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CAPM

A Three-Pronged Approach to Stakeholder Analysis

Engineering, project, and product managers deal with a wide variety of stakeholders.  Some stakeholders are customers or clients, receiving the products and deliverables of our work.  Other stakeholders are fellow team members, working with us to achieve project objectives and business goals.  Finally, other stakeholders serve in functional and support roles with whom we negotiate for resources and guidance to reach desirable outcomes.

Regardless of a stakeholder’s role, engineering, project, and product managers will build the relationship using a three-pronged approach.  Stakeholder relationships require care and nurture for a project to succeed.  Successful, engaging stakeholder relationships are built on three key tenets:

  1. Effectiveness,
  2. Efficiency, and
  3. Satisfaction.

Effectiveness

Effectiveness is defined by Dictionary.com as “providing an adequate or appropriate outcome.”  Engineering, project, and product managers incorporate effectiveness measures in our work to ensure that we deliver the products and results promised in a project charter.  Moreover, effectiveness demonstrates meeting scope, schedule, cost, and quality goals.

Project stakeholders focus on effectiveness during the initiation of a project.  In new product development (NPD), for example, effectiveness measures will define feature sets of the new product so that customer requirements can be met.  A product must be easy to use by its target market and should include certain plug-and-play features.  Customer requirements may specify that a product is offered in different colors or different sizes.  Packaging is another element of product design in which customers request specific features and attributes.

Customer and stakeholder requirements are usually gathered during the early planning phases of a project.  Engineering, project, and product managers will convert stakeholder needs and expectations into specific, measurable product requirements.  As the project progresses, managers will measure effectiveness in meeting project goals against these deliverable metrics.  Thus, project effectiveness is determined by meeting the project scope.

Efficiency

Studies show that project schedule is a greater determinant of project success than any other variable.  A project that is further behind schedule will suffer a greater cost hit than will a project that is just slightly delayed.

Efficiency is a management variable that will measure implementation of the project schedule and evaluate it against the plan.  Engineering, project, and product managers have a whole suite of tools available to determine efficiency, namely, variance analysis.

Earned value management (EVM) is a common project management tool that compares the actual project schedule against the plan.  Any significant gaps or trends are noted, and the project manager can take steps to reduce the impact of a schedule delay.  EVM is an especially good tool for project efficiency because it not only examines the project execution to date, but it also allows an accurate forecast to predict project completion based on current performance levels.

Satisfaction

The third prong of managing stakeholder relationships is satisfaction.  Customer satisfaction can mean a lot of different things to various groups of stakeholders, so it is imperative that engineering, project, and product managers define satisfaction early in the project design phase.  Simply delivering a product on-time and on-budget will not meet the definition of customer satisfaction.

One element of customer satisfaction that is relatively easy to measure is repeat business.  Engineering and project managers can use repeat usage of tools and templates as a stand-in for repeat business while product managers will measure repeat sales.  Regardless of the specific measurement, returning customers and end-users signal customer satisfaction.

An Example

Let’s take an example of an internal software development project to create an online experience for employees to engage their mandatory training criteria.  The project may be effective in that it delivers a software tool available to all employees.  The project can meet its scope of work requirements by creating an internet-based training delivery mechanism available globally at each work site.

Further, the project may be executed efficiently.  Given a 3-month window in which to design, develop, and implement the software training tool, the project team can measure and meet the schedule goals.  A software training program delivered in 13 weeks would be considered efficient in this case.

Yet, if the end-user stakeholders (customers) find the training software difficult to use or hard to navigate, customer satisfaction is not met.  When the employees avoid using the tool or complain about access issues, the project is not successful.  Customer satisfaction is a key element of building a successful stakeholder relationship.

On the other hand, if employees use the software training tool without significant prompting and return to use the tool as a source of knowledge to support their job function, the project can assess a highly positive level of customer satisfaction.  Such repeat usage (or purchase) metrics are very easy to gather.

A Three-Pronged Approach to Managing Stakeholders

Engineering, project, and product managers need to build long-lasting and interactive relationships with stakeholders to assure project success.  The three elements most important to stakeholder management are effectiveness, efficiency, and satisfaction.  Effectiveness is measured by scope of work and delivering a product that meets customer requirements.  Efficiency is measured by delivering the results of the project on time to the internal customer and by reaching the right market at the right time for external customers.

Finally, customer satisfaction can be measured by repeat purchase or repeat usage.  A satisfied stakeholder, whether s/he is a functional manager or external client, will demonstrate satisfaction by returning for additional business.  Satisfied stakeholders positively assess the quality of interaction with the product or service.

To learn more about project stakeholders and customer usage, check out self-study and other NPDP Workshops.  Feel free to contact me at [email protected] or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Reading Recommendation

Any of a number of general project management textbooks provide guidance on managing stakeholder expectations and customer requirements, including Successful Project Management by Gido and Clements or Project Management:  The Managerial Process by Larson and Gray.

More specific to NPD is a book called Sense and Respond encouraging the interaction with customers and project teams to develop successful new products.  We also discuss the role of customers and stakeholders in NPDP Certification Prep:  A 24-Hour Study Guide and additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Learning from Bad News

I had to give someone bad news and I hated doing it.

You see, I usually ride my bike to the gym.  It’s a short distance and gets me warmed up before a workout.  It also saves gas, and therefore, saves money.  When I got to the gym one recent evening, I saw a cable and padlock lying on the ground at the bike rack.  There aren’t many of us who ride to the gym, and I thought I recognized the lock and bright blue cable.  Unfortunately, it had been cut and there was no bicycle nearby.  I took the damaged cable and lock to the front desk.

When I got into the gym, I looked around for the one guy who I know rides his bike a lot.  Mike’s bike isn’t fancy or expensive – just a common hybrid, but he has told me that he enjoys riding his bike more than anything – even running!  I see him riding all over our part of town since on non-workout days, Mike will ride for over two hours.

