Tuesday, January 26, 2016
Monday, January 18, 2016
I don’t know about you, but I often use Wikipedia for a quick background on a subject and to identify the in-depth references that I need for further research. The site is easy to use and often very helpful. Is it a peer-reviewed authoritative source with thoroughly vetted information? No. But when I want a quick insight to a topic or issue, it is a great place to start.
Wikipedia has only been around for 15 years, but it is the 7th most visited site on the web. It beats out social media giants Twitter and LinkedIn. And it beats out the online sales giant, ebay. What makes it so popular? I believe it is because it is because Wikipedia understands its customers and has created a platform that brings value to them.
The concept of an encyclopedia has been around as long as there have been books and reference libraries. The purpose of the encyclopedia was to combine the information from multiple references into one place. Before computers, this was done through books. I can remember using our family’s copy of the World Book Encyclopaedia while doing homework as a teenager. But these multi-volume sets of books were cumbersome and expensive. When Then computers came along the encyclopedias were turned into programs, the most notable being Microsoft’s Encarta. Today most, if not all, encyclopedia companies no longer offer a print version.
The internet changed the way many people assimilate information. They wanted immediate access to short summaries of current information on every topic under the sun. And then if they are interested, they would dig deeper into a topic. This sounds like an opportunity for encyclopedias, yet Microsoft shut Encarta, down several years ago. Just taking the old encyclopedia model and putting it online did not create a lot of value for potential customers.
The Customer Value of Information
When considering the value of information, I want to segment the consumers of information into three groups. The first group is the academic, researcher or professional who needs authoritative information about specific topics to do their work effectively. The second group is the student who needs authoritative information on many topics to complete their assignments. The third group is the consumer or hobbyist who wants to quickly get the background on a topic in order to answer a question.
The first group were the people who wrote the print versions of encyclopedias, but seldom used them. They were already experts with far more knowledge and information in their fields of interest than could be summarized in an encyclopedia article. Their interest in encyclopedias was the prestige or pay of writing content.
The second group used the encyclopedia when they had to get their information for their assignments. Rather than hours in a library, they could get what they needed in a few minutes from the encyclopedia. They had no intrinsic love for encyclopedias; they were just an easy source of information. As books and information because available online, the search engine browser replaced the encyclopedia for many students.
Which brings us to the third group. Most people are curious. Sit down with neighbors and friends for a few hours and you will likely hear dozens of topics discussed. The ability to quickly find out about a topic is very enticing to many people. But the key is “quick.” With our short attention spans and busy schedules, most people do not want to go to the library a buy a book for every question they have ever had. They just want an overview.
Here was the opening for Wikipedia. While encyclopedias have always been able to provide overview information, most of us didn’t want to carry the 24 volume set around everywhere we went. The search engine on the internet at first seemed like the answer, but we soon found that it often was taking us to sites that were trying to sell their products or philosophy and we had to sign up to get the information. We didn’t want a sales pitch; we just wanted an answer to the question.
The value of Wikipedia to these people is that it is a free and easy source of basic information. Wikipedia further added to the value by letting the readers enhance or contribute to a topic. They have not taken an elitist attitude that restricts contribution to only an enlightened few. This allows everyone to share what they know and keep the information current. The user not only can get the information they need, they can help others learn.
Lessons from Wikipedia
There are some lessons in the Wikipedia story about creating customer value that may be helpful for your products and services:
- Segment your customer base – different users have very different needs. The academics don’t use Wikipedia for research because they have different needs, and that is OK. Wikipedia is not trying to be all things to all people.
- Easy access to information – when people have a question, they want the answer or at least a high level perspective on the answer quickly and concisely. If you make it hard to get the information, they will go somewhere else where it is easier. If you turn the information into a sales pitch they will suspect your motives and your information.
- Keep your message simple – you are an expert in your field or industry and you want to share that expertise, but most people don’t have the same interest or passion. Make it easy for the casual user to get what they want. Then if they are interested, lead them into a “deeper dive.”
So Happy Birthday Wikipedia. Thanks for the information and thanks for the example of value creation.
