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Posts Tagged ‘Project Management’

Delivering Bad News to the Customer

Thursday, March 4th, 2010 by Roger

Whether your business is building wooden pallets or designing nuclear power plants (or anything in between), it’s safe to say that you’ve had to share bad news with some of your customers at one point or another. And who likes to do that?!? Human nature is generally to avoid these negative situations as long as possible, and consequently the problem only continues to get worse. In my experience, if you follow a few simple guidelines in delivering bad news, you can make life more manageable for yourself, your company, and particularly your customer. The news itself can be anything from a schedule slip to budget overrun to a technical catastrophe, but the rules for handling the news really do not change much.

Here are some of the guidelines that I have adopted over the years to help deliver ‘less than stellar’ news to my customers:

  1. Bad news never gets better with time!  If you only retain one single fact from this reading, make it this one! Don’t waste valuable minutes, hours, days or weeks hoping that the problem will all go away or get better on its own. The harsh reality is, these things seldom solve themselves. Be prepared to share the news with your customer as soon as you validate it. Remember that they too have made commitments based on YOUR performance, so keeping facts from them is going to make things even worse on their end when the truth eventually comes out. And it ALWAYS comes out, eventually. The sooner everyone knows the problem, the easier it is make arrangements to deal with it. I always try to put myself in my customer’s shoes when I need to be the bearer of unfortunate news. This helps to keep a balanced perspective, and in the end you will be able to serve your customer’s needs better. Another crucial point to remember: It’s not at all uncommon for the customer to be able to help craft out the solutions. It’s possible that they have run into similar issues on other efforts, so the sooner they are engaged, the better. Don’t forget about this valuable resource for resolution plans, especially if you’re stumped about what to do next.

  2. Ok, so now you’re prepared to break the news……Make sure you have all your facts straight first! Understanding the root cause of the issue is the first step to dealing with it, so make sure you can identify it clearly in your discussion. Spend ample time getting all of the info relative to the issue at hand gathered and sorted before your discussion. Before you make that dreaded customer call, bring together as many of your team members that are involved in the project as you can and have a brief rundown of the what/how/why questions with the group, and take detailed notes of this meeting. In my personal experiences, these meetings have saved me from many embarrassing “well, I don’t really know……” statements during the delivery of the bad news. Try to anticipate as many of their questions as you can, and make sure you have as many of those answers as possible available to you before you have the unpleasant discussion with the customer.

  3. Don’t EVER pass off the dreaded task of delivering the negative news to someone else. Many times middle-management personnel will bring in the ‘big gun’ VP or Director to break the news to the customer. This happens for a variety of reasons (don’t want to be the ‘bad guy’, execs may feel more comfortable spinning the bad news than allowing a subordinate to do it, etc.), but seldom are the reasons valid. When I’m the customer and my everyday contact brings in someone I hardly know (or don’t know at all) to break bad news to me, I have a hard time trusting and respecting either one of them. If you need some backup in the room, that’s another story. It never hurts (and in fact is usually a good idea) to have moral support or ‘color commentary’ from another member of your team during the discussion, but you need to be the bearer of the bad news. Period. Your hard-fought reputation and relationship with your customer may hang in the balance on this one if you choose the seemingly easier path of “let someone else deliver the bad news”.

  4. If at all possible, try to have at least some general ideas close at hand of how to you may be able to mitigate the problem. Even better if you already have a firm plan of action figured out and in process when you break the news to the customer. However, don’t spend days or weeks working on your plan before you break the news. You have to be quick on this one (see rule #1).

  5. If your team is directly to blame for the bad news, own up to it candidly. Nothing makes a customer lose faith in you quicker than trying to shift blame to some other entity. Own up to the culpability, take whatever whipping that’s dished out, and then move on to the solution phase. It’s hard for anyone to put much energy into mercilessly flogging you if you’ve already done it yourself in their presence.