So, I found Mike in the free weight area and asked if he’d ridden his bike to the gym that day.  “Yes,” he replied.  And then, I had to tell him that his bike was gone, and the cable and lock were cut.  He didn’t get as I would have been, and he left the gym before I could chat with him again.  From experience, I do know that the local police and most insurance plans are of no help at all when you have a bicycle stolen.

Bad News

Bad news comes in a lot of categories.  Mike lost money, transportation, and joy.  We often com across bad news in our jobs as product, project, and engineering managers, too.  Projects have bad news when they are behind schedule and over budget.  New product development (NPD) efforts result in bad news when the technology doesn’t work as envisioned or the market interest is lacking.  Engineering managers deliver bad news when employee promotions are not forthcoming or when a company is forced to downsize because of a poor economy.  Worse yet, instead of a being mere acquaintances, as managers we are usually deeply vested in the lives of our staff and the viability of the project.

Product, project, and engineering bad news also costs us money, time, and joy, just as Mike’s stolen bike has cost him.  However, we can learn from the mistakes and errors in a project to improve our circumstances next time.  This is the heart of a learning organization and learning is the key to a lean business model leading to successful project execution and product development.

Learning from Bad News

First, I learned from Mike’s stolen bike incident and reflected on how I could improve the safety of parking my bike at the gym.  I use a “Krypton” lock with an excessively thick cable, unlike his smaller and thinner cable.  I hope my bike will be safe with this lock.  Second, I park my bike closest to the main traffic lane.  Mike typically parked his bike closest to the gym’s secondary exit where less people walk or drive by.  Although, my bike is more likely to get bumped by a careless driver or inconsiderate pedestrian, it is more visible.  I’m willing to take that risk.

We should also apply reflection and learning to the bad news we get from projects.  Learning from the past to prevent future errors is a foundational principle of a lean organization.  “Lean” means to reduce waste and scrap, and to apply continuous learning in seeking continuous improvement.

On a project that fails to meet its objectives, we typically ask the following questions.

  • What went right?
  • What went wrong?
  • What can be improved next time?

These questions form the basis of a lessons learned review.  However, most product, project, and engineering managers are using only a backward look in such a review.  Real value, especially the ability to learn, comes from applying a continuous improvement mindset throughout the project – and especially when bad news hits.

Characteristics of a Learning Organization

A learning organization is not ashamed of failure.  Instead, the team focuses heavily on the last question of how to improve.  Learning organizations take the time to review best practices as well as the things that have gone awry.  And a learning organization has no fear.

Most of us have been conditioned over a lifetime of formal education and complying with the norms and laws of society to fear being called out as wrong or different.  We have been taught that there is one right answer on every test.  While exams do have right and wrong answers, product development projects have a lot of different options available to accomplish the goals and objectives of the business.  With hindsight, one choice might have been better than another, but there aren’t wrong answers in life!

A learning organization also accepts that there is no one right answer and feels free to investigate and explore multiple alternatives.  Trade-offs are evaluated to determine which option might be best for the customer, market, and firm at that particular point in time.  Freedom to make choices and to evaluate alternatives is a hallmark of a learning organization.

Learning from Bad News

I’m going to be a little more diligent at the gym when parking and locking my bike at the rack.  I am really sorry that Mike had his bike stolen.  I want to learn from his experience because I don’t want to suffer the same fate.

As a product, project, and engineering manager, I’m going to learn from the experiences of past successes and failures.  Bad news isn’t just a set of dismal facts, but an opportunity to improve.  We can dap the lessons learned to enhance team member relationships, to improve process flows, and to encourage additional ideas and feedback from the customer.  Bad news is only bad if you don’t learn from it!

To learn how to become a lean learning organization as project, product, or engineering managers, please join us in an NPDP Workshop.  Feel free to contact me at [email protected] or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC

The Curse of Knowledge

I was recently teaching a Project Management Professional (PMP®) prep course to a group of 15 experienced project and program managers.  The gray hairs in the room attested to the years of experience, and all of the participants actively described their current project work and challenges.  Several of the attendees were employed by a government agency working on capital construction projects – roads, bridges, and drainage.

Not surprisingly, the government agency had a lot of strict and rigid policies and procedures in place to manage projects.  Contractors were granted procurement agreements when they had the lowest bid, regardless of past experience.  Bidding and acquisition followed specific procedural steps with no allowances for deviations.  In no circumstance was budget allowed to overrun, yet cost estimates could be padded beyond a normally-acceptable allowance for private industry.

During the PMP prep class, one individual (let’s call him Spencer), struggled to align practices from the Project Management Institute (PMI®) with the policies and procedures he was used to in his job.  Change orders were a particular stumbling block since the government agency required full accountability of any change before it was approved.  A general industry practice is to estimate the overall impact scope, schedule, and budget for the change, and to work out the details later if the change is approved.

Spencer’s problem was the curse of knowledge.  His experience in one job had taught him that there was one right way to do the job.  Of course, his knowledge had served him well in his job and resulted in success in that job.

The Basis of Cognitive Bias

Spencer had learned to follow the rules.  He had made sense of complex projects according to one set of policies and procedures.  Following these practices to the letter meant he could successfully execute a project in that environment.  He simply could not conceive of an alternate way to do things.

All human beings are bombarded with data and information daily – even more so today with social media and technology available to us 24/7.  We are exposed to risks and we must make trade-off decisions to balance time, money, and relationships in a constant rhythm.  To survive the onslaught of information, we necessarily filter this vast amount of information through our history of past experiences to make the best choice.

For example, we know that if there is a car accident on our primary route to work, a secondary road will be a good alternative.  Because we are familiar with the roads, we can easily estimate the trade-off in terms of the delay in time to reach our workplace.  Our history leads us to an effective decision in the present.

However, in projects and in innovation, cognitive bias can lead us to uninteresting, trivial tweaks of technology.  Our new products and services are “lukewarm”, and sales have only marginal improvements.  The Apple iPhone’s latest version advertises “brighter colors”.  I have to wonder if the average consumer can discern these subtle intensity changes for brighter colors and if that alone will motivate him to spend $1,000 on a new smartphone.

