assess the state of affairs. Transparency needs management’s help. Management must be involved with their people—mingling, asking questions, looking for stress, and proactively proposing solutions.

Elimination of Blame and Tolerance for Failure “An eye for an eye makes the whole world blind,” a line attributed to Mahatma Gandhi, is inspired by a verse found in the Torah. The original line, an eye for an eye, is intended to limit the perpetrator’s liability, rather than require retribution or solve a problem. Does it apply to every business failure? Hardly. Unfortunately, we have developed a worldwide culture that has infused blame into our corporate culture. We must find and punish someone for every result that does not equate with our expectations. A relatively good example can be seen in the 2013 implementation of the Patient Protection and Affordable Care Act (ACA) in the United States. One of the deliverables was a website that 8 million households would need to access between October and December each year to apply for insurance. It took three years to build—a truly massive endeavor. On its launch date, though, it could not handle the load and subsequent analysis showed numerous technology and planning issues at the source. It took about 90 days to rectify the issues to a point where people could reliably use the system. With this delay came myriad cries to fire Kathleen Sebelius, the Secretary of Health and Human Services. Yet anyone who has been through a large enterprise-

296  Chapter 11: Leadership Traits and Actions wide software deployment at any private sector company might wish that their project, which most likely only handled a small fraction of the front-end users, was only three months late (about 10% of the schedule). The resignation of Ms. Sebelius solved nothing as the government had, and continues to have, a long list of over-budget and late projects. The core problem was not addressed in her resignation. The goal was to find someone to blame and somehow make people feel better. According to Tom Peters’ research, however, excellent companies have, “A special attribute of the success-oriented, positive, and innovating environment is a substantial tolerance for failure.”

Being a leader entails stepping out and doing new things. Innovation can be risky and regularly includes failure. These are the words that we as leaders like John Burke of Johnson & Johnson live by.xli The real failure in the ACA was in cronyism and people thinking that their connections to political leaders were going to get them out of trouble. This information came anonymously from dozens of interviews in the years following the deployment. Vendor arrogance was the primary contributor. Nothing disincentivizes, demoralizes, and defeats people quicker than blame. People stop making decisions, innovation evaporates, ideas remain cloaked in secrecy, and solutions go untried if there is any fear of blame. It single handedly destroys any attempts at open dialog and substantive discussion. Ideas need to be well vetted and decisions made. If there are problems with the decision, it has to be thought of as a learning experience, and people have to move on. General Johnson, founder of Johnson & Johnson, once said, “If I wasn’t making mistakes, I wasn’t making decisions.”xlii In fact, you can search out a plethora of quotes from hundreds of executives on how blame is destructive and how failure shows you are pushing barriers. In practice, though, it still remains one of the most difficult concepts to grasp. People fail to see how to correct a crisis without hastily pointing fingers at failure’s first sight—even though finding fault and laying blame does absolutely nothing to get closer to a solution. Do not get me wrong, you still need to do some form of failure analysis or post mortem to understand what went wrong so you do not repeat the problem, but finding someone to blame gets you further from solving the problem because people will not engage in open dialog. Organizations that focus on blame also exhibit issues with accountability, since those accountable are those who get blamed. It is heard on the nightly news, it is heard from our elected officials, and it is heard in the C-suite and the board room. Our litigious society makes affixing blame more important than solving the problem. Litigation may be a good mask to show stockholders that executives are looking to save some capital, but the time required and distraction from core duties makes it a poor investment. Meanwhile, the core issues that caused the problems are not getting the proper attention and the organization is not learning from the experience.

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The master of learning organizations, Peter Senge, considers blame one the seven learning disabilities of an organization—number two to be exact.xliii As blame is almost human nature, it is paramount that leaders ardently focus on root cause and not affixing blame. This can be difficult when you are not the CEO or President, but you can operate by those principles inside your sphere of influence and reap the benefits. It takes perseverance as pressure from peers and superiors may run counter to the noblame culture. Understanding and changing the culture is the only way to combat it. It is not one person; it is the culture. Take, for instance, the troubles of British Petroleum, Wells Fargo, Enron, AIG, and the US savings and loan scandal of the 1980. You can blame Tony Hayward, John Stumpf, Kenneth Lay, Hank Greenberg, or Charles Keating, but hundreds of people had a hand in carrying out their tasks. Yes, some of these people broke laws and should be punished, but others are culpable. However, upward of thousands of others were complicit. Many of whom profited (never complaining about the too-good-to-be-true-earnings) were the first demanding revenge in the form of one or two people being prosecuted when they lost their money. For instance, Wells Fargo, the most recent example in this list, may have dealt with the problem appropriately. Around 2008 its executives established sales incentives with a lucrative bonus structure. Everyone from the sales person, who would create the new account, to its executive vice president reaped monetary rewards. The structure created little desire for internal controls. Thousands of people at Wells Fargo created over two million new accounts for existing customers, charged them the associated fees, and got bonuses based on those sales. Whistleblowers were terminated.xliv Simply firing John Stumpf would not have addressed the problem. Theoretically, firing over five-thousand employees who bought into the crooked culture along with new senior executives will bring about a new ethical operation. That is yet to be seen. But it is one of the better-documented schemes showing near wholesale complicity.xlv Stepping away from the headline news, in a large majority of failures the worst accusation that can be made is ignorance and if that were outlawed many would be fired or in jail. Regardless of the situation, pointing fingers at a single person makes some people feel better about the failure; it absolves them of being complicit. It nearly always falls very short, however, of correcting the quandary. Build truthful organizations where dialog and discussion sets the path, where failures are openly admitted and corrected, where red flags can be raised to show when something is going awry is what is needed. It starts with removing blame. Removing blame is one of Jim Collins’ four practices for creating a climate of truth— autopsies without blame.xlvi If you stand back and look at the major failures just mentioned, you will see when cultures allowed people to truthfully highlight issues, there is no need for whistleblower laws. If you want to live a utopia, where little goes wrong, live the simplest of lives and keep your goals minimal. If you want to advance, excel, and create something new,

298  Chapter 11: Leadership Traits and Actions expect trouble. When it arises, determine the root cause, create a corrective action, and educate everyone as to what went wrong. Some problems are so big they show that some prior decision or assumption was incorrect. Maybe the project or initiative has to be cancelled. Experience shows, with open and honest dialog the warning signs come sooner and the pain is much less. You can fire the person who did not plan properly for an earthquake, but that does not stop the next trembler. Learn what went wrong in the planning and use that information to minimize the damage from the next one. As Charles Knight, CEO of Emerson Electric Company from 1973 to 2000 said, “You need the ability to fail. You cannot innovate unless you are willing to accept some mistakes.”xlvii There are two types of discourse—dialog and discussion. – Dialog is open discourse without judgment. The object is to collect ideas. – Discussion is discourse with the goal of making a decision. Neither works if people think there will be blame.

Organization Wide Conceptual Changes To implement a new concept for how projects are run and staffed, many parts of the organization need to change their approach. It is no longer about technical expertise, but about leadership, basic domain knowledge, trust, and recognizing the skills needed at each layer of the company. Technical expertise gets people to a level where they can master the work, but as people are promoted to leads, managers, and executives, their core traits and soft skills are more important.

Redirecting the Focus Away from Process Crucial to any project manager’s future is acquiring the soft skills and aspiring to new levels of leadership. A single class cannot teach leadership, nor can tests identify one’s leadership competency. People develop the traits we have discussed and those traits are reflected in their core values and how those people relate to others. It starts with studying, learning, and mimicking various techniques. Until these qualities become part of one’s values and persona and are as natural as breathing, managers will fall woefully short of being leaders. Minimally, this requires education in organization development, sociology, business management, and leadership. The cornerstone, however, is real-world experience. As with any discipline, education pales in the shadow of experience.

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It is critical for executives, managers, and individual contributors to move from a reactive to a proactive approach, where they can identify and address problems prior to them morphing into major issues. This requires education, experience, and a solid support network, allowing them to adopt a calm, methodical approach based on open communication with all stakeholders. The result is managers repeatedly creating high-performance, self-directed teams that drive any project to its appropriate goal. The challenge in attempting to traverse these layers is that project managers need to rely less on process and more on intuition. This is contrary to how many executives view project management. It also is in opposition of the message for years from prominent project management certification organizations—Project Management Institute, United Kingdom Government/AXELOS, and International Project Management Association (IPMA)—all heavily promoting process as the end-all for managing projects. Process has a role in project execution, but leadership has an equal or larger role in guaranteeing success. The thought that process is the lynchpin is quite desirable since the idea that a process framework will create successful projects is quite alluring. This works well in projects that rely on established engineering or sciencebased rules (construction, research, and so on) but less so in the world where success criteria rely on human behavior. Human factors and the unique character of many projects reduce the effectiveness of process. A properly engineered building or highway works. The concept of “build it and they will come,” for the most part, applies. However, business workflows, new consumer goods, and the like, are subject to the whims of human behavior or the latest fashion. In these cases, process loses its power as it has no inspirational, motivational, or persuasive capability. People need to market the concepts and create acceptance. Process is great for relaying data to executives on what is being built and potential obstacles, but suffers when translating subjective elements as a software’s design, workflow nuances, product’s ergonomics, and so forth. Process is needed, but is not the answer. As George Rathmann, cofounder of Amgen, said, process and bureaucracy is often a sign of leadership failure. Process grows by managers’ intolerance for mistakes. The slightest faux pas and they demand process to keep it from happening again. Progressively, procedures stack one on top of the other and before long people see the magic of an organization leave.xlviii Looking back to the beginning of the book, we have returned to the base principle—people first.

Project Leadership So why focus on project managers and their teams? Why not stick with the statement that all levels of the corporation need leadership skills? Simple. Project teams have a different role. As mentioned in Chapter 9, “Leadership’s Relationship to Projects,” functional managers are primarily responsible for their direct reports as shown in the

300  Chapter 11: Leadership Traits and Actions classic organization chart (refer to Figure 9.2). On occasion, functional managers coordinate with their peers or a boss, but their primary focus is on their staff. Project managers, on the other hand, must align a significantly larger array of people. Besides their project team and peers, they have an entire “organization chart” above them consisting of the project’s stakeholders (refer to Figure 9.3). This potentially disorganized collection of people may be totally unrelated to each another. They may have conflicting goals with one another or they may be opposed to the project’s primary goals. This can be a significantly larger population than their well-organized subordinate project team. The project managers and their teams need to address each of these groups’ concerns so that the project can proceed. In many projects, the quantity of stakeholders greatly outnumbers the project’s staff. For an extreme example, Portland, Oregon’s northern city limits and Oregon’s northern state line is the Columbia River. For over twenty years, there has been an effort to start a project to build a new bridge on Interstate 5 to cross the river. The two, currently steel, structures, one built in 1917 and the other in 1958, were constructed long before seismic design techniques became mainstream. They are arguably the weakest link and the only drawbridges in the 1,400-mile long freeway that stretches from Canada to Mexico traversing Washington, Oregon, and California. There is a legitimate concern about either bridges’ ability to sustain a reasonably sized earthquake. Without a doubt, it will be a massive project building this multimodal, dualdecked, mile-long bridge. It will take thousands of designers, managers, and construction workers. However, consider the stakeholders involved. They include: multiple federal transportation agencies, the US military (a reserve airbase is nearby), Federal Aviation Administration (FAA), Union Pacific, Amtrak, and Burlington Northern railroads, the Coast Guard, two states’ and two cities’ governments, two transit agencies, light-rail proponents and opponents, bicyclists, pedestrians, local (potentially toll-paying) citizenry, state taxpayers (both Oregon and Washington have broad political differences between their western and eastern populations), boaters, businesses, truckers, commuters, environmentalists, Native Americans, and the list could go on. All have special interests; all can slow or stop progress wreaking havoc on the best project plan. Few of them know anything about project management; none of them care about the woes of the project manager. Without a doubt, the project manager will need to navigate more obstacles from the stakeholders than from the team actually building the bridge.3 To accomplish completing this project successfully, the project manager and many of the core team must be leaders—people who (with no authority over the diverse set of stakeholders) can get stakeholders aligned and supporting the project.

 3 In 2013, the project was again cancelled due to the Washington State legislature’s inability to approve funding to match Oregon’s approved funding that would secure a federal grant to start the project forward.

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This can only be achieved through gaining trust based on transparency, objective problem solving techniques, negotiation, compromise, and persuasion. Attempting a project of this magnitude with a checklist of tasks for the project team and disregarding the work of corralling the stakeholders, will result in disastrous failure. This is equally true for architects, designers, team leads, solutions architects, business analysts, and the like. Once someone gets into a position of coordinating groups of people or working with customers and end users to define the solution, leadership skills quickly take precedence to technical aptitude or process.

Leading without Authority All of us have bosses and our penchant for matrix organizations means that most of us have numerous bosses and peers who change on a frequent basis. Hence, we are continually trying to sell our leaders on following our team’s suggestions. This is true if you are the vice president of sales or a business analyst trying to sway an end user. We are working with people we have no authority over trying to get them to support our position. Therefore, leading without authority is a required skill. Leading our customers, bosses, and peers is the art of persuasion supported by a few sensible rules. The following are a few steps to follow each time you are faced with getting others to make decisions. Be passionately dispassionate. Objectivity is paramount. Passion is what everyone says they want, but when you are solving a problem where emotions flare, stick to the facts. Make sure the pros and cons are objectively laid out in a logical manner to make a decision. Follow the persuasion rules to make sure the facts are stated in a positive light (for instance, 40% success rate, instead of 60% failure). Explain the problem. Referring back to NASA’s Wayne Hale, your bosses may have once known the technology and subject in detail, but now your boss’ job is to manage and lead teams; your customers’ job is specifying their needs.xlix Hence, assuming your leaders or customers know the detail, or even the subject, of the issue you are addressing can be a fatal mistake. You know every intimate detail of what you and your team are working on; your leaders do not, nor should they. They need the problem explained in concise, high-level, decision-making terms so they can give informed direction. Sell your leaders the solution. Always have two or three viable solutions to problems or decisions you escalate. Your audience’s job is to make decisions rather than figuring out all the workable solutions. Your bosses hired you to develop the options. Normally, when asking stakeholders to make decisions, you present them with a list of benefits for making a decision in your favor. Think about it, this is exactly what the car salesperson does to you. The stereotypical sales pitch lists features and functions (whether they have meaning to the decision maker or not) and then ask for the close: “Would you like me to draw up the paperwork and you can drive it home today?” That technique might work if you were buying a multifunction calculator or

302  Chapter 11: Leadership Traits and Actions some new widget for your computer, but it falls woefully short in higher stakes decisions where money and reputation are on the line. Instead, decision-makers want to understand the value based on the key benefits to them. In the case of the car, what might be a cool feature to the sales person (a remote-control rear window sunshade), may be useless to the buyer. On the other hand, additional backseat legroom may be critical for comfortably transporting a car full of clients to lunch. Explaining the issue in terms that relate to specific needs is a requirement. This concept is central to getting people to make decisions—understand what is valuable to them and frame the decision based on those points. In general, people are looking for a reason to say no. The reluctance to say yes is due to the person describing the solution improperly comprehending the buyer’s value. In addition, as opposed to the car salesperson, you need to present the decision-maker with the pros and the cons. (No car salesperson is going to remind you that the fancier car is also going to have higher insurance premiums.) Even though you may be repulsed at “selling” to your boss, that is exactly what is required. It makes perfect sense, therefore, to employ the same type of techniques used to sell large systems. Telling the President He Has a Personnel Problem Project managers run the project; however, if they are confounded by a problem, it is better to ask for guidance than to flail and fail. A few years ago, I was called in to fix a project that was projected to complete at three times the projected cost and three times the overall duration. As part of the preliminary description, the client indicated that the project was building a product that would benefit two departments; however, only one was funding it. A short investigation showed that nearly all of problems were “above” the project in the executive hierarchy. The leadership was dysfunctional. While talking with one of the project team members, I noticed that an email he was using for talking points had a person blind copied—the vice president for the non-funding department. I asked him to print the email for my reference. I eventually determined that she had asked him to blind-copy her on all emails and communications regarding scope. The VP would then use this information to have her team bias the requirements in its favor. I bundled up my data and trudged into her boss’ office—the President— three layers above me in the organization and second-in-command for the multi-billion dollar company. I made the case in logical and dispassionate terms asking for his assistance to stop the covert action. Upon returning to my desk (three blocks from the executive’s office), the reverberations had hit the project team, with a memo reprimanding the use of the blind copy feature. He took care of the situation with all due haste. He wanted to help, he was unaware of the problem, and when he became aware, helped me regain command and control over the project by removing the executive’s meddling, some might say subversive, tactics. A year and a half later she was demoted. Less than a month later, I had to invoke the assistance of another executive, this time the vice president of information technology, asking him to stop the drone of negativism from one of his direct reports. Her constant barrage of negative comments about the team being a failure were destroying morale and I had already proven the issues were in the executive team. He helped and the offending director apologized. These two examples show that executives want to help; they simply need us to tell them how.

