Tuesday, February 8, 2011

Triage for Project Managers (Part Two)



Our triage process has identified the most difficult and challenging projects, and now it’s time to perform a “deep dive” analysis of project difficulty — the final step in our preliminary analysis. The goal is to make sure we have a deeper understanding of the issues. Our earlier question, “What is the minimum decision and minimum action I must take right now?” is one that we must repeat as we move forward in the project.

Unless you’re staring at an Apollo 13-style deadline, with the clock ticking as CO2 levels rise, the right thing, as innumerable after-school specials have taught us, is to Learn More About It.

Difficulty comes in three dimensions: more complexity, tighter constraints, and less certainty. Of course, a project can have difficulty in more than one dimension, and their various combinations produce even more issues.

Complexity

Complexity can exist in both product and project. Project complexity is measured by such factors as the number of work packages, the number of resources, and the number of interactions and linkages. Product complexity is measured by such factors as the number of components, the number of processes, and the number of production steps. The key word here is numbers. Complexity can be counted.

Tools for managing complexity abound. They’re found in classical project management, systems engineering, logistics management, and financial risk management. A good background in probability is useful.

Constraints

Constraints come in many flavors, not merely the Neapolitan mélange of time, cost, and performance. You must obey applicable legislation, ethical codes, regulations, internal policies and procedures, and the laws of physics. They aren’t all created equal, especially in terms of their impact on an individual project.

A constraint is only a constraint if it limits your project performance choices.  If a regulation, for example, keeps you from doing something you’d otherwise do, it’s a constraint. If breaking the regulation would not help you achieve your project goal, it’s not a constraint, but merely a fact. (We’re not advocating breaking the regulation, of course, but merely classifying it in terms of your project universe.)

Constraints, as we noted, can be tight or loose, flexible or inflexible. A tight, inflexible constraint can make a project extremely difficult or even impossible. A constraint that is equally tight, but has flexibility, is much less serious. Equally, a loose constraint, even if inflexible, still gives you room to maneuver.

There are three fundamental strategies for managing constraints: change them, check assumptions, and come up with creative workarounds.

Uncertainty

How firm is the ground on which your project sits? Some of the factors that govern project uncertainty include the stability and likelihood of identified assumptions, the stability of your stakeholder community, the state of competition, the extent of newness, and the level of risk.

The difficulty in measuring uncertainty is the extent of the “unknown unknown” universe, the extent to which we don’t even know what it is we don’t know. In the managing assumptions, an equal problem comes in the form of “unknown knowns,” things that we don’t know that we actually do know.

Complex and Tightly Constrained

When complexity meets tight constraints, the value of the formal tools (project management, systems engineering, logistics management) tends to increase, because driving waste out of the system and driving structural efficiency into the system reduces constraint pressure. Formal systems also provide the necessary data structure to back up negotiations to modify constraints as well as to support creative efforts to move past them.

Complex and Uncertain

Uncertainty, on the other hand, undercuts and weakens the tools needed to manage complexity. Formal systems naturally work less well when the necessary data is unavailable or unreliable. The two main tools to manage complexity and uncertainty are risk management to prepare for known possible risks, and contingency reserves (extra time, extra money, optional requirements) to prepare for unknowns.

Watch out as well for uncertainty caused by complex stakeholder interactions and political maneuvering. The trouble-plagued Denver International Airport (DIA) construction project, delivered in 1994 after a $2 billion cost overrun and a year’s delay, was victimized by a constant tug-of-war among stakeholders ranging from city officials to airlines to various business interests.

Cognitive biases interfere here as well. Not only does weak data increase the role of bias in decision-making, uncertainty can also manifest itself in the form of various biases, especially denial.

Tightly Constrained and Uncertain

While tightly constrained and highly uncertain projects may not be impossible, they are often problematic. It may be legitimate to review whether the project should be attempted in the first place. If you go ahead with the project, failure is a significant risk, so plan for damage control in case of catastrophe.

Negotiating changes in the constraints is usually a worthwhile strategy, but the real problem is that projects in this category are often crisis responses. There were plenty of CO2 filters available for the Apollo 13 lunar module; the problem is that they were on Earth. Management freely gave project teams every resource possible — the problem is, that the range of the possible was very narrow indeed.

Complex, Tightly Constrained, Highly Uncertain

The trifecta of project management comes when a project scores high in each of the three dimensions. In 1991, as the Iraqi military retreated from Kuwait, they set fire to 737 oil wells after placing land mines to keep out firefighting crews. The resultant project to put out those fires fit all of our criteria. While money was available in ample amounts, professionals with the unique skills to handle a problem such as this are in short supply.

The time constraint didn’t have a specific date attached to it, but the environmental damage was such that time pressure was enormous. Risk and uncertainty were extremely high. Commentators at the time speculated that it might not even be possible to extinguish the fires in anything less than years. The dimensions of the problem were not clear at the outset.

Maintain an extreme vigil over your risk portfolio. Spend resources on information. Move forward in small steps, and watch for indications that your assumptions need to be modified.


[Part 1 appeared last week.]

Adapted from Creative Project Management: Innovative Project Options to Solve Problems On Time and Under Budget, by Michael Dobson and Ted Leemann; published by McGraw-Hill and copyright © 2010 by The McGraw-Hill Companies; all rights reserved. Used with permission.

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