Reframing the Problem

One of the key principles in Design Thinking is to reframe the problem.  This technique is also helpful for project, quality, and risk managers.  Looking at a problem from a new perspective can help us generate new insights to a better solution.  Even more important is to view the problem from the customer’s perspective.

Andy Zynga shares a story (“The Innovator Who Knew Too Much,” HBR.org, 29 May 2013) in which an organization sought a new vaccine for AIDS.  Scientists experience in working on solutions for the dreaded disease did not submit any proposals.  Yet, when the organization reframed the problem as a need to stabilize proteins, they received dozens of high-quality proposals.  Protein stabilization is a step toward a vaccine, but cognitive bias prevented the scientists from viewing their work from that perspective.

Tools for Overcoming Bias

The first tool to overcome cognitive bias is observation.  All too often, R&D scientists, engineers, and project managers sit in offices working on so-called innovations in isolation.  Get out there!  Talk to potential customers and end-users.  Learn what their problems are and seek to understand issues from their point of view.

A second useful tool to generate alternative perspectives is the SCAMPER heuristic.  The acronym SCAMPER encourages us to view a product or solution with a different perspective:  Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, and Reverse.

Finally, we can use standard project management techniques such as interviews and focus groups to gain insights to the problems our customers face.  What these tools have in common is that they are qualitative market research techniques.  While data is important, we also have to understand the emotional impacts of trade-off decisions and of how our customers interact with our products and services.

The Curse of Knowledge

I finally convinced Spencer that his experience was very valuable for the government agency and for us to learn from him.  But, for four hours, while he sat for the PMP exam, he needed to visualize the ideal world that PMI envisions for successful project management.  Spencer suffered from the curse of knowledge, assuming that the right answer in one situation translate to the right answer in another circumstance.  While following our internal compass usually results in a predictable outcome, project, product, and engineering managers need to overcome such cognitive biases in order to generate truly innovative solutions.  We do this by viewing a problem from new perspectives and especially through the eyes of our customers.

To learn more about problem-solving for project, product, or engineering managers, please join us in an NPDP Workshop.  Feel free to contact me at [email protected] or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC

Teaching and Learning

Recently, an acquaintance phoned me at about 9 am on a Wednesday. While I’m not 100% sure why, she asked if she had awoken me out of bed.  I’m assuming that because I work from home, she made a leap of judgement that I don’t really work and I get to sleep in every day.

The truth is that I’m usually working by 6:30 am and I often work past 9:30 pm.  Like others who have home offices, my breaks might include throwing a load of laundry into the washer or going running, but my work is equally intense.  In fact, I plan to continue teaching at the university and college level until I am too old or infirm to continue.

Teaching can be done from home for any online class.  A professor could ostensibly wear pajamas and slippers as office dwellers and offhand acquaintances might assume.  In my case, I shower and dress daily and when I make the short commute from the kitchen to my office, I enter my office with the same dedication to work as anyone else.  In this way, I can maintain a high commitment to education of students, colleagues, and clients.  I am as dedicated to being a good teacher as I am to being a good learner.

Teaching as Lifelong Learning

Teaching is the ultimate zenith in knowledge.  Not only do we have to understand a subject with both breadth and depth, we also have to be able to make the topic engaging enough for heterogeneous groups of students to find interest in the topic even for required, foundational classes.  Being able to restate learnings in a new way or apply knowledge to a new situation is what makes education successful – from both the teacher’s perspective and the student’s viewpoint.

What many students don’t realize is that teachers learn from them as well.  Every term, I find that there are new or unusual interpretations of homework assignments.  What seemed to be a clear cut question to the course designer can elicit a wide range of responses.  In some cases, the responses are so far off that the learning materials and homework assignments need redesigning to meet the course objectives.

Planning Learning

Learning events have to be as carefully planned as any college course.  First, the organization’s objectives need to be considered in full.  For a college or university course, the learning objectives typically align with a certificate or degree program, and are often specified by various accreditation bodies.  In corporate learning, our objectives must match a desired business outcome.  If a company wishes to improve its success with new product launches or increase communications among virtual team members, the learning event must include these results as success measures.

Key to a successful learning event or course includes application of the new knowledge or skill in the workplace.  Simply going to a class and having absorbed information is insufficient to demonstrate transfer of knowledge.  An important measure of success, then, tracks the student beyond the classroom to ensure that s/he is applying the skill in the real world.  Firms can measure the implementation of new skills via professional certifications and management surveys to determine that the learning event met corporate objectives.  Colleges and universities measure success by job placement and feedback from employees.

Education Delivery

While I get up every day, shower, and get dressed in real clothes before going to my office, learners today are cramming skills development into ever smaller parcels of time.  A student very well may be wearing his or her pajamas while watching an online lesson or be listening to a podcast during the daily commute.

Online knowledge delivery has changed how we learn.  Indeed, our attention spans as a whole have dropped precipitously.  Most of us remain engaged for less than 10 minutes.  So, education delivery must meet these parameters and still impart a new skill or behavior within each lesson.  All of our online courses at Simple-PDH.com include short videos or podcasts that can be consumed in brief intervals of time, yet each lesson delivers an important topic necessary to gain and maintain professional certification.

Knowledge Checks

Perhaps more important for professional certification and corporate training is a knowledge check that learning new skills has occurred.  Again, the measurement of knowledge transfer should be part of the organizational planning effort.  In the case of university students and candidates for professional credentials, knowledge checks include practice exams leading to the final, formal exam administered by the appropriate credentialing body (PMI, PDMA, or ASEM, for example).

Practice quizzes offer a risk-free environment to learners to hone their test-taking skills as well as verifying their knowledge base.  CAPM and PMP practice tests help to solidify the sometimes peculiar wording used by PMI that is not as common in an industrial project setting.  New Product Development Professional (NPDP) practice tests help to bring higher order strategic processes into focus with objective, application-oriented questions.

