Poor Project Management: Why some consider it a Crime

The Sarbanes-Oxley Act makes senior executives criminally liable for misrepresenting financial information and for relaying fraud to shareholders. After several corporate accounting scandals, Congress passed a law referring to the SOX Act of 2002. If the company manages projects, then if projects are mismanaged it could leave your senior management legally exposed.

Keep in mind the stories in the press about companies with large projects facing huge cost overruns. If this kind of cost overrun is not foreseen and anticipated, the financial effects could seriously impact the projected profit for a given period. It is reported that 77 percent of companies will spend more on IT, business process change, governance, and consulting to insure project management compliances. Management Assessment of Internal Controls must be established by CEOs and maintained at an adequate internal control structure of procedures for financial reporting. Companies undertaking large projects will need a process that provides a detailed cost and schedule metrics for all projects with time based cost reporting and continually updated completion estimates. Senior management must have visibility into project performance data at all times along with the confidence that the underlying process is sound.

No methodology or process will suddenly make projects profitable. If a problem is not identified before the budget is depleted, a corrective action cannot be applied to improve the outcome and the profit margin begins to disappear. Management by exception, variance analysis, and the calculation of accurate estimates at completion all help to maintain project profitability and ensure confidence on the part of management and share holders alike. Complying with the many factors of the SOX Act is already an enormous challenge for today’s companies. When it comes to project management, companies can overcome the challenges mandated and adopt practice for project control and further peace of mind.

Trend Watching

One company’s success is not always another company’s success. Many businesses that are quick to follow business trends experience a long line of great initial excitement only to end in frustration and investments lost. The reasons for this is that many businesses are quick to recognize great ideas, but often do not have a plan of how to successfully integrate them into their business model. Not allowing your company to get caught up in following the latest trends and fads will save you from the likelihood of failure. But if in a trend you see real potential for your company, pursue it with some initial analysis to determine its success.
Failed initiatives can cause several severe consequences other than cost. Severe issues like; doubt in management credibility, a negative impact on morale, as well as a variety of other problems. Every business initiative should begin with a strategic plan. Not every strategic plan can be successfully implemented so in order to do so the plan must be measureable against the following elements:
1. The trend should be in alignment with the overall vision and mission of the company
2. If the initiative doesn’t provide a unique competitive advantage it should at least bring you closer to an even playing field.
3. Any new project should preferably add value to existing initiative, and should show a significant enough return on investment to justify the effect of not keeping the original the same.
4. Put the idea through a risk, reward, and cost and benefit analysis.
5. Usability should be easy for the company, customers, vendors, partners etc.
6. Validate proof of concept based upon detailed, credible research.
7. There is always risk so detailed risk management provisions should be outlined
8. Adopting a trend should be based on solid business logic that corresponds with financial engineering and modeling.
9. New initiatives should contain accountability provisions. Every task should be assigned and managed according to plan.
10. Any trend must be measurable. Deliverables, benchmarks, deadlines, and success metrics.
Properly implemented initiatives keep businesses from stagnating and cause growth and development

The Art of Delegation

Are you delegating enough? During your stint as a non-manager type, you probably learned that handing off important tasks was surely a path to failure. Along with your new title as Project Manager, came an increase in responsibility. This is the reason you get paid the big bucks. The only real way to manage all that you are responsible for is to enlist the help of others. But once you’ve handed the task off, you begin to sweat profusely with anxiety from thoughts running through your head: “Do they understand the instructions?” “How will I make sure it is done correctly?” Paul M. Ingevaldson retired CIO, indicates that you know when you are not delegating enough when “the questions you are getting are easy for you to answer.” He is adamant about the fact that you should only have time for the tough questions. If you are handling the easy ones, then you are wasting your time on matters that can be taken care of by someone else and overall hindering the productivity of your team.

He indicates how to evaluate your delegation propensity. If a person from your team comes to you with an easy question, then there are two possibilities. First, they don't have the confidence to make the decision and want validation from you, the boss. In this case, you must be careful not to answer the question but to tell them that they should trust their own instincts and make the call. In this way, they will have an opportunity to grow as a person and will begin to gain the confidence that they are lacking. You also will be able to monitor their decision-making ability.