  6. Move your customer communications to “crisis-mode” during the recovery phase of the problem. Provide daily (sometimes multiple daily) updates to your customer contact with the progress and the direction that corrections are taking. This will make the customer a true partner in the effort, and it also makes it a lot easier for them to be able to deliver updates to their stakeholders. Remember: Once the bad news is out in the wild, everyone along the chain will be constantly tuned into hearing the solution progress. If your customer is getting hammered every hour by his boss about what’s going on and he doesn’t have the answers, the pressure ramps up unnecessarily for all involved, particularly you!

  7. If your correction plan takes a drastic turn from your published course for any reason (plan A didn’t work, the team came up with a better plan, etc.), be sure and let your customer contact know immediately (see rule #1). This bullet point probably should really be 6B, as it ties in directly with standard crisis-mode communication.

I’m sure there are dozens of other rules and guidelines that could apply to this list, but these are the mainstays that I use to try and keep problematic project issues from becoming business-killers. If you are able to utilize some or all of these methods the next time you’re faced with explaining a catastrophic setback to your customer, I think you’ll find the situation can not only be more manageable, but your customer ties will only get stronger. True partnership demands the whole truth be shared in a timely manner, and anything less will only complicate your problem. And one last point to remember: In our modern world they seldom execute the bearer of bad tidings anymore like the old Roman custom, so you have that going for you, which is nice! 

If you have some additional rules or guidelines of your own that you’ve refined over the years for delivering bad news to your customers, please share them here! We can all use all the help we can get when we have to be that bearer of the dreaded news.

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Why does the huddle work at Setpoint Systems?

Thursday, January 14th, 2010 by JoeK

Setpoint Systems is an open book company. This means that our books are open to our employees. Even though we are a privately held company we choose to share our financial information.

When the company started in 1992, the engineer founders Joe Cornwell and Joe VanDenBerghe (aka the Joe’s) decided they wanted to share financials with their employees. As a project based company they found that the way their part-time CPA did the books with them did not give them a good measure of how the projects were performing financially on a week-to-week basis.

So the two Joes with the help of others developed a way of tracking their projects on a weekly basis that included hour tracking by labor section, material costs tracking, and earned value project management concepts. This allowed a fairly accurate measure of the financial performance for projects on a weekly basis. This type of the project financial analysis did not comply with GAAP (The Generally Accepted Accounting Principles). Their CPA did not like it but it made sense to them and their employees.

The weekly tracking process happens on a big white board where projects are measured for material costs and percentage progress every week. The key project number, that every employee follows, is GP or gross profit by project (at Setpoint GP is simply earned revenue by percent complete less actual material costs). After the gross profit by project is measured then we compare that to our week OE or operating expenses. You take GP – OE to measure our profit for the week.

We track closely three measures on our huddle board. First, is GP/OE. For us, 1.2 is good and anything less is not good enough to sustain the business. Second, we track what percentage of our labor is direct to our automation projects. Third, is GP per direct hour charged to projects. Everyone knows that if our GP per hour is over a key threshold and our percent direct is over a key threshold Setpoint will make a nice profit and GP/OE will be well over 1.2.

It’s actually a really simple system. We have a monthly and annual bonus that pays out based on beating minimum GP-OE targets for the month and year. We also train all of our employees on how the huddle board works and what the key metrics mean.

So why does our huddle work? Well I think that there are few things that have made this simple 15-minute weekly meeting work for Setpoint. First, it’s a simple way to track projects and everyone understands it. Second, we tie objective financial rewards to how the board looks. Third, we involve every employee in the process. In the weekly huddle every employee has a seat at the table.

The power of Setpoint’s weekly huddle is evident in the survival and success of this business. When a project is bad on the board, the assembly people blame the design and engineering people, the design and engineering people say the project was under funded when it was sold and blame sales. We are all together in the meeting and it needs to be worked out between these groups or we do not have a business. The huddle creates at Setpoint what I like to call ‘psychic ownership’. Ever though all the employs do not own stock in Setpoint they act like owners because they see the performance on a weekly basis and want the company to perform well.

We have seen this ‘psychic ownership’ express itself in many ways over the years. Recently, when a project was nearing completion some shop people approached our CEO and challenged the percent complete shown on a specific project. They were in final assembly and thought the machine was well beyond 90% complete but our project engineer had the number much lower on the huddle board thus lowering our GP-OE and bonus for the month. In short, our assembly people accused the project engineer of sandbagging on the project. After a brief review an adjustment was made. We’ve also had situations where percent complete has been challenged as being farther along than we really are.