Teaching and Learning

We must all be committed to lifelong learning – whether we are working from a traditional office, a home office, or a student wearing pajamas!  Teaching is the ultimate demonstration of lifelong learning.  Both university and corporate learning event should start with extensive planning to ensure that course objectives, goals, and measures align with the desired business outcomes (e.g. job placement or improved results).

As students today, we demand on-the-go knowledge delivery.  Online courses deliver content that is engaging and brief.  Follow-up practice tests are recommended for those seeking professional certification.  And, yes, you can learn and teach while you are at work or at home!

Contact me at [email protected] or 281-280-8717 to enroll in a free NPDP overview course or any of our newly scheduled PMP, Scrum, or NPDP workshops in Houston as well as our online PDH courses.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC

Project Management Contract Types

Project managers play an integral role in selecting third party vendors to perform work on projects.  It is no realistic, in most cases, to complete projects with only internal resources.  Additional skills can be accessed via outsourcing and often provide specialty services that are unavailable otherwise.

While procurement, purchasing, and legal departments normally take the lead in contract negotiations, project managers need to also take an active role in procuring third party materials and services.  After all, the project manager will be integrating the work of the vendor or supplier with all other aspects of the project.  This includes understanding the scope, schedule, cost, quality, and risk of the third party work.

Contracts

Contracts are used in projects to outline the legal responsibilities of the seller and the buyer.  The seller may be also identified as the vendor, supplier, or third party.  The buyer may be identified also as the customer, client, or sponsor.

A contract is a legally binding agreement in which the seller agrees to provide labor, equipment, materials, or other services in exchange for some form of payment.  The buyer agrees to pay the seller for the work provided; usually, the payment is made in monetary terms (e.g. $10,000 or 10,000 €).  However, in some cases, exchange of valuable goods may be made in lieu of money.  For instance, the right to license a process or access to patent-protected technology may be considered a valuable exchange by the buyer and seller in a contract.

It is important to keep in mind that a contract is a legally binding agreement.  Normally, the terms and conditions will state the jurisdiction of law under which the contract will be executed.  This may be stated as “according to the laws of the State of Texas” or in discussing mediation if the parties later disagreed upon the service rendered or payment received.  Thus, third party agreements should not be treated casually.

The Basic Contracts

Project, product, and engineering managers should be familiar with the three most common types of contracts.  While there are variations on these types of contracts that add risk or may reduce cost, most project managers can participate in a technical negotiation with a clear understanding of these basics.

Fixed Price Contract

The firm fixed price contract is used when the buyer can explicitly describe the materials, equipment, or services to be acquired.  The buyer agrees to a specific price (“fixed”) and the seller agrees to provide the goods and/or services.

A fixed price contract is of little risk to the buyer because there is no room for variation in the price of the goods or service being procured.  Of course, project, product, and engineering managers will prefer this type of contract since it allows a firm budget estimate.  However, the project manager must be extremely clear in describing the full scope of work in the contract as the seller will be constrained to provide exactly what is stated in the contract.

In a fixed price contract, the seller is at a greater degree of risk than the buyer.  Many factors can impact the completion of the work as specified that may add cost to the project work.  For instance, an unexpected period of high inflation or a labor shortage that drives up wages can impact the cost of the work that the seller provides.  Furthermore, if the seller underestimates the scope of work, they are still legally obligated to provide the agreed-upon work product, even at a financial loss.

Both the buyer and seller will be particularly attentive to changes in a fixed price contract.  The seller will view the contract as a minimum standard.  Anything that the buyer requests that is not explicitly called for in the contract may be considered a change.  Change orders are often expensive and can introduce schedule delays as well.  Again, it is important for the buyer to be familiar with the work and to provide a detailed scope statement to avoid eth potential of costly changes later.

Cost Reimbursable Contracts

Cost reimbursable contracts typically involve more risk for the buyer than the seller.  In this type of agreement, the seller is reimbursed for all actual costs as they are incurred.  Usually, the seller will invoice the customer on a regular basis, say weekly or monthly.

A buyer has more risk with a cost reimbursable contract than in a fixed price contract because the total cost of the work is not predetermined.  Sellers may incur more overhead costs using this type of contract since they will spend more time justifying expenses to the customer.  Buyers normally protect against financial risk by requiring specific documentation for costs incurred and/or by including a price cap within the contract terms and conditions.

A cost reimbursable contract is useful in situations where the end result in unknown.  This might be the case for a research study or if the scope of work is unclear.  For example, a home remodel project may involve uncertainties regarding the condition of subfloors, piping, and supports.  In other situations, the end product may be ill-defined due to the nature of the work, such as in new product development where customer inputs will guide decisions throughout the project life cycle.

Evaluation of fixed price contracts is easy.  Normally, a buyer will choose the lowest bid.  Cost reimbursable contracts must be evaluated based upon estimated total costs as well as other factors.  These can include approach to the work, experience, past performance on similar projects, and/or technical and management capability.  A vendor-customer relationship built on trust will enhance the execution of a cost reimbursable contract.

Time and Materials Contract

Finally, a time and materials contract is a hybrid between a fixed price and cost reimbursable contract.  Materials, equipment, and supplies are provided at a fixed (known) price while labor is reimbursed as necessary to complete the project work.  An example of a project in which a time and materials contract might be used is in venture software installation.  The cost of the software licenses is fixed (e.g. $300 per user) but operating system upgrades, testing, and data transfers are variable.  Like a cost reimbursable contract, buyers often include a price cap for a time and materials contract.

Procurement Contracts

Project managers should be involved when contracts are negotiated for third party work.  Technical specification and requirements are the responsibility of the project manager during negotiations.  Moreover, the project manager has a vested interest in the delivery schedule and cost of outsourced project work because it must be integrated with all other project activities.  Third parties also introduce special concerns regarding risk, quality, and communication – areas which are key responsibilities for a product, project, or engineering manager.