Tuesday, January 12, 2016
This sounds a lot like what is happening in the Powerball lottery. As the payout keeps growing (it is now estimated to be $1.3 billion dollars), I see more and more people spending money they can ill afford to spend on lottery tickets. They then cross their fingers and hope they win; just like this project team kept hoping that one of the ideas they tried might work.
Risk and Reward
Ask any financial adviser and they will demonstrate that an individual will be far better off financially if they took the average amount of money the typical Americans spends each year on lottery tickets and invested that in a sound investment. Yes, someone does eventually win the lottery and they receive a huge payout, but the vast majority of people who buy tickets are losers and the money is wasted.
Even many of the people now buying a lottery ticket will tell you that it is a stupid waste of money. But they are doing it anyway because the payout has become so big. The risk is the same – you are virtually guaranteed to lose your money. But the reward has grown to the point where people are now willing to take the risk.
The reason the reward has grown is because there have been no recent winners. The longer the Powerball lottery goes without a winner, the larger the payout. It was somewhat similar on the innovation project. None of the earlier ideas had been feasible. An idea that gave adequate product performance was too big, or not serviceable. An idea that was the right size, couldn’t meet the specifications. It was like having some of the winning numbers on the lottery ticket but not all of them. The longer the project went without a viable solution, the more management focused on the project. Whoever came up with the idea that would work would be big hero in the company and be well compensated for their idea.
So ideas kept coming. In fact, the project team was growing. People were working overtime. There was a frenzy of activity – most of it wasted effort. The project manager had no control over what was happening. Configuration control of product designs was lost. Testing was analysis was ad hoc and unfocused. Different sub-teams responsible for different components were using incompatible approaches for subsystems that had to integrate with each other. The project manager could no longer even report on project status because he had no idea what many of the people were doing.
Discipline of Project Management
The company had lost sight of the discipline of project management. Just like disciplined investment of money will yield steady predictable growth in the value of a portfolio, disciplined project management will yield steady progress on a project. Starting with a plan and doing regular risk reassessment and pulsing of the project will identify the problems and issues. A disciplined problem solving approach will lead to an understanding of the nature of the problems and point to a solution strategy. Planning the solution and implementing the solution plan keeps the project on track and moving to a successful conclusion.
Granted this isn’t the adrenaline rush of a “Eureka” moment when using disciplined project management on an innovation project. Nor does it lead to the discovery of “heroes” in the business that suddenly emerge by creating the next mega-million jackpot product line. But it will prevent the business from wasting tons of money on worthless ideas. It does provide a predictable approach to innovation and it keeps the project manager and senior management informed and involved.
Incidentally, which project disciplined project management approach you use is not critical. What is most important is that you pick one and use it on your project. Just like there are many financial strategies, there are many innovation project management methodologies. You might prefer stage-gate over Agile. You may be a fan of the PMBOK Guide®, or you may be an advocate of PRINCE2. You may be able to use an industry specific methodology like APQP or IPPD. You may prefer the rigor of Design for Six Sigma or the framework of the SDLC. Pick the one that best fits you industry and culture – then actually use it.
Disciplined project management does not mean nonsensical bureaucracy. It does mean that you have a plan which is followed and updated periodically. It does mean that you do regular risk assessment and variance analysis in order to make tweak the plan. It does mean that you have regular status updates within the team and stakeholders to maintain alignment and integration. These same principles apply to wise financial investing.
Powerball project management is a recipe for disaster. Chasing ideas with no project plan, throwing resources at problems with no structured problem solving approach, and getting caught up in the frenzy of the moment won’t bring you success. Keep in mind, the odds of winning the Powerball jackpot is 1 in 292 million. The odds of Powerball project management leading to a successful innovation are about the same.
Monday, January 4, 2016
This is the logic often used in appointing project managers:
Major Premise: The best project managers create project plans.
Minor Premise: Bob created a project plan.
Conclusion: Therefore, Bob is one of the best project managers.
But then Bob’s project becomes a train wreck and Bob and the project team are clueless as to why that happened or what should be done. The problem was in the approach to project management. Let’s go back to the major premise that was used.
