PM Network - June 2009

What might be some of the new rules in a cash-focused environment? Let me suggest a few:

Troubled projects will be dead projects. Whatever the past tolerance level of your organization, expect far less patience for projects plagued by performance problems, schedule slips and especially cost overruns.

Long-term projects will be at much greater risk than those that will finish near term. In his book Leadership in the Era of Economic Uncertainty [McGraw-Hill, 2008], management expert Ram Charan advises CEOs to constantly reevaluate the desirability of ongoing projects from a cash perspective.

Plan for more frequent milestones and more “go/no go” decision points. In the new environment, expect an increase in the intensity of managerial oversight. Quarterly reviews will not suffice.

Expect a shift to cash flow as the primary meas-
ure. Once upon a time—like six months ago—projects

were evaluated on ROI, but no longer. A project offering near-term cash flow will be seen as preferable, even to one offering a higher ROI over a longer term.

None of this may seem terribly fair, of course. After all, project managers rarely get the opportunity to choose their ideal project. Many project parameters discussed above are far beyond the project manager’s ability to determine, especially for projects already under way. But the rules have changed, and they will likely continue to evolve in ways that we project managers need to ponder. PM

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Bud Baker, Ph.D., is a professor of management at Wright State University, Dayton, Ohio, USA. Please send questions for Ask PM Network to pmnetwork@ imaginepub.com.