Project procurement is one of ten (10) knowledge areas covered on the Project Management Professional (PMP™) exam.  If you are planning on becoming certified, you will want to consider a PMP review course and/or practice tests.  Candidates who prepare with a PMP training course are more likely to pass the exam on the first try.  Join us for online study sessions – contact me at [email protected] or 281-280-8717 for more information on our next available study session.

Contract management is a key responsibility for product, project, and engineering managers.  Be on the lookout for a special PDH course on contract management where you can refresh your skills, learn new tools, and earn professional development hours (PDH).  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC

Risk Responses

In product, project, and engineering management, we are often faced with uncertainties.  In fact, much of what we do includes risk.  Risk is defined as an unexpected outcome that can impact the deliverables of a project through distortions of the scope, schedule, budget, or quality of work.  Note that the Project Management Institute (PMI) specifically defines risk as uncertainty with a positive or negative impact on the project deliverables.

We spend most of our time focusing on how to manage and/or mitigate negative uncertainties.  In my career as a chemical engineer, we concentrate on identifying and minimizing safety risks using tools like hazard identification and analysis, job aids, and engineering controls.  We don’t very often consider the potential for a surprise, positive outcome.

However, in product, project, and engineering management, such positive uncertainties do, indeed, occur.  Why should we identify positive risks?  What is the reason for developing risk response plans for a positive uncertainty?  Are there drawback to looking only at negative risks and ignoring positive risks?  Let’s take a quick look at these questions to learn more about risk management in the product, project, and engineering fields.

Why Identify Positive Risks?

Identifying positive uncertainties in a project is much the same as recognizing negative risks.  However, humans seem to be better conditioned to identify negative risks in science and technology.  Meetings extend for long periods of time when opened for criticism, yet silence ensues when a facilitator requests positive comments.

This is unfortunate because when we identify positive uncertainties for a product development or engineering design project, we access several advantageous opportunities.  First, when team members recognize and identify potentially pleasant surprises on the project, they are more motivated to work on the project.  Building camaraderie around positive project outcomes can lead to enhanced teamwork and collaboration.

Next, identifying positive project uncertainties can have an affirmative effect on product revenues and ease of project implementation.  For example, consider a new product development (NPD) project in which the market is unknown.  A full risk analysis will include determination of the maximum market size and penetration in addition to analysis of a product that fails at launch.

This positive risk analysis allows the NPD team to consider the optimum size of the production line, inventory, and distribution channels.  Isn’t it just as likely that your new product will become the next “Tickle Me Elmo” doll as it is to become the Apple Newton?  Risk assessments must account for and create response plans for unexpected market reactions in both tepid sales and blockbuster revenue situations.  The only way to do so is to first identify the potential positive outcomes that are equal in impact and probability as safety risks.

What are the Reasons for Risk Response Planning?

After quick consideration of the question, most of us can readily understand why we need to develop risk response plans for positive as well as negative project uncertainties.  A project can fail if the scope, schedule, budget, or quality elements are not met.  Yet a project can fail under conditions that lead to overly rapid business growth, too.

Consider the case of Krispy Kreme, a popular donut shop in the southern part of the United States.  Krispy Kreme recognized the market need to sell more of it donuts.  Customers love Krispy Kreme donuts.  So the company began a large expansion project and built dozens of stores in prime locations.  At the same time, recognizing the demand for their product, Krispy Kreme began selling donuts at service stations quick-stop shops and at supermarkets.  Unfortunately, with so many outlets available to purchase a Krispy Kreme donut, the stores suffered due to higher operating costs.  If the company had conscientiously and thoroughly evaluated the positive risks of rapid growth, they may have changed the strategy and saved millions of dollars lost in store construction as well as a hit to their brand reputation.  Product, project, and engineering managers should consider fast market acceptance and rapid growth among other positive risks when evaluating project uncertainties.

 

Are There Drawbacks to Ignoring Positive Risks?

If we ignore a risk, there is some probability that it will have an impact on the project deliverables.  Depending on the severity of the risk event, a safety incident can range from a near-miss to a fatality.  Because we don’t want our staff to get hurt at work, we design risk responses for almost all negative uncertainties.  These responses range from eliminating the risk by automating the task to machine interlocks and procedural controls.

While the disadvantage of ignoring a negative risk is obvious, we tend to struggle with the concept of positive project uncertainties.  If a product is launched to higher-than-expected market demand, we assume we will just make more profit by charging a higher price until we can build another manufacturing facility.  Of course, by ignoring an analysis of the potential positive outcome (high product demand), we also ignore the possibility of competition and market timing.

A competitor may also have recognized the customer need for a new product but is slower at launching.  However, when the competitor observes the popularity of the product, it may be in a better position to ramp up production.  The competitor may launch a slightly better product or one with more features or better economics.  In any of these circumstances, the competitor is ready to take the majority market share while you are willing to accept status quo due to a lack of planning.

Secondly, some products have a short-lived cycle in the market.  Remember PDAs (personal data assistants)?  If a firm does not evaluate the positive risks in a short-term sales situation, production may lag and the product misses a wave of popularity.  This results in very negative outcomes by failing to anticipate positive market responses.

Positive Risk Analysis

Normally, we are conditioned to consider negative outcomes as risks.  In fact, working in product, project, and engineering management, we are trained to identify, monitor, and mitigate negative risks.  Yet if we fail to anticipate positive uncertainties, projects can also suffer scope, schedule, budget, and quality outcomes.  Risk identification should include analysis of potentially unexpected, pleasant impacts on the project deliverables, such as increased sales or market penetration.

We need to include positive uncertainties in a risk assessment so that we can plan risk responses just as we do for negative risks.  Simply ignoring the potential for a positive outcome can negatively impact the revenue inputs or success of a project to the same degree as ignoring the potential for a health, safety, or environmental risk.  A company needs to be poised to take advantage of rapid growth or high customer demand with a marketing, production, and distribution plan that delivers maximum value to all stakeholders.