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Ask your decision-makers for clarification and mentoring. If you and your team are having trouble establishing a set of practical solutions, ask for guidance. Although your leaders and customers are often far from the technical aspects of your job, they once were doing what you are now or know of optional results that will adequately meet their needs. They have a wealth of experience and a broader view of acceptable solutions. As noted in the earlier section on persuasion, this is good to do even if you have a reasonable solution. It makes them feel more valued and helps you understand their potential objections. The result of this questioning is to coax your decision-maker down the road of discovery. It opens their mind to the complexity and slowly introduces them to the various solutions in advance. If you have numerous people involved in the decision, it will be time-consuming to work with them all, but the rewards are huge. By addressing each member’s concern outside the meeting, you reduce the chances of objections surfacing in the meeting that you are not prepared to answer, or that the meeting takes on a negative tone. Ask for the decision. Do not wait for someone to announce the decision. Ask for a decision based on the discussion. In general, you should be able to tell the direction people are leaning. Ask specifically, “So it sounds like there is agreement to option B, correct?” Determine who is accountable for the decision and document it. Project managers must learn to lead both up and down. They must: – Be passionately dispassionate. Objectivity is paramount. – Explain the problem. – Tell your leaders how to solve the problem. – Ask your decision-makers for clarification and mentoring. – Ask for the decision. Do not wait for someone to announce the decision.

Project and Middle Manager Takeaway Project and middle managers come from a wide range of experiences—new college graduate to 30-year business veterans. They transform from the coordinator to the negotiator and finally to the project leader. In this process, they are improving their leadership traits. At the lowest level, they have to have accountability and ethics—these are not aspirational goals. To survive in the job, they next need to work on decisiveness and focus. As these are mastered, awareness, empathy, inspiration, and humility follow. Confidence builds over this entire span. It is in constant tension with humility. Project and middle managers have to mind the same points highlighted below for the executive. Project managers, though, have to stress listening, questions, and a non-blame culture—even if the organization’s leader does not hold the same values.

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Executive Takeaway First and foremost, executives need to make leadership skills a priority in the culture. They must train, mentor, and coach employees in the skills that are most appropriate for their roles. They need to hire people with these skills in mind. This starts with all job descriptions enumerating the leadership skills expected. These should include the importance of each trait in that role. Core actions leaders must take are: – Being exemplary listeners. Asking question and taking appropriate action. – Fostering ownership of initiatives by treating people as humans, not resources, and motivating them. – Creating a no-blame culture where people can take initiative and incur risk without fear of reprisal. – Knowing when to sell and when to tell. – Building a culture where both dialog and discussion happen frequently and openly.

Applying These Concepts Organization Wide Questions 1.

Reread the three opening scenarios in this chapter. a. Rewrite them into scenarios that you could use as interview scenarios to probe an interviewee’s leadership traits. What traits are you uncovering? b. Determine one other way that you could have handled the situations to come to an acceptable outcome? c. Were they handled appropriately? Explain your reasons. 2. Being realistic, few can master all nine traits of a leader. Which of the traits listed above are most critical to project success and why? 3. Create a matrix of domains (say, non-profit, government, medical, manufacturing, or other) and leadership traits. Rank the importance of each trait by domain. Are there traits that are more important in one domain over another? 4. How do you rate your strengths as a leader? a. Write down the traits and do a self-assessment. b. Identify where to focus your efforts to become a better leader. 5. What interview questions will identify leadership traits in a candidate? Develop a hypothetical situation and identify what traits it exposes.

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Project and Middle Manager Centric Questions 1.


Reflect on a project that you have worked on, was under your care, or is in the public domain. Identify the traits of the project manager (this could have been you) to the nine traits listed above. Where was he or she strong and how could the weaker traits have been bolstered. Using a project from your past, how might you have redesigned the team with stronger people to make the project more successful?

Executive Centric Questions 1.


Reflect on a project that you have worked on, was under your care, or is in the public domain. Identify the traits of the executive sponsor (this could have been you) to the nine traits listed above. Where was he or she strong and how could the weaker traits have been bolstered? The listening techniques in this chapter come primarily from the world of sales and may seem a little mechanical. a. Why is it important for executives to be involved in such technical aspects of communication? b. Other than using this as a technique to communicate with your teams, how might they be used?

PART 7: Pulling it all Together A hole is a space where everything has been moved out so that opportunity has space to move in. —Craig D. Lounsbrough

Chapter 12 Filling the Six Gaps [Between] where you are today and where you want to be lies a gap. That gap is the price you have to pay to get to the top. —Oscar Bimpong A paucity of material can open up just as many possibilities.

—Sara Sheridan

The more gaps a leader can bridge, the more significant [the] influence she or he can make. —Pearl Zhu I was talking with a long-time mentor over breakfast one day, an executive in a large insurance company, and she lamented, “I have had to recalibrate everything I say. If I say any off-handed remark, maybe, ‘Hmm, I wonder what that wall would look like blue?’, the next morning when I come in to work the wall has been painted blue. Somehow this became a priority because I was just wondering out loud.”

I looked at her and explained the difference between dialog and discussion. She agreed this was the good distinction and could not understand how her staff could possibly interpret what she said as direction. I took a pause, sipped my coffee, pondered my next words. Eventually I asked, “Do you make the distinction about what DOI 10.1515/9781501506390-012

310  Chapter 12: Filling the Six Gaps type of conversation you are having—whether you are trying to make decisions or just brainstorming? Maybe your staff is always thinking you are giving direction.” She did not say a lot after that. We changed the topic. As the breakfast wrapped up she said, “I think I need to reevaluate my leadership style. Maybe my style is too directive. With the experience of my core team, I occasionally need to be.”

This revelation is the opening for change. This person saw it on her own; others may need a little more coaxing. Over the next couple of months, she made a number of changes in her team, she pushed leadership education, she moved people around, and replaced a couple of her direct reports. She was in a position to make a change, which truly helps. However, it is not required.

Initiating a Change The opening story is just one example of a turning point that starts an organization down a path to being aware of its gaps and filling them. Nearly every organization has one or more of the six gaps mentioned in this book—lack of common understanding, misalignment between goals and projects, poor executive sponsorship, weak change management, ineffective governance, and inadequate leadership in the project stack. Filling these gaps properly does not happen when the executives say that they need a PMO to monitor and ensure all projects stay aligned with corporate goals. Essentially, that is saying, “It’s not my problem, it is those pesky project managers or some middle manager that have run amok and I need a group to reel those folks in.” This may be the easiest approach, but it is putting process in place to control people, rather than being a leader, setting a vision, motivating people to achieve that vision, and attacking a problem at its root. This reaction is at the core of tolerating mediocrity. Depending on your company’s state, filling its gaps could be as simple as handling a few nasty pot-holes or as arduous a blazing a new road in a jungle infested with lions, spiders, and snakes. If your CEO is frustrated with the company’s performance, your job will be the former. If not, and your executive team is having trouble focusing on a direction and is chasing shiny balls, the task will be significantly harder. The executive team must be strong to stay focused. It needs to allow just enough change to let the company adjust to legitimate changes in the business environment and provide the wisdom to understand which changes it should address.

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Your Role in Initiating Change Not all of us are CEOs or executives; many of us run PMOs, are project or middle managers, or are individual contributors. It is easy to see how an executive’s epiphany can start a change initiative to fill a series of gaps. If you are not in that role, it is harder to see how and where a change starts. Anyone in a company, however, can initiate a change. Central to this is using the word “leader” correctly and not using it as a synonym for the company’s senior executives. Anyone in the company can be a leader; hence, anyone can start change. Without a doubt leadership in the executive ranks is a must. If the CEO or board is leading the company one direction this month (or week) and going another the next, it is hard to believe that the company will grow. This lack of direction could sound its death knell. The CEO or the board is going to have to make the case to the other that the whiplash in the organization is stalling the company, customers will not get what they need, or that the cost is going to be too high—probably all three. The board can replace the CEO for lack of performance, but if its members do not see the gaps in the organization, they will not know what to look for in a new CEO. The new CEO, however, is fertile soil to plant the seeds of change.

A Non-Executive’s First Actions A well-formulated argument (internally or by a consultant) can sway executives to change their ways. This is the best tool for a non-executive to initiate a change. So, not all is lost if you are a project or middle manager reading this book and can see one or more of these six gaps and the damage they are doing to your organization. Your job is creating a sense of urgency at the top. It takes imagination, calculation, persuasion, vision, and work. You need to create allies, convince a few select executives that there are problems, and outline ways to solve those problems. You need to create visuals that are visceral and show executives how they are missing business opportunities, growth, and market share. You need to get them to understand the organization needs to change. There are relatively simple actions you can take. For instance, developing a job description for an executive sponsor can be done easily by a group of project managers and a sympathetic executive. Making a proposal that all projects adopt that job description as a framework will make a major difference in how your projects run. If it includes accountability for adoption, alignment, and acceptance of the project, you can achieve a focus on these items and prioritize addressing the gaps at their root cause. Developing the executive sponsor’s job description is a great way to start highlighting the issues. Finding executive allies is important. CEOs can be very busy people; however, CFOs are often more approachable. Even when they are busy, saying that you see where the company is wasting tens or hundreds of thousands of dollars will most

312  Chapter 12: Filling the Six Gaps likely pique a CFO’s interest and he or she will find 30 minutes on their calendar to meet with you. Existing executive sponsors or shared services leaders could be potential supporters as they are so heavily affected by these issues. They often live the same problems that you do and are looking for answers. Getting their attention, though, without some form of plan is going to do little in moving your cause forward. Never ask executives to help solve a problem without having some sort of proposed solution in hand. By putting together the outline for a plan and asking them to help you fill it in gives them some ownership and makes a stronger plan.

A CEO’s First Actions If you are a CEO, though, you have some of the same problems. You know mandating a solution will meet with failure. You too need to start by creating a sense of urgency. Without that, your team members will not get excited enough to reach a critical mass to cross the chasm or reach the tipping point. Regardless of the term you want to use, you still need 16% of a cross-section of the people to accept the idea to make it catch on. You can also start by getting a team of project managers and executives together to build an executive sponsor’s description. As you will be the sponsor for most of initiatives that fill these gaps, apply that description to you. As mentioned before, good executive sponsorship addresses filling most of these gaps. The team seeing you apply this job description to you, will tell them you are serious. Your biggest job is introspection. Are you the leader that can move these changes forward? I have yet to meet anyone that cannot improve their leadership skills. This will be a good test of those skills and will teach you a lot about where they can improve. Approach this with an open mind.

A Shared Services Group’s First Actions Shared services groups suffering from poor prioritization, overloading, or lack of visibility can start a Balanced Scorecard initiative. Developing a strategy map showing the initiatives for each business unit is a very effective way to create a sense of urgency. A services group’s learning and growth perspective will impress upon the business unit executives how the services group needs to constantly improve to meet the business’ needs. The graphic shows the loading and priority, while the background documentation for the scorecards supplies the inarguable data. These data can be accompanied with the requirements for executive sponsors (which initiatives need them and what their qualities need to be) and where the business units need to bolster their adoption practices. Strategy maps can also show lateral alignment issues, but care should be taken not to make them too complex.

The Strategy for Long-Term Change  313

The Strategy for Long-Term Change After reading the first few sections, it might seem that the executive sponsorship or alignment might be the primary gaps causing issues in most organizations. Generally, they are not. These two gaps are more easily used as examples. Listen to executives and you might hear them talk about these same two issues, but rarely will you hear them mention leadership as an issue. This is because the other gaps—poor change management, lack of a common understanding, ineffective governance, and inadequate leadership—are much more difficult to solve as they are less tangible and take longer to resolve. There are different timelines for how the six gaps can be filled. Educating people on leadership, improving business acumen, and hiring the right people takes time, sometimes a long time. Training people on and implementing Balanced Scorecard takes less time, but seeing all the benefits usually takes a year. If your approach is to try to fill gaps based on which is easiest or quickest to fill and overlook, say, leadership (with its long lead time and ongoing nature) you could fail. Education and training need to happen in parallel with filling any other gaps. Figure 12.1 is a hypothetical example of how a company having all six gaps might address filling them. Note that building leadership and business knowledge is run in parallel with other work and that three tracks are considered ongoing—leaning out governance, leadership training, and business training. Every company’s situation will be different and this is just an example.

Figure 12.1: Example Implementation Timeline

314  Chapter 12: Filling the Six Gaps Improving Leadership and Business Skills Leadership is the key. Leading up. Leading down. This is by far the most important gap to fill. It is also the hardest. A tactic for achieving a quick win is to develop job descriptions that highlight leadership and send people to leadership classes and workshops. The strategy, though, has to start by getting more leadership training for you and your team. Have them read this book. It provides the foundation for understanding the issues and how to solve them. The other knowledge people need to acquire is business education. Although this education is more easily identifiable in the lower levels of the project management stack, it is more critical for middle management. Like leadership, developing employees’ business acumen takes time, but directly attacks the foundational problem in achieving a common understanding—the vernacular. Business education teaches project managers the language of CEOs, CFOs, COOs, and other executives and vice versa. It should not be lost on the reader that the last few paragraphs say “you” without regard to your title in the company. It does not matter who you are—CEO or architect— you can always improve your leadership skills and your business knowledge. For the architect, education may focus on understanding EBDITA, and for the CEO, it may concentrate on project management or organization change management. Education is ongoing. Executives should spend time learning more about projects and project team members learning more about business. As the opening story indicates, even executives who have been in business for years can fall into the wrong leadership style. To expose an area for improvement may take a frank conversation with a friend or simply some reflection.