With everyone involved the huddle really keeps us safe and accurate on our business. We believe the huddle process and the systems behind it is the single greatest asset that Setpoint Systems has.

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Posted in Finances, open book finances, open book management | No Comments »

Whose Decision is it Anyway?

Wednesday, November 18th, 2009 by Brad

It is way too easy to say that because I’m the boss, I decide. That is a very autocratic approach, and your company will only be as good as the dictator at the top making those decisions, and there has never been a dictator that gets it right all the time.

The opposite view might be that you require consensus with all those involved before a decision can be made. In my experience, very rarely will everyone agree unless the decision has no consequences or you have a team of suck-ups. Have you ever heard the saying, “if two people in a company always come to the same conclusion, one of them is not necessary”. Not making a decision because everyone is not at consensus can be paralyzing to a company. Being unable to decide is a decision also, which can have disastrous consequences

Setpoint is unique in that our culture promotes ideas and debate regardless of who is on the other side of that debate. Pretty much everyone at Setpoint feels comfortable enough to tell me when they think I’m up in the night, and that happens all the way up and down the organization.

I have worked in other places where there were taboo subjects that you could not talk about in front of certain executives or owners. That has an unbelievable stifling effect on ideas and choices that come forward and can be considered. The worst part is that those executives never engage their organizations brains and get the benefit from those that are working closest to the challenges.

Creating the right environment for deciding:

  • You must create an environment where ideas can flow freely, with no repercussions
  • Make sure it fits into the strategic direction of the company
  • If you are surrounded by smart people and they are telling you not to go the direction you are thinking, maybe you should stop and listen to them because you might not have the best idea
  • At the end of the day what you and everyone in your organization should want is the decision that best fits for the direction you are heading
  • Very rarely will you have perfect information and data to make your decision, nor will the same checklist work for all circumstances
  • In my career it has been more important to recognize when you are off-course rather than holding off deciding until you have all the data you need to make a decision
  • If you do not give credit to those contributing the idea, it’s not hard to know who will decide in the future, it will be you because no one else will put their ideas forward
  • Have milestones where you check the validity of the decision to see if it is on- track or if modifications need to be made

Good luck in creating an environment where good decisions can be made.

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Toyota Production System (TPS) - How it Influences Design

Thursday, August 27th, 2009 by Nate

You have probably heard a lot about Lean Manufacturing systems like the Toyota Production System and how it can transform a manufacturing plant by eliminating waste, but you may not know that the principals of the Toyota Production System can also apply to the design process.

One of the first steps in the Toyota Production System is to define what adds value for the customer. During the design we try to completely define what the customer wants. What problems are they trying to solve? What needs are they looking for the machine or product to fulfil? By fully defining the scope of the project, you will end up with a set of expectations that are agreed upon so you know what to design and the customer knows what they can expect to receive. This will help eliminate the “Takes What It Takes” (TWIT) attitude that can lead to overages on time and materials.

The next step is to design for manufacturing. Here at Setpoint, we are always looking for ways to make our machines better, faster, stronger, and less expensive both for us and for our customers. We do this by trying to eliminate complicated parts and assemblies, incorporating features like Poke-Yokes (error proofing) and Single Minute Exchange of Dies tooling, and learning from the best practices from past projects.

One of the final steps in the design process is the Post Project Review. This meeting brings together all of the parties involved with the project to reflect upon the things that went right and the things that didn’t go exactly to plan. It includes the design team, project management, purchasing/receiving, electrical and mechanical assembly, the programmers, accounting, and the CEO. These meetings help us to capture all of the “lessons learned” from the project and use that knowledge on the next projects. Reflecting on past projects is a core value of the Toyota Production System and allows Setpoint to build on our successes and prevent us from repeating our mistakes.

At the heart of it, the Toyota Production System is a method to speed up processes, reduce waste, and improve quality. Applying these principles to the design process, allows you to improve quality, become more efficient and provide exactly what the customer is looking for. Happy Designing!