You can learn more about risk management with certification training in New Product Development Professional (NPDP) workshops including an affordable self-study course or in a customized face-to-face training session.  Contact me at [email protected] or 281-280-8717 for information on new product development training or professional management coaching.  We also offer several options for Project Management Professional (PMP) training and practice test questions, including risk management.  At Simple-PDH, we want to make it simple for you to study, learn, and earn and maintain your professional certifications.

And for inquiring minds – Egyptian cotton has longer fibers than Turkish cotton making the towel feel softer but it will take longer to dry.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC

A Growth Mindset for Learning

Product development, like all other types of engineering projects, requires taking risks.  Sometimes new products fail.  In fact, statistically, more products and services fail than are successful in the marketplace.  But not many leaders would readily agree that failure can have a positive outcome.

A Growth Mindset

Failures should be viewed as learning opportunities.  We improve our behaviors, skills, and technical capabilities when we understand the gap between current performance and our desired level of accomplishment.  Failure allows us to grow.

A recent article in Harvard Business Review (November 2015) describes failure as the ability to tap into a “growth mindset”.  In contrast, a “fixed mindset” is one that assumes outcomes are pre-determined through innate skills or through good luck.  People with a fixed mindset do not always recognize learning opportunities since they assume they cannot add to their own talent pool or development.

The “growth mindset,” on the other hand, is one in which people recognize they can get better through effort and practice.  Years ago, Tiger Woods famously changed his golf swing (apparently before he needed a lot of prescriptions for back pain…).  When we make radical changes in our training and execution of a skill, sometimes our performance declines temporarily.  We may fail.  Yet, seeking the challenge and sticking with a plan for improvement will lead to better performance in the end.

Thus, a person with a growth mindset accepts that a failure has occurred and will work to improve performance next time.  These people will practice, practice, and practice.  They recognize that the payback is proportional to the effort they input.  Managers can support performance improvement by accepting failure and learning from it.

In new product development (NPD), for instance, a failed product launch may be related to the technical functionality of the product or may be due to a poor marketing message.  Learning the root cause of the failure will help all future NPD efforts.  You just also might be able to profitably salvage the current product!

Acting without Action

While a crucial step in learning requires acknowledging failure and taking steps to practice and improve, we sometimes get bogged down in action for the sake of action.  Let’s look at an ordinary golfer, Tom, instead of Tiger Woods.  Tom goes to the driving range weekly and hits a couple of buckets of balls.  He chats with his buddy about practicing at the range.  Yet when they play a full round of golf on Saturday, Tom’s score doesn’t really improve.

What’s going on?  Tom has been practicing at the driving range – just like Tiger Woods, right?  Wrong.  Tom is just going through the motions.  He is acting without action.  Tiger’s practice was focused, deliberate, and detailed.  He worked through every motion of his golf swing.  He worked at it day and night.  He studied golf swings of the masters and he was coached.  The coach provided feedback on his performance so Tiger could learn how to close the gap between his current skill level and the desired future state.

Tom, on the other hand, was not focused.  He spent half his time at the driving range chatting with his buddy.  He golfed as a hobby, not a passion.  More importantly, Tom just hit the golf balls.  He did not have a picture in his mind of how a perfect golf swing should look.  He lacked coaching and feedback to close a gap between his current and desired performance.  Tom was simply acting without action.

We do the same thing with our business projects.  We might tweak the advertising campaign of a new product.  We will add features and functionality to “improve” or “enhance” its technical capabilities.  Yet, these are unfocused actions – doing something just for the sake of doing something.  Without proper customer and market feedback, we might just be acting without action.

NPD projects should learn from failure by shadowing and querying customers.  Products are successful when they deliver an affordable and convenient solutions that address customers’ specific issues.

Growth and Action for Learning

Failure happens.  Projects are cancelled, new products don’t make sales, and we face professional setbacks.  Yet the key to success is learning from failure.  Continuous improvement comes from evaluating failure and taking deliberate steps to learn from any real or perceived defect.

First, you must equip yourself with a growth mindset.  Outcomes are not a result of bad luck or only because of in-born talent.  We can improve our own performance through deliberate practice and applied effort.  Recognizing the gap between current and desired performance allows us to design a path forward.  In NPD, we must fully understand the customer in order to design, develop, and launch an effective product solution.

Next, as we accept failure and recognize that defeats introduce learning opportunities, we must take focused action to address the performance gap.  Acting without action is just stirring the pot.  Or as Einstein is quoted as saying, “Insanity is doing the same thing over and over again but expecting different results.”  In NPD we must carefully survey markets and customers to understand their needs and how existing product solutions meet or don’t meet these needs.

Professional skills development also requires focused practice and deliberate actions to improve performance.  Many individuals seek to demonstrate learning and continuous improvement through professional certification.  We offer new product skills development with industry best practices in innovate coupled with certification training in New Product Development Professional (NPDP) workshops.  You can demonstrate continuous learning through an affordable self-study course or in a customized face-to-face training session.  Contact me at [email protected] or 281-280-8717 for information on new product development training or professional management coaching. At Simple-PDH, we want to make it simple for you to study, learn, and earn and maintain your professional certifications.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC

Components of Learning

learning_is_contentLearning is a lifelong activity.  An article in the newspaper relays information from recent studies documenting links between physical exercise, learning, and mental health in the elderly.  Lifelong learning bridges our knowledge and experience from the vast array of times and events in our lives.  Learning prepares us for the next step in our careers and in our lives.

For learning to be effective, it must contain and deliver three aspects:  content, access, and technology.  Professionals who gain certifications and credentials master these three perspectives of learning.  To maintain a professional certification, learning again engages through these three arenas so the candidate can earn PDHs or CEUs (professional development hours or continuing education units).

Content

You’ve probably heard that the volume of information and data doubles at an astounding rate – faster than ever in the history of mankind.  In just two years, they say, the amount of information ever created doubled from the beginning of time.  Consequently, for a busy professional, knowing where to find information, that is meaningful knowledge, can be a challenge.  Studies also show that knowledge retention decline precipitously if the information is not delivered when and how it is needed.