Creating an Atmosphere for Learning Some of the problem is that we need to slow down and create venues to hear each other. This seems almost impossible in our increasingly fast paced world. But at times we need to slow down to move faster. I have experienced a number of roundtable settings where people are allowed to ask questions without fear of shame. These are unstructured forums where a broad range of people gather to get answers to questions on a variety of topics. The effective ones include a wide range of people from the seasoned executive to the green college graduate, are small (less than 50 people), and are non-mandatory. Anyone can ask a question and the group lends comments and advice. In a company setting, though, an executive should take ten to fifteen minutes to discuss one corporate goal or initiative and host questions. This could be the theme of the roundtable or a topic that is brought up at some mid-point of the meeting. There are a number of valuable outcomes: – Opening lines of communication. – Creating accessibility to senior executives.

The Strategy for Long-Term Change  315

– – – – –

Clearing up the direction of the company. Empowering people to address issues. Ingraining the company values in all employees. Boosting empathy to others’ struggles. Enhancing the feeling of ownership.

Leadership and business education needs to start early because it takes time to see the results. The first benefit realized is that your team will feel respected because the company is investing in the future.

Organizational Assessment Although one of the initiating tactics above might be needed to highlight that there is a problem, the best place to start for many organizations is an assessment or audit. It is rare that an organization’s executives know the magnitude of their troubles. Sometimes they are completely oblivious to some of them. For instance, our survey showed that less than one percent of non-product companies had job descriptions for their project sponsors. Yet, when brought to their attention, most executives see its value immediately. Or, using another example, unless there is an obvious issue in how projects’ products are adopted that is being addresses, the discipline of change management is so poorly understood that many executives will not see the importance until it is brought to their attention. They will just get frustrated because changes do not seem to stick. This is why an assessment or audit is a good place to start. They highlight that the company has unidentified gaps. If you have or can lobby for the necessary budget, have an audit done of your project operations. Hiring a consultant to evaluate how these six gaps might affect your company is valuable because it provides an objective view of your needs. An internal audit generally overlooks issues since they are ingrained in the culture of the company. In some very large companies, however, using people from other divisions can be effective. Some executives want to understand how the organization ranks with others by asking for an audit with respect to an industry baseline. At first, this sounds reasonable; however, comparisons to baselines set the stage for identifying the minimal amount to bring a company to the industry average. This quite literally reinforces a level of mediocrity. Do not ask for an industry baseline audit. Trying to compare your company to the rest of the industry will fail at getting action. Remember that 50–70% of projects fail to meet their goals. Is that an acceptable goal? Another tactic for objectively identifying gaps is to hire a consultant to review a challenged project. If you have a project that is in trouble (these are usually easy to find), have someone audit it. Just make sure the scope of the engagement is large enough to look for real root problems (even include that the audit should look for

316  Chapter 12: Filling the Six Gaps gaps identified in this book) and that the consultant you are hiring has experience identifying root causes and not applying band-aids to address symptoms to get the project completed. Getting a project done is far easier than identifying and fixing the problems that got it messed up. You need to understand which gaps your company has and this generally requires an external view. An external consultant is needed for two reasons. First, a consultant can see things in your organization that people in your company cannot see because they are blinded by your company’s culture. Second, a reputable consultant can say the same thing as a company employee and the consultant will be listened to. Consultants are viewed as experts who are objective. When they say that a governance function to validate project alignment to corporate goals should be disbanded and the operation absorbed into functional roles throughout the company, they are not looked at as having a hidden agenda or being vindictive.

Opposition to Filling the Six Gaps Opposition can be found everywhere, but it will reside mostly in middle managers. As mentioned in the chapters on change management, they have the most to lose. They are running the PMOs that need to change or be dissolved, they are the ones that need to learn about adoption, or other new skills. If there is bureaucracy or process steps should be removed, the people who built these structures will complain wildly, and they are probably middle managers. The concept of removing a quality check and holding someone at a prior step accountable for doing the work right is extremely difficult for some people to handle. Especially if this means their job is suddenly redundant. One group of middle managers that is targeted in this book are the ones who work and run PMOs. As mentioned in the chapter on PMOs, a large proportion of PMOs are created to fill gaps. Unfortunately, PMOs are inefficient at filling gaps and are usually ineffective. The suggestion to address the problem at its source, as you might expect, raises fear and the people who run or work in them will be very defensive. I have been surprised, however, by how many of the people who work in PMOs will admit that they are ineffective. In both the interviews and at conferences, I talk very bluntly about the lack of value in PMOs. Many people realize that their PMO is unproductive and routinely blame the lack of executive support. If you are going to focus on addressing the governance gap, listen to people’s frustrations, format your arguments in a manner that addresses their objections and you have an ally versus an enemy. For instance, in a recent PMO “birds of a feather” roundtable with about 65 attendees at a project manager’s conference some of the questions included: – How can we stop the most popular executive from sneaking in his or her favorite project and prioritizing it as number one?

Order of Filling the Six Gaps  317

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– – –

How can we justify project management to a company whose CEO does not see the value? Our projects are never adopted, because our executives never stick with a direction. Employees know they can out-wait the executives and will never have to change. Our group cannot combat that! Our group is supposed to do those functions [of the executive sponsor], but we have no respect, clout, or authority. We cannot do it. We are supposed to build a project culture in the company, but the executives keep undermining us. It seems that if I am trying to show benefits realization, there must be no benefit. I should not have to show benefits, they should be able to see it. No one has to show the benefits of accounting.

These people saw that they could not do some of the items their group was chartered to do: – Maintain project alignment. – Prioritize projects. – Drive adoption. – Build a project culture. – Show benefits realization. – Be an executive liaison. – Improve stakeholder communication. But they also knew that if they stopped doing their work, these problems would get worse. Each person knew they needed to find a more effective way of doing their work. They need to influence executives to take on these tasks.

Order of Filling the Six Gaps As should be obvious at this point, these six gaps are inextricably intertwined. Executive sponsors cannot do their job if they are not leaders. Governance cannot be reduced if capability alignment is not considered first. Everything falls apart if there is not a common understanding and vernacular. In some places there are dependencies. For instance, trying to reduce governance without having the right people, good accountability, and effective executive sponsors is going to be difficult. The assessment may indicate a sequence for filling the gaps based on the severity of a given issue, but usually you are posed with two or three issues to address in whatever order seems logical. The following is a guideline that will prove helpful. Once you have identified the areas where your organization has gaps, you need to prioritize addressing them. This is unique to each situation, but there are some general rules to follow. Filling leadership and business knowledge gaps is crucial, but

318  Chapter 12: Filling the Six Gaps both are also ongoing and so, if you develop a plan that prescribes working on them before tackling anything else, your initiative will most likely encounter an apathetic death. To be sure, annual training and education budgets will be needed to improve leadership and business skills in parallel with filling the other gaps. These are critical and need to be addressed at the same time as the other gaps. The second priority is usually executive sponsorship development. The reason is that it affects all the other areas. For instance, once effective executive sponsors are in place, the need for governance decreases as sponsors will be providing it. With effective executive sponsorship, the lack of alignment and the need for better tools will be understood better because an executive will be in place to see the lack of alignment. Finally, the complexity of project adoption will be better appreciated by an executive who can drive a solution. In most cases, there is a significant boost in project performance when effective sponsors are on board. It is easy to define the role and create a job description. Implementing the accountability is more difficult and often drives how the other gaps are filled (assuming they exist). Implementing an alignment solution is usually third. As an executive sponsor improves project execution, implementing a tool, like Balanced Scorecard, will ensure that projects stay focused on corporate goals. This will also pull a lot of core work off the executive sponsors and place it on division and business unit executives to ensure that their teams are focusing on the right work. This step often increases the bandwidth of the organization as it releases people from doing extraneous work that is not focused on corporate goals. This usually relates directly to the bottom line, freeing up resources (monetary and human) for working on filling the gaps in adoption or change management. As with filling any of these gaps, the work may be phased. For alignment, one logical breakdown is along the three dimensions—vertical, capability, and lateral. Which dimension to start with depends on how much each is contributing to problems in the organization. Generally, people start with capabilities or vertical alignment because these two gaps are contained within a business silo and hence are less political. Starting with capabilities often makes sense since, as we have said many times, people come first. Addressing issues with adoption and change management usually come after alignment issues are tackled. This way the adoption efforts are focused on what is aligned with corporate goals and less affected by poor alignment issues. Asking people to adopt items that are not on the corporate roadmap confuses and disincentivizes people. If the project’s customers or executives are frustrated with low adoption rates, though, some executives will want to focus on this earlier. Governance is often last, but that is not to say that it has been unaffected by filling the prior gaps. For instance, as alignment and priority are addressed in the business units, any redundant governance to accommodate this should be removed. Governance to ensure that customers are getting what they want is unneeded as adoption

Method of Execution  319

processes are put in place (even on an as-needed basis in individual projects). This tends to lean out project governance automatically. There is more to be done, though, and each governance function needs to be looked at closely.

Method of Execution Any way you look at it, filling a gap is a change. Hence, we need to turn back to Chapter 5, “Understanding Business Change Management,” and Chapter 6, “Organization Change Management and Projects,” and apply our newfound knowledge. These are big changes to the organization and must have executive support. As they will change the culture, the executive sponsor will most likely be the CEO. It is hard to think of any of these actions—changing executive sponsorship, aligning goals and projects, implementing Balanced Scorecard, driving change management, or rightsizing governance—without the complete support of the highest-level executive in the organization. Maybe that executive is driving the concept of the change, or maybe the first step is creating a sense of urgency in him or her. Although filling the change management gap may not be the most important gap to fill, the process is critical and these projects will need to use it. The structure that is outlined in Figure 6.2 will be crucial in achieving success.

Create a Sense of Urgency Regardless of whether the focus is to get the attention of the CEO or for the CEO to get the attention of his or her executive team, the first step is creating a sense of urgency. This often requires a visual to appeal to people’s emotions. Sometimes that is part of the process itself. If you are trying to show that there is little prioritization and people are working on the wrong things, create a strategy map and activity system diagramming what the company is doing. Show them to your executive team and judge their reaction. If they tell a story that spurs action, then you have achieved the emotion you want. Making the Visual Visuals can be very difficult to make. They take imagination and need to convey the right data. The visual has to reflect what you are trying to prove and have detailed supporting data. In the change management chapters, there were a couple of examples. You may need to create more than one visual to handle various perspectives. Engineers will not see the failure of a nicely engineered product as something they need to deal with. They will focus on the fact that they were beautifully engineered; they will see

320  Chapter 12: Filling the Six Gaps the problem as one of specifying the need. Engineering needs to see engineering defects. Doctors will be less impressed with the financial implications from not following a procedure, but if you show them pictures of the ramifications of poor patient care, they will be more affected. Here are some other ideas: – When executives are providing poor direction that is leading to high attrition, post the pictures and high-quality attributes of employees that have left. Attach to the pictures the cost of hiring replacements, the number of weeks the position was left vacant, the amount of overtime that was incurred due to their absence, and any impact on deliverables. If the person who left was in sales, state what the effect was on the related accounts. This puts a personal and financial impact on turnover. – If product adoption is low, compile all the logos of customers that have gone to different suppliers or contracts have been lost. Attach a dollar amount. – Create stacks of money for lost opportunity (could be for slow adoption), the cost of late projects, or overburdening governance. Unless you have a lot of cash and a good security guard, use plain paper for stacks of “$20” or “$100” dollar bills but make sure a few of the real bills are on top for impact. – Referring back to section “Slow Project Execution” in Chapter 7, the data in Figure 7.2 worked very well in convincing both executives and engineers that the problem was not in procurement, but that engineering had throughput issues. The visual was created using painter’s tape for the grid on an empty office wall and placing a “ticket” for each project in the appropriate section of the grid. The engineering sections were overflowing with tickets, one stacked on top of one another. Supplemental data showed that the root cause was everyone changing engineering’s priorities. A simple Kanban process solved the problem. Instead of buying new engineering product definition software for a few hundred thousand dollars, they bought about $250 worth of Post-It® Notes and cork boards at the local office supply store. The visual required $7 worth of painter’s tape from the hardware store.

Get the Right People As has been stressed in every chapter, people come before the plan. The people probably already exist in the company and they just need to be refocused to work on the identified issues. In many cases, training will be required to pick up lean, Balanced Scorecard, organization change management, and other skills. Everyone can use leadership training and many of the lower level personnel will probably need business training. A few people need to be hired. Balanced Scorecard and OCM specialists are likely. However, this depends on who is in the organization. All new job descriptions need

Method of Execution  321

to be modified to account for the work in filling the gaps, as well as having leadership traits and responsibilities added.

Develop a Vision With any of the upcoming changes, the vision and plan for the future state is developed by the people who will lead the change. The change management team that reports to the executive sponsor must include people from throughout the organization—including influential resisters. The executive sponsor for the change should be careful not to build the future in a vacuum, as that would defeat creating ownership by the team. He or she should work closely with the adoption architect to help guide the team toward a solution that fills the gap—most likely in a series of small wins.

Deliver Short Term Wins Trying to make this transformation into one huge project is a mistake. Showing progress slowly through small wins is critical. At this point you should be able to show at least one short term win—effective executive sponsorship. As mentioned above, you need a good sponsor to make all of this happen. People will see this in your efforts and realize what there is to gain. Capitalize on this. Show how the sponsor is passionate and engaged. These initial projects are models for future projects and should be a showcase. The second win is demonstrating the use of organizational change management tools. The methodology you are using right here. Explain why you are using this process to gain additional buy-in as people see the process working. Just implementing this framework is a lot, so the gap you are addressing should start small. Here are some examples on how to approach this by gap: Alignment: – Start by building an activity system and mapping all projects to that system. In classes, I routinely see people develop an activity system and have one activity that does not fit. They ask how to fit it into the system diagram. The point of the activity system is that if an activity does not fit, then it is a candidate for removal. This is a good result as it is points out activities that should be dropped. – If you are in a shared services group, build a strategy map to show other business units the diversity of your group’s workload and what you need to do as foundational work (that is, learn and grow or internal) to meet their needs.