The best project managers create project plans. There are several flaws in this logic. First, although it is true that the “best project managers” create project plans, there is no statement about what the “worst project managers” do. In fact, many of the worst project managers also create project plans. And some of those project plans use all of the latest forms, templates, software and are full of excruciating detail.
Second, the “best project managers” do much more than just create project plans. They execute their project plans. They regularly do status checks and risk reviews. They manage the stakeholder interactions and project teams wisely and well. It is an ongoing continuous set of interactions that are not part of planning – but are necessary for success.
Project plans come in all levels of accuracy and completeness. Project plans that are based upon incorrect assumptions about resource availability, technical capability, or stakeholder interactions are doomed from the start. I have seen many books and courses on how to do project planning. They often gloss over some of these points and instead focus on things like the format of the WBS or critical path calculations. If the underlying assumptions about the project conditions are wrong, everything else in the plan is just a fantasy.
Project management gurus often talk about the need for upfront planning in a project. The focus of that effort should not be just the technical planning activities; it should be identifying and testing the assumptions and constraints. There are assumptions about business conditions and assumptions about project objectives. There are constraints on resources and constraints on project options. If any of these are missed, it can destroy the validity of the best formatted and calculated project plan.
Unfortunately, there isn’t a simple (or even complex) equation that can be applied to identify and test the assumptions and constraints. Rather, the project manager must meet with the stakeholders and ask probing questions about goals and risks. They need to determine how much support the stakeholders will really provide to the project – it is just cheering on from the side lines, or will they dedicate time and money. The project manager needs to determine realistic resource capability and capacity, regardless of what is promised. These activities require cross-functional and multi-level communication skills. It is one of the hardest things to teach technical professionals. One of the most challenging aspects of this activity is that you don’t know if you did it well until the project is over – which may be months or years later.
A project plan is a necessary condition, but not a sufficient condition for excellent project management. The plan must still be executed – or at least a variation on the plan must be executed. Inevitably, something unexpected happens. The project manager must be regularly pulsing the project to recognize the change and make the appropriate adjustment. A project manager who blindly follows a project plan, even after a risk or issue has invalidated elements of the plan, can lead the project into disaster.
In addition to regular updates and adjustments to the plan, the project manager must interact with stakeholders and team members to ensure appropriate decisions and actions. In many cases the project team members are matrixed onto the project team. They still have other responsibilities, often simultaneously working on multiple projects. The project manager must keep them engaged and focused. This usually requires strong interpersonal skills and negotiating skills.
The stakeholders who are involved in project decisions can delay and derail a project if they are not engaged regularly and kept informed of the project status and project risks. Stakeholders often change during a project. The project manager must bring the new stakeholders up to speed. The stakeholders often are looking at the “big picture” in the business and the project manager is often focused on “immediate details.” If the project manager is not careful, the project communication will actually confuse and irritate the stakeholders. A good project manager is able to switch between the perspectives and effectively communicate and manage both “big picture” and “immediate details.”
The Real Logic of Project Management
So let’s review. An organization that only focuses project managers on creating complete and intricate project plans will likely be disappointed in the actual project performance. A good project plan is needed, but the most important aspect of planning is to understand and account for the assumptions and constraints – not just filling out forms and spreadsheets. Then once the plan is in place, the project manager must stay flexible to modify the plan when appropriate. And the plan is not enough; the project manager must engage the stakeholders and team members to keep things running smoothly and achieve project success.
This leads us to a new logical statement:
Major Premise 1: The best project managers create project plans based upon realistic project assumptions and constraints.
Major Premise 2: The best project managers adapt their plans throughout the project to reflect changing conditions.
Major Premise 3: The best project managers interact with stakeholders and team members regularly to ensure alignment and appropriate actions and decisions.
Minor Premise: Jill creates project plans that are based upon realistic assumptions and constraints; she modifies them to reflect changing conditions; and she regularly interacts with stakeholders and team members to ensure alignment and appropriate actions and decisions.
Conclusion: Jill is one of the best project managers.