Today, anyone learning a new skill or refreshing basic competencies expects compelling content.  That content should be delivered so learners engage as many of their senses as possible.  This includes seeing (reading, viewing video), hearing (podcasts), and touching (writing, sketching).  As more senses are involved in the learning activity, the retention will increase.

All of our online courses at Simple-PDH.com include lessons to engage these different learning styles, such as reading, watching videos, listening to podcasts, and taking quizzes.  Online learning can be supplemented by face-to-face workshops where professional have opportunities to practice their skills in a non-threatening environment.  Often, busy professionals cannot find time during a typical workday to test new management theories.  An offsite training course provides the chance to apply knowledge in a risk-free environment with other like-minded individuals.

Access

Online learning has huge benefits for students and professionals.  Content is available 24/7 and is accessible in whatever format a candidate needs.  Learners can switch from a laptop to a cell phone and then to a tablet to complete an online learning module.  Having lessons available on digital devices, like smartphones, offers a quick reference in the field as well; thus supporting learning when and where knowledge is needed.

Maintaining professional certification is simple when the information is broken into small chunks.  A lot of people are too busy to book two hours per period for continuing education.  But, these same people can fill 10 minutes of waiting time with learning.  Online PDH courses break the content into small tasks on lessons, typically less than three (3) minutes each.

For candidates that require a deep dive into a new topic, labs and workshops offer access to knowledge and learning-engageexperiences shared in a classroom setting.  Peer-to-peer knowledge sharing, known as “social learning,” is an effective way to increase knowledge retention.  We remember the stories we hear and share in the classroom.

Technology

Finally, learning has been irrevocably changed by technology.  Just 20 years ago, when I was in college, the professor wrote on a chalkboard and students took laborious notes in spiral binders.  Advanced technology at the time included overhead projectors.

Today, technology assists learning in many ways.  As indicated above, online learning delivers content to a candidate on his/her mobile device, transferring seamlessly between computer and classroom.  Technology allows us to access the different learning modalities – seeing, hearing, and touch – in order to improve knowledge retention.

Yet, technology can be a hindrance to learning.  We are easily distracted by ads and instant messaging while viewing internet content of any kind.  Our attention spans have shrunk as we expect to be entertained and we quickly make that decision within a couple of seconds of loading a new web page.  Consequently, technology can assist learning but it is not learning in and of itself.

Learning Components

If you want to learn a new capability or refresh an existing skill, you must consider three components to increase your knowledge.  First, the content must engage as many senses as possible.  Many subject matter experts possess great knowledge and experience in their trade but cannot adequately translate that information.  Candidates for professional certification should look for courses (online or face-to-face) that provide opportunities to see, hear, and interact with learning materials.  Particularly important to earning and maintaining professional credentials is an opportunity to practice the new skills.

Next, knowledge must be accessible.  At Simple-PDH, our online course materials are available on your laptop or mobile device.  Our classroom workshops provide reference material to check when you are back in the office facing a new situation.  And, we are available to answer questions and share our experiences from the School of Hard Knocks.

Finally, technology can enhance the learning experience but it is not a substitute for well-built lessons.  Our knowledge base is supplemented by carefully selected videos and podcasts to encourage multi-modal learner engagement.  While our online courses rely on technology as a primary means of delivering information, our labs and workshops still ask you to use pen and paper, role-playing, and active discussion among other simple exercises to cement new concepts into your behaviors as a manager.

Lifelong learning is an adventure.  We need to continue to learn to preserve our mental health as we age and to be successful on the job right now.  Learning new skills presents challenges to advance our careers and professional performance.  At Simple-PDH, learning is convenient and affordable.  It’s simple to study, learn, and earn!

information on project management certification.  At Simple-PDH.com, we want to make it convenient and affordable for you to study, learn, and earn your professional certification.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

by Global NP Solutions, LLC

The Value of Learning

While most organizations agree that learning is important for employees, they also struggle to measure the learning-gradeffectiveness of learning programs.  Does a training class better prepare the worker to do his or her job?  Is productivity or quality enhanced when learning modules are completed?  Does the performance of the organization change as a result of training?

Intuitively, the answer is “yes,” yet senior management often requires hard numbers to justify continued or increased investment in learning programs.  One way to validate enhanced performance is to treat knowledge gain as a project.

Project Phases

Projects go through five phases in a traditional framework.  These are:

  • Initiation,
  • Planning,
  • Execution,
  • Monitoring and Controlling, and
  • Closing.

In the initiation phase, a business case is developed for a project and key stakeholders are identified.  For most projects, the planning phase is quite extensive and may last one-third to one-half of the total project lifetime.

Planning includes clearly and succinctly identifying the project scope of work, boundaries and constraints, schedules, costs, risks, and required resources.  Clarity of the quality of project elements is also designed during the planning phase as well as training of team members to accomplish the project work.

Implementation of project plans and execution of the project accounts for about another half of the total project life cycle.  Execution of every project is different, of course; however, many projects encounter unknown circumstances during implementation.  The project manager and key stakeholders must adopt flexible and creative solutions to problems faced during execution in order to deliver project results successfully.  This is a key feature of the risk management plan which is used to evaluate, analyze, and prioritize unexpected trouble spots in a project.

At the same time that a project is being implemented, the scope of work is evaluated for performance as compared to the plan (monitoring and controlling).  The project sponsor and key stakeholders will be monitoring the project status and progress while the project manager will control the performance of project activities.  For instance, if the schedule is falling behind the plan, a project manager can add staff or re-prioritize tasks to speed up the work.

Finally, a project retrospective is conducted during closing.  Here the project team addresses what went right, what went wrong, and what could be improved next time.