322  Chapter 12: Filling the Six Gaps Executive Sponsor: – Create a job description for a sponsor and apply that to two or three small projects. Track how quickly issues get resolved and what problems arise. Have the executive sponsors make suggestions on how to make the job description better. Work with their bosses to better understand how the executive sponsor’s other tasks need to change. – On one larger project, select an executive sponsor based solely on their leadership skill. Use an organization-wide assessment to select the most respected person to drive the project. Have the sponsor focus on just one task. Make that the most critical task. Assuming the task is communications, which is a very high likelihood, use Figure 6.2 to lay out a communications plan to reach every team member and representative end users on a frequent basis, maybe monthly. Track their engagement in the project, their enthusiasm for the deployment, and end user satisfaction. Change Management/Adoption: – Build a change management team that works with the project from its inception. Track adoption relative to other projects. Use an end-user survey to determine satisfaction throughout the project. – On a project that will be completed in a short time, add the role of adoption manager to work with the project manager. Have them on the project from its inception. Ensure that the project and adoption managers are cross-trained in the other’s skills. The wins come in the form of understanding the new domain (project management and OCM), smoother start of the project, and at the end when the deployment has fewer issues. Lean Governance: – Assemble a team to look at project governance and what functions might easily be removed. Select a couple of projects and run them without those controls. Use the results to look for other areas where governance can be removed. Track the attitudes of the team and stakeholders. Did they feel more freedom? Were they more motivated? Did the project seem to move faster? – Look for a governance function that should be a managerial function. Within one department, change how the function works by assigning the duties to staff. Give them the liberty to change the processes to be a better fit. Note the speed, ease, or efficiency with which the projects execute. – Identify a step in some process that can be removed. These are normally testing and validation steps. Determine the cost of doing the step along with the cost of any education or action the person doing the work being inspected needs to avert the issue. Complete the education and remove the inspection step. This type of action creates both autonomy and mastery. Use the cost savings to throw a party, have a lunch, or buy new tools for the team.

Best Practices  323

In Chapter 7’s closing section “Slow Project Execution,” the steps validating that engineers built in the correct design-for-manufacturing rules would be good candidates. In that situation, one engineer who did the work properly had his work bypass the inspection step. This gave the other engineers an incentive to produce a clean product and not have a third party double-check their work. Leadership: – Find an area where people could use different leadership skills to improve their effectiveness. Maybe they can use a different strategy or develop a trait. Coach them on how to use the trait for a positive outcome and have them solve a problem. Again, the concept here addresses autonomy and mastery and provides you with the ability to remove or delegate work and lighten the daily workload. As confidence builds, more work can be done in each area. Remember to keep working toward small, frequent wins whenever possible. Although some actions may take time, there are almost always small steps that can be achieved to show small wins. It may add a little time to the project, but if the extra work makes the change stick, it is invaluable.

Best Practices Putting together a plan to address these six gaps is unique to each situation. The mix of people, problems, cultures, and business domains makes defining a recipe to fix every issue in a book impossible. There are, though, some best practices that make the approach easier: – Have an outside party evaluate where your gaps are—corporate cultures hide many of these issues. – When addressing a change, create a sense of urgency, get the right people, work with them to create a vision for the future, and reinforce the progress with shortterm wins. These are the critical steps to affect beliefs and expectations. – Everyone needs to understand why this is being done. The idea of common understanding starts with simply filling one of these gaps. – The sponsor for any projects who tries to fill these gaps will have to be the CEO or similar leader who is responsible for the company culture. – Common understanding and leadership are ongoing tasks. They have to include indoctrinating new people and advancing current employees. The education never stops. – Establishing effective executive sponsorship is often the first gap to fill and, with the right executive team, is the easiest.

324  Chapter 12: Filling the Six Gaps –

Often the second gap is in corporate alignment, as this focuses people on the right work and reduces people’s workload. This has a huge return for the organization affecting more than just projects. Some of the actions above automatically improve adoption as the organization understands why they have to change. Having a person accountable for the change—the executive sponsor—stresses its importance.

This is a job of leadership and can be initiated at any level of the company. It will reap the largest rewards when unconditionally supported by senior executives.

Project and Middle Manager Takeaway As a non-executive, you are going to have to enlist an executive ally to help champion fixing any of these issues in your organization, although there are many small actions you can take on at an individual or project level. For instance, make the projects you can influence have good change management, improve your own and your team’s leadership and business skills, and, as suggested earlier, create and review an executive sponsor’s job description with your sponsor. You can act as a change agent and push for some of these changes at the organization level. Most likely, this will not be easy, but using the methodology described above, mixed with tenacity, you have a good chance at success. As always, start by creating a sense of urgency. Never present a problem to an executive without a proposed solution. Have a high-level plan to solve the problem and stress that the real solution will be developed by the team addressing the problem. You will need to be passionate about the effort and cannot let up. Do not expect to succeed the first time you try to solve the problem—aim high, but do not get discouraged.

Executive Takeaway Executives have the advantage of authority to instantiate these changes. Just like everyone else, though, they need to create a sense of urgency. Remember that your highest level of resistance is going to come from middle managers. They have the most to lose. In fact, these could be your direct reports. Seek to determine where your leaders are and how you can sway resisters into being promoters by affecting their beliefs and expectations. Have an assessment or audit done of your organization to determine where to spend your time most effectively. Although consultants may be best to conduct an assessment, the best people to implement the recommendations are employees. This creates ownership.

Applying These Concepts  325

Do not try to do too much at once. Develop a plan that will logically work through the items found in the audit. The order in which the gaps above are addressed is generic but based on how each gap affects the others.

Applying These Concepts Organization Wide Questions 1.


Take any gap that you see in your company and define a visual that will hit people emotionally. Identify each group in the organization and in the broader stakeholder community that will need to change. a. For each one, write down how the visual will affect them. b. Is there a need for different visuals for some groups? Identify a current or past troubled project and determine how each of the gaps affected it. a. Based on the outcome of that project, list what actions you could have taken to fill any of the gaps in the organization. b. How can this experience be used to influence changes to how current and future projects are run?

Project and Middle Manager Centric Questions 1.


Identify which of the six gaps affect your projects. a. Determine which executives would agree these are an issue. Develop a plan to persuade them to help you. b. What business objectives can you use to show executives how these gaps affect the company at large? c. What visual might help create an emotional message? d. What data would be needed to back that up? Look critically at your project governance functions. a. How could you address suggesting better solutions than using these groups (for instance, Balanced Scorecard instead of a PMO maintaining alignment)? b. State the challenges by starting with this over starting by fixing other individual gaps first.

326  Chapter 12: Filling the Six Gaps Executive Centric Questions 1.


Assume your company has all of these gaps: a. What order do you feel the gaps need to be addressed to reap the greatest rewards? b. How are you going to reduce the effects of change fatigue? If your organization has a PMO: a. What are its roles and what gaps is it trying to fill? b. How could you solve this issue permanently through better managerial procedures?

Appendix A Endnotes Chapter 1 First Data, Cover Oregon Website Implementation Assessment, Assessment Report, April 23, 2014,, accessed December 12, 2016, p. 13. ii Oregon Legislative Information Website, 2015 Regular Session, Senate Bill 1,, accessed December 12, 2016. iii Todd C. Williams, Case Study: $250 Million Failure, Who Are You Going to Sue?,, accessed October 12, 2016. iv First Data, Cover Oregon Website Implementation Assessment, Assessment Report,, accessed December 12, 2016, p. 7. v Ibid., p. 2. vi Clyde Hamstreet, Draft Letter to Aaron Petnode, Cover Oregon Board, and Governor Kitzhaber, Hamstreet and Associates, August 29, 2014,, accessed October 12, 2014, p. 1. vii State of Oregon Purchase Order Number P0320168, dated September 7, 2012, provided to The Oregonian through the Freedom of Information Act, pp. 5–17. viii First Data, Cover Oregon Website Implementation Assessment, Assessment Report,, accessed December 12, 2016, p. 2. ix Ibid., p. 9. x MAXIMUS, Oregon Health Insurance Exchange Corporation (ORHIX) / Cover Oregon (CO) Monthly Quality Status Report, provided to The Oregonian through the Freedom of Information Act, November 2013, p. 10. xi First Data, Cover Oregon Website Implementation Assessment, Assessment Report,, accessed December 12, 2016, p. 12. xii Ibid., p. 6. xiii United States House of Representatives 114th Congress, Cover Oregon: How Mismanagement and Political Interference Squandered $305 Million Federal Taxpayer Dollars, May 25, 2016,, accessed December 12, 2016, p 6. xiv National Aeronautics and Space Administration (NASA), A Brief History of the Hubble Space Telescope,, accessed May 22, 2016. xv Ibid. xvi Hubble Space Telescope, Wikipedia,, accessed May 22, 2016. xvii National Aeronautics and Space Administration (NASA), Benefits from Apollo: Giant Leaps in Technology,, accessed May 22, 2016. i

DOI 10.1515/9781501506390-013

328  Appendix A: Endnotes

Lauren Keller Johnson, “Exerting Influence Without Authority,” Harvard Business Review, February 28, 2008,, accessed March 13, 2017. xix Peter Senge, The Fifth Discipline: The Art & Practice of The Learning Organization, Doubleday, 2006, pp. 139–148. xx Rana Foroohar, Why the Wells Fargo Scandal Really Matters (Hint: It’s Not Just the Fraud), Time: October 12, 2016,, accessed December 1, 2016. xxi Frederick Brookes, Jr., The Mythical Man-Month: Essays on Software Engineering, AddisonWesley Professional, 1995, p. 153. xviii

Chapter 2 Robert Kaplan and David Norton, The Office of Strategy Management, Harvard Business Review, October 2005, ii Donald Sull, Rebecca Homkes, and Charles Sull, “Why Strategy Execution Unravels—and What to Do About It,” Harvard Business Review, March 2015,, accessed February 27, 2017. iii Ibid., accessed February 27, 2017. iv Ibid., accessed February 27, 2017. v Adapted from Robert Kaplan and David Norton, Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Harvard Business Press, 2004, p. 33. vi Mark Twain, Following the Equator: A Journey Around the World, Harper & Brothers Publishers, 1906, p. 311. vii Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action, Portfolio, 2009, pp. 138–139. viii Ibid., p. 134. ix Ibid., p. 41. x Projects with Purpose, YMCA,, accessed May 24, 2016. xi Federal Theatre Project, Manuscript Digitization Demonstration Project,, accessed May 24, 2016. xii Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action, Portfolio, 2009, pp. 70–1 xiii Michael E. Porter, “What is Strategy?,” Harvard Business Review, 1996,, accessed February 27, 2017. xiv Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action, Portfolio, 2009, pp. 140–141. xv Ibid., pp. 138–139. xvi Jim Collins, Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, HarperBusiness, 2001, p. 42. xvii Ibid., pp. 41–65. xviii Ibid., pp. 42–43. xix Ibid., pp. 46. i

Appendix A: Endnotes  329

Donald Sull, Rebecca Homkes, and Charles Sull, “Why Strategy Execution Unravels—and What to Do About It,” Harvard Business Review, March 2015,, accessed February 27, 2017. xxi Printed with permission, Bram Kleppner, CEO, Danforth Pewter, from interviews March 2017. xxii Peter Senge, The Fifth Discipline: The Art & Practice of The Learning Organization, Doubleday, 2006, p. 130. xxiii Dana Simona Gherai, and Diana Elisabeta Balaciu, From Creative Accounting Practices and Enron Phenomenon to the Current Financial Crisis,, accessed May 25, 2016. xxiv Pink, Daniel, Drive: The Surprising Truth About What Motivates Us, Riverhead Books, 2009, pp. 83–145. xxv, 35 FDA-Approved Prescription Drugs Later Pulled from the Market,, accessed May 24, 2016. xxvi Wikipedia, Rofecoxib,, accessed May 24, 2016. xxvii Michael E. Porter, “What is Strategy?," Harvard Business Review, 1996,, accessed February 27, 2017. xxviii Walgreen’s website,, accessed March 17, 2017. xxix Chris McChesney, Sean Covey, Jim Huling, The 4 Disciplines of Execution: Achieving Your Wildly Important Goals, Free Press, 2012, pp. 23–102. xxx George T. Doran, There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives, Management Review, 70, November 1981, pp. 35–36. xx

Chapter 3 Jim Collins, Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, HarperBusiness, 2001, pp. 29–30. ii Ibid., p. 46. i

Chapter 4 Tom Peters, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p. 203. ii Ibid., pp. 202–234. iii Jeffrey Liker, The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer, McGraw-Hill Education, 2004, pp. 178–182. iv John P. Kotter, The Heart of Change, Real-life Stories of How People Change Their Organizations, Harvard Business Review Press, 2012, p. 15–60. v Tom Peters, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, Collins Business Essentials, pp. 208, 225. vi Ibid., pp. 218-233. vii Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 22–38. i

330  Appendix A: Endnotes

Tom Peters, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, pp. 89–118. ix Jeffrey Liker, The Toyota Way, 14 Management Principles from the World’s Greatest Manufacturer, 2004, p. 180. x Tom Peters, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p. 202. xi Ibid., p. 203. viii

Chapter 5 A. Tom Horvath, Ph.D., ABPP, Kaushik Misra, Ph.D., Amy K. Epner, Ph.D., and Galen Morgan Cooper, Ph.D., edited by C. E. Zupanick, Psy.D., Cognitive Theory and Addiction (Thoughts, Beliefs, Expectations),, accessed March 8, 2017. ii Daniel J. Boorstin, The Americans: The Democratic Experience, Vintage Press, 1974, pp. 336–345. iii Everett M. Rogers, Diffusion of Innovations, Free Press of Glencoe, 1962. iv Geoffrey A. Moore, Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers, Collins Business Essentials, 2014, p. 21. v Malcolm Gladwell, The Tipping Point, How Little Things Can Make a Big Difference, Back Bay Books, 2002, pp. 196–203. vi Elisabeth Kübler-Ross, On Death and Dying: What the Dying Have to Teach Doctors, Nurses, Clergy and Their Own Families, Collier Books, 1969, p. 245. vii Geoffrey A. Moore, Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers, Collins Business Essentials, 2014, p. 21. viii John P. Kotter, The Heart of Change, Real-Life Stories of How People Change Their Organizations, Harvard Business Review Press, 2002, p. 1. ix Jeffrey M. Hiatt, ADKAR: A Model for Change in Business, Government and Our Community, Prosci Learning Center Publications, 2006, p. 43. i

Chapter 6 i Michael Krigsman, Preventing CRM Failures,, accessed September 24, 2015. ii C5 Insight, 30% - 60% of CRM Projects Fail,, accessed September 24, 2015. iii Culture definition,, accessed August 12, 2016. iv Tom Peters, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p 208. v HP Blew It With The TouchPad, But Sony Has Had Some Far More Epic Flops,, accessed March 11, 2017.