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Posted in Lean Systems, Project Management | 2 Comments »

The CAD System is Evil and the White Board is Your Friend

Thursday, June 11th, 2009 by Setpoint

Engineers are typically detail oriented, introverted problem solvers that techno-babble about the latest advances and can’t imagine how the previous generation accomplished anything without the modern tools that are available today.  So, what does this mean?  If we start with introverted…sometimes I’m certain that our virtual world that has been brought to fruition by engineers is just a selfish result because we really didn’t want to actually talk to each other in the first place.  How about latest advances, we spend significant time and effort learning, trouble shooting and maintaining the latest software tools.  Remember, engineers are problem solvers, given enough time and money we can make anything work.  I’m going to rant for a moment: how often do we end up with an annual software upgrade that requires nearly double the hardware capability that was fine for the previous release along with significant install, debug and training for no real ‘core’ improvements, just new look and feel.  Done ranting and back to latest advances, we spend significant effort on the latest CAD tools.

What does this add up to?  It is all too easy when starting the design process to work on our own with the latest software tools.  Generally goes something like this: there is a preliminary design review in two weeks, who has time for daily internal reviews not to mention the customer is expecting to see a beautifully shaded and textured virtual model…I just have to get this done.  There are a few things inherently wrong with CAD on the front end of the design process. 

  • Drives towards details rather than system thinking.  Rather than a generic ‘schematic’ component we model the actual component and it escalates from there to the fits, clearances, parametric mates etc.  It’s all too easy to get caught up in a correct or perfect model of a potentially flawed concept.  Think of this as the proverbial forest for the trees problem.
  • Far too slow and rigid for preliminary system thinking…a faster more flexible tool is required.
  • This is probably the most significant detriment: minimal team synergy.  Not only is it difficult to engage a team with only one person ‘driving’ but the ‘bandwidth’ of team resources is potentially limited to CAD jockeys.

 

How do we combat this at Setpoint?

  • Egos are checked at the door, there is no room for ‘not invented here’.
  • The old saying that there is no such thing as a bad idea…wrong.  Get over it, it’s part of the process and we’ve all had them, the public humiliation doesn’t last long and the bad idea may spawn a great idea.
  • Whiteboards are always available.  Impromptu white board discussions don’t happen when conference or war room pre-scheduling is required.    Table tops also make great whiteboard surfaces.
  • Typically no chairs in white board areas.  People are more engaged when on their feet, helps reinforce a sense of urgency and meetings rarely drag on.
  • Digital photos of whiteboards for a quick and simple archive.
  • Multi-discipline group involvement.  Rather than a review it’s a process that many participate in because anyone can operate a whiteboard marker.

 

Don’t misunderstand me, CAD is a valuable tool in design; however, it’s not always the best tool.

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Posted in Creative Thinking, Lean Systems, Process Improvement, Project Management | 1 Comment »

Virtual Companies

Monday, May 11th, 2009 by Brad

You read and hear a lot about virtual companies these days. What does it take to actually try and make one work?

At Setpoint, we are in a highly cyclical business.  We used to size our business based on the busy times and then try and tough it out during the slow times with out having to lay people off.  Every time you have to lay people off, it is very painful – not only for the people you have to let go, but it is difficult for those that remain. A couple of years ago we made a strategic decision to size our company for the lean times and use outsourcing techniques to handle the busy times, we decided to try and become a small base of key people that can wear many hats and outsource some functions that we believed could be more generic with proper management.

I had read many articles about the virtualization of the work force. One book that gives great insight is The Future of Work by Thomas W. Malone.

It is hard to make a virtual company work. Reading about it is one thing, putting it into action profitably has been much more difficult.

We used www.dice.com to help us filter and identify technical people that fit our needs.  We then used our best mentoring VP to sort through the resumes and set up discussions to find those that might match with our culture.

One thing we did instead of flying them out to meet with us was, we set up a 20 hour project they had to complete (we paid them for this) to see how they would do. We found out a lot by seeing how they solved that project. Like all people that work for a company – not all will be a fit for you or them, the sooner you find out the better for everyone involved.