The second possibility is that the answer was indeed simple but you didn't share the necessary information, requiring them to ask the question. This may mean you retain some information in order to feel that you have not lost control, but it causes your people to be frustrated and to feel that you don't trust them. It's important for you to disclose to your team members all of the information that they need to do their jobs.

Well, then, if you tell your subordinates everything, what's your job? Don't worry. There is always more to do. The main role of the boss is to work at the intersections. By that I mean that any organization must interact with peer organizations to get the job done. This is where the Manager can have the most impact; it's not where team members should spend their time. This is the boss's turf, where relationship-building and mutual understanding creates successful projects.

If you find that you are this type of Project Manager, maybe it’s time to re-evaluate your management style. By analyzing each of these encounters and taking the appropriate actions, you will grow your people and improve the productivity of your organization. Of course, once you have accomplished this, you will have time for only the tough questions. That will make your days harder and your nights more sleepless. That sounds like an accurate description of management to me. Welcome aboard!

Forensic Project Management - Investigating the case of a dead project

When a project has come to an abrupt halt and death is in sight, the initial response is shock and disbelief. The next feeling is denial, a need to place blame, and a need to understand why it went wrong. Calling in a forensic expert will help in identifying the factors that lead up to the demise of your project. In an evaluation these experts take factors measured against dark outcomes. There is little point in measuring them against successful projects. Just as a coroner performing an autopsy, you wouldn’t compare a dead body with a living one because it would only prove that it’s dead. Comparing the dead project with other dead projects will determine factors that led to its downfall as well as what caused the initial failure.

Project failures rarely arise from a single cause or a single individual. When using a forensic approach you will establish what triggered the initiation of the failure. In this approach you will be able to define blame, but more importantly uncover the facts the company can do to prevent the same failures from happening again. A Forensic Project Manager works the same as Fraud Examiner, with responsibilities in resolving allegations of project fraud, reinforcing accountability, writing reports, implementing policy changes, as well as investigation of project failures. Policy recommendations are presented for the conduct of future actions which are backed by evidence, not gossip; in turn these actions will have an enormous impact on future performance. Often when a project is lost the company will suffer from a cycle of doubt and destructive habits. Employee confidence will become low and personal accountability will not be accepted. By using a forensic approach in project management these methods will reduce the effects of a loss on your company. Once policies are reinforced a company can build up its momentum once more and move forward.

Forensic Project Management is not only used in the case of a dead project, but also when a project is led astray. A Forensic expert can investigate the point in which a project has lost sight of its target and can get it back on track. A forensic expert should also apply changes to processes and other factors that can dramatically improve project performance. Project education will improve overall skills and project assurance will provide a focus on what is current with the project. Organizations are realizing that there is more than success and failure of a project, there is also the critical public and market perception of the company. If a company is seen in any kind of negative light, it can be a detrimental blow and cripple, or worse, extinguish it completely. It is important to take data found in an investigation or in planning of a project and turn it into knowledge. Utilize the resources found in the investigation and implement them into your planning and it will prove to create improvement in your projects. Another opportunity of improvements is in the control areas of planning and performance. The process of projects through approval and consideration should be adjusted to checking for appropriateness instead of compliance and for management instead of variance. Budgets should not be stressed, quality of the project output should. When the quality of the project is projected the budget will be properly assessed. Many times projects are beaten with the concept of budgets in planning that quality is ignored or dismissed to accommodate budgeting. People skills, commonly thought to be a prerequisite of a project manager, are often surprisingly negotiated. Knowing who you are working with is critical. You wouldn’t sell children books to a university college library. This all goes into the planning and execution of a well laid out project plan. Hiring or becoming a Certified Forensic Project Manager is the first step.

Fighting Project Fraud

Let’s Get Ready to Rumble!

Rocky Balboa stated that “It’s not how hard you hit, but how hard you can take a hit and keep moving forward”. What you need to know is how to take a hit from fraud and prevent your company from getting a bloody nose. Misrepresentation, Misuse, and Improper dealings all define the outline of Project Fraud. Since there is no true definition of project fraud Richard B. Lanza and Steve Rollins have identified these signs to help us diagnose symptoms.

