Cargo Cult Project Management

Maybe you have experienced this phenomenon. You are at a company and they have a PM methodology, they are using the forms, there may even be people with Project Manager titles, but the benefits and results that come from project management are not there. I suggest that organizations like this are suffering from “Cargo Cult Project Management.” I doubt I can trademark that, so feel free to use it as your own. Let me indulge in a little history for those who may not be familiar with the term.

During World War II the Allied forces occupied many of the Pacific islands. Up until that point, many of the inhabitants of these islands had never seen manufactured goods. With the military occupation, things like clothing, food, weapons and other manufactured goods were delivered in plentiful quantities. These supplies arrived in airplanes. To the islanders who were unfamiliar with manufacturing or powered flight, the arrival of the good from airplanes seemed to be a direct delivery from the gods. After the war, the airplanes and their cargo, no longer came. In an attempt to get the planes to return islanders made airplanes out of wood, radio sets out of bamboo, and even painted military symbols on their bodies. They talked on the radios, waved flags, and lit up the runways at night, all to no avail.

This is not unlike what happens at some companies today. We use project charters, create Project Manager job titles, and produce a methodology but nothing really happens. We don’t get all those great project management benefits. Some PMO Directors have told me that they are not allowed to call their organization “the PMO.” This is invariably due to an unsuccessful attempt at a PMO which left everyone bitter and disillusioned. I can certainly sympathize with those feelings. Imagine how the natives that spent all day waving palm leaf flags felt when they finally realized that no cargo was coming. Just like these natives, executives and management have been asked to do a lot of work for little or no result.

How did this happen? More importantly, what can be done? In my opinion, this happens for two primary reasons. First, too much emphasis is placed on the trappings and appearance of project management. Secondly, someone tried to implement project management in the wrong order. Let’s look at the second reason first.

You can read earlier articles where I talked about the need to build your PMO through People, Processes, and Tool and in that order. In the case of a cargo cult PMO, someone has started with the tools. Not necessarily a purchased software product, although that is common, but the forms, the meetings, the language and other end products of Project Management. Just like the natives, we started with all the right tools, and got no result. The reason the natives did not get cargo is because there was no infrastructure, no industry, trade or machinery to create the cargo. Similarly, a PM tool without the underlying support of the right people and the right processes will fail.

Next there is this (IMHO) unhealthy focus on the physical aspects of project management, the forms, tools, reports. These are not project management. If you’re reading this, you probably already know that, but some PMOs have gotten a bad name because they tried to start there. This is a huge temptation and absolutely understandable. Your management is demanding that you show results so by creating a methodology or by implementing a tool you can show that something has actually happened. Something did happen and it may look like project management, it may even feel like project management, but it’s no more project management than a coconut headset is a radio.

Now, I am not saying that you can’t succeed if you start off with tools and methodologies. Some companies (the very rare ones) may already have a fertile environment for this. I’ll bet that if you looked carefully at these companies you would find that they already had the right people and processes in place; they just probably were not calling it Project Management. Unfortunately, most places are not like that. So what do you do if you are stuck in this kind of situation?

I think the first step is to assess what is going on. Resist the impulse to act, you probably represent the last chance project management will have at your company for the foreseeable future. If you fail, then you and project management are out the door. After you have an understanding of what is going on, cut, cut and cut some more. Get rid of every one of the forms or tools or processes that is not creating significant and measurable value. You can figure out what these are by observation. If everyone enters 8 hours for a project every day, then your time system is not being used correctly – can it. At this point you are not trying to fix anything - that will come later. Just clean house.

What you will be left with are the people, processes and tools that are producing and valuable. Start here by enhancing and consolidating. Improve what is working. Bring everything into a consistent whole. Call this your methodology if you want, but please do not confine project management to a series of steps to be taken. If you confine PM then so will everyone else. Things get more complicated from here and I’ve already written on several of these topics, so I’ll stop here. The idea is to stop doing the things that do not work and start doing the things that will.

Metrics References

Apologies to my past professors for not using the correct reference style, but frankly I don't feel like spending an hour correctly formatting a set hyperlinks. And since this is not for a grade I don't have to.

These are some of the documents I read when putting together the articles and presentation on metrics. I used a little of this and a little of that, so all share pretty equally. My thanks to the authors for making their work available.

Assessing the Value of Project Management Offices (PMO) By PROFESSOR YOUNG H. KWAK, PH.D. (KWAK@GWU.EDU, HTTP://GWU.EDU/~KWAK ) AND CHRISTINE XIAO YI DAI, PH.D. CANDIDATE (CDAI@GWU.EDU )

Selling Project Management to Executives: What’s the hook? Dr. Janice Thomas, Associate Professor, Centre for Innovative Management, Athabasca University, JaniceT@athabascau.ca

Growing Your Business Through The Project Management Office Steve Rollins, MBA, PMP, Steve.Rollins@EPM-Solutions.com.