We have needed many tools to help us make this concept work. One of the main tools we use many times a day is from www.37signals.com – it is called Basecamp. This is our main communication and file tool, it is a diary of all that is taking place and assignments given. We use concurrent licenses for our engineering software programs to give us flexibility to share licenses. www.twiddla.com helps in our concepting phase. Every engineer has a unique color they use so we can recognize who has done what. www.gotomeeting.com is used to host virtual meetings and share information. You will need a conferencing program so that many can join the daily conversations. Setpoint is considering IP phones so we can send phones to our virtual employees and have them just a local extension away.

As you start out with new people give them clear short work assignments to make sure you and they are a good fit with your culture. The key roles of some of your employees will have to change. They have to over communicate and not be afraid to call up and see how their distant team member is doing. One of worst things is to assume everything is going fine if you don’t hear from a virtual team member.

More than anything it is important to have frequent (at least daily) contact with your virtual people. We have done things to connect with our offsite members so they feel like they are working for a real company that cares for them. In Basecamp we have a picture of our facility. As we send messages back and forth through Basecamp we have our own pictures on the message to reinforce that there is a real person behind all of this action.

Your face to the customer has to remain with your employees. We have found that customers have to connect with employees – not virtual team members. It has to appear seamless to them.

We feel that we are making progress but it is a continual battle.  Is it better than carrying too many employees through a downtime in the cyclical nature of this business? For us, the answer is a definite yes.

We are still growing at being a company that has virtual team members and believe we still have many lessons to learn as we go down this path. We’d love to hear from any of you out there that can help Setpoint get there faster.

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Posted in Creative Thinking, Human Resources, Lean Systems, Process Improvement, Project Management | 1 Comment »

Manpower Planning

Monday, April 27th, 2009 by Roger

Science Meets Voodoo

One of the most daunting tasks that I’m regularly faced with is Manpower forecasting and planning for all of our various project efforts.  It seems like everyone always needs to know the facts relating to our human resources…”Do we have enough staff available to take on this new project?”  “How many calendar weeks will this project require?”  “What’s the estimated labor cost?”  “How long will this project take if we put a small team on it?”  “What kind of labor budget do we need to include in this new proposal?”  These are just a few of the staffing-related questions that tend to bubble up around here on a regular basis.  And we are not unique in that aspect.  These questions really apply to EVERY business at some point or another.  And make no mistake about this:  If you are not able to consistently answer these questions for your business within a very small margin of error, you are in big trouble!  Bids will be incorrect, projects will be late and/or over budget, personnel will be overworked, and most importantly, your company’s financial picture will quickly head to the red-ink zone.

First, let’s look at the science involved in the manpower planning process…

There are a couple of scientific tools that I use that I have found invaluable for manpower forecasting. First and most important is the use of reports from historical data. If you have access to data from previous similar jobs, it’s very easy to utilize as a guide for your current efforts. This data includes hours charged to previous jobs sorted by sub categories, calendars days required to complete tasks, as well as individual skill sets applied to the work. If you have this sort of data and can assemble it in a report format, you will find it invaluable to apply to current projects. The second tool that you must have is some sort of manpower modeling device to layout the requirements of your project. There are a number of different ways that you can model human resource requirements. One of the simplest and an old favorite of mine is a spread sheet with resource requirements and availabilities cross-linked. Microsoft Project also has the ability to load and model your resources within a project schedule. It’s a little complicated, but it does the job if you take the time to learn the software. There are also a number of other commercial software products out there that do the same thing.

And then we have the Voodoo…

While there is a large amount of science that you can apply to manpower-planning in today’s working world, the black-magic or gut-feel factor will always be present. This less-scientific side of the game often includes a project manager’s intuition, experience, instinct and occasional dumb-luck. The guys that are good at manpower-planning manage the Voodoo side of the process as well as they do the scientific side. Just don’t ask them to teach it to you, because they probably cannot. It’s just too opaque.