Learning as a Project

Treating learning activities as a project can formalize skill development and improve the measurement effectiveness of knowledge building.  Just as we put forth a business case to justify installation of new equipment, learning must have a clear purpose and expected benefits.  These benefits should be documented as part of the learning project’s initiation phase and should be measurable.

projectmanagement-puzzleAs with any project, planning for the learning activity should be detailed and encompass scope, schedule, cost, quality, and risk.  Plans should be specific and include boundaries and constraints for the learning activity.  For example, mid-level managers will attend a communications training course in person but factory employees may receive the same training form a computer-based module.  Certifications in specialized fields should be considered as part of training and learning plans since they are unbiased and measurable demonstrations of successful knowledge and skill building.

Unlike installing a new piece of equipment, execution of learning projects is highly flexible and adaptable.  Changes to curricula can be implemented on the fly while feedback (monitoring and controlling) is often immediate.  Learning activities can be easily analyzed and evaluated during the project implementation to ensure the goals and objectives are met.

Finally, closing of the learning project must be more substantial than in a typical project.  Beyond asking what went right, what went wrong, and what can be improved next time, a learning project must include follow-ups in the field to verify the objectives of the learning event were accomplished (e.g. improved behaviors and performance).  The project manager should assess skills after the training and compare them to an assessment taken before the training.  Moreover, the specific goals dictated in the business case of the learning project should be clearly measurable in performance improvements.

Again, certification are an essential tool for measuring specific learning.  Certifications require objective testing and are validated by experts in the field.  For example, Project Management Professional (PMP®) certification is a rigorous validation of project management skills including education, experience, and knowledge.  The certification exam verifies that candidates demonstrate understanding and practice in the ten knowledge areas and receive a passing score on a very challenging and comprehensive exam designed by experts in the field of project management.  To learn more about PMP certification, please join a free class by emailing “PMP” to [email protected]

The Value of Learning

Senior management will validate the financial return on learning and training as with any other business activity.  Treating learning as a project with clear business objectives, detailed plans, flexible implementation, performance monitoring, and validation at close-out can increase the confidence of senior management to support training activities.  Often, certifications and continuing education to sustain trade certification provides meaningful, industry-wide measurements of the value of learning.

All of the courses at www.Simple-PDH.com offer objective tests and certificates of completion to validate and measure the value of learning.  Check out our newest course, Cost Estimating, for example delivered to any device, any time.  We also offer group discounts for PMP Boot Camps and New Product Development Professional (NPDP) Certification (next class is 12 & 13 October).  We want to make it simple for you to study, learn, and earn!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

by Global NP Solutions, LLC

Leadership in Learning

learningI am huge believer in the strength of lifelong learning.  Learning allows us to connect with the new ideas born into the world on a daily basis and learning allows us to stretch our imaginations beyond any known boundary.  Without lifelong learning, our brains and bodies stagnate.  We will rot away in the muck of sameness and predictability.

Organizations need learning as much as do individuals.  There are new theories to test that may (or may not) improve productivity and efficiency.  Learning new ways to execute projects can save resources and motivate the workforce, for example.  Like individual learning, organizational learning must be a continuous passion.  However, organizational learning must be exemplified by leaders.

Leadership

Leaders are very different than managers.  Most of us are familiar with the old adage that “managers manage things and leaders lead people.”  Yes, that’s true.  Yet leadership is more than directing the people on a team.  Leadership involves inspiring others to achieve greatness.  It involves helping your team members to stretch beyond their capabilities to create bigger and better solutions to age-old problems.  Leadership demonstrates a vision and the pathway to reach faraway goals.

Leaders don’t just dream about a different future.  They also put in place mechanisms and tools to build that exact future.  A leader doesn’t have the technical solutions in his or her back pocket but he or she can encourage and motivate the team to find designs and to develop solutions that create a better world for all of us.  Leaders inspire, motivate, and encourage even when the chips are down.

Leading by Example

Leaders are just managers if they don’t have natural followers.  Often, leaders can be compared to managers by their actions.  A manager dictates work by command and control.  She will tell her team members what to do and check to see if it gets done.

Leaders, on the other hand, will stand beside the team member to learn the task and to identify a solution.  He is not afraid to get his hands dirty seeking a better way.  Leading by example is a fundamental characteristic of successful and inspiring leaders.

Leading by example includes lifelong learning.  Leaders that read and share new information, concepts, and theories demonstrate that learning is important.  Team members will follow that example and also read to share new information, concepts, and theories that they encounter.  Shared experiences are a key to successful team growth as the team members collectively find new solutions to project problems or technical challenges.

Learning Together

Leaders also demonstrate a commitment to lifelong learning through continued professional development.  InLeadership today’s busy world, many careers demand that workers hit the ground running when they are hired for a new job.  Professional certifications like Project Management Professional (PMP®), New Product Development Professional (NPDP), Scrum Master (SCM™), and Professional Engineering Manager (PEM) also demonstrate a commitment to lifelong learning.  Professional certification demonstrates education, experience, and subject matter knowledge exemplifying technical and market leadership.  Many jobs today require applicants to hold such professional credentials to validate their skills and capabilities as well as to demonstrate the candidate’s leadership competencies.

Teams can learn together to expand their skills in these fields.  PMP exam prep training and Scrum Master training are great classes for teams to take together to learn a common vocabulary and approach to problem-solving.  Simple-PDH.com offers a company discount for PMP Boot Camps, next scheduled for 26-30 September 2016 in Houston, Texas.  You’ll earn 35 professional development hours (PDH) in this course as well as be prepared to pass the PMP exam on the first try!

NPDP training is also well suited for innovation teams.  The course presents a common framework and best practices for teams engaged in radical innovation and applied R&D.  Our next NPDP face-to-face class is scheduled for 12 & 13 October 2016 in Houston, Texas.  You’ll earn 16 PDHs during this intense learning workshop.

Leadership in Learning

Leaders exemplify the behaviors they want their teams to demonstrate.  Lifelong learning is foundational to long-term organizational success.  Great leaders not only encourage and share learning with their teams, they also practice lifelong learning through professional development.  For more information on gaining and maintaining professional certifications, please contact us at [email protected] or by phone at +1-281-280-8717.

 

Study. Learn. Earn. Simple.

Simple-PDH.com

by Global NP Solutions, LLC