Appendix A: Endnotes  331

Chapter 7 Tom Peters and Robert H. Waterman, Jr., In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p. 211. ii Ibid., pp. 211–213. iii Project Governance: A Guidance Note for Public Sector Projects, HM Treasury, November 2007,, p. 6. iv Governance of Portfolios, Programs and Projects: A Practice Guide, Project Management Institute, Pennsylvania, 2016, p. 19ff. v Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 121. vi Daniel Pink, Drive: The Surprising Truth About What Motivates Us, Riverhead Books, 2009, p. 83ff. vii Tom Peters and Robert H. Waterman, Jr., In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p 55–56. viii Boeing 767,, accessed August 23, 2016. ix First-Hand: Evolution of the 2-Person Crew Jet Transport Flight Deck,, accessed August 23, 2016. x Tom Peters and Robert H. Waterman, Jr., In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p. 144. xi PMI’s Pulse of the Profession, PMO Frameworks,, Project Management Institute, November 2013, p. 2, accessed April 30, 2016. xii Top 10 PMO Worst Practices: Pitfalls to Avoid,, Change Management Group, 2015, p. 2, accessed April 30, 2016. xiii Taiichi Ohno, Toyota Production System: Beyond Large-Scale Production, Productivity Press, 1998 (English translation). xiv James P. Womack and Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation, Revised and Updated, Free Press, 2003, pp. 16–26. xv Ibid., p. 25. xvi PMI’s Pulse of the Profession In-Depth Report, The Impact of PMOs on Strategy Implementation,, Project Management Institute, November 2013, p. 2, accessed April 30, 2016. xvii Tom Peters and Robert H. Waterman, Jr., In Search of Excellence, Lessons from America’s BestRun Companies, Collins Business Essentials, 2006, p 127–131. xviii Ibid., p 133. xix PMI’s Pulse of the Profession In-Depth Report, The Impact of PMOs on Strategy Implementation,, Project Management Institute, November 2013, p. 13, accessed April 30, 2016. xx Tom Peters and Robert H. Waterman, Jr., In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, p. 132. i

332  Appendix A: Endnotes

Chapter 8 PMI’s Pulse of the Profession In-Depth Report, The Impact of PMOs on Strategy Implementation,, Project Management Institute, November 2013, p. 2, accessed April 30, 2016. ii Alison Hueber, Jim Schroer, PMOver: Transforming the Program Management Office into a Results Management Office, 2006, 09.pdf. iii PMI’s Pulse of the Profession In-Depth Report, The Impact of PMOs on Strategy Implementation,, Project Management Institute, November 2013, p. 2, accessed April 30, 2016. iv PMI’s Pulse of the Profession, PMO Frameworks,, Project Management Institute, November 2013, p. 2, accessed April 30, 2016. v PMI’s Pulse of the Profession In-Depth Report, The Impact of PMOs on Strategy Implementation,, Project Management Institute, November 2013, p. 2, accessed April 30, 2016. vi Ibid., pp. 2, 15 accessed April 30, 2016. vii Ibid., p. 7, accessed April 30, 2016. viii Ibid., p. 2, accessed April 30, 2016. ix Ibid., p. 5, accessed April 30, 2016. i

Chapter 9 Bill George, Peter Sims, True North: Discover Your Authentic Leadership, Jossey-Bass, 2007, pp. 191–195. ii Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 21. iii Bill George, Peter Sims, True North: Discover Your Authentic Leadership, Jossey-Bass, 2007, p. 154. iv Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, pp. 191ff. v Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 21. vi Bill George, Peter Sims, True North: Discover Your Authentic Leadership, Jossey-Bass, 2007, p. xxiv. vii Joseph Phillips, PMP® Project Management Professional Study Guide, Fourth Edition, McGraw-Hill Education, 2013, p. 86. viii The Arbinger Institute, Leadership and Self-Deception: Getting Out of the Box, Berrett-Koehler, San Francisco, 2010, pp. 93–107. ix Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 152. x Anonymous, Amazon reviews, of Todd C. Williams, Rescue the Problem Project: A Complete Guide to Identifying, Preventing and Recovering from Project Failure, i

Appendix A: Endnotes  333, accessed October 22, 2016. xi Introduction to Montessori Method,, accessed September 20, 2016. xii Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, p. 319. xiii Virginia Valian, Why So Slow, The Advancement of Women, The MIT Press, 1999, pp. 19–20.

Chapter 10 Tom Peters and Robert Waterman, Jr, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, pp. 202–234. ii Ibid., pp. 127–129. iii Ibid., pp. 145–150. iv Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 121. v Dwight D. Eisenhower, Speech to National Defense Executive Reserve Conference in Washington, D.C. (November 14, 1957), Public Papers of the Presidents of the United States, Dwight D. Eisenhower, 1957, National Archives and Records Service, Government Printing Office, p. 818. vi N. Wayne Hales, Leading Your Leaders, Ask Magazine,, p. 8, accessed November 21, 2016. vii John P. Kotter, The Heart of Change, Real-life Stories of How People Change Their Organizations, Harvard Business Review Press, 2012, p. 43. viii Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 42. ix Tom Peters and Robert Waterman, Jr, In Search of Excellence, Lessons from America’s Best-Run Companies, Collins Business Essentials, 2006, pp. 81–82. x Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, p. 319. xi Bill George, Peter Sims, True North: Discover Your Authentic Leadership, Jossey-Bass, 2007, pp. 169–184. i

Chapter 11 i Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 54. ii Peter Economy, The 9 Traits That Define Great Leadership, Inc. Magazine,, accessed September 28, 2016. iii Chris McChesney, Sean Covey, Jim Huling, The 4 Disciplines of Execution: Achieving Wildly Important Goals, Free Press, 2012, p. 13. iv Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 65–89.

334  Appendix A: Endnotes

Tom Peters and Robert Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies, HarperBusiness Essentials, 2004, pp. 119–155. vi Ibid., pp. 122–125. vii Robert J. Sterling, Legend and Legacy; The Story of Boeing and Its People, St. Martin’s Press, 1992, pp. 122–123. viii Ibid., pp. 283–289. ix 1924,, accessed July 29, 2017. x System 360: From Computers to Computer Systems,, accessed July 29, 2017. xi Frederick Brookes, Jr., The Mythical Man-Month: Essays on Software Engineering, Addison-Wesley Professional, 1995, p. 31. xii Jim Collins, Jerry I Porras, Built to Last: Successful Habits of Visionary Companies, HarperBusiness Essentials, 2004, pp. 104–105. xiii Chris McChesney, Sean Covey, Jim Huling, The 4 Disciplines of Execution: Achieving Wildly Important Goals, Free Press, 2012, p. 10. xiv Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 90ff. xv Tom Peters and Robert Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies, HarperBusiness Essentials, 2004, pp. 292–305. xvi Chris McChesney, Sean Covey, Jim Huling, The 4 Disciplines of Execution: Achieving Wildly Important Goals, Free Press, 2012, pp. 65–76. xvii Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 27. xviii Virginia Valian, Why So Slow, The Advancement of Women, The MIT Press, 1999, pp. 19–20. xix Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 27–30. xx Ibid., p. 73. xxi Ibid., pp. 27–33. xxii Ibid., pp. 74–78. xxiii Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, pp. 221–232. xxiv Patrick Lencioni, Getting Naked: A Business Fable about Shedding the Three Fears That Sabotage Client Loyalty, Jossey-Bass, 2010, pp. 206–207. xxv The Arbinger Institute, Leadership and Self-Deception: Getting Out of the Box, Berrett-Koehler Publishers, 2009, pp. 100–111. xxvi Adele Faber, Elaine Mazlish, How to Talk So Kids Will Listen & Listen So Kids Will Talk, Scribner, 2012, pp. 1–47. xxvii Neil Rackham, SPIN Selling, McGraw-Hill, 1998, p. 17. xxviii The Arbinger Institute, Leadership and Self-Deception: Getting Out of the Box, Berrett-Koehler Publishers, 2009, p. 157. xxix Ibid., pp. 93–107 and 157. xxx Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, p. 176. xxxi Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action, Portfolio, 2009, pp. 37ff. xxxii Daniel Pink, RSA ANIMATE: Drive: The Surprising Truth About What Motivates Us,, accessed January 23, 2011. v

Appendix A: Endnotes  335

Daniel Pink, Drive: The Surprising Truth About What Motivates Us, Riverhead Books, 2009, p. 105. xxxiv Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, pp. 131–137. xxxv Tom Peters and Robert Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies, HarperBusiness Essentials, 2004, pp. 55–56. xxxvi Jill Konrath, Selling to Big Companies, Kaplan Publishing, 2006, pp. 75–85. xxxvii Noah J. Goldstein, Robert B. Cialdini, Ph.D., and Steve J. Martin, Yes! 50 Scientifically Proven Ways to Be Persuasive, Free Press, 2008, pp. 150–154. xxxviii Jack Johnson, Flake (song), from the album Brushfire Fairytales, Enjoy Records, 2002. xxxix Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 75–77. xl Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, pp. 221–232. xli Tom Peters and Robert Waterman, Jr., In Search of Excellence: Lessons from America’s Best-Run Companies, HarperBusiness Essentials, 2004, pp. 223–234. xlii Michael Z. Hackman, Craig E. Johnson, Leadership: A Communication Perspective, Sixth Edition, Waveland Press, 2013, p. 107. xliii Peter Senge, The Fifth Discipline: The Art & Practice of the Learning Organization, Doubleday, 2006, pp. 19–20. xliv Matt Egan, Wells Fargo’s Whistleblower Problem Worsens,, accessed June 30, 2017. xlv Matt Egan, 5,300 Wells Fargo Employees Fired Over 2 Million Phony Accounts,, accessed June 30, 2017. xlvi Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 77–78. xlvii Alan Loy McGinnis, Bringing Out the Best in People: How to Enjoy Helping Others Excel, Augsburg Publishing House, 1985, p. 72. xlviii Jim Collins, Good to Great, Why Some Companies Make the Leap . . . and Other Don’t, HarperBusiness, 2001, pp. 122–124. xlix N. Wayne Hale, Jr., January 1, 2008, Leading Your Leaders, NASA,, accessed February 18, 2016. xxxiii

Index A Abernathy, Ralph 45, 47 ACA (Affordable Care Act) 8, 295–6 – marketplace failure 8, 295 Acceptance 102, 142 – change 124–7, 131–2 Accountability 17, 30, 87, 98, 106, 107, 116, 190, 269 – abdicate 179 – blame 17 – capability alignment 209 – decision making 17 – deficiency 8 – delegation 212 – executive sponsor 98–101, 147, 149, 151, 208 – governance, and 160 – missing 30 – organization change management 100 – oversight 208pervasive 17 – project manager 208–11 – project success 87 – role’s 95 – self 68 – training and development 210 Accountable executives 5 Accountability, leadership trait 269 Action plan 279, 290 Actions, executive 97 Activities, critical leadership 242 Activity system 57, 58, 59, 69, 71, 72, 321 Activity system diagram 57 Activity System for Southwest Airlines 57, 58 Addressing problems common 211 ADKAR® 131 – up-level 131 Adopters, early 125, 126, 145 Adoption 82, 102, 124–6, 128–130 141, 144, 147, 150, 153, 154, 155 – architects 147 – accountability 147 – cycle 124, 151 – end-user 98, 99, 210 – executive sponsor 145 – goals 102

– go/no-go 143 – lifecycle 142–5 – manager 153 – methodology 143, 154 – phase gates, and 143 – product development 144 – product’s 151, 152 – project’s 90, 147, 260 – rates 18, 156 – targets 101, 104, 143 – tasks 152, 154 – value 142 Adoption and organization change management 6, 132 – responsibility 153 Adoption processes 144, 151 – project’s 133 Advisory groups 155, 171 Advocacy 180, 243, 257 Affiliative leadership 220–3, 243, 265 Affordable Care Act See ACA Agenda 171, 270, 271, 281, 282 Aggressive growth goals 282 Aggressive sales goals 22 Agile methodology 99 – adoption 143 – project management 256 Agreement 82, 89, 108, 129, 220, 227, 256, 290, 292 Alignment 6, 7, 37, 42, 70, 71, 172, 253, 318 – capability 38, 66, 109, 199, 208, 209, 267, 317 – deficiency 7, 8, 10 – gaps, filling 321 – governance 166, 176, 177 – horizontal. See alignment: capability – inter-project 168, 176, 177 – lateral 38, 64 – monitoring 103 – poor 29 – project 103 – projects, oversight 176, 177 207, 208 – three dimensions 37 – tools 59–63, 70 – tracking 101 – vertical 38, 243, 253

  Index Allies, executive 311, 324 50 Amgen 247, 299 Anger (change) 127 Anarchy 163, 244, 245 Anchored beliefs 122–3 Arbinger Institute – humanizing 286 – leadership 224 Arcane business process 162 Architects 16, 102, 146, 204, 253, 254, 265, 275, 314 – project’s 238 Assessment 8, 130, 143, 315, 317, 324 – organization-wide 322 Assigned sponsors 88,96, 114 Assumptions 43, 99, 100, 104, 242, 260, 275, 283, 288, 298 Audacious goals, big 67, 272 Attributes 14, 94, 105, 201, 204, 223, 228, 239–54 – key sponsor 107 – leadership – executive 239–44 – middle manager 244–8 – project manager 248–54 – project team 254 Audits 315, 324 – cost-effective process 69 – examples 8,39, – health check, and 69–70, 103 Authentic leadership 220 Authority 16, 17, 108, 111, 258, 300, 301–3 – lacking 18, 86, 94, 106, 109, 205–6, 231, 260, 258, 301 – leadership 163, 180, 229, 258 – perceived 108, 109 – project office 180, 196, 208 – sponsor 46, 108, 109, 111 Aware, leadership trait 271 B Balanced Scorecard 59–64, 68–69, 179, 200, 312, 319 – quantifying goals 66–8 – challenges 69 – PMO 179, 200, 205, 207 Balanced Scorecard Collaborative 36 Bank of America 48

Bargaining (change) 127, 128, 133, 134 Because, use of 292 Behavioral changes 81, 86, 102 Beliefs and expectations 69, 123–4, 131, 146, 244, 276, 285, 293, 323, 324 Benefits realization 176, 194n, 207, 209, 317 Best practices – implementation 324 – project oversight 211 Bezos, Jeff 50 BHAGs (big hairy audacious goals) 67, 272 Big hairy audacious goals. See BHAGs Blame 137, 297 – affixing 296, 297 – demotivates teams 228 – punishment 277, 295 Boat analogy 122–3 Boeing 37, 170, 272 Brookes, Frederick 28 Budget 5, 12, 14, 18–20, 111, 141, 171, 172, 175, 225, 251 Building leadership traits 274, 321 Bureaucracy 28, 30, 52, 53, 160, 198, 201 – avoiding 28 – government 53 – high performance teams 168 – people 53 – organization’s 49, 100 – PMO 201 – reducing 72, 189 – survey 198 Business acumen 20, 31, 45, 110, 249, 313, 314 Business analysts 16, 200, 254, 267, 301 Business cases 98, 99, 101, 210 – Business changes 100, 104 Business development 284 – manager 281–2 Business direction 105, 177 Business domain knowledge 30, 176, 178, 314, 313–5 Business environment 24, 43, 54, 100, 104, 127, 139, 179, 243 – changes 31, 69, 100, 103, 132, 238 Business executives 100 Business goals 56, 200 – change 104 Business knowledge gaps 317