Adaptability is another key part of being able to accurately forecast and deliver the appropriate number of personnel to make-up a successful project team. Once things start to fall away from the plan (and it WILL fall away from the plan sooner or later) the trick is how you adjust. Some tricky projects may require adjustments every day, so a Project Manager has to literally keep a pulse on things every day. Anything less will come back to haunt you before you’re through….trust me on that one!

So if you’ve chosen Project Management as your career path (or if it chose you), then you’d better figure out a way to forecast, plan and track your manpower resources on every job, every day. And you better have a scientific process that covers all of your bases, as well as an open mind for the Voodoo side of things….Stick with this gig long enough and you’ll develop your own manpower planning process to get you through your projects. And if you don’t develop something that works, chances are you’ll be doing something else real soon!

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Posted in Human Resources, Lean Systems, Project Management | 1 Comment »

Project Management: The Balance of Time and Money

Tuesday, February 24th, 2009 by Bob

Managing a project consists of many tasks that need to be scheduled, delegated to the members of the team, completed, and followed up on by the project manager in order for the project to be successful.

One of the main tasks of the project manager is to track the overall progress and profitability of the project by the total hours and cost of goods charged to the project compared to what the bid has allotted.  At Setpoint we have an open book policy for all projects.  Anyone can go to the team board and see exactly what the progress is of any project at any time.  This board shows the project revenue, the bid cost of good sold (COGS), actual COGS, project gross profit (GP), earned GP, percent complete, the week’s hours, the week’s GP, the week’s GP per hour, and the GP per hour to date for each project.

Reporting these numbers can sometimes be a tightrope walk for the project manager who reports the progress of each of his projects to management and the team of assemblers and programmers working on them.  The management team wants answers to why the progress of the project is behind the forecast numbers he gave them at the beginning of the month.  The assembly and programming team members working on the project are wondering why the hourly rate is so low or they are expecting the percent complete to be much higher.  There are usually good answers for both teams.

As a project manager, I take the conservative approach.  Sometimes a projects progress is well ahead of the hours that were in the bid, and sometimes the cost of goods is less than what is in the bid.  This doesn’t often happen, but when it does I don’t like to take all the “good news” on the progress report until I am sure that all the parts have been accounted for in accounts payable and the majority of the debugging has been done on the machine.  Some people might call this “sandbagging,” I call it proper project management.  Can you be too conservative?  Sure you can.  But I ask you this; would you rather take all the “good news” at the point of discovery and find out later that one of the key, and very costly, components was not accounted for or was overlooked in the procurement state?  Maybe you find out the scope of the project was not communicated to the programmer correctly and you now have two more weeks of programming to do.  This is usually not the norm, but it happens.  You now have costs or time you need to “give back” on the next progress report, or several reports, making it look like you have made no progress when the team is still working hard on the project.

Yes, in reality the end result should be the same; but let’s say your team can earn bonuses for completing projects ahead of schedule and below cost.  I for one do not want to get the team excited about their efficiency and the prospect of getting a bonus for their efforts one week just to have it taken back the next.  It doesn’t help the morale of the team.  There is a “happy medium” for claiming the ‘good news” that differs from project to project.  This is one of the hardest tasks to conquer for a project manager.

So call me a “sandbagger,” I’m ok with that.

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Posted in Creative Thinking, Custom Automation, Industrial Automation, Lean Automation, Lean Systems, Project Management, open book management | 2 Comments »

Keeping a Watchful Eye on your Project Gauges

Monday, September 29th, 2008 by Roger

Previously in my career I worked as a Project Manager for a large project-based business.  Our product was amusement rides, and we had the tallest, fastest and coolest roller coasters on the planet!  Each of these projects were multi-million dollar in value, and they would generally last between 8 and 18 months from concept to installation.  These projects also were often on the cutting edge of technology, as we were constantly trying to find the proverbial ‘edge of the envelope’ for speed, g-forces and general panic-inducing thrills for the paying customers.  As you can probably imagine, projects of this size and nature were a nightmare for a project manager.  You had to keep the customer happy, the team on task, the project on schedule, and the budget under control. 