The State of the Project Management Profession Gregory G. Stine, PMP, Project Management Institute.

Marketing Your PMO – Metrics (cont.)

Cost:
The BIG one! This metric is probably something you are already tracking. I’m sure you have been asked “what is the PMO buying me?” or “Is the PMO worth it?” or other such frightening inquiries. There are a lot of drivers for cost. Certainly, the desire to get the most out of every dollar is the underlying driver, but this does have some different flavors such as:
Resource Efficiency – how much productivity am I getting out of my staff? This can take a lot of forms – time on projects, time on maintenance, burdened cost, overhead…

Faster Project Completion – of course, the sooner they get done, the sooner we can start raking in the benefits and the more projects we can do overall, a big benefit of the PMO!

Reduction of Redundancy – here is a portfolio savings that PMOs bring. If you can eliminate a $1millon project because it represents duplicate work, then your PMO just saved the company $1million – almost enough to pay your salary. OK, the PMO does not deserve all the credit for the savings, but there is certainly a real justification that without your PMO, the company might have gone down the wrong path – or the same path twice.

Costs of Defects - Many of you are familiar with the formulas that show how much it costs to fix a problem or make a change in design versus how much it costs when you get to production. Improved product quality is a real benefit of Project Management. If you can measure and reduce the cost of changes and defects, then you are saving the company money or reducing cost.

Effective Forecasting - While this may not be considered a cost metric, it is certainly financial, and it does impact costs when a company does not have an effective cost forecasting model. How many times have you had to stop buying office supplies in November or December just to make budget? Your PMO can help management effectively forecast costs over longer periods which will lessen headaches and ultimately saves money.

PMO ROI – can’t forget this one. Your PMO will be seen by many as a cost vortex. If you’re going, you may be perceived as a black hole where the company has all these high paid people who do nothing. You will be fighting this constantly. You should really plan to continuously combat this perception via good marketing. Don’t think for a minute that you can establish that the PMO is worth it and then relax. You can never relax (OK – maybe never is the wrong word, but if there is someone out there who is relaxed about this, please write).

Because of the last bullet (PMO ROI), you will want to mirror your cost information with any savings or profits that resulted from your work. Whenever possible, report costs and benefits together. If you’re doing a balanced scorecard, or consolidated PMO status report, that is a great way of showing the whole picture. So where do you get all this lovely information and how do you report it?

A good mental model for cost metrics is earned value. Think “what value did I create for the money spent.” You may even want some form of CPI for you PMO; you could chart your CPI over time showing the return on investment. If you can couple that with a visual on the cumulative savings, even better. Something that looks like this might be very effective.

Here the ever-rising Blue line shows the cumulative savings over time while the pink line shows the CPI for your PMO. I have to stop here and make a recommendation about reporting in general. I have been very influenced by the work of Edward Tufte, his analysis of design and presentation are (IMHO) unsurpassed. The most important thing I have learned is that the presentation of information can be as vital to the message as the information itself. Before you start putting together management reports, I highly recommend that you look at his work. He has several great books, and he also has seminars. I went to a one-day one and it was worth every moment. Back to cost.

If you have information about what things cost before your PMO, then you will want to use that as much as possible. You can use these prior numbers for a while (months to a year) until you have established a trend and collected good post-PMO information. Once you have enough data on that, you can start comparing how you did last period to how you are doing this period, showing progress always. This really holds true for any of the metrics we’re discussing.

If you always measure cost as a factor of benefits, then we can present both sides of the equation. If you were to present just costs, then a document showing PMO costs would exist separate from a document showing PMO benefits. This document can then be used to argue that the PMO is costing the company money. Without the other side of the equation, you risk perception problems. Some ways of presenting costs and benefits are:

• PMO costs v. Project Benefits. Take the benefits portion of every project run by the PMO and compare that to your costs. Granted this is not a real return on investment, since a lot more went into producing those benefits than just your project management.
  
• PMO costs v. Project Management Savings. If you can, compare the costs of pre-PMO projects to that of post-PMO projects. Since you are now more efficient, you will be able to show how you are saving money. You can also show improved throughput with the same resources or even less people doing more.
  
• Project Hours v. Maintenance Hours. What you want to document here is that we are now spending more time on projects and less time on maintenance. This is probably going to be hard to get in the beginning, but as your projects go in and create better products, your ratio will improve. There is a general perception that time spent on projects is better than time spent keeping the lights on, so demonstrating an improvement in this area will be good.
  