Index  

Business leader 124, 200, 222 Business – leadership 239 – objectives 61, 325 – plans 23, 44 – plans change 41 – problems 51, 198 – process improvement 25 – processes 84, 140 – strategy 57, 105, 111, 220 – value 30, 205 Business training 313, 320 Business units 38, 63, 64, 180, 196, 197, 203, 209, 312 – executives 312, 318 – customer 60 C CABG (coronary artery bypass graft) 11 Capabilities alignment 38, 40, 44, 61, 62, 63, 64, 66, 277 318 – accountability for 209 – deficiency, examples of 8, 40 – enhancements 19 – executive sponsor 89, 101, 109 – organization’s 218, 287 – PMO 199 – relative importance 40 – strategy map 62 Case study 6, 7, 8, 13, 37, 42, 49, 166, 171 – Affordable Care Act 8 – Circumventing the PMO’s Methodology 204 – Cover Oregon 8 – crying baby 225 – customer relationship management systems 137 – Dynamic ‘Fail Fast, Fail Cheap’ Strategy 49 – enterprise resource planning 121 – healthcare 9–10 – Hubble Space Telescope 13 – Interstate 5 Bridge 300 – leaders and resisters 236 – management by competition 42 – manufacturing execution system 39 – National Speakers Association 7 – No Project Support Time 231 – Owens Corning 125

– Project Manager to Business Leader 222 – rolled glass 125 – short term wins 130 – sponsor engagement 93 – steering committees 171 – technology addresses efficiency 56 – Telling the President He Has a Personnel Problem 302 – The Team with the Wrong Vision 253 – What type of CIO? 227 – What’s in a Name? 7 CEO 86, 139, 145, 200, 280, 311, 314, 319 Certification-based screening processes 249 CFOs 4, 21, 227, 242, 311, 314 Champions 45, 46, 100, 105, 112, 144, 239, 243, 294 – executive 85, 94, 95, 100, 108, 109, 115, 243 Change 100, 123, 133, 310, 311 – culture 145 – feelings 128 – implementing 319 – initiating 312 – making stick 129 – persistent push 129 – resistance to 316 – social 125 – top-down 130 Change control processes 132 Change control versus change management 102, 140, 144 Change culture 29, 130, 242 Change fatigue 145 Change initiatives 130, 131, 145, 146, 148, 311 Change management 121–35, 137–56 – accountability 147, 153 – adoption 322 – agile 151 – communication 147 – culture 184 – deficiency 7 – discipline 140 – gaps, filling 324 – history 124–29 – initiatives 131, 154 – iterative methodologies 150 – lifecycle 142, 148

  Index – methodology 133, 145 – personal 127 – philosophy 133, 156 – planning 145, 149 – poor project 179 – processes 124, 125, 131, 133, 134, 149, 150, 156 – product development 142 – project lifecycle 102 – project management integration 148 – resource group 210 – responsibilities 102 – team 114, 139, 147, 148, 156, 321, 322 – theory 127, 133 – training 146, 156 – transition states 147 – value 145 Change management’s connection project management 132 Change order processes 100, 175 Change – philosophy 132, 145 – processes 106, 127 – resistance 148, 149 Changing behavior 128, 129, 131 Changing role, project manager 249 Characteristics of effective executive sponsors 107 Cheerleaders 105, 107, 243 Chief executive officer – executive sponsor as, 139 Chrysler 86, 274 Cialdini, Robert B. 109n, 289-91 CIO 171, 194, 206, 227 Clients 4, 5, 78, 79, 175, 270, 271, 281, 302 Clinicians 83, 90, 144, 149 – executive sponsors, as 87 Coaching 89, 111, 179, 184, 218, 220, 223, 228, 233, 242, 243, 248, 252, 259, 267, 323 – executive 123, 234 Coaching leaders 221 Collaborative decision process 227 Collins, Jim – dialog 293 – focus 273 – goals 67 – inspiration 223 – leadership 228

– Level 5 leader 107 Colonial Williamsburg 49 Commitment 35, 51, 67, 87, 96, 272, 273, 290, 292 – organization’s 51 Common ground, establishing 290 Common understanding and leadership 22, 323 – deficiency 7, 10 – executive 11 – gap 21 – lack of 11, 25 – PMO 197 – project manager 12 Common vernacular 24, 176, 178 Communication 21, 22, 103, 104, 105, 106, 122, 180, 199 – accountability for 210 – change 129 – change management 147 – executive sponsor 147 – project manager 105 – responsibility 252 – stakeholder 103, 176, 207, 209, 317 Communication plan 115 Communication skills 30, 207 Companies – large 38, 167, 315 – non-product 144, 315 – small 55, 162, 163, 167, 239, 242, 281 – successful 49, 175, 255 Competency 246, 266 – leadership 257 Complexity, project’s 42, 167 Compliance 19, 46, 47, 63, 64, 65, 66, 72, 177 – internal 208 Compliance group 178 Compliance projects 19, 65, 66 Compromise 5, 18, 54, 55, 250, 251, 257, 301 Computer-integrated manufacturing systems 39 Confidence, leadership trait 272 Conflict avoidance 52 Conflicts 19, 20, 52, 71, 84, 90, 107, 208, 248 Conflicting priorities 20 Consensus leaders 220

Index  

Constraints 20, 24, 200, 204, 252, 254 – executive’s 21 – organizational 20 – organization’s 253 Consultants 42, 163, 193, 311, 315, 316, 324 – leadership development 123 Contingencies 149, 176, 177, 209 Cooley, Dick 47–48 Coordination, inter-organization 8 Coordinator 249, 250, 260, 261, 303 Core team, project’s 251 Coronary artery bypass graft (CABG) 11 Corporate – culture 51, 131, 200, 209, 275, 323 – goals 5, 40, 42, 59, 70, 73, 103, 172, 179, 180, 253, 259, 318 – goals, changing 44 – governance 162, 170, 176 – projects, and 6, 33, 43 – reaction time 49 – reorganizations 104 – values 315 – vision 23, 41, 44, 86, 270 Corporate-alignment tools 22 Cost savings 71, 264, 284, 322 Costs 7, 69, 87, 102, 146, 170, 283, 320, 322 Cover Oregon (CO) 8 Cray XMP 42 Creative accounting 52, 162 Credibility 110, 196, 227 – organizational 255 CRM (customer relationship management) 137, 138 – implementation changes 139 – project 138, 139 Culture 41, 71, 222, 239, 242, 297 – alignment-centric 38 – assumptions 99 – CEO 139 – change, of 145 – change, project that 242 – conflicts 21 – company’s 50, 85, 133, 139, 145, 149, 156, 183, 209 – corporate 20, 128, 139, 145, 228, 248, 291, 295, 323 – micromanagement 164 – organizational 183

Cultural awareness 291 Customer 5n – change orders 3 – company’s 253 – delinquent 138 – external 61 – goals 172 – perspective 60–1 – potential 139 – project’s 318 – value 213, 238 Customer input 43, 84, 142 – executive 243 Customer relationship management (CRM) 137, 138 – failures 137 Customer service 236 D Danforth Pewter 49 De facto leaders 235 Decentralized leadership 221, 237 Decision maker 28, 105, 208, 283, 301 Decisions 108, 218, 241, 271, 293, 294, 303 – accountability 17 – critical 111, 271 – executive sponsor versus project manager 105 – making 17, 30, 78, 108, 220, 221, 248, 296, 301 Decisive, leadership trait 271, 277 Defining goals 243, 259 Defining sponsor roles and responsibilities 115 Definition 12, 29, 79, 80, 115 – project’s 140 – role’s 95, 112 – executive sponsorship 79, 110 Delegate 81, 96, 104, 105, 131, 200, 240, 179, 180, 221, 239, 260 Deliverables 8, 16, 42, 71, 72, 232, 237, 254, 260 – project’s 89 Delivering – project’s 89 – organization’s goals 19 – projects 231 – successful 114 Denial (change) 127, 128, 133, 134, 141, 270

  Index Departmental PMO 196, 199 Departmental strategy map 63, 65 Deployment 85, 98, 153, 322 Depression (change) 127, 128, 133, 134 Develop talent – accountability for 210, 216 Development group 207, 210 Dialog 276, 277, 285, 286, 292–5, 296, 298 Diffusion of Innovations 125, 130 Directive leader 220, 221, 222, 226, 230, 239, 248 Discovery, process of 30, 219, 281, 282 Discretionary changes 127 Discussion 277, 283, 292–5, 300 Discussion and dialog 292 Disney, Roy 47 Disney, Walt 47, 49 Distributing leadership 237 Domains 6, 16, 82, 83, 84, 168, 249, 304, 322 – general project governance 168 Drive 288 Duties 84, 85, 96, 107, 161, 322 – changing 10 E Early adopters 125 Early majority 125 Earnings 11, 12 – quarterly 4, 225 EBITDA 12 – company’s 164 Eckerd, Jack 86 Educating people on leadership 313 Education budgets 318 Effective executive sponsors 94, 107, 317, 318 Effective governance 6, 7, 22, 30, 157 Effective leaders actions 293 Effective non-authoritative leadership 108 Effective project sponsorship 29 ElectroTech 23, 187, 196 Embedding customers 257 Empathy, leadership trait 110, 233, 250, 272, 287, 303 Employee performance 40 – responsibility 41 Employee training 19, 65, 179 Employee trust 41

Empowering people 129 End user 5n – involvement 100 – perspective 25 Engaged executive sponsors 28, 93, 94, 96, 98, 100, 102, 104, 106 Engaging leaders 220 Engagement 80, 81, 104, 106, 111, 116, 239, 240, 243 – executive sponsor’s 81, 106 – lack of 93 – stakeholder 166 Enterprise governance group 200 Enterprise PMOs. See EPMOs Enterprise resource planning (ERP) 39, 121, 241 – unclear direction 247 Environment 67, 245, 289, 295 – changing 259, 271 – efficient project 105 – no-fault 276, 277 – shifting business 176, 177 Episodic interactions 83, 144 EPMOs (Enterprise PMOs) 196, 200 ERP see enterprise resource planning Esprit de corps 243 Escalation 80, 81, 243, 248 Ethics 160, 169, 251, 263, 265, 268, 269, 270, 287 – leadership trait 270 Evangelist 105, 113 Execution 45, 269, 271, 272, 319, 321 – successful initiative 30 Executive – accountability, absence of 18, 22 – actions required 97 – approach 131culture 242 – engagement 213, 239, 242 – engagement, lack of 5 – influence 317 – leadership – attributes 239–44 – mistakes 240 – responsibilities 240 – styles 239, 242, 248 – organization’s 218, 259, 282, 315 – ownership 166 – perspective 23 – project’s 171

Index  

– project manager gap 21 – responsibilities 242 – training 95 – uncommitted 114 Executive engagement – continuous effective 103 – effective 103 Executive sponsor. See also executive – accountability 98, 111 – adoption 99, 147, 153 – business case 99 – job description 311 – lack of 114 – oversight 208 – project value 98 – adoption 96, 145 – alignment 103 – authority 96, 109 – challenges 21 – characteristics 107, 111 – chief executive officer 139 – coaching of 111 – commitment 96 – communication 147 – decision making 78 – deficiency 7, 10 – definition of 89, 95, 112 – domain knowledge 110 – education 95 – engagement 97, 106 – lack of 81, 93 – gaps, filling 28, 322 – governance 170, 166 – job description 110, 312 – leadership 107 – misconceptions 108 – new role, education 110 – organization change management 82, 100, 144 – performance expectation 113 – performance reviews 96 – priorities 87 – problems with 79 – product manager, contrast 84 – project – fiduciary 100 – oversight 211 – success targets 101 – value 100

– respect and trust 108 – responsibility 80, 89, 111 – definition, for 97 – selection criteria 87, 95, 171 – survey 79–89, 95 – team 112 – Texas Instrument 112 – time commitment 113 – training 89 – value of 110 – respect and trust 108 – responsibility 80, 89, 111 – vertical alignment 208 – vision 46 – vision, belief in 107 – volunteer 85 Executive sponsor/product manager 82 Executive sponsorship 28, 29, 30, 77–91, 93–117 – changing 319 – development 31 – effective 6, 318, 321, 323 – implementing effective 170 – ineffective 97 – poor 310 Executive sponsorship team 113 Executive support 48, 71, 180, 316, 319 Executive team 7, 133, 135, 184, 185, 210, 282, 310, 319 Executive team communication 180 Executive-level customer relationship 243 Executive-to-project-team communication 29 Expectations 89, 90, 100, 101, 115, 123, 124, 130, 146 – changing people’s 130, 134 Expectations and beliefs 81, 123, 128, 129, 133, 134 Experience 109, 110, 173, 175, 226, 250, 266, 276, 298 Experience gaps 5 Expert leadership strategy 218 Expertise, technical 94, 219, 298 F FAA (Federal Aviation Administration) 300 Faber, Adele 279 Fail fast 50, 114 Failure 7, 17, 18, 29, 31, 48, 50, 296, 297

  Index FDA (Food and Drug Administration’s), processes 53 Federal Aviation Administration (FAA) 300 Fiduciary responsibility, manager’s 225 Fiduciary role 109 Fifth Discipline 51, Fill gaps 201, 309–33 Filling leadership and business knowledge gaps 317 Financial perspective 60 First Data 8 Flow 67, 131, 163, 175, 181, 184–5, 187, 189 Fluke, John 294 Focus, leadership trait 273 Food and Drug Administration’s (FDA) 53 Funding 49, 63, 72, 101, 109, 112, 142, 300, 302 G Gaps – adoption 6 – alignment 6 – assessment 315 – capability 40 – common 20 – common understanding 6 – critical 30 – cumulative, 6, 30 – executive sponsorship 6, 28 – filling 310 – foundational 252, 277 – governance 6 – filling with 27 – identifying 315 – important 314, 319 – incompetency 202 – leadership 6, 30 – order of filling 313 – managerial 179 – organizational 26 – organization change management 6 – prior 318 – six, interrelation of 6 – tension vs 20 – unidentified 315 – vernacular 20 Gaps in accountability 8, 190 Gates, project 143 General Electric 131

George, Bill – leadership strategies 220 – purpose 222 GE’s Change Acceleration Process 131 Gladwell, Malcolm 126 Goal-project alignment 35, 243 Goals – achievable 68 – aligning 319 – appropriate 299 – aspirational 303 – awareness of 36 – big hairy audacious 67 – common 44, 69, 159, 222, 249, 253 – company’s 167, 287 – competing 88 – customer’s 19 – discussion’s 294 – executive’s 209 – external 162 – extravagant 272 – financial 59, 60, 61 – group’s 41, 63, 204 – implementation 88, 137 – important 67, 171, 272 – indefinable 141 – influence 37 – intermediate 272 – long-term 113 – measurable 46, 66 – meeting 205 – missed 6 – mutable 37 – nonbusiness 84 – operational 20, 59 – organization’s 19, 24, 29, 37, 38, 60, 70,243 – project’s 18, 81, 111, 243, 254, 270 – short-term 41, 220, 275 – SMART 68 – sponsor’s 87, 88, 101 – strategic 18, 19, 48, 250 – wildly important 67 Goals change 19, 37, 208 Governance 157–208 – accountability 28 – alignment 172, 207 – basis for 167 – benefits realization 176, 207

