Gary R. Heerkens, MBA, CBM, PMP, president of
Management Solutions Group Inc., is a consultant,
trainer, speaker and author with 25 years of project
management experience. His latest book is The
Business-Savvy Project Manager.
One of the most insightful points that Mr.
Devaux makes is tied to the adage, “time is
money.” I totally understand that when a
project is late, this delays cashing in on the
benefits, which negatively impacts long-term
project profitability. But what I haven’t given
sufficient thought to—and Mr. Devaux uses this as
the basis for many excellent tips and techniques—is
how that adage can work in reverse. Delivering a
project ahead of schedule can often increase project
profitability. This triggers an important question:
Shouldn’t schedule acceleration be analyzed from
this cost vs. benefit perspective? But this question is
rarely asked in firms today.
Mr. Devaux combines a cost vs. benefit mentality
with resource management. Again, he describes how
management behavior often flies in the face of sound
project business. This time, the subject is the principle
of sunk cost and late-stage management of projects.
To paraphrase Mr. Devaux, as projects near completion, less and less needs to be spent in order to pocket
financial return. While some might suggest that projects nearing completion should have top priority for
resources, the opposite is often the case. Managers
begin focusing on non-project, personal metrics, such
as resource utilization rates, and key resources are
diverted to other “busier” initiatives.
Mr. Devaux’s strong points from his book clearly
show that there is a wide variety of ways that sound,
business-based decision-making can be brought to
bear on the way we manage project implementations. One of many insightful passages that truly
captures the spirit of the book is this: Even though
their final value might not be revealed for a long
time after the initial investment is made, projects
always should be managed in such a way as to maximize their expected return. PM
My current efforts—a training class called The
Project Management MBA, and this column—focus
almost exclusively on the periods of time before projects are approved and after they’ve been delivered.
This addresses two critical aspects of project business:
ensuring that only worthy projects are approved and
guaranteeing that organizations leverage completed
projects in ways that optimize their return on investment. But what about during the project?
Luckily, in his book Managing Projects as Invest-
ments, author Stephen Devaux makes solid points
about what can be done to maximize ROI during
project execution, and it reveals a large
void in my perspective on the business of
projects. The book describes how project
managers often start with a simplistic
directive like, “Provide X product on
Y date at Z cost”—and nothing more.
The factors driving project value are not
shared with the project team, rendering teams incapable of generating ideas
on how to optimize those factors during
project execution. A critical opportunity
Mr. Devaux mentions how cost targets
are typically handed down in an absolute,
stringent way. He correctly points out that
few project managers would be inclined
to recommend an increase in project
spending, even if that overspend might return many
times that amount to the customer or management
sponsor. He doesn’t blame project managers for this,
as they are simply avoiding the management punish-
ment that could result from the suggestion of over-
spending. Sadly, this example of counterproductive
project oversight is quite common.
EYE ON THE PRIZE
can be a logical component of
BY GARY R. HEERKENS, MBA, CBM, PMP, CONTRIBUTING EDITOR