  I think I overstayed my welcome on this one, so I’ll stop here. I will start trying to present more visual information and links as I continue. I’ve been pretty lax in that area and want to share some of the great sources out there.
  
  
  

Marketing Your PMO – Metrics

So, how well is the PMO doing? How much money are you saving the company? Have you created a Project Management culture? Are your projects more successful? Are they taking less time, more efficient, lest costly, higher quality…. Are you going nuts trying to figure out how you can prove your PMO is helping? Well Metric is certainly one way to communicate this.

The metrics a PMO Director may be concerned with fall into three broad categories. Project Metrics – these tell how well an individual project is doing, so things like EVA, risks, issues, those types of information would be collected and reported. Second there are Portfolio Metrics. This is a completely different topic, but corporate alignment, strategic goals and so forth would be covered here. Lastly, and most germane to this column are PMO Metrics. I’ve divided these into 5 categories based on the primary drivers. This is no firm, hard-and-fast categorization, but rather something that just helps me think about the purpose and type of metrics. The categories and some discussion are below:

Compliance:
The compliance driver I usually external to the organizations and can come in the form of laws, regulations or contract agreements. Probably the most prevalent and well-known compliance driver these days is the Sarbanes-Oxley Act. The basic premise behind compliance is to ensure that a certain minimum level is reached. If you have children, you know exactly what compliance is when you say – “clean your room” and do an inspection later to find that everything has been stuffed in the closet. For which you usually get the response “you didn’t tell me to clean the closet.” So, while I don’t advocate this method of compliance, the basic tenet is the same. Compliance Metrics then need to measure and communicate compliance.

First, you need to understand the compliance and non-compliance conditions. In many cases this is written somewhere, probably a contract or some other legal document, so get ready for some confusing reading. If you are lucky, said document may have information about how compliance/non-compliance will be determined. If it does, then those measures are exactly what you will use. In any case some determined investigation on your part will reveal the compliance goals.

From there, create a process to measure those goals and begin measuring. Create a contingency plan to bring you back into compliance should the metrics show you have slipped. The use of run-chart type measurements with control limits is well suited for compliance measurement. But remember, you are not looking to be “exceptional” or “superior” at compliance, this is a pass/fail game, so do not put more into this than is necessary to ensure that you are passing. Kind of like the PMP test right?

Consistency:

The drivers for consistency usually come from inside an organization. Often they come as directives or mandates from management. These can be as simple as “we need to be more consistent around here” to adoption of one of the more rigorous methodologies. Some of the better known methodologies are Capability Maturity Model in software development, Six Sigma, ISO, or OPM3. All of these methodologies have a foundation of consistency. It’s a simple concept; you can not improve what you are doing if you are always doing something different.

The first step then is to do the same work the same way every time, only then can you improve. Great, but how do you prove you are becoming “more” consistent, or that you have reached a level where you can say that you are consistent? If you are using one of the aforementioned methodologies, you are in luck as there is ample information and processes for you to use. If you are not, or as an addition, you can perform these measures yourself.

The key to consistency is adoption. You want to measure the adoption rate of the standards. Often this can be expressed in numbers or percentages. Numbers are good to show raw progress while percentages show the increases in terms of penetration. Since we are a PMO, we will be measuring how well Project Management is being adopted within an organization, so some measure here might be:

• # or % of Projects with Project Charter (or plan, schedule, etc.)
• # or % of Projects with an assigned Project Manager
• # or % of Projects using standards
• # or % of Departments using PMs in their projects
• # or % of employees trained in Project Management

You get the idea – find out what your management means by “consistent” and start to measure that. Of course, by measuring you will improve adoption and hence consistency. No manager wants their VP to ask them why they are not using Project Managers in their projects when everyone else is. Conformance is a powerful motivator. The nice thing about these metrics is that they are binary, either you are doing this or you are not. Your job as PMO director is to capture the individual components, aggregate and report. Not too tough, but very powerful.

A warning here, like with all measurement, you risk becoming seen as the police. Don’t be a tattle tale; consistency is a great way to work with your peers to help them adopt Project Management. As you collect the numbers, you will notice that this or that department is a little behind or is using less than another. This is your golden opportunity. Go to that manager, show them the numbers (BEFORE YOU PUBLISH), explain how the numbers are derived and suggest ways to improve. Say something like: “If we were to assign Dan to these projects that would bring you up to 90% of your project with assigned PMs.” They may not be your biggest advocate, but no one wants to be at the lower end of the curve. Do not “enforce”, help, assist, find ways to make them successful.