That last issue was never an easy task!  Customers in search of the perfect cool ride combined with engineers in search of the ultimate cool features constantly intersected with ever-fluctuating material costs.  to make this messy situation that much worse, you never knew how financially successful your project was until months after it was wrapped up and complete.  The bean-counters would huddle up, crunch all the numbers, allocate your overhead, and then see if you had any cash left over to throw into the profit bucket.  This all equated to ulcers for the project manager, constant worry by the finance gurus, and a general lack of the feeling of “being in control” of these nasty monster projects.  Once, when a particularly discouraging project had just concluded, I remember telling a colleague something like this:  “man I don’t manage these projects…I just get dragged along for the harrowing ride!”  All roller coaster puns aside, it was a pretty helpless feeling at times; and the fact that the financial tracking was so far behind the manufacturing and construction of the rides meant that budget-driven course corrections were almost non-existent.  You had to just spend whatever it took to get to the finish line, and then hope you had something leftover at the end to dump into that profit bucket.

Fast forward to today, here at Setpoint I have many of the same challenges that I did at the roller coaster factory: gray scope of work, customers clamoring for more, engineers looking for the best, etc.  But guess what?  I now have a saving grace.  What could THAT possibly be, you say?  Well I’m glad you asked, it’s gauges my friend!  If you can visualize the project as an airplane, and the project manager as the pilot, it’s easy to see that this aircraft desperately needs some gauges!  Big fancy gauges to measure the projects metaphorical airspeed, altitude and direction.  Without constant real-time feedback on those critical navigational parameters, this plane is gonna be in trouble; it’s just a matter of time, and we’re talking “auger into the side of a mountain” trouble!

So, what are these magical project gauges?  For our business, they are the priceless project whiteboards that we update meticulously and review weekly with our entire company on Monday afternoons.  These boards are a key component of the Open Book Management philosophy that Joe has described in the excellent blog previous to this one.  Here at Setpoint, we love Open Book, we live Open Book.  Each project has a line on the board that details the ongoing project revenue, material costs (both actual and projected), labor hours invested, project gross-profit per hour (both for each week and cumulatively for the life of the project), and forecasted versus actual completion percentages of the project.

Every Monday afternoon we gather our entire company around these boards and the project manager briefly explains to everyone where each project stands on the critical and often brutal scope-schedule-budget trifecta.  This can, on occasion, be a very painful experience for the project manager, as his words are sometimes a forewarning of pending financial impact to the project, which translates directly to bonus money slipping right out of everyone’s pockets.  Obviously, that’s never a fun conversation to have with folds.  However painful this early warning system may be in that respect, it’s MUCH BETTER than just waiting until it’s over to see how your profit score turns out.  Why?  Because once we identify a problem early on we can make course corrections to try and minimize or eliminate the negative financial and/or schedule impacts.

Invariable, when an issue like this comes up in our Monday huddle, it’s always followed by a company-wide discussion/brainstorm session that more often than not presents viable solutions to the problem.  The bonus checks are saved, the project gets what it needs, the project manager is taken off suicide-watch, and the team camaraderie is ratcheted up a few notches on those days.  It’s really quite a wonderful sight to behold.  Our examples of successful mid-course corrections are many, and the ability to do those sorts of things makes life reasonably bearable for a harried project manager.  Instead of feeling like he has to solely carry the burden of the problem, he knows that the whole company will be right behind him to help grab the wheel, pull back on the stick and keep our airplane from auguring into that upcoming mountainside.  In comparison to the old days at the roller coaster factory, the best we could do there was when someone came along months after the crash and said something to the effect of “Hey did you know that you were flying too low when you hit that mountain?”  Well DUH!  Where was that nugget of knowledge 6 months ago!?!?!?!?!?

What are your project gauges?  Can you tell when the mountain is coming at you, or are you destined to know of the crash only when you’re picking up the pieces of the aftermath?  Get yourselves some gauges kiddies, today, or sooner for that matter, and watch them closely.  Keep that nice shiny project-plane in the air where it belongs!  And what do you call a non-airborne project-plane?  A scrap pile!  Please, stay off the pile if you can.  Your sanity will thank you for your efforts, I promise.

Keep your eyes on those project gauges folks!!!

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