Index  

– best practices 211 – charter 212 – communication 176, 207 – compliance, with standards 177, 208 – corporate 159, 162, 167, 170, 189 – deficiency 7, 10, 166 – executive sponsor 170 – external 162 – financial 175 – gaps, filling 27, 322 – government required 167 – high levels, when needed 170 – lean 165, 180 – lean, example 159, 187 – level of 160, 161, 167, 183 – management – difference from 165, 207–8 – replacing with 179 – mistakes, compensating for 169 – misuse 179 – organization change management 176, 207 – organizational 189 – overreliance 30 – people 169 – performance and reporting 162 – permanent 190 – project 164 – Project Management Institute 168 – project management support 177, 207 – project methodology 174 – risk management 173, 207 – sizing and costing 176, 207 – talent development 176, 207 – temporary 28, 29, 178, 184 – temporary vs permanent 187 – too little 162 – training, replacing with 178 – value-focused 183 Governance functions 165, 182, 206, 316, 319, 322 Governance process 186 Governance-based solutions 28 Grief process – five stages of 127 – misapplication 141 Groups – end-user 152, 153 – offending 94

– permanent 205, 206, 210 – project-focused 196 – small 160, 164 – temporary 199, 205 – user 110, 171 Growth, leadership 257 Growth perspectives 61, 62, 64, 209, 312 Growth plans, business unit’s 281 H Hales, Wayne 253, 301 Hanover Insurance Group 51 Health insurance exchange 8 Healthcare 9, 82, 144, 149, 151, 167, 232 Healthcare interviews 83 Heart of Change, The 128 Hedgehog effect 273, 287 Hiatt, Jeffrey M. 131 – ADKAR 131 Hierarchical authority 108, 109 Hierarchy 83, 219, 229 – executive 302 – organizational 236 Horizontal alignment. See alignment: capability Horvath, Tom – cognitive behavior theory 123 How to Talk So Kids Will Listen & Listen So Kids Will Talk 279 Hubble Space Telescope 13, 141 Hubris 269, 272, 273 Human resources – constraints 248 – coordinator 248 – issues 258 – managers 247 – professionals 79 Humility 107, 223, 233, 265, 273, 274, 303 Humility, leadership trait 279 Hyatt, Michael 7 Hybrid corn 124, 126 I Iacocca, Lee 86, 274 IBM 28, 272 Implementation of effective project sponsorship 29 Implementing technology 54, 55, 226 Implication, question 283, 284, 291

  Index Improving leadership and business skills 314 In Search of Excellence 164 Inamori, Kazuo 51 Influence – selling a vision 289 – structure 236 Influence: The Psychology of Persuasion and Yes! 50 Scientifically Proven Ways to Be Persuasive 289 Information technology financial management (ITFM) 175 Initiating change 311 Initiative lifecycle 96, 97, 99, 143, 155 Initiatives 11, 61, 63, 64, 66, 68, 173, 304, 312 Initiative’s goals 4 Initiative prioritization 64 Innovation 123, 124, 125, 126, 175, 244, 245, 246, 257 – impeding 53, 200 – inspiring 257 – leadership 257 – process 245 – team’s 257 Innovators 125 Inspirational, leadership trait 270 Insufficient project governance 166 Integrating project and change management 150 Integration effort 138 Intel Corporation 18, 258 Internal projects 18, 85, 99, 134, 143, 144 International Project Management Association (IPMA) 299 Interpersonal communications skills 226 Inter-project issue resolution 248 Interviewees 40, 42, 85, 144, 172, 267–9, 275–6, 284, 304 Intracompany issues 177 Introducing change management concepts 145–53 IPMA (International Project Management Association) 299 Issue escalation 248 Iterative methodologies 143, 150, 203 ITFM (information technology financial management) 175

J Job descriptions 84, 85, 90, 110, 114, 311, 312, 314, 322 – executive sponsor’s 90, 115, 311, 324 Jones, James T. 181 Johnson & Johnson 296 K Kanban 56, 163, 188, 320 Kaplan, Robert 59, 182 Key performance indicators (KPIs) 148, 154 Keyhubs 236, 242 King, Martin Luther, Jr. 47, 288 Kleppner, Bram 49 Knight, Charles 298 Konrath, Jill 290 Kotter, John – change management approach 128–31, 139, 146, 255 KPIs (key performance indicators) 148, 154 Kübler-Ross, Elisabeth 125, 127 – grief process (change) 127, 141 Kyocera Corporation 51 L Lack of – adoption 176, 177, 178 – business domain knowledge 176, 178 – common vernacular 176, 178 – executive sponsorship 94 – information 176, 177 – leadership 30, 244 – project governance 166 – project management discipline 176 – project management knowledge 177 – understanding of project management value 178 – uniformity of project 176, 178 Laggards 125 Late majority 125 Lateral alignment 38, 41, 59, 64, 68, 209 – accountability for 209 – issues, examples of 39 – relative importance 41 Layering process 247 Leader – corporate 94, 115, 289 – directive 220, 233 – dismal 219

Index  

– effective 222, 234, 268, 289 – executive 243 – expert 220 – focus 228 – group’s 160 – middle-management 248 – organization’s 303 – political 268, 296 – potential 256, 267 – project’s 253 – strong 86, 221 Leadership 215–305 – authoritative executive 244 – authority, without 18, 86, 301 – basics 218, 219, 221, 223, 225, 227, 229, 231 – building 221, 313 – capabilities 248, 250 – characteristics 87, 107, 219 – consensus 220 – competency 257 – cultivate versus acquire 275 – dearth of 86, 219, 223 – deficiency 7, 10 – directive form of 224, 239 – executive sponsor 107 – executive 239, 272 – failure 86 – filling the gap 314 – functional managers 299 – gap 30 – goals 275 – growth 257 – inadequate 310, 313 – innovation 257 – interviewing for 267 – management, versus 224 – middle management 224, 244 – organizational style 242 – people 224 – positional 86, 219 – prioritizing 266 – process 244, 298 – project 299 – project manager 248 – project team 254 – pseudo 247 – qualities 110, 229, 231, 268 – responsibilities 229, 238, 247, 260

– roles 221, 233, 267 – scope of functional managers 230 – situational 218, 222 – skills 254, 258, 259, 260, 266, 299, 304, 322, 323 – sources 238 – strategies 219–34, 252 – structure 230, 256 – styles 218, 219, 220, 239, 242, 243, 252, 258, 259 – project manager 229 – technical proficiency 266 – technology, and 226 – through the organzation 255 – title, and 228 – training 224, 234, 266, 313, 314, 320 – traits 263–68, 276, 278, 304 – traits, poor 273 – women, and 232 Leadership and Self-Deception 224, 286 Leading stakeholders 253 Leading Your Leaders 253 Lean 164, 165, 171, 172, 181, 182, 184, 185, 319 Lean approach 165, 177, 180–5 Lean governance 20, 165, 170, 187, 190, 205, 322 Lean principles 171, 180, 182, 187, 189 Learning 51, 61, 64, 266, 277, 278, 280, 296, 298 – filling the gap 314 – humility 278 – listening 277 Learning organization 23, 297, Liaison, executive 176, 210, 317 Lifecycle 84, 85, 96, 97, 105, 143, 145, 147, 154 – project’s 84, 105, 142, 143 – process 144 Liker, Jeffrey 180n – authority 17, 109 – executive sponsor 94 – Toyota Production System 180n Linear thinking 6, 9, 22 Listening 52, 276, 277 – discussion and dialog 292 – innovation 294 – learning 277 Long-term change 313, 315

  Index M Maintaining corporate alignment 35–72 Major gaps causing project failure 21 Management 122, 165, 203, 205, 206, 211, 224, 228, 244 – adoption and change 141, 318 – control 228 – customer relationship 137 – executive 29, 149, 204, 294 – governance, difference 165 – help 223 Management and governance 165, 206 Management – departmental project 200 – permanent project-oriented resource 210 – principles 17, 180 – roles 208 Management by walking around 271, 294 Management versus leadership 224 Manufacturing 55, 65, 79, 180, 181, 182, 185, 196, 304 Marketing groups 23, 101, 130, 142, 144 Master, scrum 256 Mastery 52, 289, 292, 322, 323 – personal 289 Mazlish, Elaine – listening 279 McChesney, Chris – accountability 275 – goals 67, 272 – scorecards 273 Meeting project goals 101 Mentoring 89, 95, 97, 228, 233, 248, 252, 266, 303 Merck 53 Merging change management and project management 150 Methodology, responsibility for 251 Methodologies 150, 151, 154, 174, 249, 251, 257, 259, 321 Metrics – predictive 67 Middle management 223, 224, 225, 226, 237, 238, 244, 247, 248 – common understanding 27 – deconstruct goals 237 – focus 226 – involvement in projects 244 – leadership 244

– leadership responsibility 247 – shepherding improvement 247 – leadership attributes 244, 245, 247 – roles 225, 247 Misalignment 100 Mission 14, 43, 44, 58, 63, 141, 170, 184, 222 – corporate 43 – organization’s 42, 63 – strategy map, via 63 Moore, Geoffrey A., 145 – adoption 145 – chasm 126 Motivation 52, 287 Musk, Elon 50 Mythical Man-Month, The 28 N Narula, Vikas 236 NASA (National Aeronautics and Space Administration) 13, 14, 15, National Speakers Association (NSA) 7 Negotiation 249, 250, 254, 274, 301 Negotiator 260, 261, 303 New product development (NPD) 23, 82, 84, 153, 154, 163, 167, 172, 187, 188 New sponsor role 110 Non-executive’s filling gaps 311 Non-governance groups 206 Non-profit 6, 21, 60, 304 Norton, David 59, 182 NPD. See new product development O Objectives 18, 19, 63, 68, 87, 89, 98, 105, 201 – corporate 88, 89 O’Brien, Bill 51 OCM. See organization change management Office Space 162 Ohno, Taiichi 180n On Death and Dying 127 Operational – effectiveness 46, 64, 65 – efficiency 46, 64, 72–3, 88 Organization – accountability of 100 – accountability for 210 – bureaucratic 247

Index  

– change 89 – change management team 147 – executive sponsor 82, 100, 147 – formal governance 173 – great 210, 293 – healthcare 21, 79, 83, 110, 144 – large 184, 200, 243 – multiple 102, 183 – non-healthcare 79, 149 – non-profit 220 – product development 142 – professional 219, 249 – reporting structure 102 – shared services 63, 196, 200 – small 237 – team 129 Organization change management (OCM) 82, 99, 102, 140, 141, 142, 144, 155, 210 – projects, and 137–52 – staff 210 – teams 155 Organization change structure 148 Organization prioritize projects 72 Organization wide conceptual changes 298, 299, 301 Organization’s culture 17, 99, 242 – healthy 270 Overhead 171, 173, 179, 247 – reducing 182, 183, 187 Oversight 160, 165, 167, 168, 182, 203, 205, 211, 212 – project management support 207 – management roles 208 Oversight groups 171, 212 Owens Corning 125 P Packard’s Law 267 Passionate employees 42 Path of discovery 281–5 Patient Protection and Affordable Care Act. See ACA Penchant, executive’s 12 People – governance 163 – process, and 52 – strategy, and 47, 50 Perfection principle 181, 187 Performance expectations 113

Performance goals 162 – sponsor’s 88 Performance reviews 96 Persistent problems in organizations 10 Personnel, project-related 79 Personnel problem 302 Perspective – customer 60 – end user 5, 25 – executive 4, 6, 11, 23 – financial 60 – internal 61 – learning and growth 62 – project manager 4, 6, 12, 24 Peter Principle 225 Peters, Tom – champions 108 – failure tolerance 296 – five attributes of communication 105 – focus 273 – governance examples 164 – governance 170 – governance, temporary 183 – leadership 107 – motivation 289 – projects 184 – sponsor vs. champion 100 Pink, Daniel – governance 170 – motivation 52, 288 – people, acquiring the right 51 – vision 45 Planning teams, executive 256 PMBOK 151 PMI See Project Management Institute PMO 193–214, See also project oversight – acronym 197, 198 – alternatives 202 – Balanced Scorecard 200, 205 – case study 193 – client’s 203 – function 197 – governance 27 – manager 4, 27, 80, 86, 193,247 – meaning 194 – meaning, lack of 197 – office 195 – officer 195 – operations 196

  Index – portfolio 195 – problems with 198 – product 195 – program 195 – project 195 – successful 199 – types of 194 – value 193 Poor leadership styles propagate 239 Poor project performance 176, 177, 178 Porter, Michael – activity system 57 – types of projects 64 – What is Strategy? 46 Portfolio 195, 196, 223, 251 Positional leadership 86 Potential sponsors 88, 113, 114 Post-It® Notes 15, 44 Power structure 83 Predictive metrics 67 PRINCE2 151, 299 Principles, lean 181, 182 Priorities 318 – changing product 23 – project’s 109 – sponsor’s 81 – executive sponsor 87 Priority issues 83, 241 Problem manifests 283, 285 Problem perspectives 22, 23, 25 Problem questions 283 Problems 6, 22, 56, 179, 198, 202, 283, 284, 296 – complex 10 – core 30, 224, 296 – correcting 17, 225 – department-wide 203 – explicit 284, 285 – implied 284 – multiple 7, 79, 281 – perceived 226 – perspectives 22, 23, 25 – small 54, 97 – solving 52, 189, 268 – strategic 183 – tenacious 10 Problems governance 175 Process 51–5, 244–7, 299 – adding 169, 246

– adoption-acceptance 153 – agile 154, 204 – definition 176, 207, 210, 211 – establishing 165, 198, 206 – gating 101, 191 – grief 128, 133 – hiring 232, 252 – innovation 245 – internal 84, 238 – leadership 298 – manual 56, 67 – nonvalue 67 – overreliance 30 – overuse 244 – people, and 52 – planning 51, 59, 63, 70 – strategy, and 51 – value-added 165 Process steps 131, 316 Product, project 5n Product – adoption 144, 320 – company’s 84–5 – developed 164, 223 – innovative 64, 163, 164 – organization’s 23 Product development 23, 26, 102, 167, 174, 188, 256, 281, 282 – adoption 144 – change management 142 – executive sponsor 84 – governance 167 Product development – goals 187 – process 195 – projects 147 Product managers 17, 28, 84, 144, 147, 153, 188, 210 Product sponsors 84, 149 Profit 17, 24, 50, 83, 124, 231, 258 – leadership 258 Project – adoption 84, 156, 243, 318 – advocacy 243 – alignment 6, 180, 316, 317 – assumptions 99 – audit 69, 103 – benefits 176, 189 – business case 99