Signs of Project Fraud

1. Over- reported and unsubstantiated business case

2. Unsubstantiated project decisions

3. Under-reported initial estimates of project lifecycle costs (to get approval)

4. Under-reported initial estimates of project maintenance costs (to get approval)

5. Under-reported costs

6. Over-reported schedule progress

7. Over-reported quality progress

8. Project asset misuse

9. Vendor conflict of interest and kickbacks

10. Vendor “overselling” of their capabilities

11. Inappropriate vendor charges

According to a recent PMI study using data from the U.S Department of Commerce projects now make up over $2.3 trillion in U. S. economy. Projects are perfect for fraud since they are creative and new.

Different from operational process, which is controlled, projects in many instances are completed in an uncontrolled manner.

Richard B. Lanza and Steve Rollins also reported that in their findings the Standish Group reported more than $275 billion relate to application software where these trends were noted:

• Only 16.2% of projects are completed on-time and on-budget

• 31.1% are cancelled

• The average cost overrun was 189% of the original time estimate

Once an organization has understood that projects are the most risky investments a fraud examiner should become more involved. Their control should be extended beyond computer security and verification to better execute a recovery. The two most common fraud symptoms are an over-reported and unsubstantiated business case and under-reported initial estimates of project plan effort required. The over- estimated need of a project is always followed by the under-estimated effort needed to execute the project. The under-estimated time period to execute a project is always followed by a rise in cost. With these common factors monitored and benchmarked prevention of a project from entering fraud is accomplished. Now go get’um Tiger!

For more information visit our website Wainscott Finch Associates.

Preventing Project Loss

Little issues that turn into full-scale problems is a red flag for the need of a recovery plan. A well mapped and executed recovery plan will identify the issues and prevent project loss. After identifying the source of the problem, your next step is to reorganize the project structure for a better execution. Start by assigning responsibilities and accountability this will not only create a better team involvement but communication. A well defined project team will strengthen the positive outcome of a project. Having smaller project teams will also prevent employees from being spread too thinly among other projects and losing progress on the specified project at hand. By making smaller teams, project issues will be handled in a timely fashion and communication and accountability is measurable. Now that communication and accountability have been established, organization for execution is all that is left.

Nailing things down on what is expected as deliverables is a key in the organization of a recovery plan. Making small integrated changes over a time period will help to maintain a clear scope of the project’s progress. But remember that it is critical not to over-report or under-estimate these changes. Have a centralized location where meeting minutes can be accessed and documented decisions’ regarding the project is available for all team members. This will create ability to measure progress and keep a clear scope. It also gives team members a view of where the small changes have been made or need to be made in order to keep progress moving.

That is easier said than done, execution is measured by deliverables completed thoroughly. If a deliverable is not directly related to the project at hand, the project has made no progress. Reviewing what works and what does not work will avoid the creation of deliverables that do not benefit the project. If this process still feels overwhelming employ the help of a Certified Forensic Project Manager. They have the ability to make a smooth transition of your recovery plan in preventing project loss.

For more information visit our website Wainscott Finch Associates.

PLAN YOUR COMPANY’S FUTURE

Get a game plan! All great accomplishments begin with a greatly detailed and effectively executed plan. A corporate strategy is basically a company’s game plan to accomplish a particular goal. Some have used models to outline their corporate strategy such as Michael Porter’s Five Forces model and Gary Hamel and C. K. Prahalad’s model of core competencies. The key point to each model is to define an objective that will achieve business success. When defining that objective companies must take into consideration that at any time it must adapt to and anticipate its business environment. Establish the purpose and scope of the company strategy which should formulate the nature of the business it is in, the environment in which it operates, its position in the marketplace, and the competition that it faces.

Breaking down your plan into simplified attributes, advantages, and cost is the first step of planning your strategy. Start with defining your problem. For example a new t-shirt company wants to distribute its clothing line to new boutiques, but the boutiques don’t sell brands that aren’t guaranteed to sell. The problem is can the new company generate enough publicity to be picked up by the boutiques and how. Once the problem has been defined a solution can be as well. Break down your solution into tasks. For the example situation the t-shirt company would compile different marketing schemes to get their brand known by the public.

When your plan is simplified you create direction and drive which in return allows the plan to execute effectively. Tasks should have realistic deadlines in which they are to be completed and measured against. Following through on deadlines and clarifying problems that occur in the planning process helps to keep the progress flow. Planning realistic goals and executing them effectively will lead to a successful corporate strategy.

For help planning your company's future contact the consultants at Wainscott Finch Associates.