Index  

– change control 103, 132, 140 – common problems 28 – complex 19, 168 – constituent 153, 195 – culture 166, 317 – current 32, 115, 190, 261 – customer 5n – decisions 105 – deliverables 5, 29, 30, 44, 71, 179, 204 – direction 206, 242 – disparate 195, 197 – end user involvement 100 – executive sponsors support 101 – execution 30, 153, 165, 189, 299, 318 – external 18, 85, 243 – failure 114, 223, 240 – goals 89, 243, 253 – governance 164 – governed 166 – high-risk 173, 207 – issues 203, 205 – issue escalation 248 – large 117, 151, 174 – late 28, 296, 320 – leadership 8, 90, 115, 215, 299, 231, 299 – style 247, 252 – skills 251 – structure 260 – lifecycle 96, 99 – maintenance 19, 65, 72, 73 – managing 142, 299 – military 15, 200 – non-product 84, 153 – organizational change 242 – parties, number of 18 – performance 19, 189, 318 – priorities 64, 65, 89, 196, 206 – product, result, or service 5n – product 23 – release 191, 204 – risks 8, 86, 176 – running 79, 87, 168, 172, 175, 195, 198, 252 – scope 94, 132, 176, 178, 179 – scope changes 5, 243 – sizing 176, 196, 200, 207, 209 – status 25, 104, 194 – strategy 252 – strategic 46, 64, 66

– structures 15, 18, 200, 260 – styles of 19, 174 – success 12, 16, 17, 19, 27, 30, 85, 86, 92 – conflict in definition 30 – success rates 89, 115, 155, 259, 291, 292 – support group 210 – technical 12, 113 – temporary nature of 229, 231 – troubled 6, 42, 54, 171, 217, 325 – value-laden 89 – value 98, 177, 243 – vision 45, 104, 106, 111, 129, 243, 251, 252, 258, 321 Project and change management – relationship 152 Project champion 85, 108–9, 113 – executive sponsor, versus 112–3 Project change control culture, strong 102, 132, 178 Project, change management and 132, 140, 144 Project complexity and organization maturity 168 Project compliance group 210 Project governance 159–90 – establishing lean 168 – functions 197, 325 – general 169 – groups 32, 196 – issues 188 – level of 168, 189 – philosophy 199, 200 – processes 150, 156 – responsibilities 251 – role 165, 210, 229 – structures 169, 174, 188 – talent 177, 210 – training 267 – value 176, 178 Project governance bodies 32, 168 Project lifecycle 104, 207 Project management 124, 133, 140, 151, 199, 209, 210, 249, 260 – adoption relationship 152 – change management integration 147 – change management, merging 132 – culture 183, 201, 203 – discipline 176, 177, 178 – experience 199

  Index – framework 177, 199 Project management document framework 178 Project management initiative 152 Project Management Institute (PMI) 151, 168, 175, 194, 299 Project management methodologies 29, 115, 150, 151, 174, 205 – agile 151 Project management office’s. See PMOs Project management stack 220, 259, 314 Project manager – accountability 208 – accountability for 209 – business relationship 231 – communication 104 – contract 200 – coordinator 250 – executive gap 21 – junior 249, 266 – leader (maturity) 250 – leadership attributes 248, 249, 251, 253 – leadership experience 248 – leadership style 229 – maturity, levels of 249 – negotiator 250 – perspective 24 – responsibility 104, 209 – scope 109 – solving problems 97 – support 177, 207, 210, 211 – accountability for 210 – training 214 Project managers and middle managers 259 Project manager’s job 51, 155 Project methodology – governance 174 – responsibility for 251 Project methodologies 102, 124, 143, 144, 156, 165, 168, 174, 178 Project methodology’s change control process 102 Project offices 194 Project oversight 167, 198, 203, 205, 212 – accountability 208 – alignment 207 – benefits realization 207 – best practices 211

– communication 207, 210 – compliance, with standards 208 – executive sponsor 211 – liaison 176, 201, 210 – managerial 206 – organizations approach 202 – organization change management 207 – process definition 207 – replacing PMOs 202, 211 – risk management 207 – sizing and costing 207 – talent development 207 – temporary 205 – value 203 Project oversight and management 203–12 Project oversight group 204 Project portfolios 46, 250, 251 Project sponsors 11, 81, 86, 171, 315 – effective 84 – ineffective 89 – role 80 Project stack 238, 251, 265, 274, 310 Project team and stakeholders 105, 208, 263 Project team 174, 176, 237, 240, 243 – ad hoc 183 – inspiring 260 – leaders 178 – leadership attributes 254 – members 95, 106, 108, 112, 252, 254, 263, 302 – mirrored 238 – well-organized subordinate 300 Project type 65, 174 Project types – compliance 19, 65 – maintenance 19, 65 – needing change management 140 – new product development (NPD) 23 – operational 19, 46, 65 – priority 19 – strategic 19, 46, 64 Project’s business case 99 Projects languish in indecision 271 Project’s progress 28, 30, 225 Project/strategy alignment, proper 166 projectum 132 Prosci’s ADKAR® 131 Prototypes 24, 185, 187, 252

Index  

Pseudo-leadership 247 Pull principle 181, 186 Pulse of the Profession In-Depth Report 199 Q Qualification process, decades-long 53 Quality assurance 13 Quality assurance steps 184, 185, 188 Quality issues 284 Quantifying goals 66 R Rackham, Neil – selling 283 Rathmann, George 247, 299 Reconcile project delivery /end user leadership style 252 Regulations 19, 24, 65, 139, 162, 167, 168, 173, 245 Reporting, standardized 27 Requirements 88, 151, 162, 172, 203, 204, 210, 302, 312 – external governance 167 – external project compliance 194 – regulatory 19 – sponsorship team 98 Rescue the Problem Project xxxiii 226 Resistance to change 108, 148, 149, 161, 172, 242, 324 Resolving escalated project issues 248 Resolving inter-project issues 258 Resources 56, 82, 87, 89, 109, 159, 175, 176, 286 – allocation 166 – coordination 248 – Respect and trust 108, 258, 268 Responsibilities 28, 29, 80, 89, 95, 97, 106, 153, 160 – abdicate 179 – business-wide 196 – executive 104, 149, 172, 247 – executive leadership 240 – employee performance 41 – executive sponsor’s 80, 89, 104 – executive’s 172, 247 – governance, and 160 – group’s 153, 202 – line-of-business 29, 88 – middle management, leadership 247

– PMO 197 – project leadership 251 – project manager’s 104, 153, 209 – project team 209 – team building 254 Results Without Authority 86n Rewards 224 Risk management 168, 173, 209, 210 Risk management culture 176, 177 Risk planning 70 Risk register 104, 149 Risk tolerance, organization’s 88 Risks 12, 24, 70, 71, 140, 149, 174 – business manages 173 – corporate 12, 23 – managing 162, 209 Rogers, Everett M. – adoption 125, 145 Role 29, 79, 80, 95, 113, 114, 256, 266 – executive 208, 249 – functional 210, 316 – person’s 161, 195 Role definition, executive sponsor’s 179 Root cause 205 – gaps 6 – governance, need for 177 – multiple 6, 10 – PMO 201 Root issue 177, 178, 190 S Sample metrics 66, 67 Sandberg, Sheryl 232 Sarbanes-Oxley (SOX) 65, 167n Schedule targets 176, 178 Scope 8, 14, 15, 98, 101–2, 105 – project’s 94, 103, 106, 173, 209, 217, 271 Scope control processes 144 Scorecards 59, 67, 68, 70, 273 Sebelius, Kathleen 295 Self-direction 170, 228, 254 Sell or tell 276, 301 Selling to Big Companies 290 Sence of urgency – creating 319 Senge, Peter – blame 297 – dialog and discussion 293 – leadership 239

  Index – leadership and title 228, 255 – learning organization 23 – mastery 288 – people first 149 – people, enriching 51 – permanence vs temporary 182 – tension 20 – vision 222 Senior executives 45, 49, 236, 238, 239, 242, 243, 252, 314 – organization’s 286 – setting goals 237 Senior leadership team 264 Sense of urgency 146 Service groups 38, 60, 61, 180 Service group’s customer 61 Shared services groups 63, 72, 180, 197, 198, 312, 321 Short term wins 129 – case study 130 – creating 321 Sinek, Simon – vision 45, 288 Situational leadership 218 Skunkworks 49 Slow project execution 187, 320, 323 SMEs. See subject matter experts SMART goals 68 Social change theory 128 Social proof 291 Society for Organizational Learning 20n Software development projects 16, 56, 151 Software products 8, 196 Software-process solution 132 Sources of leadership 237 Southwest Airlines 57, 125 SOW (Statement of Work) 8, 26 SOX (Sarbanes-Oxley) 65 SPIN Selling 283 Sponsors See also executive sponsor – attention of 153 – coaching 111 – duties 94, 95 – education 95 – effective 83, 105, 318 – engagement 81, 264 – executive 29 – focus 322 – project’s 90

– selection 79, 87, 91, 117 – training 89 – vetting process 177 Sponsorship 6, 7, 79, 81, 90, 95, 97, 166, 169 – executive 85, 97, 211 – role 29, 78, 80, 94, 95, 96, 97, 98, 107 Stack, project’s leadership 30, 237, 320 Staff, project 300 Stage gates 143 Stakeholders 105, 106, 109, 111, 176, 250, 279, 280, 300 Standards compliance – accountability for 210 Standards 165, 167, 169, 177, 203, 206, 208, 210, 211 – organizational 160 Stark, Peter 123 Start with Why 288 State of Oregon 8 Statement of work (SOW) 8, 26 Status 27, 30, 70, 99, 105, 106, 124, 125, 164 – project’s 99, 240 Status reports 32, 164, 226, 245 Steering committees 10, 165, 168, 171, 172, 206, 218 Steps, inspection 182, 185, 322, 323 Stifling creativity 245 Strategic direction 50 Strategic plan 43, 44, 45, 49, 57, 61, 71 – ever-changing 43 Strategic planning activities 42 Strategies 36, 43, 46, 47, 48, 50, 71, 220, 221 – company’s 36, 37, 281 – corporate 179, 180 – directive 222, 242 – organization’s 46 – project’s 259 Strategy 46 – competitive 59 – departmental 60 – dynamic 49 – fail fast, fail cheap 49 – government 60 – information technology 60 – measurable 46 – Michael Porter 19n

Index  

– people, and 47, 50 – process, and 51 – project 252 – technology, and 53 – unclear 47 – understandable 47 – what is 46 Strategy for long-term change 313, 315 Strategy implementation 199 Strategy map 59–66, 215 – capability alignment 62 – communication 87 – departmental 63 – mission 63 – usage 312 Stumpf, John 22, 268, 297 Subject matter experts (SMEs) 16, 109, 110, 113, 142, 147, 177, 184, 187 Subproject 204 Sull, Donald – corporate reaction time 49 – employee performance 40 – employee trust 41 – goal awareness 36 Survey – change management 140, 145 – executive sponsor 79, 89, 94 – accountability 87, 114 – characteristics 108 – communication 105 – definition of 79, 89 – engagement, lack of 81, 106 – industry specific 82 – leadership 86 – organization change management 82 – perceptions of 112 – priorities 87 – result 95 – solutions, proposed 85 – organization change management – accountability 149 – executive sponsor 144 – healthcare 144 – misunderstanding 144 Survey on change management 142 System integrators 8, 78, 175, 231

T Tactics 27, 36, 258, 264, 281, 289, 302, 314, 315 Tangible outcomes 59, 328 Task force 177–9, 183, 184, 205, 206 Team composition 252 Team development 253, 259 Team members 218, 222, 226, 231, 232, 251, 252, 254, 258 – core project 257 Teams 106, 111, 147, 218, 232, 252, 253, 254, 257 – best 47, 48 – guiding 129, 131 – project’s 256 – right 129, 145 – sales 15 – sponsor’s 98 – objective problem solving 301 Technology 15, 16, 53, 54, 55, 56, 57, 226, 227 – acquired old 40 – efficiency 55 – leadership, and 226 – strategy, and 53 Technology projects 226, 232 Temporary project governance structures 190 Temporary project oversight and management 178, 189, 190, 203, 205, 212 Tenure, project manager’s 98 Tesla 50 Third party management 166 Tools – activity system 57 – ADKAR® 131 – GE’s Change Acceleration Process 131 – scorecard 68 – strategy map 59–64 Toyota 17, 180, 184, 258 Toyota Way 17, 94, 180n TPS (Toyota Production System) 180 Tracking alignment to goals and business cases 101 Training 62, 89, 110, 131, 178, 207, 208, 210, 266, 313 – governance, instead of 178 Training and development 207 – accountability for 210

  Index Training tools, inadequate 79, 94 Traits 266–9, 275, 276, 277, 287, 304, 305 True North, Discover Your Authentic Leadership 220 Trust 108, 160, 161, 218, 227, 265, 268, 272 Truth 18, 128, 193, 194, 228, 255, 270, 293, 297 Turnover, decreasing employees 68 U Understanding, common 6, 7, 10, 12, 21, 30, 54, 110, 176, 197, 277 Understanding business change management 82, 120–33 Urgency 95, 129, 131, 255, 285 – sense of 134, 135, 145, 146, 311, 312, 319, 323, 324 US Food and Drug Administration 53 V Valian, Virginia 233 Value 5, 14, 15, 16, 98, 101, 181, 182, 203 – adding 16, 185, 189, 247 – anticipated 15, 103, 110 – change management 141 – conceptual 101 – core 275, 298 – corporate 42 – delayed recognition 14, 15delivery during project 15 – delivering 17, 200, 202 – executive sponsor’s 84 – expected/anticipated 153 – extreme 166 – generating 260 – highest 15, 19, 259 – immeasurable 15 – increasing 182 – intangibility 14 – intended 104 – measure 14 – monitoring 102 – project 243 – perceived 30, 82, 100, 194 – product’s 226 – project manager’s 251 – project’s 15, 87, 98, 102, 151, 176, 225 – quantify 101

– scope, relationship of 15 – subject matter experts 16 – subjectivity of 15 – success 12 Value aspect of project oversight and management 203 Value proposition 198, 203 Value stream 163, 175, 181, 182, 184, 187 Value targets 30, 81, 111, 142, 204, 212 Values constant change 145 Values leadership skills 275 Vernacular 11, 197, 314, 317 Vertical alignment 38 – accountability for 208 – executive sponsor 208 – issues, examples of 39 – relative importance 42 VIAGRA 17, 44, 47 Vioxx 53 Vision 50 – activity systems 58 – belief in, project 107 – champion 46 – corporate 23, 41, 43 – defining goals and value 243, 259 – executive sponsor 46 – leadership 222, 228 – project 45, 104, 129, 228, 243, 251, 321 – selling 289 Visuals, creating 319 V-Level executives 142, 238 Vocalize project risk 176, 177 W Walgreen, Cork 48, 63, 86 Want versus need 16, 26, 219, 254 Waterfall 154, 174, 203 What is Strategy? 46 Wildly important goals (WIGs) 67, 269, 272 Womack, James P. – lean 180 – perfection 181 Women as leaders 232 X, Y, Z Xerox 292 Yes, overuse 292